competition. it is thursday, january 16, we couldn't figure out why 2020 >> we had some good first "squawk box" begins right now. ♪ quarters and the bea has been out there kind of revising the way it does it as a result and we'll see. it could be that there is some still residual weakness in the first quarter numbers that we have to watch for including the good morning concern that people had moved dana-farber cancer institute ahead their estimate of when the discovered the pd-l1 pathway. pd-l1. bottom of the trough would be welcome to "squawk box" live from the fourth quarter to the they changed how the world fights cancer. blocking the pd-l1 protein, from times square. first quarter so we have to deal with it. lets the immune system attack, the dow and s&p coming off we have residual issues from the tariffs out there and a lot of attack, attack cancer. record highs funny stuff in trade pd-l1 transformed, the dow closing above 29,000 for and don't forget, we're going to revolutionized, immunotherapy. have to incorporate or account pd-l1 saved my life. the first time ever. saved my life. marking the 40th trading day for the halt in the production saved my life. of 737 max in this quarter and what we do here at dana-faber, changes lives since the blue chip's last the estimates there, becky, it everywhere. milestone met november 15, could shave a half point off gdp everywhere. everywhere. everywhere. and it would come back -- everywhere. >> more than the tariffs. >> yeah. 28,000 we'll talk about the moves that affecting the export numbers as drove that over. well as production numbers up we are indicating the futures up towards the end of the year. you would get a rebound in that sharply. dow futures up 118 points which once that return so something we have to deal with i think the street will x that would put the dow at a record.

out. but right now, just one quick s&p indicated up about 18 points that would also put the s&p at question for you, target missed and raised questions about this. was that a target specific an interday record problem? it looks like holiday sales were the nasdaq up about 55 also pretty good. >> yeah. putting it at an interday and target was able to maintain record the futures all comfortably margins. meaning, they ran out of above that right now inventory on some issues they weren't overstocked on some of those things. i don't think it was a problem the yield right now in the with the consumer. >> walmart did well, right walmart had good numbers amazon had good numbers. 10-year below 1.87%. >> i think it's problem . welcome back, everybody. take a look at the futures emblematic of problems they had the dow, the nasdaq and s&p 500 in a few areas specifically china premier speaking out all set to open at new intraday electronics and tois not growing as much as they thought. levels we'll see you tomorrow electronics dropped by 6%. right now it's time for "squawk liu he said the data showed a on the street. that maybe market share they better outlook lost to best buys and walmarts he said china's economy is it's premature to call that a transitioning from high-speed problem with the consumer. growth to high-quality >> we'll see later today the national retail federation development. >> meaning what? will put out their estimate of good thursday morning, >> that's sort of what i welcome to "squawk on the holiday sales. pretty modest pickup in street." thought. cramer is in seattle today where >> meaning intellectual property electronic in internet sales later today he'll have an rights are more important to >> steve, thank you. interview with microsoft satya still to come, much more on them that tesla downgrade that's been nadella which you will see >> i thought it was an tonight on "mad money," 6:00 hitting the stock this morning

we'll get you up to speed when "squawk box" returns p.m. eastern time. interesting philosophical way. futures solid a day after we new york state is taking business to the next level. close above dow 29k for the i was wondering, i hope he supporting innovative companies first time translated it exactly right. that will shape tomorrow a trifecta of solid data today there is not a direct and building workforce development europe is trying to get back and tuition-free college programs translation for what they are opening gainan to generate the talent companies need. trying to say. i think in keeping with the with a $150 billion investment in state of the art, notion that instead of an export modern infrastructure, and a nation-leading commitment driven society, they are going to low-cost clean energy, to be consumers the gdp is still new york is doing more than any other state to build for the future of your business. new york state, the state of the future. pretty low multiplied by a billion and a learn more at esd.ny.gov. half like so many things that runs the gammot we heard from bannon and others yesterday that this really fundamentally changes the way china will do things this is really at the margin we have navaro on. we'll talk about a lot of things knock offs, which i worry about. >> some of our brands being

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sanders. he reached out to shake her hand and she pulled her hand back cnn released that audio. >> you called me a liar on national tv. >> what? >> i think you called me a liar on national tv >> let's not do it now you called me -- i don't want to get into it. >> i just wanted to say hello, bernie >> okay. good >> just over to shake hands. >> that was perfect. how many people look at this as a demonstration of what it means to be a leader, how do you approach each other? people reacted by saying, should she be doing that on that side and did he respond the way he welcome back to "squawk box," everyone we spoke with white house trade should have? >> the bigger question is if one adviser peter navarro a short of them drops out, do their time ago about the newly-signed

supporters go to the other that is the biggest question u.s./china phase one deal. if you could take the block of one issue intellectual property rights. >> we have license in this new both supporters and put them together deal to crack down very heavily if you can't put them together on that flood of counterfeiting. because their supporters are mad at the other one, then you have these ecommerce platforms, joe, a problem. >> if you did a poll -- my the amazons and the alibabas, twitter followers are bernie shopify, they have been facilitators of the chinese people they were furious at the whole counterfeiting and so, if we're going to thing. they are bringing up all the enforce this deal, it's going to past things she said be a big part of that is >> i like the way he responded scrutinizing this, but the deal more than the way -- the whole gives us the ability to do it. >> more on what's next and the thing. the question is, do you think trade talks, let's welcome she knew going in -- senator rob portman, republican >> that she was wearing a of ohio who has septembered as u.s. trade representative. he was present for the signing of yesterday's phase one deal microphone >> that she did it for the and the senator also wrote an moment and that it would op-ed in barrens praising the benefit? >> not sure it did, by the way deal senator, thank you for being with us today. knowing the cameras are on, the it's good to see you. >> thanks, becky always great to be on with you

thing is going you are going to go over and >> i know the trade dispute made say, you called me a liar. you a little uneasy because of the damage it could potentially cause on american companies, does it make me look like i'm american farmers what is it that you like about upset? this deal? the question is was it real? what makes you look at this with the brightest optimism >> well, imposing significant >> there are those that worry that the far left party suffered tariffs is always a risk from that. there are inadvertent effects on >> if you can't combine their consumers on businesses and that voters, that is an issue was happening. but it also got china to the >> i thought it was interesting table. i got the tell you i supported that chief justice roberts is it with regard to china because we didn't have any other alternatives it was the best tool we had. wondering whether okay boomer and i think what happened yesterday is proof that it has worked, so far most of the tariffs stay in indicates discrimination place. some were reduced. age discrimation some were eliminated pending it was brought up as a joke, the phase two which goes to the next issue which is really subsidies in my mind the biggest issue left unaddressed term okay boomer was banned. but this is a really good first >> i don't know what they are step i was positive because we were laughing at. reducing tariffs in the context >> obviously age discrimination. but most importantly intellectual property protection, forced technology

>> okay. >> to me, i think about the transfer provisions are excellent for u.s. companies and greatest generation. therefore u.s. workers and then finally, the commitment they are my boomers. they are still around. to purchase a lot more goods enjoy it while you can >> isit fair to say that you'v time passes really quick changed your mind on tariffs and you think you missed your think they are an effective tool that should continue to be used? generation what are you >> well, look, you know, i was >> genx. supportive of doing it because >> you are generation triple x we had no alternative, not >> talking about x because i support tariffs in general but because in this case i think it was the one thing corporate news tesla that was going to bring china to the table in a serious way the overall vehicle registration the proof is that yesterday we had a very significant in california nearly halving accomplishment it's the first step. during the fourth quarter. there's a second phase now being worked on. and i think the rest of the tariffs, you know, ought to be a tax credit for buyers ended. staying in place for now but we also ought to look to those to be removed as well as a new report claiming tesla is we get to the second phase the $200 billion in new once again the most shorted purchases over the next two stock in the u.s years, by the way, includes a the total dollar amount of lot of agricultural products is shares borrowed to sell the company's stock fall short to great for my home state of ohio and ag climb to $14.5 billion it will help manufacturing, particularly financial services

above the $14.3 billion which with regard to ownership rights. so, there's some very good things in this phase one enforcement is probably the most overtook tesla's stock important part of it and the fact that some tariffs have stayed in place, others could be reimposed if, in fact, that stock now over $507 after monitoring this and having some transparency into it the >> the short makes sense now way commitments are not kept, that's real important that's what everybody will be more than it did three or four looking for. but, becky, this is also the months ago week we're going to pass usmca looking at where things have a couple hours we'll have a big bipartisan vote. i think that's important, too, not just because we're now gone we've had people that come here dealing with our three largest trading partners in one week, that say they used to short china, canada and mexico but because it shows america can tesla. >> i've seen weird things on my get to yes i think there was a lot of skepticism that we could come up with either one of these twitter about people we have on. agreements and we have done both of them including that once it becomes a screaming match again america can be out there why is this on my twitter feed helping to level the playing field and create a better environment for our workers and but the teslarians are our farmers and get some deals done. >> we can have -- tweet us, reemerging interrupt us can occur at any i mentioned to them, it might time here is the president tweeting

right now. work out with the apploonians. one of the greatest trade deals ever made also good for china and our long-term relationship $250 billion will be coming back it did not work out with the to our country we're now in a great position for a phase two start. there's never been anything like presstecians coming up, the dow topping this in u.s. history and then usmca next. that was like 30 seconds ago the 29,000 we'll take a closer look when we come back. ♪ president tweeted that, rob. >> yeah, yeah. he was in a good mood yesterday, joe, because -- >> i saw you there i saw you there. i can't remember who you were >> announcer: today's big talking to. >> yeah. >> you know what i saw you saying -- >> a lot of skeptics out there. >> i saw you on your lips, joe number, $189.7 billion that's how much the market cap burrow was what it looked like of the russell 2000 has you said were you talking to someone thcreased over the past year about the bengals? wi the index hitting a 52-week high yesterday >> i was talking about joe burrow because we need him badly. we did win two games this last year it would be nice to win a few more. >> three or maybe win two and tie one. i think with where the bengals our retirement plan with voya gives us confidence. are. >> i don't know. i think we're with going to the we can spend a bit now, knowing we're prepared for the future. playoffs, man. i really do.

