Transcripts For CNBC Worldwide Exchange 20180119

Im courtney reggen in for sara eisen thanks for having me its a great day to be on wex on friday happy friday to everyone watching our top story, countdown to shutdown lawmakers have under 19 hours to pass a spending bill or else the lights go out in washington. The republicancontrolled house okayed a temporary funding measure late last night but now the senate must approve it so far its unclear whether or not they will. Senate democrats are holding their ground demanding an immigration deal they have until midnight tonight. The last time we saw a Government Shutdown was 2013 it lasted for 16 days. Well have much more on this developing story coming up well see how the markets are reacting to the d. C. Drama a marginally higher open on wall street, the dow higher by 15 points, the nasdaq higher by 21, and s p 500 higher by about 4. Throughout the day yesterday the markets did slip as it got more and more evident that we were getting closer to the shutdown we had that late vote by the house last night lets look at the tenyear we saw a nice move yesterday hitting a high of 2. 67, this was the highest level since march of 2017 we are at 2. 63 bangon look at that we will watch that today asian equities for you, mostly positive today. 0. 4 for hong kong, shanghai, japan just slightly higher looking at the bank of japan meeting next week as well. European trade for you which has been an odd week we have the ftse down a percent week to date, germany up, france down slightly. We are ending on a positive note for germany, which is up the best part of 1 . Lets check on commodities the International Energy agency out with a new report that says the u. S. Is well positioned to overtake saudi arabia and russia as the worlds leading Energy Producer by the end of this year the iea notes this all provided opec and nonopec production restraints remain in place oil prices selling off here. Wti crude down by almost a percent. Ice brent crude down by 0. 9 week to date, wti is down a half percent. Looking like well add to that today. That would break a four week winning streak for wti and brent if we end the week down. Lets look at the price of gold. Gold on thursday was down about 0. 9 also on pace to break a fiveweek winning streak it is slightly higher here today at 1335, up by mo 1335, up by m. Not enough to break that losing streak for the week. Currencies for you, the dollar was flat yesterday. Its soft today. The euro is higher by 0. 3. The yen is higher by 0. 4 . The pound is higher by 0. 1 bank of japan next week, we have an ecb meeting an ecb meeting is coming next week i think we forget, despite the strength out of europe, we forget we did see rather dovish mario draghi after the last meeting just a month or so ago we saw Euro Weakness off the back of that its hard to see why mario draghi would want to be hawkish in this upcoming meeting given the euro means so much for the exporters. Even if they are getting closer to hiking, why be hawkish until theyre at that point. So perhaps some risk to the downside given the euro recently bitcoin, you have just seen it, its had a roller coaster week today relatively flat, up to the mid to high 11,000 level lets talk more about the markets. Joining us is gina sanchez good to see you. Its been a week where we have seen volatility come back. Markets have recovered from tuesdays intraday selloff is one of the reasons the volatility is up is because of the threat of a golf shutdown in your eyes . Without a doubt i think thats driving quite a bit of it. And its also driving the dollar which is affecting a lot of International Trades i think the dollar could remain weak as long as we see this Political Drama play out sorry in terms of what to expect for the broader u. S. Market if we do get a shutdown, does it lead to a big intraday selloff over the weekend in terms of the fut chichir futures market or does it not really have an effect on the level of the equities markets i dont think it will have an enormous effect on the equity markets. They seem impervious to whats happening in washington. I think earnings will probably be the story of the day, even if you do get a golf. Shutdown lets be clear, if you have a shutdown, it does have a consumption effect, you will see it a quarter later so you may not see an immediate reaction, the kind of selloff over multiple days i think it causes a bit of volatility and its ab coshed ba absorbed back into the market over a day or so that seems to have been what happened in the past with a bit of a pullback, then markets digest it and move on. As we talk about down the road what do you think equities are shaping up to look like for the first half and the second half of the year, if earnings are strong and economic fundamentals continue to grow so, we actually see it exactly the way you just described it a year of two halves the first half will continue to see momentum, well see strong earnings, as we get into the second half of the year, we have a few things were keeping our eye on that could make it difficult for equities to maintain these very high evaluations. If you look at evaluations today, we have not seen valuations this high more than three times since 1950 thats a big deal. There is a couple of things, earnings comps will get harder as we head into the latter half of the year. Comps right now are easy, we have real Earnings Growth. Those are all positive even if Earnings Growth maintains it will be hard to have extraordinary double digit figures into next year because the comps will be harder second, i think once the ipo of aramco happens, i think