good morning we are live from nasdaq marketsite in time square. i'm becky quick. you are going to see some red on the s&p and dow. dow down by 155 points yesterday, we were looking at the dow down by as much as 220 markets managed to rally and close higher for the day dow was up 124 points at the end of the session however, it is thelast day of january. the weakest start we've seen in a while they do remain poised to post their fifth straight gain

we'll keep an eye on all of this today. we'll talk more about that in a moment treasury department right now. yesterday, below 1.6%. the 10-year at 1.56% 2-year at 1.36%. the hang seng is down and the nikkei up almost 1%. ibm long-time ceo is stepping down effect jif april 6. krishna will be taking her place. the stock rising on the news a look at how ibm shares have performed. >> eight years she's been there

through that time and it has been down 20%. >> it has been a saga. it has >> it has. >> massive turn around process it involved people like warren buffett. people all along said the revenue is not rising. others will make the case that is difficult people said is that one of these glass cliff situations like when women are put in a position. at the time, when she got the job, you would have never known

how difficult it was because her predecessors appeared to be rock stars but really left her holding the bag. >> she was trying to get rid of the empty calories revenue that would not be profitable. >> this is even trying to transition like a microsoft. when was that in like 1980 >> this is 50s and 60s and big blue it had to be repositioned a couple of times. gershner had to come in. to have ibm, even know what it is anymore digital equipment, prime computer, novell they are just totally gone it has been tough. maybe it is positioned well.

>> whitehurst will be president. >> it is interesting you probably got the same e-mails that i did there are so many people in the ceo community that love her. >> you love her. >> i do. >> she's on the business round table with jamie in terms of measuring her legacy you are either going to say she kept the company alive at a time when it was a real struggle or with a less generous view. you really have to think you are in a position they didn't become

google or microsoft or new companies. these guys in their garages. dell in the garage and then it is better than the previous thing. to even have ibm still around and playing in the cloud i don't know >> we'll talk to a lot of people today about it >> meantime, the u.s. issuing a warning saying do not travel to china. after the w.h.o. declares the virus an emergency >> duh >> color commentary there. the death toll rising past 200 the number of confirmed cases worldwide, 10,000. six confirmed cases in the united states. united kingdom reported its

first cases now. we'll go to eunice yoon for what it is like living in china as the outbreak worsens good morning to you. >> reporter: people are slowly starting to return to beijing. in the chinese context, there are very few people here the lunar new year travel for this period was down significantly. overall trips by 16.5% january 30, travel was down 84% because the government has been imposing travel as well as other measures to try to stamp out the virus making things very difficult on a day-to-day basis here for thoefz us living in china, wearing a mask is standard

practice it is not a government requirement outside of wuhan but nearly everyone has one on because they are fearful of catching the disease today was supposed to be the first day back the government extended the holiday. finding fresh produce has been a challenge. few vegetables and eggs. not so normal during the holiday but now people are eating at home and hording masks are hard to come by. now, there aren't any. i've been looking for sand sanitizer overoe't know where there will be more this is one of the entrances to my apartment complex more and more housing estates and government areas are setting

up barricades and health checks. my temperature was a little on the slow side but still normal if i had a fever, he would report me to the authorities >> living here, you get a sense of how desire the impact would be goldman believes the full year forecast for china will be 5.4% instead of 5.9%. they also see an impact on the u.s. in the first quarter but the expectation is that the u.s. will be able to recover in the following quarter. the overall impact for the year in u.s. won't be a big drag. >> i've heard a lot of different numbers. we are talking 10,000 roughly confirmed cases. i've heard there are 15,000 plus more suspected cases and 100,000

people being monitored you were talking about if you had a fever, you would be reported to the authorities. where would you end up >> yes potentially in quarantine. it hasn't been standardized yet. the people at the subway set if you were running a temperature, you would call an ambulance and have a team take you to the hospital in some other compounds, they would turn you away. it is possible that they could be at the end of the day, they make sure people don't go out and infect anybody else. >> i think there have been 213

deaths so far. they estimate the rate is somewhere between 2% and 3%. that is lower than sars, which was 10%. if you compare that to flu, the regular strains we see here. there is a mortality rate. you'd be talking about 450,000 people dying that's why this is so concerning what do authorities say about whether or when they'll be able to get some role >> they are hoping as quickly as possible the premier told scientists he was hopeful they'd be able to be able to find the root of the virus. it is so difficult to know

because there is so many unknowns right now you put out the death rate people have been questioning there is a lot of speculating. all is adding to that level of fear here and one of the reasons why everybody is wearing masks we don't know enough even though when you look at the straight numbers of the confirmed cases when we look at sars, which is very vivid in people's memory here >> we appreciate it. we'll check in with you soon when we come back, amazon shattering cases stock is up 9%

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♪ a strong quarter for amazon. the company blowing past earnings and revenue expectations and better than expected results in the aws cloud unity. market value hitting 1 trillio in the spring market right now, i think it needs to be at $2,016 in change to pass market cap you can see it is beyond that. head of retail strategy and r5 capital founder.

it is good to see both of you. what is amazing is that they are hitting on every cylender. let's talk about the retail side of this. >> you see a little sloeg wing aws. you look at how much it is really a data enabled organization >> what do you mean? >> we believe organizations are using data to do supply chain and modelling in a way most are not doing. >> sort of what they recommend to you as a customer >> they've used that for years they've used those same techniques to do their

modelling. terming when you price that individual product to where you hold inventory and recommending third party sellers. there are thousands of models in the organization that's sort of the backstory the other piece is the product organization the way they've developed small teams. two things often overlooked in this very strong q4 results. >> you are already talking pre-market trade up 9% pushing it wellon $1 trillion market cap. is it deserved is it here and going to run further? >> we've made amazon our top pick not only deserved. we have raised our price target.

this is like an atm machine. they are generating so much cash our forecast is $26 billion in free cash flow in 2020 and that's after investing in cap x. our next title is world domination the question is how high can equity go. we think they should swin opin aws. >> why >> we think they are losing a little business because they are associated with amazon >> because amazon competes with everybody. >> the biggest reason, retail can stand on its own we think retail itself can generate $5 trillion more. >> jeff bezos is a rational guy. when it looks like they are losing enough business or the

government is getting too into their business >> are we there yet? >> we are pretty close i think the government will get interested > >> do you agree with that? >> there are significant advantages to keeping aws but i think the government oversight will be huge especial will we see the bad news in tracking those. >> thank you for your time coming up, the end of an era at ibm rometty will pass the torch to the head of the cloud division more on the news that broke this morning. the uk confirming the first two cases of wuhan coronavirus "squawk box" will be right back. we made usaa insurance for members like martin.