surprise! >> good. we renovated the guest room, so you can live with us. >> and got to resign a.j. green i'm good at my condo and keep offensive line healthy. >> lose again in primetime. well planned, well invested, well protected. >> the sky is the limit. voya. be confident to and through retirement. >> he's an ohio guy. >> i miss those days of losing in primetime any way, senator, thank you. and phase two. we'll see. we'll see what happened. >> phase two. >> we didn't get to ask you about the other thing that's going on, but i don't know it's so weird, isn't it surreal? >> well, the big news -- it is and the big news this week is frayed everyone expects what's going to happen with impeachment to have happened actually a while ago. so that's anti-icalclimactic. it's like the super bowl and world series of trade all in one week this is going to really help also to address some of the concerns that steve and rick were talking about in terms of potential economic weakness. i think it will result in a lot more investment which is key right now. this is good to keep that economy moving >> all right thanks, senator. thanks, guys. coming up, what to watch ahead of this morning's opening

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above 29,000 and more than a half a million clients worldwide, does it matter to you? >> it is just a number u.s. money reserve is one of the most dependable gold distributors in america. i was so bullish last year, i expected things to go a lot higher i think the dow will go even higher this year >> by how much what are the gains you are looker for last year was a really strong year >> typically, after siege things like last year, i'm not surprised if we get 10 percent e plus this year, which is probably gold. >> it is you are looking for stronger than that? >> that's right. we'll see how things pan out >> your stock picks. the first one is jp morgan they came out better than welcome back, everybody. one stock we're watching very anticipated. why are you picking this now closely this morning is tesla. >> stock is already up 40% dom chu is here with news of a i think the one thing they significant downgrade we just got. good morning, dom. >> good morning, becky let's look at shares of tesla didn't do really well enjoying right now. yes, they have been pair ra

bollically to the upside as of late this morning in the extended trade we're off another 4% on the yield curve global is up some heavier volume. the reason why is because we have seen this nice run in fact stock. by the way, just since about december 5th, that stock is up some 58% during that time frame. starting to rise again or become now, i note that because on that date back on december 5th, it positive again i think you'll see the 10-year was morgan stanley autos analyst adam jonas came out with a treasury where you'll see the pretty big call. now today adam jonas at morgan steep yield curve. those margins will start to go stanley is saying that that stock is now an underweight off up and be a positive rating and here is kind of what's driving it they're saying downgrade to >> chevron, why will this be underweight from equal weight. the target price rises because it's gone up so much to 360 better >> you have the global growth versus 250 prior what's driving a lot of that is picking up a valuation call that's gone up china will need more oil a long ways. it's also about a best case scenario in china already being every dollar that goes up for priced into the stock. there's a lot of things already oil will see $450,000 in the positively in tesla's favor. the stock is reflected it. bottom line. now, again, i want to call your they are lean and mean attention to what happened back on december 5th, 2019. it brought their costs down like that was when the same analyst $20 million in the past four

adam jonas made a call saying years. they are well positioned because that the bull case at tesla is their costs are so low $500 per share how does that matchup to now, the reason why you said it then was, again, this idea that a lot could be priced in but he also said to be clear, we are not bullish on tesla longer exxonmobil they've increased the dividend term especially as over time we they are funding all of their believe tesla could be perceived by the market more and more like a traditional original equipment dividends with cash flow for all those reasons, i like manufacturer that particular move there, we are prepared for a potential ch surge in sentiment through the chevron better first half of 2020, which is >> larry fink talking about kind of happened, but question the sustainability investibility. the reason why that does that hurt a company like sustainability is a factor right now is because with tesla's stock, again, a huge move move chevron? >> i think they can all do higher a lot driven by better the bottom line is, look, we are fundamentals delivering a lot more cars a lot driven by short interest energy efficient adam jonas, guys, you might recall has been characterized and criticized in the past as these stocks have gone up so being an ardent tesla bull, some much they are side ways of the bull. you have to buy them now some of the scenarios he's thrown out in the past have gone looking at multiples before up against a lot of criticism. he called tesla, what a huge prices go higher move it could make so maybe a

>> looking at caterpillar. lot has come to fruition it took a roundabout way to get a lot of people said, look, stay there but we'll see if that away from the ones that have done well. momentum can sustain itself. why do you like caterpillar it's downgraded to underweight. meantime we are now just about a half hour away from the right now? does it have anything to do with opening bell on wall street. the trade deal i want to talk markets the dow crossing a milestone >> you are already starting to yesterday, closing above 29,000 see china for instance, we've for the first time and led hire probably seen a trough last by apple, united health and year it is starting to pick up. goldman sachs. to talk more about the road to their demand, every demand china dow 30,000, we're joined by richard bernstein, and cnbc has, everyone benefits from that if you look at industrial metals contributor. i don't know, you fine -- i feel going up business. like i'm going to be like joe. the trade deal, more agriculture are you finally bullish? >> well, we've been bullish. products or more machinery has our funds are outperforming this to be bought year, so it's fine for all those reasons, i think that's the only thing that matters, joe, is do you caterpillar will be huge outperform or not. >> your entire thesis is that >> then you shouldn't come on and say all the stuff you've the global economy is going to been saying for the past year if now you're bullish. lift up this and that will lift >> no, no, no. let me finish, please. all of these where were we a year ago, year >> tying three stocks directly and a half ago or indirectly positively our multi asset funds have a

benchmark of 50% equities. impacted everything has been priced to five years ago we were 65% to the fact that last year, manufacturing has slowed down. 75% equities now we're down to benchmark the big surprise is that global weight in equities as you enter the later stages of economy is more than expected. a bull market, do you buy into >> from your lips, we'll see that bull market or do you sell what happens into that bull market? thank you. when we come back, we'll we've just been lightening up as tell you about a branding the market keeps going up and up and up, despite fundamentals collaboration between netflix and ben and jerrys i think most people would agree what it says about the state of fundamentals are not booming, so marketing. guess what the name is why not sell into that >> because you are anticipating what >> i think the question, will we have that and more coming up next returns over the next one, two, ♪ three, four, five years be as this year... strong as what we've just seen and will other asset classes, perhaps gold let's say or tips or something like that, will they be more competitive to equities i think the answer is yes, they will be. >> does that anticipate a recession as part of that? >> not necessarily it doesn't have to the valuation of the equity market is not cheap. shouldn't returns be lower if it's relatively expensive.

then you look at gold, tips, how people are ignoring certain asset classes like that and say, gee, that seems to be a pretty good value, what's the probability of the now performing stocks over the next one, two, three, four, five years. >> are you moving into tips right now? >> we've had positions in tips, yes. last year we started taking positions in tips. tips are now roughly 12%, 15% of the world's most spellbinding journey... the portfolio. will take its wildest turn yet. >> we all thought we were in the prepare to face the forbidden forest seventh, eighth, ninth inning, but we've thought this now and join hagrid to encounter... the rarest of magical creatures. for -- >> forever. >> -- several years. in the epic new addition to the so the real question is can this continue several more years? wizarding world of harry potter™. is there an argument to be made that there is still a remarkable wall of worry, if you will, out only at universal orlando resort. there and there will be an even stay at an amazing universal hotel with rooms greater influx of cash and money starting from $79 dollars plus tax per night. into equities at this time we talk about the train leaving restrictions apply. the station and say, oh, man, now we've got to get on the train and it's late.

>> can you get past your tds ever and get in the market or not? trump derangement syndrome can you get out of your personal views of what's happening. >> i've never heard that tds. >> you haven't >> no. that's not a factor in our investment decisions. >> although you'd vote for bernie. >> i'm not voting for bernie >> he has to be political. >> to answer your question, your question was -- had something that was very important. car vending machines and buying a car 100% online.vented you said for years people have been worried about the equity market and that's absolutely right, now we've created a brand new way for you to sell your car. people have been worried whether it's a year old or a few years old, i think the data are showing that people are now not as we want to buy your car. worried and they're seeing the so go to carvana and enter your license plate, market go up as the market goes up, they're answer a few questions, getting more and more bullish. and our techno-wizardry calculates your car's value that's actually quite unhealthy. the time to be max bullish -- and gives you a real offer in seconds. >> i'm not telling you it's not when you're ready, we'll come to you, unhealthy. pay you on the spot, and pick up your car. but it could go on for two years. >> it could, absolutely. that's it. so ditch the old way of selling your car, >> you're getting too bullish, and say hello to the new way-- now i'm worried. at carvana. you didn't used to argue like this a year or two ago at all. >> that's because you're not arguing with him

>> i see the stuff he sends me and it's like, wow >> it could go on. there's no reason why it has to end tomorrow at 2:30 in the afternoon or anything like that. no it could go on but i think as an investor you have to say where are the better values, what are the relative returns among various asset classes. >> thank you, rich we've got to get out to mr. cramer. >> he's in the beautiful city by the bay. >> west coast. >> actually he's in redmond. >> yes. >> oh. >> he's got a big interview coming up. >> you should just tell us about your interview but you can talk about anything you want. but that's coming up >> look, he has turned this company around the total returning since february of 2014 when he came in is better than almost all the other large gap growth stocks since amazon it's been a revolution a lot of people thought microsoft was a utility and now it's a leader in artificial intelligence, it's a leader in

the cloud. and it's because of satya. the man is just a visionary. i had to come out and see him. if you're going to understand tech, this is where you have to go. >> yeah. we just had a long conversation, jim. are people getting bullish and complacent do you think maybe we are getting there? would it make sense to at least fade, you know, big up days and start to think that maybe a lot of the good news is in the ♪ averages >> joe, i listen to a lot of the welcome back to "squawk mainstream media commentators box. we are in the chairs this and i listen to a lot of people morning. an update on the antitrust fight who allegedly cover the market they're all saying that the deal over the sprint t-mobile merger. is a nothing burger. i think you and i both realize delivering the final arguments it's an historic breakthrough. and the judge has promised to try and render a decision as so the idea that you can add to soon as possible wall street is nervous about the gdp and have all those great companies at the press conference yesterday and believe outcome. sprint trading to.4% to the those stocks shouldn't go higher, that is pretty much of the state of the market. thaeps t that's the narrative i'm

