>> good morning. we are live from the marketsite in time square let's look at u.s. equity futures. dow was up 187 points. that came after the decline the day before apple and goldman sach led the way. s&p up the nasdaq's biggest gain since september 5. dow futures indicated up 112, a lot of that because of apple s&p indicated up before 13 and nasdaq bup 67. looking at the 10-year up above

1.6% looking at markets overseas. the shanghai composite still closed we are paying close attention to the hang seng, which is playing catch up after being closed last week it is on track for the worse month since august the nikkei up a little higher by 0.07%. top corporate earnings numbers, it makes the hair on the back of my neck stand straight up. when a stock goes up and you are not sure what's going on then you are like, well, no wonder when i'm anywhere in the world and i see someone on an iphone and they are wearing air pods,

it becomes clear to me everyone in the world owns an iphone and someone sold that to them. >> brian put out a stat it is tick saying that the wearables is now $22 billion >> there is no flying car with apple tv yet >> remember people didn't give them enough credit for the watch. >> what's wrong with your voice? >> what's wrong with your nose >> no arguing today. >> i've got my warm water. >> everything you say, i'm going to say andrew is right >> if that's the case, i hope you guys are sick forever. >> i feel like i will be it's going to go from $1 trillion -- i'm not making a forecast we waited for a trillion for so

long >> the gains this morning are substantial. apple set to add to record run. it was a holiday quarter they'll do $60 plus million for the current quarter, which is billion. that $90 billion $91.82 reporting the largest profit for any company in history up 11%, this is profit, $22.2 billion for the quarter. apple gave an upbeat view but said the coronavirus means there is less visibility in apple's outlook. i'm headed to the apple store today to get some new air pods for my son i don't know what he did with them >> virus man is coming >> good clear out. i'd like a clear path because

there never is one there that segment includes air pods and watches. someone tweeted me about silicon cover they purchased for these >> the new airpods have the seal >> it makes me look even more ridiculous services were up 17% driven by the addition of the credit card, video subscription and we'll show you what tim cook said later this hour. talking about the coronavirus, we want to bring you an update. china now saying 132 people have died from the virus. the number of confirmed cases are up over 6,000. companies in response to the growing threat

starbucks announcing it will close half of its stores to help stem the spread. toyota is halting production in china until early february british airways halting all flights to china ab inbev suspending production at the brewery in wuhan. tencent is extending the lunar holiday break. a chartered flight with over 200 americans out of china landed in alaska to refuel all passengers deplaned and have been screened. this comes as airports are trying to step up their checks we'll get to eunice yoon now with the latest. >> reporter: thank you hong kong has taken a step

towards cutting off all train and ferry services and reducing flights in half. that's one of the reasons why cat had everyoc cathay pacific said it is scaling back inflight services for china. no amenities or in flight services meal services will also be limited. exposure to china were dragging down the hang seng to a seven-week low casino numbers because china had said it would stop issuing travel permits for mainland chinese going to the gambling center people look for safety measures like tencent

starbucks said it is closing half of its stores in china because of the virus apple has shut one store as for production, the apple supplier foxconn made a statement saying it has measures in place to meet all global manufacturing obligations despite the outbreak foxconn has been in focus because it has a factory in wuhan. some have pointed out it is one of the top five firms exporting to the united states >> eunice, thank you can you give us an update on people on the streets? >> it is very empty. people are now talking about not being able to get fresh vegetables i saw it myself and saw people

taking as many eggs as they could because store shelves don't have as much food as normal the agricultural ministry is trying to do their part to ramp up what the have on hand >> the two meetings coming up the beginning of march where 5,000 officials come with their aids the hope is that this will be contained before that at the beginning of march, correct? >> yeah. absolutely this is the national people's congress that starts on march 5. officials come from all over the country to gather and make their speech it is a really important meeting.

there is hope that this could be contained. the hope is totry to ensure people do not gather in close quarters that would be something that would be difficult to do if you are trying to get the entire country and politicians together in one place >> thank you >> so screening. if it is a 14-day incubation period what do you do, ask how do you feel the three of us wouldn't get through. >> this morning in the wall street journal, former fda commissioner and our next guest have a new warning saying features might be hard to detect joining us, vice president of

incutel and previously served for the white house. thank you for being here today >> good morning. >> the idea that there was a plane that arrived in alaska carrying more than 200 americans. reports are that they are being screened the next stop is in los angeles. is there any way to know for sure those people on board have not been infected? >> sure. there is no way to know for sure the cdc working with the passengers will be monitored very closely they'll be tested to see if they might be harboring the virus. this is a highly controlled situation where the contact will

be restricted until we know for sure whether they had been exposed. >> you said there is only one way to have this test done but it does take several days and results have to be sent to the cdc? >> that's right. anybody that needs to be tested gets the sample sent to the state health lap, the cdc and then back. this takes a couple of days. as the number of cases expand, it becomes difficult it is critical to get tests at the point of care. >> if this is a six-month event, wouldn't it be easier to do a diagnostic test like antigens right there?

couldn't that we developed in a matter of weeks? >> so the technology exists. it has to be refined when dealing with a new virus the most critical aspect is to identify any person that may be harboring the virus and isolate them that's the most critical step. we'll have a very dicey next few wee weeks. in china, more population restriction. this is a rocky road for all of us most of our efforts have to be towards developing this test i was happy to see the fda call to private sector. we have some hope these tests

can be fielded quickly >> is the feeling now that human-to-human transition is fast odds. it happens a lot >> there is a lot we don't know. it is pretty well established there is person-to-person transmission >> there are cases in other countries. >> that's right. we don't know but our biggest worry is people that may feel a little sick, not sick enough to stay home. they'll go about their daily business and that way infecting more people. there must be a sensitivation that people with the symptoms and risk need to be out of circulation. >> one of the questions is the mortality rate

i realize it is early. we have been reporting that the mortality rate looks lower than with sars. 3% or so with sars my guess is that we are underestimating because it is impossible to know at this point. what do you think about mortality? >> that's right. it is going to be very difficult. i do think we are beginning to see a picture where people that are older and have other comorbid conditions tend to be the ones that sucome to the illness. >> you say there are reports of

hospital workers wearing masks and full gear and still becoming infected. we are calling for maximum protection, which is critical to protect health care workers. it is going to be very difficult to search and provide this type of containment if the number of cases continues to increase, which is again, very critical to get in front of the die no, tick test so we can spare the health care system from being in a position which is very difficult, which is to isolate a greater number of patients this equipment comes from china.

most of the personal protective equipment comes from china that worries me. we can't afford to waist any time on the diagnostic tests >> while we were on the air, i got my michake allen email talking about the people that have died. then he writes, 8,200 people in the united states have died from the flu. we need to deal with flu you should get a flu vaccine so you are out of the way >> it is early days.

that's the early question. it is not too late to get your flu shot >> but not if you are already sick coming up, boeing set to report earnings. we'll bring you the numbers and the first on cnbc interview thwi chair. more when we come right back what'd we decide on the flyers again? uh, "fifteen minutes could save you 15% or more on car insurance." i think we're gonna swap over to "over seventy-five years of savings and service." what, we're just gonna swap over? yep. pump the breaks on this, swap it over to that. pump the breaks, and, uh, swap over?

that's right. instead of all this that i've already-? yeah. what are we gonna do with these? keep it at your desk, and save it for next time. geico. over 75 years of savings and service. but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast. beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity.

every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. boeing is arguably one of the biggest earnings raeports o the season looking at its balance sheet, results on 737 max costs are down 15% since the max was grounded resulting in a loss of about $35 billion. phil lebeau has more you probably have some really good questions we all do, phil. what is the most important one, do you think the degree in confidence in a

midsummer launch >> yes what they feel about the max they gave, what they called a renewed guidance in terms of midyear. that's a big window there. when we talk with dave calhoun, we'll get a better sense they have ample liquidity. we'll get a sense of where they are in terms of cash on hand and a 737 max update remember, airlines in the united states are expecting the max to come back into service in early june we haven't seen them shift those dates back saying you know what, we'll probably not have recertification until midyear. the fact this we haven't moved their dates back is that there is progress being made here. take a look at shares of boeing,

it is unlikely whether they'll be giving guidance they are not going to do that until they know what is happening with the max in terms of better clarity. we heard from dave calhoun next week you do not want to miss this interview. we'll sit down and talk with dave calhoun it is all about the max. make no mistake, he's got a lot of things to fix the culture, getting back to the basics the blocking, the defense business we have a lot to cover with him but clearly the max is front and center >> you are right, that is a must-see interview when we come back, a warning to the makers of purell.

accusing the company of false advertising. and expecting results from ge. we'll bring you osthe numbers. "squawk box" will be back after a quick break.

when i lost my sight, my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo.

my dream is to help millions more people like me. it is already working everyone has something to say. but in a world full of talking, shouldn't somebody be listening? so. let's talk. we are edward jones. with one financial advisor per office, we're built for hearing what's important to you. one to one. edward jones. it's time for investing to feel individual.

