it's due to dramatically decelerating growth, the fourth straight quarter the company's revenue growth was less than 30%. and the earnings per share growth of 8%, better than expected is down from the 65% facebook reported in the metric a year ago the results showing pressure on operating margins. 42% operating margins in the quarter. down from 57% in the fourth quarter of 2017. now, total user numbers came in a hair ahead of expectations 2.5 billion monthly active users. but growth in the u.s. and canada slowed. adding 1 until new users in the quarter. that's the region with the highest revenue peruser. baird saying the modest size and eps beat may disappoint some investors askmd to outperformance and another saying this is a correction the recent rally in the stock suggested the market was looking for upside and didn't get it with the call getting under way we are listening particularly for what the cfo says about expectations for 2020 performance and 2020 costs now, last quarter he said that revenue growth deceleration in 2020 would be less pronounced than it would be in the fourth

decelerating growth from operating expense and potential acceleration in core metrics >> so there isus on the expense side and so much focus on shipping and, again, you know are they getting into fedex's business or not, shipping costs up 43% is that a number going down, going higher >> i think overtime it is all abou even though you have the ability for them to invest in the business, which is clearly weighed in operating income in the past and dampened growth, the fact they have now invested in the business so heavily has facilitated to the point where -- where three-quarters a go it was 10% and that escalated to 18 to 22, yes, a head wind if an operating income growth perspective, hopefully not lapping that to the point where unit growth continues to accelerate. >> you look at the stock, a couple of different issues here, so do we not worry about aws deceleration anytime going forward? when does aws become a commoditized business, instead of just with the competition of microsoft and google, when do i worry about that, and, c, do i ever worry about any other metrics involving amaz

further deceleration at a wf."says that "a wf no longer has the cofactor." >> it is not the hip cloud offering that people expect, they are going a little bit cool on it. >> with 2020 shaping up to be a big advertising year, some analysts want to see how amazon will start taking market share and the growing advertising market to drive future revenue growth. ♪ taylor: back to facebook earnings, growth seems to be slowing in a company that is facing privacy regulations and continue to scrutiny from lawmakers and antitrust officials. the ceo also spoke about the company's efforts in election integrity on the earnings call. >> we are very focused on election integrity. this is an area where i am proud of the progress we have made, preventing foreign interference. in 2016, butd after working to protect elections in countries across the world from the eu, to india to mexico and the u.s. midterms for the past few years, we think our systems are more advanced now than any other company's, and we are often alerting intellig

if you think we are decelerating meaningfully and policy will push us into that. if you think policymakers will be more supportive, that gets us back to a more supportive environment which would lead you to be less. the federal reserve, any time have seen the yield curve flattened or conditions tightening, which they really haven't yet, but the yield curve is flattening. ability to respond. chinese policymakers, fixed income -- fixed asset investment, i think both stand ready. joe: we thought that right now earnings season will be dominating the discussion. this is the top story and this is starting to dominate earnings season as well. it has come upon an overwhelming number of calls. sarah: starbucks, closing half their stores in china. mcdonald's closing stores. expectede a wider than forecast going forward because they were not sure how this would affect them. while earnings have been fine for the fourth quarter, that is not the issue here. china pmi numbers overnight coming in strong. data we get now do not yet respect what is coming through with the coronavir

>> the street has a massive deceleration in growth.ou could argue, is the street looking too far in terms of deceleration in the growth rate given the investments they are making. if they could show better growth, you are looking at a multiple that is three times -- three and a half times four sales. that is below that of just eads. if you look at other industry leaders, you have seen multiples that are fetching five to six or seven times -- we do with a lot of software companies that have sold for 15 times revenue. i think the right range for tech mna, a code -- tech mergers and acquisitions, you are seeing assets trading between five and high single digits. you can get to a higher multiple assuming the revenue does not implode. you can get a higher stock price organically and in organically if they execute a little better than they have in the last year. e are obviously a lot of what if's. taylor: talk to me a little about the organic versus inorganic growth. it has been said that uber eats would be that are served by growing organic

believe there will be further deceleration, because businesses are cautious.at environment you are going to see cooler real disposable income growth and more restrained consumer spending growth. so with all that said, what am i supposed to make of this idea that you still have all of these job openings and, presumably not enough qualified people to fill those openings? gregory: i think we are in a labor market where it is important to find the right candidates for the job. what we are seeing is that businesses are being cautious when it comes to hiring. not just in terms of who they hire, who they pay them -- how much they pay them. they are still hiring when they need to, but they are being cautious as to the skill. there is a supply-side issue. we are not at full and climate yet because we still see be -- see people being pulled from the sidelines, we are seeing some increased faculties finding people with the right skills. caroline: romaine mentioned that women surpassed men for the first time in a decade. should we be concerned that this is happening for t