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joining us to discuss what this means for the company, steven milunovich have you been a supporter all along, steven? was there a time you thought maybe she was not the right person to orchestrate the turn around go back and let us know how you feel about the position for the future >> all of us know ibm has been per performing for a long time we put out a piece that perhaps the company required more management and more structural change i think it will be received bullishly. it is surprising that krishna will be promoted

the combination of krishna and whitehurst will be positively received from investors. >> in hind sight, youought to be able to figure it out were there miss steps or was execution difficult or is it hard for a legacy company to compete with the upstarts we've seen again and again in tech >> that's it there is an uphill battle. when she came in, she probably stuck with the prior plan a little too long. and she overmarketed watson. they did try to create their own

cloud. the recent strategy makes more sense. they call it chapter 2 80% of work loads are not made it to the cloud. ibm has a better shot dealing with that from a cloud perspective. when we do our checks with cloud customers, ibm doesn't have the track yet. >> what is ibm now and where will it be five years from now it could even have a new name, i would think. >> it has changed a lot over the years. it was a mainframe company software and services. it will be software and cloud. the world has changed. particularly the hyper scalers amazon and google and microsoft have taken the lead leaving

companies like ibm in the dust it should be positive for the stock over time. it is probably not quite a microsoft situation. >> we are talking about her legacy and someone said the ceo community adores her and yet you look at the stock performance and it is what it is not to second guess but had she gotten into that role and done something different out of the gate is there something in your mind she could have done that would have somehow changed the direction of this company in a more material or faster way? >> i think the company was late to cloud they are very smart and saw it coming but the concern that cloud would undercut their core business which to a degree, it

has. their ability to create their own public cloud not expecting amazon or microsoft to be as successful you could also argue the divesture of their company and how much they paid for red hat there were steps along the way that could have been better. >> thank you it is early. we'll get you into the studio next time. and you can appear in all your glory. an okay picture but it is not moving, we should get one of those mouths that move when we return, caterpillar is expected to report. we'll bring you those numbers and instant reaction here when we return.

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good morning welcome back we are about three hours before the market would open. but now would open about 170 points down on the dow s&p off about 10 points and nasdaq looking to open up about 21 points. >> they are up now a little on caterpillar. the adjusted current number was 2.63 the estimate was 2.37. you can see, that is above $13.1 billion in revenue compared to $13.4 estimate the guidance for this year, 2020, $8.50 to $10 the street is at $10.63. that would be a big miss

$10 versus $10.63, not as bad. the company says continued uncertain global industry affecting them >> did it say anything about the coronavirus. the shut down. hoping with the trade deal, it would mean everything is open back flowing again this has put a damper on that. i don't see anything about the coronavirus either >> pleased with the overall performance. some positive things the macroenvironment, economic uncertainty is an issue. caterpillar is volatile. i can tell you that.

down 1.4%. honeywell reported too reporting as we speak. earnings of $2.06. revenue falling short of forecasts. that stock looking like it would open slightly higher almost a percent higher right now this morning coming up, this weekend, we'll feature a marquee matchup between two football teams but a fierce ad spending battle between two presidential candidates not going to tell you who my pick it is >> i'm going with my heart, which is kansas city middle of the country. i bet you go with your head and

go 49ers >> everything is political with me you think i'm going to give nancy pelosi i'm kidding. kidding. closing out a busy week of earnings with sam zon. nancy may need a win from somewhere. you can watch or listen to us live or on the go on the cnbc app. 'lbeig bk. n-free. 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

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president trump and mike bloomberg are former friends rolling out a new playbook for sunday's game and it involves a lot of money >> good morning. both spending $11 million each for one minute ads in sunday's game the first time two candidates have squared off in the big game trump's campaign was the first to buy a spot and bloomberg found out and decided to buy their own spot for bloomberg, it is a drop in the bucket he has spent $240 million on tv

ads. that is more than 14 times what trump has spent. trump leads in digital ad spending those two ads are more than joe biden and elizabeth warren's election and more than sanders total. bloomberg has vowed to spend over a billion to defeat trump trump started with over a billion in his war chest highlighting how the country is now stronger, safer. the bloomberg ad focuses on gun violence that will run near the half time show >> $11 million, what do you get? >> 60 seconds.

>> you've seen both ads now? which do you think is more powerful >> trump's is pretty generic bloomberg features a young football player. trump is running two 30 second spots. one of those was shown last night the other one he's holding back to the actual game. >> you saw the lead on drugs or did you look at that today exclusive from the bloomberg campaign that he has spent $100 million so far >> more than that in advertising. >> he spent over $200 million in

tv ads one is the anti-trump campaign and one is the bloomberg campaign >> part is the simple show of strength ze expect to get a lot of votes from this? i don't know or creating a sense of national election that elevates himself to a national level if it is only him and the president on super bowl sunday, it changes the dynamic there is biden, sanders and then it is down in single digits.

>> and remember that strategy is to vault ahead to super tuesday. that does create a sense on this stage, there are two people, donald trump and michael bloomberg. >> welcome cofounder and ceo of the consulting firm nothing to do with barny or anything? >> just red and blue. >> i think it is a bluish purple with you >> depends who you are talking to plenty of red and purple and red too. you learned it in school >> i guess i missed that part. >> this part today is blue >> what do you make of the whole bloomberg effort here?

is it ultimately going to be successful in a party that is vilifying millionaires >> i think he's trying to get into donald trump's head i think he's trying to introduce himself to an issue that matters to a lot of voters and he brings in a weakness which he doesn't do well among african-american voters this is the story of an african person kid who is a football player and dreaming of life in the nfl when his life was cut short by gun fire. it is one in our party that

matters a lot. >> the wage spectrum and positive things we'll hear in the general advertising. >> the best argument the president has is not the one happening on capitol hill today, it is the one on the economy there is a pretty good story the president is concerned like a lot of people are about the growth rate that dame out yesterday which is lower than it was than both jimmy carter and bill clinton if it slows, the president's argument is slow >> you are talking about the quarter or the year. you are talking about the one year, 2019 much the average of

the first three years. >> on another nbc affiliated segment. they were taken apart. >> you are kidding me. >> your purple turns to almost totally blue >> former congressman. >> i want to ask about this. you've got citizens united they march the democrats money and politics money and politics it is okay that a guy with $60 billion wants to be president. i'll buy it myself >> it is not okay. it is okay under the current supreme court ruling to do this. >> you see my point.

if that's where the energy is. why do you think the center of the party will embrace a billionaire trying to use money to buy the presidency. >> you have to expect those two things money and policy is a reality. you can't control it or stop it. you either go with the floe or disarm >> i think mike bloomberg hasn't met that challenge he hasn't been in a debate he'll have to answer a lot of these questions. i don't think it will be an easy road for him he's got $60 billion to spend. >> peel off a few trump voters, the never trumpers i don't see how he gets the

elizabeth warren or bernie types. >> i'm trying to be purple it is hard for me. >> you are trying. you are doing a better job today. >> when i listen to you, that might be what you are talking about. thanks always fun coming up, when we return, disrupting consumer giants >> yeah. a dollar are the blades any good? no our blades are [ bleep ] great >> talking about billion dollar brand club and how a brand turned a direct to consumer idea into a billion dollar business back with more maybe more bleeps in just a minute that's why fidelity leads the industry in value while our competition continues to talk.

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disrupted by the direct to consumer revolution and it's called billion dollar brand club how dollar shave club and others are remaking what we buy he was my editor for so many years and mentor and rabbi at the new york times he was a mentor to becky at the wall street journal and the l.a. times. so we're thrilled to have him here this morning. >> great to see you guys. >> congratulations on the book. >> thank you. >> explain this to us. there's all of these new brands that effectively disrupted what

we thought were the older businesses but one of the questions i have now as we're watching casper and some of these other guys try to go public and do things is the valuations seem to be compressing. great question as usual andrew it's a little bit of both. it depends on the particular situation. casper is in a category really disrupted. 5 years ago. $50 million of 16 billion was direct to consumer it's $2 billion now. it got so crowded that you have winners and losers it depends on the particular situation. they probably overspent that marketing. they'll need to right that but a lot of the companies are

profitable. >> they created the entire jenre for everybody else to go after. >> >> they were the biggest marketer or doll they remain independent? >> i still think that it's going to buy warby parker and just say enough already and they forced b companies like gilette to lower prices they lowered for the first time in forever by 10 to 15%. they had a 70% market share for decades before dollar shave club and harrys came along.