the fda is out with a new warning and they want the maker of purell to stop claiming they can keep people from catching the flu, ebola and other viruss. they will reclassify purell as an unapproved drug the company's website cites

advice stating if soap and water is not readily available to use an alcohol-based hand tieser but their marketing claims it will stop viruses from spreading. better than nothing, i think >> all of these people saying it is making things worse backing the virus even stronger. >> virus or bacteria >> bacteria. >> how often do you get a bacteria problem >> i think what i have is bacterial but we'll talk about that later >> which means you are going to make medicine. >> that's why you take ant buy

ot ticks >> general electric to report. we are hours from boeing's report we look at shares of starbucks falling after the company said it would closealf hof the stores in china to halt the spread of the coronavirus. more in a moment through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition.

that's the power of edge-to-edge intelligence. but how do i know if i'm i'm getting a good deal? i tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if i'm getting a great price. this is how car buying was always meant to be. this is truecar. rowithout the commission fees and account minimums. so, you can start investing wherever you are - even on the bus. download now and get your first stock on us. robinhood.

good morning welcome back to "squawk box" on cnbc we are live from the marketsite in time square let's look at u.s. equity futures. it looks like dow futures are

indicated up by nearly 100 points the nasdaq making up gains from the losses we had seen on monday a form dow component out with earnings right now >> you take it at face value, it looks better than expected >> 21? >> yep 21 cents a share, which is above the 18 cent estimate for the year it has fallen a long way >> revenues better than expected $26.2 billion versus 4.6%. industrial free cash flow. what about 2020? can you see a decent -- they are looking for -- they did industrial organic growth of 5.5% and they were looking for

mid-single digit growth outlooks that was more in line. profit margin did expand by 60 basis points >> they are saying on 2020 low single digit on organic growth adjusted earnings 50 to 60 cents. industrial free cash flow $2 to $4 billion >> interesting they say the outlook estimates, the ungrounding of the 737 max will be in the middle of 2020 if you are looking for the full 2020 adjusted number, the full year estimates on the street right now would be 66 cents. they are saying 50 to 60 cents on adjusted basis. they do say the estimate assumes to offset through better

performance. again, i'm not sure if this matches up they are saying adjusted earnings per share 50 to 60 cents. again, they say that this is going to be dispositions, things that they would sell off >> forecasted to be a slow steady grind this is probably exactly what we are seeing first reaction to those ge numbers is cohead of global industrial infrastructure. you know as much about ge than anyone would you characterize this as steady as she goes we are seeing some of the efforts bare fruit >> good morning, joe, becky and andrew i think right now, we still have

to keep focused on the most critical keel on this turn around, which is where you are going on free cash if i'm anywhere close to the market's thinking, the fourth quarter was in the 2.8 to the 3.2 billion range. you mentioned 3.9 billion. that would be near the upper end or slightly above the positive guidance for 2019. we look forward to 2020, i thought the initial guidance would most likely come in the rake of 1 to 3 or 2 to 3 i think you mentioned 2 to 4 obviously some variability to that with regard to the leap to return to service for the max.

that will be a tale wind as we exit this year and certainly to 2021 i think certainly better revenue, organic orders moving up their epf is a good telltale and the best way i would describe it not the focal point right now and how they are taking assessment of his success. >> so the industrial free cash flow of 3.9 for the kwauquarter $3 million for the year. >> that's right. the street was looking for $800 million to $3.1 billion. you are running a step ahead

which is wear larry likes to be. >> that's helped by the fourth quart quart quarter? >> right year to date, you were negative $2 billion you add this in, 3.9, you have a catch up i think one of larry's important efforts we'll see more of this year is he's trying to get these large, long cycle big businesses in aviation particularly powered to run every day, not just in the last quarter of the year you'll have more uniform performance as we go through 2020 >> that's what i was going to ask. we can't expect this in the first quarter but you want that

mujed out. stocks up 5.5% at this point >> this should put you in there right now, 12.25 to 12.50 range. >> then you hang there until the outlook meeting in march >> today's focus there. looking at 19 and free cash flow this year, moving to power improvement with the large gas turbin global upturn and this year, the big turn is grid and renewals. you have risk elimination, not reduction. the guidance isn't going to be earth shattering it will be reduction of any last remaining doubt. as we exit this year and go into 21, we'll monday ties, in my

opinion, the rest of health care because power recovery will be well enough along that it can replace. you'll have the grid and renewables return in '21 as you get the huge upturn in the offshore wind development. >> market cap is now back over $100 billion it is not a yield anymore. .34% we appreciate your analysis. >> thank you have a great day when we return, futures are indicated higher ge among the names leading the s&p 500. more earnings movers are straight ahead later, we'll dig into another morning mover. apple shares are up. we'll get the comments from ceo tim cook about the quarter

you can watch or listen live on the go on the cnbc app, we'll be right back man: how can i deliver superior long-term results? it begins with a distinctive approach to managing money. that for over 85 years has focused on keeping confidence up when markets are down. an approach where portfolio managers work well independently. and even better together. who don't just invest, but are personally invested. can i find a proven approach designed to deliver results? with capital group, i can. talk to your advisor or consultant for investment risks and information.

talk to your advisor or consultant you still have service? call the insurance company sfx: [phone ringing] it's them, calling us. it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering?

look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

on today's squawk planner, the fed is set to release the interest rate announcer. they are expected to hold rates steady and president trump is skpoekted to sign the new trade agreement with mexico and canada he's expected to be joined with a ceremony and guests including farm workers and others. canada still has to pass the regulation and all three countries need to come to agreement before the ceremony can take place tim cook calling the apple numbers block buster around. we'll have a first on cnbc interview with boeing ceo dave

calhoun. >> announcer: don't forget to subscribe to our podcast look for us on apple podcast or your favorite podcast app and subscribe today. [cymbals clanging] [knocking] room for seven. and much, much more. the first-ever glb. lease the glb 250 suv for just $419 a month at your local mercedes-benz dealer.

apps except work.rywhere... why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports. i'll let you in on a little secret. they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business. to learn more, visit paycom.com

apple reported record breaking revenue thanks to strong sales of iphone 11 and air pods shares of the widely-owned trillion-dollar stock, moving up again there. tim cook making comments on the potential impact of the coronavirus. josh has a look at all of it >> one issue front and center

for investors, how the coronavirus impacts apple. tim cook issued wider than expected forecast because of the virus saying you can see from the range, it anticipates some level of issue there, otherwise we would not have a $4 million training at wuhan, the center of the virus they expect to mitigate loss shares of iphone jumped. saying iphone 11 was his best seller people love the battery life and camera we also hit the right price with it and when he plans to make enough air pods pro to meet demand. he said, we can't predict it but given the velocity of movement, we are aways away from that.

>> bringing in an analyst. did you get it wrong >> it was positive over the summer it wasn't for this phone it was for the 5g phone coming >> coining the super it certainly is -- will be a driver of upgrades when it happens. but what the expectation over the summer for this cycle was muted because the phone impacted and changed so much as they said the factors that were helped and better battery life. >> how were you changing your numbers based on what you heard yesterday given the fact that it was a $4 billion range here. >> i think in the quarter and this was the good news for apple as you go into the june quarter. this was the quarter that doesn't matter as much it's the slowest part of the year it's ahead of the news cycle so

whatever happens in -- as you go forward is not quite as important and it's not going to change your view of, you know, what would happen in the 5-g cycle. >> one of the issues is the wearables. what is the -- how big of a business can that ultimately become >> and right now it's about a 5th of the size of iphone. what you have seen in other -- when apple has added other product segmentsis that it grows for a certain period of time as you penetrate the install base one of the things is while you're in shortage you actually don't know the real level of demand you just know that you're not fully fulfilling the demand and that's the situation that we're in right now in my estimates i've got it up in the 20 year on year into the next year and i think that's pretty reasonable.