inflation in south africa decelerates it's a full percent in december but there's a ray of hope with the lowest on the inflation in 15 years. this is business africa you updates on africa and global business on it. as well. is the purpose of a company just to make money and create value for shareholders or is it to guarantee social benefits life workplaces and decent wages and also environmental sustainability the climate change looming views on this of changing fast and skepticism over traditional shelder capitalism is coming from all corners for many economies across africa though putting sustainability before growth is easier said than done but facing what is perceived as a global emergency those worries seem to matter less the idea is getting more and more applause in davos where the international business elite as gathering for the world economic forum for one message coming out of davos is that companies want to take more responsibility for the environment and one is ahead of the pack one of the world's biggest money managers blackrock is working with germany and france on crea

we were expecting deceleration we got slightly deceleration than expected.ine. there was a one-time legal expense that negatively surprised people, but other than that, we had -- we did bring down numbers a little bit, near-term little less constructive i still like facebook as a play as we go through 2020. they should be a major derivative off of the surge, the increased acceleration we'll see in global advertising because of the u.s. elections, because of the olympics we still think they have these very large growth catalysts out there in terms of whatsapp monetization and commerce activity on instagram. we like the asset. yeah, near-term we were disappoint and brought numbers down, still shows material upside so we'll stick with the stock. >> sticking with $270 price target >> no, no. we took our price target down to 255 from 270 just on valuation, we got an asset now that's trading around 18 times next year's earnings 16 times if you adjust for cash for an asset like this with 40% margins and 20, 25% revenue growth, i think that's highly attractive >> br

. >> reporter: facebook is under pressure because of the decelerating growth.s is the fourth straight quarter the company's growth is less they were 42% in the fourth quarter, down from 46% and down from 57% two years ago ceo warned revenue growth will continue to decelerate in the first quarter. >> factors include maturity of our business and global impact and other ad targeting regulations. we have experienced some modest impact, the majority lies in front of us. >> facebook shares gained more than 50% going into earnings saying this is an expectations correction the recent rally suggested the market was looking for material upside and it didn't get it. mark zuckerberg focusing attention on the call that lies on commerce and payments to enable 134589 small businesses to better serve consumers. >> joining me now, our guest thank you for joining us telling us they are posting this revenue growth yes, facebook is growing, right? you are not going to put up revenue growth of 80 perce% for. >> exactly they are a victim of their success. they are not going to live

when you look at the street that has a massive deceleration growth. one thing you could argue is the street looking too far in terms of the deceleration in grub's growth rates. if they can actually show better growth, you are looking at a of sales which is not a big multiple and that is below that. if you look at other industry leaders, you have seen multiples that are fetching 5, 6, 7 times. we deal with software companies that have sold 4:15's revenue. times revenue. it could be three to four times. you are seeing assets trading between five and huizinga digits. i think you can get to a higher multiple, assuming the revenue does not implode. you can get a higher stock price both organically and in organically, if they execute a little better than they have in the last year. there obviously are a bunch of what if's. the multiple at just eat is going to get you a higher stock than where it is today. taylor: talk about that organic versus inorganic growth. uber eats would be better served growing organically. can they get there? this is in an economy o

going forward, but you would expect to see is as profit growth decelerates with a lag, that does affect the labor and the labor costs in aggregate income growth that corporations are paying out. guy: if the fed can't encourage wages to go higher, does it react with further cuts? tiffany: i think ultimately, the bar for interest rate cuts is higher at the moment then the bar for hikes. that is the result of, as we mentioned before, the fact that we are not seeing a lot of inflationary pressures. wages,, outside of goods, i would actually say there's a lot of global deflationary pressures for goods. we could also see tariffs drop, etc., which is also disinflationary in the near term if that happens, although probably good news for the broader economy. lack ofof the inflationary pressures, what you have to think about is growth and the distribution of risks around growth. they say risks to the downside. a material change in gross, they will cut the outlook again. a steady funds rate throughout this year, we think the risks to cut our maybe a little higher now relative to the risks of hikes

and there is focus on this deceleration of ad growth. that's the key the feeling that they would beat by a healthy margin and they didn't. >> no, they didn't and it is an expectations issue. i do think buying back stock, they have $50 billion in cash. there's a lot of optionality people are focused on maybe this was a model that was really great when they didn't have to do anything. now they have to do things and it costs them money. >> if revenue comes in sub-20, is that a demarkcation >> what happens is it just gets a very low multiple. >> but it still trades at 20 times gaap eps and growing its top line faster than that. >> look, i think -- like i said, there are just as many people that loved it as hated it today, but the overall sense was that this is not as good a quarter as they said and that this time it's real. you know, it's kind of like scooby do, david remember that? i do think when he talked about that, it was like, wait a second, trusted principles, how much is that going to cost try to put a dollar amount on trusted princi

