we'll show you where it is trading now. it is february 6, 2020 "squawk box" begins right now. good morning we are live at the nasdaq marketsite with brian sullivan hanging out with us today. joe and becky are in pebble beach and will join us tomorrow with a huge lineup all starting at 6:00 a.m. eastern. on set with us this morning is liz young, director of market strategy a lot to talk with her about

the wild ride. take a look at futures again, we are in the green opening up about 80 points higher s&p looks like it would open up higher nasdaq dak would open about 30 points higher. almost as if it didn't happen. no coronavirus, no worries, no nothing. >> amazing amazing how quickly the market gets over things i don't know if this is positive >> i feel like we may have overreacted on friday. some recovery on monday was okay i don't know that i can explain this much of a rally >> is this all fed related and maybe the central bank of china? >> part of it is that it didn't

pred to the u.s. as many feared. there are so many people quarantined and so many people not at work. the cases are going up so much >> why do you feel the fear in the market has evaporated. what is that about >> irthink it is a little bit of animal spirits we get too scared when we see a pull back. you shake the apple tree and some of those fall down and it is okay. >> the tieback to our companies -- we are not minimizing the human toll. tie it to u.s. earnings. aside from a yum china -- you don't go out to dinner that's lost. if you want a pair of nike shoes

or iphone, you are going to buy them eventually. do you think it will hit our earnings >> at some point, yes. you can still buy things on line but there is still that in store experience >> the argument -- we had a guest on this week all of the chinese who used to travel to hotel companies and then go to the luxury stores in new york who aren't buying i could see how it would trickle down >> it is probably transient. we could explain it but it is still going to happen. >> this could be a part of the story as well. we had a surprise november

overnight. china announcing it will slash tariffs on $75 billion of goods. cut them in half eunice yoon with us live a gesture of good will or maybe an effort to help their own struggling economy >> or a little bit of both china sees this as a reciprocal move perhaps to the u.s. that they will make good on their promises that's the signal. the chinese move follows the decision in december whether president trump tweeted there would be cuts of additional tariffs of chinese goods

that is supposed to happen on 12:01 a.m. february 14 chinese finance ministry said today that china would do the same cut the tariffs in half at the same time. so these cuts are going to affect u.s. crude oil cutting rates from 10% to 5% -- i'm wrong, from 5% to 2.5% also affecting soybeans, pork and chicken as well. it is still unknown what kind of impact that outbreak will have ubs today, an economist described this and also said that this is a sign perhaps that is positive that the u.s. and

china will continue with what is called a honeymoon period also a report looking good now there are signs that china may not be able to make those goals saying that beijing could see the disaster related clause that could allow them to back out of some of these. >> we'll see june is again for a look in the day of the life of a deliveryman. what is it like there in the city we'll bring eunice back for more

on that. there are now more than 28,000 confirmed cases, the death toll has risen to 565 japan's health ministry says 10 more people on the japanese cruise ship have tested positive we are going to speak live to a quarantined passenger later this morning for an inside look at what it is like to be on that ship right now people that cannot leave their rooms. people have interior state rooms, no windows. they are unable to belief. >> how small >> have you been on a cruise i haven't. my children want to go on a cruise, disney cruise specifically but the sorkin

family hasn't done it. >> mr. bell has a balcony, so he's getting fresh air if you are in an interior room, no windows 100 square feet. >> are they bringing them food >> i bought my parents a cruise for their anniversary. they are not in an intier yar state room mom and dad, i love you. political news to bring you on the delayed iowa caucus results. almost here, folks looking at the watch with 97% of precincts reporting, pete bult r buttigieg with a narrow lead over sanders

nbc has not yet called a binner in the race. joe biden in fourth place with 15.8%. the numbers have stacked the way we thought once they came out with these results, they seemed to be relatively in line the larger question is with biden out, effectively what does this say about the party, the rest of the country, mayor bloomberg's ability to come in? >> without having to sfep into that merky world, there is a

politic political angle of the market. is any of this rebound related to the aidia that it could be a moderate or more than we are likely to see a reelection of president trump? >> there is an idea of protest voting where they are voting for somebody they think can their him out of office. there is a chance. we have one-third on the left, a thirtd on the right and the middle a lot of times, the person in the middle wins. a lot of people like the devil they know. >> there is a lot saying sanders raised $35 million in january.

he's got people behind him is anybody underestimating the senator from vermont >> i think. >> i think the bloomberg strategy will move people to the middle they are sort of rope a dope play >> brokered conviction milwaukee will get interesting in june. president trump acquitted of impeachment. >> president trump does plan to make a statement from the white house at noon after being acquitted yesterday on both of

those articles announcing the speech in a tweet. his tone is unmistakable calling the vote, quote, victory on the it impeachment hoax one senator went against his party. >> the great question the constitution tasks senators to answer is whether the president committed an act so extreme that it rises to a level of a high crime and miss demeanor? yes, he did. >> the second article because decided along party lines with romney voting against the president.

the harg -- they said democrats brought this on themselves >> i can tell you this, right now, this is a political loser for them they initiated it. they thought this was a great idea at least for the short term, it has been a colossal political mistake. >> senator schumer said democrats would do it all over again. >> i think it is conclusive that the president did. if he does in three months, they should impeach him again and the next one him or her. >> house democrats have left open the possibility that they could still subpoena john bolton

and are reviewing conflicts of interest by hunter biden we are just getting started. we'll bring you the big names you might already own like peloton. more big swings for a stock you may have heard of. tesla. a 17% selloff yesterday. more next. we'll be back >> announcer: today's big number, 1,861. that's how manpotsy in the dow has traveled in the past five trading days we made usaa insurance for members like martin. an air force veteran made of doing what's right,

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get that umbrella out. it is pretty much raining from here to new york talking about stocks on the move peloton is among stocks to watch

right now. the fitness company reported quarterly results. also showing mounting losses joining us now, managing partner and portfolio manager at douglas lane associates and cnbc contributor. let's start with peloton that's a big mover after hours this is a classic example of revenue slowing. when they say they will be cash flow positive, they'll see that. you'll see momentum here getting out. stocks will probably stay there

and move up next quarter you can see companies like uber are doing that too does cash flow positive matter in this market >> i think the markets by fther. >> another one, grubhub. the lost of five cents a share was in line with expectations. we say whip sawed. here, we say great numbers, terrible numbers within two minutes? >> right

i think grubhub there is in a space that is really competitive. you are seeing consolidation in the space. there has been comments around you've got doordash everywhere as a trading vehicle >> this stock has been in existence. >> let's move on now you heard about this tesla thing? >> we have two more trading days left shares were up on monday.

>> maybe after the company exec and cars will be delayed got a lot of retail investors. the number appear to be getting into this stock now is really high this is an epic tale what do you make of it great company. what i would tell people at these levels, be careful manage your risk i would say that on any stock. >> this is fivedays. this looks like a 10-year chart. five days from 620 to 950. this is not a good positive right now.

this was 200 bucks >> good stuff there. we'll see you in the next hour as well. see you in a few minutes >> by the way, elon musk is awake. he's on twitter right now. tell me if you can understand this one, brian. this is 5:56 a.m what if there was an ai program to want to pick as many strawberries as possible so it cultivated nothing but strawberries on all of earth's land, then it would be strawberry fields forever. >> he lives in beverly hills he's at home it is 2:30 he's probably awake.

he's quoting the beattles. there is a little "here comes the sun. was he on the joe rogan show again? i don't know by the way, i asked people what they thought of the cars i got like 10,000 responses. people are fanatical about the product. >> we'll try to figure out that reference. if it has an impact on the stock, we'll tell you. making big returns on starbucks. bill ackman cashing out of that company. more after the break dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer.

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billionaire investor bill ackman banking 73% return. he sold his last share on january 31, nearly two years after announcing his $900 million stake. coming as starbucks has closed 2,000 locations in china amid the coronavirus outbreak this has clearly worked for him. he had a remarkable little run last year. probably his best in years >> maybe he needed >> also good news for starbucks and that new management team

running that place >> you guys fund -- you are like 20% of the new york revenue. >> there is a store over there have you tried the new egg bites? >> they are good if you are keto. they are perfect >> 200 calories, 20 grams of protein. >> the sous vide >> are they all white? >> i want the yoke >> it is hard to find healthy things like on the road. this is my new go to >> when you go home to milwaukee, what do you do go to cops >> it is pick and save cops is a northern milwaukee thing. >> mattress maker casper pricing

ipo at the low end of reduced range at $12 a share original range was $17 to $19. plans to list today under the ticker cspr. facing scrutiny for lack of profitability and high cost to acquire new customers. liz, is casper indicative of anything or is it just its own thing? >> we talked about this yesterday. in 2019 there was a lot. starting off the year, this is a bigger one i would like to see ip o's come out at a higher level.

i'd like to see smaller ones >> finally getting headlines out of opec. the meeting has ended and will reportedly see a cut of 600,000 barrels a day. always a matter of that opec plus russia, ropec this is sort of the bean counters there looking at supply and production numbers they will recommend a cut of 600,000. just because they recommend it doesn't mean it won't happen doesn't mean russia won't cheat. we don't know if chinese demand has dropped by 500,000 barrels a

day. or last week, if it could go to more we don't know. >> a report from china eunice yoon will show us a day in the life of a delivery man in beijing during the outbreak. as we head to the break, take a look at yesterday's s&p 500 winners and losers through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet...