that saudi will have to step back from support of these tight opec policies and you could see oil fall in the latter half of the year that could have an effect on equity pricing bank of japan and the ecb next week, what do you expect . Clearly we had a strong run in both the euro and the yen. The dollar has been wreak. Are these events something that could change the direction of that i think if anything it would continue theyre both fairly dovish you mentioned it earlier in your commentary, the ecb will remain dovish i think the strength of the euro is not quite a problem, but it will become a problem at some point, but for the time being the dollar will remain soft reflecting whats happening in the United States more than reflecting the policies of the ecb or the boj so nothing will change there gina sanchez, thank you very much making headlines, San Francisco fed president John Williams is being considered by the white house for the number two position at the fed. The wall street journal says it is unclear whether williams is the frontrunner for vice chair. He would replace Stanley Fischer who retired last year. Williams took over as president of the San Francisco fed in 2011 in a statement to the Financial Times williams said he would welcome an opportunity to serve as vice chair. Ibm just did something it has not done in 22 straight quarters lets get to landon dowdy with the details. Good friday to you. The tech giant returned to ref kn Revenue Growth for the first time in five years, but shares are down this morning as weaker than expected guidance overshadowed that news the tech company beating on the top and bottom lines this is a positive sign as the Company Faces competition from amazon, google and microsoft ibm says it took a onetime charge of 5 5. 5 billion as a result of recent tax reform. Heres what Martin Schroeder told jim cramer on mad money last night first half to second whatever which we described in july played out as we said. That puts us on a good base. We guided towards growing ref knew and stable margins. When we think about the transformation of ibm, yes, now that the portfolio is transformed, we have momentum going after 2018 looking at the stock, shares are down about 2 in the past year the stock is off about 2. 5 in early trading. Back over to you thank you very much for that. Softbank closed its deal with uber yesterday making it the largest shareholder in the Ride Hailing Service as part of the deal, softbank will invest about 9 billion in uber including 1 billion in new shares softbank will own a 15 stake in the company and has added two representatives to the board uber will also limit Voting Rights by early shareholders and the control held by Travis Kalanick so kalanick, by all reports, is selling about a third of his stake and netting about 1. 3 billion in cash. Its unheard of to see a founder get out so much cash early from a company when theyre still making a loss. Usually you want to incentivize the founder to stay and not sell a single share until it fully lists, but given the clashes kalanick has had with the board and opposing softbank coming in, hes been forced to do that. I think its an amazing outcome for him. He banked at least 1. 3 billion while the company is still losing money and he still has twothirds of upside to come and a billion out. The whole situation is unusual. What if the company over five years doesnt do well, continues to lose money, never ipos, he has done fantastically well. Even if he had been fighting the softbank deal, he has done well. American express reporting its first quarterly loss in 26 years in the Fourth Quarter but adjusted earnings did beat the street they will suspend the Share Buyback program for six months to rebuild capital following tax law changes in the u. S shares are down 2. 5 Jpmorgans Jamie Dimon received 29 29. 5 millions in toa pay last year according to an s. E. C. Filing, thats up more than 5 from 2016. His pay package includes 5 million in cash. His base salary remains unchanged at 1. 5 million his total cash comp is 6. 5 million of the 29. 5 million number all enormous numbers, but when you consider the performance theyve had 2017 was not as good a year for them as probably the previous three or four last year bank of america was the standout, but their performance was still strong yes, its a lot of money but the bank is doing well when you look at how much other people below him are paid, daniel pinto, number two, followed by gordon smith, those are the two you point to as the most likely successors, if anything happened quickly, and theyre the two that were paid the most in total, 21 million for pinto, 20 million for gordon smith. A lot of money paid out by jpmorgan they want to keep him in that position he is their guy. They have to make sure hes paid appropriately. Its the first of the big banks that we know what the pop brass were paid. As we see the rest come out, it will be interesting to see how they fall. The performance was different for some of the names last year. 6 share price gains off the top of my head for Goldman Sachs and wells fargo in and around that level versus over 20 for bank of america well see how the numbers play out for their various pays. Texas instruments named Brian Crutcher as the new ceo. He will succeed Rich Templeton in june. Templeton will stay on as chairman crutch hear worked at ti for two decades. Still ahead on Worldwide Exchange, ring the alarm. Well tell you what the s. E. C. Just said about bitcoin that could have a major impact on the cryptocurrency plus countdown to shutdown well head live to washington as the clock ticks on the senate to pass a spending bill stick around, Worldwide Exchange will be right back lets get started. Show of hands. Who wants customizable options chains . Ones that make it fast and easy to analyze and take action . How about some of the lowest options fees . Are you raising your hand . Good then its time for power e trade the platform, price and service that gives you the edge you need. Alright one quick game of rock, paper, scissors. 