with any deceleration of credit growth there, that has a meaningful impact on the demand curve, not onlyties but overall for global trade we believe they will continue to decelerate we're not anticipating a hard landing. overall we think it will have a meaningful impact on global impacts not just this year but the next three, five years >> there's a lot to go over, but if you were to pick out a couple highlights for investors, what should we be watching? >> look at the tech sector i think it will be the one most people watch because i think it's the one that could perhaps be the most volatile i would look at the tech stocks. >> absolutely. and i think apple is going to continue to be one we watch because of the size of that market cap, the weighting. gentlemen, thank you for being with us today. chad and chris that's it for "worldwide exchange." futures still under pressure "squawk box" is going to pick it up "squawk box" begins right now. >>> good morning futures pointing to steep losses at the open amid growing fears over the coronavirus that outbreak is expanding as another case here

cfo david wehner warned it will continue to decelerate as privacy regulations and other limits to adarget continue to impact the company in the u.s., the region with the highest revenue per user, facebook add 1d million active users in the quarter anl list analysts have buyer over weight rating the reason despite the slowing growth is the still untapped opportunity around e-commerce and payments facebook announcing it has 8 million advertisers, a million more than a year ago, and 140 million businesses on the platform >> our goal here is to make sure that every individual, small business, entrepreneur out there has the same opportunity and access to the same type of sophisticated tools that historically only big companies have had access to that's what we stand for, putting power in individuals' hands. one example we've been working on is whatsapp payments. you'll be able to send money as quickly and easily as sending a photo. >> zuckerberg and sheryl sandberg saying they're still in the early days of making money from whatsapp, but they're the fastest growing formats. >>is with us t

that compression might decelerate, so it would be nice seeee deceleration -- to that come back from theere. vince, to what you were saying, it feels like what we are basically talking about is if we have some kind of liquidity driven rally that then changes, markets react with a risk of a selloff, but then are we going to get more cuts? is it a catch 22 where you can't really get out of it? vincent: you may get more cuts, but we have to wonder about what this is actually going to do. we will talk about that later in our trader's take. that is the endgame, how credit stands for the consumer. look at auto sales the last year. really poor. if you are a consumer and you are confident, that is the ticket item you really buy. markedlybeen declining over the last year. so i question the real health of the consumer and the confidence the consumer has of not so much 2019, but what 2020 and 2021 will bring. to lauren's point earlier on capex in an election year, it is not going to zoom. there are a lot of questions still to be asked. that ise get past really the. . question to be answered lauren:

. >> the economy is decelerating this year from last year the consensus view -- >> flat earnings we havelat earnings 2019. >> correct. >> you're assuming flat earnings in 2020, isn't it more negative than -- >> we're assuming 2% to 3% growth this year from last year. last year we're predicted 0% earnings and it was. the model now is saying 2 to 3%. >> congratulations. >> what's the progression on that 2% to 3% per quarter? is the first quarter going to be up 5%, second quarter 7.5% and then we're down in the next two quarters >> it's going to be flattish throughout the year unless there's an acceleration in growth beyond the 1.8%, so we get more top line or costs get under control. the bigger question we have, and the way we think about the market is basically there's not income inequality in individuals. there's corporate income inequality, okay so it's predicated on small, midcap companies we're not focused on -- we're focused on the next six months, what's the market going to like right now and not going to like right now? >> at that point that's exactly where i wanted to go i don't u

showing a dramatic deceleration. some same store sales growth for the holidays with the misconcentrated in electronics, toys, and home. i think these below expectation categories cannot be explained by a weak consumer but by encroachment of amazon and the uber cramer fave costco. coupled with the dramatic sales of the apple iphone -- the 11. which i keep telling you is a game changer but you won't listen to me yes, it could be so big that it's pulling sales away from other big-ticket items that's the way it works. we don't have -- i can't even reveal how much it cost. to me, here's the issue. even with the all-time highs, the president of the united states singled out at his press conference simply refused to run up dramatically in spite of market-moving information. and i think that's all about we. he put out a by-list today i'm not kidding when he was doing it, i'm thinking bye, bye, bye. look, this is not a political show on "mad money," i'm in favor of anything that results in higher stock prices and that is exac

