good morning, everybody. welcome back to "squawk box" on cnbc we are live from the nasdaq market site in times square. let's take a look at the u.s. equity futures at this hour. as joe mentioned, we are looking at red arrows once again the dow futures indicated down by 180 points. s&p futures are down by almost 20 the nasdaq off by 66 this comes after the markets saw their worst day in a month on friday again, concerns about the potential retaliation for what we saw happen last week in iraq. that is what has people on edge this morning let's take a look at what's happening happening at the treasury markets at this point it looks like yields are continuing to come under pressure right now the ten-year is at 1.75%. the 30-year is 2.26%

crude oil last week which hit the highest interday wti up to $63.72 an barrel ice brent crude is up to $69.49. gold hit a nearly four-month high last week posting its eighth straight positive session on friday. longest daily winning streak since june of 2019 right now gold price is up another 1.75% to $1,579.60 an ounce. our top story, tensions with iran escalating over the weekend. eamon javers has the latest from washington good morning. >> good morning, joe the iranians were vowing revenge over the weekend the administration took to television to explain its decision to kill that iranian general who was in iraq last week and to offer an explanation for what its plan is going forward. mike pompeo said the administration is prepared and ready to handle anything that the iranians respond with. here's what he said.

>> if the american people should know that we have prepared for this, that we are ready -- >> we'll talk cultural - >> that our responses are lawful and the president will take every action necessary to respond should iran decide to escalate. >> the president taking to twitter over the weekend to announce that he is prepared to respond. in fact, a warning to the iranian side here on twitter saying, these media posts will serve as noifctiotification to d states congress that should iran strike any person or target and united states will strike back such legal notice, the president argues s not required but given, nonetheless. meanwhile, nbc news is reporting there's a high-stakes meeting expected later today in iraq as the u.s. ambassador to iraq is scheduled to meet with the iraqi prime minister today they'll discuss the future of the u.s. military presence in iraq the prime minister is expected to tell the united states to

leave the country in the wake of that attack. the iraqis frustrated they conducted that attack on the iranian general in baghdad some questions about the u.s./iraqi relationship and troop presence there the president returning to washington on air force one yesterday from mar-a-lago told reporters that ultimately if the iraqis force the united states out of iraq, the united states will send them, in effect, a bill for u.s. military bases that costs billions to construct in iraq and he also said if it's done in a way he doesn't approve of, he will slap sanctions on iraq that will be worse than the sanctions on iran. moving parts in the iraqi relationship as well as tensions with iran this morning. >> eamon javers, thank you here to talk more about this and particularly the market reaction, cnbc contributor

michelle caruso-cabrera. >> good morning. >> good morning. you're seeing market reaction but not much, is that right? >> in terms of oil, yeah when you go back and look at when iran attacked the saudi aramco oil fields, you had a move but it wasn't that big. when you go back and look at that event and realize how much slack the u.s. could pick up as a result of that attack, i wonder if that wasn't one of the factors that played into the president's mind when he decided whether or not they're going to do this attack because 10, 15 years ago, you would say, gosh, if bedo this, what's going to happen with oil prices now they do this and i think maybe the iranian attack on saudi aramco fields may have backfired on them. they took down, what, half a capacity and all they got was a lousy 10%? it's nothing so fast forward and now you have a president who thinks he has more room when it comes to the economy. >> introduction came back online quickly in saudi arabia, but is that what did it or is that we

replace it and there really is a difference than there was ten years ago? >> oh, there's definitely a difference from ten years ago. >> we can step up and -- >> oh, yeah. >> the straits of hormuz being closed - >> i still think that would be a very big deal. don't misunderstand me i don't think we did this because of oil all the calculations are completely different the market's down today. the market went up 12 weeks straight in a row. i don't see this as a huge move. i think because ultimately, talk of war, i estimate, is probably overblown. the iranians don't have the capacity, the capability it's that's not -- their economy doesn't have the capacity or the capability they were putting down protests for two months over the economy. and more than 100 people died as a result of them putting them down. >> still in the region you understand why the markets there pulled back, why saudi aramco pulled back on this news, too. even though many of those

countries are enemies of iran, they are now waiting to see if any retribution takes place on their soil. >> yes if saudi aramco is attacked again, it definitely hurts the saudis, right. it hurts us less absolutely, that stock should go down i would also add, though, it's done nothing but go down since its ipo because it was a sham, right? it's a bs idea. >> walk through what you see the iranians attacking us or our interests. and what -- and how that plays itself out. >> nobody knows. >> i know. i'm just curious as somebody who spent a lot of time - >> i've only been to iraq once and iran once. i'm no expert like richard engel, et cetera i'll say this, when i see what happened with general soleimani, he's in charge of the quds forces for 20 years. what do we know about organizations that have the same person in charge for two decades? what do we know about their

succession planning? it's probably not very good. the number one and number two guy are dead now what's happening behind the scenes, i don't know for fact but what i assume is everybody is trying to climb over the spoils there are probably ten different people who want that job and all fighting for what is a lot of economic power in iran because that's why the iranian revolutionary ga rd is so loyal to the supreme leader because he hands out economic bits to each of these people. internally what's happening in iran, i'm sure, is incredibly political and interesting. at the same time, i think they'll take a considered approach about what they do next and they don't have a capacity to do a full-on conventional war. what i would be worried about is some kind of cyber attack, something vicious, something that takes down a power grid, god forbid the water supply. who knows. >> i think in evidence in 2013 or '14 the iranian cyber war criminals had gotten into rye, new york, to a dam that was

here had it hen taken -- >> did you see the piece on shell nattleson. i remember when $63 was, wow, we're down to $63 on oil didn't take much to get it to $100 we get incredibly acclimated to where we've been for six, eight, ten months for some reason we thought 50 -- i didn't think we would think 50 was the normal price again for a while when we were up at $80 and $90. $63 is not a huge damper to global growth. that's what we need to think about, isn't it, at this point if it's not a really -- if we don't have a full-fledged war, the financial markets mostly are going to be concerned with what happens with oil, is that where we are right now >> yes remember, the dynamics of oil have changed dramatically because we're now producers of a large -- >> that's what i mean. $63 doesn't -- that's not even

$4 a gallon, is it maybe we're getting close. >> i'm old enough to remember when i was paying $1 a gallon. >> i remember less than that i remember how much -- >> i remember top lining and saying, did you see oil just crossed $40? >> i remember what feed used to cost the horses, which is even - >> horse and buggy >> to get that, andrew, i remember what feed cost the horses now you can go. >> i'm just trying to understand, going back to not just the cyber issue but thinking about u.s. embassies, thinking about israel, other proxy states or places then what happens afterwards to me, that's the bigger issue. >> is the escalation. >> that's the escalation. >> in terms of destabilization in the middle east >> right the real cost. i know we're not really -- we're talking about the cost of oil this second but i think this is a larger issue, no or do you think it's straight oil? oil is the only economic - >> we're on cnbc and we're talking -- >> no. >> that's the per view i look at

it is there destablein the middle east yes. it's been going on for decades and decades. you can go back to '53 we can't go back and undo all of that. >> i think you point out u.s. interests are not necessarily aligned with all the countries that are there that has been pretty dleer, i think, to saudi arabia recently, too. just because they've had problems with iran doesn't mean the u.s. is going to step in it wasn't until the u.s. embassy was attacked that the president took these steps and really went after these issues sometimes you may be in a situation where your interests align, other times they won't. you'll see more and more dichotomy -- >> our interests with saudi arabia are not less aligned because we don't need them as much as we used to when it comes to oil production. it's that simple. >> these calendar changes are really -- they don't mean anything, but it's a new year, okay, so we're trying to look at what the stock market's going to do for 2020.

and all the stars were aligned for another good year unless something happens and we talk about the unknowns and then the unknown unknowns the middle east was an unknown no one thought we would kill the top iranian general deliberately with a drone as he was leaving -- so, does this qualify if as something no one really thought -- it was not in anyone's calculus, i don't think. >> i don't think, no it's incredibly provocative. the intelligence forces have wanted him dead for a long time and now we've done it. >> 3% from the highs where are we today i don't know if it qualifies - >> something that would hurt - >> something to derail the rally. >> we haven't seen how this plays out yet. >> right it's january 6th >> we're very early. it could -- look, it could go both ways, right we just don't know. >> is this one of the things we didn't - >> yes >> this is. >> don't you think generally --

generally, though, i was on the week before new year's eve one of the big risks -- talking about what could happen next year and we talked about iran's going to be an issue how it plays out-- >> but we didn't -- >> i think we put china front and center before -- >> and iran it was the nuclear deal, what's going to happen with that. that is so far off. >> maybe north korea would have come to mind before -- >> they're abandoning -- >> i'm not sure china still shouldn't be the biggest concern for this year. to your point, look at what just happened and how much market move in equities or in oil not much relative to the level of discussion about how provocative a move this was and the fear of potential retaliation. >> but i think people had a lot of time to sit and think about it over the weekend and to see through the potential -- >> are you okay with stocks set to tam bell? >> are you asking me remember, i'm still at 60/40,

much to the chagrin of my financial adviser, okay? >> and i don't know, for me, when we go, we have these dire headlines and then we go, and netflix stiffed at the golden globes it just seems -- i don't know if it really gets serious, hopefully that won't be -- hopefully we will -- hopefully it doesn't get to the point where we can talk about ricky gervais and netflix. >> to becky's question, people had the weekend to really think about what this means. >> that's why you walk back into down futures. >> right ultimately when i've spoken with traders over the years about north korea, they ultimately -- as a comparison, they ultimately assume kim jong-un is rational and that he wants to stay in power. >> yes >> so, it is not in kim jong-un's interest to launch a nuclear weapon either at japan or the united states because then you would see all the might of the u.s. come down and his reign would be over.

iran is in the same situation. if they were to do something so extraordinary -- >> but they have to do something. they keep talking and revenge seems to be so - >> i would -- okay i would also say - >> he said, we are going - >> but there's also been incredible amount of messaging from the united states when you see the statements coming out of iran, a little wiggle room about whether or not there can be discussions or negotiations when they come out and say, we're not complying with the nuclear agreement. well, that's only when it comes to enrichment. they're still going to allow inspectors it's not a full-scale pullback i'd wait to see -- >> they're probably looking to see what they can do without bringing a full-on frontal attack that's what they're measuring and trying to figure out harder to do with this administration than in the past, i would say. >> yes they also have to manage their domestic struggles, which are

huge they have a very bad economy, which isn't just because of the sanctions. they have self-induced problems, indirect lending they have price controls, ala venezuela. they have a rotten economy, a very unhappy population as we saw from the huge demonstrations in november and december what's their rationale they are rational. they want to stay in power and all their calculations - >> so the rally of troops or causes another arab spring. >> in iran >> i think it's a little of both i don't -- i don't know there's probably more than a million people out there for the funeral procession that's going to happen today at the same time, i'm sure there is deep discontent there as well >> the crowd's three miles long, almost. >> yeah. when khomeini died, the first supreme leader after the iranian revolution, it's believed his funeral may have been the largest concentration of people in one place in the entire world in the history of the world

because so many millions of people showed up for that funeral. >> thank you >> nice to see you. >> you, too. when we return, we will talk about the crisis in hong kong. china replacing its top man in the embattled city we have details on that next. more problems for boeing we'll show you three headlines weighing on the stocks this morning. myww's been an amazing journey. ...it's almost like a challenge everyday to see how well i can eat and still enjoy myself all day long. i wake up every morning to see how much weight i've lost and how much better i look. myww join for free + lose 10 lbs. on us.