what happens if they buy them up we'll have less competition. that's one of the great things about this revolution. where it was easier to introduce product. they took advantage of technology you didn't have to have retail space. you have to go directly to the consumer the people behind this, these young entrepreneurs in the 20s and 30 >> i thought they disrupted kraft macaroni and cheese. nobody buys that anymore except

for brad pitt. >> do you think one day there will be a merger of all of these direct to consumer businesses so they can have the scale to play against the big guys because so far a lot of it gets subsidized or it's waiting to get bought by walmart. >> i think the fact is one possibility. >> started by a couple and their husband they have done well taking on victoria's secret and building a business. the stories of the people that i focus on a lot in the book is really fun. >> what's the purple matress. >> how would you describe it >> it comes in like a little lunchbox. >> that was one of the great brilliant things about it. they said oh you don't like it, you can return it. is there a more miserable experience than going into a

matress store. >> congratulations for coming in the billion dollar brand club is the book go get it. we appreciate you. >> great to see you. we're watching three big reports before the opening bell. we'll dig into the numbers from caterpillar, exxon and chevron and get reaction from wall street stick around we'll be right back. ♪ ♪ ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

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♪

a. good morning, a beautiful live shot of the white house in washington d.c. this morning. >> purple sky. >> the purple sky and the sun coming up. it doesn't get better than that image. take a look at u.s. equity futures. the dow looking like it will open up much lower but the nasdaq looking up. we'll explain why in a minute.

that's going to open up 34 points higher. the s&p 500 off 7 points we have had earnings hit as well and becky has those. >> earnings hitting the wires in the last hour. caterpillar on the bottom line and a weaker than expected outlook. it's putting pressure on shares of caterpillar. also talked about the broader sell off that we have been saying. he's managing partner. also elizabeth good to see both of you. why don't we just start talking about caterpillar and honey well the guidance was weaker. what do you think is really affecting that >> i think it's the uncertainty. any company the last couple of

weeks that has called out either china in terms of the buyers or trade uncertainty has been penalized and the companies that have shown secular growth that the stocks have reflected nicely they really manage their businesses well. they always had up and down quarters and it will be interesting to see what they call they really brought down the guidance to the lower end. >> maybe he's being conservative we'll see. the stock is fluxuated up and down and at this point at least through the earnings season a lot of investors are not giving the benefit of the doubt but might not be aggressively buying them there's other stories and other companies doing well through this and those are the growth companies and when you look at that's the quarter that people are expecting.

plenty of them are better than expected and you do have this uncertainty created by the coronavirus in china and the potential for the shutdown not only in china but around the globe. how do you play this >> our outlook on caterpillar is cautious and driven by sales outside of the u.s it will be interesting to see how the next few weeks play out and how it effects china's manufacturing or manufacturing in china they have a decent amount of factories. it will be interesting to see it >> you have a buy rating on the stock. is that at risk based on what they said today. >> we have a hold. we're very cautious for a number of reasons including pricing pressure in china. >> and what about a price target where are you focused on that for the next 12 months >> so our 12 month price target is about 156 we're going to evaluate where they go on the call and go from

there. >> so how do you read on what's happening in china right now >> if you go back to history, the way to play this is if we get a little bit more of a pull back, a 5 to 10% pull back with manufacturing companies and those associated with china and transports that's when i would get aggressive you have seen a 5% pull back in delta and united and key manufacturing companies. that gives you the opportunity because a year from now this would be a one off at that point and investors will not take it as long-term earnings growth but in the short-term as some of the news comes front and center and you get unfortunately more bad news that as an investor is the opportunity that you would look for for high quality companies it's a really high quality company. it gets sold off or honeywell gets sold off or you look at the other blue chip companies those are the opportunities to put it to work.

>> how can you measure what's happening in china with the trade uncertainties at this point? >> i think the biggest thing is competitive pricing pressure their product sales are facing a lot of pressure from other competitors in china that can sell at a lower price and the china-u.s. tariff situation has not helpedthem.

>> i think the key is going to be guidance from a lot of the blue chip companies. they see a lot more in the world than we do and if china which we know is discounted it's the rest of the world how is europe doing. because our ten year is up to 1.6. is that because the world is slowing down or because people are getting defensive because of the virus and the first thing that you do is buy the most liquid bond in the world and that's where investors are trying to figure out which of those or a combination of the two. if it's a combination of the two the buying opportunity is going to be better. >> so the ten year falls below 1.5 or is first. >> i think in the short-term it goes down lower.

which is ironic because the value sectors are getting hurt you have the secular growth stories of the amazon, the teslas and momentum stocks acting well and it's more i think trading at that point. >> it's an incredible three years and 7 months since that actual vote took place finally lead what has been since that voting day. three prime ministers.

it's still part oppenheim the market for the next 11 months future trading and and boris johnson is seeking a clearer separation with no regulatory alignment in may during this transition period citizens of both sides will continue to benefit and they'll pay a settlement down from the figure of 40 billion because some payments were made already since march 2019. have you been back recently.

>> i have been back regularly. >> keep your chin up, wilf. >> what is the feeling that you got from people. >> i think the biggest change that we had recently was the result of the december 12th general election so what other people's views are on leave or remain, the paralysis largely came about because of the lack of an authoratative leader and the big judge of whether brexit is a success or not won't just be in five years time if the economy is performing better than it otherwise would but whether some of those people that didn't want it to happen come along and accept that it's been good or not for the country. there's a lot of big asks to get to that point. >> big asks though

okay >> trade deal is going to happen even with the anger over huawei. >> so that's also the official start date where the u.k. is permitted to have new negotiations is as of tomorrow and the u.s. will be high up on the list it's been one of disappointment and not of fury and it could be something that could have happened relatively quickly. >> i saw that. i mean, he would have i think framed it that way regardless

and either way it hasn't lead to an outrage response. which is important. >> you'll be back in the next hour with an update on brexit. >> we're not. >> stick around. >> you dropped it, joe now there's a digital twist that hit well-known companies we have that story coming up before we head to the break let's check on the markets as we mentioned the dow and s&p both under pressure this morning. dow down by 135 points s&p futures down by close to 7 nasdaq indicated up by 42 points thanks in large part to amazon and the strength that it's seeing in it's premarket trading too. ea'll be back aftea ic r quk brk.

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high-tech skimming. >> >> every time you type a key on to this forum the code is sending it off to another server. >> in other words, i have just become the victim of e-skimming. >> even if you were to change your mind the attacker already has the information. >> this is just a demo but the same attack hit many retailers it works like an atm skimmer except it's all online they insert malicious code and also break into a common server that's thousands of different online shopping websites to steal from all of them incht he helps clients thwart

attacks. >> they can update and effect a lot of online shopping websites all at once. >> e-skimming has been on its radar for nearly seven years but it's becoming more prevalent >> that's probably just the numbers that we see reported to the fbi. >> the threat impacts companies large and small including british airways, puma, ticket master and american outdoor brands corporation.