but, you know, online sales up 15% and you are seeing deceleration in aws.hings to look at a little bit further. >> what do you want to hear on the call >> i want to get a better read on, you know, they highlighted india. right. they're pumping a billion dollars into that region to help small and medium businesses get on their marketplace platform. haas what drives a lot of their new areas. i would like to know how it's fairing. there's 40 million active fire tv users now so, you know, amazon prime has free video associated with it. the real upside for them is that upselling other streaming networks like cbs all access or nbc has the peacock thing coming out. i think you have a huge footprint. there's a way for them to get more into that marketplace being the marketplace for streamers as opposed to being a streamer themselves. >> the big profitability baeeat, clearly aws -- sorry the big probability -- we've lost them. excuse me, tom james, same question to you. it came from launching from aws beat but profitability in the core business. do you get the feeli

raynor: the baby's heart rate beat is still decelerating. we're gonna need to deliver now. >> kristen: no! my baby--my baby can't die! she can't die! do you hear me? >> haley: you are not gonna lose this baby, okay? dr. raynor is the best. >> dr. raynor: kristen, i need you to push, hard. >> kristen: okay. okay. >> haley: don't vocalize, okay? just squeeze my hand and push. >> dr. raynor: good. good. good. >> kristen: ahh! >> male announcer: like sands through the hourglass, so are the "days of our lives." [soft orchestration] ♪

robust holiday season along with strength in advertising and the cloud and at 34%, jim, minimal decelerationprior 35. >> perfect it's perfect i know these analysts have to put out these bull case, bear case there was none the one thing that really shocked me was that if you saw satya nadella how azure is doing, 60% growth for cloud these guys crushed it in cloud plus they talk about the love they have for same-day, $150 million prime, how that happened overnight. there's a page, not a page, they put out a five-page thing that's more important in many ways than what the numbers are of all the things they do, invented and what they're doing with alexa and it's just so impressive. they are not at all promotional in the conference call, but there was a moment when someone just said geez, how about the web service? is that doing okay the cfo said i don't know, if you do 30 billion last year and 40 billion this year, i think that's pretty good that was the most understated overdelivered number there's no slowdown. there is an acceleration, and i'm trying to figure out whether it's because the cons

growthimately if asian is likely to decelerate as well as global growth. shery: you are sticking around. for now let's get to first word news with paul allen. the bodies of ukrainian victims of the plane crash in iran have been flown back home. they were among the 176 people who died when the plane was brought down by a missile january 8. tehran has no immediate plans to release the black boxes to ukraine or any other country. that contradicts earlier statements. rival factions in libya's simmering civil war have held talks in berlin as production of a oilfield was hit. the national oil corporation said output will be over 70,000 barrels a day. that is down from one million a day last saturday. that is libya's lowest level since august 2011. the volcano in the philippines is venting smoke and ash after an option that displaced thousands of local people. tion that displaced thousands of local people. magma is rising and a devastating explosion could be days or hours away. first tennis majors starts in australia and it could be halted by a are pollution from

that deceleration has halted i think that helps a ton >> art, thank you for those market thoughts. >>let's take a look at other toppies this morning rahel solomon has more >> reuters ask out with a new poll suggesting that the phase one trade deal with u.s. and china is unlikely to provide a boost and will only reduce the down side risks. out of 100 economists, not juon said it would increase growth. about 30 to 35% in the next two years. payment provider square has won a new network transition to move currencies including cryptocurrencies it could be add ven tajious. >>> ford is expecting to take a record $2.2 billion pretax hit over employees pension funds leading to the increase of amount of money that can be used for future pension benefits. >> back on the show, new details about comcast ambitions. plus much more on the coronavirus threat and the u.s. response we speak with a former cdc director coming up and how tesla is making history again and possibly lining the pockets of its ceo and founder, elon musk more after this. risk having your clubs lost or damaged by the airlines. s

attributed some of the deceleration to the difference.think of it on a steady state basis, it is actually something that tells you a bigger picture about the economy. the global economy is actually pretty solid. been beatinghave the drum on square for quite some time. i think you have the highest price target on the street at 105. you showed there was a little bit more traction now with that cash app. almost did a survey of 200 people. we asked, how willing are you to see another price increase? what we found out was remarkable. people were willing to accept up to 2.3%, a 50% price increase from 1.5% instant deposit. instant deposit drives the majority of the revenue. why is that the case? the answer is, having access to the banking industry for the under banked and on banked -- unbanked is-- and more expensive otherwise. if they pursue the price increase, that is upside topared to 21 -- compared 2021 estimates. sarah: you have a price target of $105 on square, which implies a 40% gain. maybe they raise fees, you have higher revenue growt