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a developing story out of hong kong. china replaced the head of its liaison office in hong kong over the weekend. this is seen as a sign of beijing's frustration with the way of office has handled the crisis luo huining is taking that job he says he hopes to return to the city and make sure the city returns to its right path. breaking news on boeing. they are planning to raise more debt to bolster finances that have been strained by the grounding of the 737 max separately boeing and the faa confirmed yesterday they're reviewing awiring issue that could potentially cause a short circuit. >> on top of the mcast system and anything that happens with that completely separate? >> this isn't a lot of information. it's a wiring issue that

involves a couple of bundles wiring bundles that are too close together i don't know what it controls or anything but it's looking into what it would take to separate them or shield them. i don't know if it has anything to do -- >> it's in the tail, apparently. >> nothing to do with any of this. >> no, it doesn't have to do with mcas. apparently the wires were to get shorted out or something and the pilot didn't realize it, it could create a problem i don't think these are as critical -- i don't want to speculate. >> they're all critical. >> as the mcas situation is. i would think the wiring you could fix. >> do you remember, it was years ago, and there was one of the engines, you know, sort of came apart and it went and one of the wires that controlled whatever it was got severed so that it is pilot lost control they had to address that i would think how many wiring bundles are there on -

>> lots. >> 100,000 or so it's weird. another "wall street journal" report the faa said to be considering mandatory flight simulator training before u.s. pilots can operate the planes again. the faa had rejected this idea just months ago as unnecessary but it's since gained momentum among safety experts mandatory training would mean more costs and more delays for the airlines. >> that goes back to the original reasoning behind this being labeled the 737. the 737 max is pretty different from planes that came before it but because it came in with the 737, boeing could tell the airlines they didn't have to spend as much time training their pilots. netflix, we talk about pivoting from one serious issue to maybe a less serious issue but netflix fell short during last night's golden globe awards scored a whopping 70 nominations but two wins olivia coleman for

"the crown" and laura dern for "the marriage story. universal's "1917" won the best picture for drama category and sam mendes won for best director at&t's hbo won four awards in tv categories disney won three for shows on hulu and fx. golden globe's host ricky gervais is -- well, see the clip right now, took an opportunity to take a shot at hollywood a-listers. >> you say you woke but the companies you work for, unbelievable apple, amazon, google, if i started a streaming service, you'd call your agent, wouldn't you? so, if you do win an award tonight, don't use it as a platform to make a political speech, right? you're in no position to lecture the public about anything. you know nothing about the real world. most of you spent less time in

school than greta thunberg if you win, right, come up, accept your little award, thank your agent and your god and -- >> we should mention tim cook sitting in the audience. they had a cutaway shot of him right before that because he sort of had made a nice comment about apple. there tim cook is. and then, of course, proceeded to lambbas him later in the program, sacha baron cohen was on stage and took a shot at mark zuckerberg. >> what was his shot >> equal opportunity, everybody getting hit. he came out and almost opened as if i was giving an award to "the social network" but related to mark zuckerberg and said, oh, no, that was ten years ago. >> they had to know by inviting ricky gervais what they were in for. >> this is his fifth time doing it he said it was his last time doing it we'll see. it's very funny. i wish they had cutaway shots of

everybody in the room actually during those moments historically jeff bezos has been there. i don't know if he was there this year. the folks from netflix and everybody else the real shot prior to this is what he said about apple specifically is he said sweat shops in china that was the line. >> he got some shots in on everybody, weinstein and epstein. was there a shot at tom hanks? >> i don't know what he was reacting to, though. >> tom hanks was reacting to that, what you just saw. i don't know if we have an image of tom hanks but - >> i read that - >> it was a tough pick. >> i love ricky gervais. i didn't know i loved him. a couple years ago he said something i thought was cruel to some guy -- i forget he said he only regretted one joke he told and it was about tim allen because he introduced tim allen and tom hanks and said, one of these guys is, you know, a producer, a director, a

writer and has his movies have grossed $3.5 billion and the other person is tim allen. he said something like that. he said he regretted that. >> he says before he does his routine, just remember, folks, these are just jokes. >> so is life. he's basically undercut -- i mean, are truer words ever spoken about actors? someone noticed you were pretty in high school so you thought you didn't have to learn another thing since then and now you think you're in a position to preach it was awesome. coming up, culture clash at mcdonald's we'll tell you about the changes the new ceo is reportedly making next

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mcdonald's new ceo is making changes at company, moving away from a culture that we're now, i didn't realize, tolerated partying and fraternizing between senior managers and rank and file employees kind of a weird piece. the journal says the new ceo chris kempczinski is seeking to restore professionalism after former ceo was fired for having a consensual relationship with a staffer. okay, maybe it's addressing that the journal piece describes a culture of late nights at bars and happy hours at the company's headquarters where easterbrook

and another former executive developed a reputation for flirting with female employees a formal complaint in october triggered the investigation that led easterbrook's firing. stocks to watch. this is a great place. the journal reporting bed, bath & beyond struck a deal to sell half its real estate and lease back that space. they will generate $250 million for the troubled retailer. pains me to call it troubled i enjoy our time there. coming up, a banner year for bill ackman. we have new numbers on the turnaround at pershing eautt raht abo istig ahd. through the at&t network, edge-to-edge intelligence

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good morning welcome back to "squawk box. take a look at u.s. equity futures on this monday morning after investors had a weekend now to digest the news in the middle east. nasdaq looking to open down, 65 points down. s&p 500 off 19 points. we'll pivot to some good news. bill ackman's pershing square making a bigcome back in 2019. the hedge fund ending the year up, are you ready for this, 58.1%. it's the first time since 2014 pershing square posted positive returns. those are quite some positive returns. the biggest contributor to those results is its position in chipotle, fast casual chain for 2019 and they worked to bring in the company's ceo, brian and nicole, and he had become the ceo in march of 2018 and

orchestrated the turnaround. >> taco bell. >> the stock up 170% since he took the helm. pershing square first invested in chipotle when it was priced at $400. is that right when all the issues were taking place there were a lot of problems people were having -- okay ackman's last biggest public proxy was with adp two years ago that didn't work out since then the hedge fund manager has kept a low profile >> not normal mexican food problems but something much worse. you have to say, okay, is this something wrong or about average for my - >> no. it was - >> it was much worse. >> it was much worse >> yeah. >> you were davos. i will always have davos >> i don't think the viewers connect with you but that's okay. >> no. i'm just saying. you know when something's wrong. >> as was for you in davos a few

years ago. >> yes and it was a three-month -- you need to repopulate your entire system - >> i remember. i shared a car ride with you. >> with flora and different yogurts and -- don't take it for granted. the bacteria are your friends, the right ones. >> that was sushi that did it to you. >> yes, that was raw -- from benny hannah that is where it was, yes. and, you know, i think about it every time anyway, davos is coming up again. it's like the anniversary. when we come back, we have the latest in the carlos ghosn saga we'll bring you new details around the ousted nissan ceo's escape ♪ ♪

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we are learning much more about how carlos ghosn escaped from japanese authorities are fled to lebanon. phil lebeau joins us good morning >> good morning. he tries to say through a sore throat we'll give you the update with what's going on with carlos ghosn. he's still in beirut don't expect him to leave beirut any time soon. japan has decided to tighten the rules when it comes to people leaving the country. that's what they're focused on

how was he able to get out of osaka, let alone leave the house where he was under house arrest and fly out. an ex-green beret is linked to the escape carlos ghosn will tell his story origin telling his story his exact location in beirut not entirely clear a lot of people are saying, is he at his mansion or at his mother-in-law's? nobody is entirely sure because he hasn't been seen. meanwhile, turkey is questioning the pilots and those who were linked with the flights. seven people in total. they are also checking the plane that carlos ghosn got away on for fingerprints a lot of developments are expected this week, guys most notably hearing from carlos ghosn. >> phil, yao you are a champ >> you have to go home. >> i hope you feel better. >> go back to sleep. >> we have some audio issues or something. >> your mic's not working. >> yeah. something is - >> feel better go back home get some rest.

thank you for making sure you show up for that early morning hit. >> lay off the helium. >> hot water and lemon >> by the way, there was some great reporting over the weekend, some of those journal stories were incredible. the box -- did you see - >> the audio of the box? >> it wasn't a double base >> and then how they decided which airport to go out of because they realized that the security -- because these -- if you have an oversized box at this particular airport for private aviation, they can't put it through a security -- they can't actually put it through the metal detector and given that they think it was a low terrorism risk for a private aviation, they don't wand it or force people to open it up, which they're supposed to do but this seems like a s.w.a.t. team -- >> yeah, there were holes drilled in the bottom for him to breathe. >> he had a team of people, 15 people travel willing back and forth to japan to look at all the different options, ten different airports to figure out

where they could do it, where the vulnerability was and decide this is how they were going to do it,it's pretty extraordinary. >> it is let's bring in crisis management expert eric dessenhal. you see how we're learning month are about this you hear the stories coming out. and your take as a crisis management executive is what >> my take is there is no way that you can separate the escape from the legal strategy going forward. you know, normally in the corporate defenses i've worked on, there's a lot of nuance. a judge goes before a jury and says, according to sorkin versus quick, you cannot prosecute this particular charge. and one by one, something is either knocked off or a jury acquits on it. >> why are - >> i'm not prosecuting her i'm not prosecuting her. >> well, i - >> i have no reason at the moment. >> you mean you're unfamiliar with the esteemed case of sorkin versus quick

>> sorkin versus kernen, i understand sorkin versus quick is harder. >> but here's the thing. the thing is, what this strategy will come down to is an unusual one, which is one of audacity. you could call it the shawshank defense. yes, i escaped from prison but i was wrongly accused. and the prison and the prosecution was medieval >> well, he's basically already said that, hasn't he >> that's right. but that -- it's very difficult after an escape like this to go back to legal nuance and so what i think you'll see in his news conference or whatever he does is a very audacious, high-concept, swinging hard very back at this. there's good and bad news here the bad news is people tend not to be very sympathetic to ceos the good news is there is a real dislike of hyperactive prosecutions and where i've seen strategies like this work is when you can make the argument that a

prosecutings was draconian his audience here is not the general public it is prosecutors, it is judges, it is juries they have to really understand in a clear wyoming this prosecution and imprisonment was unholy >> so, there is risk for carlos ghosn. there is also risk for the japanese government. if he's going to come out swinging and say, look, this is their -- their justice system is unjust i was never given the opportunity for a fair trial i was never treated properly and i was wrongfully charged what is the risk for japan on this and how aggressive are they going to be with going after him and allowing this to continue to stay in the headlines? >> the biggest data point that i've seen, and i don't know -- i can't verify it, is that 99% of prosecutions like this end up in conviction that is a very disturbing statistic. and what i'd be looking at if i were representing japan is whether or not that is a true

statistic because if it is, it's very difficult to make the argument that that is fair i mean, the average person, even people who don't like ceos, don't like hearing that 99% of prosecutions end up in convictions and may very well, able to flip the villain here to the victim and that's what you do in cases like this, where everybody looks at these things, who's the victim, who's the villain. and so japan is going to have to defend -- is going to have to defend against that. >> what do they do what's their move? >> their move is they have to show precisely why this is not an unfair system to a defendant. and i don't know what their data points are there. >> basically, this entire case is going to be litigated in the media from here out? >> well, to the extent that -- look, you can't separate a media defense from a legal defense and something high-profile like this this is not something you can do exclusively in a court because judges -- one of the first

things that happens when you tell a jury, don't read the internet or the newspaper is they google the defendant. so, you're going to see a media strategy here and it's going to have to be something that is communicated in terms -- >> but, eric, here's the thing that i don't understand. >> okay. >> ultimately, even if he were to win in the court of public opinion. let's just assume he wins in the court of public opinion. it's still going to be very complicated for him to ever, i would imagine, be very hard to leave lebanon in the future. >> i agree with you. >> once he goes to another country that has extradition, whether he has the public support or not is almost beside the point. >> it is beside the point. >> because the japanese will call whomever the country is he's in and try to haul him back there. and if you believe if justice is fair or not fair or the fact he escaped unto itself, how long a sentence that unto itself carries -- >> well, the first thing you

have to look at when you are an attorney or crisis manager is what is the best achievable outcome? not what is the best fantasy outcome is so, in a lot of cases i've worked on, the best achievable outcome is an acquittal. it is not the restoring of a reputation and so, to me, the best case here is that he is unable to be prosecuted or he is unsuccessfully prosecuted in certain regions. the objective here is not a restoration of his -- of reputation or a return to being ceo of a company >> all right eric, i get the feeling we'll need to talk to you about this more as this continues. >> oh, this is a fun one this is a fun one. >> we'll be watching we appreciate your time. coming up, democratic candidates reacting to the moves in the middle east we'll bring you what they said and have their latest fund-raising numbers we'll tell you where they stand and what it means for the first caucus later this month. do you believe that? >> announcer: don't forget to