1, 2, 3, go. E trade. The original place to invest online. Welcome back to Worldwide Exchange. If youre just waking up, lets get you up to speed on the market action. We are counting down to a potential shutdown in washington, d. C. But futures are pointing to a slightly higher open the dow jones higher by 16 points the nasdaq higher by 22. The s p 500 up by almost 5 lets look at whats going on with the bitcoin action. What a week its been for cryptocurrencies with bitcoin the predominant one that we look at here. You can see just about flat for the cboe and the cme futures contracts. But for coin base and bitstamp trading, we are higher by 2. 5 and 5 federal regulators are raising the red flag on bitcoin backed funds the s. E. C. Detailing their concerns with cryptocurrencies among the issues, bitcoins volatility and its potential liquidity. Last year the s. E. C. Rejected two proposed bitcoin etfs saying the market was not transparent enough to regulate lets talk more about this with alex scaggs from the Financial Times. Its been a fascinating week for bitcoin particularly as it relates to regulation, whether u. S. Based or international. Its recovered a bit in the last day or so. How serious is the threat of regulation that weve heard about in the last couple of weeks, and which region or country do you think is the most significant to look out for . So i think that its really interesting that bitcoin is basically setting up to be this governmentless Payment System and currency regulators still do control the downra onramps and offramps the s. E. C. Put in new regulations that could hurt funds, in the u. S. That could affect Retail Investor adoption of bitcoin so the u. S. Is a big market. So i think that that will probably affect the price a little but its tough to say. I think it really affected the price to see that chinese regulators ended up cracking down a bit on bitcoin, because the chinese adoption has been pretty big so it should be interesting to see from here. Its been all over the place yes, it has because of that we sort of dont know what reversion to the mean is we have heard some analysts say thats maybe what this move is and the pullback is. Is this just the result of fear of selling because of the potential of regulations from south korea, china, potentially here with whats going on with the s. E. C. In is this just fear selling or are we going to figure out somewhere thats a little bit close to this reversion to the mean relatively soon well, what is the mean . Like you said, the price has been all over the place. I think it was breasting to see t interesting to see the rally we got after the cme allowed Bitcoin Futures to trade that Regulatory Approval helped. Even just thinking about where things have stabilized, the volatility of the thing has been huge and its almost impossible to know what its worth. Alex, thank you very much for joining us alex scaggs the Financial Times. Still ahead, more on the big ththatasattle in the senate e re of a Government Shutdown looms hi. Im dave nemeth. Television talkshow host and, until recently, a hair loss sufferer. Thats right i used to have a bald spot right here on the back of my head. And being seen by millions on tv, it was embarrassing. Thats when i turned to hair club, the numberone customized hair loss Solution Provider in north america. Today, my bald spot is gone, and i feel 100 more confident. Im 52, and i look better now that i did when i was in my 40s i love it. I really do. It has changed my outlook on life. 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I know it looks good. [ nemeth ] this was me before going to hair club, and this was me by the end of my visit. The moment you see yourself with hair again, youll wish youd done it sooner. Call and set up your free hair analysis at a hair club near you. Welcome back to Worldwide Exchange. Were sort of mixed on futures it comes off a slightly soft day. Yesterday the dow was down about 0. 4 the s p and nasdaq just slightly lower. Were now higher across the screen treasuries for you, yields moved noticeably higher. Yesterday the tenyear well through 2. 6, now at 2. 62 the fiveyear above 2. 4, which was the level for so long that we hovered around for the tenyear retail has been on fire so far this year with the retail etf, the xrt up nearly 5 . Will this trend continue in 2018 lets bring in mary epner. Thanks for joining us. Thanks for having me. Holt dthe holiday numbers, bn large the big numbers were strong what do you think, do you think this is temporary or do the fundamental problems that existed in july and august of this year still exist . Will that piull us back down lower . A couple of things are happening. Im optimistic for 2018. This is the year of the customer if the customer is not getting the most out of his or her retail, its time to switch retailers. Its about the product and services to get you into the store. Its their responsibility not just to give a discount but to give everything that goes with it those retailers doing that are winning. Secondly, if you have a retailer who is distanced from amazon, no offense against amazon, but aspiration luxury, luxury, youre winning the more you dont have