are shaping up a bit of deceleration in the dow indicating a lower open by 130 after the dow staged a late-day rally yesterday. the major averages are on pace for the fifth positive month in a row. a quick check on the bond market to see how things are shaking out there. higher today at 1.56%. a check on asia as mainland china remains closed we have seen some movement india trading down japanese nikkei higher amazon shares are climbing after market and pre-market here this morning after crushing expectations for the fourth quarter. the company surging above $1 trillion key numbers include cloud, much faster growing prime memberships topping 150 million. jeff bezos network takes up another $13.2 to more than $129 billion. arjun ch arjun kharpal joins us now >> reporter: they went in saying, look, we are doing more on investing and shipping numbers. we have seen numbers strongly. even though the costs associated to shipping did jump up. the margins didn't fall as much as the market expected moving on to the cloud business. web services, revenue is up 34%. there is a slow down beating ma

the street has it slowing down at the end of the year, and i think that is too steep a deceleration fromgrowth they posted last quarter. additionally, any upside you get in revenue demonstrates significant margin leverage, so we think there is good upside to both revenue and the margin side of the equation. we strongly believe that crowd strike is one of the key solutions to the security problem that enterprises are facing. paint a positive picture in terms of enterprising and corporations increasing their spend on cybersecurity, but what is crowd strike doing specifically that perhaps other companies are not to take advantage of that positive backdrop? >> let me delineate between the winners and losers here in the security space. we very strongly believe that the world's perimeter defense, where you basically put an id stack at the edge of your data center, is no longer a vali security solution. while you still need to do that, the world is shifting to what i would call a crowd-direct solution. companies are in the cloud and will deliver cloud security. these companies are trying to do

this is a deceleration from the previous quarter.a summers for the first word headlines. u.s. economy is holding steady. that is despite drops in major confidence indicators. the economy grew an annualized 2.1% in the fourth quarter, marginally outpacing estimates. that is the same as the previous period, but there were falls in consumer spending and business investment did deteriorate. the white house economic advisor, larry kudlow, says the u.s. has not seen any major economic impacts from the coronavirus. japanrial producer in recovered in december after falling for the two previous months. factory output climbed 1.3% from november, almost twice what economists had expected. production slipped 4% over the december quarter. data shows tokyo consumer prices rose by 7/10 this month, fractionally below forecast. exports rose in december, snapping a 13 month streak of declines. it was the longest since 2016. shipments expanded 45 billion u.s. dollars, up 3.3% from a year ago and beating economist forecasts. imports fell just under 2%,

charles: i think growth decelerating towards trend growth, and i put trend growth towards 1.75%, so 2% is above trend. i think we have had a long expansion. the labor market, unemployment going to 3.5%, more people going into the labor force in the face of declining labor force participation trends due to demographics is a good sign for the future when people who previously did not have strong attachment to the labor force are getting jobs and moving to other jobs, so i think that helps. i think the fundamentals are good. it has been a long recovery. it has come from a very low point after the great recession, so it has been a good run. i'm looking forward to continuing growth. after 11 years of expansion, everyone is looking under rocks for the reason it is going to end, what are you looking for? charles: what do i worry about? there are always risks, obviously international events concern you. inflation has been low. at this point in the cycle, we really need to get inflation up to 2% and above 2%. we have said for a long time that our objective is to percent. -- 2%. we have been bel

has been getting share, but we think amazon has gotten a lot of attention in terms of potential deceleration of growth. i think this quarter, they really answered all doubts, in the top line and about 26.5% operating margins. we are seeing amazon web services on the forefront of a lot of technology and innovation, but you look at the other areas, prime membership group. when you look at those numbers, i think you get a sense that the holiday was a major catalyst without. a lot of positive takeaways across the board with remarkable execution. was: amazon web services one that was going to be watched closely. expectations firmly managed care to say the least. what do they need to do to remain competitive against microsoft and google without expanding unsustainably? >> i think they are actually doing what is within their control. the biggest upside ac for them now is international markets. margin markets like india being a notable call out there. pentagon cloud infrastructure contract to , whichft was a deep blow they are still litigating, but that being said, i think this is a huge market that

from your point of view, how much can the chinese economy accelerate or may be not decelerate too much in 2020 without meaningful further stimulus? >> we have had significant stimulus. we look at the rrr cut since 2018. we had 450 basis points. the fiscal measures and so forth, and our view is that the measures have been sufficient to stabilize the economy. a long-term view is very much a declining trend rate of growth, for instance over a five-year period, going down to 5%, so that is very much fitting into that pattern so we see stabilization but within that declining trend. i think for the moment, we have had sufficient stimulus to stabilize the economy. absent further shocks on the trade front, we are unlikely to get a lot of further measures from here. nejra: stabilization within a declining trend is what i have taken away from there. do you hold a lot of chinese assets in the portfolio therefore? yes. yes.priya: we have emerging markets. we are quite positive on emerging markets across the board. that is down positive inflation dynamics, outside of china inflation coming down, al