>> if we put up a wall they're building a ladder or tunnel or way to go around it. >> convictions are difficult because the criminals are often outside of the u.s. the most important thing is to monitor what's going on on the web server itself. there's logs being created all the time we need to monitor those to make sure that there's no signs of an attacker logging on and taking control of the webserver

>> they allegedly compromised hundreds of websites they reportedly used them to buy electronics and luxury goods and resold them for a profit we heard about things happening here all the time from every retailer. >> so this would be a record fine if this is actually in place. this would be a record fine for british airways. perhaps the message that they take the privacy issues seriously but american corporations can also be fined if they found eu citizens, their data was compromised so it can effect a lot of retailers and they're hearing increasingly from retailers concerned about this who wants to send the e-mail that your data was compromised. >> am i right as a consumer to think the bigger the company, the more tech savvy the company? like amazon?

i'm probably not going to have to deal with something like that so they're a bigger target perhaps and then with the smaller more medium sized retailers a lot of them share some of the coding for their payment portalsand they're vulnerable so it just depends. >> it's great to see you it's great to see this package by the way, welcome for your first time to the set. >> thanks, guys, good to be here. >> good to have you here. >> coming up, the ceo of hpe on environmental sustainability and how the company is creating value for shareholders and then later, the netfli netflix docuseries pandemic couldn't have come at a more couldn't have come at a more crucial

coach saban convinced us. we are committing to aflac. why aflac?ime. how many people watched last year's super bowl? the answer when squawk box returns. ibles. 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

now the answer to today's aflac trivia question. how many people watched last year's super bowl, the answer, 98.2 million these ratings were the lowest since 2008 when 97.5 million people watched the game. >> he is ranked 17th on the list before we talk about your call coming up i want to ask you about a couple of other big issues that are in the news. stepping down at ibm you have competed against for the last 20 years. what do you make of the switch in transition and how do you assess her legacy? >> good morning. thank you for having me today.

>> i have tremendous respect. from a stock performance perspective relative to the nasdaq, a lot of metrics pretty much any during this period it's hard to look at this as a strict win unless you say to yourself that the business was going off a cliff otherwise. how do you assess that component of it? >> think about the competition of the business. they have an infrastructure of business that they divested of they transform and obviously they thought about ai and the

cloud business and the jury is still out about the possibility to compete and win. but ultimately she will reposition what she felt the future would be and now is next. >> what do you think it's going to do in terms of impacting your own business and what you're seeing. >> we'll need to watch and monitor and take action on it. in our case, obviously we have a population in china because we set up a different structure in china a couple of years back but ultimately i think with the chinese new year and right now we have not overly concerned but obviously something that we have to continue to watch. >> the other question i want to ask you about is your name sake

but not the same company so people are very clear, xerox is -- and hp not being your hp. >> hp ink. >> but what is your view of the whole situation. >> i don't have any to speak from knowledge you watched from outside to me that doesn't make any sense. >> which part doesn't make any sense? >> the fact that ultimately you think about this and how to create value and it's someone that i respect tremendously and we work together for many, many years and he's on the right path >> i cannot speak about them i have no knowledge. i have not thought about their performance or anything at all in this point in time.

it's more about what is the opportunity. >> you're going to be on this call in just a minute. >> one of the things that you have done quite successfully is try to refocus the culture of the company. >> we just got back from davos where the whole stake holder concept has become a thing. >> do you think that shareholders or investors are rewarding this approach? >> it's very important it's becoming way, way more at the top of the list of the conversation that we had with shareholders i personally gauge, you know, quite a bit throughout the year. we have board members talking to shareholders this was the top this was the main topic of

discussion because in the end -- >> how much pressure do you feel on yourself? i'm thinking of what microsoft did weeks ago with this carbon negative program it's going to cost them real money. there's nothing free about this and whether you think -- you guys have going to have to say we're going to do this too it's going to hit profits it just can't not. >> just to be clear we already have this. a quarter of our purpose if you think about it and carbon footprint and energy consumption and so forth on top of it and ultimately you can do it through innovation it's not just about investing more it's being smart about it.

think about this at the beginning of the innovation cycle. >> it happens at 8:00 a.m. half an hour from now. you should keep squawk on while you're doing it. you can listen and register at just capital.com. >> before we head to a break, let's check on market movers this morning caterpillar shares dropping after the company offered guidance you can see right now that stock is down by 1.5%. honeywell trading higher after an earnings beat and guidance that was in line with what the street had been anticipating amazon, take a look at this. shares of amazon soaring after rushing expectations for the fourth quarter the company's market cap surging above a trillion dollars they only needed to get to about $216 that stock right now looks like it would open at $266 a share. squawk box will be right back. who says our bank isn't tech enough?

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earnings just out.

and right now the stock is trading up we'll take a look at the further numbers from this. but again, exxon mobil looks like it's trading up even though it was shy on the bottom line number. >> we have been asking business leaders about the coronavirus and concerns about an utbreak. everybody wants to be him i think. oh, that's just me >> what is going on? >> that was a very warm introduction from you. >> you know what you are you know what leaders do

leaders lead >> i'm missing you guys down here we have to get you guys down here and even more action. and this would have been in miami. i'm sure that you're going to do great stuff this weekend any effect on your business? you have to think of all of this stuff as a leader of a billion dollar company. >> of course, truth be told our exposure to china is pretty small. we made in china and in a specific area and as of right now i'd say they're exposed there. we are building our china business in a pretty aggressive way and it's so small. over $3 billion of revenue this year

china is like 1% and just put it in perspective for you >> right, so i guess you're selling a few jerseys at this point. getting a lot of mahomes interest >> sales are spectacular when we look at the revenue from the championship games two weeks ago, we were actually up 120% in rev knew against last year the 49ers have been six super bowls. sales are spectacular on both teams. they're going to yield the same results for fanatics

>> his individual jersey is the number one selling jersey. we joked about this before we used to always say other than death taxes and tom brady jerseys nothing was consistent tom brady was probably the number one selling jersey over the past 20 years. so that's the number one we have is patrick's jersey and we're selling fast but oost other great players too. jimmy g. from the 49ers. we have lots of players, we have lots of players selling jersey and that's, you know, it's amazing in the nfl when you have players that emerge and become absolute heros and how much their fans support them.

>> would you do that would you bet on the overall winner what would you do if you were me >> i can't encourage gambling. >> legal. >> i always go with my heart and the outcomes are a little bit better with the wholesale business and how much more retail there is in san francisco and i'm routing for the 49ers and they get the victory >> you're huge. >> it's a lot less complicated. >> it's a lot less complicated when the eagles were playing the patriots and so this is more peaceful i have two teams and i can have peace and quite. >> right so just tragic it's a big family. the nba. any comments on what it's been

like to show up at games now after hat? i was fortunate i got to spend a lot of time with kobe starting 7 years ago. the one thing that i'll say about kobe is what made him successful. i said this guy's second act could be better. you talk about a guy that won five championships and he was so incredible driving the team on the court but his intensity off

the court was even more. everyone is trying to do what he wants us to do i ended up having a conversation with steph curry and we were saying kobe would want kobe would want us to find a positive in this and find out how to make you stronger and i have to be honest, i don't think anyone has found it yet but i think that's what he would want but obviously i think the world is devastated and we have lost not only one of the best basketball players in the world but a great human being. >> i'm surprised that you didn't have some type of joint business venture, did you at all? you have an eye forral laentd i'm just surprised that you didn't find anything to do together >> we were always talking about different business things to do together we actually when i was working with the panthers i spent time with him talking about having him part of my ownership group

one of the great things with kobe and i remember this like it was yesterday. in 2013 he was asking me question after question about business and he started talking about this company called body armor. he said i love this company. it's going to be huge and he made the investment in that company. i think he put $5.5 million. and that was his first investment so here is this guy that so many people can be skeptical and say is he going to be successful and the first investment he made 50 plus and that's kobe he was a winner at everything he did. the whole world is going to miss him dearly. >> all right great to see you. >> have fun down there. >> it's going to be great. you're going to be disappointed i think when it all said and done but you're friends with the owner, so that's fine. if that's your excuse for being on the wrong side of things.