>> hey, josh, are you still there? >> yes, sir. talk about the services piece. it feels like we're about to get there. >> so services was really interesting. you saw that segment jump 17%. $12.7 billion. thatwas a new quarterly record for the company. it did miss what the street was looking for. they don't break that segment after you buy line item. there's certainly some analysts that think some services could be slowing they argue that's the law of large numbers kicking in the question is whether you think those new services like apple tv plus are going to accelerate now apple tv plus launched in november i did ask, you know, how do they really judge success of apple tv plus are you looking at engagement? are you looking at the number of users? what are the metrics

it will be subscribers they don't break that out like they do apple music. maybe that's a number the street can expect at some point. >> what's your sense on apple tv or apple plus? >> i don't think it's relevant. >> frankly it's relevant because of the cost. because it's added cost. but my view if you go back a year ago, you didn't believe that could be the case in the context of declining iphones now that it's turned the corner and is growing then services is on top. >> you don't need to actually have the apple device. >> the problem is if you compare it to netflix, for example and you look at the margins on netflix business it's really low and in the context of how much money apple makes everywhere

else, even if you were to build a netflix business within apple it adds 25 cents to annual earnings it's just significant. >> as an apple lover, there's one thing these days, apple news plus i'm a subscriber it doesn't do what it's supposed to do. do you know what i'm talking about? what happened there. anyway, chris, thank you. >> thank you. >> appreciate it very much >> thank you. >> we have some earnings out from at&t. i want to run through the numbers with you 89 cents on an adjusted basis. that's better than the street was expecting. revenue came in at $46.8 billion. street estimate was for $46.9 billion but they have a number that says the revenue would have been $48 billion excluding the hbo max investment i'm not sure what that means. >> it means they spent a billion dollars. >> they do run through their goals for 2019 and say they either achieved or overachieved

all of those including things like reducing that debt by $20.3 billion and looking at a 2.5 times net debt range the portfolio review $18 billion of net asset monetization versus the goal of 6 to $8 billion and their adjusted earnings per share growth up by 1.4%. 29 billion versus the original goal of 26 billion. >> they talked about the dividend covered 48% and it's a big yield it's, you know, 5.4% or something. and as you said, in this quarter they reduzed it ced it by over 7 billion. revenue growth 1 to 2% coming up, boeing set to report t in next half hour. we'll bring you the numbers and first on cnbc interview, you're watching squawk box on cnbc. a. but to businesses, we're a reliable partner.

we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. ♪ ♪ i've been a caregiver for 20 years. no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery.

♪ ♪ ultimately, it's helping thousands of patients return home. and who doesn't love going home. can be a sign your feeling digestive systemhed down isn't working at its best. taking metamucil every day can help. its psyllium fiber forms a gel that traps and removes the waste that weighs you down. it also helps lower cholesterol and slows sugar absorption, promoting healthy blood sugar levels. so, start feeling lighter and more energetic by taking metamucil every day. take the metamucil two-week challenge, lighten up. just take metamucil every day for two weeks. available at your local retailer.

we're going to get to some numbers that are crossing the tape as well dow would open up higher and nasdaq 150 points higher we're showing you mcdonald's on the creen.

u.s. same store sales 5.1% that's also estimates of 4.7%. for the full year the company surpassed $100 billion in system wide sales and this is going to be a really big one. he was fired from being a consensual relationship with an employee also how coronavirus is impacting it's china business. they technically have less exposure beyond that we'll be looking out for any further update on delivery and a potential expansion of the partnership with beyond meat on the burger offering.

back up to you r.j., what do you think? >> they're strong numbers. we're starting to see some of the benefits from the technology we'll have to wait for the call. it's been a busy one as mentioned. it's the first time that we get to hear the vision for the company. >> do you expect any sort of rapid departure from already the company's plans? do you expect to hear something hugely different than what was

already in the works >> no, i don't think they're going to say anything different. especially since chris was one of the co-authors of a lot of the technology initiatives that being said, he has to put his own spin on the vision for the company. and i think that's where he can make his mark right now. so i think you'll hear discussion about a plant based burger in the year that's going to be a focal point later this morning. >> the stock is up a little over 1% but strong performances. >> by the way, also coming after starbucks had similar 5 to 6% comps domestically it shows you this disposable income story

it's good. still working below the highest in the summer which was that big rush into defensive saving stocks so right now it's trading based on these results it's doing well. >> what did you think of yesterday's actions for major indices. >> it was obviously encouraging but also kind of just got you back up to neutral the old leaders reasserted themselves and then the treasury bond yield going up a little bit so everything worked together. >> add today in and wondering whether we're in a market where it's been working for how long this time, after davos and the indicator was way too bullish. i figure maybe -- >> countering. >> and then immediately the coronavirus, the whole situation got worse right after a positive

davos and i'm thinking maybe, but i don't know -- >> i don't know. i do think, look, if we came through davos and all the indicators were that people were very aggressively positioned and a little bit too bullish and sentiment that wasat two year high and valuations at a couple year high, is it 2.5% back on enough to skim that away i don't know something i was also thinking about is the volatility possible world war iii we got through that. possible pandemic. i mean zero volatility is that the fed or apple and the consumer >> it's all of that but mostly the fact that if the market is not detecting real weakness in terms of a recession on the horizon, consumer credit remains great -- >> so world war iii and a

pandemic but the consumer is really fine. this doesn't make any sense. >> what did the market do through the cold war we were on the brink, right? >> you're right. >> what else do you want to hear on the call today aside from the new products and what they do with cash and dividends? >> really the coronavirus is the last point you're going to hear about. so i want to hear more about what they're seeing and that's an important market for them. >> for mcdonald's you said it's 8% of the revenue.

>> it's about 9% of the overall units of the company right around 10% of the revenue. >> in terms of starbucks, what is the percentage there. >> it's the same it's 10% in terms of the operating for the company. it's going to have a material impact on second quarter results and full year. depending on the severity. but starbucks talked about half of its locations in china. to about 2,200 locations are closed right now we continue to see that over the next week or two they're closed for the next week or two that's probably putting them in the lows, double digits in the second quarter probably puts international at a low single digit decline there so that's something we have to keep an eye on right now it's going to be short-term. this isn't something that's company specific and open up a lot of buying opportunity ifs the market gets spooked by the coronavirus impact. >> great to see you. thank you. >> meantime we're going to talk about the coronavirus and what it's doing to business now stopping all main flights

because of the outbreak and joining us with what it means for the other airlines out there is the principle at kaplan research we also heard about stopping in alaska >> it's already on its way to california. >> it's already on its way to california how do you handicap this situation and which airlines do you think are most at isk? there's more priced into the stock movement than you would necessarily expect on the impact of the business. we talked about the impact of a possible suspension of flights to china which, you know, impact of that by the white house is less each day because they're doing it on their own because of weaker demand. china has been a tough market

for several quarters for these airlines anyway. it ended the flight between chicago and china and said that was profits. so you're basically saying they're a place where they're not doing all that well anyway if anything, i worry more about flights between u.s. and seoul, an airline like delta that has a joint venture with korean air. i worry more about the 30 something flights total in both directions by korean air between the u.s. and seoul which are with people connecting to and from china and with delta's 8 or so flight than i do about delta's dozen flights to china because what do you do about those? you're getting rid of flights that are tough anyway to china. >> just so investors that are looking at these stocks today understand what is baked into the cake meaning what do investors -- what do you think the stock market is already reflecting,

the view that what is going to happen in terms of how long this lasts, how it impacts the airlines and just so we understand what baseline means. >> probably more baked in than what happened with sars where you had a few months of really weak demand back in 2003 granted, airlines were much weaker back then these were companies that were much less positioned to with stand any kind of shock than these airlines are today but back then you had a billion dollars in total revenue impact to north american airlines skewed more actually to canada because that's where the cases were if you talk about a billion dollars for an industry that does a few hundred billion a year to this country these companies are united airlines by itself has lost $2 billion in market cap over the last week so it's pricing in something more than what we're seeing right now and hey, that's the point, right the unknown here

the regular flu killed 80,000 americans last year. you have a range of expectations here we don't know where the bottom is but if you like these companies a week and a half ago and if you believe this thing is going to be contained here at some point and again take into account that this is from a financial perspective a market that's been difficult for these airlines, this has not been a tail wind. it would have to get some what worse for them i worry more about second order impacts on the economy, the global economy. >> i like the way you worked in tail wind. >> yeah. >> thank you it's nice to see you. >> second nature. >> coming up, boeing results are expected to be released at 7:30 a.m about 20 minutes from now. we'll hand them the numbers then at 8:00 a.m. eastern boeing ceo dave calhoun. that's andrew. calhoun will be -- will be jo joining phil live.

they're both glad they're in chicago. >> they are. i wish i was too. >> before we head to break, santolli is leaning left as he does >> go away. >> check out the shares of ge after reporting quarterly results up almost 6% - uawk box - >> not good role models actually. >> you're disgusting. >> what do you want to do? what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

strategic alternatives for victoria secret's brands the talks are on going the 82-year-old is the longest ceo of an s&p 500 company. he turned it into a national chain but last year he drew attention for his association with jeff epstein. he of course managed wexner's wealth for two decades he owned a home that was on fifth avenue that was effectively given to epstein and there were all sorts of transactions. >> he really was the nexus for all of this. >> all of it.

>> he gave them the money to run first. >> and a lot of connections. he says he was hoodwinked by epstein. obviously there's outstanding questions about that in particular on this victoria's secret piece there's a coup of things going on. the epstein piece is a cloud that overhangs all of this but really there's a large issue of the changing shift in retail changing shift in cultural -- >> in america. >> they cancelled the fashion show that they created in the 1990s to go up against all the other companies. >> ran on cbs for so many years and that's something that died down but look, this is also an inindictment of les wexner's strategy of doubling down on the stores and the malls and getting rid of some of the other things that he had been doing he said in an interview with the journal maybe two years ago. he said he has history on his

side and go back and going to these shops and back to roman times. >> it's in this company and it's now in the scale where it could live on its own. >> it's the white barn candle company at the same time. >> he's 82. >> he's 82 and people also search for prince andrew and however you say her name you search for someone and those are the two names that come up that would not have been the case >> the fed is going to be wrapping up in 2020 and while no change in rates is expected.