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good morning we are live at the nasdaq marketsite in times square we have some green on the screen

now. dow looks like it would open up. looks like it would open up 12.5 points higher as we erase much of the losses that seem to have disappeared from almost a week earlier. the death toll from the coronavirus has surpassed 500 in mainland china those affected crosses over 3,000. eunice yoon shows us what it is like to actually live in china during this outbreak >> thank you with so many people under quarantine or choosing to stay at home, the deliveryman has become an indispensable paurt. we decideds to to go out with

delivery man >> he's on the front line helping the chinese get through the coronavirus outbreak a courier in beijing part of an army of those delivering just about everything to families. he's been a delivery man for eight years. never faced anything like this >> translator: i put on my mask. i don't go to places outside my route. before they leave the stations, bikes are disinfected and health checked. if it turns out they have a fever, they can't work and get sent to the hospital he goes out twice a day carrying 30% more than normal >> before the outbreak, couriers would be able to go to apartment doors. now, they are only allowed

outside of the enter prances of complexes. >> wong says he sees at least 50 customers a day. he's not worried they feel the super market is too crowded. safe is on the minds of people here >> these couriers have been fixtures of life in chinese cities for years now in this environment, when physical stores are closed, when restaurants are shut, they become the way for consumers to assume that is helpful for the economy these days >> we appreciate this. you are going between the studio and your apartment

is it still pretty much a locked down situation >> it is still a locked down situation. the other day, i saw a tissue box taped next to the elevator because they don't want people actually touching the buttons. now you see tissues and tooth picks to avoid touching the buttons. today, found out restaurants in beijing can no longer have group meals. from they understood, a group contests of three people that is a challenge for restaurants if you can't have more than three people in the restaurant or -- they said

another regulation is to make sure each group is at least one or two meters from another group. a lot of things making life difficult here coming up, mayor pete getting big support from silicon valley big names backing the candidate we are looking at quarterly numbers from twitter watch or listen to us live on the go on the cnbc app only if you download it. we'll be right back. owers. 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.

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welcome back the candidates have moved on to new hampshire. pete buttigieg getting some financial support from the heart of the silicon valley. >> good morning, pete buttigieg has raised over $76 million. more than a fifth of that total comes from california, especially silicon valley. top donors are google parent,

alpha best followed by microsoft, amazon has chipped in $98,000 and apple, $88,000 among the individuals who have given, you have powell jobs and others bundlers, those include marc bodnick, google executive and nest cofounder. holding a meeting for nicole shanahan, the wife of google cofounder, not to be confused with the wine cave fundraiser

for elizabeth warren all of this comes as criticism of boouuttigieg that he is part the swamp. >> does this give you a sense that what happens in iowa doesn't matter >> there are polls now that say buttigieg is doing well in new hampshire. >> stay where you are. a look at the 2020 democratic field. she wrote an oped titled, "i am a republican i hope the democrats pick a candidate i can vote for." i'm so curious about all of this and so thrilled you are here

this morning elizabeth warren is your candidate? >> i would be happy and proud to vote for her i've known her for many years. i think she's a person of integrity and understands markets better than any other perhaps save michael bloomberg >> the thing i'm so curious about. the earlier piece i read said you were desperately looking for a moderate i would not put her in a moderate camp? >> the headline the post picked was good for a lot of clicks but it wasn't my headline. it was a piece because we tend to vote negatively, not positively, that tens to hurt people you are seeing pete buttigieg, i

think he's really under qualified but he's a shiny new toy. i think they are examples of people with experience and proven ability in washington to build on those ideas to get things done. is it suggestive of the drartic party or suggest the possibility for mayor bloomberg you mentioned earlier? >> i think senator warren remains an attractive candidate.

i think she has the chance to cross over as well yes, i think biden's poor showing. we'll see what happens he has avoided those early states >> would you take bloomberg over warren >> i know warren better. i care for financial reform. i think mike bloomberg was a very good mayor. he is close to that industry his business makes money on that industry he is a very good mayor.

i love what he's done on gun control and scholarship at johns hopkins. he has a really good record. >> you criticized buttigieg but elizabeth warren was for fundraising from big donors until she was against it she raised a lot of money and then moved some of that money from snapchat campaign to presidential campaign is there some hypocrisy on her judge of buttigieg? >> i don't think so. when she was first starting, she played the game like everybody else does. she's tried to move beyond that. it has made it harder to raise money but she's sticking to her principals >> go pick up the paper and read her piece. >> do you know a new york city

mayor has never become president but a new york police chief has and the youngest ever at 42 years old. teddy roosevelt. >> drop the mic. 2012 but just don' @us. settle down. tesla shares up more than 13% this week. we'll talk who is yi ubungp tesla shares and time to be a little concerned what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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all right, welcome back. let's take a look at shares of tesla.

all right. so, you got to imagine, this stock falling 17% yesterday, but it is still up on the week it's been an incredible run just the last few days, from just over 600 to 950, now sitting at, what, $708.12. in this runup, the question of course has been out there everywhere, who exactly is buying the stock according to retail investing platform robin hood, more than 13,000 accounts bought tesla for the first time ever this week. joining us now is j.j. kinnihan, j.j. chief market analyst. you're seeing people on these apps buying one or two shares or never bought a stock before but now they're buying in to tesla on one hand, you can say, clear peak, retail investor or maybe tesla is good because it's getting people's attention back to the stock market. >> well, a few things about it

first of all, we release our imx every month that shows what our clients did for the month. what's interesting for the last few months of the year last year our clients were buyers of tesla the whole time particularly our millennial clients. i find it interesting that as iterallied friday and monday, our clients were not sellers that day they were taking profits it evened out more after that. i was happy to see our clients reacting more like a professional actually does when things go up, starting to sell some of it the other thing about it, to your point of people who are new, people may not trade options and that's fine, but there are tools in the options market that can really be valuable understanding an expected move right now the expected move from now through tomorrow afternoon, which is expiration is $61.87. that's a one standard deviation move most people are not prepared for that type of move in that short of time. even if you go out to march, the

third week in march, which is an expiration, 43 calendar days from today, sully the expected move the $206. again, these aren't -- i'm not saying people have to trade options, et cetera, but there are great tools to help you understand the type of risk you're going to take if you get involved and, again, i think -- i certainly hope people making their first trade, this isn't the type of risk they're looking for. if you want to gamble, at least go to vegas. you'll get some free drinks. >> j.j., this is liz. >> hello, liz. >> my question is it becoming one of those stocks that it's more of a risk not to own it than it is a risk to own it? it's so indicative of overall market moves you have to be in it if you're a market participant, like it or hate it, retail or institutional, is it more of a risk to not have it? >> i don't think it is, liz. that's a great question. i think people often feel like i have to be involved. there's 4,000 other stocks you can be involved with and let's face it, this type of

movement, you know, it's so abnormal that if you want to be involved with tesla, yeah, maybe you wait until it calms down a little bit even for tesla, this is a crazy, crazy move these last few days overall. and again, abnormal behavior is probably not the time when the inexperienced investor wants to be involved. there are a lot of other stocks, apple, microsoft, done very well that are more predictable. we've been doing this for a while. this market itself has been different. >> j.j. thank you for being on >> always a pleasure, brian. thank you. >> big thank you to liz young for dealing with us these last 60 minutes. >> thank you for having me coming up when we return, two big hours ahead. we're getting results from twitter in just a couple of minutes to bring you the numbers as soon as they cross and show you how the stock is trading plus, we'll have a first on cnbc interview with the company's cfo

ned segal later this morning you don'wa to sst ntmi that. you're watching "squawk box" on cnbc what a time to be alive.

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♪ earnings alert twitter set to roll out quarterly results. we'll bring you the numbers, instants market reaction then, a live interview with the company's cfo. breaking overnight, china cutting tariffs on about $75 billion worth of u.s.-made goods. we'll tell you what this has to do with the coronavirus. >> speaking of that outbreak, more than 2,000 people are on quarantine on a cruise ship in japan, and more cases are being discovered on the boat we're going to talk to one passenger live from the ship as the second hour of "squawk box" begins right now ♪ welcome back to "squawk. we have an earnings alert. twitter just posting their earnings, crossing the tape adjusted earnings of 25 cents per share, 4 cents below

estimates. however, revenue came in above forecast as did some key metrics. show you what's going on here. one of them monetizable daily active users 152 million higher than the consensus estimate of 147.5. also up 21% from a year ago and the fastest-ever growth rate for that measure twitter says it expects between 825 million and 885 million in revenue for the current quarter. the consensus estimate is 872.6 million. so, it's a little bit the middle there. we'll talk about twitters quarter with the company's chief financial officer ned segal. that interview is at 8:45 a.m. eastern time for reaction now given we have the numbers crossing, we have ed lee here, new york times corporate media and john ford is in the house, co-anchor of "squawk alley" and all things tech what is your immediate take on this, the stock looks like it's moving on this news about 3% up just now

>> well, i want to get in there and see the daily active user numbers as well expected to be up 2 to 3 million overall pretty flat in the u.s. but i think this is a little bit of a sigh of relief given what we saw from snap, concerns about the holiday season overall snap and twitter tend to be associated together more than anything and then if you look across digital media in general, facebook's quarter disappointed some people, google they broke out the numbers, but top line wise not as strong as some had hoped the core ad business was the strongest part i think there were some worries about twitter. that's why perhaps the pop initially. >> i do think with this move to the monetizable daily active user, they keep moving the goal post on us -- >> which is in itself a little weird. we'll make up a new metric. >> daus and hold on a second we want to look at the monetizable -- >> remember the eyeballs metric

in this building, 6 million eyeballs no profit. >> logged in non users -- >> non-gap is the new gap. >> the stock has gone up 3% now moving down about 1.5% off a couple things i imagine investors will look at, increase of 17% the u.s. it's a 17% increase however, international revenue totalled $416 million, that's only anocrease year over year of 3% >> most of their users are outside the u.s. >> i think i'm trying to sort of understand where maybe some of the questions that are going to start to get asked about what these earnings really mean and where we are. >> the top line beat is actually nice because that's really where you want to see companies like twitter go i think facebook, the disappointment was it's not growing at the rate that we're used to seeing for them. so, twitter getting back to that top line growth is nice. the fact that they missed on the bottom, you know, they're

figuring things out, right that seems to be as much a part of the twitter narrative. >> rebuilding their core ad server >> so it becomes a perpetual growth story what is your terminal value and when do you say this is a real functioning cash flow building company. i think as you said the goal posts keep on moving at some point investors will get frustra frustrated. >> draw our attention to the outlook, though. part of what they say here is they're looking to grow head count by 20% or more in 2020 especially in engineering product design and research. and they go on to explain exactly why they want to do that but for a company in this position, you know, people got a little skiddish about facebook's costs associated with adding people. >> yeah. >> when twitter says they're going to do that, given what we've seen with the stock in general, i wouldn't be surprised to see this thing bounce around quite a bit as people balance out, yeah, got some top line growth but exactly where are these costs going to go. >> you may have said this, john. if you did, i apologize.

