>> hd. >> via comcbs. >> that was on the list we talked about earlier >> reiterate sun corps which we talked about last week we continue to see the market come off the lows of the day. dow down 50 or thereabouts that's it for us "the exchange" starts now. yes it does. thank you. welcome to "the exchange." i am brian sullivan. here's what's on top the u.s. and iran battling out in a war of words with both countries making big threats will the war of words become a war of war we'll look at the most likely scenarios. the market seems to think it will stay just talk, maybe call this the teflon market no matter how tense the geopolitical situation is getting, investors, they don't seem phased. we're going to explore why and holy schnitzel could europe be the best moneymaking opportunity in the world right now? that's ahead rapid fire, as well. so much to come. we begin with the markets and

numbers. happy new year >> good afternoon, happy new year, brian. we are off the worst levels of the day. the s&p 500 briefly turned positive we're back in negative territory. the dow currently on track for its second consecutive day o losses geopolitics, the u.s.-iran conflict certainly front and center for investors as they try to assess the risks there. take a look at energy. that's certainly been a part of the story. and a standout for the market today, as well as on friday. oxidental petroleum, piner natural -- pioneer natural, all seeing gains of 1% to 2% interestingly we saw oil gain around 1% in early trade but look at wti crude. negative on the day. best friend crude up .16% and gold as part of the risk-off tone is higher by $13. back to you. >> all right thank you so much. we'll see you in a bit all right. the iran crisis continues to escalate following the u.s. air strike which killed iran's top military leader. iran now says it will abandon the nuclear deal and will no longer abide by any uranium

enrichment limits. in the meantime, iraq's parliament has called for all foreign troops to leave the country. president trump pushing back, threatening to bomb 52 targsz inside of iran -- targets inside of iran. the president threatening more sanctions against iraq and a bill for billions of dollars to them if troops are forced out. more on these developments with michelle caruso cabrera and michael greenwald, former u.s. treasury to kuwait and qatar great to see you both. michelle, you have been to both countries. what is your likely expectations for iran's threat of some retaliation? >> they're going to try to do something, but i think the conventional wisdom that it's going to be something big and dramatic as a show of force, i'm not so convinced general david petraeus gave an interview over the weekend to "foreign policy" magazine and raised a very big question -- is it possible that this actually works as a deterrent to iran because they had been doing step by step, ever bigger attacks against our allies, et cetera,

and there have been almost no response from the united states. we finally shifted their thinking in terms of what we would do under president trump >> you know, michael, there was an attack on the u.s. embassy, at least an attempted attack on the u.s. embassy in iraq we forget that we also seem to forget that the iranian general was not in iran. he was in iraq what the hell was he doing there? >> well, brian, he's been there quite often. this has been a major departure for u.s. policy to kinnetically strike the iranian leader in general. i think going forward this is going to be key for the u.s. away from sanctions, more to strikes. and iran's going to go through its own inflection point, it's unifying its country there's a renewed sense of nationalism. we're calling for a completely new inflection point for the u.s. and iranian policy going forward. >> we need to remember, though, both countries are themselves in political disarray the prime minister of iraq basically being impeached, forced out the energy minister of iran, he

continues to be impeached inside of his own country there's a belief that maybe some people are not hard-line enough. >> sure. >> how does the political calculus internally in each of the countries affect what they ultimately may or may not do >> there's a renewed sense of nationalism as a currency. i think you've seen that over the weekend. you've seen how the morning in iran that there's definitely a sense that you're seeing the factions all unify around each other. i think in iraq, iraq needs iran for electricity. so it's going to be important going forward to see how that economic relationship grows and expands and whether the united states maintains waivers for the potential sanctions going forward. >> important to not overstate, though, the vote, for example, that happened in the parliament in iraq over the weekend a big show that supposedly they want u.s. troops out when you look at how the voting went down, all the sunnis voted for the u.s. troops to leave the sunnis and the kurds boycotted it i mean, it's the analog of impeachment here in the united states it went straight down political

lines. they are a country that's very much divided to your point also, iran is constrained by its internal politics remember how many hundreds of protesters they killed in november and december due to uprisings because of the economy. by the way, more than 500 dead in iraq in the latter part of last year because of the internal protests going on because of their economy >> michael, do you believe president trump's threats that they will, that we will potentially do more actual, you know, attacks inside of iran >> well, i think everyone is calling for a deescalation i think this strike is a major departure. i think other countries are reading the tea leaves - >> was it a merited departure? given suleimani's history? >> i think suleimani, everybody is happy he's gone the timing and the question and what information was available to the administration, we don't know but it's important to note that now without this situation here, this potentially could open a vacuum because we can't attack isis from iraq if we do leave.

