This friday right now. Good morning, im dominic chu in for Brian Sullivan it is friday, december 13, 2019. Happy friday the 13th. After a record breaking day on wall street. The dow closing off the highs after hitting the 16th interday high, the s p coming off the second high record close it would go up another 11 points if if holds. Dow would go up by 112 and the nasdaq by 35 we are seeing some signs of life the 10year note yield just below 1. 89 . Twoyear yields 1. 64 . Around the world, asia following that lead on trade it was green across the board. The any kay up 2. 5 . Hang seng similar. Shanghai up nearly 2 and kospi up 1. 5 as well. In europe, it is green there as well stocks are surging on the heels of trade developments, what is happening with the uk. The german dax up, cac similar the ftse 1001. 5 up as well. The british pound spiking to the highest level since 2018 you can see here that spike higher in those particular currencies up 2 , 1. 3409 is what it will cost you to buy the british pound. The chinese yuan those reports of a phase one dr trade deal you can see that move. Take a look at what is happening with oil prices. We are seeing a move there as well on the upside on the heels of that optimism over trade wti crude up 1 here you can see 59. 70. That move higher on the reports of a phase one trade deal. Lets talk about what is happening this morning in the uk Prime Minister Boris Johnson taking a major victory last night. His party vowing to leave the European Union by january 31 is by his words no ifs, no buts, no maybe. And china and the u. S. Have reached a phase one in principal, pending President Trumps approval can we expect this kind of a deal is this pretty much done or is the chinese side reluctant to say anything on the record right now. I would say the chinese side is quit reluctant to say anything there has been very little reporting on this. The Foreign Ministry did comment only saying a deal did agree to being beneficial i was speaking to a source close to the trade talks he said that the reason why the leaders are being so hesitate is because of the demand for large purchases and those hard targets. The concern is that the hard targets could hem in the chinese to eventually get into conflict with its other trading partners. It was described to me as a reallocation and fears that it could end up with several challenges of the wto. There is also concern that trump could change his mind because of u. S. Politics as the Campaign Continues to grow in momentum. That could mean that china could be stuck with large purchases of american product that it doesnt necessarily need another Sticking Point is the idea that we could agree in principal to some property issues as well how much does that line up to this round of negotiations and is there anything that could be measurable to the possible agreement . The intellectual property agreement seems not to be as high on the pry ority list in terms of concerns by the chinese. Theyve said before that they are willing to make some progress on the protections of intellectual Property Rights that will be something that they believe themselves will be important for them as they continue to innovate in the economy. Going forward, i think, what one of the main issues is mainly for the u. S. They wont see as much progress in structural changes for the chinese. That is a big concern for washington here, the concern is more about whether or not china would be stuck with those purchases and again be hit with tariffs by the United States. Live in beijing with the latest on that trade deal. For more Market Reaction joining us now from hong kong. We have Deutsche Bank and head of Research Michael spencer. Im troubled because i heard eunices report. There is no real commentary coming from the Chinese Government with regard to this deal is this another scenario where the markets have to tread a little more lightly around the possibility of an actual deal happening . It is concerning that almost a day after these first reports started to come out that the chinese still havent corroborated any of this i do think it is in both sides interest to get this done. There is enough Common Ground that u. S. Would agree not to raise tariffs not just through the weekend but through 2020 the chinese would like to lock President Trump into that agreement. So the uncertainty doesnt derail things. The u. S. Tariffs have been far and away the most important reason this region has been slowing down if these reports are correct, this is really positive news the absence of increases will reverse the slow down weve seen with that in mind, what exactly does the market see for them to really see as though there is a substantive reason to be more bullish and the prospects for possibly at least a move higher in some of those growth rates given the u. S. china negotiations. At this point, all we need is the chinese to say, yes, we need enough Common Ground that we will agree to the increase and make commitments on it for profit rights and more level Playing Field for a Foreign Investment and the u. S. On their side will at least not raise tariffs. The chinese always