outcome signaling this maybe hearing. it's perhaps so ideological as isn't going to happen. >> if it doesn't happen, what to be let's just say wrong does that mean about the states so no, people aren't too versus the federal you can look at a million places bullish. look at the raid that happened on the reuters story of noy abt where state and federal isn't on board. you can go all the way to 3:00 a story that actualliment legalization of pot. nothing. the party has to get rid of its. >> yes >> if i want to look at the emissions standards from they have to minimize this california versus the federal incredible deal. i'm not being partisan what i am being is som government it makes it really complicated recognizes what's going to happen to companies. >> that's the legal piece. >> yeah, and that could theoretically at least support where we are and maybe we're not way out over our skis or maybe i think if the deal doesn't even support higher prices -- happen, does sprint even exist >> you don't need to fade the what happens to softbank and rally, the media will fade it for you. the media who hates anything that comes within an area from massason do cable providers like our washington, d.c. >> whenever i say that, people parent company look to buy say you're part of the media. >> no. >> we're not sprint does t-mobile go up for grabs? >> no. we're trying to figure out how to help people make some money. the whole thing kind of goes up >> we'll be tuned in for grabs. e n't wait for microsoft seya, thanks >> do you think wall street as a we'll see you in a couple of

whole can get nervous? minutes. stay tuned, "squawk box" will be right back whether your beauty routine is 3 steps... i think skeptical may be a better answer. is there anxiety maybe there is nervousness and anxiety. >> i can put it in my own category >> that wasn't your word someone else came up with that are you nervous. >> i'm just an actor i just read the words. >> i'm going to explain ron burgundy in just a minute. >> you really have anxiety you have to get out more i haven't thought about it >> a lot of implications or 57, >> you are right make nature's bounty hair skin and nails step one. i can't believe we are in the it's the number one brand uniquely formulated chairs today i'm going to do this story but for silky hair, glowing skin we look like we are doing the and healthy nails. same thing with the white. nature's bounty, because you're better off healthy. this is the first time i've done

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him as he looks for a girlfriend to join him. p indications have topped 20,000 featuring a love diagnostic test some questions include, if you rode in a private jet, where would you go if he farted in front of you, what would you say if is a billionaire and you want to marry him, you would probably say, god i love when you do that >> which seat would you sit in >> that depends on the second question, where you want the person to sit, probably. >> i don't think he's probably looking to say everything your way. >> it sounds crazy what goes on in my house and i

leave the room, the bachelor those people get married there on tv. >> some don't. >> but some of them actually find their life partner on a tv show >> why is that any different than finding somebody in a bar when you've been drinking? >> there was a time when there was a bet, you met on an online dating site? no, no at a bar >> clam flavored ice cream ben&jerrys is trying something new to prevent itself from being upstarted. a new flavor, netflix and chilled demonstrating what iconic brands have to do

ben&jerry has always been on the forefront. ron burgundy, they have a scotchy scotch scotch flavor they have schweaty balls phish food just so everybody knows, presidentle and peanut butter. do you think they have to license the netflix name does netflix get a piece >> i think it is a collaboration. >> it has the netflix on it, so it must. >> interesting this is mapping when there are so many screaming services out there >> i think there should be a peacock one. today is the launch of peacock investor day, not the launch >> they were early in on socialism, those two dudes

i think it is a for profit company barely vermont. >> bernie land who i like now all my twitter people are on his side >> i don't really like him >> because you like how he reacted? >> i don't know whether he would have said that it seems kind of weird who knows. he's genuine one thing about him. he's cranky. >> that's why you like him >> i met him once. he was cranky about getting a selfie with him. >> kindred spirit. >> we identify more when we return on the phase one trade deal with u.s. and china and talking about the impact on some wildly held names. and a look at yesterday's s&p winners and losers ♪

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good morning we are live from the marketsite in times square. us equity futures are indicated up higher. the dow up 102 points that would put the dow at an interday trading high the dow closed above 29,000 for the first time ever. nasdaq indicated up about 47

points s&p indicated up about 14 points a new chapter in economic relations between the united states and china is set to begin. in the past 24 hours, the u.s. economy signed the first trade deal business groups applauded the agreement. looks like the market is doing that too kayla has more on all of this. the period ushers a new period of calm that says will last so long as china enforces the deal. china has pledged to spend $77 billion in manufacturing many companies and lawmakers representing states posed to benefit were in attendance yesterday at the signing which was a jub lent event as campaign season ramps up.

china's move was more subdued. seeking tafr roll back president trump says that is not happening yesterday. >> i'm leaving them on to negotiate with because negotiating with leo is very tough. >> ambassador robert lighthizer said those face two talks should start before the election. lighthizer told reporters they should know sometime this spring whether china is following it. >> the enforcement mechanism, we've seen different reports we did talk to steven mnuchin who said the president is unhappy with it. solely in his discretion whether to raise or put back on additional tariffs >> essentially a flag poll that

goes from the local level all the way up that is the vice premier and ambassador level relying on companies on the ground to blow the whistle if they see something happening that does not fall in line with the spirit of the agreement there were concerns that companies would not report that. because they did not want to be retaliated against in china. the administration says there was a way to do this anonymously so they don't share that concern. saying that dispute mechanism will go into effect in 90 days the channel for people to weigh in on whether this is working. the u.s. has the ability to put tar if tariffs back on and china can quick the agreement. but china cannot put tariffs back on if it wants to

retaliate. that's not in the cards here >> thank you very much investors trying to figure out if trade is still a risk to our guest now, a cnbc contributor. i don't want to say you have a bleak view of things you do in general the market to you -- >> realistic that sometimes means just facing that the market is headed higher no matter what you think about it how long -- it would be years you've been suspect about the valuation? >> i'm still riding along. >> i'm not really a tech investor >> anything good about the deal? hitting your head against the wall

it feels good when it stops. >> i'm happy with the investment >> that's half full. that's pretty good >> i had no problem. i was glad he challenged china the only thing i was against is the tool of tariffs. there are other ways of challenging china like what we did with zte and huawei. >> don't do tariffs because that hurts us but shut them down in other ways >> if we are accusing people are stealing, let's go after the people who are stealing. >> he made a lot of points that not all are equal in terms of the way they areemployed

the has not shown that was a huge negative. some of those affect certain businesses that uncertainty to the market looking at the marker. on december 11, the u.s. tenure was 1.79 the day of the deal went up 10 basis points today, we are back to 179. we are back to the economic impact that was supposed to be the inflationary sign ups. that indicates the global slow

down companies are eating the cost of the tariffs. we are seeing that in profit margins. in 2019, profit margins will be down revenue growth will be fine, about 5% the decline of profit margins are upsetting that part of that is higher labor cost, no question. some companies have had to absorb these >> you are saying these are what compared to 2018 >> it will be down a touch >> look at the manufacturing, in august 2018, ism was close to 61 global trade is basically flat lined. there has been an economic impact to deny that is mistaken i'd rannther see us grow 3% instead of 2%.

if we are accusing china of stealing and they clearly do i see it firsthand then you go after those that are stealing the fbi, cia are going after those that are stealing. i feel that would have been a more effective way rather than using tariffs and damage gs ourg own economy as a way to go about and challenging china, which i agreed with challenging china. >> that's the question the $100 question whether what we extracted adds to the future gdp. i think he said combined usmca and china trade could be 50-50 basis points gdp >> i hope so >> all right bleakly

>> looking for places to buy >> around the world as the market has gone up >> i don't own u.s. tech i admit it >> delivery wars are heating up. uber eats, post mates and doordash are heading into the new year hungry for growth don't miss our big interview of the morning, at 8:00 a.m. eastern white house director of trade peter navarro. if you have to head out now to the office, head over to the cnbc app which allows you to watch the broadcast in motion. we are back in a moment.

welcome back americans have a growing appetite for food delivery companies like uber eats, doordash and others have been the biggest players. also facing a number of challenges that's the story frank holland brings us this morning >> challenges and opportunities. the market is projected to grow

at $467 billion, a 31% increase over now but those estimates project 13% of restaurant spending being user for on line delivery doordash, grubhub, post mates and uber eats. grubhub, the leader in 2018 seeing only 4% growth. the industry itself is growing increasing to 70% of on line orders now other trends that could be troubling for a industry with thin margins and some companies that have yet to be profitable usage has increased by double digits in five years, the growth on spending in orders continues to decline the use of ago ra getters applies. a site called foodboss gives

users a choice millennials make up 70% of delivery customers the future of this industry could be largery influenced by what is influenced by millennials. 57% of orders are still pizza. a lot of still mom and pop stores that take orders by phones and have their own drivers. >> that would be changed by generations. pizza. the interesting part is how much it costs and how long they can hold out >> we have some transparency to grubhub. they talked about cross over between the different brands >> shocker no loyalty >> 33% of post mates use doordash a quarter of post mates use

grubhub. the question is what is the difference between these two do you really care who drops off your food? >> thank you take a look at this, 10-year mystery etf chart. we'll tell you why the trade deal may be set to boost this sector even higher when we return through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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♪ we showed you this chart before the break it was our mystery chart wonder if you got the answer semiconductor stocks were among the stop performers the last

decade let's talk about the impact of the phase 1 trade deal with china on chip stocks joining us is steve, the technology strategist at wolf research good morning to you. >> good morning. >> so is this -- have the decks -- have things cleared for you now? do you feel better do you feel worse? >> i would say i feel about the same we're actually underweight semiconducts in the short-term but positive in the long-term. >> right. >> the earnings were down 10% last year. the consensus they'll be up 15%. i think that's a little aggressive in terms of phase trade, not forcing technology transfer, but i'm a bit skeptical about this after years of stealing ip, i don't think they get fixed overnight. it helps the markets and trumps re-election prospects. >> who would you buy and stay far, far away from >> as a strategist i don't have

stock recommendations. we have a screen that we use we like taradine and lab research sky works which is a plan wireless and 5g. micron, starting to see turn in the memory business this year. micro chip and t.i. has come down and looks fairly inexpensive at this point. >> you mentioned 5g. everyone says 2020 is supposed to be the year of 5g is that right or early >> i think it's a bit early. yes, it will give apple boost late in the year when they have a 5g product long-term it's an enterprise applications, internet of things i do think it's a bit overhyped at this point. >> when it comes to the semis, when we get into that space, who is the winner? >> well, sky works folks who play in the wireless space for the most part are going to get some benefit this

year some companies their 5g business is actually stalling in the short-term, but the point is longer term obviously the electronic content of product is only going up. the value is shifting from the traditional computer systems companies to semis i think they got ahead of themselves. >> how is the phase 2 deal to the extent it will become the next conversation enter into this discussion? >> yeah. i think it will take time. my guess is we're probably going to have another round of address ip issues. the commerce department is supposed to establish restrictions on export for both emerging and foundational technologies that could come as soon as next month and some of the emerging could be semiconducts. foundational could include semicap equipment. if you want to stop china, buying all this equipment from lam, that hasn't been stopped. >> could you see the administration doing that at the expense of the u.s. businesses. >> it seems extreme but they are taking a hard line with china. i wouldn't rule it out. >> steve, good to see you.

