good morning welcome. already tuesday. i'll start with that it is not monday we have that going for us. live from the nasdaq marketsite along with us wilford frost with us he's 6'7". movie star good looks and smarts >> you definitely exaggerated my height there so you exaggerated everything else. >> what is your actual height? >> 6'4", 6'5" people always say,

you must be 6'8" because i'm 6'6" >> that's tom cruise talking >> i've been told we have to interrupt this briefly to get to walmart numbers which have just crossed. >> walmart is out with fourth quarter and full year earnings $1.38 adjusted versus estimate of $1.43 $141.67 billion. analysts expecting $142.488 billion. the majority of stores in chile have been disrupted and some totally destroyed. they'll be holding an investor day discussing this more in

depth. shares are down 2% in early going. in u.s. comparable growth streak does continue 1.9% also below analyst expectation of 2.3% for the quarter. u.s. e commerce net sales grew 35%. coming year expectations to grow at least 30% speaking with the cfo, quote, the quarter started off and ended strong despite softness in some categories like media and gaming on the coronavirus, they are monstering the situation and focused on the safety and well-being of customers and associates he says sales are still okay the fear is mixed towards food walmart is not seeing any major impact from the u.s. on the

coronavirus. also right now, the coronavirus impact is not factored into the full year guidance that does expect that e commerce losses would be flat to lower and global e-commerce sales would preach $50 billion i'll be sitting down with ceo doug mcmillon. a lot to talk about for the year coming up. >> at 9:00 >> at 9:00 investor day starts at 8:00. a busy day. >> couldn't do 8:30? >> couldn't do 3:30 p.m. >> it was the way it worked out. >> here i am >> i think i'm even going to come back later in the show. >> thank you let's talk to charlie o'shea

now. retail analyst at moody's. shares trading down and coming into this with. >> we saw costco numbers that set the tone and maybe get some revenue. disappointing in some cat goegoe and others amazon had a nice quarter and hit the margin to price the sales. we knew we were getting highly promotional holiday season they were spending a ton of money on shipping and everything

else >> when do we get past the worst on that? when do the margins bottom and start to improve amazon will be spending on 2020 walmart is in good shape target in great shape. costco and others are great shape. when you build an online network, it is a second business you see that win out over time we are not there yet >> u.s. comps, 2%. was expected to be more like 2.5% >> the area this is kind of a mystery to me is the toy

business we saw target comment on toys being softer on holiday. that has dampened consumer behavior there is no place to go for just toys spreading things out no super hot toy for the holiday. >> walmart is still the highest retailer in the world. aa 2 costco is a aa 3 getting amazon into the prime one paper category target is an aa 2. they are continuing to perform really well at the expense of the guys atthe other end of th food chain watching shares of apple for a couple of days already

the company announcing it would not meet forecast because of lower chinese resulting from the covid-19 outbreak. apple says it still expects supply shortages it is not like they had a good idea of what the revenue was going to be. you could drive a truck through $4 billion i think that included the conservative forecast. 63 now they are not going to hit the low end. >> the frightening thing is the uncertainty. they can't even give guidance on where that revenue is going to be until we get until april. i think that's a concern it is a concern for walmart and retailers for all of these manufacturers. we just don't know where that's going to land. >> i think market watchers immediately started crunching

through every other company that could possibly have similar problems there is a lot of them it would be nice to knownow. given that their suppliers manufacturing plants were surpliers as well. you could have had the secondary as well. that are down 2% to 4% compared to a few months ago. the share price action is muted particularly given the fact that it is up about 120% since then

the only point i would factor in, shares were up prior 30 days we are giving up another few days the broader nasdaq had been stronger i think you could have seen a stronger share price reaction. >> there would be a selloff that was fundamentally based. share price down about 0.6% off the gdp to the low fives >> japanese gdp was terrible and others that came in with a forecast huge drop because of coronavirus fears. that said, shanghai was slightly

higher, up five basis points europe is down a little bit. all being offset because of the concern that the stimulus will outweigh this. >> given the three-day weekend and new numbers on the coronavirus. let's get over to eunice now i don't know what to think eunice the number of confirmed cases now has risen to more than 73 y -- 000. death toll higher by 98. i feel like there is a degree of positive news that it wasn't worse over the weekend is there a reason to believe it is slowing and efforts are baring fruit >> you are not the only one that

i noticed looked at the numbers and thought that way new infections are dropping. today, it was under 2,000 for one day. the numbers with he got for yesterday. that hasn't happened since january 30 there is some reason to think that the authorities clamp down is working you would hope it would work because effectively, 760 million people in china are under quarantine or lockdown the other measure they took is to quarantine cash they are now disinfecting and destroying it. the impact on business has been disruptive there was a survey that came out that said three quarters of the members didn't have enough staff

to run a full production line. they cited a lack of workers over the challenges the next two to four weeks. they are not the only ones one of the big events they've postponed has been the auto show the national people's congress here is also going to be delayed. i thought of you lawmakers are going to be discussing whether or not to delay that event next monday or whether or not to end the practice of eating exotic animals for good and ending the wildlife trade that could be a longer term decisioni decision that could snuf out the issue of having animals and people mixed up together and viruss that could come from

that >> eunice, this is joanne the question about the people kept at home once the quarantine is over, how long will it take to get these factories back up and running again? >> it is difficult to know there is no official estimate. when i speak to suppliers, most of them are planning for the disrupt at least to the end of march or april that is where they are targeting. we've been hearing about how truck drivers are sleeping on the highway because they don't want to get stuck in quarantine

in either city or sometimes cities don't want them in their city a lot of suppliers can't find workers >> how are you do you ever wake up -- i wake up scared over here i do not just about coronavirus but about a lot of things. how is it for you now? it must be terrifying, isn't it? >> um, well it comes in waves. sometimes you do get nervous the other day, i saw one of our security guards wearing a hazmat suit that through me off.

i got a little jarred because they have disinfection stations i asked what they were using they are using bleach. we don't know if that's really healthy for you. i do get nervous i hope it is going to be okay. keep reporting the news. >> you hear stuff we probably don't hear coming from the affected areas in hubei and others >> you see people in horrific conditions that is really difficult >> thank you mean it, thank you very much coming up, the race for the white house is heating up. democratic candidates prepare for the debate in las vegas.

for the first time, michael bloomberg has qualified and someone tweeted, you should be the next bond. >> you >> no you. they'd have to retrofit all the sets i don't think you are going to do that. you are not scottish, are you? >> they are not all scottish the actors but bond was. >> you knew that we'll dig through the numbers. >> i can't wait for that movie i agree with dom chu >> next, i predicted it. every day, i predicted it. polls are one thing. when people put their money down. >> do you have money on him? >> i did not i did have xavier and north carolina >> if you have questions for

warren buffett, now is the time to ask tweet us with the hashtag #askwarren we'll be right back. >> announcer: today's big number, $533 million that's the current value of rkirs new position in super market giant kroger, announced on friday. i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424.