economist saying the worst case scenario perhaps for the economy, we could see a similar dropper decelerationn china then we saw from the first of the second quarter in 2003. 11.1% 9.1%. int could be a 2% fall quarter on quarter growth in china. us for the hour, the head of u.k. rate strategy at ubs. need to what tomorrow was saying , also saying we could see rrr interest rate cuts and liquidity investments -- liquidity adjustments -- liquidity injections. what are you expecting in terms of potential further stimulus if the outbreak gets worse? john: it is hard to say. clearly, there are downside risks for activity, clearly based around consumption, retail sales. it could spill over to the business side of the economy with investment. it goes, how contained it will be and so on. isst order of events, this about seeing with the loss of momentum is about. manus: we are grappling with reference points, aren't we? what we did, we put the equity market in context, sars and likewise, markets the year before this. we are coming into this with a 29% gain in the equity market. sars, a drop of 17%. the

the numbers show deceleration. they did not drop it they were not as strong as the previous month.n december, payroll growth accelerated to 145,000, less than forecast. november was up 256,000. let's keep that in mind. as you mentioned about unemployment, unemployment on the main number remains at 3.5%. i have to show you. i show it going back 50 years. this is matching the lowest number we have seen. let's come back. think about it. you have a tight labor market. we must see wages rising even faster. but instead, wages went in the opposite direction. let's take a look. average hourly earnings, the proxy for wages, rose 2.9%. in february, it was up to 3.4% so it is definitely losing momentum. is the the main takeaway fed can be happy with enough job growth to keep unemployment low. but not only are wages not rising, they are falling. they want to boost inflation. there may be some discussion at the meeting or press conference afterward. not a good number for the fed from the standpoint not having to worry about cutting rates. if they have to worry about inflation and falling wages,

is a matter of watching that number of cases, how much it increases every day and hoping that decelerationows the virus is being contained. vonnie: mike regan, thank you. what if we got coming up? you really want to pay attention to this. "balance of power" in the united states. david westin taking you through that show. we have an interview about to happen. ush clarida will be joining on bloomberg. fascinating to see what the vice chair of the federal reserve has to say. that is coming up. this is bloomberg. ♪ david: from bloomberg world headquarters in new york to our tv and radio audiences worldwide, i am david westin. welcome to "balance of power," where the world of politics meets the world of business. welcome now our very special guest, richard clarida, federal reserve vice chairman for an exclusive interview. welcome. we have had a decision on the fed and the last few days. we had a news conference with jay powell. the markets took away what they wanted to. what should we have taken away? vice chair clarida: we have said the u.s. economy is in a good place, solid growth, historical

dean: the deceleration probably ends. you start to have replaced things. thinking about doing. in terms of the push and a investment spending increases, that seems unlikely anytime soon. colin: at an economic level to individual corporate, what type of investment are you looking for that would have the higher multiplier effect on the economy. not all investment is that useful. in terms of multipliers, construction always has additional things that go into it. all of it does have some positive influence, but that is the one that draws in most other sectors. colin: i was thinking about infrastructure and housing. dean: also commercial construction. alix: which leads us to what the fed can do. the rate cuts helped with the housing market. the bets are increasing because of the coronavirus. what would another cut do? can the fed do anything to help any of this? dean: if they did end up cutting, it helps on the margins. i do not think that is what is needed. what is needed is more policy stability, solid environment to make decision. the fed cuts have helped th

i think that is too steep of a deceleration.ionally, any upside you get in revenue demonstrates significant margin leverage. i think there is good side -- good upside to both the revenue and margin side of the equation. we believe crowd strike is one of the key solutions to security problems that enterprises are phasing. taylor: you pay -- phasing -- facing. taylor: what is crowd strike doing specifically that perhaps other companies are not to take advantage of that positive backdrop? alex: sure. let me litigate between the winners and the losers here in the security space. we very strongly believe that the world of perimeter defense, where you basically put an i.t. stack at the edge of your data center, is no longer a valid security solution. while you still need to do that, the world is a shifting to what i would call a clouded direct solution. like mine cast and proof point are in the cloud and delivering cloud security. the companies that are in the perimeter side of it, like palo , theseheckpoint companies are trying to do