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2020 candidates announced the fourth quarter fundraising hauls for 2019 president trump's in the lead with sanders coming up second. several candidates announcing their best hauls of the campaign cycle. joining us for a look at the impact, the latest numbers have on the 2020 race, stef kite, axios reporter covering the election i have a fundamental question, stef, do we compare president

trump's haul with the individual democratic candidates, or what i've seen done is, you add up all of the democratic candidates, compare that to what the president has raised and that looks like a democrat advantage? which is more relevant >> i think both ways of looking at this are important. it's important to see of course that donald trump has significantly more money on hand to help his campaign and this is before we even have a democratic nominee. that's going to give him a head start and advantage and important to pay attention to. as you said, that doesn't necessarily mean that the democratic nominee who eventually wins the nomination won't have significant funds to combat donald trump in the end i think it's also important to look at donald trump is outpacing obama's re-election fundraising as well, which is a significant point that puts it in a different context but shows how much the president has been able to raise for his re-election and that's also during an impeachment

proceeding >> okay. money is important nobody is going to raise as much money as michael bloomberg can spend or as tom steyer can spend probably and those guys are below single -- i mean -- i think i have a higher possibility of being the candidate. is it all about money? >> of course like you said, of course money is important and it helps candidates in a crowded 2020 field to last longer in this race, but as you said, money is not everything and, you know, you look at the national polls where joe biden consistently has been at the top and he doesn't raise money as much as others you look at andrew yang outraised amy klobuchar but yang has not qualified to participate in this month's debate which would be a significant moment for him. as you said, money does help, it helps keep these candidates going for longer, but it's not going to decide the candidate. >> mike was on last week, alan,

i tried to make him as uncomfortable as i could he loves that. i'm going to ask you a funny question, what did bernie raise? bernie raised a lot, right >> he did. he raised i believe it was $34 million last quarter. >> $18 apiece was the average. and the biggest group of people contributing to him were teachers, right? so are all the teachers teaching our kids to be socialists and communists, do you think is that something -- will you ask mike, if he could address that question? >> i'll ask mike when i see him later today if he has an answer for you. >> should we be concerned at all that the teachers are the ones contributing to -- maybe not i don't know maybe it's not a big deal. >> i don't think it necessarily means that all of the teachers are democratic socialists per se, but i think when you look at bernie sanders' fundraising he has a very specific way of fundraising and is really good at gathering support from the

people who feel forgotten in a lot of ways, people who feel like they're overlooked. >> people that don't have four houses like bernie. >> exactly >> i feel you. what's up. you're back. you're back. there's been no one here, becky usually just smiles. she doesn't, you know, take it personally do you have anything do you got anything? >> minor correction. i think he only has three houses, not four. >> really nice ones. hedoesn't have as nice one as obama, the one in martha's vineyard is nicer than any of bernie's. >> stop it we all think people like steve schwarzman have proposed fabulous programs to not even tax teach percentp there's lots of things -- >> i was doing this for mike alan thank you. >> thank you. >> doing it for trump? what does that even mean >> coming up, when we return, we're continuing to watch the markets closely. stocks sliding this morning as

middle east tensions escalate and later, a report over the weekend giving new details over incentives that new york city offered amazon for its hq2, including potentially paying some employees' salaries i want to say the story was a bit misleading stay tuned to "squawk box. we'll talk about that in a moment i'll get that later. dylan! but the one thing we could both agree on was getting geico to help with homeowners insurance. what? switching and saving was really easy! i love you! what? sweetie! hands off the glass. ugh!! call geico and see how easy saving on homeowners and condo insurance can be. i love her!

. stock futures pointing to another day of losses as middle east tensions continue to escalate the latest on what it means for your money straight ahead. >> google parent company alphabet gets an upgrade the analyst making the call joins us live. s.a.l.t. sends snow birds flocking to the south. a look at which states are attracting new income. the second hour of "squawk box" begins right now ♪ good morning bond market to "squawk box" right here on cnbc i'm andrew sorkin and becky quick and joe kernen we do have some red arrows after

investors spent the weekend trying to digest the news in the middle east. right now the dow looks like it would open down about 184 points right now. s&p 500 looking to open off about 19 points and the nasdaq down about 65 points we'll see where things are headed in a little bit, joe. >> markets moving this morning as tensions between the u.s. and iran reach some new heights after the air strike that killed iranian general qasem soleimani. eamon javers joins us from washington. >> the united states facing fallout both in iran bracing for potential reaction there and in iraq, bracing for the political fallout after the iraqis voted to remove u.s. troops from that country over the weekend in terms of iran, mike pompeo, the secretary of the state, suggested on "meet the press" over the weekend that the united

states is ready for any action the iranians might take. here's what he said. >> the american people should know that we have prepared for this, that we are ready. >> we're going to talk a cultural -- >> that our responses are lawful and that the president will take every action necessary to respond should iran decide to escalate. >> the president backing up that warning with some tweets over the weekend including this one in which he suggested that the united states just spent 2 trillion dollars on military equipment, the biggest and by far the best in the world. if iran attacks an american base or any american, we will be sending some of that brand new beautiful equipment their way without hesitation meanwhile in iraq, the nbc news is reporting that u.s. ambassador to iraq is scheduled to meet with the iraqi prime minister today they'll discuss the future of the u.s. military presence in iraq the prime minister is expected to tell the united states to leave that country president trump responding to that late last night on air

force one telling reporters that the united states will effectively send a bill to the iraqis for the cost of u.s. air bases and facilities there if they push the united states out of the country and done in a way he doesn't like, the president suggesting the united states will slap sanctions on iraq that might be tougher than those on iran some fallout there diplomatically between the united states and iraq and then bracing for any response here by the iranian side guys >> okay. thanks monday, i don't know, you know, see how long it takes for some type of response, i guess we're expecting. so many different possibilities, i guess. >> the iranians vowed revenge and suggested they would take it out on american military sites but a lot of experts have been worried about a cyber strike that might be a response here. they just got through the funeral process over the weekend and we'll see whether they're prepared to do anything here or whether they decide to sit

tight. >> thanks. markets remain in focus for the next segment amid all the geopolitical concerns. bring in paul, co-founder of bespoke investment group and david, five-star bond portfolio manager at new fleet asset management which has $10.7 billion under management if i need to, can i hide somewhere with you, with fixed income or am i setting myself up for disappointment >> i don't think so. last year we derisked the portfolios based on relative value. the trade in leverage finance was up in quality double bs in high yield and leverage finance. we have a lot of powder dry, we switched to the consumer we reallocated and diversified from corporate riskses to go into areas which will be less sensitive to geopolitical risk like asset backed securities and jumbo mortgages backed by the consumer >> is it a year we have to worry aboutprinciple risk because of rising rates or no

>> with $11.2 trillion of negative rates around the world rising rates will be muted the range on the 10-year treasury we're looking at 175 to 2.25, unless we see a breakout with the u.s., trend growth around 2%, moderate inflation, a fed that's on hold, central banks very accommodating >> return of your principal us must a little bit. >> selectively we're finding opportunities in some of the fallen angels, so, for example, in high yield, a company like teva that has opioid exposure, generic pharmaceutical company. >> what does that yield? what can you get there for a yield? >> yields on a double b are about 8.5. >> if you can find some -- >> wow. >> obviously they're case by case and i think more than ever be, the selection is extremely important because if you have a bond down 30 points, if you're

getting coupon plus a little difficult to make that up. loss avoidance. >> there have been concerns about corporate debt, the amounts and concerns about what could happen to some of those things do you worry about any of that. >> absolutely. you have to do your homework vintage deals done in 2016/2017, probably over 60% have missed their targets, so we have to -- you have to do your due diligence and look through the credits. that's why active management is so important you don't want to buy an index in the more esoteric sectors last year you would have owned energy, an underweight for us, overweight to triple cs. we overweighted double bs. active management is more important right now. >> the reason i was talking to you, it would be nice to be able to have part of your portfolio in something not exposed to the stock market, so paul, you're neutral on the markets right now, equal number of pros and krons. is that what you said in january of 2019? >> so in january of 2019, we were coming out of the fourth

quarter, weakest fourth quarter in years and the weakest december what history, the precedent talked about good years in -- good years following the first quarter and after, coming into january of 2019, i think our biggest mistake was that typically markets have always retested when you've seen that type of pull back and we didn't necessarily see that this time around you have to adjust and -- >> do you ever get long throughout 2019? >> yeah. we were long. >> really long you could have done 30% if you just -- >> yeah. >> if you got out of your own way. >> if we were fully invested we would have done great. we added exposure throughout the years and once we started to see the uptrends, to the point of what david was saying, back to what you were saying, about being neutral, equal number of pros and cons is that doesn't necessarily mean neutral, what's to stop us from having an average year in the market and an average year in the market is high single dijtss to low double

digital returns. not to say an equal number of pros and kons makes us look for flat equity returns going forward. to what david was saying, if we see the 10-year between 1.75 and 2.25 throughout 2020 it could be a good year for the stock market the fed being loose going forward throughout 2020 is great if we do see inflation rise and interest rates start rising higher than 2.25 that's a problem for the equity markets that's not the base case if we see rates steady that's very good for equities. >> if you could know one thing about whether to stay long or fully invested, it would be the range of the 10-year all this other stuff we talk about, geopolitical and unknowns, if you knew where rates were going to be you would stay long and get high single digits >> i'm not an expert on the middle east by any stretch and won't pretend to be, but over

the last -- i mean my entire lifetime -- >> an election coming up and impeachment and all kinds of -- >> middle east has been a tinderbox and especially over the last three years we've seen multiple headlines over the last several years where we're being told we're on the brink of war north korea two years ago didn't materialize. if you panicked about the headlines then you would have missed out on a lot. i think you have to put these headlines, you know, could something really flare up and get bad here possibly, but that's been the case forever that hasn't materialized i think using that as your base case isn't probably the way to go here. >> could -- if there were something in the middle east would you think it would be oil that would derail things or do we make enough here now -- you would have to think about oil too. >> we're the swing producer. the state of texas produces more oil than iraq, venezuela and iran combined. >> is that true? >> yeah. 3 million barrels a day. for us, exactly, if i think oil is going to rally, i could play

some subsahara africa countries like angola or guiana, the high yield market we could look at some of the energy names, but again, you have to do your credit homework because a lot are exposed to natural gas. >> these equity guys have nothing on you you have more stuff you can think about. >> sectors in the bond market. >> stuck with fixed incomes and boring yields -- >> emerging markets look so good you're not envious of paul >> i'm envious of david. >> that's unbelievable 2% yields >> angola bonds. what should i buy over there triple -- >> what would i be buying? >> triple a in angola real triple a >> absolutely not. >> it's single b. >> obviously you have to take credit risks but if you do it diversified you can make money in fixed income and being a multisector guy i can go where i feel there's value. >> have you back

it's always like we have the fixed income guy, we have a fixed income guy too that was very interesting. thank you, david paul, thanks. >> thanks. >> when we return, other corporate headlines moving markets this morning and a check on some key commodities. later, amazon's deal for hq2 with new york fell apart because of activists and city officials. but some new numbers show how much the state was willing to pay to get the company's business details straight ahead "squawk box" will be right back. i can. the two words whispered at the start of every race. every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries) it is humanity's official two-word war cry. words that move us all forward. the same two words that capital group believes