wanted some token tariff cuts. It sounds like this will be part of the agreement weve agreed to be close to wrapping this up for the next year or so michael, who has been winning the trade war . I say that tongue in cheek there is a notion that the u. S. Has been doing much Better Holding up against the economy and the chinese has been feeling it more than the u. S is there a scenario that perhaps china could see a pick up in their economy and perhaps the u. S. As well so i dont think either side has won. China has had to adjust policy in order to accommodate it has been an adjustment theyve made. Theyve not had to give up on the policy, the relatively tight credit policy. Weve seen a big fiscal stimulus here it has been, i would argue bad for both economies bad for Business Sentiment and bad for the u. S. Consumer who has paid for the tariffs it has been bad for the sector in china if tariffs have stopped going up that drag for both these economies has become less. If that comes down, that gets magnified. For both countries, this agreement, if it is corroborated, this provides the foundation for both to improve over the next 6 to 12 months and it will be more important whose exports to feed in have been even weaker. The rest of china desperately needs to agree at least to a stalemate for next year. Thank you for those thoughts on the u. S. china trade agreements lets turn now to the breaking news in the United Kingdom and Boris Johnsons brexit victory willem, take us through how big of a deal this was for the tories and conservatives some are calling this a landslide victory for Boris Johnson and the right winged side of the uk government. Frankly, this is the largest victory the conservatives have enjoyed for several decades. The worst for the labor party since the 1930s. In scotland, weve seen the party wipe the floor getting four fifths in that country. That could lead to a further cause to a second referendum for them trying to pass the withdraw agreement, thats the divorce deal with the eu by the end of january. Given the size of this majority, it doesnt look like Boris Johnson will face any major decision with that date. Im curious, there is a lot of talk about what will happen with Jeremy Corbyn and that status as the leader of the labor party. In the coming months, given what weve seen as large as it was. What we said overnight is that we will not be leading the party to the next election that vote will be five years from now giving us detail on that time line all put forward by the policies on that vote they supported them wholeheartedly his leadership was in negative leadership those who maintained or lost those seats say he was a real problem for them when he was out campaigning doortodoor thank you very much when we come back on the show, facebook under antitrust pressure as federal regulators look to probe the tech giant choppy trade and shares of oracle as you can see stock down by 2 . Later on, we are live in washington, d. C. Where just hours ago, House Democrats move te delay an impeachment vo Worldwide Exchange returns after this [ ] looking to simplify your skin care routine without sacrificing results . Try olay total effects. One dose provides more vitamin b3 than 50 cups of kale and improves 7 key areas of visibly healthy skin. Try olay total effects. Here, it all starts withello hi . How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. You can see there futures pointing to gains at the opening bell following a record day for the s p and nasdaq opening by 112 points at t the opening Bell Facebook finding itself under scrutiny to integrate instagram and whatsapp we did see a dip on headlines. The federal trade commission may reportedly seek a preliminary injunction against facebook the wall street journal is reporting due to concerns about how its apps Work Together and with rivals and if this violates antitrust laws Mark Zuckerberg did announce plans to integrate the messaging services towards a shift of a more private form of social networking allowing whatsapp and instagram and facebook messagin to Work Together earlier this week, we heard attorney general say he would hope to complete the investigations by early next year facebook futures closed down but slightly up this morning this is one of several investigations into facebook about antitrust concerns so the crux of this is that you put an injunction to keep them from putting all of these things together. To integrate them, yes. Why is it because at some point, the ftc decides to hypothetically break up facebook. Once they are emerged and encrypted, this is hard to pull it apart some say, they should have blocked the merge to begin with. Hind sight is 2020. At least instagram is relatively small. Compared to Everything Else in the past, that has grown at the same time. And may continue to do so is the concern for regulators mixed signals in big tech. A brexit drama pause why our next gstue say investors sigh of relief may only be short lived. Welcome back lets get a check on some of the big moves. Oracle and revenues hit forecast Cloud Services fail to offset in the Software Licensing business. Oracle founder