that's going to be important going forward. so it could hurt us in the long run from a counterterrorism perspective. >> the president threatening to send iraq a bill if they expel or try to expel our troops we carry through with that >> donald trump would. i think absolutely after -- after -- after everything -- of course, after everything that was done to combat isis and retake mosul and retake the country back after it was falling apart. by the way, an effort we did in conjunction with the iranians who did not want isis there, as well, right? i mean, that's how complicated this part of the world is. not that long ago, we were allies in that fight even though they didn't really want to talk about it that much. those are the facts. >> iraqis do not want to return to a pre-1990s sanctions regime. that would be disaster and a nightmare for them economically. so i think it's important to note that they're going to do everything they can to hold the line, to have a balancing act. they need that iranian electricity and the natural gas. >> quickly, what leverage if any

does iran have over us >> leverage. i mean, so -- i think of this in the context of how might they retaliate. i think the biggest concern we should have is that they do some kind of cyberattack. i don't think it's going to be some kind of conventional warfa warfare. they don't have the capacity, capability compared to the united states. it's impossible. that's why they do proxy wars. we may see more proxy attacks. i wonder about what happened in kenya in the last 48 hours, if that's related to this - >> american serviceman killed -- >> exactly those are the kind of things i think you're most likely to see. and the worst case scenario is something that really hurts the u.s. economy in a big way. >> iran's a patient enemy. they're going to take a calibrated, long-term approach they're excellent negotiators. we should be patient and realize that iran is going to take its time >> michael, michelle, great discussion on an important topic. thank you both very much despite the tough talk and new threats of violence, stocks remained fairly sanguine news of the major general's death broke on friday, the dow

closed down. but only by 0.8% the s&p fell, as well, the nasdaq also slipped but by less than half a percent. fast forward to today, stocks are well off their session lows. the nasdaq even wandering briefly into positive territory. treasuries are in a holding pattern. the world is witnessing the u.s. and iran ratchet up tensions the question is this -- where is the fear in the markets? art hogan, chief strategist at national security, and bob pavlek, chief investment strategist at seniorportfolio manager of slate stone wealth. the vix is up, art the market is down a tad >> right >> where's the real response where's the real fear? >> i think we saw the market react in a natural way with the concern that we saw on friday. a sell-off on friday a little bit of a sell-off on the open i think the market is acting rationally now and saying we don't know what this brings us i can tell you this, i'm driving to vermont with my kids. in the back seat comes the question, what's going on with the u.s. and iran?

i asked that of my father when we drove through the exact same ski mountain when i was in high school that's haw long it's -- how long it's been going on yes, this has been with us a long time. difficult to put into the economic model the market's going to be saying what's driving the market is still driving the market >> bob, would you agree? stocks go up when there are more buyers than sellers, let's be clear. they're down a touch to begin the year the reality is, is this news going to change anybody's thinking with their 401(k), their ira, their 529 plan? are they going to stop putting money into the equity markets because of this? >> no. stocks are not priced on geopolitical events. they're priced on earnings and potential growth for going forward. this has a potential to affect growth only in that it could affect business leaders' sentiment, their concerns about the general economy. and you don't see that happening right now. if we have some kind of major terrorist attack or cyberattack that really cripples the country like michelle said, it's another story. so far we haven't seen that. i don't think iran is going to be able to pull that one off

i think they're worried about what donald trump's response is going to be. i think we're going to see this sort of fade away in a relatively short period of time. >> you know, art, listen, the iran news rightfully getting the headlines. there's two other things with regards to the market that may be more important. one, the ism manufacturing number was terrible. worse than i think a decade. number two is the stock market went up the last three months of 2019 as the fed expanded its balance sheet. the fed is running out of fiscal ammunition >> uh-huh. yeah, that may well be the case. i would tell you this -- manufacturing is the one piece of the u.s. economy that's not working right now. i think that changes a bit if we actually get a phase-one deal signed in some uncertainty around manufacturing is removed from the marketplace i think we've got a dichotomy between corporate confidence and couple confidence. i think we'll see meaningful reversion of those when we move to the u.s.-china trade. >> can stocks go up if the fed is not only not cutting but potentially even tightening -- what i mean by that is reducing