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welcome back to "squawk box," everybody. let's take a look at some of the commodities on the move this morning in the wake of those rising tensions with iran. check out gold prices first up gold on friday hit a four-month high posted its eighth straight positive session, longest winning streak since june of 2019 and it's up once again today. trading up another $27.5 to almost $1,580 an ounce check out oil prices which spiked on friday as well both wti and brent saw their best daily performance since december 4th and hit their highest intraday level since april of last year this morning, those commodities also moving higher brent right now up another 1.6% to $69.69 a gallon -- or a barrel wti $63.88 a barrel.

and you can see that's gain of about 1.3% finally take a look at currencies this morning. the yen has been seen as a safe haven where a lot of places -- lot of people have been trading into right now the euro down against the dollar right now, it's trading at 111.96. >> coming up when we return a lot more on "squawk. what wall street analysts are expecting from facebook and amazon and names flying under the tech radar alphabet getting an upgrade this morning. we'll speak to an analyst who made that llca "squawk" returns with that and so much more after this. we're carvana, the company who invented

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. welcome back to "squawk box. got a story for you, i think it's overblown, but new york city offered amazon more than three quarters of a billion dollars more than was previously known, this according to the "wall street journal" and offered to pay some employee salaries to coax the tech giant to locate its hq2 in the city. this according to as i said the report in the journal over the weekend. lots of people making hay of it and discuss, joanne lipman at the institute of advanced study and ed lee, both are cnbc

contributors overstated, understated, interesting, this was bigger than we originally knew. >> but when i say overstated, to me at least, this is one of those things you do to get people to the table, if you will, and also at a time when hq2 was going to one city, not two. >> not two. >> right. >> it was a bit of a -- the reason i say that is because instantly, the critics jumped on this story and said look at how irresponsible the city of new york -- >> they were willing to giveaway the farm to lure in big business the bigger point is, you lure in big business, you just get a bigger tax base. that's the whole point you're not giving away, you're getting potentially 20 plus billen >> not a fight from me, but a fight from joanne. >> no. i totally agree -- >> what's wrong with you people? >> this is an overblown story. i'm sorry. newark was offering $7 billion, right. maryland was offering more than

new york i think to me -- >> by the way, the critics therefore say look, amazon was willing to come here for a lot less anyway, so really the money had nothing to do with it. >> well -- >> that's what aoc would say. >> to a certain extent. >> amazon based their -- setting up shop at hudson yards goongds hire 1500 more people. they were going to do it anyway. >> manhattan is not the same as long island. >> and 1500 is not 20 or 30,000 employees. >> but the most interesting part of that story to me was that so much of the incentive was to try to actually get amazon to come out of new york city and particularly upstate central new york, you know central new york, cornell grad, you know, you look at rochester or the hudson valley and that was interesting to bring amazon beyond new york city in new york city it's already becoming a tech hub. we have something like 20,000 tech workers. >> so when you go against the

crowd and when you're right about something finally -- >> thanks. >> you feel so -- why do you feel so uncomfortable? the critics are so loud in your ears you think maybe -- >> i don't think he feels -- >> you ask her -- how could either not be on your side. >> you should argue -- >> why are you arguing -- >> you mentioned 20,000 tech workers, i mentioned a "new york times" piece i saw that said the 20,000 -- >> you are reading it again. >> yeah. no, it's on twitter. on twitter either one interchangeable. >> okay. >> but that the 20,000 facebook, google, high-tech workers in new york city with these high-paying jobs are actually detrimental to new york city because they're exacerbating income inquality and making the city less affordable -- >> that is an argument to be made. >> you don't want high paying jobs to come to new york city? >> you want infrastructure to rise at the same rate -- >> you -- but no, you're connecting so many bizarre dots

to some kind of income -- >> we want high paying jobs in new york city. that's a stupid -- >> an argument -- >> talk to your editors -- >> the issue that's missing in that argument about high-paying jobs is, if you're going to have high paying jobs you need infrastructure so everybody's boat can get lifted and figure out a way -- >> why is it - >> hold on -- >> so that teachers, policemen, firemen don't have to live across the bridge -- >> okay. >> and 30 and 50 miles away from here to actually survive. >> so you'll have a bigger tax base from the 20,000 workers with the high paying jobs to do some of those things >> but -- >> how do you do it -- >> you're against a lot of other things -- >> i don't -- >> don't start putting up -- don't change -- >> a -- >> how do you know i'm against rent control because i am, but how do you know? don't start throwing -- >> don't start throwing it out. >> my point is that if you're going to have -- going to make the argument -- >> you need money to spend money. >> 100%. >> did you see the new moves that san francisco is taking now

against airbnb because they have decided that airbnb is part of the problem with the housing issue there because people will hold on to a lot of properties they can make a fortune renting those properties out on airbnb so the new requirements are that it has to be your primary or your primary or secondary residence before you're allowed to rent it out. >> not just san francisco. >> i had not thought about how that must be adding to it. not that it's why you see the out-of-control housing cost. >> we have a house in hudson valley and the local newspaper and the lead story airbnb, they want to do the same regulation. >> you reamed that poor congressman that said that long island city was not affordable for anyone if amazon got there -- >> that is ridiculous -- >> what is -- how are you going to make sure -- >> the same time you have to figure out ways to create affordable housing -- >> more government to do everything -- >> frankly on affordable housing you do i don't know of another solution for that i wish i did >> we're building these

million -- >> is it that hard to get here from queens? everybody has to -- >> look, if you're okay with a fireman and policeman and everybody else not living where -- >> i'm not sure how -- >> that creates a really -- a much bigger problem. >> i don't think they're allowed to move too far away you have to be within a certain area. >> that creates another issue about community. which is to say that, you know, if you want a cohesive community, you need people to be able to live there of all -- >> you need enough of them as well. >> but you already have that issue, the income inequality issue. i think the argument for bringing high paying jobs to new york city it will increase the tax base and you can use that for education and you can -- by the way, they're not all high paying jobs. >> i know i do -- >> short hills is fine. >> like all the actors that fly to the golden globes from palm springs on a private jet are you willing to sell your multimillion-dollar place to make it -- or rent half of it to some people to some firemen and

policemen? >> that's not what i'm looking to do right now. i don't think -- >> the argument for every multimillion-dollar -- >> bill gates to contribute all his money to the government to -- >> i'm willing to go where there's a lot of land in new jersey and free up some -- >> if you care about teachers -- you say you care about education and teachers you need to find them affordable housing. we have to talk about the golden globes because they opened up with a feisty monologue. >> ricky gervais. >> roasting hollywood and talking about newcomers to the movie scene including apple with tim cook in the audience listen to this. >> apple rode into the tv game with a morning show, a superb drama. yeah a superb drama about the importance of dignity and doing the right thing, made by a question that runs sweat shops in china so you say you're woke but the companies you work for, unbelievable apple, amazon, disney, if i isis

started a streaming service you would call your agent, wouldn't you? if you do win an award tonight, don't use it as a platform to make a political speech, right you're in no position to lectures the public about anything >> what do you say >> yes he's absolutely right. but -- and by the way, apple didn't win anything. i mean last night was very, very interesting because as we know, going into it, netflix was supposed to dominate. >> had the most nominations. >> but what do you make, though, of the point that ricky made, and i -- >> shouldn't be making political statements because you're here just for the money >> i was going to say something different, do you think that the hollywood class that these companies have to appeal to get them into their projects, are going to use their voice, whether ricky gervais wants them to use their voice or not, to push back on any of these companies eventually there was a face, i wish we had the cut away, of tom hanks after

this comment. >> probably the best reaction face of the night i thought. he had this -- >> i wonder whether tom hanks would call up a tim cook or end up calling up a -- >> can you move -- >> say look, i want to do business with you but -- i don't know they don't -- they haven't done this to disney i don't know if you think disney is in the same category. >> you know you had these guys up there talking about climate change, a whole variety of these actors up there talking about that but i don't -- >> apple is probably the best of that group by the way. >> in terms of climate change. >> your point being that for decades and decades actors have used their platform to talk about these big social issues. some might argue dill la tant issues you say go where your money is coming from. >> hollywood has such a short attention span think a year ago at the golden globes, all the women wore black because they wanted to talk about sexual harassment. this year one of the big winners

was quintin tarantino one of the major collaborators with harvey weinstein and no talk about sexual harassment. it's a short -- >> tom hanks cecil b. demille accepting that like he won the nobel peace prize. so pretentious. >> are you going against tom hanks? >> how could i oh, my god he's barack's best friend. i would never dane to do that. >> barack obama is -- >> i think tom is. >> it's all political. >> joanne, ed, thank you, guys. >> how could anyone say anything about tom hanks? >> we have stocks set to tumble as tensions with iran continue to hit the markets the latest on what is moving and what china is saying about the w tuation. dofures down by about 160 points "squawk box" will be right back. , this gets my undivided attention. you take a lot of trips to the caymans, phil? pretty great, right? oh phil's legally dead. fell off a boat. going by denis now. celery. long story.