if you look at that aggregate trend, you can see a deceleration. it certainly bears watching. we can see we have been at this was an 2016 and 2017, and milquetoast economy and that. -- in that period. we did manage to muddle through. that is what we are looking for. david: lukewarm. there you have it. thanks to carl riccadonna. now let's get a check on the markets and how they are doing. joining us is abigail doolittle. i do not whip -- i do not know where to start. abigail: i think traders are tired. very small moves to the downside. in a week where some were talking about the possibility we could see world war iii and then the middle east tensions diffused. so many stories this week. investors seem to be taking a low bit of a breather. volume is below average. we do have a bid for bonds. gold higher. there is a slight risk off town even though the stop declines are small. earlier the dow did go above 29,000? we do have hedging going on in the haven assets. if you take a look at what is happening with the vix, basically suppressed, but as is normal the vix curb going out, tel

it is a very slow slowdown in terms of the rate of deceleration very moderate and overall this is a positive for risk assets. ♪ [bell] >> ending the week on a high note here. the dow, s&p, and nasdaq at record highs. the dow firmly above that 29,000 mark. now a five day winning streak for the dow. ♪ >> still ahead as we review the week on "bloomberg best," conversations from the jpmorgan health care conference. plus, an exclusive interview with dallas fed president robert kaplan. he thinks the central bank should rein in its asset purchases. >> growth in the balance sheet is not free. there is a cost to it. juliette: next, more of the week's top headlines. >> u.k. inflation data at a three-year low in december. juliette: this is bloomberg. ♪ juliette: this is "bloomberg best." i'm juliette saly. let's continue our global tour of the top stories. taiwan reelected their pro-independence president in a landslide. >> taiwan's president has won a landslide victory to clinch a second term. the win is being seen as extending the fourth quarter market rally we have been witnessing. >> what most have

ralph: this year, we are looking for deceleration growth, but still very healthy growth, especially relative to what we are expecting. speaking,ket, broadly we are looking for earnings growth to be supportive throughout the year, and a lot ,f the monetary accommodation trade issues we were contending with last year are coming to support that. but again, this is something that is very difficult to forecast. guy: one of the things i have heard equity strategists talking about with reference to the upcoming season is that if costs rise, that could squeeze the bottom line. did today's payrolls number but that to one side? wages don't look like they are going up anything like the way that some of these strategists are fearing. ralph: i think the margins are probably supportive, but we are talking about several basis points here. the concern heading into this year was margin pressure for corporate's. i think that is natural at this stage in the cycle. broadly speaking, we are of the view that earnings growth is going to disappoint this year, but we don't necessarily think that is going to be bad f

i think that is too steep of a deceleration from the 100% growth they posted last quarter.ionally, any upside you get in revenue demonstrates significant margin leverage. so we think there is good upside to both their revenue and the margin side of the equation. we believe crowdstrike is one of the key solutions to security problems that enterprises are facing. taylor: so you paint a positive picture in terms of enterprises and corporations increasing their spend on cybersecurity. but what is crowdstrike doing we believe crowdstrike is one of specifically that perhaps other companies are not to take advantage of that positive backdrop? alex: sure. let me delineate between the winners and the losers here in the security space. we very strongly believe that the world of perimeter defense, where you basically put an i.t. stack at the edge of your data center, is no longer a valid security solution. while you still need to do that, the world is shifting to what i would call a cloud direct solution. companies like okta, zscaler, crowdstrike, companies like mine cast and proof po

>> i'm basically, we're still looking at decelerating growth in the u.s.ptick in inflation, right? that is quintessential stagflation model. energy stocks, reits, utilities, things that did well in 2019. some tech thrown in there. some tech is probably overbought. the thing is this. the reason markets are staying up, up, up after the china trade deal, there is uncertainty in the business environment. look for uptick in manufacturing. look for up tick -- charles: so ride the wave. >> but it is the fed. the fed is injecting so much money, such a large quantity of money over a short period of time to short repo markets. where there is liquidity, equity prices go up. charles: ride the wave for now. >> ride the wave. charles: happy new year,. >> thanks, charles. charles: the tale of two legacies. remembering a man with profound impact on entire world of sports. we're talking former nba commissioner, david stern. a now disgraced chairman making unbelievable escape in dead of night. carlos ghosn. don't go away. ♪ ♪ ♪ ♪ ♪. charles: the sports world has lost a lege