>> andrew and becky who are you routing for? >> kansas city. >> 3 for 3. >> here's the question that i have what jerseys -- have you printed extra stuff? how does this work >> yeah. we are in great stock in both teams and all the key players and we're printing jerseys like crazy and the demand has been up 10 110%. >> i assume you have to do shirts that say both sides win, right? >> so here's the great thing about e-commerce you don't print them until the team has won and then you print them immediately we have printing presses all throughout the country so printing presses in kansas city and san francisco and also near our ware houses and you don't hit print and other than the retailers and they buy t-shirts. when they get them and if they don't they pay a discounted

price. most of that is done online. >> just so we're not all -- >> i wish you would. just to make it interesting. so we'll talk about it. >> you're not betting anyway. >> you're not betting anyway. >> when we return, this morning's market movers and then the threat of a global outbreak of the coronavirus growing he'll be with us and he's featured in this netflix docuseries pandemic. he's going to be our very special guest. squawk box returns after this. de development and tuition-free college programs to generate the talent companies need. with a $150 billion investment in state of the art, modern infrastructure, and a nation-leading commitment to low-cost clean energy, new york is doing more than any other state to build for the future of your business. new york state, the state of the future. learn more at esd.ny.gov. to take care of yourself. but nature's bounty has innovative ways to help you maintain balance

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and cited among other things global economic certainty. it matched wall street earnings

estimates but revenues were better than forecast and they're keying in in better growth in key measures of sales that strips off acquisitions and currency fluctuates and then we'll end on shares of honeywell which are down fractionally at this stage the industrial company behind everything from aerospace systems to climate controls hosted a mixed report. profits were better and sales fell shy of forecasts. honeywell also gave a full year forecast that was below some estimates saying that boeings continued grounding of the 737 max jet will be a headwind and we have a huge slate of earnings coming up including exxon mobil and chevron. keep it right here squawk box will be back right after this break

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when you add comcast business securityedge. call today. comcast business. beyond fast. there are now more than 10,000 confirmed cases worldwide and 213 deaths eunice is in beijing good morning again eunice. >> hey, guys, i'm at the beijing train station and there's very few people here. people are coming back to beijing and on january 30th when most people expected to be traveling back to the chinese capital the transport ministry said trips are down 84%. a lot of this is because this is

supposed to be the first day when china was going to be back to work. the chinese government had extended the holiday to next month but because of that people have been pretty much held up in their homes and concerned about going out. that's been having a lot of strain on the day to day life of the people here. the shops have been closed restaurants for the most part also shut and that is just a little bit of a window into the economic impact that this potentially could have for this year in fact, goldman sachs had said that they're revising downwards now their 2020 gdp outlook from 5.9% to 5.4% they also see an impact on the u.s. economy on the first quarter but don't think that it's going to last for much of the year, guys >> eunice, thank you very much for more on how cities can prepare for coronavirus, let's

welcome special pathogens expert with the special pathogen program. also the center for global health care special pathogens preparedness also featured in the netflix docuseries pandemic. thank you for being here today. >> thank you for having me. >> we heard reports of what companies in china and the united states were doing to prepare for this in some cases companies are cutting back saying that they're not sending people to china anymore and asking their employees that were there to stay home and what would you be telling companies to do. what else should they be doing >> we don't know much about what the end dpidemiology is yet and taken across the world in terms of preparing and responding to this outbreak and you can obviously, you know, turning

back, shutting doors, things like that. we need to take a step back and just look and see what is actually happening and put things into context. so here in new york city, we are preparing very aggressively. right now we have no cases as per the cdc. the risk to the general american public is low. however, with that said, these past 24 hours there's been a number of different developments first, there's been one of the most fatal days for china which has been over 40 deaths being reported in the past 24 hours and up to 200 cases of deaths being reported we had the first, you know, person to person transmission here in the united states that was undiagnosed in the past 24 hours and the number of over 10,000 when they come through our doors to new york city hospitals so i think some of the advice is just washing your hands.

>> so they're very similar the coronavirus, but the caveat is folks may have a travel history or have contact with somebody that has travelled. with seasonal flu you obviously may have a travel history but not to the epicenter is why you want to lower the burden to health care systems. get your flu shot. >> just trying to figure out how big of a concern this is people have pointed to the idea that the flu happens here in the united states influenza is here and 15 million people get it more than 8,000 people die how does that compare to what you see in a situation like coronavirus. but early days. >> very concerning this outbreak is not something that we have seen before it can't really be compared to

sars or mers mers started in 2012 spread to over 27 countries and over 2,000 cases but coronavirus outbreak and the outbreak just started about a month ago. we can't compare that. >> is it just so early that maybe you see the death rate increase >> so it's still very early and while we have a case we have mathematical models showing the actual cases in hundreds of thousands. there may be a number of underreported cases happening around the world, so with that said, that's compared, that's based on the number of cases we know today so if we're saying over 100,000 cases the overall severity of the disease goes down. >> is that good or bad >> that's good. >> but it means this may spread more rapidly and it seems to be

spreading faster. >> that's right. unfortunately with this current outbreak, with sars and mers people become symptomatic and that's when you can start spreading the disease. and they're exhibiting signs and symptoms >> that's right. so even these travel screenings in different airports across the united states while it may prove to be slightly effective if there are asymptomatic carriers there's a large number of folks that are not showing signs and symptoms. >> is it too late to stop this from spreading >> not at all. the majority of the cases are in mainline china and they're doing a number of different public

health measures so it's too early to tell but we're hopeful this outbreak can be contained at the global scale. >> thank you very much for your time it's great to see you. >> thank you for having me. >> we're learning more airlines are suspended flights to and from china amid coronavirus fears. they're temporarily cancelling all flights in and out of the country. air new zealand is cutting back on its flights it will reduce capacity in it's routes to china but is ruling out a full halt to its schedule. >> american airlines pilots pursuing to get back on the schedule. >> i did i saw that we interviewed him yesterday morning. >> meantime, take a look at futures right now. about an hour and a half before the market opens looks like the dow would open down 135 points. nasdaq looking higher. opening up 40 points higher and the s&p 500 looking to open about 7 points higher and we're expecting results from chevron we'll go through those numbers and talk about what the impact of the coronavirus may have on

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the final hour of squawk box begins right now good morning and welcome to squawk box on cnbc live from the nasdaq market site in times square it's down 132 points after the turnaround yesterday it's toward the end of the session. it turned positively and kept going. treasury yields this morning are down once again below the level

at 1.563 >> here's some of the stories that investors are going to be talking about today. the united states issuing a new warning, do not travel to china. the state department raising the alert level after the w.h.o. declared the coronavirus outbreak it passed 200 and the number of cases confirmed worldwide across 10,000 >> we also just learned about flight reductions and cancellations into and out of china by vietnam's viet jet and singapore airlines caterpillar posting mixed results. missed expectations for revenue.

and on the top line and missing on the bottom line stock off by 24 cents. >> big changes are coming to big blue the ceo is stepping down in april. krishna is going to be taking over the job shares have fallen while the broader market has soared. he is at the table with more on the incoming boss at ibm where do you think the company is headed? good morning. >> good morning. he is an interesting guy i had a chance to spend time with him over the past year. very much kind of a deep research guide personality wise.

and a cloud and infrastructure guide and engineering is red hat acquisition. and microsoft choosing satya nadella and interestingly, i also look at the steve balmer era going into the satya nadella era. >> they're a dinosaur and they ever going to be any good. he didn't do anything right. it turns out, he didn't do everything right but he did many things right so as an investor you have to be careful here because ibm could be so -- >> well, i don't know the inner workings of ibm well enough to be able to say that specifically yes, they missed timing wise a

bunch of transitions, particularly cloud they were trying to talk ai. >> i'm not sure that aggression alone is ibm's problem either they have to restructure so that some of the legacy businesses that are big revenue and big profit get moved to the side or find some different way to report numbers or tell the story. so that that gets rationalized but up to this point they have been focused on how they tell the story. i don't think the motion of how to tell it is really the issue. >> you think they're going to tell the story fundamentally do you think he's the guy that's going to go in there and say this, this, and this. >> these kinds of transitions are opportunity for that