>> good so see you. when we return, after a 29,000 close on the dow for the first time ever, we are in the green. once again this morning. let's look at the stocks that powered us from 28,000 to 29,000 in the span of just 40 days. apple, mcdonald's and goldman among the names there. plus, we're getting more details this afternoon on comcast peacock. what is she hoping to hear today? stay tuned to "squawk box. this is cnbc, and we'll be right back ♪ [ ominous music playing ]

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♪ [ applause ]. phase one of the china trade deal is in the books and wall street is doing something it hasn't done in almost two years, the dow eyeing a 30,000 milestone we have the latest on where this market is headed and what a phase two deal would mean for the economy. that's straight ahead. and investment strategy or a marketing ploy we'll debate black rock's debate on clie mate change and what it means for finance. apple is gearing up for a fight with the federal government over its iphone encryption and using back door tactics to open devices. the legal ramifications and what it could mean for the tech

giant's stock. second hour of "squawk box" begins right now ♪ good morning, welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen look at u.s. equity futures. it looks like it will open in the green. dow opening 121 points higher. looking to open 16 points higher than the nasdaq looking to open about 54 points higher further gains. further gains. >> right, after the gains we saw yesterday and we have seen for the last 40 days here is what's making headlines at this hour we're going to get a fresh read on the holiday shopping season this morning with the government releasing december retail sales in 90 minutes time economists are look for increase of 0.3%. we have earnings from wall street morgan stanley. morgan stanley is expected to

earn 99 cents a share on revenue of $7 billion. both of those measures up significantly from a year ago. we'll see if it matches from what we've seen. california market fell by nearly half during the fourth quarter compared to a year earlier that drop comes amid a significant cut in federal tax credit cards for purchasers of tesla's electric cars. they downgraded from equal weight that stock is still trading above $500. we have news crossing on southwest this morning they are removing the boeing 737 max now from their flight schedule through june 6th of this year. they're changing that date it will eliminate roughly 330 weekday flights from the schedule and it's just another indication of the continued problems that boeing has created and that the airlines are having

to deal with. >> i think some of the other airlines have already moved. >> american just did. >> united i'm not sure where they stand, probably just a reflection of the not knowing what's going to happen with the faa. there are no clear signals to suggest we have any idea of the time frame. >> if you're david calhoun, are you calling gary and saying, please, don't change this? >> who was it, there was a major airline company, carl tweeted, airline company yesterday, not one of the american ones who said they were glad thatilenburo they were so unhappy with the former ceo, now you have a little time to work with them. but look, boeing is not going to be able to tell them when the plane is back. it's not boeing's time. >> it's the second time i've seen june. you probably didn't see the signing ceremony yesterday the front and center, first row. >> right. >> david calhoun. >> yeah.

>> that's important. >> i saw the ups guy. >> that had been one of the questions, china buying boeing planes there had been speculatiospecul, eunice fold us they didn't want to buy the maxes anymore >> president trump calls them the great lou dobbs. >> did you see the thing that apparently he said at jp morgan. >> no. >> will you say thank you, mr. president, at least? >> who said this >> apparently the president says to jp morgan, will you say thank you, mr. president, at least meaning for like what's happened. >> in the third person. >> yes, in the third person. and there was a whole sort of back and forth of ken griffin. >> becky thinks that's a little weird. meanwhile -- what did you say? >> kevin warsh. >> yeah, he criticized

i wish i would have picked you as chairman. >> we have to get all these lines together was this on film >> i don't know. >> okay. >> you know you're allowed to say whatever you want when you're president obviously. >> now that phase one of the trade deal has been signed they entered a new era. >> china has made substantial and enforceable commitments regarding the protection of american ideas, trade secrets, patents and trademarks but they're doing many more things in phase one that anyone thought possible >> but questions remain about the economic impact of the deal on our own steve liesman now being introduced here joins us more than just the gossip behind the scenes. >> this is a really complicated deal to game out range from guarded optimism to outright skepticism. the good and the bad most tariffs remain in place, almost every economic report i've read starts with that fact.

the idea that those tariffs are still there. china will be upping purchases of u.s. goods. questions about how that works with the u.s. economy. confidence and cap x could both rebound overtime, as a result, however tariffs can be reimposed. maybe limit to how much confidence comes back. on the upside, this deal looks like it's a step towards freer and fairer trade with this dispute resolution in there. barclays writes this the reduction in u.s. tariffs is fairly minimal and the raises the risk and business spending by u.s. spending remains subdued it's likely to have some benefits for business and household confidence because the tariffs remain in place and chinese purchases may not represent new business for u.s. firms, not seeing much in the way of upgrades to the gdp for the united states. some forecasts are upping by 0.2 this year and 0.1 next the gdp story in 2020 will be this, continued negative effects

of the tariffs last year working through its way. at the top of the 8:00 a.m. hour, peter navarro will be our special guest. never one to hold back what's your big question for him, steve, by the way >> on the spot here a little bit, andrew. i would ask him about the idea that he made this big deal about a steel tariffs having this big effect i looked at steel employment in the steel industries they're all negative you have not had the bounce -- >> there were news about layoffs in the steel industry. >> he said this was a big win for the u.s. economy i would ask him if he's happy now. i think navarro won the day here because -- and look, depending upon your orientation here, the president may have negotiated the best trade deal in the world in the sense that he changed the facts on the ground. the tariffs remain in place. and he got china to the podium to sign a deal

>> so they were much more effusive about the actual deal because the knee jerk is that we're not going to get anything and it's just sort of a truce where we didn't really get anything they think it was a watershed -- >> joe, the problem with my signing on to that effusiveness is the tariffs remain in place. >> i know. did you read -- navarro's piece. >> that's what caused me to look at steel employment which was negative but i read the journal today. >> certainly in terms of its impact on the stock market, none of the worst case scenarios came to pass. >> i think the effects of the tariffs have been underplayed in terms of negative effects. >> what about the stock market >> not by the stock market the idea we were going to do 2% growth with a 3% funds rate and declining balance sheet, we instead 2% growth with 1.5% funds rate and increasing balance sheet. took a lot more stimulus to get

there. >> people have been arguing for years 2% is the most we can do with productivity and population growth where we are. why do you expect us to do 3. >> it took a lot more stimulus to get there in the first place and manufacturing is flat, joe manufacturing is flat. >> best we can do is 2%. you said that was the best that shouldn't surprise you. >> i actually said, joe, we could do better. >> maybe 2.5. >> that's what i said. >> maybe we'll get back there. maybe there's something in the usmca and china that gets me back there >> we love matt. >> involving himself in the production of the show like he has a right to do that as producer. the dow and s&p 500 both closing record levels. find out what investors should focus on next. joining us is greg hahn, winthrop capital management and david. you have a muted response to the

whole deal you've been muted for a while, right? >> well, i think that part of the reason that we've been a little guarded is because we really didn't get any new information. there were really no new surprises in what was finally signed, seal and delivered yesterday. it was very much in the price and our view was that it was in the price so rather than speculating on potential upside stemming from the deal which obviously didn't materialize we were more focussed on the fundamentals, 2% growth, what's going on with earnings, what's going on with wages and what's that impact on margins as we kick off the fourth quarter earnings season here, i think the most important thing to keep an eye on, look at operating earnings, you'll see a big bounce back. look at proforma, it will be flat what does guidance look like for 2020 can companies defend their margins and continue to generate earnings growth. the fundamentals begin to wane a bit, that's going to cause some of the trajectory of the market into question. >> you weren't thinking we would do 25, 30% last year, i don't

think, did you >> well, i thought last year was going to be a good year. >> like what >> north of 20 if you just look at the rerating of multiples into the end of the year, a simple return to where we were before the big selloff would have given us 20%. was i surprised we went up to 30, that caught me a bit off guard, but given the way that the fed played out and given the way that u.s. china trade played out, i think that created that additional upside we were able to capture. >> how does 2020 look for you, greg >> 2020 will be a challenge with the multiple expansion we saw in 2019 to go -- to go further from here we see about 5% earnings growth in the s&p 500. the current multiple, probably at 3,300 in fixed income we're still using fixed income in our asset allocation. that's our safety net. >> so, flat this year then >> 3289 is where the s&p is. you're expecting 3,300 >> we're looking at a market that is fully valued, fully

discounted, all of the good news that's out there and we're putting conservative -- >> do you have a price target last year? >> yeah. >> what was it last year >> we did it off of a 16 multiple, though it was lower. >> how much lower? >> down probably 15% this was a reluctant rally for us we participated in input we were looking at this saying this doesn't make sense. >> and i think that's the big risk this year, right? you look at what's going on in the investment community and people are skeptical about further progress on trade. they're nervous about what's going to happen with the election they're nervous about brexit to an extent the economy keeps growing, this is the proverbial wall of worry. joe, at the end of last year, we were talking about what's the bigger risk in 2020, a big upside move or downside move you and i actually shook out in similar territory, which is given all the skepticism we see amongst the investment community, perhaps things could epd up being better than expected. >> you're not feeling that again right now? >> no. >> every time we interview someone on the show they say the

same stuff, you're not feeling deja vu all over again >> it's a little da ja view. >> let's say you see upside profits in companies like deere and caterpillar because heavy equipment rebounded. let's say the return of the deal clears the way for cap x to come back and you start seeing added flows between the china and the u.s. >> add to that you see an improved global economy. >> i think that's an excellent point. >> thinks demand will go udoes. >> my question is spin the upside, layer in becky's very important addition here, you have this change in the outlook for global growth. >> yep. >> is your forecast incorporate that or are you sort of discounting there is no upside here? >> so i think there's upside and we just use the pmis as a rough gauge. i think we can get back north of 50 if the global economy starts firing the point i would make in addition to what becky said, the

global economy gets better the dollar gets weaker, that's more of a tail wind for u.s. corporate profits. if the global economy begins firing, i think there's some head wind for profits to move higher than people expect. >> okay. it's amazing, what is it, january 16th or something, right at the beginning of the year we say, well, the unknown unknowns. something in iran can happen and it's january 16th and it already happened no one knows what's going to happen but we went through something already and we are above 29,000. thank you both. when we come back, meeting with morgan stanley. plus, comcast's streaming peoc ack."squawk box" will be right . ♪