their balance sheet expansion? >> i think that reduction of the balance sheet really is something that the market is not overly concerned about, not here right now. i don't think the fed is going to move on interest rates in 2020 at all. i agree with art i think what you're going to see is the phase-one trade deal. obviously gives some confidence back to business leaders you partner that up with strong consumer spending, a tight labor market, low interest rate environment, slightly weaker dollar, and you have the potential for the market to gave between 7% and 10% this year >> leave us with some ideas, bob, your best ideas for 2020 for our viewers and listeners are what >> consumer discretion, you can buy home depot right now little bit more risk, lululemon. industrials, look at union pacific. if you want to take on a little bit more risk, buy bowing and g.e., and in technology you buy adobe on a pullback, next earnings report they usually get the guidance by adobe when they give cautious guidance look at fin tech, fi-serve and

fidelity information services. >> we'll call you flash pavlik what about national security, where are you finding opportunities for clients? >> 2020 we love financials coming in 2020 we also like the industrial. we see a pickup in confidence in corporate. i think the third is controversial because it's an election year, but health care health care away there large-cap pharma and pharmaceuticals, more in the biotech and med device. the fundamentals look sound. there's going to be a massive amount of m&a activity >> good real-world investment advice ways to make money art, you look pretty good considering the patriots are out so early >> thank you for bringing that up >> it was time thank you so much. see you soon a lot more to come on this busy monday. here's what else is ahead. coming up, crude math. oil moving higher on the latest geopolitical turmoil given the possibility for massive disruption, why isn't it up more? plus, the battle brewing in

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welcome back oil prices spiked 3% on friday on the killing of iran's top general.

today a different story despite continued heightened tensions. oil actually lower so let us try to answer the question many are asking -- why didn't oil prices shoot even higher the reason is basic math world oil demand now is about 99.8 million barrels per day production is just below that, about 99 million barrels per day, assuming the recent opec cuts actually work now that slight gap in demand over supply is the reason that prices firmed up over the last couple of weeks. so if the market is getting tighter and it appears to be, why not an even larger jump for crude prices on that iran news there are three reasons. let us walk you through them number one, there is a ton of oil stockpile around the world depending on whose estimates you look at, there may be 2 million to 3 million barrels china, 700-plus millions stored. the point is there's a lot of

oil out there stockpiled in the world. two, if prices do keep moving higher, debt-heavy u.s. companies may get greedy and produce even more. potentially taking us over 1 million barrels per day in production, adding supply to an oversupplied market. three, if there is some kind of iran-led supply shock, opec, particularly the saudis, could easily make up the gap the saudis alone could probably add two million barrels per day in a short time. and don't forget, norway, yeah, norway, they've added 350,000 barrels to the market over just the last couple of months with their new field in the north sea. in other words, even if iran does something big to iraq or maybe even saudi production, the world right now is likely able to make up for it. the key to higher prices longer term would be how many barrels are off line and really the key would be for how long. right now, the crude reality is that the oil math adds up to a fairly stable market

let's stay on oil and energy and bring this katy base, co-founder of sandhill strategy are you surprised there is not more of a pop in the price of oil? >> hi, brian yeah, thank you so much for having me. i think it's an excellent question you've just walked through some of the most compelling forces in the market i think it is a little surprising that there hasn't been more of a reaction. in some ways, perhaps there's too many things going on, right, because of course the big headline item, the killing of general suleimani, but then also we had a very interesting kind of exciting crude report from the eia last week that showed 11 million barrels tang out of storage. the biggest export number for the u.s. in decades. and it was this kind of transformative statement about where the u.s. oil economy is today. but at the same time, really, you know, no outsized reaction in the crude market i think as investors are trying to process all this information amidst so many dynamics that are also going on