>> okay. stay where you are i want you to be part of the next conversation. for more of the big changes we want to bring you a cnbc contributor. you know ibm well and i believe you know the incoming ceo as well so tell us where you think this company is headed? >> thanks. i do know them thank you for that introduction. in the interest of full disclosure, jenny is a friend and ibm has been one of a couple of different sponsors of the ce and suspiciously the recommendation so we can see there's been a succession plan in the works and everything he said and

perhaps the only thing that i disagree with on the show is that becky's lead in where she read out that this was a turultous tenure. >> i didn't write that but i read it and i will stay the stock was down 23% at a time when the s&p is up 150%. if you're a shareholder you may still have m so questions about it. >> it was largely flat and i know that you read it and didn't write it and we can sort of disown it the way alan dersowitz disowned his testimony this week. >> down 27%. >> jeff besos joe is my number one ceo. number two, bob iger of disney and number three you could take a look from 20, each one of them had about a

dozen years of flat stock performance. amazon didn't make money for the first 20years. >> we had about 8,000 guys. >> that could be absolutely fair we talked about that at the top too. but i -- look you pointed out that amazon didn't make money for forever but jeff besos is still there. >> that was a start up >> that's my point it's transforming at pepsico it took awhile for ingenuity but

it soared. she has been in office 8 years she has done well. 25% of their revenues are coming in from the cloud. that's pretty remarkable overall, 90% of this company a lot of people considered heavy medal is that 90% of this company is now services and software only 10% of it is devices. it's pretty extraordinary. and she has lead on transformation she has done well. i think on terms of transforming the values, of course she has been a leader in responsible uses of information and transforming the knowledge work or the new collar worker she has talked about in terms of investments in training and technology and training for new skills but also in terms of

women. you go down layer after layer. these are people that get nobel prizes it's an extraordinary change so it's remarkable in that front. we use the same standards that we use for the women it was a great choice. >> and the stock is up pretty sharply. i'd think you could say it's a period. >> the stock is up 25% just this year >> just like he was saying about balmer, he said it was not a

good deal. this red hat at $32 billion for its clearly going to be a home run for them and it's only been two quarters that they have been integrating red hat into the business >> he didn't get to go there and the leader has the vision where we're going and doesn't have the time to get there. you pulled off an incredible transformation. >> so why leave now? she could stay she is young. >> she could say she is 62 candidly between us. i think witness integration of red hat in there, he is not

changing the plans he's not tearing up her strategy we'll see this unfold. he's going to be the right guy to execute this and the same with jim iger. he's the perfect guy for what he has done in transforming red hat. >> i mean, i don't know. that was nastiness. >> that was for you joe. >> i won't bring up your defense when he left either with everything we have seen now after that so i'm not going to bring that up thank you. >> thank you >> today was mixed >> okay. and down 30% anyway, today could mark the end

of president trump's impeachment trial in the senate. we'll see what happens join us now from d.c. >> that's right. this trial could end this evening. democrats appear to be short of the republican senators that they need to call for witnesses and to extend this trial lamar alexander said he tweeted last night that there is quote no need for more evidence than to prove something that's already been proven and does not meet the high bar for an impeachment offense. she told reporters she is reviewing her notes and using eye drops after the late session last night and she is going to reflect on the decision today. that means there's two republicans that will likely support witnesses. mitt romney and susan collins of maine. collins said that witnesses would allow each side to more fully and fairly make their

case, resolve any ambiguitys and provide clarity. so this trial will resume at 1:00 p.m. today with four hours of closing arguments split between the house managers and the white house defense team then the senate will vote on whether to call witnesses. >> thank you very much what's pushing more fwgan rates down he'll join us with insight on all of that. plus the impact of the coronavirus on the housing market ♪ ♪

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let's talk about what you're saying >> demand has been great and it's the refinance side and then inventory is low combined with rates and see more purchase interest like i said, a lot of people out looking for homes, inventory is pretty low and full blown approval and people are visiting sites. >> in march it looks like it's happening in february. i had to think about that

for a minute i guess the impact is coronavirus concerns about what that means for the global economy could have driven down interest rates so below 1.6% again pretty handily at the beginning of the week is that the week i can't imagine another one. >> before the virus, we saw. and now here across the entire and that's caused more uncertainty. and finances and look at the death that accumulated over the holidays and that also tends to drive up interest. so those two things combined are probably meeting record high traffic that we're having. >> i know that it's hard and markets vary depending on

geography and price in different places but would you say now it's a sellers market. >> absolutely a sellers market and some of those things in the past that we have seen geographic perspective are changing so even in places where there's snow on the ground, you're seeing activity much stronger. here in the midwest in particular people are out looking for homes, thinking about buying and that's a new trend this year and -- every year it's kind of moved forward from april to marchand then march into february but like i mentioned before, people getting full blown approval from rocket mortgage have been at record highs now. >> you guys have a good feel for what's happening about everywhere in the country. we have been trying to figure out if the change in deductions has impacted some of the blue states like the housing prices let's say in new jersey and new york and connecticut and california have you seen that overall >> no, we haven't seen that. and i think that comes down to the route of owning a home and

that's really more about the emotion of that place that you're living and how you're raising your family et cetera. so we're not seeing any change at all in interest levels in those states. >> let's talk about the rocket mortgage and the partnership that you're doing with the nfl and super bowl as well not cheap. why is that a marketing employ that works >> this year we comboed it up with the squares initiative. so we have added extra excitement and millions of people signed up for the squares app so watching the game and every single time numbers and $50,000 at halftime a person will win half a million dollars

and then at the end testify gof someone will win half million dollars. when we look at marketing the outreach of hundreds of millions of people there's very few events like that throughout the year where you can accomplish that mission and so super bowl allows us to do that and then now this year with jason mamoa we have a whole other level of excitement i heard today 7 or 8 million people viewed the teaser videos that are out there with him. it should be a big super bowl for us. >> you spent a lot on marketing. they spent a lot of marketing too. it works for them. they get lots of customer acquisitions for all of that it's the same story for you. >> actually if you think back a few years, we partner with warren buffet on the billion dollar bracket and he introduced us to some of it will the folkso and when you have a centralized operation like we do the market becomes important to get the brand out to let people know that there's a different way to get a mortgage better way to get a mortgage through our process and we have

studied some of the other great companies out there and taken different suggestions from them and so far it's working well. >> thank you we appreciate your time today. >> absolutely. thank you. >> coming up, amazon's big fourth quarter shares surging on strong results pushing the company past the trillion dollar market cap we're going to ask a top analyst just ahead stay with us from s

tinch . >> planned a show. full moon lovers. >> but he says he's shutting down the competition his wife thought there might not be a great idea. nearly 20,000 women.