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♪ welcome back, everybody. we have some news about a good friend of the show, tom farley, his special purpose acquisition, far point acquisition is buying global blue for $2.6 billion including debt global blue processes transactions for international shoppers, letting them buy goods tax free silver lake has been the majority owner of the company since 2012 and it plans to keep a minority stake the new public company will be based in switzerland and will trade on the nyse under the

symbol gb. tom farley will join us live in 15 minutes time. >> of course it's on the new york stocks exchange. >> yes >> former head of the nyc. >> right. morgan stanley earnings are out. will fred frost has the numbers. >> big beat. revenue 10.9 billion the forecast was 9.7 eps 130 the forecast was a dollar or under that 99 cents. they got a beat in fixed income trading like the others though that's a smaller part of the pie. 1.3 billion relative to 900 million expectation. equity trading held up well. some of the other source like miss important area for them to see hold up well 1.9 billion in line with expectations wealth management of course a massive part of the pie for them was a slight beat, but clearly didn't see any pressures for margins, 4.6 billion the forecast is 4.4. big part of the beat, coming

double expectations, surprise, smaller part of the pie but massive beat, 1.4 billion of revenue in investment management, the forecast was for just under 800 million so, 600 million beat there pretty impressive. the release talking about aum, assets under management being up 20%. so not just the market performing well that they had net inflows over the course of the quarter year over year and also high performance fees and that's really where this main part of the beat has come in on. compensation expense i'm just seeing as well is a little elevated so, i'm sure there will be questions as to whether there's one-offs there or whether we're looking at a year ahead with much higher expenses on the surface looks like a very healthy number the shares were down a tiny bit before the open and they're now jumping as you can see 2% and they came into today up week to date all in all finishing the week nicely high relative to the market.

>> breathe a sigh of relief you made it through the week >> i'll miss it. >> do you love this? >> of course >> yeah. >> what do you think having looked at all these banks? is there a take away we can kind of spread on all of them >> i mean, interesting thing they came out it's been much more stock specific than perhaps past quarters where general themes have been at play and you see that where as jp morgan, citi and wells fargo saw interest rate effective part of the bank held up quite well. bank of america didn't bank of america call yesterday they downgraded forecast for the year, that weighed on the whole of the sector. there's a question mark about how much longer in the year ahead they can find ways to offset the interest rate pressures even though jp morgan managed it, jp morgan didn't really and investment management, doing well because markets are high trading not so great in equities but very good in fixed income. >> with all this stuff, i mean, so on top of it.

were you able to keep up on mexit. >> not the last three days. >> do you still have harry's cell phone supposedly all his friends don't even have his cell phone number. >> not all of them, some of them. >> he doesn't talk to any of them. >> i never had his cell phone. >> is there a new candidate in the canadian number to call? >> does the area code change. >> you have to ask his friends. >> this is all sort of amongst you people you don't even divulge anything you're talking about. you can't tell us anything -- >> i'm not a close friend of harry's joe. >> that's fair for disclosure. >> not close how many really close friends -- >> how many people live in that country, right you have the accent, you think everybody should have the phone number. coming up when we return, a lot more on "squawk box" ahead parent company comcast meeting with investors today ahead of the launch of its streaming service peacock. we're going to speak to an analyst about what it means for the company.

then blackrock doubling down on making climate change a focus for their investment strategy. we'll have a debate on whether the issue will reshape finance or not like larry says or if it's just a marketing ploy to bring in new investors. "squawk" returns right after this ♪ >> announcer: time now for today's aflac trivia question. which chinese city opened the first mcdonald's drive-through the answer when cnbc'ssqwk x"etns "ua because health insurance doesn't always pay it all. aflac! after surgery we had extra bills followed up visits, deductibles. we thought health insurance had us covered up for everything, but it didn't. aflac gives you money directly to help you with those things. i want to thank my wife, my mom, the duck. get help with expenses health insurance doesn't cover. get to know us at aflac.com

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♪ >> announcer: now the answer to today's aflac trivia question. which chinese city opened the first mcdonald's drive-through the answer -- beijing. ♪ welcome back, everybody. cnbc's parent company comcast is getting ready to enter the streaming wars today we'll find out more about its peacock service during the company's investor day here is what we know the service is scheduled to launch in april. unlike competing services, it

will be ad supported comcast is expected to spend $2 billion over the next two years over content and marketing we're joined right now by jessica, senior u.s. media and entertainment analyst at bank of america securities and jessica, great to see you today. >> thank you thanks for having me. >> what do you want to learn today? >> well, i think it will be important to find out what the distribution will be besides comcast. what the content will be, of course, and what the revenue -- where the revenue will come from we know there already ad supported which is great because everybody else is behind a pay wall we'll have premium content with advertising and a direct consumer relationship, but what else what about the sponsorships? there for sure will be sponsorships and will there be any subscription revenue will people be able to buy it at a footprint? hopefully we'll get a better handle on costs. >> you touched on the difference in the model barry was with us late last year and said he liked it because it was a different business model

because it was ad-supported. why do you think that's a distinguishing important fact? >> it's really important because you have premium video content with advertising with a direct consumer relationship. so, the cpms will be higher than other content. and it's unique and advertisers need a place to go there's so much content but almost all of it is ad free. >> what do you think the street is expecting >> comcast got the bad news out of the way in december by saying there's $2 billion of losses over the next two years. i think execations are incredibly low it will launch in april. the real push is probably behind the olympics that's the secret sauce of comcast. amazing, amazing benefit in terms of distribution. you have the olympics, which is unparallel in terms of promotional platform and of course comcast symphony. you get the resources of the whole company behind it which is really unique. >> in terms of cost, how much do

you think -- how much do you want them to spend to be competitive relative to the fact that obviously netflix is spending a small fortune and now you have disney spending -- everybody is spending a small fortune or a big fortune really. >> big fortune actually. >> $17 billion for netflix. >> the question is 2 billion enough too much too little >> comcast is a conservative company. the preference would be probably to have more originals, but there is 15,000 hours of library and tv content and some really strong shows, "saturday night live," "the office" will come back from netflix. we'll see how much content is pulled from hulu the spending will probably be looked through in the early years. >> do youwant them pulling a lot of content from hulu and other places >> it's important to have a really strong video offering this is the way the world is going. >> an exclusive. >> and exclusive

and this is very friendly to the ecosystem. the existing pay tv bundle unfortunately we're in new york and we can't get it, but it will obviously be really easy if you're a comcast scriber to toggle between different services. >> what do you think of the stock? we've seen a bit of a pickup recently. >> yes but our price drop is 38% above current levels many still a long way to go and obviously all of these direct to consumer offerings, all of these new streaming platforms will only drive broad band. >> you're sticking with the $58 price target because -- >> despite the peacock losses, we still think the cable business is really strong. nbcu is incredibly well run with still a loot of upside in multiple areas of the company and expectations sky are pretty low. >> jess karks i want to thank you for being here i know you're attending later today. we would be interested to hear what you think after the conference. >> she's so smart. so smart, jessica.

i've known you a long time you've been great on media this is a parent company, so we -- we would let you go a little longer if you wanted to >> anything else >> tell me more -- enough about comcast. tell us more about comcast no, i'm kidding. >> i love your company, but it's -- you're just so conservative that's the thing -- >> you think it's way too conservative >> the spending should be more >> okay. all right. relax. >> it's still great. >> how about that nice broad band -- >> charter is outperformed >> everybody is talk about core cutting, you have anybody that streams has to have -- >> broad band. >> we're not on, are we? >> yeah, we are. >> sorry >> it's good to hear >> okay. >> good to hear what you think. >> you can watch right there. >> the conference video, too. >> we're going to start doing this to get their real -- we're going to do this to get the real story. i think we should. i'm going to say something so outlandish we couldn't be on

which i usually do. >> you do that on a regular basis. >> thank you. >> thank you, jessica. >> thank you >> it's all good we will debate blackrock and new investment strategy. larry theory reshape climate and the way we invest. for law enforcement and other issues, iphone and what that could mean for the tech giant. also, coming up at the top of the hour, president trump signing phase 1 of the trade deal with china, so what comes next white house trade adviser, peter navarro will join us "squawk box" will be right back. dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives

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♪ welcome back, everybody. far point acquisition purchasing swiss payments company global blue for $2.6 billion including detd the fin tech company processes transactions for international shoppers and has been majority owned by private equity firm silver lake since 2012 silver lake is going to be keeping a minority stake in this but joining us first on cnbc is tom farley, far point acquisitions founder and cnbc contributor and tom it's great to see you.