and chairman says there are no plans to hire a new coceo following the death of mark herd in october adobes Fourth Quarter profits are higher however, the companys revenue out look is just shy of estimates. Still shares up 3 in the premarket trade broad comes Fourth Quarter earnings top forecasts but investors were disappointed in the growth in chip business. Those shares off by about 1 in the premarket still ahead, House Democrats opting to delay an Impeachment Vote until later on today. This morning, we are live in washington for the lesatt there as Worldwide Exchange returns after this danny let me get this straight. After a long day of hard work. You have to do more work . vo automatically sort your expenses and save over 40 hours a month. danny every day youre nearly fried to a crisp, professionally vo you earned it, were here to make sure you get it. Quickbooks. Backing you. A live shot of our nations capit capitol. The house moves to wait on the vote of articles impeachment to today. Tracie potts with the latest an interesting move, what does it mean . It means we still have to wait to see what the outcome is going to be. The democratic chair simply said weve been at this all day, lets come back fresh in the morning and vote the lack of case that they have, for them to come out here and defend this is the most ludicrous thing ive seen. After hours of debate, allday marathon no president is supposed to be a dictator in the United States the committee will stand to recess until tomorrow morning at 10 00 a. M. Postponing the articles of impeachment against President Trump until this morning this committee is more concerned about getting on tv in the morning than it was of finishing the job tonight. Two articles up for vote. Abuse of power, the president accused of withholding aid while the president asked ukraine to investigate joe biden. Trying to get them involved in our election. Thats wrong and obstruction of congress which republicans tried unsuccessfully to remove nonof your witnesses were able to establish any evidence the democratic image or almost assures the president will be impeached and tried in the senate he wants witnesses out there because he wants his side of the story told Senate Republicans may block all witnesses. They want this over quickly. We all know how it is going to end there is no chance the president is going to be removed his party vowing to save his job when impeachment lands in her hands. They are thinking if they can get a vote done today, we are looking toer a final vote next wednesday and the trial starting right after the new year if that time line does hold, what exactly can we expect today . Is there an expectation that will is a shock . Will we see a move by the democrats to move on those articles of impeachment. We are expecting a vote that was supposed to happen still a head scratcher as to why they didnt go late into the night. We are expecting a vote to happen later in the day. Are they going to come back and debate and push it back hours again. That drama unfolding. Live in washington with the latest hopes of phase one u. S. china trade deal. Hopes of one we break that down when Worldwide Exchange returns after this he hasnt changed. I started a tiny investment business, and over 27 years, grew it successfully to 36 billion dollars. Im tom steyer and i approve this message. Im running for president because unlike other candidates, i can go head to head with donald trump on the economy, and expose him fo what he is a fraud and a failure. Struggling to clean tough messes with wipes . Try mr. Clean magic eraser sheets. Just wet, squeeze and erase icky messes in microwaves and on stovetops for an amazing clean, get the power of mr. Clean magic eraser in disposable sheets. So servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Wall street goes risk on once again washington appearing to secure a phase one trade deal with china days before the deadline of december 15. This one nation conservative government has been given a powerful new mandate to get brexit done not just to get brexit done but to unite this country and to take it forward. That was uk Prime Minister Boris Johnson landing an historic general election victory as he turns his attention towards making brexit a reality. Facebook coming under fire again as the federal government weighs new steps over antitrust concerns a very busy Worldwide Exchange rolls on welcome back to cnbc im brian chu this morning for december 13, 2019. Stock futures are looking half way through the hour as you can see, green across the screen after a record breaking day yesterday. The dow closing off session highs after hitting the 16th interday record of midday trading. S p coming off the 27th record high close you can see we would go up by another 131 points if these gains hold into the start of the trading. On the bond market side, we are seeing a slight tick lower across the board the twoyear, 1. 647. And the 10year just shy of 1. 8 as well. In asian markets, the nikkei up 2. 5 the hang seng also up 2. 5 the shanghai up 1. 7 and kospi up 1. 5 in european trading, take a look at what is happening up 1. 