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beijing urging calm as u.s./iran tensions escalate. markets in asia moving lower you're back, eunice. >> that's right, joe so china is urging restraint for

all parties and today, the chinese foreign ministry said that beijing would take relentless efforts to salvage the iranian nuclear accord the ministry also added that the u.s. was -- should not abuse its force through military interventionism and also it dismissed president trump's threat of sanctions on iraq, calling them wanton. this is separate to another report that china is supposedly now thinking of sending a delegation to washington starting on monday, this would be a four-day trip, ahead of the planned signing of a trade deal with president trump the "south china morning post" said the delegation would be led by premier liu he and pushed back its travel plans which they thought were going to be earlier in the month after president trump tweeted the signing would take place on january 15th the team was apparently caught off guard according to sources

that president trump announced a date and that president trump would himself sign the deal because the expectation had been that this was going to be signed on a ministerial level, that trade representative robert lighthizer was going to sign it with vice premier liu he the chinese state press has been suggesting that president xi would not be signing, but that it wouldn't really make so much of a difference, that seems to suggest that the chinese would want to have a deal signed and at the time -- the timing matters more than who is going to be there. but the messaging, guys, i think would be interesting to the chinese public because if they see president trump signing a deal with the vice premier, the optics of that to the chinese public is that the u.s. was more desperate for a deal than china. >> thank you by the way, now that you're back, i know it's 8:30 p.m. but you still think it's morning,

just based on your recent travels? >> yes yes, i do. i do i'm very jetlagged right now but still perky and interested and engaged. >> they said, come on in, when you got back they weren't watching last week, i guess, when you were on "squawk box" >> no. it's you, not she. >> okay. >> eunice, thank you we will see you again soon. for more on what's next with the u.s./china relationship and an exclusive look at china's fourth quarter gdp welcome leland miller the ceo of china beige book be international, great to see you eunice started talking about china's reaction to iraq and iran and what's happened there my guess is, china must be at least breathing a little bit of a sigh of relief they are not number one on the president's attention, on his list right now? >> good things happen for china when they're not the focal point of trump's anger this is a great thing. they have a baby trade deal they

will sign and the whole world is worried about the middle east again. this is very well scripted from beijing's point of view. >> talk about the fourth quarter gdp for china that you've been tracking very closely. how did it fair? >> well, we don't have an exact breakdown of how gdp is going to look, but we know the dynamics behind it and what we saw was actually a relatively smoother path in the fourth quarter than we thought manufacturing looked better, services looked better but there's three key developments that undermine our confidence going into 2020, future demand, new orders are falling, credit is much more active than i think people are talking about than beijing is admitting because you're seeing much more credit going in for much less of a result and then, of course, you know, you're looking at a scenario in which a lot of these dynamics are not going to play into 2020 the same way they are now. a lot has gone into

manufacturing, a lot has gone into services, retail, and you're not seeing the oomph from the policy support. >> you were surprised that the fourth quarter seemed to do as well as it did in china? >> yeah. but part of that was the comparison basis when you are basing it off q3, weak in our data, basing it off the fourth quarter of last year, which was extraordinarily weak in our data, you have a basic that makes it look better than it is. the main dynamic here is that things are not falling apart and you may get a sentiment boost from the trade deal but you're not seeing any type of real expansion. firms are not active right now you're not seeing that despite the fact that so much credit is going in the economy right now. >> do you think we've hit a trough right now >> the beginning of the year will look better doesn't mean they're not going to report the gdp numbers slightly less. one of the things they like to do is smooth it out. they don't report big jumps and

falls and that's one of the ways they sort of smooth out the data i think the course is clear over the first few months of the year. >> what should we be paying attention to over the next several months >> credit is probably issue number one you know, china right now, too, it has to make a big decision. they have the trump tariffs at least the possibility of a huge escalation mostly off the table right now. you know, they have an economy that's smoothing out, global economy is not looking too bad overall, and so they have to make a decision whether they accept lower growth. if they accept lower growth and when they start the restructuring, start the reform, some of these structural changes, if so they'll allow slower growth because for the first time in a couple years the course is clear. there's a policy decision to be made here whether they will accept that going forward. we don't know yet. >> leland, thank you good to see you. we'll talk to you soon. >> thank you coming up when we return, a look at some of the names on the

move ahead of the open on wall street we are headed lower at the moment show you the futures the dow off about 142 points right now. s&p 500 looking to open down about 15 points, and the nasdaq looking to open off about 51 points "squawk" returns right after this a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

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welcome back to "squawk box. i'm dominic chu with a look at some of the notable morning movers as markets overall are in negative territory bucking the trend you have shares of smile direct club which are higher by around 8% or so in roughly 100,000 shares of premarket volume the medical technology company specializing in dental aligners announced a new slate of oral care products available for sale exclusively at over 3800 walmart locations driving the news here. the initial rollout will include electric toothbrushes, teeth whitening systems, future plans for toothpaste, water flossers and others those shares up 7.5% next up shares of boeing down around a percent or so, roughly 40,000 shares of premarket volume the giant saw a number of headlines this past weekend regarding possible wiring problems in its 737 max jetliner this morning, "the wall street journal" is reporting that boeing might look to raise money in the debt market to the tune of around $5 billion to help

cover costs related to that jet's grounding. we will end on shares of apple which are down by nearly a percent or so premarket, roughly 208,000 shares of premarket volume, not exactly being helped along by downgrades over analysts at needham a buy after being a strong buy before. it raised the price target to 350 to 200 citing valuation after a tremendous 2019 performance. those shares on the move joe, i'll send things back to you. >> dom, thanks google parent alphabet getting an upgrade or being upgraded joining us on the newsline, michael levine, research analyst at pivotal research. some of this doesn't seem that new but i guess you're significantly bullish on the cloud business under thomas? is that the bottom line, michael? >> i would say twofold, joe. one, you know, probably the bigger catalyst from my perspective was seeing the regime shift under, you know, sundar pa chi and it happened

right at the end of the year but you had a filing with the sec about, you know, about sundar's compensation package and, you know, this is one of the first times we've actually seen alignment with respect to, you know, with respect to senior management and actually how the stock price performance. if you just look at this company historically, like there's been this real general aversion and cultural norms set under the prior leadership of we're not going to really hold hands, you know, with the street and we're basically going to kind of do what we want to do, beat to our own drum and their defense, they've built an unbelievably good business. if we look forward, and, you know, i'll get back to your cloud question, because they're sort of interrelated, if you look back now, you see what amazon has done in terms of disclosure, alibaba, netflix, i think if you're sundar you're saying to yourself, like what -- you know, what basically is my

regime and the footprint i'm going to put on things when i see something like this, what i'm really hopeful about, i am very bullish about cloud. tom kerren a superstar out of oracle, i think he's moving everything in the right direction. we did take our numbers up for 21 and beyond on cloud, but, you know, the rub is, until you actually get disclosure that you can be count on as opposed to these occasional signposts that the company has provided, where we told you revenue run rate at the end of q4 '17, they did so in q2 of '19, if you get the disclosure people are savvy and they can see that this is fundamentally a very attractive margin business. they've seen aws as your comp. you know, folks would laud them pretty gratuitously. a lot of it, at least on the fundamentals, is around cloud.

>> i just -- i was giving you the benefit of the doubt that it was going to be the cloud. your most important point is that the ceo's compensation is more aligned with how the company does now, therefore the stock will go higher they will court the street more and do the guidance philosophy for earnings and the change to capital allocation for larger buybacks those were all things that the previous regime felt were evil and since they do no evil, shareholder appreciation tied to ceo compensation, was not aligned and that's your reason for upgrading the stock? it's interesting >> i think it's -- look, it's part of it i mean i would say threefold we're very encouraged about the duration of the core advertising business, even without -- >> that's your third part. we didn't mention it. >> without even -- >> like the energizer bunny, keeps going and going. >> my sense is we'll look back

on '19 as being this watershed year with regards to cloud, even though it's not really where the revenues are beginning to take off. my point is, when you have these -- when you have these opportunities to go ahead and reset the dialog with investors and you can help them understand, so let's take, for example, netflix covered by my colleague jeff woolercheck if you didn't know how much they were losing in terms of international, at this point it's gotten positive, and you just had one reported number, like you would have no idea how to make sense of why are numbers moving in the wrong direction. when you can see the two of them, you can say okay, i get it, like i understand and maybe i don't think that margins ultimately get to the u.s. levels, but i can basically model that and make sense of it. my sense is that they're probably running the cloud business at google at around 0% margins right now, kerren has made a number of pretty senior

hires, his lieutenants in place, he made a comment earlier to the "journal" this year basically saying he thought their salesforce was 10 to 15% the size of aws and azure and he plans on being half of their size, you know, in terms of head count in two years from now. >> okay. >> so like, if as an investor you can be actually see that versus saying well, i kind of think this is how much the margins are and i can do some back of the envelope math, is very different from i understand what aws is doing, i understand what core allibaba is doing and something that has been applauded by holders we had written once basically pachi had announced to be in this role, but when we see that compensation agreement filed, i mean to us this feels pretty obvious. >> okay. >> we have a price target based on 12.5 times 21 ebitda, i mean

if they start following the path of their peers i could see that multiple being higher. >> wonderful michael, thank you pivotal research, thanks coming up when we return a millionaire migration continues to low tax states the futures at this hour, we are in the red as investors digest the news of what's taking place in the middle east, focused on iran tensions this morning. raig aalrom washington is so sththead here on "squawk." i can. the two words whispered at the start of every race. every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries) it is humanity's official two-word war cry. words that move us all forward.

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millionaires flocking south for more than the winter robert frank joins us now with more hi, robert. >> good morning, joe florida attracted more new residents and income in 2018 than any other state, while new york was the biggest loser florida netted $16 billion in adjusted gross income in 2018, up 3% according to the irs, makes it the sixth year that florida ranked at the top. now arizona ranked a distant second and texas and north carolina the biggest loser was new york which saw $10 billion in income leave the state. california lost $8 billion followed by illinoisand new jersey now 2018 was the first year that the new tax law took effect, capping state and local tax deductions but it may be too early to tell if it's had a big

impact immigration or migration out of new york slowed in 2018 and connecticut had the average income loss. the average loss leaving new york is rising at $120,000 a year the bigger reason people are leaving new york is affordability. the top state for people leaving new york city was not florida, but new jersey, because as you know, there's more affordable space out there. >> plenty of room. >> you think that -- >> don't come. >> do you think this gets to the point where it forces some of the blue states, some of these s.a.l.t. states to change their own taxes, their tax systems, if it doesn't get changed on a federal level, you have to lower taxes at some point? >> we head into this year, new york has a $6 billion deficit and they are already talking in the assembly, my sources say, of perhaps another tax, a new tier for income tax of 10.3% for those who make more than $5 million a year that would bring us above

california, which is 13.3%, if you live in new york city. you would think it would go the other way, but, in fact, every state, whether you look at california, new jersey, connecticut, talking about higher taxes in 2020. >> robert, hold that thought we're going to continue this conversation for more on the s.a.l.t. impact, bring in our guest joining us right now is seth hanlan, center for american progress action fund senior fellow, joe griffeth, heritage foundation institute for economic freedom and opportunity research fellow. as you listen both of you, and i'll go to seth first, listen to robert talk about this and specifically the idea that high s.a.l.t. states like new york, like california, are actually thinking of imposing even more taxes, not less, what does that say to you and do you think that the rationalization -- i was going to ask robert because you may have a view of this, are they rationalizing to themselves that the people moving out are not moving out because of -- for tax reasons? i will go to seth first. >> that's probably right i think the data shows that over

time i think we really need to look at these new numbers in perspective. i don't think they're telling us anything meaningful about the tax system. >> why do you say that >> because let me give you an example. let's say a doctor in new york retires and moves to florida, which obviously there's -- happens all the time, that income is going to show up as leaving new york right. but the income in the migration data, but the patients in new york are going to find another local doctor that income is going to stay in new york new york's economy is still growing. there are people, you know, coming into the workforce, people whose income is rising, and, you know, so the overall gdp, the overall tax base of new york, grew substantially in 2018. >> let me ask you, seth, hang -- let me ask you, robert, in terms of the pace, though, of people leaving, it's going up, correct? >> no. actually, last year the pace of decline, the pace of people migrating out, declined. so that's why a lot of people were expecting the s.a.l.t. tax

to have a big acceleration on migration out of new york. it didn't. we didn't see that but i would say, revenue should be stronger given where we are economically and it doesn't take a lot of very high earners to leave the state to impact the budget, which is why partly it's medicaid spending but we have a $6 billion problem going into this year in new york. >> so okay, joel, that takes a little bit of the wind out of the sails of the argument, though, that i would imagine you would be making, no? >> no. here's two reasons why number one, capping the s.a.l.t. deduction be at $10,000, we have to look at what that was in exchange for this lowered tax rates across the board meaning income learners from the middle class to the wealthiest saw a net tax cut. if you look even in new york district 10, which is new york city, and those are some of the biggest users of the s.a.l.t. deduction, the high income earners saw a net tax cut because this was exchanging that

big tax subsidy for left wing big spending city governments, exchanging that for lower rates. second of all if you look at the data, i don't know what data my counterpart is referring to, but if you look at census data, bureau of economic analysis data, all the data shows for decades there has been a flood of people from states like california, illinois, connecticut, and new york, to much better manage governments across arizona, and across florida. no surprise if you look at arizona, you're spending under $4,000 per capita per year per government compare that to new york where you're spending $9,000 per capita, no surprise people are fleeing those high tax regimes and it's not just retiring doctors. it's families. >> it's not clear the data suggests that. we're going to run out of time why don't we agree that seth and joel will come back, you're going to come on back. >> yep. >> we will do this conversation either another time later this week or in the next week or two.

it's not going away. >> no. >> thank you appreciate it. thank you for your patience. >> sure. thank you. when we come back the escalating tensions in the middle east, market reaction to that is next. later, a squawk exclusive interview with peter weinberg. the news of the morning. the state of the economy and much more. "squk x"ilbeig bk.awbo wl rhtac created by apple, not a bank. with a better way to track where you spend. a new level of privacy and security. daily cash you get back every day. and no fees. not even hidden ones. oh, and if you happen to be somewhere that doesn't accept apple pay yet, there's this. nice. that doesn't accept [ ominous [ hissing ]ng ] mirror, mirror on the wall... ♪ makeup mode! [ verdera voice mirror ] done. start happily ever after playlist.