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this just happened former new york mayor michael bloomberg has qualified for tomorrow's debate in las vegas joining us now, founder and ceo of predict it. registered users can buy and sell shares in political races you have other stuff on there but let's focus on political stuff for now. i can show you a poll that they are different by 20 points at a

time if i did tell the truth, i don't know if i would show up. when people put money down, it does make a difference if you put a little bit of money on a proposition, it clears your head it is funny you say that something that actually matters >> have you found in the actual results that you track and are more accurate? where do you stand >> markets are really efficient at disstilling risk and value

into odds and price. much more than polling what you want to have happen what you yourself have happen. in reaction to the poll and timeliness. >> how accurate do you find that it is it varies. if it is a year before the election, it is one thing. a month before, is another i watched elizabeth warren fall to 40 cents. i watched biden before it was clear there was issues, he was down in single digits. when does real money start

changing hands >> just in the democratic nomination market, we had 100 million shares change hands. it is still changing what is fun about it you don't have to stay in the contract until it ends to make money. you can love bernie sanders at 35 cents and love him. you buy him. wait for something to happen he will go up and you can sell those if you think it is too high >> there have been weird things. i saw bloomberg move up to two but he's still not really registering for eventually becoming president in the presidential nomination. i think sanders is still well above him but below trump. does 55 cents for trump, is that

still a 50/50 proposition. how do you read it >> i can't dispute the thinking of the traders a week is a life of politics especially today a lot can change between now and then reelection of trump is trading at 55 cents. >> 53. >> okay. >> bernie is 28. bloomberg is 15. down since he got into the debate he's got to up his game a little >> a lot of traders will be watching him >> when you consider the fixed odds spending, how do you track the spending i know you guys only start in 2014, what is the overall weight

of dollars waged on your marketplace versus the fixed odds spending market >> fixed odds is the largest spending of this type in the united states. you have to get your money over to the uk. somewhere figure out how you'll get paid back. if you are on u.s. soil, open a predicted account. you can start making projections. >> clearly sports betting is increasing you get around any of those issues >> it has been more than that. issuing a no action letter you to operate in the united states. >> given that size, do you have concern of stakes leading into

this >> it is shares, not dollars you can have shares change hands at a penny, 5 cents, 10 cents. we wouldn't have done this if it was clearly permissible. instead of going off shore there are limits for instance, to the 100 million question there is a maximum of $850 you can put into any of these. >> because bloomberg -- why couldn't he, why couldn't he buy a corner of the market and put himself at 100%? >> off shore, he could do that but in the united states, he can't do that. there is identification veribility there is a cap it is implaqractical to come in. >> 100 million shares, what is

it dollars. >> i have no idea. >> the volume presumably in betting markets massively goes off of trading hands. >> i don't know about that i think the volume are probably not too dissimilar the uk is the number one betting site. this is structured like a stock market >> bernie at 48 cents. biden, elizabeth warren is half of hillary at 3 cents. that's unbelievable. bernie looks like he's supposed to be the nominee right now. >> he's just under 50% where did this support come from it likely came from other candidates who are failing >> that would also have to do with the demographics of those

making bets, i assume. >> the accuracy is pointed at that and a number of things. overall since 2014, the market has accurately predicted these things >> we didn't even talk senate and house. we'll look at those now. thank you. still to come, a round up of today's billionaire stories and what jeff bezos will plan to do with $10 billion and why elon musk said what he said about bill gates

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amazon ceo jeff bezos has announced he's committing $10 billion in the fight of climate change in the new fund on the matter yesterday. he says the money will help back scientists, activists and oranges and efforts to help protect our planet he'll start issuing grants this summer i hope we can stop this bad weather. it is really getting out of hand we have to get rid of all these

storms a tiff between musk and bill gates. -- i might use it on clean water. >> it is a new fund. he can direct it to clean water. >> that would be good. >> he bought an all electric porsche taycan he said his porsche is a premium priced car and is very, very cool he saved up for that on twitter elon musk responded to a user who wondered why gates chose a taycan over a tesla. he said, my conversations with bill gates have been underwhelming. >> it is hard.

elon is an absolute genius. it is hard for him to criticize bill gates >> he also has no filter >> i empathize andrew told me, the taycan, you don't go as far but you can accelerate more. >> does andrew have one with of these? >> he's looking at a minivan >> all these car companies were massively behind >> we'll have flying autonomous electric cars in like ay and a half >> printed by 3d printers.

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good morning welcome back to "squawk box. apple says it won't meet its quarterly revenue. lower iphone supply globally and demand as a result of the covid-19 outbreak. it is down but given the recent runup, it doesn't seem that awful for apple share holders. walmart cfo did tell cnbc the

quarter ended strongly and that the new year has begun the same way. the stock is paired its losses down u.s. equity futures will see the nasdaq down 70 the dow jones indicated down over 150, the s&p indicated down 13 and change. still to come, the fallout from the coronavirus and talking about the outbreak this morning >> caller: the coronavirus is different it is big. it is going to par lialyze chin. i think we should pay more attention to this. we should try to resist our inclination to buy the dip >> he'll join us at 7:00 a.m

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shipsticks.com saves you time and money. make it simple. make it ship sticks. apple's revenue warning has investors looking at other tech companies that could be hurt joining us now, he says they may

have avoided the worst of the coronavirus thanks to the trade war. mike, first of all, let's hit the apple news this morning. to what extent were you surprised given this guidance cut given the forecast >> not entirely surprising if you look at china right now there are over 150 million people with some kind of restriction. that's over 10% of the population when people can't travel, they can't buy phones or ipads. their production is in china, so they get hit on supply and demand when they did their earnings call, they gave a wide band. i'm sure they didn't exactly know the effect. no surprise there, really. >> share price down 3% in the pre-market does it surprise you it is not

more than that >> the truth is, people don't really know the deep impact of what the coronavirus will do we try to keep up with what they are saying about it. it is not really well super understood >> do they say there due to the do downgrade, do people think this will be short or medium term and will bounce back >> it looks like sometime between now and the summer and doesn't go beyond the summer the ripple effect as opposed to a long-lasting effect. >> compared to the component manufacturer, which one are you focused on that could be hit

>> there are so many looking at consumer electronic company like sonos they have resisters to cpus and all sorts of components. if people can't get to the factory, it could hit anything it depends on where the factory is and if there is a lockdown there. it really depends on where the factory is sonos has the advantage for now of not selling a lot in china. for now, their demand isn't affected the tariffs created the number moving to other geography and doing significant portion of manufacturing in malaysia. that dampens the effect. doing the final assembly in malaysia that should be okay.

all of the component flow for now coming from china. for now, it looks okay not totally sure yet the effects may widen. >> how do you look at the enormous run that was up 120% on the guidance warning >> it is an amazing company. every time you think apple has reached its peek and can't do anything more, it does it again. one of the gems of our industrial system, i would say >> more big tech once again a better than 30-day performance distraction if your view >> it is really hard to say. we've talked about this notion that is the tech sector stretched or not probably two or three years we have stretched the companies and leaders in consumer and on the enterprise

side like workday and the broader theme in commerce wear where technology is becoming the heartbeat of every kind of business all over the world. these companies continue to perform well, add product lines. there is just more demand for these things >> thank you for joining us. coming up, the u.s. is evacuating passengers from the diamond cruise ship. how prepared is the united states to handle an outbreak we'll ask the former fda commissioner he'll join us next on "squawk box. >> announcer: don't forget to subscribe to our podcast you'll get interyviews, origina