>> i want to be clear. we're walking through the math we are in no way minimizing the risk of a heightened escalation. if there is a full-blown military conflict in that part of the world, then all bets are off, correct >> absolutely. and to your point, the scope and the scale of that military conflict is really important the market for basically five, six years hasn't priced in a real geobill clintpolitical rism if there is a substantial conflict that takes, i would say i agree with your math, you have to take more than 2, 2.5 million barrels off line to talk about a significant impact to the supply/demand balance. in the scenario that that happens, you would certainly see the geopolitical risk premium go back into oil, commodity prices, but i think you're right, too, in the market is reacting to the fact that we're not there yet. >> i like your numbers here's the -- the saudis can produce 12 million barrels a

day. they're producing below ten. call it 9.8 million. that's why we can to the opec meetings and schlep to austria, they're making production cuts if two million barrels a day were taken off, say, some big iraqi oil field was attacked, throwing that out there, the saudis and the u.s. and russia could make up for that fairly easily in your mind, then, katy, would it be a combination of the amount of barrels and the amount of time? that inventory we talked about would have to be drawn down in a meaningful way >> that's right. and you -- you know, you have seen inventories in the u.s. come down somewhat they're still very levated, inventories are elevated around the world. you would see that dynamic more acutely. i think there are limits to how much u.s. production can rise. so if i put my commodity analyst hat on, i start thinking about where in the world am i worried about the next barrel of oil if i start thinking about, you know, now we're talking about a scenario where opec cuts are no

longer a factor, saudi production has increased, russian production has increased, i'm worried about where the decks middle eastern barrel come from that's when the geopolitical risk premium becomes a critical factor in the market how do i compensate that producer for taking this risk. >> what about the factor behind you, over your shoulder? we see the beautiful nation's capitol, there's a man there, by the way, under an impeachment inquiry. but he would like to win re-election later on this year what is the trump factor in all of this? >> yeah. absolutely and the trump factor as we think about it is first and foremost the u.s. economy has to remain strong if this president is going to get re-elected, he'll have to do it by shepherding a strong economy into november of this year so -- and you can look back, too. we love this statistic that no president since the '30s has been elected on a weak economy that's -- that's his kind of northern star, if you will this conflict with iran could

threaten that, right sudden increase in energy prices is a negative for global economic output and certainly even for u.s. economic output. you're looking at the stock market take a little bit of a hit on the back of some of this. so for him to balance, i think the trump factor here is that the president needs to balance how his foreign policy toward the middle east interacts with public sentiment, americans don't want to see another war with a middle eastern country. and then how does it interact with economic sentiment. >> good stuff. katy bays, great analysis. we'll talk to you soon, thank you so much. >> thank you speaking of oil and being timely, tomorrow we're going to be live at the goldman sachs energy conference in florida and we have got a great lineup, very important time. the ceos of pioneer, chevron, the coo of conocophillips, and marathon oil, one of the first tv interviews in i think more than five years with them, as well so big lineup tomorrow all throughout the day on cnbc, very importance time.

tune in for that coming up, they've done it before, the question is, will they do it again to what scale? we're talking about iran and cyber attacks and the u.s. companies and the industries that could be primary targets this time around plus, smile direct club soaring 25%, sinking its teeth into america's biggest retailer. why the news is giving the stock such a boost ahead it. she was at the golden globes last night today, she is on power lunch we're talking about gwyneth paltrow on her new netflix partnership, the health and wellness industry. talking goop with gwyneth at 2:30 to forecast anything, from today's weather to tomorrow's business trends. with esri location technology, you can see what others can't. ♪

welcome back to "the exchange." sue herera has a news update sue? >> hello, good to see you. here's what's happening this hour, everyone australia's government said it is willing to pay whatever it takes to help communities recover from devastating wildfires. aerial views from helicopters showing some of the damage the fires have burned more than 30,000 square miles with at least 25 people killed the commonwealth is committing an additional and initial $2 billion over the next two calendar years starting right now to support all of the efforts of recovery right across the country. >> mercedes-benz is recalling 750,000 cars because the

vehicles' sunroofs can potentially detach and fly over. the cars include the c class, the e class, the clk class, and the cls class, made between 2001 and 2011 and chaos inside and outside of venezuela's parliament on sunday as legislators replaced opposition party leader juan guaido national guard troops blocked him from entering parliament then he tried scaling a fence, but it was blocked with riot shields. with guaido unable to enter, legislators swore in new parliamentary leader luis parra. you are up to date that's the news update this hour back to you. >> venezuelan democracy in action sue, thank you so much here's what else is coming up -- "the exchange " -- >> ahead, wall street bets on the abcs smile direct investors are smiling today. little caesar's strikes a new delivery deal. and has europe finally bottomed out? legendary terrain in telluride,