>> with the normal rotation in place this meeting with four regional bank president exits and the cnbc exclusive finds the newcomb mitt tee that includes the governors and the fed president and the new regional ones, slightly more dovish than the previous one on a scale of 1-10 with 10 being more hawkish they recorded a more modest movement 4.9 to 4.6 and more hawkish than those leaving. only one viewed more dovishly. he's the most dovish this year according to our respondents what's happened is that the existing committee members including chairman jay powell and the new york fed president

have been given more dovish marks. here's where they were last year and now take a look this year for example, powell fell from 5.5 to 4.4 down by a point and by a bit less than a point. so all three of those, the victory right there, you may call them are judged more dovishly what does it mean for interest rate policy reflected in the view which we reported yesterday that the fed is on hold for the rest of this year. it's reflected in the willingness of this fed to not be concerned with the potential inflationary effects of record low unemployment and it shows up in the decision to reverse course and allow the balance sheet to resume growing. it's now worth it shows up in expectations for easier monetary policy. >> thank you >> mike santolli is also here. earlier i made the point that we

have very little volatility. the news cycle is how long have you calculated the half life of a major news cycle in today's world. >> it's the space between presidential suites. >> but the volatility has been low. there's people that had to do with the fed being accommodated but things are good in terms of earnings do you think the fed is involved there? >> i don't think the fed has involved that much role. if the fed were tightening the market would respond companies like earnings and starbucks and mcdonald's suggested the economy is growing and rates are rock bottom. they're below the inflation rate cbo says the budget deficit is a trillion dollars for as far as the eye can see more than 4% of gdp so you'll have the fiscal

and monetary gas pedals pressed to the floor and you're not getting any inflation and the economy is doing well but you'd think we'd be at the point where they have to be pulling things back and they're not. >> do you think at this point, david, that we are too complacent about inflation and that we have the feeling that it's dead and buried >> no, i don't think we're too complacent about inflation it's remarkable how slow prices have been to rise to the fed's 2% target. the fed knows what to do if inflation rises too much they'll raise interest rates the big mystery is why hasn't inflation gone up more i think we may be a little complacent about the risks of things like the coronavirus or more in the middle east instead of turning everything upside down it's hard to quantify. >> all of these things thrown at the economy has left us in a 2% world which is 2% growth and

less than 2% inflation and less than 2% yields even though that might be unsatisfying and maybe it's going to go up from here but that's very comfortable for financial assets and that's how you squarethat. >> a agree fundamentally i can explain it. >> it's not really accelerating and slowing down that sost that market itself. plus these huge companies running the indexes are not that cyclical. >> yeah and david, i mean, things are pretty solid. and you saw apple and across the board things were good and in davos you could not believe how positive people were even globally. >> that leads some people to say

what everybody says, it's going to be wonderful. >> right. >> and that could be i mean, it is kind of incredible to me though that given the risk that the coronavirus seems to present to the world, to global markets, to big companies we have one bad day in the stock market and then it's been up ever since so i really do think that's a wildcard and i think that has to be on the fed's mind if you're already dovish leaning and you look at the risks out there, i think that they judged that the risk that something bad happens it seems the risk that somehow we get 2% plus inflation. >> maybe we get a change if we get judy shelton on the committee. i know yesterday the president sent up the names of judy shelton and chris waller i think she is in the camp that's in the i guess let it run camp we can talk a lot about her other views when it comes to her change of policy from one administration to the next but ultimately she's a let it run and see how far we can go with

it. >> i don't think she'll have much influence but she's going to be a lot of fun to cover. >> thank you >> all right let's get a quick check on mcdonald's that was a penny better than the street was expecting revenue at 5.3 billion it was the global comps up 5.9%. we'll talk a lot more about this when we come right back. >> time now for today's aflac trivia question. in what year did the first canned beer go on sale in the unedtas?it ste the answer when cnbc squawk box returns. ac. why aflac? 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

? what year did the first canned ater go on sale in the united stes the answer, 1935 you should be mad your neighbor always wants to hang out.

and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.

and we are awaiting results from boeing and it should be right at 7:30 mike santoli and phil will bring those to us when we get them. we're all looking for the same

thing i think. >> yeah. what is the company going to be confident in saying? obviously, the cash balance, secured more debt. that's all good. just a matter of how long you're going to be burning cash with the return right now. >> the dow is up 130. it's actually up this morning. >> that stayed in last year and not the year before them. >> it's a little bit patient. >> the year before december. >> i understand the numbers are out. phil, let's get right to you what are they? >> for the fourth quarter, boeing reporting a earnings loss of $2.33 that's well below the estimate of analysts expecting a profit of $1.47 boeing is reporting it's first annual net loss since 1997 revenue at 17.9 billion.

remember you're not delivering maxs that's going to have a huge impact in terms of revenue negative 2.7 billion for the year negative 4.3 billion in term of free cash flow there's three important items that we're going to talk about all related to the max first of all, a fourth quarter charge of $2.6 billion that's customer considerations. this is the company saying this is money that is going to airlines that have not been able to a receive the max or b fly the max for the year $8.3 billion are the total cost impacts in terms of customer considerations and i should say the year, the total now 8.3 billion. the cost increase, increased cost to produce the airplane that's $2.6 billion meaning the total now for that part of the max is up to 6.3 billion and then there's an additional cost the company is announcing. this is the cost to shutdown the

manufacturing line and then fire it back up and begin production. this has all expected to occur in 2020 or for the most part in 2020 that is $4 billion. you add all of this up and you have the total impact of the 737 max rounding and then shutting down production and firing production back up coming up to $18.6 billion. guys it was just over 9 billion at the end of the third quarter so that is the impact of the 737 max. we're going to be talking in a half hour with dave calhoun, the president and ceo of boeing. we'll talk about the max his outlook, his confidence in the airplane, you do not want to miss this interview. again, a net loss of $2.33 in core earnings for boeing first annual net loss since 1997. >> i don't see how anybody can't figure -- how could it be worse than expected at this point.

i don't know whether to blame the analyst or boeing. and not knowing about the full implications of what is going on has boeing not been forth coming about everything. >> this is far off >> i would say if they're -- guys, i wouldn't say that there is an element of them not being forthright with analysts, i think if anything the $4 billion cost to shutdown manufacturing and then ring up manufacturing primarily in 2020, that may be something that some analysts have not fully factored in but we have seen the estimates here in terms of the total cost impact for the 737 max anywhere between 15 and $20 billion so the companyhas been guiding wall street pretty clearly in terms of what the cost impact would be here. >> can i just ask that $18.6 billion cost estimate for

the max grounding, that assumes that the max comes back when >> their guidance right now is mid year it could be a little bit sooner than mid year. this is a company that's not going to set a deadline. they're not going to say may first, june first, july first, it is worth noting that last week steve dixon talked with the ceos of the u.s. carriers that have the max and he said i'm seeing good progress from boeing when it comes to getting the 737 max ungrounded that means they also believe it's likely mid year though they're not going to say that. this is all provided there's no other surprises that come up and they're making these final steps toward recertification and then ungrounding the plane. >> what is the chance that there's -- we'll talk about this but this is just to throw everything at it right now this is the first outing you try to buy yourself six months, 12 months, just a quarter frankly. >> i mean, i think that's part of the answer to the question of

why this -- to some degree it's discretiona discretionary. how you recognize it -- >> how discretionary is it right. >> this is what we think. >> and the stock is now down 2 it went down as much as 6 or 7 the dow recovering a little bit. we'll be back. let's get some analysis. joining us on the newsline, the founding partner in u.s. aerospace and defense analyst. so carter, is that what we're seeing getting a lot off the table right now and we shouldn't be surprised or is this much worse than we should have even imagined >> yeah, so there's a lot of detail in here that is, i would say supportive of the view that they're getting a lot of the negatives in here. in general, look, the market expected big charges as a result

of the delay and return to service. so i don't think that it's particularly surprising that we saw billions of dollars in charges but if you try to parse through what is some what nuisanced about this is the $4 billion of shutting down a line and then starting it back up being isolated in 2020 that's a big number but it's transitory in 2020 let's look at the rest of the charges that's lower than what the street was expecting what is important about that is what the market is focused on is what is the cash flow of this company going to be when the max normalizes and that's out in 2022 or 2023 if those costs could be credibly loaded into 2021 or 2020 even better you know, those out year numbers get protected and provide a basis for which people will trade the stock on higher valuations. >> you don't think things are going to normalize for the max program until 2022 or 2023 >> absolutely. i mean, you can see from the

commentary, from the supply chain most notably united technologies yesterday, boeing now expects to be coming up at a production rate that is something like 21 a month in the back half of this year and then ramping with a slower pace than what they had originally anticipated so to get back to the rates of 52 or 57 and look like they're probably going to take into the 2022 time frame and so, you know, there's 400 planes that are sitting around constructed that need to be delivered. you know, it's going to take a number of quarters to get through those. so we're looking at several quarters to get here but i think the important question for the stock is, you know, what do the out year numbers look like once you get through. there's no surprise that 2020 is a bad year we knew it was going to be ugly coming in here and that's really what we're discovering. >> the stocks now up and the dow is back up over 100. maybe the s&p is the way to go