5 . The cac in france up almost 1. 5. The ftse up 1. 5 as well check out whats happen with the british pound. Spiking to the highest level against the u. S. Dollar since may 2018 on course for the biggest oneday gain in two years. One of the biggest ever. You can see a lot of that happening on the heels of those election outcomes. Also rallying against the u. S. Dollar the most since december of last year remember this means the dollar is getting weaker. So again strengthen the chinese currency we are watching that play out as well west texas intermediate. Crude, you can see are up over 1 59. 82 there. Green across the screen for a lot of those we are following a number of developments around the world that are driving those markets including that big election victory by the uk Prime Minister Boris Johnson. Again, conservatives win there considering a sweeping majority in the house of commons expected to make an orderly exit to the union. One of johnsons top aids has reportedly said that it would introduce legislation before christmas. Speaking overnight, the Prime Minister vowed to make brexit happen by next month we will get brexit done on time by the 31st of january. No ifs, no buts, no maybe. Leaving the United Kingdom taking back control of our laws, borders, money, trade, immigration system delivering on the democratic mandate of the people. That is the United Kingdom. We are also watching the breaking news on a potential phase one trade deal with the u. S. And china when asked about the agreement, china saying overnight, it is committed to resolving issues but the deal must be mutually beneficial this comes after the Trump Administration recordedly reached a deal but President Trump must approve the deal overall and must scrap the 15 of tariffs on roughly 60 billion worth of chinese tariffs set to take place on sunday and would reduce existing tariffs on chinese goods by half. Also increasing the amount of u. S. Ag products by 51 billion as a part of this. Im joined by chief strategist of global investors. This is such a huge news day what exactly is the biggest driver in your mind given that weve seen brexit happen a possible phase one happen. Are all of these things going to eventually put a risk on our environment back in the market today will be a key risk on day. What youve had is two of the key risks to hanging on the markets to as much of 2019 being lifted today as we get to january, the key issue and as we get to q two maybe some of those can slightly return to the market so markets are at record highs if the uk election are the propel ants of it, how much more upside is possible and do we need to see to say okay, now i really do believe it a lot of this has been priced in on fairness of what can happen with the uk election. From here. I think the key thing is that you are looking for Global Growth recovery and key risks. Business confidence, Consumer Confidence that should push markets further. We have a continued flood of liquidity. That means for some parts of the world, equities are extremely expensive. For this continuation of a risk on environment, you will see a reallocation towards emerging markets and equities and a risk on trade for cyclicals as well in places like europe, does that also translate to places like the United Kingdom. Is the uk scenario now clear can brexit be delivered or is this a situation where this could take months or years for the overarching agreement done between the uk and the eu . You raise a Crucial Point here uk assets can do well. At some points, there will be concern to the market about really how much can Boris Johnson do to make sure we get the trade deal done within the space of 11 months we look at the last three years looking at the deal with not really much progress you have seen two major countries come to this space we do expect some concerns about a no deal brexit returning to the market Boris Johnson has such a large majority it is how important theyll take into the future negotiations here that is topic one u. S. china trade how optimistic should we be that this phase one deal leads to something bigger in terms of the overall agreement . I dont think we should be too optimistic i think we should be happy with what we have the key thing the market was looking for is that lifting of the december 15 tariffs hanging over Consumer Spending now that thats been lifted, thats great there are other things that will take much much longer to resolve. We are hoping we have almost a stalemate from here through to the elections and maybe in 2021 with whoever the president is either President Trump or somebody new, negotiations could proceed. I think the markets should be happy about it but not expect too much more. That brings us to the third topic, which is the economy. Globally and the United States the United States is holding up relatively well. The employment picture is good can the u. S. Economy still power the Global Economy will that mean the Global Economy in 2020 is due to a nice bit of rebound to justify some valuations weve seen we are seeing very clear signs of stablization having said that, i dont think it is the case we need the u. S. To power through the chinese economy will stabilize. We think the european economy is stabilizing. This will be enough to keep markets up the most important thing from here is Central Bank Liquidity we know there is little chance theyll raise rates in the for seeable future this really means for us to be fully invested in risk risk assets. Thank you for your thoughts looking at headlines with phillip mena with the latest happy friday happy friday to you a top democratic and republican lawmakers have reached a tentative deal on a government wide 1. 