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>> he sits on the board with pfizer it's good to see you this morning. this should be twice a week, three times a week maybe that we have you on at this point.

there's been mortality rates in terms of who gets it and is able to handle it more. do you have things that you didn't know or that is indicating to you that you didn't know? >> i don't think there's george anthony nett-- genetic factors china put out detailed data on who has been effected and who has died and you're seeing people under the age of 20 aren't being stricken. only 2% of the cases were under the age of 20. 60% were between 30 and 60 so a lot of middle aged people are getting more advanced

disease because china is only keeping track of people that have significant symptoms. mild and moderate cases are unreported do you see any slow down in the rate of spread they were briefly optimistic and then changed the record they were using was it not as bad over the weekend or are the reasons for hope or do we believe what we're hearing? japan appears to be on the cusp

of an outbreak so if you start to see this become epidemic in other nations or have other nations experiencing large outbreaks that's going to be extremely worrisome that we're not going to be able to control this globally you have seen a decline in cases where they have imposed effectively martial law. so since they're all locked up in their house you expect to see reported cases go down in other china cities and we don't know whether or not there could be epidemics taking route in other cities in china right now. >> as you get more information about this disease and where it's going, do you have a sense of how this compares even to other epidemics in the past and even to the flu? we know in the united states as many as 60,000 people die from the flu just in the united states how is this comparing?

how are we going to look back on this are we reacting properly overreacting under reacting >> this is extremely worrisome there's a lot we don't know right now. if you remember with the swine flu when that initially took route it was first diagnosed in april of 20099 it appears to be the case that it's probably more contagious than seasonal flu and has more potential to cause death and disease. the case fatality rate how many people die could be as high as 2 and maybe it will settle down at .5 once we have all the data in flu is. .1 to .05

s that significant the number of new infections might be as high as three or four with flu it's 1.3 with the seasonal flu so it's 1.3 meaning there's 1.3 new infections but with coronavirus it appears to be on the order of 2 or 3. >> i wonder if you still feel there will be pockets here in the united states and does bringing back the diamond princess patients is that something that could exacerbate that or increase the possibility of that, scott >> well, they keep control over those individuals and it does appear we might have spread that we're not detecting now and we're just implementing a surveillance system. >> all right thank you. thanks to joann for joining us

what are you doing got to go do your real job >> a misths is morning we'll talk about the numbers with former walmart ceo bill simon. fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

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>> bloomberg qualified for tomorrow night's debate as the second hour of squawk box begins right now. good morning and welcome back to squawk box this morning on cnbc. andrew and becky are off today metropolitan capital president and fast money contributor are you ready? >> i'm ready for you. >> do you have good stuff to talk about >> i hope so.

>> the backdrop is -- you need to be a jack of all trades, do you not? is this what you were expecting six months ago >> i can't say that i was expecting it andi don't quite get into it but this market seems to be insulated from everything until it isn't. which it will one day be.

that's a triple effect i wouldn't see that gain >> you take it you immediately assume that i'm sarcastic. you immediately assume that? you need no introduction almost president of egypt, right? didn't they beg you to take it on >> there's so much going on. >> all right. >> wall street's fourth quarter results missing analyst estimates despite online sales having their best quarter of the year sales open for at least 12 months and it's website were up 1.9% so comp sales in the u.s. were up 1.9%.

shares were down more than right now. bill simon joins us now. bilks a very good morning to you. thanks for joining us. i guess headline first of all on the quarter. what's your take away. q-4 that was expecting some softness following target. shares declining further than where they were already priced in i wouldn't be too concerned with the quarter itself there's interesting things in the full year report that i would be keeping an eye on but a lot of retailers reported a strong black friday cyber monday and strong final week but this holiday season we had the shortest period between thanksgiving and christmas a lotof retailers reported softness in there and that's what walmart is saying for the year operating income is still a

challenge. when you peel apart it concerns me about where the sales are coming from. >> in terms of the factor that maybe you have great online sales but it's pressuring margins. >> that's right. if you look at the segment results in the press release this morning you can see that the u.s. sales were up 1.9 but the e-commerce sales was over 200 basis points so the net effect was the brick and mortar stores stand alone declined in same store sales and so the report of increasing grocery online sales which is what is happening and walmart needs to do that amazon's online business is coming at a really severe cost to operating income.

that was $29 billion a year ago. they have been generating 40 billion or $50 billion has come at an impact at a loss so it's very, very expensive. >> it might be expensive it's not coming in relative to the share price overall over the last couple of years so you accept it's the right strategy even if it doesn't mean every single financial metric celebrates that factor. >> exactly shareholders are dictating that that's the path that they take the question is for me at some stage, when do you start seeing operating income growth? how does the third strategy transition into, you know, an increase in improving operating income the other piece for me that i would be looking at and it's in the release is they indicated all the changes that they have

undergone and a new ceo in the u.s., the new chief her chanmer new ceo at sams club there's a lot going on there particularly in the u.s. segment which is the engine to this whole venture. it funds the ability to do all the other investments in international and in e-commerce and the new ceo is a talented executive but any time there's a transition, you know, you have to keep an eye on things. >> given what we heard from apple yesterday, how do you think that is related to walmart for the next quarter but also longer term in terms of where it suppli supplies. >> walmart's dependence on china is overestimated by many the grocery business is enormous a few years ago they reported that about 2-thirds of what they sold was either made or grown in the u.s.

china represents about 20% represented about 20% of the balance with that. with all the trade tariff, you know, discussions going on over the last two years, many companies including walmart had either moved or made plans for alternate supply lines so i think, and i heard you guys talking about it in the prior segment, nobody really knows where this virus is going but in the current context it would be too early to assume that there would be anything that would be a significant impact to walmart's business. >> walmart in china, i don't know that's probably kind of -- but how much actually of walmart's products are touched in some way, shape or form by what happens in china what percentage would you say? >> there's large portions of particular product lines so a lot of the apparel is

it's a big piece of business don't get the wrong idea it's a big margin driver but it isn't a huge volume play and over the last two years walmart and virtually everybody else has found alternate supply lines to deal with what they thought would be, you know, really harmful tariffs and so there's other alternatives i think a lot of the toys that historically come out of china and plastics but toys have been a relatively flat to declining segment anyway so the exposure from china to walmart has been overblown. >> let me ask you a question about the margin so the margins didn't depress as they spend and get online sales. where do you think is a goal margin that they can reach >> what i would be looking for is margin stability. what they're doing and it's a good strategy is transitioning their food business to a digital

business they order online and pick up in store and grocery delivery is a really strong, strategic advantage that they have in the e-commerce battle with walmart and amazon but that comes at a cost you have to pay somebody to put it on the shelf and then pay somebody else to walk around the store and take it off the shelf. so by definition that's a lower margin than the brick and mortar grocery sale and i have been looking at where that stabilizes and it's probably going to cost 400 basis points to their food margin so as you evaluate how much of that is buy online and pick up in store delivery and you evaluate how they're able to offset some of the margin and they're brilliant at developing operating efficiencies i would be looking at a margin somewhere between what their typical margin is in the mid to high 20s

to something that would be slightly lower than that. >> thank you for joining us. >> you bet >> 9:00 a.m. eastern time. a cnbc interview you don't want to miss that. >> apple may not meet it's revenue forecast due to supply constraints. as a result of the outbreak we'll discuss that after the break. investors on the hunt for you. partnered with black rock to launch a new fund. let's get a check on the market. squawk box coming right back (gasps and screams) i got in! yes! woah! oh yes yes yes yes! ♪