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stock futures under pressure we're seeing red numbers across the board as investors try to gauge the impact of last week's killing of a top iranian commander. >> weight loss and stock gains the ceo of ww international formerly known as weight watchers will join us as the company kicks off its busiest time of the year. a rare interview with one of the biggest names on wall street peter weinberg will join us to talk markets, m&a and his firm's involvement in wework. the final hour of "squawk box" begins right now.

♪ good morning and welcome to "squawk box" here on cnbc from the nasdaq market site in times square, i'm joe kernen and becky quick and andrew ross sorkin futures down 160 points on the session, down 15 on the s&p 500. 57 on the nasdaq friday worsened into the close people didn't really want to hold positions, obviously, over the weekend with what's happening and no one knows what iran is going to do or what we're going to do at this point. did not bounce this morning, but have bounced from the lows treasury yields, the bond market has been rallying, the dollar as well on some of what happened. gold as well and oil, all moving on these geopolitical events. let's get you our top story of the hour. the fallen escalation of the killing of a top iranian commander. good morning >> yeah, good morning, andrew.

that fallout happening in iran and iraq the administration dealing with the consequences of its decision last week to kill that top iranian general who was operating in baghdad the president and the administration warning iran not to escalate in its response. secretary of state mike pompeo was on "meet the press" over the weekend suggesting that the united states is prepared to handle anything that the iranian attempt to do. here's what he said. >> the american people should know that we have prepared for this, that we are ready -- >> we're going to target cultur cultural -- >> our responses are lawful and the president will take every action necessary to respond should iran decide to escalate. >> the president amply fig that warning on twitter over the weekend suggesting that the u.s. military is in a position to respond. the president saying the united states just spent 2 trillion dollars on military equipment, the biggest and by far the best in the world if iran attacks an american base or any american, we will be sending some of that brand new, beautiful equipment

their way and without hesitation meanwhile, in iraq, nbc news is reporting today that there's a high stakes meeting taking place between the u.s. ambassador and the iraqi prime minister that expected later on today they're expected to discuss the future of the u.s. military presence in iraq the prime minister is expected to tell the united states to leave the country in the wake of an iraqi parliamentary vote yesterday. all of that comes as the president suggesting now in response that he would send, in effect, a bill to the iraqis for a u.s. military base there if they force u.s. troops out and threatening sanctions against iraq, saying these sanctions could be bigger than those that have been imposed on iran if the iraqi government forces u.s. troops out of the country in a way that the president doesn't like a lot of moving parts here we'll be tracking all of this throughout the day the president has no public events on his schedule today, but he is back in washington after his vacation in florida so

he is back at the white house monitoring all of this today guys >> thank you very much for more on this and what's been happening with these escalating middle east tensions bring in kaream, he's carnegie endowment senior fellow. it's great to see you today. >> thank you great to be here >> we know things have been escalating, watching what happens. how do you think this all plays out? >> well, as we see, we've seen in the past with major events in the middle east, it will take years to really measure the impact, but i think there's two certainly short-term strategic implications number one, the nuclear deal with iran is all but dead. president trump hoped to get a better deal with iran and perhaps even have a summit with iranian leaders along the lines of what he's had with kim jong-un. that is 100% dead. it's not going to happen the second implication is that president trump had hoped to get out of the middle east and reduce america's footprint in the middle east. the assassination of qasem soleimani is going to necessitate an even greater u.s.

presence in the middle east to protect a very vulnerable allies like the gulf countries, saudi arabia, the emirates, israel, from iranian retribution in some ways this move by trump was inimical to the strategic objectives he had in mind. >> you had a publication how ali cha meaneny became the most powerful man in the middle east. is he still today? >> i think iran's supreme leader is the most powerful man in the middle east and what i said about him is that, you know, he had a sword in qasem soleimani that allowed him to project power throughout the region. one of the things which is commonly misunderstood about regional dynamics is the fact that iran is a shiite country and nearly all shiite extremists from india to lebanon are willing to go out there and fight and kill for the islamic republic of iran if you look at sunni countries like saudi arabia, almost all

sunni extremist groups like isis and al qaeda want to overthrow the government of saudi arabia so the huge advantage that iran has over all of its regional adversaries it's the only country in the recentgion whichn harness religious extremism in its favor. >> what about iraq and the vote in their parliament to try to force the united states out? how do you think that plays out? >> i know a lot of these senior iraqi politicians and they're in a terrible spot because privately they don't want the united states to leave iraq. they realize that it's far better for iraq's future economically, politically, to be allied with the united states and they view the united states as a key ally in the fight against sunni extremists like isis, but iran is their neighbor and during times like this, iran is able to mobilize forces in iraq in a way that united states

isn't because america no longer wants to send thousands of its sons and daughters to serve in iraq i think iraqi politicians are in an impossible position, but i know privately, they don't want to server a server all ties wit the united states. >> how does cha meaneny measure this >> i think you framed it well, which he has to calibrate his response this was such a momentous event for iran that he has to respond in a way that is forceful or else they risk losing face but with the erraticness of donald trump they have to be careful how they respond my sense looking at the last 40 years of iranian history is that they generally ascribe to that old adage that revenge is a dish

best served cold, that there's going to be a series of proxy attacks on the united states and u.s. allies over the course of the next many months, it's not just going to be in the middle east, but perhaps throughout the world. >> why would that not provoke a response from the united states given what donald trump and mike pompeo have been saying? >> you know, one of the things which iran has managed to do quite effectively over the years is operate via proxy these days, their proxies are using drones, so it adds another layer of deniability so i think if there's an incident somewhere in asia, in africa, even if it's an attack on a neighboring country, place like the united arab emirates coming from the houthis in yemen who use a drone, i think president trump is going to be himself in a very difficult

position in the year 2020 because on one hand if he doesn't respond to iranian provocations he looks weak, on the other hand i think president trump has said publicly his base doesn't want another conflict in the middle east and he's fearful his base could abandon him if he starts another war in the middle east i think the iranian regime is very motivated to make donald trump a one-term president they feel like they made jimmy carter a one-term president with the iranian hostage crisis of 1979 and i think they're going to try to put trump in a similar -- >> what would they have to do though >> i'm sorry >> what would they have to do? to the extent that you -- >> taking notes? >> i'm not taking notes, joe i'm asking because -- >> i think jimmy carter had a lot to do with his own -- >> curious about -- >> a misery index of 26 didn't help. >> well, the hostage crisis, which was a daily humiliation of the united states which lasted 144 days, broadcast on a nightly

basis, i think -- >> helicopters crashed into each other when we tried to free the hostages too >> exactly. >> humiliating. >> let me set up kind of a plausible possibility, which is a drone from yemen, from iran's proxy in yemen, the houthis, hits the airport of dubai, which is one of the busiest airports in the entire world now, a key hub of global commerce for asia or the middle east or for africa or parts of europe, how does the united states respond in that instance i think many regional allies are concerned that trump is not going to stick his neck out for them >> thank you for your time today. >> thank you coming up, when we return, a rare interview you don't want to miss with one of the biggest names on wall street weinberg partner ceo peter weinberg will join us why he sees resill generals for the markets this year working with wework in a time of crisis and

so much more as we head to a break, take a look at futures, we are in the red. the dow looking to open off about 180 points right now ayp 500 off about 18 points. st tuned you're watching "squawk" on cnbc i'm part of a community of problem solvers. we make ideas grow. from an everyday solution... to one that can take on a bigger challenge. from packaging tape... to tape that can bond materials to buildings... and planes. one idea can unlock a breadth of solutions. at 3m, we are solving problems that improve lives. one idea can unlock a breadth of solutions. our retirement plan with voya gives us confidence. they help us with achievable steps along the way... so we can spend a bit today, knowing we're prepared for tomorrow. wow dad, do you think you overdid it maybe? i don't think so... what do you think, peanut? nope! honey, do you think we overdid it? overdid what? see? we don't think so, son.

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box. the futures right now indicated down almost 200 points we were down 200, down 150, back to 186 on the dow. the nasdaq indicated down 65 and change and the s&p down just under 19 crude up 61 cents at $63.66. gold prices have been hitting a series of some new intermediate highs. not quite 1600 yet, but today 1578 this morning. want to talk more about the markets, what's ahead for them this year, m&a and so much more. we're joined on set by a special guest, peter weinberg is here, he is the founding partner and ceo of perella weinberg partners and joins us for his first broadcast interview since becoming ceo of the investment bank that you founded. you didn't have that title originally back be 14 years perella weinberg announced more than $1

trillion in m&a volume and we don't have this out, we should have gotten it, i wrote this story about you guys, and there was a picture when you guys were standing with the ladder in that picture when you were first opening up the office because it wasn't even finished at that point. >> it was -- i believe it was entitled "great expectations". >> great expectations and you lived up to them let's talk about the markets right now. you spend a lot of time with the ceo community in the corner office and in board rooms. given what's taking place both in the markets, but maybe more geopolitically, do you think that's going to have any impact on confidence right now? >> it has to it certainly will. but i must say that one of the things that i've noticed in the last, you know, five, ten, 15 years is that board rooms and chief executives are so much more accommodating of risk and almost comfortable with risk because, you know, the days of calm waters have been over for so long and so, you know, i

think there's, yes, of course, it will effect how people think about things, but i've really been a proponent of this resiliency theme for some time and i felt that before the events of friday. >> right. >> but i feel that now, even though the market is off today and it will be very volatile i feel there's going to be a resiliency in the market unless we have a crisis like we did in 2008, i actually think that markets will behave quite well. >> but in particular, you think the markets will see -- i don't know, i don't want to say see through what's taking place in the middle east right now, but there's still concerns there, there's concerns about oil prices ultimately. >> of course. >> aramco, which was financed and supported by so many wall street banks. >> all those things are -- and others, are big concerns today but if you look at the amount of opportunistic capital in the world from the private equity firms, from sovereign wealth fund, from corporations

themselves. >> right. >> it's -- there's a lot of that capital that's very opportunistic and it's kind of mindset. a lot of people think things are overvalued now so i think once things start to -- >> if everything is overvalued no one wants to touch it or do you think everyone has too much confidence in these moments? >> it depends. it's all over the place to be honest with you. i do think that there's still m&a activity even at these high levels s&p is 18 times next year. still very active. >> where do you think the regulatory community -- it feels like the big companies, big tech, but across the board it's going to get harder to buy things, right? >> yeah. it's a big change. i mean before years ago, i would say that regulatory equation was sort of an execution matter. now, first of all takes a lot longer before it would have been six to seven months on average of regulatory approval. now it's, you know, 12 to 16 months >> right. >> and the regulators are not united at all. they're verydivided.