4 trillion spending deal to stave off a federal shut down next week but President Trump has yet to sign off on the plan. Former nba commissioner david stern suffered a brain hemorrhage and underwent surgery. Stern served as the nbas longest commissioner for exactly 30 years and has remained affiliated he has the title of commissioner amiretis players tweeting, praying for the commissioner an airport in lithuania made a Christmas Tree from items confe confess indicated items. The thing i see most there are scissors i dont know how many people are traveling with scissors. Whats up with that . A lot of people do i dont even run with them. Thank you. Coming up, the u. S. Government is weighing a potential crack down over facebook over some highprofile products what the increasing scrutiny could mean for the tech giant. Plus. Announcer todays big number 360 million thats how much forbes eimstates taylor swifts net worth to be making her one of the highest paid celebrities we weave security into their business. second man virtualize their operations. woman and build ai customer experiences. second woman we also keep them ready for the next big opportunity. Like 5g. Almost all of the fortune 500 partner with us. woman when it comes to digital transformation. Verizon keeps business ready. Wat t. Rowe price, hundreds of our experts go beyond the numbers to examine Investment Opportunities firsthand. Like a biotech firm that engineers a patients own cells to fight cancer. This is strategic investing. Because your investments deserve the full story. T. Rowe price. Invest with confidence. Thats a check on futures. We are just near the highs of the session for s p 500. If these gains hold, the s p would open up again. We are watching a developing story this morning out of facebook the federal trade commission is considering an injunction over behavior concerns center around facebooks many apps and how they interact with each other and with rivals. Joining me now to discuss this, head of Investment Research of global data. Lets talk about what that means. Is this as important as the stock move deictated yesterday. We did see a sharp move on the heels of those headlines it is one move in a series we expect to see during the course of 2020 in regulation against big tech this concerns data privacy, which is one of the biggest issues it could evoke antitrust laws. The big issue is that antitrust law is not in a fit state to regulate the internet industry antitrust looks after protecting consumers and legislation. They could argue there is no antitrust case they need to take a different angel. Lets talk about that different angel. How exactly does antitrust legislation or framework need to evolve to then look at big tech through the right lens so big tech has been as it relates to the internet has been essentially unregulated for a very long time since the internet was involved. Part of that to allow the regulation in the internet now the Biggest Companies in the world are basically internet companies. Regulators have to change the way they look at market. The advertising market, they need to look at control of data. Facebook doesnt just dominate in a traditional sense it dominates data. Facebook, like google, and other internet systems, they have developed an app that controls the users interface and Software Code on which that data runs all of that is on its own cloud. What that means is that innovation is discouraged because competitors cannot get hold of that and customers are probably pricing that data wrong because facebook is making super normal profits lets talk about that pricing. Is there a world now in which we have to look at the economics of data, what it is worth to me as a consumer or user to some of these big tech platforms the traditional penalty is a fine or, you know, or a remedy or a break up. I think neither of those will work facebook was fined by the ftc in july shares went up i dont think they will break up big tech because they need that to combat china with 5g, ai and blockchain and military. The key is breaking up control of data that facebook and google have one of the ways is suggested in a solid open Source Software which you decouple the data. So my data on facebook from the app. You allow the user to control where the data sits and who can access that data at the moment, if i leave facebook, i loose all my Friends Network and the data i have. And facebook still holds it. Really data is a human right at least in europe, we have legislation to legislate against that that means the consumer should be in charge of the data they have on facebook, be