we're all looking at your numbers trying to dissect this stuff. it's their first billion dollar quarter that's kind of a big deal. >> yeah. >> i think the hard part about that, though, for a long period of time is always compared against facebook facebook is five times the size. >> here is a question for everybody, andrew, you and i talked about this commercial break yesterday. what is twitter? twitter is kind of like for us, it's the media sort of talking to media. >> old school people. >> it's not that big of company in terms of compared to facebook or snapchat. can we compare the two they're all three very different platforms used for very different things. >> a certain someone else on twitter who likes to use it people pay attention to. >> if that person left the twitter, how much would twitter stock fall if president trump just said, i'm done with twitter. i'm building my own twitter. >> that would have assumed there would have been a twitter spike

when he became the president, which also didn't happen. >> but i don't think anybody expected this kind of twitter activity from the man. >> look, the conundrum i see with twitter is a product one which is to say why is it that twitter has my attention but that the advertising does not? >> well, so the daily -- >> that's the fundamental problem. >> daily engagement rose 29% how many ads have you clicked on twitter. >> that's my point a, i rarely see ads and they don't work on instagram, every ad is beautiful. every ad i get sucked into >> the formatting is different on twitter >> i get it. that's a product issue >> andrew, i take the counter side it's not good now. there's an opportunity there and there's a mote around this business there's no real competition to twitter information feed at this point. if they can actually get it right, there's a lot more upside here i'm not saying they're going do it right away. but it's an interesting --

>> they're pumping more ads into the system that's their upside is that there's -- i'm actually seeing them more and more i'm getting used to it now i'm not saying i like it there's more room for them to ad. >> new york times ads, guys. do you think that twitter has done a better job at curbing abuse? >> so, you know, jack dorsey said -- >> this is a big deal. a lot of prominent women i'm off twitter because people are gross. >> the abuse on the system is terrible especially if you're a woman it's much worse for you. >> threats of violence it's disgusting. >> so, if you're having a social media platform, you're going to have that. i'm not talking about on the user side. i'm talking about on the management side. are they getting better in terms of managing that system? i haven't seen it yet. there's a lot of pronouncements. we're putting more systems in place. in terms of the net effect, i haven't seen a positive one. >> the reality is on facebook you're probably yourself i'm sure there's people who will

have facebook -- >> the point of facebook is so people can find you. anonymity. >> twitter is a broadcast medium you don't have to be connected to the person. you don't have to have a twitter account. >> you run into a room, hurl an insult and run away. >> that's sofrt dynamics sometimes. >> that's the model, the facebook/twitter model we don't create the content. we let the users create the content. where is your real cost? if you can improve the leverage on the montization that's where the stock can do well. >> this is when twitter is supposed to shine, big political year you wonder given what's in this report, breaking down what they expect these costs to go toward, they say increasing development, velocity and trust, so that's engineering. they say increasing healthy public conversation, that's what we were just talking about increasing revenue durability. i don't know what does that mean? >> yeah. that's another sort of term of art that we have to figure out what that's supposed to mean. >> enabling anyone anywhere to

work at twitter. huh. not exactly sure what that means, but perhaps platform that allows engineers from different areas to contribute better i don't know >> i don't either. i'm glad you brought up the election year fact jack dorsey talked about, we're not going to take political advertising. he made a bold stance. there is so much political activity on twitter, they may not take the advertising but every politician is on twitter, using it to amplify its message, sometimes it is disinformation they put policies to flag things that look like disinformation -- >> but 90% of the content comes from 10% of the users. >> right >> so if those users get bored or tired -- are we supposed to tweet for the rest of our lives? >> that's what they want you to do. >> some guy said you're off twitter because you don't have cogent arguments to push back. good use of the word cogent. it's a polite insult. >> thanks, mom. >> your mom? >> who is that >> but that's what i'm talking

about. you stink. fine start randomly calling people up at their office. you suck, hang up. >> we're at the point in this market, social media duds small and medium business work here or is it just a mega corporation battle. >> we were going to talk to the company's cfo in just a little bit. you don't want to miss that interview coming up in the 8:00 a.m. hour. thank you, guys. well, beyond twitter, here is what's making headlines at this hour. china will be cutting tariffs on some u.s. products by half that follows a similar move by the united states following the recent signing of the phase one trade deal, however, it is also being seen as a move to boost confidence as the outbreak of the coronavirus and the resulting economic impact take their toll mattress retailer casper sleep is seeing its valuation tumble as it gets set for its wall street debut today. that ipo is offered at 12 bucks per share, bottom end of the range of slashed range of 12 to $13 per share. casper was thought to go to

public 17 to $19 casper sleep valuation tumbled more than half in less than a year. another stock debuting today appears to have a better chance of success drug research firm ppd raising $1.6 billion ppd congrats so far you are the biggest ipo of 2020. coming up, oil prices rising this morning opec and russia taking another step toward cutting production or are they? what investors need know about a very contentious couple of days in vienna. let's check out shares of yum, company's earnings falling short of estimates, revenues did top the consensus. yum shares off about 1.5% and "squawk box" will be right back.

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welcome back to "squawk box" this morning another stock surge pushing the nasdaq and s&p 500 to record levels yesterday i want to get to mike san tolely with all the market moves and action. >> yes really a rapid round trip we've made here in the s&p 500 look at a ix-month view of the index, this little pullback, shakeout, whatever you want to call it starts to look like what we saw in september into october. that was another round trip.

it looked more like a w than a v. this is a sloppy w we have over here this is quicker. this is essentially three weeks. this was more like four or five weeks. you did regain the former highs. obviously don't know if this is over yet it does seem a little hasty in some respects in terms of the comeback, but look at the bond market, the ten-year treasury yield over the same span this is partial explanation. here is that same period, september over into october. what you see is bond yields did not come back up asmuch as quickly as they did then this is 1.9 down to 1.5. what did we have over here, 1.9 down to 1.5. obviously you see has not come back as quickly. effectively, the stock market says whatever got us spooked seems like perhaps its past or in the process of being processed by the market. yet we have lower bond yields so that supports yields better. so that seems as if a little bit like a bonus or almost like the

market did some easing for the stock market it's not the whole story but an interesting dynamic. see if it still remains consistent with what happened back in the fourth quarter, guys. >> mike, thank you very much well, the s&p 500 is up 3% this year. but that's without help. i mean, no help, from the energy sector the 11 major sectors in the s&p 500, energy is by far the worst performer, down 9% and oil prices are down big as well, 16% lower year to date even after a 4% reprieve yesterday on optimism that opec plus will be making cuts joining us we bring in matt smith, director of commodity research at clipper data opec has their technical committee meeting day three, supposed to be a two-day meeting, recommending a cut of 600,000 barrels per day, in addition, 600,000 barrels a day even if they do it enough to

firm up oil prices >> it doesn't seem so, brian one thing to consider here as well is that this is going to take a lagged effect even if they do decide to cut and extend these production cuts, they're not going to kick for another couple months. we're seeing just with the latest meeting back in december there, the saudis put pressure on iraq and put pressure on nigeria to dial back their flows. we haven't really seen that coming through, at least from a nigerian perspective and so these things take time. and so really there is going to be a lagged effect we shouldn't really see it giving a bump to prices. apart from that sentiment-driven kind of aspect of it. >> we're not seeing oil prices move that much now nobody knows how much is offline in china, matt let's call it a million and a half to two million barrels a day. and the longer that drags on, the more inventories go up do you see any path forward

higher for either oil or oil stocks >> well, i think what we're seeing, brian, when you have this fundamental shock like we've seen with the coronavirus, you have seen the market turn to the technical element of pricing. so we gravitated to that $50 mark on wti like this honing beacon, consolidating there. so as we get this positive news from opec, from potential vaccine for the coronavirus, we're getting some support coming back in now the interesting thing with china is that what we could see f we see prices stay low, they still take that crude in they just put it into inventories instead rather if we see prices start to rise again, they will then take that krurksd refine it and push it out as products and so, i think going ahead here really is really going to be dependent upon the coronavirus and see how that develops in terms of that demand piece so much is uncertain at the moment. >> when you look at the big integrators, how do you think in

the next three to six months the price of oil at these levels plays out? is it a short-term blip or do you think that this is a major technical correction >> it seems like this is more of a new norm from the perspective that once we get up to that sort of 65, $70 level perhaps on a brent basis, you see demand concerns coming in once you get into the 50s, you then have these concerns from a spending perspective and hitting domestic production, at least. and so what we should see -- we already know that these guys are cutting back we know that production growth in the u.s. is slowing, that it could be rolling over here and so prices in the 50s is only going to exacerbate that situation. >> all right, matt smith, of clipper data, matt, we appreciate your time and views thank you for joining us here on "squawk box. okay coming up when we return, big real estate news out of new york this week. just happened overnight. everybody is talking about it

here regulators banning broker fees for renters. but could this story be too good to be true we're going to talk about the broader implications for business, real estate, so much more when we come back. first, don't forget to subscribe to our podcast "squawkpod." stay tuned you're watching "squawk. we're back in a moment >> announcer: time now for today's aflac trivia question. on this day in 2018, space x launched the first falcon heavy rocket according to spacex, how much does a launch cost coach saban convinced us. we are committing to aflac. the answer when cnbc "squawk box" returns 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.