>> rule of thumb under 7 dow points per dollar. >> the stock is up now you're going to talk to carter what do you make of that. >> it doesn't surprise me. carter said it best. most analysts expected total cost impact for the max to be between 15 and $20 billion somewhere in that range. it's $18.6 billion and so i think most of the analysts are looking at this saying okay. this is pretty much what we expected look, they might be a billion below or a billion above what they originally expected with some of those analysts expected but i don't see that as a surprise and i agree, look, everybody knows this year is going to be a mess but the question becomes as they start to deliver the 737 maxs that are already built and that's the priority as they're moving the production system back into a more normal position it's going to take time guys. their priority is not to go right back up to full production right away

it is a gradual increase and that's why you see them outlining. it's going to be $4 billion. not only have we incurred a lot of that by shutting down the line but when we bring it back up. >> do you think it needs rebranding >> last time we had calhoun on we asked him whether he needed to rehabilitate the brand. he had an answer that he was glad we asked but he didn't see it as a rehabilitation but a lot has happened since the last time he was on. do you think they stick with the 737 max program and call it that >> i think so. i think if we're going to jump to the conclusion that passengers are smart enough to identify the plane and choose not to get on it which is the negative there they're then smart enough to figure out that it was rebranded so what's the point. >> that would feel like being dishonest to me. >> i agree

everybody has said this at boeing it's going to take time. it's not going to say it's recertified and you'll have everybody getting back on the planes, it's going to take time and if they go a couple of months, no issues, no incidents but it will fade how much does that include in terms of the payments they made for other airlines >> that's the q-4 charge and that's $2.6 billion for customer consideration. think of that as payments to airlines that a aren't able to fly the max because they already have it or b they have ordered

the max. it was supposed to be delivered by now or won't be delivered by the date the total is 8.3 billion. >> for now but the clock keeps running on that, right >> no, that's the expectation. assuming it's back up mid year. >> but look at it this way, if you're an airline and you're not going to have it another six months beyond what you're expecting there's going to be more negotiations with boeing. could we possibly see a charge in q-1, q-3, whatever it might be if the cost increases sure that's a possibility but i don't think it's going to be as large as what we see them reporting for the fourth quarter. >> so you think they're being conservative with these numbers now? >> i agree with carter on that

a conservative time line and conservative charges and another per month to try to derisk that. you try to get all of it in there and move forward and try to get positive news and turn the tied on this i'm not saying that they will, necessarily but that would be what you would shoot to do. >> if you're an investor and the things you calculate, you have to have a view of what the global economy is going to look like you have to have a sense of what the market share dynamics are going to be if it's going to change or not going to change and maybe other developments you're at that point looking toward the next kind of, you know, members of the fleet so to speak. you have to have a view of the economy. that you really haven't let settle but would you have had

the nerve to buy this when it was 7 or 8 based on thinking that the stock is now sold out and the company is probably -- it's somewhere near as low as it's going to get? i mean, what is your target on this >> so our target is 440. that's a two year target based on what we think the cash flow will recover to and that number has come in as return to services slid to the right and these expexatictations would ha grown. i do own the stock here. it's a situation where we would have some return to normalcy how far out and how much continued noise do you have to take in as you wait for it and there will be a camp here that says most of that news is now out and hopefully you can be

positively surprised that hasn't been the track record to date and if you want to buy the stock and believe in the longer term that's what they conclude. >> you have to figure the new ceo is going to do that at the beginning of the term. >> someone sold below 310 today. just go back. >> within ten minutes you're like oh my god it's back to 320. >> he said he never buys it. do you want to hear what else? >> i want to buy.

nobody has any sympathy. anyway, let's start out with dow components premarket here roughly 70,000 shares of oeing. up 6% in premarket shares of volume this topped both profit and sales estimates and it's free cash flow came in better than expectations as well it was helped along by better

results in aviation. ge did offer a full year 2020 profit forecast that fell shy of analyst expectations but those shares up 6% and we're going to end with corning the maker of cable and up about 5 or so percent and profits and revenues both came in better than analysts nvestments >> it came with a warning about operations in china and impact of the coronavirus. >> i'll talk about supply chain and give you some color.

all of these suppliers there's alternate sources and we're working on mitigation plans to make up any production loss. good morning to you. $4 billion worth and tim cook made a point of. >> people are concerned by the virus. i don't think people should try to make calls and be very smart about this they disagree about whether it's 1.5 and 3.5. and try to figure out what's going to happen this quarter some of the print is good. the services number underneath if you look at it, apple is close to 500 million paying subscribers. >> you don't get a break out of how those services are working

exactly but what is your assessment of hows happened? >> they don't give revenue segments but they give growth rates so 500 million paying subscribers is an incredible figure people taub abo people talk about netflix and spotify being services business. apple is larger than both of theme combined. >> when you try to think through which of the services are working, which of the services may not be working as well. >> apple music is clearly working but interestingly they didn't give a new figure update that i could tell this quarter apple pay is just gangbusters. every quarter that they report the figure it's still double a yearing a. >> what is your sense in terms of wearables we talked in the last hour that you could really ramp on some of the wearables but they plateau or get to a place so these new he headphones we may not be to the

place but when do they get there. >> all hardware plateaus it's a matter of penetration people need to realize that apple as a company knows how to innovate and keep growing even mature segments. look at it that's a 30, 40-year-old decade business and apple is still growing that business. the air pods are brand new they're still on back order for amazon so plenty of runway for wearables. >> what's your price target right now? >> it is about a 15% over 5 years. we're not into it for the hardware business. our position is around apple pay and it could, you know, the credit card was the most successful launch in history so that could be very interesting. >> a lot more. appreciate it. thank you. >> still to come this morning, we will hear from the boeing ceo david calhoun joining us in ten minutes time 8:00 a.m. eastern. boeing reported a loss and detailed the cost related to the

737 max grounding. stock is actually up by 1.75%. reminder you can always watch us live on the go on the cnbc app we'll be right back. no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. so it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. ♪ ♪

if they saw you on the street would your advisor recognize you? at ameriprise, we see you as more than a client. that's why our advisors care about what's important to you. they offer personalized advice to help you prepare for what's expected and even what's not. giving you the freedom to live financially confident. because to us, you're more than just another face in the crowd. with the right financial advisor, life can be brilliant. ameriprise financial. looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020

with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast.

also they have been around 65 or 66%. they are saying medium term can get down to 60% and that number achievable in about three years will probably impress the markets and comments from david solomon saying we're taking real and significant steps to make

goldman sachs more transparent and easy to understand on going commitment to provide the market with a clear articulation of our efforts and our objectives we will be held accountable. it's already up about 5.5% another 1% for the year so far so continuing a strong start and these encouraging targets. >> thank you for that. >> join us now for the rest of the show >> global fixed income at black rock and airplane where i picked a bad day to predict higher rates. coronavirus and higher rates and maybe they don't deserve to go higher in the current environment. >> it's going to be in low rates. and it's through it's way to the system

the demographic is so powerful the need for assets. particularly this time of the year rates are going to stay low for a long time. by the way, europe and japan are still not growing. they were not great in the inflation. they're going to have negative rates for a long time. we'll have negative rates for a long time. >> global pandemic notwithstanding. it still makes sense 10 or 15 basis points and we're still only at 180. >> if you go to stable and the tail risk driven by the virus goes away should they move up another 15 or 20 basis points? they should. >> that being said we talked about this we added some interest rate exposure on the long end of the curve because with this out there it works as a pretty good hedge against risk assets. the demand for income and the demand for assets, this is generational we're going to be on a low rate. what do you mean rates are too low here. >> they're lower anywhere else than they are here.