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one of the places that we're going to keep a close eye on is the entire supply chain for apple. there's a ton of companies many of them publicly traded here in the u.s. that are going to be effected among them some of the analog semi-conductor stocks out there. one of them being sky work solutions which is off over 2.5% right now on the heels of apples 3.5% declines right now. this stock is still up about

39%. still one of those stocks a component maker of apple going into the red this morning. let's take a look at another one as well. this is another wireless communications company matching the move premarket we'll finish off as one of the biggest semi-conductors out there. down 2% so far this morning. i'll send things back to you. >> shares of apple lower this morning. the company won't meet it's quarterly revenue forecast because of lower iphone supply

globally also factoring in demand resulting from the coronavirus outbreak >> newer growth is doing well for the china and this is tragic for china and the people globally being impacted and we see largely supply related and a little bit of demand impacting in china for the company. >> they went out of the way to talk about the stores being closed and when the demand could be satisfied but you think as long as that stays solid and it's a supply issue that the long-term story remains exact so we shouldn't be that concerned?

you have a wearables business that grew north of 40% and one testify key comments is that they're still seeing very strong demand outside of china and expectations are in line at this front and a terrible human toll and a temporary impact for the

supply chain in a chinese demand impact side. >> what would be the data point that says we'll be back on point. >> we're going to get information from apple suppliers and have a better understanding of the people working in these manufacturing facilities that are coming back to work and travel nor china and is beginning to get back to normal. from the physical component side i don't think there's a supply issue for the moment but it's the people, the labor being able to assemble the devices. so we'll get more information in the coming 4-8 weeks and we think as you get into late april when apple updates it's earnings we'll have much better visibility the longer term story which is what we are most focused on is that. >> is there a negative

outcomposable? depending on what happens with the outbreak could all bets be off? how would that play out? >> it's what the outbreak looks like for physical q-2. we did lower our revenue forecast below the low end due to lost leverage down to close to 10% on the quarter. it didn't change the longer term forecast due to the degree that it expands and becomes more severe on the global basis and has a broader impact on global demand we'd take that into account but we're not seeing that today. i think the point is going to be monitoring how fast do they get up and running and when do the stores in china start to reopen. >> mohammed, rosey outlook or that's the most likely outcome

4 to 8 weeks things settle down and we're back on track? what do you think? >> i worry less about apple than about the bigger message which is you are see mull tanously disrupting demand and supply from the second largest economy in the world. >> i think most people expect a trade ar

>> it's a great buying opportunity. do you feel this could be as well >> in the past supply constraints. i don't see that happening here. i see it as delayed. stick around coming up, bill gates has a new ride the electric porsche and he actually is excited about his new car. about a material possession. i can't believe that's possible and it's not a tesla details after the break. and a programming note, if you have questions for legendary investor -- who is this guy? warren buffet?

no, warren buffett that guy now is your chance to ask. tweet them to us with t the #askwarren and the oracle will answer them on monday we're coming right back.

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earlier this morning we learned mike bloomberg qualified for tomorrow night's presidential debate. if it's good for anything it's good for ratings i may have to. andrew ross sorkin is here in spirit and now on the phone as well he joins us with the details and immediately i think it's interesting that you say that these proposals would not immediately be rejected by an elizabeth warren or a bernie sanders and i think that's notable because it shows bloomberg's hand on where he thinks he needs to go. is that the right take on this >> i mean, i think that's going to be at least the initial take.

it is at least for him relative to many of the positions that think he was dead previously among many things is the idea of a financial transaction tax that is something that at least historically he has been against but is something that bernie sanders has been more. biden andothers have talked about. we will see where they end up in their plans as well. there's an effort to strengthen the rule, again something that mayor bloomberg was actually quite vocal about in 2010 and 11 as being against he has a slightly different modification to it and justification for what he wants to do to strengthen it but again something that was on the left by elizabeth warren and others he talked about when to strengthen the consumer

financial protection bureau and gives credit to elizabeth warren for creating it. that's something that president trump and under mulvaney if you remember one to really strip that unit down he wants a dedicated team to fight corporate crime and prosecute individuals and not just corporations of course this has been one of the great controversies since the financial crisis but given bloomberg's relationship with industry and wall street and his personal ties and connection with the titans of business, the decision to be this forward and this vocal about it there's a

lot going on it's a multipage proposal this morning. >> when we look down the list that you have shared with us, a lot of them do feel quite sound bite like whether you're talking about the cfpb which senator warren is such a big supporter of or quite the buzz word when it comes to financial regulation

how does he explain the you turns that he has made >> well, i spent time on the phone trying to understand because it does feel like a 180 given the comments he made on that publicly historically if you remember the way that investments are measured whether they fall under that or not was always about the intent. was it the intent of the bank to take this risk for themselves to intent of the bank to take the risk for a client. he says it shouldn't be measured like that so he has a different measure but still wants to keep and not just keep but strengthen the rule so he does have ustification

if it does eventually become bloomberg don't you think that bernie supporters have to have something to get them to the voting booth they're going to be unhappy. this would be a way of at least drawing some of them to the polls because they would maybe go for bloomberg versus trump in this case. he has to move left doesn't he to try to get bernie supporters to join him as he is the even actual nominee there's elements of this plan on wall street. especially the financial transaction tax that would have a real impact on day-to-day wall street on everything

>> my kids are watching cartoons they're not watching squawk right now. >> tough to tell the difference sometimes. do you think that you can put in for getting your vacation day back >> i haven't thought of that but it's a very good idea. so let's discuss later. >> did i need to get up early to come in is the other question? this would be a great precedent for getting vacation days back with a quick little phone call it's a great idea. >> great strategy joe. >> you know, i am always -- i always admit that i do miss you and i want you to come back so we'll see you -- or not until thursday though right? >> will you be here tomorrow >> i'll be there tomorrow. >> becky won't be back tomorrow.

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welcome back announcing a $1 billion actively managed fund for retail inves r investo investors. joining us is michael weiss. tell us what this is it's a new fund. >> so this is a new fund it's the first of its type it's a billion dollar fund. >> so it's not a billion from day one. >> correct we're going to roll into that and people have to build a portfolio over time.

if you think about it being managed by yield street and assets it's part of the asset classes that we have introduced to the market. so this is to give access to other asset classes and liquid investments they wouldn't have access to in order to give them a high yield that you're getting in the s&p 500. >> our core focus and mission is how do we have great financial independence for millions of people you do that be helping generate income so it's an income generation fund that's what we're looking to do

and to take advantage of the team that black rock has globally so new york, singapore and the u.k. >> so i can see how black rock and i'm going to simplify provides the part of the portfolio and that i get. what do you tell your customers if suddenly ample and predictable liquidity leads to changes? >> so that's a great topic we believe that retail makes decisions based on fear. if you look at the last couple of cycles retail does not

participate in the value creation they're on the other side of the trade. they sell too quickly. it isn't going to be a highly liquid fund. only after the first year can you get them based on the funds management in the board. so we believe we shouldn't be effected by short-term price volatility the dow was down before i came in here 170 points that's difficult for retail to deal with. on the whole it's been up and a great run for the market but we believe that retail investors want to find a way to generate consistent income as opposed to having palpatations where they're moving up and down. >> this marks very low yields for treasuries and bonds and there's only demand because they're desperate for that small

yield pick up and if rates went the other way you'd suffer. >> i don't think the entire statement is accurate. i say all the time we have to think about it and prepare for that and what does that mean also the indicators in the market seem to be strong but with regards to retail there's a much different story going on and people aren't paying that much attention if you look at investors life we started out in debt. we have student debt, housing debt and credit card debt. only in our 30s do we enter into some sort of stability but now most of our money sin vested in etf and equities and ira only 10% of people roughly ever end up in alternatives at the ages of 60 and above the average age is 42. we're bringing back the curtain by over 23years.