>> trying to apply well, they can sign up for the rocket mortgage. >> that they can do. >> this makes me like it more. >> it's a little more authentic. >> yeah. but what do you think happened do you realize how stupid the whole thing is >>. >> okay folks. >> it's good drama >> i'm sure that you find your true love too. >> it's so weird they get married and then get divorced. >> i read us magazine. don't pretend you don't. when we return, breaking economic data. we have new personal income and spending data out in a couple of minutes. that's all next right here on

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live from the nasdaq market site in times square seconds away from the latest personal spending and data they have been down 149 points rick, the numbers please >> december read on personal income up .2 based on expectations. we lost up half of 1% to only up .4 on november read on the spending side, up .3 exactly is expected. no revision in the rear-view mirror of .4 that's a solid number and if we look at real personal spending it was up .1 month over month pce deflator that was up .3 year over year. 1.6. if we look at core, it is up .2

month over month and also up 1.6 year over year those numbers are very close to expectations now for our fourth current read on the employment price index, it's actually up .7 as expected in the rear-view mirror. also up .7 so data largely as expected arguably the spending is solid income was a little bit light but very good. we continue to hover at levels should we close here at 138. we haven't settled that since the fall of 2017 it's more toward october but the levels are getting closer and closer a ten year note yield. it's 1.53 on a closing basis should we close below that we want to continue to get our final read on university of michigan sentiment but obviously the coronavirus and the numbers

skyrocketed in china. >> thank you very much >> let's continue to take a look at what the futures are doing this morning. it's more than 10% after hours and amazon's market cap passed the trillion dollars mark. joining us is the senior managing director and and it's up 46 points a day why didn't people expect this when people know about christmas holiday season don't they? >> i mean, the big upside, the revenues were great.

24% north america for the size of the business and the e-commerce piece and it was a billion 5 on the move from two day to one day that was up 22% versus the expectation was up 36% so they just became more efficient around some of their fulfillment. they have a lot of big initiatives as they make the transition and the consumers responded very favorably to this. >> the most recent quarters at amazon, the expenses have started toward people again. is that fair to say? >> i think so. >> is that not evident here. >> i think as it progressed last year so they started this move from two day shipping on prime to one day in the second quarter so there was 800 million of expense additional in the second quarter. 800 million in the third quarter and a billion 5 was the expectation tin the fourth quarter and they did better than

that also an initial billion dollars in the first quarter on the expense side and as they try to get their footing around this big transition from the two day to one day they're getting better and better at it and it has gone, it wasn't as costly as anticipated. >> so what will the catalyst be for amazon from here and will it be the delivery business will it be aws will it be the government contract people are arguing about what is it going to be what could be the next stumbling block where people say oh, the stock is overvalued here because they got this or that to do. >> i think on the retail side, i think what you have seen is walmart has its footing on the retail side. target has its footing on the retail side. the competition has really sort of -- i wouldn't say closed the gap but got their footing on it but i think when you shift over into the aws side that was the other piece. there was definitely some nerves around profitability a lot of of noise given the contract on the aws side and that is sequentially improved on the profitability side the operating margins from the

third quarter to the fourth quarter were 100 basis points were and were better than expected and the top line is still very very healthy. that's the big profit driver as well so they can manage the u.s. piece of it. the north american retail piece. keep the aws piece growing at a very healthy clip and not really let the international business hurt them that much. those are the pieces and they all really worked in tandem this quarter. >> just split it up? >> i don't see the need to split it up. i mean, i think we value it on some of the parts basis. >> we had somebody on the show just this morning that said you know what, aws, now the retail business can clearly stand on its own. do you really need these two businesses together? does it take any of the regulatory pressure off? i don't know the answer. >> i mean, i think generally if you look at it, could they, yes. i think it's very much could be done that way. but the north american retail business, one could argue it's been one of the biggest positives for the u.s. consumer

to really come aenilong. >> but is it jet fuel? is there a synergistic value of those things could you create more value because there's certain retailers and others that may say i don't want to use aws because i feel like i'm competitive with this other part of the business? i'm just raising the question. >> that exists i think there's definitely people that compete with amazon and prefer to use a microsoft and there's definitely a case to be made for it. >> is it going to be there forever? >> i mean, look, brilliant guy. >> are there things in the works would you say that -- is there any succession planning at all at this point

and i think the board is very solid as well. no one has shared it with me there's great leadership and a lot of depth at this company. >> do you see a situation where he becomes the executive chair and they -- some of these others step up as the ceo of the company. >> absolutely. i think that he has his key team i think he is still the man in charge and i think that that is -- that has been a question mark for many, many years and whether or not something were to happen to him what were going. i think that still exists but i think what we have seen over the last few years they have a solid management team in place that these businesses are all operating at a very healthy

clip >> it's $10.4 billion of write offs with stuff that the analysts knew about. there's also a $1.2 billion gain because of the sale of the u.k. central north sea assets in the fourth quarter if you strip all of that out you're going to get a number of $1.49 a share. the street was looking for $1.45. revenue looks shy of the street's forecast but we should point out there's not many analysts that actually even estimate revenues opposed to the number for earnings. the capex was $21 billion. that's up from 2018.

stock is down by 1.3%. >> also a sense of the coronavirus. do you want to talk about the impact more broadly? >> what i'll say about the earnings is that a lot of this bad news has been priced in. exxon stock prices at a ten year low. both of these stocks are at a 52 week low both of them now have attracted dividend yields of about 5% so you know and those dividends for these two companies are safe, andrew, in my opinion as opposed to some of the other more speculative dividend yields. >> which one would you buy right now? >> chevron has the house in order more than exxon mobil does right now. also, too, exxon mobil has a high exposure to u.s. shell prices and global oil prices and refining and chemicals so even if you get the rebound in oil prices exxon gets squeezed with

their units so it's not a really good story right now. >> meantime. talk about the coronavirus and impact it's having. >> transportation fuelled demand is the first casualty in these epidemics. now people are starting to put pen to paper we're seeing gdp estimates potentially being cut as much as 2% this is hurting. we're already seeing it. oil prices got cut almost in half during the sars outbreak so now we're seeing -- >> is that an overreaction >> overreaction? >> back then i would say yes it was and we did rebound from those prices this time around, because of how precarious the market balance is, especially -- we were

counting on the demand growth to come through in december there was a big rally in oil prices partly because of the celebrations around the u.s. china trade deal being struck the phase one deal that would mean more activity for chinese manufacturers in particular and the whole asian region now we have this last night, the chinese pmi came out right at 50 and that doesn't even really cover the coronavirus outbreak the survey ended before the outbreak was in the news so that number is only going to come down. it's only going to worsen. it's only going to spread the negativity throughout the region and the market outlook >> thank you. >> appreciate it also a programming note we'll be sitting down with chevron's ceo in addition to a great line-up of other guests at pebble beach next friday. it all starts at 6:00 a.m. right here on squawk box

have you checked the weather? >> i have not. have you >> have i? and you know how this ten day forecast we're good at the year 2100. >> we walked into it. >> we're good at the year 2100 we're pretty sure what's going to be happening then if any of the humans are left. but it's hard to go -- but it looks good looks dry. it's been wet. very wet recently. >> crossing fingers. >> not that warm. >> you walked into it. >> i walked into it. >> when we come back, the recipe for a market correction. and technical strategist runs down the ingredients you need to know as you invest your money. a reminder that you can always watch or listen to us live on the go on the cnbc app

>> dow looked like it would open right now. s&p 500 off about 7.5 points and the nasdaq looking to open higher about 42 points higher. >> just under an hour to go on the opening bell on wall street.

dominic is here and he has a look at the morning's top stock movers. >> so many of them oil majors a very big focus as we wrap up the busiest week of earnings season so far we'll start with exxon mobil you can see they're down by 2% or so. roughly 1 million shares of premarket volume after america's biggest oil and gas company reported a mixed quarter profits fell shy of forecasts though revenues did beat expectations they were hurt by shorter term supply related issues and it's refining among other things. those shares down by 2%. the drag on the dow. shares of competitor chevron down 1.3%. roughly 375,000 shares of premarket volume after it reported better than expected profits but sales fell shy of forecast much of the drag on results came by the exploration in production units over there as falling oil prices continue to take their toll as among other things so those shares off

shares are down 1.5% roughly 170,000 shares of premarket volume after the world's biggest maker of construction equipment posted profits up top wall street forecasts the revenues missed the mark and fell below analyst estimates as it grapples with global economic certainty joe i'll send things back to you. >> our next guest says the ingredients for stock market correction are coming together here to tell us about the most important technical indicators to watch, partner and head of technical analysis we'll start with the overall markets. maybe we can talk about caterpillar at the end that's the way they have things built. so the coronavirus, it's not a technical indicator but it may be an excuse for maybe we don't resume the decline immediately