>> friend of the show. >> congratulations >> thank you >> you've been working on this forquite a while. >> first conversation i had with silver lake was i think actually the week we raised the capital way back in the summer of '18. these guys at silver lake are impressive to a great extent i was able to just ride their deal making machine very good technology investor >> how did you persuade them to do this as opposed to take the company public more traditional way. >> if i can toot the far point horn they saw an opportunity to team with us and thought it could be helpful. the ceo who runs the business today, run the business for four years, previously public market executive did a great job investors for eden red, the next leg, silver lake thought this was the next leg to create value for the business. >> i think it's probably important that silver lake is

keeping a stake in the company, too. >> also they owned it for eight year you invest and you have to get the dough back they'll be in with 40% stake they're not selling out. they don't run for the hills they're excited about the next chapter. >> dan lobe is putting more money in, third point. alibaba and financial. >> it's really an all star cast. so there's a billion dollars of equity going in the business 650 we have in trust 125 from ant financial relationships matter when you're a kid straight out of school you hear that. you don't know what it means ant financial i met on the stock floor. silver lake we purchased when i was at i.c.e. and nyc. dan lobe, a friendship a decade in the making. third point is coming in for 100 million and number of new investors coming in for incremental 125 million, new investors, long only, fundamental hedge funds. >> when will there be a vote and

will this deal close >> the vote comes at the end of the process. >> right. >> so, this is a little odd. typically when i say typically, every time that i know of the vote is yes because of the way spaks are structured, but you have to go through the approvals process with the s.e.c it takes 2.5 to 3 months that's just an estimate. >> why global blue, what did you like about the company >> global blue is digitize the vat refund business. americans aren't familiar with vat in a nutshell. v value-added tax. today there's 1730 80 allow you to get a refund if your a foreigner global blue refunds the tourist traveling to france and buying a scarf, they have 70% market share, digitizing that process the thing i love about the business to answer your question directly, as the emerging market economies grow, more middle class, more rich people, what do

they want to do? travel and spend chinese are a big component of this thus ant financial. >> that was the next question i was going to ask which is long-term, do you use this as an opportunity to roll up other businesses and expand that business or why wouldn't ant financial just say i love this idea so much i'm just going to pick this whole thing off? >> it's very strategic ant financial is not the only strategic investor who is -- was interested in this business. in payments, i'm getting a little nerdy here, but in payments cross border payments are far and away the most lucrative place. so the card networks, 4 to 5% of their volume is kros border. 40% of the revenue this company global blue, that's all they do is cross border payments so if you're the ant financials of the world, one of the best financial technology companies in the world ever known, and you're looking to export more and more and more out of china into cross border or the big payments guys like fieser or fis or those types of guys or the

card networks, you're looking to do more in cross border. so global blue is very strategic. when you say we do acquisitions, yeah, we'll do acquisitions. the business is just growing it's just growing. >> possible, 12, 18 months, 2 years from now ant financials says let's just take this whole business out completely. >> yeah. that's not a strategy, but yeah. it sits between -- it's in a vin diagram sits between those three groups of strategic players. business growing organically ceos come on says our business has structural growth. there will be more people wealthy traveling and buying in china. >> it's near geneva. >> you want me to stop by? i'm going on monday to kick the tires. i mean, i hate to get there in a big facade, you checked this out, right >> no. as chairman i get to schedule the board meeting. so all four will be in january and february so i'm having a strategy

session. >> are you going to davos this year >> i'm not. >> i will stop by that place i'll tell you what i think of it, if you want me to. >> it's beautiful. great skiing do you mountain bike >> i probably could. >> he said earlier on the show you can't mountain bike. he can't touch his toes. >> you look like an irmaonn. >> bring the dogs. bring the dogs come to switzerland. -twins! grandparents! we want to put money aside for them, so...change in plans. alright, let's see what we can adjust. ♪ we'd be closer to the twins. change in plans. okay. mom, are you painting again? you could sell these. lemme guess, change in plans? at fidelity, a change in plans is always part of the plan.

welcome back to "squawk box. blackrock shake up the business world with that decision earlier this week to make sustainability the focus of its investment strategy i spoke with larry fink about why as the world's largest asset manager he decided to make what he's calling a fundamental shift. >> we believe a portfolio that focuses on sustainability and climate change will be a portfolio that outperforms so the main component of the letter is saying, this is going to be a great investment over the next ten years >> joining us right now is hall lambert, the founder and ceo of point bridge capital, the chief investment money pioneer investment manager hall, i want to start with you

you think that larry fink is making the wrong decision here >> well, what the american people need to understand is that there's been a war going on against american companies for at least the past 20 years it started with a small group of left wing agitators and mushroomed into hundreds of 501.3 c companies gone after the boards of these companies to affect policy changes they can't get past legislatively with congress or state legislatures that conform to their view of the world. and let me tell you, they're winning. there's only a couple of groups on the right that are pushing back on this so while the rest of america's gone to work everyday trying to pay their bills, companies adopted new policies, these social responsibility policies and now they're using those policies to implement things like defunding, you know, congress people that don't agree with those positions trade organizations that don't agree with the positions and let me tell you these left wing groups don't have any -- they don't care at all about the profitability of these companies.

they only care about what's happening in their social responsibility world so, yes, i think larry fink is making a mistake if you look at what he's said in your interview, andrew, there were two big red flags in that interview. the first was, he said that, hey, when he was writing this new letter on his social responsibility compacted sustainability that he's doing with his investment on the firm level, he was very emotional as he wrote it. why do you want an investment manager who is emotional about the investment decisions he's making the second red flag is that you asked him, this is the biggest one, you asked him about mandate that you have to focus on the profitability of creating the highest investment returns for your investors he said, yes, he knows about that he wishes he could change it he wishes he could change that mandate that you have to focus on creating the highest returns for your investors those are really troubling signs from a company that's now managing trillions of dollars for investors. >> hey, ken, obviously you -- i

know you take the other side of this but speak to the economics of it at least my understanding of the way larry fink was trying to describe was he was saying he was doing this on behalf of the clients and that he was being pushed by the clients to do it and doing it because he thought it was a better investment >> well, thank you, andrew good morning look, we're not politicians. we're investment advisers here and this is something we've been doing for almost 20 years pioneer without the heat of politics, hold the press activists who have been trying to affect politics for hundreds of years and nonprofits have been trying to affect their goals and manage their activities in ways consistent with their objectives are now trying to use their money, have their money invested in ways consistent with their goals. i don't think that's so out of line in fact, we're happy to advise and manage those kinds of clients that want their money managed in a certain way that

has a certain impact but of course, that's not the way we manage our mainstream open end mutual funds where we have all comers from all parts of the country with all different types of political views. >> just to get to the original point, though, in the culture wars, are you offering funds, a war has two sides typically. so in the culture wars, are you offering funds that appeal to both sides in all the culture wars i mean, we haven't decided on a lot of these contentious issues that we're talking about so larry fink has his own predilectio predilections. he gets emotional about the future he thinks we're facing for whatever reason. there's other people that don't feel that. do you have funds that someone that might have the opposite viewpoint might want to invest in or just that one progressive side of everything >> well, we don't have funds that have a political objective for open mutual funds. no if i can make my point, we're

not here to battle the cultural wars that's battled in democracy. we're here to manage our client's money in the best way we can in fact, when you look at some of the criteria that are out there in the nomenclature of esg, it's not an investment style. they're just another set of criteria to be used in order to judge the 360 degree prospects of a company let me give you an example fracking is a very controversial cultural war item you keep talking about the cultural wars. you know, i have a view. you have a view. everybody has views on fracking. that's not the way we invest m. what we do with fracking is we what is the risk to the company? there are parts of the united states where fracking is perfectly well accepted and there's no regulatory changes going on colorado voted down changes. texas, it's open season. however, in pennsylvania they're making changes so, what's the risk to our companies that have most of their properties in

pennsylvania, which can have severe regulatory -- it's not that i have a view it's that the democracy is changing we have to react to it >> ken, final word to hal here just speak to that issue, though and one of the things larry fink did say was he believes there's a new generation whether it's millennials or otherwise who are going by default at least directionally to want to invest more in what it might be described as sustainable companies, they're going to be implementing regulations like this that are affecting the way ken and others are thinking, hal. >> well, that may be but there are millions of americans that don't have that view when you ask larry fink in your interview about those people that don't share that view, he didn't have a very good answer because what do you do -- he said, oh, we'll work for them, too. only if you have, what, hundreds of millions of dollars and you can do a separate account with all their funds appear to be going towards sustainable investling, which many people don't agree with what are you going to do then? move your money out of black rock if you don't agree with

that investment approach i don't see an alternative to that look, this is much deeper than trying to pick a fracking company or not a fracking company. this is an attack on companies around the country to change policies at all the companies. and by the way, if you think you're a private business and you're going to be immune to this you're not they're forcing these companies at the public level to also look at their suppliers and say, hey, are your suppliers conforming to this >> hal and ken, it's a debate i know will continue i imagine we'll have you both back to discuss it thanks very much, guys >> appreciate it when we come back, a lot more, apple gearing up for a fight about unlocking two iphones used by a gunman in a shooting in florida last month we're going to discuss that big debate after the break. after the break, peter navarro is our very special guest. never one to hold back 'ltao him about the china phase one deal and what may come in phase two. gives us.

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apple court controversy this week privacy battle with the trump administration was reignited over its refusal to let officials access the iphone of the gunman >> it is absolutely critical for our technology companies to cooperate with law enforcement

this is a complicated issue. we're not looking for our technology companies to be controlled in any way by the government we are looking for cooperation and there's areas where apple does cooperate and i know there's on going areas of concern that are also being discussed. >> joining us now for a look at apple's legacy, co-anchor of cnbc "squa alley" and author of new article on tim cook's impact on apple since taking over for steve jobs nearly ten years ago. do either of you have a clear-cut, definitive answer that doesn't have any nuances for what the right way to approach this is for apple >> yes >> you do? >> yeah. >> which is? >> encryption is good. the right way is to leave apple alone. the government is being lazy investigation is too hard, we're going to sacrifice your civil liberties. >> that's what i said. you can't say that because

people say you need to help. >> you bring me on to say the things you're not supposed to say. >> i'm with you. >> china will say that's nice. turkey, iran, same thing once you create that so instead, government and government agencies do the hard work, figure out how to break into things instead of insisting that all the lock companies in the u.s. compromise. >> by the way, there's not a lock right? it just doesn't exist at this point, i thought back door. >> a back door no, a back door doesn't exist but lock picks exist there are constantly companies trying to come up with these things back with the san bernardino case, israeli company. wait, we found somebody who can break in, never mind now they're bringing it up again. >> i don't think it's just about the government being lazy. it's a little disingenuous these are older iphones there's a lot of evidence out there that they can already crack into it there's already the technology out there through those third parties you're talking about, the lock picks so what they're really doing is challenging. they've wanted this back door

for years and years. and they see this as another opportunity to kind of force apple's hand i don't think apple is going to stand down john and i were talking about this earlier tim cook was reported "the new york times" yesterday that he was willing to resign over this if the board said no we have to play nice with the fbi they will go as far as they can with this. tim cook really believes in it >> well, the flip side, though, is, you know, tim cook as we discussed had this sort -- threaded this needle, had this great relationship with the president and what this does to that relationship if continues down this road and is william barr really after -- is this really about trying to set a precedent? is that what he's trying to do here more than anything else >> maybe it is i don't know it's a dangerous precedent because this is a government that hates back doors except the ones that it has access to what are they upset with huawei about, back doors. the whole allegation, they're cooperating with the chinese government to create back doors for their technology that should not be allowed everybody around the world --

>> if tim cook persists -- >> is it dangerous for apple >> is it dangerous for apple when it comes to other issues, frankly related to trade and phase two. >> repercussions. >> no matter what tim cook does in this situation it's dangerous for apple. so the way apple tends to play these things is we're going to go with what we think is best for the customer, come what may. right? if he cooperates with trump and the administration, that's dangerous. he thinks the promise he made to consumers and what he thinks is technologically correct. puts their whole security posture on bad footing if he doesn't, then he risks getting taken to court next time he needs the government's assistance in something, maybe he doesn't get it sort of the catch 22 >> so i guess my question is like sort of a leading question that there is no correct answer. i would answer it the way you answered it. but i don't know if that does it for everyone involved. i think it's maybe nuanced actually i thought mnuchin threaded it pretty well yesterday. >> yeah.