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>> announcer: now the answer to today's aflac trivia question. on this day in 2018, spacex launched the first falcon heavy rocket according to spacex, how much does a launch cost the answer -- a starting price of $90 million welcome back to "squawk. it is the story that every new yorker is talking about, but lots of people across th country talking about what it

means for business in this state as well. if you ever rented an apartment in new york, you probably complained about paying a broker fee. well, guess what, folks, no more a new ruling that went into effect yesterday with very little public debate i'm not sure anyone in the industry understood what was happening it bans broker fees. payment will be passed on to landlords who contract with real estate agents. it's the only way it works landlord groups are pushing back on the ruling arguing they will be forced to raise rents, saying that actually it's going to come out of the hide of everybody even more because they're going to not just -- right now the issue is people are paying 15% think about it f you pay 15% up front, oftentimes you're paying security deposit, you could pay a lot of money up front. the idea was to try to make it more affordable to live in new york. >> so for our viewers who don't live in new york state, explain how it works you kind of just did if you pay 3,000 a month in rent, times 12 months. >> yes. >> now pay 15% of that is 5

grand rough math >> oftentimes in the city of new york and state of new york, mostly around the city, brokers are taking 15% of the first year's rent up front and effectively this says that can be no more and that if there are fees to be paid to brokers, effectively the landlord has to pay. >> so if you've got a first -- let's say you got -- you want to move into a $3,000 a month apartment. which by the way is for new york sounds expensive but it's cheap. if you pay first last security deposit and broker fee you could be writing a $12,000 check. >> yes. >> for a $3,000 apartment. >> that's the problem. and by the way, this is true even farther down the line if you go to really what you might be describe as affordable housing, rent-controlled apartments have had this issue you could have apartments that are 1,000 bucks, trying to get more people -- the whole jd to try to create more affordable housing in new york. that is the good part about this

or at least what's inspired this the flip side is, there really was very little public debate about this in the state of new york the brokers, the people in the industry didn't even understand what was happening >> i think they're going to sue, right? >> absolutely going to be lawsuits galore over this. >> yeah. >> and there's a view that it could -- i don't know if it's going to hurt real estate prices but definitely a view that the real estate industry is being taken to the cleaners right now by the state >> the real estate -- and the legislation which has felt quite emboldened on many fronts. >> you're already hurting because of salt. >> yes. >> so given the salt, which is not allowed to take the deductions anymore, real estate prices in the apartments in new york, given the amount of abundant supply coming on and inability to really deduct anything, plus you get this part, it's going to be interesting. >> i don't know how it is now. i haven't lived in the city in a long time. used to be finding an apartment in new york, you would rather pluck your eyeballs out. it was impossible.

sun drenched one bedroom and sun drenched means there's a window the size of a shoe box looking out into a vent with 16 pigeons. >> you have the ability to go online now, too. >> so the tech should help but in most cities and states this isn't the norm. >> they don't go -- people outside of america don't deal with new york city. >> laws that make it impossible. that's the issue so, if you're a business person and you're saying -- this is sort of a restraint of trade issue because they're effectively saying -- >> realtors, i'm not going to help anybody find an apartment why would they >> it's interesting if you buy a place. you don't pay the realtor up front. you're being paid by the person who is selling. >> aren't there realtors -- >> that same type of analogy. >> aren't there realtors who only specialize in rentals >> no. the way the law works, if you personally go to a broker and decide you're going to hire the broker, you can make that decision but what can't happen anymore is

you can't see an apartment online, go to that apartment and then that landlord say, okay, if you want this apartment, you have to go through these guys. >> right. >> people thought this was sort of a mafia operation insofar as you couldn't get away from these fees and that everybody was in cahoots with everybody. >> i think at the end of the day the fees will be there it's just a question of who you're paying the fees to. >> right all right. still to come here on "squawk box," more than 2,000 people are now in quarantine on a cruise ship off the coast of japan. more cases are being discovered on the boat. we are going to actually do a live interview with david able, he is on the ship. he is quarantined, but he will do a live interview with us about what it's like on the diamond princess as we head out to break, check out shares of qualcomm they're cutting the lower end of its guidance they say they are starting to see a decline in orders from chinese customers. qualcomm down 2.5% right now premarket. we're back right after this on "squawk box.

♪ good morning and welcome

back to "squawk box. we continue to follow the spread of the coronavirus there are now more than 28,000 confirmed cases and the death toll has risen to 565. the outbreak having a direct impact on the airlines >> not surprising, brian, we're seeing a dropoff in the terms of number of people coming from china to here in the united states hopper has been running basically data looking at what impact we have seen. let's go back to maybe january 20th, january 21st that's really when we started to notice airlines saying, wait a second we're going to cancel our flights. demand for travel from the u.s. to china, this is not a surprise down 58% we saw a lot of corporations saying, scrap all of your flights to china that's where the impact is in terms of tourism here in the u.s., remember the bigelowcations where the chinese visit, l.a., new york, san francisco, chicago, seattle, all of those locations will see a dropoff in the number of visitors coming from china at

least over the next couple months china flights are 4.6% of all international seats out of the u.s. just remember, this chart says it all the number of people -- this is just in 2018 -- 611 million people flying in and out of china and within china so this is the world's largest market in terms of air travel. two stocks that we're tracking here in the united states, chinese airlines we're talking about china eastern and china southern both down 15% going back to, what, january 14th, january 15th in terms of the three largest u.s. airlines who all have routes to china. remember, they have all cancelled these between now and the end of march or the end of april, though they may change that schedule at some point. we're talking about delta, united, american, all did see a falloff in terms of share price, maybe a week, week and a half ago. but since then, it started to come back a little bit so the bottom line is this, guys, we're clearly seeing the impact in terms of tourism and

the number of chinese people who were scheduled to come from china to the united states no surprise there as the number of flights has been curtailed or scrapped completely. >> so i think united was the one that got hurt the most they have over 10% of the revenue that comes from the far east but that seems to have come back now, hong kong is still slower for them, right? so that's still an issue flying into hong kong because they all stopped hong kong flights as well. >> correct they have all now stopped hong kong flights as well for a while tharks planned on saying, okay, look, we can still do daily flights there that's not the case. now you have everything shut down completely. >> when i went to hong kong in october, when sort of the height of protests, phil, the flight from newark was empty. i'm surprised -- i'm glad the flight took off, but i was very surprised. any indication that just fears of sort of being around other people is having an impact on just domestic to domestic travel, chicago to new york. people saying, you know what, just don't want to be in a metal tube with a bunch of people? >> look, you're always going to

have some of that. i fly a lot. in fact, i just flew back from new york last night. there were a few people on my flight who were wearing masks, but generally speaking, i have not seen a big dropoff i'm not seeing rows of empty seats domestically i have done a lot of flights over the last couple of weeks. >> in the u.s., we have also got the issue of capacity because we don't have the max flying as well so airlines don't have as many planes, so you have supply/demand imbalance there as well >> all right, phil, great stuff. appreciate it, buddy talk to you. >> thank you coming up when we return, senator mitt romney breaking with his party's ranks to vote to convict president trump on one of the impeachment charges we're going to talk to one of his former advisers about that decision and what it means next. first as we head to a break, shares of bristol meyers squib trading higher beating the street in the latest earning reports. the stock up over 2% don't forget, you can always watch us live on the go, on the cnbc app we're right back after this.

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emerson. consider it solved. with my vote i will tell my children, their children that i did my duty to the best of my

ability, believing that my country expected it of me. i will only be one name among many, no more, no less, to future generations of americans who look at the record of this trial. they will note merely that i was among the senators who determined that what the president did was wrong. grievously wrong >> that was senator romney ahead of the senate's impeachment vote yesterday. while senator romney voted to convict president trump abuse of power he voted against the obstruction charges. joining is lonnie chan who served as senator romney's chief policy adviser in 2012 presidential bid good morning to you. were you surprised by the decision, lonnie >> i don't know that i was surprised. i think, you know, obviously one thing that senator romney made clear all along is that he thought this behavior was challenging, it was problematic and i think, you know, one thing that we know about senator romney now, he's sort in the twilight of his career he understands the role that he

plays. and he's someone who i have always known to be driven by conscientious. i think that's something that really animated his vote yesterday. agree or disagree, he laid out the reasons why he got to where he got and so in that sense i'm not surprised that he followed his conscientious and what he believed he had to do. >> what do you think the political implications are for him and what he wants to do next >> well, look, you heard it in his speech no one would bring upon himself the kind of potential scorn and potential ridicule that he has brought upon himself without really feeling like this was what he was supposed to do so, you know, the political consequences, i think, will be significant within the republican party i think this is president trump's party. >> what does that mean to you? when you say significant, what do you think happens >> well, i think people are going to denounce him. i don't think anything -- i don't think he's going to be -- anything further will happen i think people will denounce him. i think people will speak out against him. but you have to be pretty secure in your own decision making to

be able to with stand that and i know that he >> what does it do to his supporters, his base, his ability to raise money not only for himself but for others >> you know, i think he'll be able to do just fine in that regard i think there are people who have known him for many years who aren't supporting him, you know, temporarily, who have been with him, who understand his motivations. so i think he'll be fine in that regard. >> do you think he's planning to play a role in some way in this next presidential election >> i don't think so. i think he's made pretty clear that he understands where the party is he understands his own role, which is as a u.s. senator from utah nothing more so, no, i don't think he plans on playing a role. >> when i say playing a role, i'm not necessarily suggesting he's going to be running or in some kind of other position. i guess my question is do you see him campaigning potentially even for a democrat against the

president? >> yeah, i don't know that he's going to do that i think he'll be focussing his time on helping senator mcconnell ensure that there's a senate republican majority i think that's where he's going to focus his time. he's going to focus his time on members of the house who he is close to and who he believes he can help so i think that's going to be the focus of his time here over the next couple months as we lead into the election >> could you imagine a bipartisan ticket against the president? there was some speculation yesterday that if a mayor bloomberg or somebody that's considered more moderate in the party wanted to really shake things up, they would call mitt. >> look, i think he is, as i said, i think he is happy to be a u.s. senator from utah that's his role. i don't think that this vote last night has anything or yesterday has anything to do with what might happen with a ticket or what might happen with this election for the presidency i think he is fully comfortable and fully secured doing exactly what he's doing right now.

>> lonnie, always great to see you. we appreciate you joining us this morning. >> thank you >> thank you all right, coming up tesla shares they have been on a wild ride the last couple of days and weeks and we've already heard from one elon musk this morning it was a rather cryptic tweet. okay, mr. musk wrote -- quote, what if there was an a.i. program to pick as many strawberries as possible and so it cultivated nothing but strawberries on all of earth's lands. then it would be strawberry fields forever end quote. we're going to talk more about that tweet i'm sure and the management of the company coming up next. as we head to break, check out shares of twitter right now, mixed quarter but the market seems to love it twitter stock up nearly 7.5% a billion dollar quarter for the first time after and the company's cfo will join us with a first on cnbc interview in the next hour. stick around ndence. mmm... good.