so you've got -- right now google and facebook are being looked at by doj, ftc and all the attorney generals or certainly new york and california it's not a coordinated effort like it used to be it makes it quite difficult. >> it seems that in a lot of times the federal regulators at this point are going up against the state regulators, and i don't know where that leaves companies trying to determine who to appease. >> it's very challenging and the whole state regulator sort of presence now, i mean it's most visible of course on t-mobile and sprint, but it's very different and - >> and cars too. >> yep. >> the autos. >> i want to ask you about one of the high-profile deals or at least companies you've been working with, which is wework. we've been reporting on wework practically, you know, every day for the past several months. you worked with a special committee. this is -- >> we did. >> this is after adam neumann was ousted. >> we were hired -- our firm was hired by the special committee

of the board of wework to advise them on finding a financing solution, and, you know, for all the reasons that you've mentioned, i mean it was really complicated situation. there was, you know, it was under the public microscope like nothing i've ever seen there was a change in perceived valuation very significantly through an ipo filing. >> right. >> and you had a founder and a ceo who left the company for all those reasons it was complex to say the least. >> right. >> i would say that having gotten so involved in this, andrew, is that it's -- the core of the business is a really, really good business, actually >> really good business that's worth $15 billion or $5 billion? >> well, i think -- >> or less >> what softbank has said we're a long-term believer in this business and we know it's going to be worth a lot more in five plus years so they made this enormous investment in support of that. i'm just saying that actual business model, how they think

about space, which i didn't know before we got hired, i just -- we sort of began to feel and now feel quite strongly -- >> what do you make of the idea, though, that the only dare i say i'll get in trouble, the only girl to really show up at the dance if you will, was softbank, to double down on its own investment i know that there was talk that jpmorgan and others were -- around the hoop, but sounds from the reporting i've done they really weren't a genuine cover bid, and so what does that say about the business that nobody else saw that -- saw value in the company the same way at least that wework or softbank did? >> there was a process, for sure there were a number -- there was lots of capital looking at and interested in wework various different forms from common equity to preferred equity to credit, et cetera. there has been interest across the board. but softbank was already a

investor in the company, already owned about 30% of the company and they made a decision they really wanted to back it and they're believers. >> but i guess the question everyone has asked is, were they throwing good money after bad? >> or protecting the previous investment >> listen, softbank is an incredibly sophisticated smart people they've seen lots of different growth investments overs the years. they made a decision to invest a lot more money in this company because they think it's going to win. >> what was -- what's the lesson, though, of wework? one of the other things that's happened is a function of this ipo going wrong is that it feels like the ipo market has fundamentally shifted? >> yeah. i don't think so really. that was the -- around the time this was happening, i think there was a great question about whether or not, you know, ipos were appropriate for growth enterprises of this profile. i actually don't agree with that i think the ipo market is a very strong alternative and a very attractive alternative for a lot

of growth companies so i think it will continue. >> you think it continues, but i guess the question, though, is, do you think there's been a shift in the mindset of investors about the type of valuation that they're willing to ascribe to companies that lose money and therefore the business model shift that some of these companies will have to undergo and the valuation change that will take place? >> this has happened so often over the years the pendulum has swung and the pendulum is out quite far in the context you're talking about, in that the bar is higher, in terms of profitability, governance, in terms of growth. >> but this time it actually happened, though, in the private markets instead of wading into the public markets which i would argue is a good thing because it means the retail investor didn't get left holding the bag on any of this. >> the markets were working in a way. basically that was the decision the public markets formed in its own unique way here, was not to proceed. >> is it tougher in the private markets now as a result? >> i think that the bar that i mentioned earlier, profitability

and growth, also applies to the private market don't forget these businesses start as small, little businesses, series a investments, and, you know, that's a different planet from where the company ended up into what due do you think about where prices are in the private market, because people like warren buffet told us they think it's much more expensive to try to buy a full company in the private markets or public markets and own the entire company rather than buying stocks right now >> yeah. i wouldn't have said that private market valuations were higher than public market valuations i think they're -- >> he's said when you try to buy an entire company in the public market that premium you're paying is so large, that it makes owning stocks, portions of the company, look much more attractive. >> yes that's by definition true. that's by definition true. furthermore, this is a different topic, but one of the interesting things that we're seeing in the whole activist space is on your point, becky,

is private equity firms considering taking positions in companies as a constructivist, not unsolicited or uninvited so they don't pay a premium, they can use the enormous resources of that enterprise, i know tpg, for example, is thinking about doing this, and i think that's a really interesting idea because you get the resources of that entire enterprise to help in some cases a board and ceo to achieve change and they're sort of a reference shareholder. >> tbg is considering doing that with who >> they're in the marketplace thinking about it. >> i want to have you weigh in on the business roundtable and the shift that is taking place with words, i don't know if in action yet, when it comes to the idea what a company is built for, this purpose versus profit argument dan schulman, paypal a client of yours, in here around the just

capital announcement, but do you think it's more than words and do you think people are making decisions that will impact profits in the short term? >> well, first of all, i don't think it's either or one of the interesting things i've found on the -- when dan was here with paul jones is the group of 100 companies who they've outperformed they were ranked high in this and they outperformed. i don't really think it's either or i think it's a significant move and i think it's going to -- i think in five years it's going to be a completely different landscape. one of the things that we're talking about is this public benefit corporation, this delaware designation of a company that means that you have a devotion not just to shareholders but all your stakeholders right now, there may be one public company that's a public benefit corporation but we're talking with people a lot about that and i actually think it's quite significant. >> interesting >> the ceo of that company, i'm

forgetting who it is. >> you have to come back and we have to do this again. >> thank you for having me. >> thank you it's great to see you. 14 years later great to see you i've seen you a lot since then but the first time here, so thank you. >> thanks. when we return, how technology is helping to drive the business of weight loss and wellness in the new year ww international ceo mindy grossman will join us in just a few minutes. she'll talk about winning new customers as 2020 begins and her company's expanded relationship with oprah which made headlines this past weekend. stayun u' watching "squawk box" here on cnbc apps are used everywhere...

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we want to get back to our top story the global fallout from the u.s. killing of a top iranian general late last week richard engel joins us now with more from the ground in iraq good morning, good day, richard. good to see you. >> it's good to see you. first let's start out with what's going on in iran. these are the biggest demonstrations, funeral processions that this country has seen in decades. iranian state tv says there are millions of people who have gone out on to the streets to mourn the top general who was killed in a drone strike here in iraq by the united states they're actually the biggest

demonstrations since the death of the islamic republic's founder, ayatollah khamenei. we're hearing more promises from iranian leaders including the slain general's successor that there will be acts of revenge, but no specificity provided. here in iraq there is the fallout of the political decision the iraqi parliament voting yesterday to request that the government kick out u.s. forces, there are about 5,000 u.s. troops here, but there is a constitutional question whether the parliament, whether this current prime minister, who, in fact, resigned in november, has the authority to expel u.s. forces it may at this stage be a symbolic vote, but that is certainly the direction that things seem to be heading. a lot of people here, a lot of

shia in this country who are the majority think that united states, president trump, overstepped his bounds, that the u.s. is now treating iraq like a personal playground where they can come and carry out assassinations or targeted killings orhowever you want to describe the action, when the official reason that u.s. troops are here is to fight isis, not to fight some proxy war with iran >> right and what is the iranian explanation for why the general himself was in iraq, was for what, richard? >> well, it's pretty clear the iranians haven't given it an explanation, but it is pretty clear what he was doing. this iranian generale, qasem soleimani, was responsible for managing a network of militia groups all around the world. this network formsthe outer coat of armor if you will that

has protected the islamic republic and that is a network of militias in lebanon, hezbollah, the network of militias here in iraq and there are a variety of shia militia groups the iranian general was killed while he was with a top shia iraqi militia leader iran also has networks of supporters in syria, in yemen, in afghanistan, and now this outer protective layer feels very threatened and is mobilizing and is calling for vengeance. we're getting a sense of what kind of response they are envisioning. they say that their main objective is not to attack american businesses, american civilians, or even american individuals, they say that specific objective they have, what they think is the appropriate response, is to drive american forces out of the

middle east starting with iraq and that is not surprisingly why you saw that response from shia members of parliament calling on their government to expel american forces from this country. >> richard, thank you. we appreciate it we always like seeing you. something is always up when we're seeing you i would like to say we would like to see you again, but usually it's not under great circumstances but thank you for being over there for us. coming up, much more on the markets. futures down as we get ready for the first trading day of the week stay tuned you're watching "squawk box" on cnbc today's big number 21 million barrels that's how much crude oil moves through the straits of hormuz every day. more than a fifth of globaoil l consumption.

ww mindy is here, ww international, partnered with oprah winfrey in 2015 when it was still known as weight watchers though you can see the stock has had some turbulence since its highs in 2018, up more than 85%

over the past six months and up more than 400% since the oprah partnership was announced. as 2020 begins, the company is banking on expanding that alliance joining us mindy grossman ceo of ww international on this 2020 vision tour and you said that you didn't specifically look at me, but you did invite us to come to the tour and i was explaining that acceptance is one of the first, i'm resisting, but acceptance is one of the first steps. >> it is we say everybody has a why what's the why that all of a sudden says to you, i need to do something for myself >> yeah. >> i think that's what everyone's going through it's consciousness, it's awareness and then it becomes engraved, behave change. that's really what this tour is about, is, you know, is there this weekend, 15,000 people for eight hours, galvanized around this idea of intention and purposeful reappraisal of your life and what you want to do for

yourself it's this idea of the combination of self-care and self-responsibility that people have and i spent a lot of time just looking at people's faces, you know, and it was laughter and crying, but in most of it it's radical reappraisal and people were walking out and for us, i know they're going to walk out it's not just touching those 15,000 people, it's what those people are going to do once they have left. >> how much of it is beginning of the new year and that's when we all have some reassessment of -- >> look it's pavlovian you're coming into the new year and it's such an important part of the year, and that kickoff, you know, we launched our newest program ever, my ww on november 11th and it has resonated in every market the whole idea of it is customization and personalization around what program right for you, appeal to

existing new and lapse members it's been our most popular program ever so we're really seeing that resonate and, you know, that's what's exciting to go into 2020 with momentum. you mentioned we had a softer start to last year, but the team has done an incredible job of galvanizing the business since then we with ended q3 at 4.4 million members, the highest ever in q3 for the first time, we announced we were over ten months retention and we've raised guidance three quarters in a row. i was also thrilled to end the decade with the tenth year of "u.s. news & world report" number one for diet and as much as we have now built primarily through the integration of all our technology and what we're doing in the field, an ecosystem of well being, we're never going to abdicate our leadership in healthy weight loss built on community.