the reality is that people don't have access. >> thank you for joining us. >> thank you for having me. >> you're welcome. >> coming up, the coronavirus and business apple one of many american companies with operations in china and one of the first major tech companies that say it may not meet revenue forecasts squawk box coming right back sfx: [phone ringing]

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the move would be a major blow to both companies they're at the heart of a battle for tech dominance between the u.s. and china and listen up. >> yes. >> bill gates says electri electric porsche and he praised tesla for helping drive the market for electric cars but his is a premium priced car and is very cool. >> he said my conversations with gates have been underwhelming to

be honest. we have had this discussion. >> i did see one and it's very cool i will say that. how much of it is the sound? >> no, it's all about brakes. >> i'm talking about my car. it's very agile. i will never not have one. i don't want that to end >> it would be the last thing that you'd sell? >> no, i don't mean that i just mean i'm not going to care when i'm 90 i'm still going to have one.

>> are you going to be able to get out of it? >> maybe not we got to go squawk box will be right back. everyone uses their phone differently.

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the 2.3% and multiplies by what walmart shares and it's a big number the shares are fine. down three quarters of a percent. >> it may be one of an extraordinary number of items that impacts business and the result could be a hefty number of write offs. steve joins us with that story hey, steve. >> in a historical way the first quarter for u.s. growth may end up being a write off quarter the number of extraordinary items keep mounting to the point where the first quarter growth report may end up looking like a tech start up with a bunch of one off items to write off coronavirus should shave 0-1 off. we still have residual tariffs it may not appear in the first quarter. the entire country was above normal

it fell 4% in january. so where is the cnbc update? for the first quarter it's at 1.4% that may be optimistic and many see this second squart rebound but you can imagine two effects of corona. it's the u.s. in the first quarter and a second quarter comes from the fall off in supply manufacturers can't get the stuff they need so you have the fall off in shares the longer the outbreak lasts the longer the recovery time for the supply chains will be. results in a first quarter dip followed by a strong second quarter bounce that may be why the market is writing off the apple numbers last night the tail risk is that the one off items combine to threaten

the expansion making it more than zwrus a single write off we are deeply conditioned to think of every one as containable, temporary and reversible and that has resulted in massive profits for the markets. i just get a sense that this is different. i'm more cautious. i just want more data before i can confidently say it in terms of economic and corporate effects. >> that's how much -- how big do you think the stimulus in china

has injected so far is and will continue to be >> it's great for financial asset prices it doesn't do anything to get peopleback or supply. >> i don't have a forecast. >> does that mean that corona virus has to get worse than it is right now or if the worst case scenario doesn't play out will you come back and say i'm wrong. >> first i understand why people buy this dip and let's not forget central banks provided support. >> right and we have significant loosening going on.

>> does it have to get worse for you -- >> if it doesn't get better quickly and steve made that point in one of the charts, if it doesn't get better quickly, then you'll get this cascading sudden stop and then the second leg. it's not just demand it's supply. >> right all ight this would be a supply lead or a supply driven downturn in the sense that supply is not up for

demand we don't know how that works the other thing that i want to add is i don't want to make people more concerned than they should be. but if you go back and look at the national bureau of economic research wrote about the 2001 recession the bubble breaking was not enough in itself to cause the recession. and it caused the downturn whether or not we're here and we get a quick turnawround which is a reasonable bet i'm not saying that conventional wisdom is wrong. i'm saying there's a case out there to think about and price in the tail risk here. >> can i ask you something off

topic? >> what do you think we should do >> what bloomberg is talking about is a unit with greater expertise than we currently have >> with what. >> in terms of the doj, the headline there about the doj. >> we had a pretty good point and they aren't necessarily drastically different. the thing that stands out that is new for a probusiness profinance industry is a financial transaction tax.

is that the same excuse? >> it's on the debate stage. you can't have it both ways. >> do you remember a couple of years ago kerry was in the lead and out of the lead. do you remember mccain he was in the lead and then he

wasn't there's a fight going on it's what we're going to decide and what interesting to watch it. >> all right mohammed and karen and tonight we'll be right back.

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and the tesla bull with the $7,000 price target joins us for the hour the final hour of squawk box begins right now.

good morning and welcome to squawk box on cnbc i asked her about the jet pack over who is it the crowned prince the crowned prince of dubai. >> takes off vertically. did you come in on one of those? >> i was thinking that becky and andrew are off today our guest hosts. the chief economic adviser.

it's just an overall and it's just an overall feeling. >> i just called up cnbc website. top story. coronavirus. japan is on the cusp of outbreak to almost inspire fear i thought in that interview what was so interesting was they're not seeing the very young being

hit. >> what that probably means is that the fatality rate is much higher. >> so that you notice -- >> you may notknow has improved i don't think he thinks it's 100% now but that big change had some of his fears on that front we're going to touch on all of these things

courtney reagan is all over that story. he is covering apples revenue guidance warning and good morning sleepy head we start at 6:00 but it's good to have you on now anyway josh, what's going on. >> thank you, joe. so as you noted apple dropping big news saying that it won't be able to meet original guidance for the current quarter. but now demand within china is weaker than expected also saying supply will be constrained the facilities are reopening but ramping more slowly than expected in a memo to his employees, tim cook is saying we are experiencing a slower return to

normal conditions than we had anticipated. consumers will ultimately buy apple products when they can get their hands on them but the time line is unclear for investors right now. what is the length of this outbreak other tech companies are possibly impacted oo >> and the managing partner joins us and the first question is on the share price reaction we have seen

and there's guidance because of the issue. >> if i was expected to be down by 5% today and it's the second time in six quarters that they missed numbers at that point, if you look at the stock that was a well telegraphed miss but the trajectory downward was 35%. they're reviewing this as something transitional one of the key takeaways is a stock reaction i think it's validation and what apple is doing in china. >> in terms of the underlying aspect as well