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there he is, mr. musk. he is dancing. tesla is up almost 75% since the start of the year. the stock dipped into bear market territory yesterday, though after hitting new highs for a few days elon musk is dancing all the way to the bank. since the now infamous funding secured tweet in august of 2018, that stock is up over 110% musk has had success despite slaps on the wrist now, of course, from the s.e.c. and within his own company this is all raising some new questions about the role of the

so-called god ceo in today's silicon valley climate joining us to talk is about jeff sonfeld and bethany. host of the podcast making a killing, both are cnbc contributors i want to start with you bethany. i think that you have been very, very skeptical over the years about tesla, about its ability to succeed and frankly there have been even questions about whether some of the claims that have been made by musk and the company has made over the years have been questioned you wrote a lot about some of the shorts in vanity fair and others what do you make of the run the stock has gone on but also the operations of the company right now? >> happening with the stock has anything to do with fundamentals a long time source of mine described it as basically a bunch of different games going on in trading. you think of it as just one game, but it's not

there's regular equity trading, there's high frequency trading, there's the derivatives market and all these things that are short covering and all of these forces are coming to bare on what's happening with tesla stock right now. so when you have a stock where 60% of the float changes hands in two days, 60% of people aren't changing their mind, aren't making a decision based on fundamentals. the stock is down almost 20% yesterday, yes, news out of china that isn't great, but not enough to take the stock down 20%, one thing you know for sure is that this isn't a company that is trading on fundamentals. >> okay. so let's decide it's not trading on fundamentals. do you think it's trading on truth? how about that >> on truth? >> on truth. >> well, i don't think the stock is trading on anything to do with the underlying fundamentals i think it's trading on this wide -- this belief in elon musk in part as a visionary god-like ceo. and i think in today's market, the stock is becoming almost a

proof that musk is right and that the skeptics are wrong. but i just remind people -- >> bethany, i'll come to jeff in one second, but that's because the skeptics have made an argument for many years not just that that valuation was wrong but that ultimately he was a fraud. right? that's been the argument, that he is fundamentally a fraud, that the numbers are fraudulent. that he's spinning these numbers in ways that don't make sense that the s.e.c. should crack down all of it. and for better or worse that has not happened >> right well, i think musk has set the bar so low because he's been able to make claims that haven't come true. i mean, think about this fall when he said that by the end of this year tesla would be installing thousands of solar roofs a week think about last spring when he said that tesla -- when he made claims about the autonomous, the fleet of autonomous vehicles, a million autonomous vehicles on the road this year and he's been able to set this

bar that he can say anything and then if he achieves something that is actually -- that actually looks reasonable, like a little bit of profits, people are blown away by that and so he succeeded in really redefining the role of a ceo and the communication with the market and the way the game is played and i think the skeptics have overplayed their hand, certainly based on the results that have come in. and so you've got this short squeeze impact that is happening as well. >> yeah. >> but i just -- >> let me jump in, bethany and go to jeff if i can. bethany, thank you jeff, listen, it's okay for people to doubt elon musk because let me give you ten reasons why, packard, desoto, tucker, ed sole, studebaker. you get what i'm saying. anybody who has tried to create a car company to compete with the big dogs in detroit has failed every single one of them. it appears that elon musk is doing something that nobody has

ever done before >> i think that's a great angle on it. i happen to agree with everything that bethany said however, i would like brian all those 10,000 hostile emails that come through from tesla fanatics to go bethany's way and not my way when they start piling in on the show and you generated them, i think, yesterday brian. >> you're welcome. i know i asked about the car and got 6 million responses. why don't you learn something about the cars i drove the first tesla roadster in 2009 by the way just throwing that out there. >> great it is a great car. that's something that's different. john delorean, his promotional beyond his capabilities he wasn't a technology genius he was a disrupter you mentioned tucker preston tucker, another failed disrupter, but it was because he was sabotaged by major powers. ed sole, that was, of course, a son of henry ford. that was not -- that was not a successful model, but it wasn't

that it was an entrepreneur. but to your point, yes, as we do need heroes, as freud said society is changed by content. we don't necessarily want to have always at our dinner table although apparently musk is a pretty interesting guy to hang around with is that the world is changed because of these people. musk, if he figures, if he listens to cynics like this, he never would have started the company. that's true of many entrepren r entrepreneu entrepreneurs. however, when we talked about musk and tesla in the past year or two, we have taken a look at faulting him and some of his exaggerations as bethany said, you know, where are these "chitty chitty bang bang" cars that go in the water and fly and everything else and million fleet of autonomous taxis. we don't see that. however -- he's accomplishing production goals two years past where they should have been. but he still is doing something. who could build a factory in china and be up and running in a year now it's shut down his forecasts aren't going to be

met. these 500,000 cars aren't going to be met this year. that's crazy that's why the stock popped earlier. it was that forecast. >> jeff, the technology is so far ahead of everybody else. that's the point you look at some argument -- i'm not knocking portia, but the take -- i get every car magazine all the reviews are, it looks nice but it doesn't have the range of a tesla people can't go from here to grandma's house on one charge or a quick charge, they're not going to buy the car tesla's technology somehow is better than audi and porsche. >> jim chanos late afternoon and carl tweeted it out pointed out that if you type into google jim had said i think should i. said you type in should. should i buy tesla is how it auto fills in google that we have this mass hysteria, the kind of things that charles mccay warned us about the madness of crowds in 1841 or my colleague bob schiller is instead of faulting the board

for their passiveness and the way that they have been enablers and have had some issues, they're doing better or recklessness of tesla to musk himself, i don't know what the strawberry fields dream is he had this morning, mainly we're not faulting the entrepreneur or the board, it's the market that has this mass hysteria is dennis gartman has a twist on gary twillings the market can stay irrational longer than i can say solvent, the market will revert to sol vansy as soon as it will revert to rationality as soon as i go insolvent, it's the mass that makes no sense. they're not going to meet these production levels. what punctured it yesterday was when jim chanos put out the truth that look at the craziness how this is running up, not based on fundamentals. it's not the virus the virus has been out there the coronavirus didn't change yesterday. >> the question, though, that i have and i asked this of bethany because she spends a lot of time studying these numbers and also

just the market psychology, we have had a lot of people come on this show and say, look, just on the pure mathematicalvaluation perspective, this stock is way too high let's assume that's right. but, most of the people who have come on this show have still said, look, i'm not so sure i would short the stock. sort of very interesting distinction. you can decide you think the stock is too high but you're not willing to short the stock because of these sort of animal spirits that relate to this company and just about every short has gotten burned. >> that's absolutely true. somebody said to me yesterday that tesla was uninvestable either on the short side or the long side because if you're driven by fundamentals and looking at the numbers, even though, yes, musk has succeeded in producing profits and cash flow, still nowhere near enough to justify where the stock is valued and if you were a fundamental person, you would say, it's an auto manufacturer at the end of the day. let's put aside all these grand promises he's making it's an auto manufacturer. at best the margins are going to be pretty thin

there's no way that the fundamentals can justify where the stock is trading but if you're a short seller, one shorts have gotten destroyed in the stock but, two, you look at the underlying dynamics of the stock where the float is very, very small and so the stock is easy to manipulate. >> and losing money on every car. we have gone from fear of founder to fear of missing out that's what the dialogue is about. >> there's a lot of fomo going on, no question. jeff and bethany, thank you for joining us this morning. appreciate it. all right, coming up, another olive branch in the trade war. china cutting tariffs on about 75 billion worth of american goods. we get a live report on that from beijing. rovis course, more on the conaruoutbreak as well we're back dow futures up 103 points right now. we're back when we started our business

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the market comeback continues. futures up again this morning as investors shake off coronavirus fears and china says it's cutting tariffs on billions in u.s. goods twitter posting mixed fourth quarter results. the stock is on the move this morning. we're going to speak with the company's cfo first on cnbc interview. bernie madoff's request from behind bars. we have details what the ponzi schemer wants from someone who followed every twist and turn of his case the final hour of "squawk box"

begins right now ♪ good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin along with brian sullivan this morning. joe and becky are in california. you will see them tomorrow morning from pebble beach within all-star cast lineup of guests we'll tell you about that in just a minute. but before we do that u.s. we canty futures a in the hour, we have green on your screen. the dow up about 91 points nasdaq looking to open 35 points higher s&p 500 looking to open 10 points higher. also want to show you treasury yields right now, ten-year note flip the board around right now at 1.637 also want to tell you about one of our biggest earnings mooufrs of the morning, twitter. social media company topped with

more than billion dollars in sales for the fourth quarter profit missed expectations, however, monetizable daily active users jumping 21 frrs a year ago to a record high. little later this hour we're going to be speaking live to twitter cfo ed segal first on cnbc interview lots of questions about the future of the company, where things stand some additional expenses that you're going to start to see that they talked about in this note this morning and also some questions about u.s. versus international in terms of where the growth is there. >> still the first billion dollar quarter for twitter and the market likes it. stock up 7%. >> the market likes it. speaking of market liking things, developing story out of china that maybe helping stock futures rise up 90 points. china saying it will cut tariffs in half on $75 billion in american made goods. maybe call it a valentine's day gift because it is effective on friday the 14th. so we're going to hope to get eunice yoon back up on this.