>> there's a way -- mccarthy leader mccarthy also said something yesterday. yeah, i want privacy, but if push comes to shove and we can find something out about terrorist -- >> of course california. he gets these tech companies. >> where are you from? >> from, i'm from everywhere, joe. >> there's a lot of zen things going on here. >> went to college in the midwest. i'm all over the place >> good. me, too. >> thank you, gentlemen. great to see you both. >> thank you. when we come back, white house trade adviser peter navarro, futures pointed to a higher open after yesterday's record highs "squawk box" will be right back. in fact, right now, it looks like we would open at. 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.

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cool ♪ a trade deal victory lapan a look ahead to phase two. top white house adviser peter navorro will join us live. last of the big banks reports. morgan stanley out with fourth quarter results. details straight ahead. and another potential pitfall for the retail sector coming from the housing market we'll tell you which stocks are vulnerable the final hour of "squawk box" begins right now ♪

good morning, welcome to "squawk box" right here on cnbc we're live at the nasdaq market site in times square take a look at u.s. equities at this hour. as we begin the 8:00 a.m. hour, about an hour and a half before the market opens dow would open 107 points higher, s&p 500 up 14 points higher, and the nasdaq looking to open close to 50 points higher let's also show you treasury yields right now you can look at the ten-year note at about 1.779. becky. here are some of the stories that investors will be talking about today. morgan stanley out with fourth quarter results just a little bit ago. the last of the big banks to report beat analysts estimates on the top and bottom lines by a lot. in fact, revenue came in well above expectations with firm wide revenue exceeding $10 billion for the fourth consecutive quarter. that stock right now up by about 1.5% also take a look at shares of tesla, which are down this morning. the company's stock receiving a downgrade to underweight from

equal weight at morgan stanley, which pointed to the recent stock run-up as well as long term risks associated to the auto maker's china business. that stock is off 3.7% but put into context with the longer chart it has been up significantly in recent months separately, tesla saw vehicle registrations in california cut nearly in half during the fourth quarter in 2019 compared to a year earlier that decline comes amid a significant drop in federal tax credits for electric vehicle buyers during the year 2019. finally a new report claims that tesla is once again the most shorted stock in america take a look at shares of southwest airlines and boeing, by the way, this morning southwest took its 737 max jet off of its flight schedule all the way through june 6th it is the second major airline in the united states to do that. southwest air up by about a third of a percent this morning and boeing shares up by a quarter percent. president trump taking a victory lap, signing of the u.s. china phase one trade agreement,

but the president also made clear that we shouldn't expect tariffs on china to disappear any time soon. >> i'm leaving them on because otherwise we have no cards to negotiate with and negotiating with leo is very tough but they will all come off as soon as we finish phase two. >> joining us now to talk about phase two negotiations a key member of the trump trade team, peter navarro, assistant to the president and director of the office of trade and manufacturing policy i saw you making the rounds yesterday. i was watching the signing ceremony >> good morning, joe >> there was a festive mood in the room, i must say let me ask you, peter, you're known to be somewhat hawkish we had steve bannon and hedge fund gentleman kyle bass on yesterday that both pointed to the notion that the tariffs were remaining. so that it's not just a folding to china to get more

agricultural products. in other words, i think bannon was saying that the president got the best of china. that's not what you're hearing in mainstream media, from chuck schumer or the democrats you're hearing that we folded. didn't get anything and we're just back where we started after this exercise. >> well, let's talk about what we got and what we didn't get. what we got in the phase one deal is very strong protections for intellectual property which is worth about 300 to 500 billion a year if we can get that moving. we got a good start on forced technology transfer. we've got a strong currency manipulation provision in there. three of the original what i call seven deadly structural sins above that, of course we got some very good purchases, 200 billion over the 27 bench 2017 benchmark, spread over two years, spread out over four

sectors, ag, energy, financial as much ass and manufacturing. and of course we got financial market access which has been a white whale for the folks on wall street that you interact with everyday, banks, credit card insurance companies >> yeah. >> so that's a solid phase one what we didn't get is what we have to search for in phase two, unfair subsidies, state-owned enterprises certainly, the cyber intrusions joe, this is a big one for me. it's just insane that chinese government officials continue to hack into american businesses with steel trade secrets and the seventh deadly sin, of course, is the fentanyl that kills over 50,000 americans a year. so, this is a great day yesterday for america. let's be clear about this. we brought the chinese to the bargaining table and we got them to sign a deal that's good for

america. we have a lot of work to do, but that's what president trump does he does a lot of work. >> peter, you listed a long chain of things that we would be looking for in phase two some pretty important things, as you mentioned. cyber terrorism and other issues along those lines. those seem like really heavy lifts. do you think that list is the white whale in terms of trying to reach a deal with china >> well, it's not cyber terrorism. what it is, becky, is cyber theft. what the chinese do and they do it in uniformed members of the chinese military sit in shanghai and hack into computers here in the united states and businesses that will sometimes sit there and what they call these advanced persistent attacks where they'll sit there for a year and they'll watch things. they'll steal things it's very destructive to our businesses they promised back in 2015 to stop doing it. they didn't stop doing it. so that's something really that

we take very seriously here that we need to address but again, yesterday was a great day. we got a great start on these structural issues. >> you didn't include ip theft in the phase two. >> that's the first one. that's in phase one. >> that's what i mean. so that's done that's why i'm -- that's my question you feel like what's in phase one is tough enough to solve that problem because a lot of people, rick scott, senator among others saying they made promises in the past that they just don't plan on living up to. one of the things that didn't go back into the deal that caused the breakdown in april, what was some of this going into local law over in china. that didn't happen either. do we have a mechanism to hold their feet to the fire when they if they continue to steal ip, peter? >> let me quote one of your guests yesterday the enforcement mechanism as the

president said yesterday is firm and controllable it's as one of your guests said yesterday, judge, juror and executioner is on our side of the fence. basically the way this works, joe, on a 90-day clock, okay, this is not your father's world trade organization dispute resolution that took three years and got us nowhere, this is a 90-day clock controlled by ambassador robert lighthizer, the ustr, if there's an issue, it comes to him. he negotiates with his counterpart in china and if we don't get satisfaction, then we unilaterally have the authority to take proportionate measures but let's -- why don't we deep dive a little bit into this intellectual property theft because it's an abstraction when you put it that way. but one of the purest expressions of ip theft is the counterfeiting >> yep. >> and there's a great section that nobody's yet really talked about in the deal on

counterfeiting particularly over ecommerce platforms. and this president, donald j. trump, always likes to skate where the puck is going to be. so this white house for many months now has been working with customs and border protection doing what we call operation megaflex so every month cbp has been opening thousands and thousands of packages from china and hong kong looking for carefully at what's under the hood. and we're finding, joe, it's an astounding rate of discrepancies as it's been an average of 15% of the packages coming in. remember, there's about a million a day coming into kennedy alone. 15% violates some regulations. half of them are counterfeits. the other half are things like controlled substances. deadly fentanyl, by the way, gun parts that shouldn't be coming in, fake driver's licenses

we have license in this new deal to crack down very heavily on that flood of counterfeiting the alibabas shopify, they have been facilitators of the chinese counterfeiting so, if we're going to enforce this deal, it's going to be a big part of that is scrutinizing this. >> peter -- >> the deal gives us the ability to do it. >> you just mentioned two u.s. oriented companies, at least, both in the context of amazon and spopify. what kind of regulations would you want to implement and what kind of responsibilities would you want to put directly on them >> well, we don't love regulations in this administration but what we do love is corporations accepting their appropriate responsibility right now it's skewed. if you're an intellectual property rights holder, whether you're michael coors or louis

vuitton or pfizer selling prescription drugs, the onus is on your company to police the internet where a lot of this counterfeiting occurs. that's not right amazon alibaba, walmart.com, all of these companies have a problem. and here is where the problem -- >> how do you plan to hold them accountable? >> but let me say this the big issue with this counterfeit chain is with what's called third party online marketplaces that pop up in places like china. then they plug in to the amazon or alibaba hubs and then they reach the consumer let's be clear here. you get defrauded when youbuy counterfeit, but sometimes these things can kill you because seniors buying prescription drugs -- there's actually in the deal and i'm pointing down now because i have these pages in front of me, there's actually a portion in the deal about counterfeit prescription drugs

so, we've got to figure out a way to tackle this problem and we're going to do that. >> what i'm trying to get at -- >> you want me to say what kind of regulations >> no, no. it's not regulations to the extent you want to hold -- look, we want to all hold china accountable. >> sure. >> to the extent we have american companies like amazon, and like walmart, acting effectively as distribution arms through these third party mechanisms. >> yep. >> how to the extent you want to hold them accountable or change that dynamic, what is the administration want to do? >> true. >> if you're doug hamlin or jeff bezos and you're listening right now, what are you trying to tell them >> i would love to tell -- i've told amazon, i've told ebay, i've told all these platforms we had here at the white house, look, this is harming your consumers. it's harming your business model. you're making a bunch of money off these folks selling this counterfeit stuff, but you're

not accepting your full responsibility cbp has tools. there's suspension and debarment if you get chronic, serial deporters if you bring this in there's civil fines and there's penalties. there's all sorts of things you can do, but the best thing is for the -- for china first of all to police those online marketplaces and it's right in the deal it says they got to do that. and right here in america it would be nice if the ecommerce players whether it's the ecommerce hubs themselves and everybody in between assumes some responsibility for this problem. i mean, look, let's go back to the numbers here 15% of the stuff that's coming in right now that americans are buying is contraband it can hurt you. it can defraud you and