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betting on the abcs, let me see that smile, pizza-pizza, and offering up the kitchen sink

sounds like "jeopardy!" categories, but it's time for "rapid fire. contessa brewer, robert frank, and rahel solomon. >> who is contessa brewer? >> for 400 -- top three favorite person on the set now. all right, first up, shares of google's parent company, alphabet, hitting a new all-time high pivotal research upgrading to a buy rating from the whole boosting their target to 1,650 the math is about 18 more upside on alphabet. the analyst says he's optimistic about the new ceo of the whole company. he's also bullish on google's cloud opportunity and points out the strength in the core advertising business what's interesting about this, last night watching the golden globes, everybody talking about netflix and amazon i'll bet you that google with youtube is actually the most-watched, quote, network in the world, and it's -- doesn't seem to be getting a lot of love >> it may not. the investor here seems to like pichai's compensation package, a significant amount that's tied to the stock price

so if the stock does well compared to the s&p 500, shareholders do well they really like that. >> yeah, if you outperform -- had fee outperforms, he gets paid - >> that could lead to short-term gains for long term -- take it now -- >> every company's ceo is tied to performance in the stock. the lyft ceo is tied to the stock. down 50% plus, there was a $120 million stock grand over time. all he has to do is stay in the job to get the money that's not pay for performance >> they're optimist big what could happen they're saying, well, there could be more disclosure for investors. there could be a change in philosophy, there could be a change in capital allocation with larger buybacks that doesn't mean it will happen and also, isn't it -- the timing is odd we just had the story last week about how the culture has changed so dramatically for google employees, that everybody's miserable. they don't like the direction the company's heading. all right. where are we >> yeah. you wonder -- i mean, google --

$120 million, the company, like 96% of its revenue was just the ad words business basically. it almost runs on automation - >> right >> it's a great company. it is a juggernaut - >> what are the moon -- none of the moon shots have worked >> it's unlikely that the talk of regulation and privacy will change any of that but to tie it all to the alignment of the compensation seemed like thin gruel to me >> who will be the first company that doesn't have a ceo? it's coming. mark my words. next up, here's a reason to grin smile direct shares soaring, on pace with their best day since ipo in september the only good day. this after the announcement to launch a new line of oral care products in walmart stores and on line. will the deal be enough to straighten out the stock down 50% from the ipo a lot of this is short covering. >> you've got 29% short interest right now in the stock look, this could be a real branding opportunity for smile direct they're going to reach an entirely different audience than they have now for teeth straighter ins they go this to the walmart

customer base, and they sell them on maybe slightly more expensive toothbrushes and teeth whitening and all of that, but it's got a different level of aura than crest or colgate or -- walmart brand. >> see, that's the risk. i wonder what the intellectual property is of the company how much protection do they have so amazon doesn't have a prime straighter in. >> this was -- straightener. >> this was supposed to be the company that reinvented orthodonti orthodontics and now we're going against oral b, commodity, electric toothbrush market, that is not something i want to pay for. >> right now they're not offering the aliners they're offering complementary products, the teeth whiteners, the white flosser thing. we could start to see them move into this -- >> does it work? >> the water pick? >> this product? i have like brown, crooked teeth. i need better television teeth does the product work? >> i've never tried it i don't know >> fake got knocked out from rugby.

these are all bonds. >> what is that -- >> they discolor over time >> what? >> let's get a closeup >> no, too embarrassing. >> we'll take brian's teeth for 400, please. >> nobody wants that daily non-double all right. topic three, little seize -- little caesar's offering to deliver pizza with door dash >> pizza, pizza. >> the third largest pizza chain in sales so robert frank, i like that, bay the way, pizza, pizza, could this take a bite out of domino's or pizza hut >> how about the ceo said we just realized people want home delivery >> yeah. >> really? >> hello >> we're getting out the horse and carriage >> make sure they get it >> get the pizza by tomorrow or your money back. >> they're late adopters to this you know what's interesting, you have to, if you want to get this delivered, you have to order it from their app and their website, not grubhub, not doordash that's interesting, right, because a few months ago we heard grubhub's executives i