i think with everything that is going on, i think, andrew, china probably felt the need that it had to do something. >> right. >> that would be seen as sort of a goodwill gesture to the u.s. but also maybe to help its own economy because their consumers already dealing with all kinds of stuff as you might imagine were probably paying higher prices for those american-made goods. >> we want to continue this conversation we're going to try to get eunice back on in just a little bit from beijing but to talk more about the economic impact of the coronavirus outbreak, want to bring in derek scissors, resident scholar, bill bishop is here, china watcher and author of the newsletter. however, the thing i can't figure out and i want to ask both of you, at least the way the stock market has reacted, you look over the past week, it's almost as if, guys, that this whole coronavirus hasn't even happened. derek, what's happening here >> i think the stock market is probably right as economists, we look at productivity the labor force,

the capital stock, china has 800 million workers. this isn't a natural disaster that destroys capital stock. as long as people recover fully from the coronavirus, we hope they do will not affect productivity the market is looking down the road a year, year and a half and saying this is not a long term economic event mft in the short-term there's uncertainty but we know what that uncertainty is it's not an unknown, unknown in that kind of language. so i think the market says, we're going to get over there. there's going to be a big bump to chinese gdp in the short-term but we know that we're comfortable with the level of risk. >> what about multinational corporates, virtually all of which have mentioned the coronavirus in their calls over the past couple weeks? >> right but that's an earnings hit again in the short-term. the trajectory of china's growth of demand for u.s. products in china of chinese supply in the global supply chain, that's all the same as it was

so, if you want to trade really short-term, then fine you'll have a short-term earnings hit looking a year out, those companies should be in the same kind of financial position as they were six months ago. >> right hey, bill, you're always my china whisperer. take us inside of china. take us inside sort of the mind of president xi and the people around him what are they thinking, what does it mean to our relationship with them? >> well, i wish i could. one quick comment on the market. i think the reaction today about the tariff cuts, seems like the market is buying the same horse like the fifth time. this is part of the trade deal and so, that was i think to be expected i think from the perspective of the chinese leadership, this is really the biggest crisis they faced in many years, perhaps since 1989 because they're looking at -- as derek said, i think this is a short-term economic hit, but they're looking at a significant economic hit of unknown duration it will be more than just this quarter. they're also looking at a massive human tragedy which is affecting tens of millions of people right now, again, with no sign of it abating any time over

the next several weeks or couple of months. and then third, you know, they're looking at i think a real potential failure of what you call performance legitimacy, where they just spent the last year talking about the superiority of the socialist system and now they're in a situation where, you know, a province of tens of millions of people is effectively shut down and people are starting -- food is still in good supply, but you're seeing, you know a pretty significant stressing and failure in some areas of the medical system >> okay. this is a jump ball for both of you, gentlemen i'm very curious where you land. wilbur ross made a comment and he got killed for saying it. i'm curious whether you think it's true or not this idea and maybe the markets aren't taking it this way, that long-term multinational companies that were thinking about keeping their supply chain in china will think again in part because of this do you believe that? either of you? i'll go to derek first >> i mean, i think people have been rethinking they're china supply chains for a while.

one slowing growth, two a conflict with the u.s. that's not resolved by the phase one deal and then, three, to echo a little bit with what bill said, this makes the chinese government look less competent that may not be fair who could do better. it's unclear but nonetheless, it makes them look less competent. points to problems in information transmission, people not wanting to tell their bosses what's going on because it makes them look bad. it raises the possibility of another purge by xi jinping. i think this adds to it. it's not by itself enough to change global supply chain process. there's a number of pressures in that direction the chinese do have to worry about jobs leaving china. >> the question therefore, bill, are they worried about that and what are they going to do about it >> well, i think right now they have much bigger worries in the short-term i think things like they need to get the virus contained and the economy back functioning we're looking at normally the factories would start filling up again maybe end of this week, starting by next week.

we're looking at march best case i think. and so i think that that is what they're really focussed on and then longer term, how they figure out whether or not they can slow the wave of decoupling. good luck to them. i agree with derek i think this just adds another very obvious risk to any multinational company, any company sourcing from china y you cannot have too much reliance on that one single country. >> okay. we'll leave the conversation there. bill and derek, thank you so very much for joining us this morning. don't miss it tonight. we have another cnbc special report called outbreak, coronavirus. make sure to tune in at 7:00 p.m. eastern time for the latest on the virus and the impact on global markets well, the man behind the biggest ponzi scheme ever now wants out of prison. bernie madoff is asking to be released so he can die at home scott cohen, of course, followed every turn in the madoff scandal and he joins us now with more and i guess what is a very sick bernie madoff, scott, who says

he wants out of prison any chance that's going to happen >> probably doubtful, but we'll see. just happened a month or so ago with bernie ebbers of worldcom who of course died this past sunday at home bernie madoff did admit to running that massive ponzi scheme and now he says he wants out of prison. only about 140 years earlier, one vick testimonytim i spoke w bernie madoff has hoodspa. he had stage 4 kidney disease and that he was foregoing dialysis according to his new attorney, brandon sample, who specializes in getting elderly inmates out of prison, madoff has end stage kidney disease and should be allowed to die with the support and comfort from the remaining loved ones that he has in the motion to judge denny chin, same judge who sentenced madoff to 150 years, sample

writes madoff expressed remorse for his crimes now over ten years of incarceration later and after with less than 18 months less to live, madoff humbly asks the court for a modicum of compassion i last heard from bernie madoff in july moved into the prison medical center to begin his end of life care he told me then in an email that he is fine he has since told "the washington post" that he has suffered from his mistakes and he wants to be able to get out and see his grandchildren and explain to them what happened. guys >> yeah. it's quite the story scott, i'm sure that you have been in contact with many of the victims and aside from having hoodspa, i'm sure there's a few comments that are not ready for primetime, things you cannot say on life national television from some of these victims hearing madoff would like to get out of jail. >> yeah. in the lengthy court filing, he takes a similar tack and sites this case of bernie ebbers

the idea being and the judge ruling in that case that letting him out of prison early will not get the victims their money back it doesn't diminish the severity of the crimes, but this new first step act, the criminal justice reform, says that inmates that are at this state, near death, should be allowed to die at home. now, the bureau of prisons has denied him his request for compassionate release. that's why he has now gone to the judge and one of the reasons they denied the release is that it would diminish the severity of his crimes. they don't get much more severe than the crimes of bernie madoff. >> wasn't the whole point that he was being sentenced for life? it was a life sentence, that was what he was being given at the end. >> that's right. it was 150-year sentence, but same situation with bernie ebbers, who was in his 60s at the time and the judge said that she realized that it was going to be a life sentence, nonetheless they let him out any way. yeah it was absolutely designed to be

a life sentence, 150 years for a man who was then in his early 70s. and this is the logical end of it >> do we believe -- this goes do you trust bernie madoff, do you believe that he has the health problems that he has stated? >> well, i mean, he told me as i said five, six years ago that he had kidney disease i don't think he expected at that time to last this long. there are prison medical records to back it up. i visited him in prison back in 2013 we talk about this we did an "american greed" podcast a year or so about this. that's still out there if you want to listen to it it was a fascinating visit at the time he seemed to be in pretty good health and pretty good spirits, but this is i suppose the logical end result of what was then stage four kidney disease and now his attorney says it is end stage renal failure. >> scott, is he still in the same north carolina prison

>> well, it's a big complex. so back in july he was moved from the medium security unit where he had been the whole time since 2009 into the medical center it's one of the best medical centers in the federal prison system he actually was admitted there for palliative care, end of life care and this court filing says that he is now confined to a wheelchair he barely gets an hour of sleep every night because he has breathing troubles that are the result of this dialysis, all of the things that you begin to expect in an 81-year-old man with kidney failure. >> scott, thank you, sir good to see you. we'll keep our eyes on the story. coming up, a little bit of clarity on the state of the cloud business from someone who is intimately involved jeff lawson will join us as we head to a break, reminder, you can watch or listen to us live on the go on the cnbc app

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hi good morning and welcome back to "squawk box. stock futures are up about 100 points also check out shares of twitter. that stock is higher in the premarket by about 7%. company topping revenue estimates with more than a billion dollars in sales for the fourth quarter that's the first time twitter has ever had a billion in sales in a quarter profit did miss some of the expectations, but monetizable daily active users, known as mdau, get used to that, jumped 21% a year ago to a record high. the conference call is going on right now. ceo jack dorsey said a key focus is increasing what he calls andrew healthy public conversation >> we're going to talk a lot more about that stock in just a couple minutes. >> ned segal. >> cfo of that company.

>> few other stocks to tell you about. check out cigna, earnings came in above estimates also, we're watching shares of dunkin' brands. got to get some donuts in here the company behind it of course, dunkin' donuts earnings beating expectations revenue missed and dunkin''s full-year adjusted earnings forecast also below expectations they announced dividend increase in large part because of that you're looking at that stock up. don't miss exclusive interview later today on closing bell with dunkin' brands ceo dave hoffmann at 3:00 p.m. eastern time. maybe he's bringing them the donuts. >> they get the donuts. >> it's an afternoon show. they don't need coffee they're probably not awake yet. >> what a miss what a miss for dunkin'. what a miss. >> we had our chance cloud communications platform posting results after the bell yesterday twillio

company projecting a full-year 2020 loss compared to wall street forecast of a full-year profit stocks off more than 4% this morning. joining us now for more on the company's quarter and the fierce competition in cloud is jeff lawson ceo and co-founder jeff, welcome. >> thank you. >> do you feel the market is reacting incorrectly to your quarter? >> you know, i'll let the market decide what the market is going to do. what we're focussing on is building a great business here. >> okay. the two knocks sometimes you hear about twillio, you had billing issues people want to know if those were resolved. you're correcting that overbilling in the past. too heavy with just a couple really big clients >> well, thank you for the question regarding the billing last quarter, we talked about a couple of process issues that we -- that did impact our quarter. we are absolutely confident in the process issues having been addressed and that going forward there won't be billing issues that become a matter for

investors to worry about we're absolutely confident about that regarding the customer concentration issue, when we went public almost four years ago, we did have a bigger customer concentration, but we have methodically reduced our top ten customers as a percentage of our revenue over the past few years and now we have a very distributed customer base and feel great about the customer concentration we have today. >> yeah. for -- by the way, if i get this wrong, please, jeff, jump in and say that's just incorrect. when you look at people say what does that mean, cloud computing, and what does twillio do you're going back and forth on your phone with a lyft driver, that's through your system, correct? you're generating a cell phone number and a point of contact. you're not actually texting the driver's personal cell phone so you rely on mobile person to person or person to corporation communications how big is that market ultimately >> well, we see the market for

communications in the enterprise to be utterly astounding market. you think of all communications, typically it's been driven by hardware and physical networks that's all moving into software and into the cloud and because of that, we are seeing amazing new use cases arise like the one you mentioned being able to call your driver, but that's not it. if you think of how often you may now get a text message, notification from a company because your dinner table is ready or your pizza is arriving or your package just shipped, the number of ways in which we can communicate with businesses across a wide variety of channels from voice to messaging to email is exploding. twillio is powering a lot of those applications we have 178,000 active customers representing everybody from startups that you i'm sure you know about in the digital disrupters like uber, and lyft and airbnb all the way to the largest enterprises in the world. yesterday we talked about southwest airlines becoming a customer of our flex product, powering their contact sent r applications it really is the power of