to depend on them the better. Cosmetics is doing well. Anywhere you can use augmented reality in order to close the sale and sell your product, its a win. So theres a lot of good things happening out there. Your point about luxury, the more youre separated from amazon the better, explain that a bit more is that based on the impact that amazon has on the margin or that you want to separate from amazon for reasons of therefore making yourself seem more desirable couple of things. To your latter point, that is true we found in talking to people who work at these luxury companies, they have statistics that show that if they get an online sale, a customer may buy one item if they can get that same customer in the store, they can sell six to eight times that amount that they can sell online they would rather spend the money in engaging that customer by bringing him or her to the showroom or flying to meet that customer they would rather get that sale. They need that facetoface. Its about the experience and making that customer feel special so that he or she will spend more money if we can go from the flip side, from luxeury down to walmart, they were the story over the last year, with all of the out of the box acquisitions, the stock price just continuing to tick higher. Does that continue or does target come in and pick up that momentum some folks have said target today is where walmart was one to two years ago i think target is asleep at the wheel compared to walmart in my opinion i think one of the biggest things that walmart can do to accelerate is to get ahold of their apparel business and do something with it. Ive been seeing that in the past two years thats one area where they just kind of blended in to everybody else including target. Now theyre differentiating, they have done a partnership with lord taylor, im excited to see what they do there. Lord taylor, they have really strong private label programs. Id love to see them get kashmir programs into walmart. Then with the amount that walmart can buy, you can get it down to the prices that one gets at uniglo. Im excited to see what they do there as well as with other collaborations and buyouts that they do in Apparel Companies lovely stuff. Thank you very much for joining us thank you so much up next, a round up of the top headlines and a check on the global markets. And countdown to shutdown. Were headed live to washington with the latest enwh Worldwide Exchange returns. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. But through goodt times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. The senate has until midnight to pass a spending bill and avoid a Government Shutdown. Were live in washington with the latest. Futures slightly higher as wall street awaits movements out of d. C the full market setup is straight ahead. And Stranger Things have happened what netflix said to amazon that has the internet buzzing this morning. Its friday, january 19, 2018, youre watching 1 4 white sox on cnbc good morning a warm welcome to Worldwide Exchange on cnbc. Im wilfred frost. Im Courtney Reagan in for sara eisen happy friday to everyone watching lets check in on the markets this morning we had some selling yesterday, down about 0. 4 for the dow. S p and nasdaq fractionally lower, but this morning we are higher on the nasdaq up 23 points, the dow and s p higher as well. You can see the steady trend of rising yields that weve seen to kick off the year. The top story this morning, countdown to shut down lawmakers have just 19 hours to pass a spending bill or else the lights go out in washington. We got some movement overnight on capitol hill. Lets get to Kayla Tausche i hope you got a bit of sleep. I did there was some movement but not enough to avert a shutdown the house struck a lastminute deal with the conservative Freedom Caucus to pass a shortterm funding bill. That moved the ball to the senates court where there is significant opposition from a handful of republicans, loading two democratic ai iic aides to theres enough no votes to block the bill i also want people to understand that Senate Democrats do not oppose anything that is in this bill theyre just holding this critical funding hostage for a deal on a completely unrelated immigration issue. Yes, we need to address the daca program. Were engaged in goodfaith negotiations as we speak, but that deadline is weeks away. After tense debate and a procedural vote, Mitch Mcconnell adjourned the senate until 11 00 a. M. Today 13 hours before a shutdown schumer, though, said there was only one solution to the problem. The four leaders could sit down, theres been a lot of discussion and come to an agreement and do what the president said at one point, send it to his desk and hell sign it. We could get that done before the deadline of tomorrow night expires. Mcconnell disagreed saying its not clear what the president would sign in terms of immigration policy President Trump is scheduled to depart for maralago this afternoon with a gala scheduled tomorrow night to mark oneyear of his presidency, but there could very well be a shutdown instead. Wilf how many shortTerm Extensions have we had so far . If we get another one in 18 or so hours time, how many more do we have to get for this to be a record run of shortterm kick the can down the road extensi extensions i think a lot of members of congress would say four in four months which is what weve seen is unacceptable. For all of this he said she said, this deadline tonight was put in place one month ago by republicans who believed they only needed a few weeks to reach a deal on these issues worth noting last night that