>> so business question slash news you can use for all of us at the gym yesterday, a lot of us are good until about march, right, and then we seem to fall off the wagon. this is a churn issue in your business what is the trick to staying on and what's the trick for your business to keeping them on? >> so it's about engagement. we talk about retention a lot, but what the team is -- teams are completely focused on is how do we keep people engaged. we've invested significantly in the technology, particularly around personalization, we built our third tech hub in toronto, a.i., et cetera, how do we know when you're starting to fall off and how do we motivate you and give you those incentives and it's like anything else, part of it is game, the psychology of how do you stay motivated. >> there's a thing called the band athletes -- would you get

into that business >> we have a big focus on sleep. we actually finished a pilot, you will be hearing a lot more about that from us, for us it's less about a device and more about what do you do >> right. >> but sleep, stress i think you're seeing, ces is going on right now, health and wellness is their fastest growing category. >> we get up at 3:00 and you're back >> i'm looking at him. >> very difficult. used to be about appearance. it's not it's about psychological and -- >> we use the expression healthy is the new skinny. not to be flippant. >> what else is a zero egg -- hard boiled egg -- >> there are three programs and on the purple program there's over 300 zero point foods that includes whole wheat pasta, grain, et cetera you get matched to the program that's best for you. you might be purple. >> i might need a purple -- >> you need to take the

assessment. >> eggs are good >> eggs are zero. >> you can have them any time. >> what i like to say is -- >> i know how to make them perfectly. >> on ww you can eat anything, you just can't eat everything. >> okay. all right. all right. i need 12 steps. the first step is always -- >> the first step is acknowledgement. >> higher power -- >> you have to get your mindset into i want to do this >> all right all right. >> i have a trainer. that's what you need to get through march. >> well -- so yes, you can have a trainer, but -- >> i have to show up i'm paying him money. >> 70, 75% is about nutrition and then certainly you want the activity. >> all the food. >> it's all food, joe. >> that's the problem. i'm going to get a cinnamon roll thank you. >> abs are made in the kitchen >> hopefully i will see you in brooklyn. >> abs are made in the kitchen. >> we will bring you up to speed on three new developments from boeing including a report of a potential wiring issue with the 737 max, unrelated to the mcat

system shares of the plane maker under pressure the broader markets are under pressure "saw%. down by about 1 quk box" will be right back. that bought gold in 2005 2005 and even now many experts predict the next gold rush is just beginning. so don't wait another day. physical coins are easy to buy and sell, and one of the best ways to protect your life savings from the next financial meltdown. today, the us money reserve is releasing official gold american eagle coins at cost. for the incredible price of only $154.00 each. these gold american eagles are official gold coins of the united states, and are being sold for only $154.00 each. pick up the phone and call america's gold authority us money reserve, with nearly two decades in business, over $1 billion in transactions, and more than 500,000 clients worldwide, us money reserve

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call now to purchase 1/10th ounce gold american eagles for the amazing price of only $154.00 each. . lots of cool gadgets in vegas. the biggest health care investing event in the year. what to watch. deals. >> the companies with revenue growth this quarter are going to do exceptionally well. >> "squawk box" is live in davos. >> the countdown is on for the federal reserve's next big decision on rates. >> oil stocks bounce rates go up, a direct listing craze will peak. >> three predictions for 2020. welcome back to "squawk box. take a look at the futures we are in the red this morning after investors trying to digest a little bit of market anxiety around what's taking place in the middle east and the risks ahead. the dow looks like it would open

down about 185 points right now. the s&p would open off about 19 points and the nasdaq looking to open down about 62 points. three big news stories on boeing, including plans to raise new debt, a wiring issue, separate from what we've been talking about, and other safety concerns, and the faa is reviewing all that and potential plans for mandatory flight simulator training for pilots. joining us on the newsline to talk about the stock impact, carter copeland, who we go to from time to time, founding partner and u.s. aerospace and defense analyst, he has a buy rating and a $521 price target carter, it's 2020 now, so all the things that we talked about with boeing, all we were talking about -- well that won't be until 2020, now it is 2020, give us a chronology of what to expect next? anything new today in this news

that changed your viewpoint? >> yeah, joe, look, i think the change in the calendar doesn't really change a lot in the process here the company is at a point where they're telling the faa and other regulatory authorities, you know, we'll do whatever is deemed necessary at this point to get towards certification as you can imagine, there's a lot of work under the microscope trying to get to the end of that process. as you go through the news reports over the weekend, i think what you'll find is pretty consistently the company is sort of in the mode of let's do whatever it is it takes to satisfy, you know, what safety requirements are deemed necessary by regulators. you know, i don't think moving be into 2020 changes much of that for the stock the question is, how long does it take to return to normalcy and what do the numbers look like out there ultimately that's where the market is going to go.

>> of the things that we heard today, which one of them, does anything change the game the wiring issue, doesn't sound like this is going that's going to be close to the 737 max issue, right >> yeah. look, i mean the aircraft itself is, you know, as i said under a microscope for any aircraft, if you went back and reviewed, you know, everything with a fine tooth comb, i think you could find things that are deemed risky, but what the aviation community relies on is statistical data, you know, and safe operation over thousands and millions of hours, and so you can identify potential risks and assign probabilities for those posing a new problem for the aircraft what's comforting about this process is it's putting together a very rigorous assessment that should make the plane, you know, a very safe aircraft on the back end. now what do you worry about here

from a stock market standpoint, i think what you worry about is all of the -- this activity continues to signal that the process just continues to drag on and move, you know, the targets that we thought towards return to service to the right >> all right carter, thank you. we appreciate it. >> thank you. >> 329 today near the lows. thank you. we are under an hour away from the opening bell on wall street mike santoli is here and he has a look at the relationship that we should be watching in the markets. mike, good morning. >> yeah. certainly one of them, becky, the story has been clear for the last couple days, oil and gold up, stocks down, a pretty textbook kind of geopolitical gut check we've gotten over the years. this is a longer term look at stocks versus gold versus wti. five-year chart. stocks have done a whole lot better they are a trending asset. companies build value over time. the other two are commodities. a couple periods like 2017 where they went in inverse directions. stocks up and you had crude

down, gold basically doing nothing. but other periods when obviously oil and gold moved in tandem, oil and stocks moved in tandem, gold is moving also on the fact that we have zero real bond yields right now because inflation is low. lower. so i think the point being here, there's no static rigid relationship among these things, and right now, we had a stock market that came into the year essentially priced and people positioned for clear sailing, and we had a little bit of a flutter that's interrupting that process but i wouldn't necessarily say that just because oil is going up for the wrong reasons arguably, it means that there's a lot decisive that will mean for the uptrend in stocks at this point, guys >> mike, thank you joining us for more on the markets is serat sethy from douglas c. lane and associates sirot, mike is right, this is a flutter at this point what we're watching in the markets. how do you determine if it's more than that >> it's hard to determine right now whether this is going to

dissipate or the volumes increase over time we are at an interesting time where the market s we've had a great last year, earnings season is about to start, so investors are pretty skeptical about the earnings season coming in to today or into the next couple weeks. markets are 18 times earnings. they have to show they caught up to the pe exchange at this point when you get something like what's going on in the middle east, first thing investors are doing is cutting back their exposure and that's not natural and our view is we're not selling into this but we're looking for opportunities, because that inevitably happens. >> you're not buying right now either, you're fairly cautious about this >> fairly cautious i think the opportunities could come pretty fast and pretty quickly. especially as we -- >> talking about a pullback. >> a pullback of high quality companies or pullback of sectors that shouldn't get hurt but can. oil goes up, transportation sector comes down, high quality, airlines like united, delta, they're pretty cheap now they could get cheaper because that's what a lot of the investors sell

>> is that, is the inverse of that true, too, if you see energy stocks start to pick up because oil prices are higher that you don't trust that either and you wouldn't get into it >> it's a short term we actually like energy. we've been buying it for the last year. i think what you have to stick with energy is high quality energy, with really strong balance sheets a lot of investors are picking energy without really looking at the quality of the companies a lot of these companies have huge debt in them, so really pick your spots, but i do think if prices stay higher, a lot of the energy companies will do better now and the future. >> what about the really bigifies like exxonmobil or chevron? >> they're index plays more like eog, pioneer and picking like a schlumberger, eog, exxon we own chevron 4% dividend can be in that but if you quote the alpha, it's the other players in the energy to play with. >> mike talked in the last couple of weeks about the

momentum as we were headed into the end of the year and we started this year. no matter what happened prices seemed to keep going up. this issue we're watching right now unfold in the middle east, is that the type of thing that puts an end to that and we see the reverse or are we just wait and pause and see what happens next >> i think it's a wait and pause. all the news used to be on the trade issue, we used to talk about that >> china has disappeared from the headlines. >> 2019. >> but in a week, something could come pretty quickly. >> the signing coming up >> if the signing doesn't happen the way we want it, phase two, et cetera. so there was a lot of money chasing some of these i think the beta momentum stocks we talked about the last couple of weeks, that's the gives me pause because it'snot really chasing earnings it's chasing just i want to be in the right names and that's where value comes into play this year, financials are still cheap but you have the treasury pull-back, so investors will

quickly look and say where should i be? the momentum will be bulls will sell quickly, algorithms come in if you're an investor and a 30% year last year, look at where your allocation is if you met kind of your allocation and now you're overweight, bonds really aren't giving you anything but it's better to take some money off the table and wait or just be in your objectives, don't chase markets just for the sake because momentum's behind it >> sarat, good to see you thathat, thank you. >> i found out i was overweight. >> i wasn't talking about you. >> keto diet want to get to the new york stock exchange jim cramer how are the investors digesting the news since friday? >> look, i think there was a really good line underneath you for people who understand the whole concept of what goes underneath, can we shrug off gold and oil not today.

we can't shrug them off today. let the market come down a little bit i don't think with an overbought market and so much greed and so little fear that this is the level you want to start buying let it come in, andrew let it come in >> let it come in, and talking about letting it come in, you saw the news about boeing over the weekend, it continues a pace it's like a never-ending stream of bad news. has it changed your view >> well, i've not been positive on boeing. >> i know. >> because of a belief they can't get control of the situation. maybe when calhoun comes in they can. andrew, what it says is where is your crisis manager? where is your guy who whispers why do we have to cover this thing and pick up any newspaper and find out something new about wiring and software. i mean, what the heck? i don't get it this is just so poorly handled

>> jim, we'll see you in a couple of minutes on "squawk on the street." we're right back after this. a , your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

welcome back, ervel. it's an important day on "squawk box. ♪ happy birthday >> i made it to 8:58 i'm subtracting a year every year now who else on january 6th, the epiphany, darrell from "walking dead" norman reitus, eric trump, happy birthday to eric trump rowan atkinson, that's a bonus, bean henry kravis >> happy birthday. >> eddie redmaine, sid barrett, founders of pink floyd, vic vabak from alice, i'm really digging here danny thomas and khalil jabron, you know that guy? wrote "the prophet" not about marcus lamonis, but the actual the prophet, the famous thing.

look how wide that is. >> that is a thick tie >> happy birthday. >> they come in fast and furious as you see and get faster and faster, thank you. >> happy birthday to make sure you join us tomorrow "squawk on the street" begins right now. ♪ ♪ ♪ i've been feeling it since 1966 man ♪ ♪ might be over there but the feeling's still ♪ good morning and welcome to "squawk on the street," i'm david faber along with, ajim crr and carl has the morning off futures as we get ready to start the trading for this week, half hour from now, you can see we are headed for what is going to be a down open, and that's where our road map starts as well as you might expect on the geopolitical risk for stocks futures as you just saw pointing to what would be a second straight drop at the open, plus oil on the ris