communications transforming how companies engage with their customers across every touch point they have with their customers. and the market for that is utterly enormous. jeff lawson of twilio. thank you very much appreciate that. >> thank you very much great to be here. >> yeah. some of these companies it's hard to figure out what they do. i was trying to give the basic example of you're going back and forth with a lyft driver you're not actually going back and forth with a lyft driver you're going through their servers. meanwhile, a lot more coming up on "squawk" this morning. a fresh look at jobless claims ahead of tomorrow's key u.s. employment report. plus, twitter cfo will join us live right here to break down the company's fourth quarter results. someone you know is happy about the stocks big pop this morning that's twitter ceo jack dorsey he gave us a simple good morning on twitter a short time ago. as we head to a break, a reminder, don't forget to subscribe to our podcast squawk pod to get interviews, behind the scenes analysis and so much

more download it wherever you get your podcasts. stay tuned you're watching cnbc ♪

welcome back to "squawk. big story this morning the homeland security department suspending enrollment in global entry for those of you road warriors out there and other travel programs that allowed for

expedited border crossings for all new york state residents the new policy coming in response to new york's green light law. that law lets all immigrants apply for driver's licenses regardless of whether they legally entered the country. now, the new york law also prohibits the state's department of motor vehicles from sharing data with federal authorities that enforce immigration laws. so it's a real fight effectively between new york state and the trump administration some people in new york state saying this is trump administration trying to get back at new york for doing this. obviously people in the security world and within that administration say that the laws have effectively made it impossible for -- for the global entry program to continue to work the way it's supposed to because these driver's license which you need to check and be able to continue to verify you can't do >> and to be clear, this is blocking new people from signing

up for global entry. >> right. >> if you use global entry, a lot of our viewers do, you're fine if you've already got it and you live in new york, you should be okay this is new people >> yes new people trying to sign up can't for now. >> shorter lines. >> we'll see what happens. coming up, we've got breaking economic data the latest look at jobless claims and productivity they're both out after the break. dow futures, they continue to go up, up 120 points right now. we'll be right back after this hey, our worker's comp insurance is expiring. should i just renew it? yeah, sure. hey

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welcome back to "squawk box. right here on cnbc rick santelli is standing by the cme in chicago with some breaking economic data rick >> yes initial jobless claims moved from 217,000 down 15, 1-5, to 202,000. and of course 217 is a slight revision up from 216, 1-6, originally released last thursday continuing claims moved up from 1.703 to 1.751 million on our fourth quarter, preliminary read on productivity, up 1.4 you know, it's in the zip code of expectations at 1.6 but it's definitely a bit light. no revision to the down .2 in

the rear-view mirror down .2 in the third quarter was weakest going back to december of 15. up 1.4 doesn't sound aggressive but it is a big improvement. unit labor costs up 1.4% pretty unusual you get both productivity and labor unit costs up with the same percentage amount, but that is the case nonetheless and on unit labor cost that may be a smidge hotter rear-view mirror, we slashed those costs 2.5 was our third quarter final versus the fourth quarter preliminary at 1.4 the aftermath, yields are actually a smidge lower than many would have expected we see, of course, preopening equity, stronger not only here but across the globe maybe it was the cut in tariffs by the chinese although much what they cut things they'll be wanting and they don't want to add those extra costs but we have more data points yet for the week

especially tomorrow's big labor report this point in the expansion there aren't a lot more jobs to create. andrew, back to you. >> rickster, thank you, sir. always great to see you. >> steve liesman is at the table. >> really nice job. >> make sense of those numbers. >> really nice job by rick i think he doesn't use a period. that's a signal sentence he does all of the data quite remarkable so real quickly on the productivity the year over yea number is pretty good, 1.8% year over year. the quarterly is okay. it bounces around. we're not seeing a productivity surge like maybe some had hoped. you had a big decline in manufacturing productivity, which is a really important place for it to happen small part of the economy but big beneficiary productivity there. total business productivity up 1.1% and the hourly compensation up 2.8 we have to watch that. it's at or near trend. real quickly tomorrow viewership prepare for a big decline in the level of payrolls the government will release its annual benchmark revisions to the jobs

data and the answer is they will lop half a million jobs off the number of americans who are really at work it's likely the biggest revision in ten years you have to go back to 2009 recession to find a bigger one what this shows is that the bureau of labor statistics has a hard time when the economy is in transition both on the way down in 2009 and you can see again some of the bigger revisions on the way back up in 2011 and 12 when more jobs were added. the trouble is if the economy is not thought to be in one of those transitions or maybe it is here are the sectors where action economics estimates the most changes are expected. lee sure hospitality will be released retail trade is the one that stands out, 146,000 total and the total good sector down just 28,000 the most likely source of these revisions the government's estimated the number of businesses started and closed. what the model may not have picked up among other things is big changes in the retail sector

where store closings are not accompanied as the model thinks by openings because of online seams. so not recession drawmatic transition happening in the economy that the bls is not picking up in its model. we're going to get this big downward shift in payroll by half a million just real quick, we're looking for i think 155,000 tomorrow >> tomorrow. >> with maybe some upside because of that big -- sorry, 158,000. >> right. >> unchanged unemployment rate with maybe some upside because of that big adp unemployment rate up 291. >> what does the leesman model say? >> haven't done it. >> that's today's project. >> i'll do it today. >> about two seconds to run. >> last minute for you >> i do it using the morning of friday, friday morning >> bottom line is what you're saying is don't freak out if you see this -- just don't -- people screaming. >> thank you, brian.

that is the point. it's going to be this big half million. will change some of the political -- what's the word i'm looking for -- accolades might reduce one of the laps -- victory laps he took. >> or add an asterisk. jobs were great but they fell but they were great because of the data revision. >> it's still good jobs growth given how tight the jobs market is yesterday, the fed president told me, look, we need to sort of look around for how low we can go she's not ready to stop this strain. >> let's broaden this out to the markets and your money joining us now is christian, former vice chairman at investments at inves koe good morning and welcome as a long time viewer and user of this product known as cnbc, i know you're one of the first bulls throughout you were long, strong and you've been right. >> yes thank you. >> do you stay that way after a doubling in seven years? >> so, i think the answer is still yes. so, the risks have clearly gone

up for multiple reasons. one, valuation is better or valuation is worse. valuation is higher. at the same time, growth rate is actually moderating. and then we have this coronavirus to deal with. >> yes. >> having said that, the fundamentals, the things that drive markets such as economic growth, policy support, balance sheet expansion, all of that is still very much in play. so until things get really bad from a surprise standpoint, these are a known unknowns we're dealing with. >> steve, krishan's point, behind doors two and three lie your world, federal reserve. policy support and balance sheet expansion. >> it has gotten to be kind of bold here. the market to my mind is out on a limb we'll be talking to a bunch of fed folks coming up, not today but in the next couple weeks >> what way? >> i'm looking at a 50% probability of a cut in july and then that ramps up to a 78%

probability by december. and they have started -- i hate doing the math live on television i looked at this earlier this morning, put it this way, they started the price at a second cut this year. that is very aggressive. i don't know how much the market needs it. >> why do you think that's happening? >> it's sars. >> i know it's the coronavirus by why >> i think part is coronavirus but part is still that the inflation pickup that the fed has been expecting for ten years really hasn't materialized so if there is a significant draw down in inflation, without any significant draw down in growth, it makes sense for them to cut policy rates. and i think that's what the market is expecting. the one thing that we have to remember in the cycle, the markets have been more right than the fed in calling these terms. >> by the way, personal finance question -- >> self fulfilling prophesy here too they force the fed to do this. >> i will till you that mary daily yesterday told me in so many words said i'm not ready to

do another cut based on the information i have seen from the coronavirus. i want to ask you a personal finance question. >> yes i'm here to answer. >> my financial planner called me said because of the stock gains our agreed upon bond stock split has gotten out of whack. >> uh-huh. >> we were all of a sudden -- >> this is a real story. >> this is a real story. all of a sudden it's 70/30 and he wants to cut it back to 60/40. is that a smart move >> if your benchmark is 60/40 -- so i would say you're probably better off 65/70 rather than 60 because i think the higher probability is that the markets still go up because all -- >> you want a higher -- >> equity allocation absolutely. >> in this market. >> how high? >> well, i don't think it's -- it needs to be 80, but i don't think it needs to be at 60 either but the trick because of all this unknown, unknowns that we're dealing with, is you

probably have to have itch your finger than you probably have had at any point. >> i'm not allowed to do half of this stuff i have to follow the big strict regulations we have here at cnbc, but i can rebalance my portfolio every now and then if that's your benchmark, go back to it and stick to it. >> yes i would say slightly higher allocation than your benchmark into equities is really the right strategy at the moment please do and i'll charge a fee for that, too. >> but the answer, though, you think is that this has a long way to run >> the markets still has a long way to run unless it gets derailed by something like coronavirus. as your previous guest was saying, the impact of that, if we can find a way of containing it from even if you get a contraction in china in the first quarter is substantial. >> what i don't understand, steve, about your financial adviser whoever this person is i'm sure they're a genius. my financial adviser is a genius

a guy named brian sullivan i'm 48 i'm 100% equities. i have the gas pedal down. i don't see any reason to own bonds. >> well, you just got a little juice, you know. this whole thing that just happened -- >> why not just own cash >> equities fall, then the money goes into bonds and you do get a little upside when that happens. >> i will say i'm getting a little nervous >> i think if there was a case to be made for owning cash as opposed to bonds, that's -- this is probably the time when that cash over bonds. this is probably the strongest case to be made. >> bnb-paribas today said sell all treasuries ten years get out. >> only one metric you recollected use, brian. >> there's no doubt in my mind that will be north of 2% by june if things tailer that sort of environment, owning bonds really doesn't make a whole lot of sense. >> brian, the metric it's the

metric that allows you to sleep at night >> i like that one. >> very simple. >> thank you >> melatonin >> well, there's that. >> steve, thank you. we have a lot more on "squawk. the path to profitability for one of the original unicorns we'll get you ready for uber's highly anticipated results tonight with the top analyst and then we're going to talk to the cfo of twitter this morning right after this company's just announced earnings back in a moment >> announcer: still to come, twitter's chief financial officer takes us inside the social media company's fourth quarter results. first on cnbc interview you can't afford to miss stay tuned you're watching "squawk box" on cnbc