think it was say that customers are permisscues because they're using another -- they move around you don't do that with caesar's. >> i had delivery last night like an hour and a half late the food was cold. i'm not going to say who did it, not trying to call anybody out pizza needs to be hot. >> right >> domino's has sort of perfected that sort of warming thing. you think going through a doordash with pizza is going to work >> well, doordash knows how to deliver. they have numbers here from a survey that said 26% of people used online delivery, up 10% from the year before research by second measure, doordash has 37% of the third-party providers when it comes to delivery. so doordash ought to know how to do it. here's the question -- if you charge $2.99 for a delivery fee and a service fee of up to $3 on top of that, does it make a $5 pizza worth it i mean, if you're in the market for a $5 pizza and you're going to pay double that - >> can we just -- can we just be honest -- how much of this is

related to just the legalization of dope? >> what? >> okay. >> i mean, that's what i was thinking for sure. >> little caesar's and your model had been people driving to get it, and now you have all these states where marijuana is recreational -- the point is you need to have home delivery if you don't, a large -- the shaggys of the world - >> people can drive. >> wait, are you going to expect to see till ray investing in food delivery? >> i don't know. i was just in colorado i'm saying there's a lot of people that enjoy delivery of products >> yeah. >> they do >> they can deliver products - >> or do i need to go back to colorado with that comment >> we understand what you're saying >> it's true, though how much of the home delivery craze has been driven -- >> to be fair -- >> by people saying i ain't getting on the roads smartly, don't get on the roads. >> we'll have to dot study with pot-legal states and areas versus non-pot-legal states. >> kate rogers, let's do it. >> it's not just food, right >> delivery -- >> we're used to getting

everything sent to us now. i mean, i live in the city, and people have their toilet paper delivered to them via amazon people have -- >> toilet paper? >> toiletries -- >> i'm hoping to get it quicker than the pizza box -- any port in a storm i guess all right. topic four, new -- my final time hosting "the exchange." new documents reviewed by the "wall street journal" slow that new york state officials offered $800 million more in incentives than was previously disclosed. that included $500 million for research center, subsidies for job training, and offered to pay 25% of the first year's salaries of some workers. david faber was very upset about this a good to debate - >> it was -- >> between kara fisher and david about whether or not this was an incentive or a rebate on taxes that were going to be paid you're a new york resident, contessa, all three of you are, how do you feel about this >> i'm curious about who was negotiating this that the deal that was presented to yaamazon s

$800 million less than the initial offer d. amazon talk itself out of all the extra grants in the end it was $505 million for some -- to reimburse some construction costs of course we know they walked away from the deal anyway because of the political - >> are you glad they're not -- they're still going -- they're still going to come. that's the thing amazon will still be - >> yeah, it's not -- >> not to this scale i know >> look, a lot of the money would have been paid out provided that they provided the jobs and provided the taxes came to the coffer. there is not just here's your money -- this is not just here's your money, we hope it works out. these were incentives that had to have givebacks in terms of jobs >> like a running back, you hit the targets, you get the bonus >> to be fair, how many cities were providing really nice incentives to try to lower amazon i'm from philly, philly was in the running pretty late in the game >> newark was offering $6 billion. now -- now should you have to pay to come to new york city new york city some would argue at least manhattan doesn't need more jobs, doesn't need to

create incentives for it long island city, which is where they were going to be, probably could have used some >> probably could -- >> even more is the hudson valley, buffalo -- albany a lot of these areas outside of the metropolitan area are struggling economically and could have used it way more than these states >> could imagine in one of the tech companies or at least half would put their headquarters in youngstown, ohio the economic boom that would occur or the government should move some of its -- anyway finally, it was the shot heard around the world last night. ricky gervais taking the west coast elite to the wood shed with his opening monologue at the golden globes. >> rolled into the tv game with a morning show, a superb drama yeah [ applause ] a superb drama about the importance of dignity and doing the right thing. made by a company that runs sweat shops in china so when you say you won't, but the companies you work for -- unbelievable apple, jamamazon, disney, if is 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. >> well -- >> one to ten let's grave him. ten, spectacular igat gave him a nine >> he was awesome. >> the monologue - >> he spoke to the tv audience, not to the people in the room. >> that's right. >> to be fair, i thought the monologue was pretty good. that joke in particular, meh and is ricky gervais woke? how many people -- >> he's not trying to be >> no one in that audience is woke let's stop >> i think, look, comparing it to isis was -- comparing disney to isis -- >> extreme - >> while hilarious was a little extreme. what i do think -- >> the joke about mark zuckerberg was much funnier and more accurate. >> yeah. by the way, if you haven't seen the whole speech he gave about social media today, you should see that from about two months ago. it's terrific. but i think -- >> i was working -