>> you have reasonable inflation. >> you're running. i hate to depend on how you're wearing it put real rates on top of it. i'm not real rates or flat to negative that's not very interesting. they should be a bit higher and they're going to get there really hard because the demand for income and demand for assets is multiples bigger than the supply. >> you said they're operating and you have this based on flows. it's plugged into an asset allocation model and you have to add to fixed income. when they look at the flows and the equity markets and it goes into the bond and they go up 25 or 30% and you're now off balance and have to rebalance out of equities and the bonds and you get this dynamic that

the more that rates are low and the more it drives the equity market higher, that money has to go back in the bonds people don't talk about that they keep a 60-40 balance. >> it will appear. glad to have you. >> thank you. >> been great having you. >> oh, you might be? >> all right when we come back, boeing earnings out just a short time ago. let's take a look at a live shot of boeing ceo dave calhoun who is standing by with phil give us a quick recap of the numbers and what you have coming up. >> a wider than expected loss of $2.33 per share for boeing in the first quarter. the first annual net loss. free cash flow down $2.7 billion and a number of charges and increased cost related to 737 max. we'll talk about that with boeing president and ceo dave calhoun when squawk box returns. i consulted with your grandmother's doctor.

we can do the screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪ wean air force veteran made of doing what's right,. not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it - with hassle-free claims, he got paid before his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. usaa

high protein low sugar tastes great! high protein low sugar so good! high protein low sugar mmmm, birthday cake! and try pure protein delicious protein shakes

as investors digest fourth quarter results you're about to hear first on cnbc from ceo dave calhoun on his plans for the company and return of the 737 max. the earnings season interview you can't afford to miss as the final hour of squawk box begins right now. good morning and welcome back to squawk box here on cnbc live from the nasdaq market site in times square. our guest host for the rest of the hour, chief investment officer of global fixed income at black rock when he makes a move it at least starts with a

b. and you tend to do it in smaller size and it's in a market. >> the total amount you need to worry about and other forms of stress, 2.3. >> 2.3 with a t. >> trillion. >> it's more than just an eyebrow. >> this is just tv so you can just relax. >> i agree mike santoli, you cannot relax because you're right next to me. u.s. equity futures at this hour are back where they were up about 150 points. earlier when boeing reported as is the dow treasury yield.

>> let's get to phil standing by in chicago with boeing ceo dave calhoun. >> dave, i'm glad that we could join you minutes after you guys report q-4 numbers we're not going to hash over all the numbers but i want to ask you about the 737 max charges. you're taking a number of them and future costs being counted in the total is now 18.6 billion. are you confident that that's the last of the big charges or are you being a little conservative here. >> i'm as confident as a ceo can

be and as we looked at that schedule and as i listened to the faa and all the constitue constituentcies that have an interest in all of this and we put together a schedule we think we can make. not easily it requires a lot of execution it requires a lot of discourse a lot of back and forth with the faa and the certification process but we think we have been realistic about that as we layed out this timetable and we can't do anything more than that >> i'm sure that you heard this, some people are saying mid year we're already hearing some fairly encouraging comments from the head of the faa as well as those involved in the process. he's sandbagging and he's

throwing it out later this year and we could see the max back in service sooner than that what do you think when you hear that >> no, of course not you can't in a situation like this i have to listen to our employees and i simply have to give them the time they need to do the natural discourse that occurs in a big, complex certification process and that's what we have provided for. nothing more nothing less so i believe that we can do it and the only other comment i have to make is i do not and will not control the time line so mid year is what we believe we can do, i appreciate the comments that came fromsteve on the other hand, if he changes those comments in a month, we change our schedule. >> steve dixon is who you're talking about. the head of the faa. we'll talk more about that in a bit. but the one question that's coming up over the last three weeks is you heard the suggestion from people that they're not going to get the max back just scrap it all together and

the fundamentals of this program have been questioned i know that bothers you. you believe in this airplane why should people have confidence in the max. we wouldn't do it. that's what boeing wants it's a nind talit's a fundamenty sound airplane the tests are exhaustive the documentation is clear the training recommendations are as robust as they could possibly be if i didn't believe in all of that process if our people on the ground didn't believe it, i wouldn't be sitting here in front of you today with a schedule like we have layed out. >> steve, a long time veteran of this industry, chairman who has said, look, i'm not sure that this plane should remain the 737

max. the name should be dropped completely you have called that idea silly, why? >> i'm not going to market my way out of this. i was with him a couple of days ago. and he was right in the sense that the max has something attached to it today but again, we believe this airplane is safer than the safest airplane flying today every next airplane has to be that way it has to be that way for boeing it has to be that way for our competitors. so what we call it, trying to relabel it trying to merchandise that, no this plain will recover with the flying public when airplane pilots step on it, fly it, like it and by the way, based on all the test flights we have had to date which are many, they do so as all of those pilots return, so will passengers. >> still no guidance for 2020 and you won't gobe giving that

until you have certainty in terms of max production. we know in this quarter we'll build this many. but firing up that assembly line is not as simple as saying let's go it's going to take time to wake it up, correct >> exactly. >> the plan that we layed out, the cost that we have described, that amount to the numbers that you accurately portrayed provide for a very steady one at a time delivery remember we emptied the line. >> yeah. it's quite right now. >> so we don't just start it up and we're all of a sudden delivering airplanes we start it up one station at a time we made the decision to keep our employees so that the employees that start back up on that line start warm that's the job they were doing that's the job they will do. all in the name of stability, safety, we're going to do this one airplane at a time. >> joe, you have a question here for dave. >> i do. so dave, recently there's another software glitch it was spotted and there seems to be two schools of thought

on more pilot involvement or more automated systems for commercial airliners and i think the president weighed in nobody flies anymore boeing seemed to even double down on going more automated systems. is that still the current thinking that you want to move further and further away from a pilot having as much influence on the flight of the plane >> yeah, that's a very complex subject. it's a very important one. i would suggest with respect to every next new airplane, the recertification of this airplane, that decision and the guidance and the regulations that come out of the faa are going to have to answer that question it is -- its sort of clear to me that more automation will be required as we move forward to prevent situations like this that occurred. i'm not completely sold on that. there is a school that believes

more flying time, more experience is in the best interest of the flying public. so i'm not going to try -- i'm not going to answer that question to decisively i think that i know which direction it's going but we're going to have to work very closely with the global regulators to answer it before the next airplane is developed. >> hey, dave, i'm not sure that i understood the answer. i realize that you can't answer all of it right now but it sounded to me like you were leaning toward more automation because of what happened in the situation but i'd argue the automation caused this to begin with it could have been pilot problems on top of that but it was the mcass system that started the whole thing. >> yeah, i'm not sure that i agree with that conclusion becky and i don't want to answer the big question about how much pilots should fly or not on the basis of the mcass experience and those instances. in those instances, we wish mcass was different and it didn't add to the complexity to

that boundary condition that caused the problem so we wish that hadn't happened and the changes that we made to the flight control system now and it being certified today would not have created that instance they'll be saying effectively do i trust these guys not that they're inaccurate but the confidence that he has or doesn't have when things are going to happen or not going to happen, my question to you is what things changed for you? what are the lessons since we saw you on our air back in

november and you had confidence in your predecessor and in the expectations of when his plane was going to get back. >> it's a great question it's a question that hits me head on every time that i'm with anyone it's internal or external. >> you, the media, my customers, my employees, they will judge me every step of the way here i'm not going to predict that it's going to be perfect but what i will do is i will put realism into every one of our assetments every step of the way and i'll listen to everybody that's involved directly in the process. and as i listen and as i help them resolve the anxieties they may have at any point in time during that process, everybody will gain confidence i believe that and we do need confidence as we launch this airplane but this performance outside of that one moment when

boundary conditions were not provided for i believe in this airplane and the engineering of it and all the fundamentals and we can get this exactly right. as i said before if we didn't believe or if anybody didn't believe we'd field an airplane safer than any in the sky we wouldn't do it >> how would you characterize the current relationships with your customers in the major carriers is it cordial? are they asking for more information. did you speak to them a lot? do you dread speaking to them? where does it stand with how that's going with all the biggest customers? >> well, listen i have known them for quite sometime and i would never describe our discussions today as cordial they're very direct.

but they are incredibly supportive of the boeing company and the products so they just want us to get back on track they simply want us to get back where production is stable and predictable. i think we have handled that discussion as well as it could be handled maybe with not quite as much transparency and i think getting back to andrew's question the transparency of the lessons i have learned over the last year that is where boeing fell short and we will not fall short on that subject under my leadership it will be uncomfortable but we will be transparent on every subject whether it's training and whether it's the certification process, everything along the way leadership and culture all of those things are fair game >> when you saw those e-mails and when you release them, you

have some employees that are calling the max plane designed by clowns and soup advised by monkeys. i wouldn't fly on it what was your reaction the first time that you saw the messages >> stomach turned. just like yours would and just like anybody would i don't want this to get confused i wish they had been disclosed inside the company a long time ago. that language is horrible. it existed trying to indict the rest of the boeing culture on the basis of those ew