>> is that something we're going to see a lot of other companies have to learn as well. >> there's no doubt that they have seen more of this it's what ultimately leaves me with this question as all of these companies want with apple the second is sure apple be in china. and the answer is absolutely that was debated. and it's the second largest tech company in terms of exposure to china. that's a huge opportunity. and it's important to talk about apple's hardware business that

companies like google and alibaba don't have problems around manufacturing so i suspect that investors that have long talked about apple's multiples should be more in a lower range because of hardware and use this as an example of what a hardware business can do. and ultimately it builds a moet around apple's business and and it's next to impossible. and it's that kind of barrier. and it's in china and then they add in china for china so we will be in china to meet chinese demand but we're going to be

more careful as well. >> and i ultimately believe if you step back and look at the global economy and think about it and think about the richest opportunities from a geo perspective. and it's at the top of the list and whatever the approach i think this is a unique asset in terms of a u.s. based company that has a large exposure. i suspect before we get into the early years of 5-g that number

would get into the 20% range for apple. >> are you surprised not to see more of a reaction in apple share price? >> they have been telegraphing this we have all been concerned to see this prolong beyond the lunar week off so to us it's not surprising i will say electric vehicle sales were down 54% in january. >> analysts missed efforts on

the top and bottom line. courtney joins us. again you left us? you're somewhere else though. >> i came down to the stock exchange got a lot of walmart action here today joe. so the fourth quarter did come in below expectations. some actually completely destroyed. that was not anticipated u.s. comparable sales growth streak did continue up 1.9% but it's below estimates for a growth of 2.3% and net sales grew 35% in the coming year. expectations are for this metric to see at least 30% growth the initial earnings guidance was for an adjusted $5 to $5.15. that's compared to the $5.22 wall street estimate beloc below consensus which is on going now before the u.s. stock

exchange the cfo did tell me that the guidance does not include any impact from coronavirus. in fact, most of those, actually almost all of them were still open in hina it will be flat to lower compared to the year before the company wrapped up with global net e-commerce shares. and then more on the coronavirus and it may have some margin pressure and wall street is not seeing any major impacts for the coronavirus. we have a lot more to talk about coming up in the 9:00 a.m. hour. i'll be sitting down exclusively

with doug mcmillon. >> back to you guys. >> glad you're doing that courtney it could be earlier. >> it will be on closing bell late in the day. >> i watch every day. >> i know that you do. you text saying how much you love it. >> i do. love you both. >> senior analyst, partner and portfolio manager. it's really solid investment firm right i mean, it's a good name, is it not? what could ever go wrong there it's just hard to imagine. it's very solid.

>> awesome. >> so coronavirus is sort of something out of the company's control. we know about it it's a given online sales and the continuing efforts. >> one is that walmart a couple of dozen years ago moved into grocery and that move which was widely pinned at the time really lead foot traffic to stay steady and you're still seeing same store sales growth in an industry that was under a lot of

pressure >> margins are so slim but it keeps the traffic going in your view it creates a strong backdrop against companies. you're seeing bankruptcy all over the landscape you have to drive foot traffic it was about describing commerce sales 35% that's great but what that really means is the 1.9% same store sales number and it means that the bricks and mortar sales were down and media and gaming being mentioned amazon comes to mind and amazon

has aws and advertising that has huge margins aren't they using those and will they not continue to use those as loss leaders to walmart but interestingly you have amazon that's moving from being a virtual merchant to now a bricks and mortar merchant getting into grocery and getting into daily distribution of goods to people where walmart has been doing that for years. >> do you have any contrary views or he's got it right >> i think the subtlety that we

would add there is that there may be actually higher profits in grocery going forward. and you have a purpose built store that customers don't walk in and you can have lower operating expenses and lower cap exand roughly the same sales as a small grocery store and that could be higher than walmart since 2002 or 2003 so that's where we think there's an incredibleopportunity.

they have been going down at walmart and maybe stabilizing now. every company is going to have to do more with technology if they're going to have to survive in this environment. >> all right well, we'll end it there thank you. she's going to be with us for the rest of the show. >> still to come, china begins to restart it's economic engine. we'll update you on businesses coming back online and those still closed due to the coronavirus. take a look at shares of tesla up big this morning. 5.6% the stock getting two price upgrades this morning at bernstein and morgan stanley though the price upgrades are some what below the price target which is 7,000. >> 7,000. >> there we go we'll discuss that in detail coming up. ♪

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coming up the latest on the coronavirus, a live report from china is coming up next. as we head to break take a look at the shares of apple lower after the coronavirus related revenue guidance the warning coming up. >> coming up our guest host kathie wood revisits tesla. >> this stock in our models this stock is going to 4,000. >> are tesla investors in for more skyrocketing share prices that cveonrsation is coming up when squawk box returns. ade usar members like kate. a former army medic, made of the flexibility to handle whatever monday has in store and tackle four things at once. so when her car got hit, she didn't worry. she simply filed a claim on her usaa app and said... i got this. usaa insurance is made the way kate needs it - easy. she can even pick her payment plan so it's easy on her budget and her life. usaa. what you're made of, we're made for. usaa

new details. the number of confirmed cases has risen to 73,000. the death toll is higher the latest on the fears and the impact of public health and business let's welcome eunice. what can you tell us >> well, joe, state tv is quoting president xi jingping as saying china will meet it's economic growth target for the year and they see continued

disruption to the supply chain and this comes as most people suspect the big political event, the national people's conference which is set for march is going to be delayed. lawmakers are supposed to discuss that next monday now this all comes as they take more extreme measures to try to contain the virus. the central bank has devised a plan to deep clean china's cash. so the way this works is that cash is going to be sanitized with uv light and then for 7 days it will be quarentined for most of the parts of china but in the epicenter the quarentine will be for 14 days and then money that is in hospitals or comes from the market or public transportation at the epicenter is going to be destroyed and by that i mean state media say that the money will be shredded and then it's going to be packed

into bricks and then sent to the local power plant where it's going to be inscinerated and turned into energy. >> that's very interesting thank you so much. as always. you nice for us in china let's welcome in the senior director of new york city's health and hospital system wide special pathogens program and also the central investigator for the special pathogens preparedness recently featured in the netflix docuseries pandemic. >> thank you for having me. >> when we see the big spike in reporting numbers middle of last week from china and since then coming down a little bit does it make you think that we're past the worst of this or can we not say this yet >> it's way too early to tell and with this trend we need to take it with a grain of salt we're still very early on in the outbreak and i think that there's still a lot that we still don't know

there's still community transmission happening not just in china but in other countries around the world. this is why around the nation, hospital and health care systems are preparing for the worst case scenario. >> in terms of how people were treated on that do you support that and one level that felt like almost a human rights abuse. >> so obviously a number of different infectious diseases and the decision that was made and continues and right now it

seems that it was perhaps not a great decision but i think that. >> i think it's a good way to obvio obviously go. >> the best case in this current epidemic is that the virus, you know basically calms down and we're able to get it under control. not just in china but worldwide. it doesn't seem -- this is a respiratory virus. they're hard to contain. just from the nature of the virus itself worst case scenario it's going to continue to infect individuals until we have a

vaccine available. >> all the people had it because of that and what is the feeling of the 1%? >> that's right. it's over 80%. and i think for every individual that's actually going to the hospital, there's more that are -- do have the coronavirus disease but they aren't going to the hospital. >> is it higher mortality rate than the average flu >> it is but it's lower than sars and mers. so i think in that context, this is a mild virus. but again, too early to tell. >> how did that teeter out was it harder person to person

transmission this is better >> so it seems like it's the flu and obviously much more transmissable. and it's compared to the sars outbreak that we saw it's most important to highlight the number of people that have recovered from coronavirus disease. >> are they fine immediately or do they go through a six month period of health and respiratory issues. >> we're too early to tell we're only six weeks in and we're still following the individuals even after recovering from this. >> don't we have three other viruss that repeat like the flu every year. >> the regular cold virus. >> that's right. >> so i didn't realize coronavirus sounded given what's happening in china terrible but there are three that repeat.