♪ welcome back to "squawk box. >> hi. >> this morning. hi nice to see you. >> that was funny i was standing on camera and you were talking it was like one of those great japanese plu vis from the '60s camera -- >> yeah. >> hi. >> you're back. >> welcome back to "squawk box." one of your biggest earnings movers of the morning is twitter. company topping revenue estimates with more than a billion dollars in sales for the fourth quarter by the way, first time they have ever done that now, some profits did miss some expectations but what they call mdau, monetizable daily active users jumped 21% from a year ago to a record high. twitter cfo ned segal will join us to talk about that quarter in a couple minutes. >> we have a lot of questions

for him about the stock on the move. meantime, the other big -- once upon a time unicorn, now it's like a big time unicorn, but one of the first unicorns, uber set to report its fourth quarter results tonight after the bell competition and costs will be, of course, the focus for the company as it looks to achieve profitability. joining us right now is senior equity analyst at hsbc so what are you looking for this afternoon? >> i'm looking for uber to talk about their cost leverage. >> right. >> i would like to see more costs focus from management team and i would like to hear their comments around how much the price adjustments they put through in the fourth quarter had an impact on demand. our theory is that demand for uber is relatively inelastic. >> inelastic. >> inelastic and should start seeing that in the fourth quarter. >> and what's your price target frlgt company right now? >> $46, 20% upside. >> based on what happened today? >> our price target is based on more longer term view. we think uber gets to scale and starts becoming profitable in 2021 and question think there

will be value. right now there's no value for the eats business. >> what do you need to hear this afternoon on eats? >> i really want to hear company talk about rationalization, using mna tool to rationalize their footprint. more than 50% of their losses come from more than 50% of their gross bookings their loss are highly concentrated getting out of india could trim those losses. >> that's my question. sort of double-edged sword there's part of me likes the idea, as i mentioned, you may like the idea of getting out of unprofitable markets like india and other places the flip side is to the extent you ever thought this was going to be one of the companies that would take over the world, that was the vision of all of this, that every time you say, you know what, india is out. china is out that growth prospect in terms of what the ultimate vision of what that company can become is diminished no >> some extent you're right. we also think there are a lot more services uber can offer in the existing markets a lot of the competitive

dynamics are local dominating the market is much more important than conquering the world. maybe go into payments and grocery. >> how about just making money on the rides i think it was jim i don't want to speak for jim cramer couple weeks ago, funny guy had a funny tweet had a picture of uber eats bag and said sell this stupid business and watch your stock go up basically sounds like you would agree with jim. why not just focus on the core business masha and make money when andrew or yourself or anybody just gets in the car >> i agree to some of that you know, rides business is profitable it went from 8% margin to 22% margin in the last two quarters and got more to go i think some of the top markets close to 60% margin. so there's no reason why it cannot get there on the eats side, there's been a lot of concerns around eats. and we voiced those concerns to some extent. but if losses can be eliminated by exiting through unprofitable markets and just keeping the markets where they're dominant among one or two players, that's key. >> i understand what you want to

do you want them to go deep in each particular market they have access to. but the question i have about that, really what i think you're doing is following really the model of what grab has done, for example, in sooeutheast asia, a company in the end started out as the uber there effectively but now has financial services payments they have a whole -- but they're a super act. >> you can do that in malaysia. >> also because there wasn't all of these other entrenched players along the way. so when you say that you want them to get into financial services and financial other products, that means they're going to be competing against banks and venmo and paypal and everybody else and whether they can do that. >> well, i'm not talking about u.s. i'm talking about emerging markets. we see a big growth in brazil. paypal is an investor in uber and partner with paypal to penetrate financial services market in latin america. >> i don't want to put you on the spot, masha, there was a

rule a law that got passed in california, i think you saw this, andrew, uber, give you an estimate on your ride. not like this will cost you $32. it will cost you between 30 and 40 and drivers can basically change their mind. and not pick you up. no thanks. is there any indication that that is hurting their business in california? >> well, first of all, california is relative is small in uber's context, less than 10% of their ride hailing global booking. so it's relatively small it's not the most profitable business either. i know they made changes through the app. we haven't seen any evidence in terms of what those changes let through, but expect prices to go up over time in california >> masha, appreciate nice to see you. >> why don't we get down to the new york stock exchange and jim cramer i don't know if you heard what i was just saying. i was referencing a tweet you had a couple weeks ago which i chuckled at when i saw it and think i got it right you basically were like i think you said sell the stupid business and watch your stock price go up on uber. >> yes masha has good points. but i obviously truncated on my

tweet. what i mean is that there's some very bad cities, cities where you can't make any money and they're responsible and it's not that many for what is a not great business so, either close the ones that aren't doing well, or sell the whole thing look, you sell it to grubhub and everybody wins and then uber goes back to where it was -- became public because this is the worst business they have they have been selling some of the bad but they need to take some action and this is the right thing to do. >> are you watching casper as a market indicator or is it just -- >> very much so. >> -- a casper indicator >> very much so. it's casper, the friendly ipo. how desperate are you to come public when you do what they're doing? what it says is, listen, we're losing a lot of money but we're not wework they're not wework because they're a mattress in a boss andrew, if i sent you a mattress

in a box and you didn't like it and returned it, have you ever tried to get one of those mat tropical depressi -- mattresses back in the box >> jim, we've got to go. >> tell matt i said hi ask him what he was doing on saturday, okay when i bothered him. >> jim, thank you. we'll see you in a couple of minutes. twitter's ceo on the fourth quarter earnings and joe and becky back tomorrow from at&t's pebble beach huge lineup from there the ceos of discovery, chevron, at&t and so much more. we're back in just a minute. turn on my tv and boom,

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i held myself accountable for results. as president, i'll offer common sense plans and i will get it done. so let's stay on the offensive, and let's win. i'm mike bloomberg and i approve this message. welcome back to "squawk. take a look at shares of twitter. they are on the move this morning and upward, about 8% the social media company posting a mixed fourth quarter with earnings missing street forecasts but revenue topping a billion dollars for the first time and beating analysts' estimates. another metric above that consensus, monetizable daily active users was 150 million higher than the estimate of 147.5 million. that's up 21% from a year ago and the fastest ever growth rate for that measure investors seem to like it. now we'll get to talk more about it first on cnbc with twitter's

chief financial officer, ned seagal jim cramer says hello. i also need to wish a very special happy birthday to your father ed is turning 80 today ned, it's good to see you. >> thanks for having me, andrew. >> i want to go through some of these numbers and try to understand what's happening here in terms of questions, i think that the big one that's going to be on the mind of investors this morning, even though i will tell you investors are very happy about what they're hearing, is what expenses and margins are going to look like over the next year because you have talked about added costs in terms of some of the things you're going to try to do >> thanks, andrew. so we're going to grow head count 20% or more this year and grow expenses approximately 20% as well. if you step back and think about why we're doing that, i'd point to that 21% mda growth we delivered. when you add 26 million people

to the service and more than half of it is tied to product improvements, you build the confidence to continue to execute against your strategy. the execution we've been able to deliver the last few years we've got more work to do on the revenue product side as well that work will continue into 2020 so these investments will be focused on those two areas in particular. >> what changes are we going to see in the product itself? i know there's been a lot of talk and internal discussion about improving the advertising product itself >> well, first on the consumer side, there's still so much more that we can do to help people find the information they're looking for to make sure they feel safe being part of the conversation and trust what they see on twitter right now we're organizing twitter more and more around topics as opposed to just around accounts there are over 1700 topics in six different languages where you can follow the topic as opposed to the account you don't have to find the accounts you want to look for, you can just find a topic we recommend to you and get all the

great tweets that you would want about it there's so much more that we can do on the consumer side. there's two big projects we've been working on the last year. one is the work to rebuild our core ad server the rest should be done in the first half of this year. that will allow to us move faster and deliver great ad formats for advertisers. the second piece is our mobile application promotion ad format. that work ought to be finished over the course of this year and gives us a better path to more direct response advertising over time. >> can we talk about the international piece of this. growth on the international side, only 3% relative to a much bigger piece in the u.s. how is that going to look over the next two years >> well, we feel great about the ad revenue that we delivered in the united states. we grew ad revenue 22% we're launching new products and services and connecting with what's happening resonated with

advertisers. we had the right mix of ad formats for them when we look to international markets, they tend to be a lot more direct response and mobile application promotion focused. apac, map was down 25% in the context of brand which continued to go so underlying advertiser sentiment remains strong but we have to deliver the right ad formats for them. >> talking about international markets, at the end of the year your boss, jack dorsey, said he was going to move to africa. there was a lot of commotion what's the state of play >> well, first, i'd just remind you the way we operate today, we're adistributed team. jack went to over 30 twitter offices over the course of 2019. a bunch of us came with him on parts of that trip we're used to running sdr distributed so it won't change much for us. jack wants to spend time in

africa to develop an appreciation there are a lot of people that should be using twitter to find out what people are talking about, but it's also important because it gives us an opportunity to demonstrate how decentralization works and attract great people to come work at twitter. >> ned, quickly, how do you improve dialogue i always say it's not twitter's fault, it's people 99.9% of people are good how do you improve dialogue and make it a safer place? >> well, we've done so much to improve the health of the conversation on twitter. we mentioned on the call today that we've reduced bystander reports, so that's when one person mentions a tweet that they see that might be offensive to somebody else by 27%. we've done that being more proactive, through leading with technology to remove suspicious behavior and give the author of a tweet the ability to hide replies if they might be offensive, to make our policies

more clear and enforce them more consistently we made a ton of progress and obviously have more work to do >> we've got to say thank you to you. appreciate you coming on this morning and waking up early. i know you had to wake up early anyway to talk to all of the investors and analysts thank you so very, very much thank you, brian, for being here as well. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david fager futures are up dow is set to join the s&p and nbc at record highs as china cuts tariffs in half on some imports. european banks are going green for the year lagarde sees signs of economic stabilization. 10-year, 1.65. record watch, stocks