>> becky, go ahead. >> just a follow up on that. you were chairman at the time. when did you find out about the messages and was it dennis's decision alone to not release the messages >> becky, we found out way too late there was only one moment in time that if we had found out we all would have done something. that is the day it was written it's the who found out later and every one of us involved in that process believe we found out too late we agree with all of that. we were as transparent as we needed to be when we found out on the other hand. none of that is relevant to a culture and safety process that we employ. we had to find out about that

the day it was written and we had to take action i can't rewrite history. i wish i could i think that's the point. >> one last question here, dave, the coronavirus as it continues to spread here are you concerned about a long-term impact in terms of travel to china and the world's largest market and as they look into the future about ordering nor aircraft, does this have any lasting impact >> first, i think i'm sorry for what's going on but i would say the experience with sars and the protocols that were established i believe would contain this and i believe that all the protocols will get perfected as we deal

with this. so everybody is doing everything they can to support those protocols and limit ultimately the number of people effected and going forward. >> at least phase one close to being finalized are you optimistic that you may get an order from china. >> yes, i'm very optimistic. >> will we see it this year likely >> i'm not going to predict this it's up to the chinese we will do everything in our power to get that order. to reestablish the great relationship that we have and we do ened i believe the need for aircraft is significant. >> dave calhoun, president and ceo of boeing joining us first on cnbc just moments after the company releases q-4 earnings. a loss of 233 butit's the charges and the cost of the max that's going to get a lot of

attention today. guys back to you. >> dave calhoun, thank you for that and thank you for bringing us that. coming up, and one of the top analysts on wall street. a stock that's had no shortage ay them recently st tuned you're watching squawk on cnbc ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast. looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card

when you add comcast business securityedge. call today. comcast business. beyond fast. well, i'm not going to market my way out of this. we believe this airplane is safer than the safest airplane flying today every next airplane has to be that way it has to be that way for boeing and it has to be that way for our competitors. so what we call it, trying to relabel it, trying to merchandise that this plain will recover with the flying public when airplane pilots step on it, fly it, like it, and based on all the test flights we had to date which are

many, they do. >> that was boeing ceo dave calhoun speaking with us moments ago. hopeful return to service and joining us with a reaction to that in this morning's boeing results. he is bank of america's securities research analyst. our guest host is black rock's rick who is also here and cnbc senior markets commentator what was your impression of what you heard? >> yeah. so on some levels i think he was being earnest. the 737 is a airplane and they're going to fix it. it had a flawed system so again it goes back to you had a system that had one failure and could take down the airplane what he didn't answer are a couple of things one, how do you change the culture in an organization of

150,000 people hard to do i know from my experience and we're in a good place. the other thing is what is his vision for the company going forward? there's a week agatha they're putting the mma and what is your path forward here? because their biggest competitor in europe right now is they're building an airplane that's going to address the middle of the market we think could be upwards of 3,000 airplanes so the 8321 xlr is fantastic but they don't have anything there right now. >> did you like what seemed like an adjustment in terms of his approach to all of this which was look, we're putting out what we think but we don't really know and we're not -- we're not dedicated to any of these dates anymore. >> i think that's a reasonable answer, right? you know, the boeing, you know, answers before were yeah, this is a hard date

we'll be there. >> and then they didn't get there, right and to some extent they probably really don't know and i think his comment about something else could pop up, something else could pop up. >> did you hear about the relationship that boeing has with it's -- with different stakeholders what is the most important was it with the faa and regulators are they satisfying all the concerns and inquiries from all of their customers and carriers? because it sounded like if it were him, he said discussions are not cordial with our carriers and i'm wondering do you think boeing is avoiding having face to face interaction with the carriers until they know more? do you think the carriers are satisfied? >> yeah, my sense of what i've heard is on some issues is they haven't been as forth coming. >> with their customers. >> with this latest announcement >> is it the regulators in the

faa. >> you have the employees and shareholders and you do have customers. >> customer must be really upset. >> it's caused all kinds of problems. >> just reading into how the stock is reacting. and most of 2019 it looks like the best guess for the up front costs are now aired out there. 2020 is not going to be about making the numbers it's going to be about making this right and then you can kind of workout of that he seems to be striking the right tones. >> i agree with that, right? so if you look at the numbers today it's what investors are going to be looking at they took 2.6 billion charge in the quarter. they took 2.6 billion dollars in the quarter related to increased production costs they identified 4 billion more in increased production costs in 2020 the one piece that they left out

is what are they going to be >> we have been saying for awhile now that the total charge will probably be about 20 billion. if you add in maybe another 2 to 3 billion in concessions they get you a little north and i think investors are saying, right, i have investors asking what is it going to be this wasn't as bad as it could be so i wouldn't be surprised if it continues into the day. >> in combination with getting $12 billion of cash. >> it's not as bad as it could have been. >> he was not sandbagging. it was trying to be giving the best information that he could. >> investors will call us and say they're just going to sandbag. he can't sandbag his customers. >> if he puts out a date, that messes with all the production all the airlines >> so how do you think about this thousands of companies in the

world are companies that have what are pretty clear path where they're driving revenue. >> if you were thinking about a portfolio, you don't want to get fooled, how do you think about this as a broad investor in a bunch of different companies. >> there's a couple of factors there's the short to medium term and i wouldn't be surprised if you see the stock trade around the fundamentals of the airplane going back into service. and then when you start thinking longer term, this is where the vision of what is the next step here are they going to do this? are they not what is the medium to longer term it gets more complicated and they're taking down the 787 to 10 per month. we have it going from 10 per month down to 8 per month. 787 today is a very cash generative aircraft. if you go down to 8 per month on top of everything else going on it makes the medium term a little more inviting.

>> right >> okay. thank you. appreciate it. thank you. >> mike, thank you rick sticking around we'll continue this conversation >> stock continued to tick up. >> it went higher as it continued to talk. >> it just happened as well. but a lot of factors that you mentioned. take a look at the shares of mcdonald's the company posted a strong fourth quarter with first sales above expectations but it's down in the red check out the ge in the premarket. up sharply after a top and bottom line shows progress and turn around. stay tuned

squawk box coming right back

welcome back the futures are at the higher

and more than a lot of these up 176 points. >> still to come, can the country afford another round of tax cuts when the budget deficit is on its way to blowing through the trillion dollar level this year kevin brady will join us right after this break as talk of tax cuts 2.0 heats up. and later, rick rieder on tesla and the ride the stock has been on over the past few months. on the go on the cnbc app. stay tuned squawk box will be right back. ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds.

so it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. ♪ ♪

welcome back to squawk box right here on cnbc here are some of the stories that investors are going to be talking about this morning shares of elle brands are talking about this morning the wall street journal is

reporting that leslie wexner is in talks to step down as ceo and exploring strategic alternatives for the company's victoria's secret brand we'll keep our eyes on that story. the overhang on that has also been the jeffrey epstein connection and the change in the culture and the mood around what victoria's secret is and can be and there's no more victoria's secret angels. >> he is a retailer and that may have been effective for decades and decades and decades it's not anymore. >> it may be more important to all of this. canadian shops and it says that the products were not as popular with customers as it had predicted and pulled them from other restaurants in september and remember when the news first

broke that stock was like a rocket and after this, we have more big names on tap we'll hear from later this afternoon. we'll hear from microsoft, facebook and tesla so you're going to want to stay glued to cnbc. >> wow. >> after apple yesterday and boeing this morning. >> when mcdonald finally hit 100 billion in sales for the year. >> oh, for the year. >> a long time ago. >> then i was thinking apple. >> remember when they used to have the signs on the sign. >> how many sold. >> how many million, how many billion? over 100 billion. >> it's finally 100 billion for the year and it's in the quarter. u.s. budget deficit is expected to break through the $1 trillion barrier this year according to the congressional budget office. that's the first time that's happened since 2012. joining us now to talk about deficit, taxes, today's signing and more congressman kevin brady, ranking member of the

ways and means committee we hear there might be a 2.0 round of tax cuts congressman. anything. so congressional budget office, excuse me, was pretty clear yesterday that the tax cuts and stronger economic growth is reducing the deficit by over $700 billion over the next decade and make it clear to if the individual cuts aren't made permanent growth will slow and deficits will increase so job number one is to make the cuts permanent for families and small businesses secondly, we believe there's more growth to be had in the

economy. we are developing a growth agenda for the 2020 election in contrast to the democrats taxing agenda and part of that will be making sure that america is the most innovation friendly country in the planet and our global competitors are really aggressive here. six countries have already lowered their corporate rate since we did they have very aggressive innovation tax policies. i think the country that wins the innovation race wins the future on the globe so that means jobs, more opportunities for families and yeah, more revenue for the federal government. >> there are some other projections recently going out 5, 10 years thatwere just mind boggling caused by one thing and that's entitlements and medicare and social security but numbers that were much bigger than the none that we' number that we're talking about

right now. it doesn't seem to be the most difficult thing to address if you get the president to acknowledge it needs to be addressed but he is still doubling down on i'll never touch medicare so what do you need to do? >> so you're right even with record revenues coming into washington these days, you know, a lot of our automatic spending is driving the deficits and it will increase in the future i don't think that we resolve those unless both parties are willing to come together you're going to need republicans, democrats and the president on board to do that how do we come together on these deficits in his second term. that's the right approach. we have to tackle it and we have to tackle it together.