everything in between. >> how do you feel about huawei in terms of them and people we described as a chess piece and talked with the secretary treasury yesterday in terms of how the u.s. government wants to approach that company. by the way, maybe you even want to comment on what's going on with apple because some people look at that back door situation very similarly to the huawei situation. >> yeah. andrew, my three favorite words on tv in the swamp not my lane >> okay. >> you like to go out of your lane with stock market calls, though. >> hey, are you guys going to have me on when we breach 30,000 on the dow and play my clip predicting it? are you going to do that for me? >> what's your -- i don't remember your target what you want to do -- >> come on now. >> do an s&p target. >> i predicted 30,000 on the dow back in july. >> i know. >> back in july. >> i know. >> if we got u.s. mca passed and

we got interest rates lowered. >> you and i did 25,000 on the dow the day after te elections >> what determines whether phase two goes past the election or starts right away? is that the chinese? is it president trump? is it -- what's key to having that start right away versus being pushed back? >> you know, every time i've walked across the street the ustr, his door has always been open. >> okay. >> there's your answer >> okay. so are you saying we'll see what happens? i know someone else likes to say that a lot >> my favorite person on the planet here, that's what he loves to say a lot. >> he does let's see what happens. >> this is incredible. today we might get u.s. m.c.a. a day after we got a phase one china deal. >> right. >> we got the greatest labor market in the last five decades. i mean, this is just a beautiful thing. and i think wall street is voting in favor of that. >> we're seeing another triple

digit gain a day peter navarro, thanks. appreciate it. >> take care. coming up when we return, why the stocks of some well known brick and mortar retails could have a headache to deal with this year thanks to development playing out in the housing sector as we head to a break, though, take a look at shares of morgan stanley reported quarterly results this morning we'll break it down. remind e always watch us live on the go on our cnbc app you're headed to work right now, take it with you turn it on "squawk box" returns right after this ♪ myww's been an amazing journey.

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welcome back to "squawk box. morgan stanley beating on the stop and bottom lines for its latest quarter earlier this morning. here are the details of these reports. >> the broad thing i would say about the results i just got off the phone with the cfo is that this is really strong across the board. he wanted to highlight the fact that they're consistent in that they have four quarters of over 10 billion of revenue. the full year over 41 billion. that's a large part what people are reacting to and wealth management, the sort of price wars we have seen going on, the

margin was above 27% that's impressive. the two big standouts we talked about earlier were this big, big beat in investment management. that is down to particular strong performance from their asian-based p.e. funds that's a lumpy part of the bi business i don't think it's purely strict out in goldenman sacks equity investments like at less valuable to some of the fee income this is still fee income it's carried interest earned on an asian private equity fund but clearly a lumpy strong performance from one particular company that ipoed this past quarter. won't perhaps get as repeated next year. on the compensation expense, which is a little bit elevated, talking more about the fact that that's just down to really strong revenues last year, so comp expense goes up also some layoffs in december. that accounts for 200 million. that explains some of that either way, very strong set of numbers. it's jumping again now 3.6% that's more than the 1 37b9 5% they're laying out some of their

targets for the year ahead and they'll do than the earnings call that kicks off shortly. that's quite encouraging targets for the year ahead. >> thanks. we have news just out. cnbc learning that the shared work face company wework only signed four leases in the fourth quarter after its failed ipo that represents 184,000 square feet of leasing space to drop of 93% from 2.5 million square feet it had been averaging for the prior four quarters according to data that real estate firms see the re shares with cnbc. maybe it's to be expected. >> that's not right math. >> 184,000 square feet of leasing space is more than a drop of 93% from 2.5 million. >> the question is and i think the issue is that this company had been growing so fast and frankly too fast. >> the math is not right that'sa drop of more >> yes >> that's like cataclysmic.

>> it would be unless -- i mean, the question is whether they felt like they overextended themselves so much earlier that what you do is dial the whole thing back which is what's happening. >> which is what's probably happening. >> what will happen over the next two years i imagine they're not taking new space virtually everywhere. >> shrinking the footprint continually. >> i think you'll see two things happen one is you're going to see them reduce the amount of leases they have in their entirety two, it's going to become much more like a hotel company. they're effectively the surfaces layer on top of other people who will rent the space themselves you'll have people -- you'll have real estate companies who will bring them in and they will effectively like a marriott, somebody else will own the real estate and they will effectively not be -- not getting out of the real estate but to the extent they're going to grow, it's going to look much more like a hotel company in especially outside of the biggest major markets like new york and l.a. and london. >> i think that is 7%.

186,000 divided by 2.5 million is 7%. >> okay. i see. >> 93% down. yes. >> 93% decline, too. okay there is something unusual happening in the housing market. it's heating up right in the dead of winter as strong demand pushes sales however, one corner of the market is showing signs of weakness diana is here with more on this story. diana? >> reporter: well, becky, home remodelling is actually pulling back a little bit thanks to weak home sales last year people usually remodel their homes in the months and years after they close sales were lower for most of the year which means home remodelling historically grows 5%, will barely gro 1.5% according to harvard's joint center for housing in 2018, remodelling growth hit 7% spend willing start the year at annual rate of 326 billion and not go much higher than that by

the end of the year. this could hit stocks of the big remodelers like home depot, lowe's sales started picking up now if sales are more robust this year that will push remodelling spending higher but right now a severe shortage of homes for sale is standing in the way. one bright note, though, the shortage continues to keep some potential buyers in place and the longer they stay, the more they probably want to fix something up back to you guys. >> diana, what are some of the most popular remodelling projects >> well, it's always kitchen and bath but you're actually starting to see more smart home remodelling and more environmentally friendly remodelling and also, the outside. it's getting to be a be a big deal always kitchen and bath. >> what gives you the best return on investment, still kitchen and bath, though >> well, you know, you would think it is. that's what people want most, but actually when you look at more of the structural things like a new roof, a new front door, that was a weird one to me but apparently you get a huge

return on investment for outdoor stuff. >> that's pretty cheap. >> exactly especially a new roof because that's what people want to know that the roof is relatively new. >> diana, thank you. great to see you coming up, a tough morning for tesla with a downgrade at morgan stanley, news of fewer registrations in california last quarter as federal tax credits drop and a report saying it's once again the most shorted stock in the u.s. i didn't write any of this don't text me. much more is ahead >> announcer: still to come, instant reaction to this hour's news-making interview with trump trade adviser peter navarro. just minutes away, a live interview with ohio senator rob portman on the industry's poised to come out ahead in phase one of the u.s./china trade deal staytuned. you're watching "squawk box" on cnbc sight, my biggest fear was losing my independence.

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welcome back to "squawk box. take a look at the futures ahead of the market open got more green arrows. dow up 108 points. nasdaq up about 48 points and the s&p 500 up about 142 points. not 142 points 14 points. >> i was looking behind you at the prompter shares of several sneaker makers are getting a boost overnight on reports that world athletics is

considering a ban on nike's vapor fly shoes and professional running competitions the shoe helped a number of athletes break world records including the first sub 2-hour marathon a carbon fiber plate the mid sole helps prevent energy loss during strides some people in the racing world says it gives runners unfair advantage. shares of asics gained 8% in tokyo before pairing those gains. >> i think that is so cool that's too bad that you can't use them i asked, what do they have flubber. do you remember some of flubber. >> i remember flubber. >> just seconds away from some several key economic data releases can you belief you can make a -- >> one guy said it's 1350% decrease if your new leases go to -- 184,000 square feet from 2.5 million. you're talking about the growth not the absolute number. >> i don't know. it just in terms of the absolute number, though, that represents

7% of what the space >> but it was new leases that were signed, not existing spaces overall of it. so your growth -- >> how do you do a decline of more than 100% -- >> it's growth. data releases including december sales numbers. >> but you're talking about -- >> rick santelli standing by rick, what's up? >> all right let's look at import prices, shall we up .3 as expected expetrole expetroleum, up .2 little hot export rices, down .2, mere image of expectations. we're looking for number up .2 look at year over year down .7 that is basically little less than half of the slightly revised minus 1.2 in the rear-view mirror all right. the big number, retail sales

also for december, up .3 also matching expectations we gain .1 and last month's revision from up .2 to up .3 you strip out autos. it jumps up .7 better than expectations strip out auto and gas sales up firmer up half a percent the control number, fascinating number, plugged into other numbers upstream it's up half of one percent. .5 control number is the best since july when we were at .8. so really bouncing back quite nicely finally, jobless claims. down 10,000 from an unrevised 214,000. all right. "squawk box," gang, back to you, knowing that yields actually did pop up a bases point and a half or so and the preopening equities have firmed up just a tad. >> just before that, the ten-year yield was at its lowest level since january 8th.

so, yeah that kind of explains why you see this pop now thank you, rick. >> yeah. wait hold on. hold on. finally, philly, fed, it was late it just popped in at 17. that is a real nice number that's about three times what we were looking for and that's the 17 that's the best number since 17.5 since may we should gain a little bit more action on the bases points on tens with that strong number >> okay. >> rickster, thank you, sir. steve liesman is here on set and studiously doing his work. >> yeah. i'm coming to a conclusion that we ended the year with a little more strength than we had the middle of it the idea that philly fed could be rebounding is among the more interesting things to me i would take it guardedly in the sense that there's some other regional surveys that weren't as strong new york fed wasn't as good the other day. if we could get a rebound or stabilization manufacturing sector, we can start firing on all cylinders in this economy and maybe this trade deal will help us do it.

if we were to get a rebound in confidence in the c suite. retail sales numbers confirms this report out there, this sense out there that it was a strong holiday season. rick was absolutely right to raise his eyebrows and his voice and his level of excitement over the nonauto number, which is up.07. data, looks like department stores were, however, down 0.8% and a very modest number for non-store retailers. so the strength we saw was in building and garden equipment. we saw some strength also in electronics and appliances so maybe you were more likely to get, i don't know, a garden hose or iphone under the christmas tree than you were a sweater i don't know that's what the data kind of indicate here. where clothing was 1.6 also sweaters were good. any way, bottom line that control group 05 we'll see get upgrade to gdp i don't remember if you remember we started the quarter thinking it was 1.5 weak one, the cnbc

rapid update edged up and now it's running over 2. we might add another tick. so good strength to end the year with the question, was that the end of the slow down or do we get more of that in the first quarter? that's what we have to kears and