>> his point about -- i do think people are tired of these celebrities who get up and start telling us how to think politically. either side. i just think people are tired of it >> i don't like politicians doing it either for that matter. or my mom. so just nobody -- nobody needs to tell me what to think politically. but here's what i would like - >> it turns people off they get mad like don't offend my point of view however repugnant you may think it is. it's called free speech. >> i would have liked ricky to say, and by the way, as long as i'm giving advice on your acceptance speech, nobody cares about the myriad of people who helped you get to this point you don't have to thank everybody here you can send a bottle of champagne later. what you should do is a great monologue yourself as an audition for your next role. then everybody - >> you think ricky gervais will have a next role is he going to have a next role? >> i like you say his name as though it's with a french accents. >> gervais - >> gervais >> ricky gervais >> whatever. >> it's so much fancier the way

you do it. i support it he has change his name [ speaking foreign language >> he doesn't think it's - to work with everyone. >> all right thank you -- [ speaking foreign language >> robert -- >> derrier >> i said it the formal way. >> i'll take french for 500. >> really, will you? can you say 5 nu00 in french do it. thank you so much. speaking of that, stock up on schnitzel and hoard the h hermes all three indices now, guess what, they're record highs what iran tension? the dow down on friday we are back up today on the s&p 500. fractionally, but we are in the green. - [narrator] at southern new hampshire university,

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no doubt you have heard about how well the u.s. markets did last year. did you know that 2019 was the best year in european stocks in a decade while many are bullish, there are risks on the horizon sema modi with a look at what could derail the european rally. >> you are right european stocks on average gained 23% last year most strategists expect europe to have an up year in 2020, but goldman sachs is only estimating a gain of 8% their reasoning is that all the good news around the pickup in manufacturing that we've seen, the brexit risk subsiding, all that is really priced in plus, if you look at the growth prospects, brian, for 2020, investors aren't salivating over them 0.7% if even for this year, that's expected to rise to 1% in 2021 additionally, europe is one of the largest net oil importers.

and this increased risk around geopolitics, the middle east tensions, and what that could mean for higher oil prices there could be economic pain that europe endures. the european central bank put together analysis. they found the impact of a 10% rise in oil prices, you see about a .1% gdp growth rate being shaved off of europe's growth consensus that, of course, increases in the second year and the third year now, if this situation were to play out, then there's the foreign policy discussion as to whether europe warms up to russia, you're seeing the north stream pipeline being built up between russia and europe. that, of course, is natural gas. but still there is a conversation being -- taking place around what happens -- >> that links germany to russia in a very meaningful way from an energy perspective russia literally could turn off the lights in germany because that second pipeline >> and if prices continue to rise, you could only see europe warming up to germany even

further, the state department has been saying and threatening the companies that are involved in the construction of this pipeline will be sanctioned if they don't -- if they don't stout constructing that. that is expected to go on line by the end of 2020 >> one of the most important global infrastructure projects in the world right now we appreciate you bringing it to us, thank you so much. on deck, it is the one group of stocks that pros watch perhaps more closely than any other. up next, the story that ships, trucks, and trains may be telling us right now about the eaamic enogrt erancomy we set out to make the best bike on the market, find the best instructors in the world, and tie it all together with a world-class software experience. we ended up creating, as you all know, so much more. peloton is truly a category of one and we're just getting started. now, let's do this. together, we are going further than we ever thought possible.