>> one of the things that's been a foundation of the republican party is fiscal conservatism look at the deficit number while i completely agree with you, we can grow revenues and there's serious initiatives to do that but you're also talking about significant deficits and then infrastructure no matter who was elected going forward. so how do you think about that >> we have a real opportunity right now. interest rates are low we're paying on our debt and it's nowhere near what that would be each year when the interest rates return to normal and so we have a window here where we need to tackle this issue -- these issues and we tackle them now. we have an aging population that's driving so much of our health care, our medicare and medicaid there's solutions to it.

and republicans are willing to sit down and tackle this but we can't put this off. >> would you be willing to go to the table and sit down and offer to cut defense spending in order to get them to agree to cut some of the spending that takes place here domestically? >> you can make it disappear and you're going to run up deficits in the future because 2-thirds of our budget is on that automatic spending so for us in congress we have to have an adult conversation about how we do it the right way and it's going to be tough but there are solutions. >> he talked about he knows a lot about we're going to stay low for a long time, possibly.

do you think that has given members of con gleszgress a fal sense of complacency that's deficits that we can run and take care of it with growth? people don't seem very worried about it no, there are to be honest i don't buy the narrative that people don't care about deficits anymore. it's the key issue for us but we're going to need a partner. our budgets as we propose them not just get back to balance, we actually have -- i've always had plans to pay off the debt over time you can't even start with a yearly budget.

>> thank you for coming on squawk box this morning as you do frequently and we appreciate it. >> love being on thank you. >> still to come, right now setting up for another big run this morning 159 points s&p up by 10 and the nasdaq up by 40. we'll take a look at this morning's biggest stock movers l. brands. ge, mcdonald's, apple and boeing we'll get you ready and shaping up to be another busy day on wall street.

welcome back as we take a look at futures before the market opens and it will open in the green. dow up about 160 points right now. nasdaq looking to open 40 points higher and the s&p 500 looking to open about 10 points higher. >> as we get closer, let's get back to our guest host for his insights on the bond markets and more specifically the importance of liquidity around the world. chief investment officer of blackrock. and rick, let's talk about something that we were talking about off camera before. it's a lot more difficult to

move in and out with such a big portfolio. >> i think the markets is rough and there's a weird construct and it's a good thing. and people talk about what they're doing and they're putting huge amounts of liquidity and they need to for the balance. and markets continue and you have this incredible paradox whether it's impeachment or the election or so conviction is -- so we talk about boeing stock, where are the places that i need to go if i feel like i'll be pretty well protected. what are the hedges that i have on the depth of the markets is low. >> does that explain the lack of volatility you're not going to run it down

really sharply either? >> so there's a couple of things keeping volatility down. one of them is because of the amount of money, the markets are pretty stable generally and the other is when part of what i don't believe in negative interest rates and people sell volatility as a way to generate return i think one of the best stocks in the world today if not the best is to buy volatility because you can actually manage your portfolio extremely well with volatility in the equity marks, rate marks, currency markets, one of the gifts that because of easy monetary policy to some extent and liquidity, one of the gifts to manage portfolio today. >> is this a potential risk at some point i wonder what unwinds, what causes that, what kind of potential? >> one thing that people don't talk about is the pro cyclical nature of the markets. because of that selling of volatility, because of the dynamic that is out there in terms of different types of assets that have been raised in volatility form, when the market goes up, it has to accelerate

and then it goes down, it does the same you think about what we had this week alone, you think about monday, markets were trading down, markets trading down and the thing you hear a lot about is all of a sudden you hit volatility triggers, you hear levels -- hit levels that people have to sell more because of the way they're managing their books. that's really different. you can have days like that are complete completely different days, they're different markets. i think the most interesting markets i've been around a long time the fact we're not talking about the fed, it is such a nice thing, not to follow every single word of the federal reserve. you can look at different companies and -- >> you live in interesting times, though. the chinese proverb, do you want that when it comes to markets. you say interesting, that does that mean? >> the ability -- talk about today, you can get engaged on every one of the stores you talked about today, you think about -- a lot of things happening in the world with technology, the digitization of commerce that i think is most

exciting thing we have ever seen as investors and things of different businesses, think about companies, apple, et cetera, who is on the right side of that. not just tech companies. who are the companies that are actually have gotten on the right side of row gilogistics, e are the company you want to get on real differentiation going on. you look as you describe over the last week or so, last few months, who is -- some companies are underperforming. not on the right side of that. that's where i think it is really cool to try and find the opportunities. >> talking about opportunities, can we talk about tesla? >> absolutely. >> that's where i wanted to go with you we'll be hearing from them this afternoon. >> yeah. the last time i was on we had a long discussion about their technology individual companies, i think the technology evolution and what is happening in, you know, your ability to produce cars at lower price points and the energy dynamic in terms of how you're utilizing it, the services you're providing, i don't know what they're going to report, but i think people underestimated for a long time

it is a better technology, it is more efficient, and the ability -- >> does the valuation of the company make sense to you? >> over a long time, i thought it was -- on your show many, many times, i thought it was too low. it has gotten up there new where you have to get to do match this valuation, for first time in a while, felt like lighting up a little bit is not a bad idea, but i think this is a company, a durable business and you're going to see others that are behind. and one thing, i know we talk about last time on the show, you know, it is to a large extent, an efficient energy company. i think the deliver services, efficient transportation through energy, by the way, look at what gm announced, it is a complete revolution in transportation that is going on going to hit more circles of transportation, energy, logis c logistics than people give credit to. >> you're long the stock >> yeah. i like the company i think it is a good business. and, listen, i think your point

about valuations today, it moved up a lot. >> yeah. rick, thank you. it has been great having you with us this morning and we always look forward to these talks. >> thank you, becky. >> did see the porsche all electric vehicle, saw one -- >> like it >> yeah, i did i did. it is called a turbo and i was, like, but there -- it is not a -- it is weird. i wonder about the competition but obviously they have a lead earlier this hour we heard from boeing ceo dave calhoun following boeing's fourth quarter results. here is that calhoun had to say about the road back to service for the 737 max. >> you can't stand back in a situation like this. i have to answer to our employees, listen to our employees, i have to give them the time they need to do the natural discourse that occurs in a big complex certification process. and that's what we have provided for, nothing more, nothing less. so i believe we can do it. and the only other comment i have to make and will always make, i do not and will not

control this timeline. >> all right for his take, down to the new york stock exchange, jim cramer joins us, the action in a stock today, jim, on the results that came out, down like ten, now up like ten is it -- how many times have we thought it is washed out and ready to buy any closer to that do you think? was that notable today >> i think what they continue to do post muilenburg is be transparent. that seems like an overused term you look at how much they're trying to say, listen, it could cost this, could cost that, it is finally out of our hands, the other thing they never talked about how it was out of their hands before this, greg smith always did, the cfo, the ceo didn't i think what you do is you feel better, numbers to it. the numbers are not horrendous they still don't know how they're going to brand it. but i do feel that they're getting their arms around it, a

possible underpromise and then they can do overdeliver. i think theywere overpromising throughout the regime of dennis muilenburg, very unrealistic if you criticize muilenburg or questioned, you were told to shut up. that's gone. i don't hear that from calhoun or smith a pleasure this is a response to having answers. >> i heard people tell me culp is getting it done at ge too. >> totally culp is getting his arms around debt coming down, cash flow coming up, i really think he has a path to figuring out how to make power, it is not going to kill him anymore and healthcare, i think, he'll pick up a little says it will aviation still good. culp is very transparent too and another regime that was not transparent, that is transparent. a lot of times if it is bad, but transparent, better than good, but not. >> right okay, great. thank you, jim >> thank you >> we'll see y ioun just a couple of minutes.

"squawk box" will be right back. ♪ ♪ ♪ ♪ ♪

every time it takes care of something for us, we celebrate. how often does that... got it. servicenow -the smarter way to workflow. asand achieved new york city'sed cacleanest air quality in more than 50 years. as a leader in the fight against climate change, he helped shut down over half of the nation's coal plants, then led one of the biggest pollution reduction efforts

in history. as president, he intends to reduce emissions by fifty percent within ten years. because if we want to stop climate change, we need to make a change. this is a fight-we can't afford to lose. i'm mike bloomberg and i approve this message. want to tell you about another deal, berkshire hathaway selling its newspaper assets to lee enterprises for $140 million in cash. that includes 30 daily

newspapers, plus the buffalo news that would be part of the transaction. it sounds like they would be getting out of it entirely, but they are buying all of the debt for lee enterprises. will be loaning them $576 million at a 9% annual rate. will help the company lee because it is a lower rate than they're already paying that does it for us today. i want to thank rick rieder for being with us. we'll see you tomorrow right now it is time for "squawk on the street. ♪ this is how we do it this is how we do it ♪ >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. big hour on deck live interviews with the ceos of amd, dow inc. and starbucks, futures look to extend the market bounce, earnings from apple, starbucks, all roll in, number of coronavirus cases exceeded that in sars. and the fed statement at 2:00. europe is steady oil almost back to 54. road map begins with the

corporatin