the top senate democrat, chuck schumer, proposed a iveday shortterm spending bill with none of these sweeteners attached to try to amp up the pressure on a potential immigration deal so if they end up folding, if republicans end up folding on that proposal, we could be right in this position five days from now instead of another month from now that will give us an excuse for another countdown clock. Its not all bad news. Thank you very much for that Kayla Tausche for us in washington lets continue the discussion. Were joined by james petagukas from the American Enterprise institute and a cnbc contributor. James, overall your expectation over the next 18 hours we should get a deal to kick the can down the road again . It wouldnt surprise me if we got a deal to kick the can down the road but not far that road will not lead into february that road might lead into monday, tuesday, wednesday, not beyond that. I dont think theres interest in doing that kind of deal i dont think that longer Term Extension would have much possibility. So that countdown clock might be back up early next week. Kayla said this deadline was put in place by republicans. In th if this falls apart tonight by midnight, are republicans to blame for this especially if they cant get enough votes to pass it on their side ultimately you need 60 votes, if democrats want to filibuster it, im not sure republicans have 51 votes. Its also important to remember that the lights are not going to go off in washington, d. C. This is primarily a political event. It is not an economic event. The biggest Economic Impact from a shutdown would be the delay in releasing the Fourth Quarter gdp report you know, other Government Data collection, but the government for the most part will continue to run we have heard from courtney is it going to hurt the republicans, is it their fault is it going to hurt the president . Is it hurting him so far is he kind of playing the democratic and republican members of congress off against each other quite successfully over the last couple of weeks . We might actually already have a deal here if not for the president s explosive comments theres confusion actually in that report theres confusion about what the president would actually sign if immigration is part of this deal. Its not at all clear if he would go along with what this Bipartisan Committee has been forming verses what some of the more hard lined immigration hawks in the party want. Its not clear what the president wants. His comments have been disruptive and destructive to the process and hes stepping on his own economic story of having passed tax cuts, having these bonuses by corporations, bringing money back, markets going up so hes stepping on a good news story for him politically. How does the c. H. I. P. Angle play into this with both sides trying to use it to their advantage . The president also seeps smse unsure about what that part of this debate is about it looks bad because you have this very important issue being sort of thrown up in the air as part of negotiations democrats and now republicans would like to extend that. So there are things in the bills that both sides would like yet this extension is not happening, which to a lot of americans seems confusing and makes washington look supremely and deeply income tepeteincompe. Is your expectation that the market would shrug this off if there is no deal weve had had these exten shups over the past few months the market has gone up you have maybe a shortterm gdp hit which is made up in the following quarter. This is a political vent which may have longerterm market implications, but it only becomes an economic event if it raises the debt ceiling in march and Shows Washington has trouble solving problems thats an issue it needs to solve in a couple months thank you very much for joining us you bet President Trump is coming up on his first full year in office, in that time the market has been on fire but how have private equity firm firms done during the Trump Administration leslie picker has more was the one pledge trump made during his 2016 campaign having do with private equity, doing away with the carried interest loophole carried interest is the share of profit that a private equity manager generates from the sale of investments carried interest is taxed as Capital Gains which is almost half the rate of ordinary income the tax plan changed one thing, managers need to hold assets for three years instead of one to get the Capital Gains treatment. But the private equity firms hold on to their investments for a median of five years any way opponents on both sides of the aisle argued that carried interest should be taxed as ordinary income and generate billions of dollars more of revenue for the u. S. Government but the private equity interests say carried interests aligns their interests with that of lps and they should be rewarded for pumping hundreds of billions of dollars into the u. S. Economy. Now, during the first nine months of trumps tenure as president , the three largest publicly traded private equity firms reported a combined carried interest of 4 billion, income mostly tax as Capital Gains. We could argue about this for so long clearly private equity employees are on one side of this almost everybody else on the other. You do want to incentivize people to invest capital in the economy t takes more risks, you should get more reward the employees are not risking their own capital. They do oftentimes buy into the fund the real defense that private equity often hinges on is this idea of where does the buck stop does it stop with private equity if it stops with