manufacturing sector relights fears of decelerating economic growth and fed minutes just released show some officials are worrying that low rates may encourage too much risk taking by investors. joining us for the hour is jim lacamp, senior vice president of investments and senior portfolio manager at morgan stanley. greg, great to have you here at post 9 >> great to be here. >> so major averages are lower, although coming back from the worst of the day it's kind of incredible. when you look at the year-to-date chart for the dow and the s&p, it's only two days, but given the fact that we saw that big rally to start the year yesterday, we haven't actually given up all the gains what does that tell you about the market >> i think the market will be fairly resilient, because there's so much negativity in the market there's a lot of cash on the sidelines and people haven't believed the story that being said, morgan, i think this is going to be a tough year, a shrug it out in a cloud of dust. go back to 2018, down year, thank god it's over. 2019, great year but this is a new year we had a l

but the deceleration of wage growth over the course of 2019 is more mysterious here's they reasons whyhat might be the case. you have a substitution effect where younger workers are replacing older workers. you have a change in the mix where low-wage retail and leisure and hospitality jobs are replacing manufacturing jobs and then an issue of monopsony >> monopsony >> you have a monopoly essentially on the purchase. in this case the purchase of labor. that's a situation where -- i think you know something about this, in rural towns where there's only one manufacturing employer, where there used to be maybe more than one, there's no choice they have essentially a monoponsy. >> all those people out of manufacturing have to go in the services industry. >> big part of it. the bottom line here is if you have modest wage gains, you may have modest consumer spending and economic growth. >> it's an important story thanks >>> visa and mastercard have been posting huge stock gains, both hitting record highs. will this under the radar rally push into earnings season? what's your best play here th

>> i think you've already hit on it the slight deceleration even though on the absolute basis it's growing robustly in services is somewhat worrisome because if you want a software and services play you can find a pure play software and services company that's growing faster and higher profit margins. the other thing i worry about, brian is nothing today to do with what was reported today, nothing to do with what was reported today with the guidance but even after i suspect this company will earn $14 per share this year instead of 13 plus you still trade where the stock is moving after hours tonight at 23 times that's pretty rich. >> 23 times, and all lets remember that we're dealing now with a quarter where one of the biggest markets is facing the worst sort of viral outbreak in at least 15 years. with the coronavirus we don't know what this quarter or this fiscal year is going to look like. so investors -- do you think they're trading too much on what did happen rather than what might happen >> i absolutely think that's the case and not only the coronavirus, you know, one of the real cat

the only question is whether the pace of the infections accelerating or decelerating and despite efforts to control it around the globe i think it is very much accelerating i think we need to still or sells for up ticks and the cdc said we're facing a health theft that makes investing in stocks seem powerless right now i'm not a immunologist or epidemiologist you and probable aren't here. but i think the stocks that are generally immune to the disease and that is what you want to look for if you want opportunity. but you can't have opportunity unless you have cash and if you haven't raised any cash, well maybe it is still not too late we've been raising cash all week for my charity trust which you could join the club. i've been negative it is painful to be negative it is right. we have a company reporting on monday that may be the true litmus test of this moment alphabet that is the actual -- for google minor chinese exposure and don't worry about chain disruption and you could use services as home which should work during this outbreak alphabet is flirting with a trillion dollars market

let's see with iran intentionally decelerating the conflict, which i think was a very positive step yesterdayings will settle out and we can get back to the table. >> thanks for coming on. we appreciate your time. >> thanks for having me on. >>> later this hour we'll get reaction on today's intelligence briefing from a house war democratic and iraq veteran. congressman seth moulton joins me. >>> first the president's strategy on iran. what is it exactly? i didn't have to shout out for help. because you didn't have another dvt. not today. one blood clot puts you at risk of having another, so we chose xarelto®, to help keep you protected. xarelto® is proven to treat and reduce the risk of dvt or pe blood clots from happening again. almost 98% of people did not have another dvt or pe. don't stop taking xarelto® without talking to your doctor, as this may increase your risk of blood clots. while taking, a spinal injection increases the risk of blood clots, which may cause paralysis- the inability to move. you may bruise more easily or take longer for bleeding to stop. xarelto® can cause serious a

trade that was not there a significant amount of deceleration we almost see the opposite as we begins year. so where we see at least the beginning of a phase one trade deal with china, we see that the economy continues to be well supported by, you know, the labor market as well as by the very strong consumer and we don't necessarily see that earnings actually are going to continue to go down in fact, expectations out of earnings will peak up in 2020. so when you look at the picture, it's not very surprising that we see a continuation of that i do think what is surprising is that we see the level of volatility not going hire despite all the geopolitical headlines we have had lately >> omar, as we look at some of the data, we're seeing an awful lot of inflows into taxable bond funds including the taxable bond etf. we've spoken a bit about a broader equity when you're looking at the taxable bond funds, something you're interested in i think in eneral, investors always look at taxes and particularly as we go through the season with so much in capital gains that have been gone through the