>> i want to emphasize here when you start a year with sentiment running very high it could be anything that hurts you. the market searches for an excuse maybe it's the virus and maybe it's bernie sanders but when you have hot sentiment you're vulnerable to a set back we had s&p down 2% from the highs. i don't think that's enough yet to say we're through the corrective phase just yet. 30-50, 3,100 on the s&p is down about 6 or 7 that's a more reasonable area to look and i think the one tactical indicator that matters, you start to get a spike in put calls up to that 140 neighborhood that's where you would say hey sentiment is sufficiently flushed out. we're not quite there yet. >> is that the indicator that you would use or something else that you might use >> it has the best track record

and i would add to that if this is sentiment we need to focus on what's going on under the surface. if you look at the internals of the s&p right here, one thing that we look at is the number of stocks making a one month low. when you start to get about 55 or 60% of the index, that's about as good a sign as any that you're sufficiently flushed out. that hit 30% this week so not enough internally. 3,100 on the s&p probably a better level. >> what's your time frame? this is a short-term call you're making when does the resumption start of heading higher? intermediate term? >> this is a tactical correction it's an election year. february, march. >> this is an election year. >> if you didn't know. february, march, tend to be weaker months. the trend tends to resume as you move into summer so you're looking at a weak first quarter and maybe early to the second quarter but let's watch also some key indicators of when will it tell us that trend is resuming and i think the transports in particular if we go to the next slide here are going to be really, really

timely this is a group that already had it's bear market down 40% in 2018 and 2019. really made no progress over the last 12 months i'm curious if they hold this upward sloping it would be a good message for the broader market and then you mentioned it this is a bell weather. it with cat, this is bellwether this is a timely name, it's already had this down 10%, 15% correction if it can stabilize in the 130-135 area it would be a good message the market resumes higher in the back half of the year >> that's it for you >> you want to talk about anything else? >> no. sork sorkin, are you aware this is an election year? we're going to vote in eight months does that make sense, the voters weigh in near-term >> you know what's notable is march volatility super tuesday volatility trades at a big discount to election volatility.

doesn't make sense to us >> what can an investor do with that, right, becky >> we can buy march vix calls and sell november vix calls. if you get a bad election outcome in november -- >> what does that mean, bad? >> it means you can teach an old dog new tricks >> bad is in the eye of the beholder, is it not? >> if the market views the likelihood of a progressive candidate winning there's weakness so march vol traded three points before november vol. >> you're getting political now, we have to end this segment here and now. thank you. >> pleasure. >> good to have you in today let's get down to the new york stock exchange, jim cramer is standing by jim, you heard chris' technical analysis what happens with caterpillar. what is your analysis? >> caterpillar did i think show some margin improvement where i least expected it in some of the divisions, including energy, so it wasn't that bad you take a look at illinois, they had negative numbers again,

cash conversion not that bad some of the industrials are doing much better when it comes to the actual cash they take in, much better than you expect. caterpillar was down to 134. i guess, i think these things are a push so to speak like the super bowl this weekend. i don't see anything that is really troubling with cat. if the stock was higher obviously i wouldn't have liked it >> what about the two big oil companies, exxon and chevron today, both of them drags on the dow right now. >> i know that mike won't want to hear this but i'm done with fossil fuels they're just done. >> because of? >> we're seeing divestment all over the world big pension funds saying we're not going to own anymore >> do you think they hold these guys back, not just necessarily oil production in the united states >> absolutely. i think it is. could you say china, swing

market the world's changed. there's new managers, they don't want to hear whether these are good or bad. bp is a solid yield, very good chevron buying back $5 billion of stock, nobody cares this has to do with new kinds of money managers who frankly just want to appease younger people who believe you can't ever make a fossil fuel company sustainable. mike wirth is trying everything he can but in the end they make fossil fuels that's going to be -- we're in the death nail phase >> for the stocks but not for the death nail phase for us using fossil fuels, right? >> well, i think that the issue is sustainability. look, this is the other side of tesla. these stocks don't want to be owned by younger people. their dividends are great. these companies are doing better than obviously when oil was at even four years ago oil was at 26, 27, but you can tell the world's turned on them, and it's

actually happening very quickly. you're seeing divestiture by a lot of funds it's a parade. these are tobacco and we're not going to own them. >> wow that's a really tough stream to swim against >> i think they're tobacco we're in a new world some of us will be dragged kicking and screaming believing that could be the case they're tobacco. >> that's a rough prognosis. >> prognosis negative. >> we're watching the dow dragged down by these three, nasdaq is holding up because of amaz amazon, 2008 is the number it needed to cross above to get above $1 trillion market cap >> amazon you read that one of the most sustainable, even though they do a lot of packagi packaging. it's a new world, becky. exxon could report an upside surprise, i don't think it would matter >> jim, i'm going to dig through and think more about that thesis >> divestiture is the word

>> reminder we will be in california next friday at the at&t pebble beach pro-am including michael wirth of chevron. stay tuned we'll be right back. i am running to defeat donald trump.

in 2016 i warned that donald trump was a dangerous demagogue, and when the republican congress wouldn't hold him accountable, i went to work helping run winning campaigns in twenty-one house seats. it's time for the senate to act and remove trump from office, and if they won't do their jobs, this november you and i will. i'm mike bloomberg and i approve this message.

it is going to be super bowl sunday, apologies to the chiefs fans since that was my pick. that's not why no, no, it might be better for your portfolio if the 49ers win, according to ryan detrick from lpl financial. stocks do well when the 49ers win, the third best of any team for winning, in fact >> third best return how many times have they won it's been 20 years since they were in the super bowl it's been 50 years since kansas city was in. >> since what, the 49ers >> i think >> no. >> i thought, when was the last time they were in? >> no, it wasn't that long ago, the kaepernick era >> who is going to call out sick on monday? >> we're out in california >> we're out in california anyway monday more people are supposedly sick or call in sick. >> 17 million so far >> more people call out sick than any other day

>> they were in the super bowl, not that long ago. less than ten years. >> couple stock stories we're watching volkswag volkswagen's truck unit made a big to take over navistar, company is offering $2.9 billion, combining two of the world's largest truck makers vw owns 17% stake in navistar, the stock surging more than 50% on that news some other stocks to watch, visa reporting record profit in the first quarter as it processed more than $3 trillion in transactions but revenue did fall short of estimates and the company says revenue will be hit this year by incentives it provides to banking clients. visa is spending more on rewards and perks pushing up operating costs by 14% this quarter. visa is taking about 40 points off the dow, the stock is down by 2.7%. ibm is basically adding back that same amount

>> 2013. >> 2013, sorry >> ravens/49ers. quick final check on markets, before we say good-bye and tell you have to a great weekend. a quick look at futures, the dow off about 155 points, nasdaq up about 43 points. s&p 500 looking to open off six points enjoy the super bowl, folks. we'll see who the winner is and have a great weekend and don't call in sick on monday "squawk on the street" begins right now. ♪ ♪ and i want to say all right, and i want to say all right ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. final day of january, futures are weak, the number of coronavirus cases nears 10,000 and the state department warns americans not to travel to china. europe is red, brexit is official today, ten-year