private equity, does that impact venture capital, thats associated with entrepreneurship but they buy into their funs in a small percentage relative to their payout. Essentially if youre really talking over a beer with a friend that works in private equity, they all admit that the net comp is similarly structured its a bonus at the end of the year, not relative to how much capital they risked at the start of the process its a loophole i think they are still lucky to benefit from. In public they say they look back to a century old legislation that says carried interest should be treated as Capital Gains. Its interesting we saw last night Governor Andrew Cuomo come out with proposed legislation, what he calls the fairness fix which gets to the heart of the issue, people dont think its fair theyre able to pay half the rate of taxes as ordinary income as that of ordinary income which everybody else has to pay his solution would be to essentially give Hedge Fund Managers, private equity firms, anyone else earning carried interest, a 17 fee essentially on that carried breast, whichint i did an unscientific poll on twitter last night, by in large most people saw the ultimate effect as people would just Hedge Fund Managers would move to florida migration impact. Leslie, fascinating stuff ibm just did something it has not done in 22 straight quarters landon dowdy has more. Good morning again the tech giant returned to Revenue Growth for the first time in five years, but shares are down about 3 as weaker than expected guidance overshadowed that news. The tech company beating on the top and bottom lines this is a positive sign as the Company Faces competition from faster growing Companies Like amazon, google and microsoft ibm says it took a onetime charge of 5 5. 5 billion as a result of recent tax reform. Heres what Martin Schroeder told jim cramer on mad money last night first half to second whatever which we described back in july, played out as we said. That puts us on a good base. We guided towards growing revenue and stable margins when we think about the transformation of ibm, yes, now that the portfolio is transformed, we have momentum going after 2018 shares of ibm are down about 2 in the past year and the stock is off 3 in early trading. Thank you very much for that. Still ahead on Worldwide Exchange, netflix throws shade at amazon. United passengers get an upgrade and panera is demanding answers on eggs. The top trending stories are ahead. First another check on e tures pointing higher to end thweek, albeit just slightly. Welcome back to Worldwide Exchange. Time for our top trending stories. Were alongside landon dowdy netflix taking to twitter to pitch a fictional tv town for amazons new headquarters, its hawkins, indiana, thats where Stranger Things is set the tweet says hello, amazon, just throwing hawkins, indiana in the ring for amazon hq. If youre waffling, we can offer you precisely 11. Love this you do . I think its amusing of them. Big rivals, coming out to play the game i dont know where hawkins, indiana is, i dont know the reference to 11, i havent seen the show, but i get its about that is hawkins stable an a Business Environment friendly . I dont know. Panera is demanding answers on eggs. The food chain is petitioning the fda to define what an egg is panera says a number of competitors like burger king, taco bell and dunkin sell egg patties that contain five ingredients. Kind of just puts me off fast food breakfast again the egg patty. The circular shape i was hoping it was eggs and milk and a cookie cutter thing as becky knows from a previous discussion, eggs in the u. S. Are just not as good as in the uk better quality like the chocolate. Hes very critical of our food he is. In general food retail in the states is terrible versus the uk no. Thats not true. Definitely true how about our airlines . United i have a view on that as well lets me talk about trending first. United is rolling out a more spacious premium economy seat on international flights. In addition to more leg room and personal space, travelers in the united premium plus will receive free alcoholic beverages, a saks fifth avenue blanket i think united got hit hard when they brought in that carryon thing if you want to pay less, that gives other people paying more more space in the bins i was nervous that i will accidentally book that united lower fare, and ill come prepared with my overhead bag, and i cant get on you dont have a seat that makes me nervous the option that creates extra leg room, im more for that. Giant like you are. In general, i prefer the International Airlines because the main difference is the tone i feel like you get treated like its teacher and student on a u. S. Airline, when you ask something. Sure, when i have time these are expensive seats often. You dont get quite as good a service, i think, as some other International Airlines it does feel at least things have changed over time not pointing to any particular airline just generally we know as well some National Flag carriers, particularly the middle eastern ones, they can make it a loss thats also a difference i just want to get where im going. I dont want the flight canceled im the queen of delays safety and efficiency number one. Thank you very much for that coming up next, were breaking out your shutdown playbook what you should be doing with your money as that clock tksic on congress. Stick around, Worldwide Exchange will be right back , malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Can we do that . The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back to Worldwide Exchange. Were approaching