are we on the road to recession? freight in many trucking stocks losing investor's money today after jb hunt was downgraded on concerns of a freight recession. with just one week until phase one of the trade deal, frank holland has a lock at how valid those concerns might be. >> you look at dow transports. they're down a percent today and on pace the close below their 50 day moving average jb hunt down b about 2% today. jb hunt is the nation's largest container shipper, con tratainer

truck rack following the bernstein downgrade. a lot of people concerned about the future of freight and whether or not a freight recession is going to come up. a lot of talk b about that last year and the majority of our imports and exports coming by container, a lot of concerns about what that means for other stocks even a ups, all down today following that bernstein downgrade. just concerns about transports overall. >> let's talk about energy because the shift from coal to natural gas, i've got to imagine that's playing havoc with the rail data. >> absolutely. we have rail data for the 52 weeks of the year. sometimes there's 53 obviously 365 day calendar the first 52, final report next week coal is down 9%. overall down by 5% so we have a good indicator that volume for trains and trucks are going to be lower than expected. >> important because maybe it doesn't mean we're slowing down

macro, may just be a shift thank you very much. still ahead, iran widely expected to launch cyber attacks on the general of soleimani week how widespread those attacks might get. we'll tell you, next ...so we ca, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. oooh, well... i'm good at my condo. oh. i love her condo. nana throws the best parties. well planned, well invested, well protected. voya. be confident to and through retirement.

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welcome back iran's top security body vowing quote harsh vengeance for the killing of a major general one form, cyber attack for the past ten years, iranian hackers have proven they can throw a serious wrench in u.s. company operations in 2012 and '13, those hackers forced certain bank websites to shut down. in 2014, they attacked networks used by a las vegas casino and last year, microsoft said a group tied to iran tried to hack into the e-mails of u.s. campaign workers, government officials and journals and over this weekend, a group claiming to be b iranian hackers infiltrated a federal library website. here now to take a closer look at the cyber threat is john carlin, a cnbc contributor john, what do you think that iran will do, what do you think iran is likely to do given their capabilities >> well, as you've gone through, we've seen what they've done so they've attacked the united

states over 47 different financial institutions in attacks that took place over a series of years from roughly 2011 to 2015 hitting 47 different banks. affecting hundreds of thousands of customer, costing tens of millions of dollars. that was done through the group that soleimani used to lead, the person who was targeted by the united states and killed that is the irgc and what they did was use armies of compromised computers, hundreds of thousands of compromised computers, so-called bot nets, to attack those websites with requests if for information. so many requests they couldn't process the information from customers and one of those same groups on the side hacked into a dam in new york. >> upstate new york. that's terrifying when you think b about the energy infrastructure water, utilities.

but we have capabilities not only to defend, but we have our own cyber force. it's not like they're operating without some resistance from our side >> i think you put your finger on it. what the key decision now for the iranian is they review their strategic options is what's going to happen to us if we commit attacks against the united states. and they're given the full range of options from ceo nettic attacks to bombs and guns and cyber. cyber might be quite tempting. they can't compete with us on the battle feed, but they can attack our companies they can attack our energy grid and then they don't necessarily need to claim responsibility. it can be harder to do attribution and i think that's probably the key decision is what can they get away with without causing a response from the united states that's so strong >> answer then your own question what can they do that would not merit a large scale response by us >> if i'm a company today, i'm

thinking through hey, look, these iranian groups have been hitting and robbing us groups linked to iran, hbo, steal movies free release. so i'm take iing a look at and department of homeland security just gave a warning about some of the tactics or techniques they've used in the past so if you're a company today, you can take precautions i can also see a disruptive event like hitting banks that doesn't necessarily cause loss of life. and then the third thing i think to watch would be there may be groups that take cyber action in the name of iran without expl explicit direction and those in some ways are the most worrisome because they don't care about deterrents so they could do something of larger scale >> you think they will >> i think they'll try now the question is whether or not they're sophisticated enough the way some of our other adversaries, china or russia, would be >> john carlin, a good analysis

on a very important topic, especially given their vow of revenge. appreciate your time >> thank you >> markets doing their best to turn around. turning positive "power lunch" begins right now >> good afternoon, everyone. thank you, brian i'm tyler mathisen and here's what's new at 2:00 on "power lunch. wall street on watch gliding above the fray basically. as tensions between iran and the u.s. are on the rise and the next threat could be as john and brian were just talking, a major cyber attack. we'll talk more about that this hour, now it is also the stock made of steel. the company up more than 30% in the past three months. makoing a major comeback we'll talk to the ceo. the stock was much higher earlier in the day it has settled back a bit. we'll ask why and find out and this is not