>> just very quickly, it doesn't stop it and it's in terms of whether we need to still hear it or not. >> we still have to year out from a vaccine and they're going to continue to obviously take cent center stage but i think we have seen this during the measles outbreak so we might have a vaccine available and face an issue that people want the vaccine and are they going to be willing to get vaccinated. >> thank you for joining us. >> thank you for having me >> a reminder, don't miss a special report tonight called outbreak coronavirus tune in at 7:00 p.m. eastern for all the latest on this story >> coming up, what's the difference between a political ad, branded content and a meme

the 2020 campaign is already testing the boundaries of communication. breaking new ground with michael bloomberg's ads at the forefront. that story is on the way squawk box coming right back ♪ ♪ ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

othroughout the country for the past twelve years, mr. michael bloomberg is here. vo: leadership in action. mayor bloomberg and president obama worked together in the fight for gun safety laws, to improve education, and to develop innovative ways to help teens gain the skills needed to find good jobs. obama: at a time when washington is divided in old ideological battles he shows us what can be achieved when we bring people together to seek pragmatic solutions. bloomberg: i'm mike bloomberg and i approve this message.

he is also unveiling proposals about how he will change financial industry regulation a justice department team dedicated to fight corporate crime including encouraging prosecutors to pursue individuals and not only

corporations and enrolling them into income based programs the digital ad spending is reshaping political campaigns as candidates wage war. robert frank joins us with that story. >> good morning. spending on digital political ads expected to top $1 billion for the first time ever. michael bloomberg is already outspending president trump by more than 50%. now political ad spending could reach $1.3 billion this election that's according to e marker that would be the highest ever and would be more than three times the spending in 2016 now about 800 million of that will go to facebook. google will get a little over 200 million but those numbers could go higher with bloomberg he just surpassed president trump in digital spending with $71 million compared to trump's 43 million about half of his spending is on facebook and about half on google

bloomberg is now spending an average of $1 billion a day just on facebook five times what trump is spending right now. his campaign is saying they still lag in terms of voter data and targeting. >> they're investing in swing voters and base voters in battleground states. >> his biggest ad spends are in florida, arizona, pennsylvania, texas and north carolina and georgia. in total when you include tv, radio and digital, bloomberg now spent over $400 million on this campaign by far more than any other self-funded candidate in history. >> that's a guy that called me fat. >> you could stand to lose a few pounds >> we could all stand to lose a few pounds. >> i resembled that.

>> you resembled it. >> i did. >> i want to sue him for defamation of character. >> on the plan announced this morning, wilf is right the headline here is the financial transactions tax of all the things that andrew mentioned and it sounds -- >> which is scary. >> because it's actually new and it was actually not in bloomberg's tax plan which he put forward earlier this month and when i called the campaign earlier this month when they launched the plan i said is that going to be an ftt and they said absolutely not so something changed. so it sounds scarier than it is. the rate is only .1% bernie sanders rate on his financial transaction tax i is .5% that's the first thing the second thing is its not a big deal it sounds scary but it only raises about $700 billion over ten years. you compare that to bloomberg's overall tax plan which is 5 trillion it's a very small amount and only effects the very top number

of investors and for them the average tax bill under this would be around $150 million. >> we have to move on. >> the banks fear that much. there's already something similar. it's in the u.k. for example it's not as bad as if you actually brought it back. >> but wait a minute, high frequency trading and it would effect them. >> it will impact the trading activity. >> all right well we should point out that squawk box is open for business. for advertising for the bloomberg campaign. >> core $100 million. >> thanks. let's continue this conversation facebook is adjusting it's ad disclosure policy following a series of sponsored memes made by mike bloomberg's campaign and causing the social media giant to reevaluate what is an ad and what is not. this is a lot to this story, sarah and i like it because really bad things could happen if you don't watch out what you

do, right? if you let certain people make memes and i'm ready to -- you know, i can decide whether i'm able to see it or not. i don't want facebook to start censoring things but this could get -- we may be talking about some of this stuff in the next few weeks, right >> yeah. they could get really messy and do you know why i think it gets really messy stories. one of the things that we're not talking about here is what happens when you have people on posts that disappear in 24 hours. the federal trade commission is not going to be able to enforce any native advertising guidelines around that and we all know that facebook struggles to police this kind of stuff too. so i agree with you it's going to be a big problem. for now mike bloomberg is just buying memes on traditional instagram posts. if they were to move to things like stories i would be concerned. >> you mentioned the people that have done ads for them are known to push the envelope are they not

someone getting hit nonstop for stop and frisk i don't think they should be buying meme accounts on white people humor that's not sending the right message. >> those are starting to come out too. >> i think i agree with you joe. he has to be careful about where he places these messages but the reason he's pushing the envelope is that's what works on social media and it's what works for donald trump and gets people to relate to a candidate if they speak in a relaxed humorous manner so we'll see if this works out for him but he has to be careful. >> it's the wild, wild west though is it not? and there's also plausible denieblt can't they say we didn't mean to go down that route it was farmed out to someone else are they able to do that or finally come to rest and they have to take ownership >> the buck stops at the campaign if you're going to place your ads on a place where you don't think you'll have a brand safe

conclusion if that buck stops with you i think to your point about the wild, wild west, just to bring the point out to viewers here, facebook and social platforms don't make money off of these transactions between campaigns or any kind of advertiser and the influencer or the account. that's why these companies want to push them to buy actual ads because then there's some accountability the reason facebook had to change it's policies is because it now says look if you're a verified political candidate we'll put this stuff in our ad library so that we know for future records what money was spent but it's still dicey. >> what do you make of the comment, we played a short clip in the previous report from bloomberg's campaign chief that suggests the president has much better data on social media and therefore the implication that his ads are having a better effect than some of the other candidates including bloomberg. >> that's right. the trump campaign ads are way more effective than the bloomberg campaigns.

what it has going for it is that it can totally spend you have to remember that the trump campaign has all the data from the data trust which is a partnership between a private company and the rnc. it's able to use that data to create lists on facebook to hypertarget the right people whether they're swing voters or die hards on facebook. the campaign is a little bit starting from scratch. they have their own digital agency called hawk fish which is creating and mining all of it's data but they don't have four years of data. a campaign from 2016 of data to rely on the way the trump campaign does. >> is it true that this has been an attempt by bloomberg to look cool apparently some of our analysts are saying these names are fa falling flat not only are they very controversial? that's a big ask there i don't know

>> here's my take. here's my take that's what he wants to do bloomberg wants to win and i think he's doing it. people are talking about it. whether or not they think it makes them look cool i don't think that's what he is going for here he wants to be talked about and i don't think that's a horrible strategy >> you're just a print person. you missed you're calling. >> thank you thanks so much chlts you'. >> you're not nervous. >> thank you you're going to pivot now. tesla shares up again this morning after two bullish calls. stock up about 100% year to date and our guest host is not surprised. she had this to say about tesla. >> this stock, in our models, this stock is going to 4,000.