the top of the hour, so the team is getting ready for squawk box. Andrew ross sorkin has a look at whats coming up good morning. Joe will be talking about the joe is over here hes googling this hes going, please, no, no, no well talk ibm Revenue Growth, but what does that mean, because theres questions longterm about whats going on there he doesnt even have a microphone what he said, if you could hear him, he said trump even fixed ibm. We will see about that republican senator rob portman will join us the countdown to the shutdown, will there or wont there be a shutdown that is a big topic of conversation well also talk about the breakup f theres breakup, if theres a breakup of ge could look like good stuff. The best thing about that, i know there was once a time in the past where you guys didnt all desperately want to do the tease, now you all want to do it at the same time becky is here, too. Everybody wanted to do the tease at the same time andrew mentioned the clock is ticking on the senate they have until midnight tonight to pass a spending bill and avert a Government Shutdown. Drew mattis joins us from metlife investment management. Good morning to you. Good morning. You worried about the shutdown has that caused volatility to pick up . Not too worried about the shutdown if you looked at past shutdowns, they didnt have a large effect. Nobody is expecting a lengthy shutdown, theres no threat of a gov government downgrade this time i think were good this time if the dysfunction continues, if theres signs dysfunction will continue in washington, thats not good but a temporary shutdown issue is not a big deal. Lets talk about that sign of dysfunction in washington. There was progress with the tax reform bill that boosted markets. That led to optimism lead nothing this year that various other things could get done. Are you again concerned that perhaps the tax reform bill was a oneoff for the Trump Administration in terms of big legislative victories . I dont think so. We have to remember that washington is designed so there has to be a give and take and there has to be these negotiations we often think of it i know my colleagues overseas often think of it in parliament we would just come to this conclusion and get it done thats not how it works here not really the way its working there either i dont think we want to read too much into how it looks from the outside. We want to look and see whats getting done the tax bill was a good example of getting something done. Gina sanchez does think theres a consumption hit when theres a Government Shutdown that doesnt hit until a quarter or two later do you agree if there is, it will get swamped by the tax cut withholding tables will change, people will see more income coming in you have the stories about firms paying bonuses that news is going to take precedent over the other news. U. S. Equities versus international equities, how is your balance for the year ahead . I like the u. S. When we look at it, when you look at the potential for growth in the United States, when you look at the length of time that we can look forward and not really see anything on the horizon that should derail the u. S. Economy or push us into recession, it would seem to me that u. S. Equities is the way to go even as the tenyear goes higher, you think equities is the place to be. Can they both continue to march higher i believe they can. I believe that tenyear yields being as low as they have been restraining activity in the United States. Its been causing consumers to save more money for retirement rather than less money because their expected returns were lower. As rates normalize, spending consumption and savings will normalize. Drew, great stuff thank you lets have a look in on futures. About 30 seconds left to go in the show we are pointing higher its been a week where we have seen volatility and volumes pick up markedly. We had that selloff on tuesday, but weve since recovered since then slight declines yesterday. Down 0. 4 on the dow we are pointing higher this morning despite 18 hours and 3 minutes to go to a potential shutdown its all in the senates hands now and all in jx in squawk bo hands next its not theirs. Its mine. Mine. Mine. Mine. The new lexus rx 350l with three rows for seven passengers. Are you excited about your baby sister coming . Experience space for the unexpected with the rx l, part of the rx family. Experience amazing at your lexus dealer. All right. Good morning if it works for us, well use it said this twice yesterday. Shutdown showdown. Breaking news from capitol hill. The house passes a temporary spending bill to a Government Shutdown the senate has about 18 hours to cut a deal and keep the lights on if you read the wall street journal, the democrats are saying they have the votes, they have the votes to make sure the government gets shut down. Ibms revenues rose for the first time in 23 quarters. Well tell you whats weighing on the shares this morning and panera is asking the fda to define what an egg is wow. I knew how hard it was to figure out whether it was the chicken or the egg, now were trying to figure out what an egg is. Well tell you why its friday, january 19, 2018. Squawk box starts right now. Live from new york where business never sleeps, this is squawk box. Good morning, everybody. Welcome back to squawk box on cnbc live from the Nasdaq Market site in times square im becky quick along with joe kernen and andrew ross sorkin. Lets look at the u. S. Equity futures. Yesterday the dow was down by just under 100 points. Off the lows of the session. That may not sound like much of a decline, but its the worst