>> kathie has upgraded that to 7,000 now. we always push congrats because you had a great year. >> yes. >> what do you think accounts for that 100% or so gain when you see how people talked about it differently today versus a year ago >> okay. well, first of all, i have to give credit to three of our analysts and director of research for the kind of research the 100% number i believe is very much a function of what has happened in china. first of all, profit numbers that way surprised expectation free cash flow numbers that completely shocked people. but also shanghai, up and running within one year for $2 billion. i wouldn't be surprised to see more plants going up in china for that reason. and the reaction of other auto

companies now. they are scrambling. many people ask me the question, well, wait a minute, these auto companies have r and d budgets and capital spending budgets that can run circles around tesla. that's true. they have been focused on the internal combustion engine they have the wrong dna. they don't have the right kind of technology -- software developers they have mechanical engineers they have great engineers for what they do now but what they are trying to do leaping from the internal combustion engine to electric is very hard and we are now seeing and more people now believe that costs are falling at such a rapid rate that within two years the average electric vehicle from just a sticker price point of view will drop below the average internal combustion engine car in price. already today total cost of ownership is lower and i do believe that is one reason that demand is taking off

here. >> let's talk about the china point a little bit more. both in the short-term how worried are you about the coronavirus impact but also the medium term because we have discussed this as well earlier about more companies wanting to rely less on china because of potential volatility but you think that the opposite is true for tesla? >> i think the opposite is true. if you listen to elon musk he says i wish our mayors in this country were as tech salve vvy s the average chinese city we're not an auto company. we're a technology company battery company. a transportation as a service company with software as a service like margin. so the chinese get that and they for environmental reasons especially they want to proliferate it we just heard today that catl which is one of the largest battery manufacturers in china is going to be working with tesla to eliminate or minimize

cobalt which is one of the most expensive parts of the battery so china from an ecosystem point of view is all in from this movement and tesla would be fine not only fulfilling the chinese consumer demand for tesla which is a status symbol. >> they might have u.s. plants in china. >> yes. >> let me just ask you -- >> nuclear is where they're going with that. >> you have a $7,000 price target so i'd think that you'd never sell any tesla but people go crazy when you're on. there's both positive and negative people and some are always talking about selling a third of your position or selling this why would you ever sell any and have you sold any? >> so, yes we can only buy. >> it's still 10%. you can keep it and that's the primary reason to sell

primary. there are times. if it's up 50% >> i'm a portfolio manager tesla is up 50%. i'm going to make those moves. tesla is our largest position. you're going up 10 times in value. what could be more positive about them >> having been a portfolio manager for years, there's always another side to the story. what i want to be able to do is when that controversy comes around and the stock drops to 8% of our portfolios i want to have the room, the latitude to buy. >> all right >> but can i just say one thing what's so interesting in this whole period is that the sell side, if you look at the buy and sell ratings, the number of buy ratings has gone down as the price has escalated. the number of sell up. so 7 buys, 18 sells and even those price target increases i

bet they weren't associated or i don't think they were associated with an actual upgrade so what we have here is a wonderful wall of worry. the best wall of worry i ever experienced in my career with a stock or with the market ahead of the open on wall street and the latest technical levels in investors that need to know watch or listen to us alive on the go, on the cnbc app. stay tuned you're watching "squawk box" on cnbc (soft music) - did you know that americans that bought gold in 2005 and even now many experts predict the next gold rush is just beginning. so don't wait another day. physical coins are easy to buy and sell, and one of the best ways to protect your life savings from the next financial meltdown. today, the us money reserve is releasing official gold american eagle coins at cost. for the incredible price of only $154.00 each.

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many investors say the market is narrow our next guest completely rebukes this notion. is that true >> that's true >> whoa. joining us now the technical look at where the markets are headed is chris faroane, partner and head of technical analysis at strategis securities. you got about five different things to look at. the first is, what, technology and communications stocks. >> no, it's the s&p excluding those. >> oh, okay. >> i think one of the big pushbacks we've heard -- >> it's just technology and communication. >> load are leadership they aren't the only things working. s&p excluding those groups is also at a new high there's other things contributing to the move, industrials have been decent what i think has not gotten enough attention, if you look at the financials, the financials have acted really well here.

if we go to the next picture this is on the verge of a massive breakout from this two-year range if you even go back further and look back to 2007, the xlf, the etf is about to make new all-time highs but when you look at the flows, these are flows over the last two months, outflows no one believes this move. that's a good combination for financials to move higher here >> because on a contrarian >> basis what's interesting if you look across the globe it's not just the u.s. banks that held up here, despite low global bond yields >> negative yields >> these are german tens, below zero european banks are breaking out first time in two or three years there's some action out of this group, names like deutsche bank and intessa, unicredit the whole group, the domestic banks or the european banks despite low yields resilient i want to show you my favorite one jpmorgan

what strikes us about jp, for as good as this name has been, the analysts buy ratings, they hate it fewest number of buys on jpmorgan at any point since 2003, about 30 analysts cover the stock, only ten buys another one of the contrarian powerful combinations we like. >> i just love that, all the guys we have on spouting wisdom, when they're all on one side, we know they're wrong which is great. we have them on but we use them as a contrarian indicator. that's great >> this is a good chart and the street neglects it now take the other side of this. even though we have low bond yields the yield stock doesn't act as well as you might expect. this is verizon relative to the s&p. so you had buying yields go down, making new relative lows so there's no relative advantage to owning some of these yield stocks

if you look on a price basis starting to deteriorate, despite lower bond yields. tech is still very good but there are other things like financials and banks which act better and conversely, these yield related plays really don't offer much leadership here >> great >> he messaged me about the coronavirus but trenner. found you, hired you >> found me, hired me and here we are >> chris >> thank you meantime pivot down to the stock exchange, jim cramer joins us now good morning to you. >> good morning. >> first question has got to be on apple i guess the size of the premarket at least stock move relative to a pretty big announcement particularly given that the january guidance was already meant to factor in corona >> right i am surprised it's not down more because it's not just

supply, it's demand. demand comes down because they don't do much shopping in china and supply chain, some of the companies that need to give them the upplies, they can switch they're six or seven plans in that you buy area that are halted but that overall i thought it would be down about ten. i don't know whether it would be down more than this. there's not a lot of people want to sell anything people are thinking that this is, i think a lot of people felt this would happen and are just waiting for that shoe to fall. i can't come up with a reason short term to buy it i think if you believe the coronavirus is going to get better, you buy it here. >> jim, we look forward to much more deep vedi analysis from you and the team on "squawk on the street." stay tuned so why isn't it all about you, when it comes to your money? so. what's on your mind? we are edward jones,

a 97-year-old firm built for right now. with one financial advisor per office, we're all about knowing what's important to you the one who matters. edward jones. it's time for investing to feel individual. delete it. you metwhy?an app. he's the one. awww. gesundheit. i see something else... a star... with three points. you're in a... mercedes. yeah, we wish. wish granted. with four models starting under 37 thousand, there could be a mercedes-benz in your near future. lease the a 220 sedan for just $349 a month at your local mercedes-benz dealer. ♪

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♪ good tuesday morning welcome to st"squawk on the street." i'm carl quintanilla, jim cramer and david faber at the new york stock exchange a lot of news to start a holiday shortened week walmart misses guidance, u.s