allowed to use it, to move it we could talk about this for hours and rest assured regulators will be talking about this for hours, days and weeks to come. Thank you for joining us this morning. Thanks, documem. Still ahead, a new warning by one bank about what a Democratic Victory could mean for the markets. Plus 2019 marking a dismall year for unicorn ipos why their struggles were a drop in the bucket. And later on today, a cnbc exclusive as Morgan Stanley chairman and ceo joins us on closing bell at 3 00 aisle in s. Prevagen. Healthier brain. Better life. Im part of a community of problem solvers. We make ideas grow. From an everyday solution. To one that can take on a bigger challenge. We are solving problems that improve lives. I spent two years alone and homeless. To one that can take on a bigger challenge. Announcer as americas veterans face challenges, dav is there. Man 1 my victory was finding the support to get back on my feet. Announcer dav helps veterans of every generation get the benefits theyve earned. Man 2 im a veteran. When i got out, i felt like nowhere was safe. Announcer so veterans can reach victories great and small. Man 2 my victory was finding the help i needed. Announcer support more victories for veterans. Go to dav. Org welcome back headlines you need in 60 seconds. Microsoft unveiling the next version of the gaming console called x box series x will feature more memory, higher resolution and more graphics expected to be released during Holiday Season next year Qantas Airlines has dealt boeing a blow granting airbus the deal it will go with the a 350 for flights from london to new york. Set to begin first half of 2023. Googles Parent Company has received a twomonth extension to respond to a lawsuit over executive misconduct theyll have until february to respond. It alleges the companys board of directors miss landled claims of Sexual Misconduct and other claims the stock market could see significant correction if a democrat takes office in 2020. A new warning from goldman sach likely overturning the 2017 trump tax cuts it has been a coutough year r companies trying to go public. Companies worth a billion or more are not fared well. The market overall has out performed this year. The Exchange Ticker fund is up 35 versus 25 against the s p 500. Joining me now, she manages the ipo etf. Easy to remember at this stage that is easy. The ipo market has been easy we expect that to continue because this has been a year route with headlines about great companies. Hyped companies that have yet to live up to their expectations theyve still managed to reduce popular concerns wework didnt get out the door other companies because of the way the markets have received these money losing unicorns have been pushed out to 2020. So we are going to face in 2020, air b b. Many have decided to get out to the regulator market, they may leave too much money on the table. Theyll try direct listings. Well see very interesting ways to try to get highly valued companies into the market. This is interesting youve brought up two big points youve been watching ipos a lot and for years. And no commentary on your age, you look great you have a seat change you are going direct listings and under guaranteed listing on ipo. You are talking investors wanting profitability or path to it that wasnt the case 20 or 30 years ago. I think the market now is more constitutional. I dont go to cocktail parties anymore where they are talking about stocks that was over a decade ago an underwritten ipo has to work for investors. If it is not working for investors and all about how the sell side can get the highest price, investors just walk away. They go on strike. It is really important when companies go public, they realize it is not about the first day of trading, it is about the long run that the stocks trade well. They reduce the earnings or expectations they have on the table for investors. What is the biggest concern that a Company Going public will have with the current environment. There is a big disconnect between how theyve been valued and what the Public Market is willing to sign in terms of valuation. They cannot look at it and think they can walk on the stage with that valuation thats the number one thing. Also to realize being private is a little different you have a board and structure that is different. The best Companies Know how to deal with that well be watching closely in 2020 managing the ipo etf ticker ipo. Futures gains, can you see as they hold into the opening bell. We are talking about the top yesterday. Record interday atone point. The s p 500 up as well nasdaq up by about 44. In european trade, very positive there on the heels of the uk election dax up 1. 5 . Cac up almost 1 the pound surging there. Can you see 1. 3391 that does it for Worldwide Exchange this morning squawk box picks up all this market coverage on the 13th right now. Good morning, the Trump Administration appearing to secure a phase one deal with china days before the deadline but china has been quiet so far. A landslide in the uk Boris Johnsons conservative Party Winning a decisive victory. And Impeachment Vote delayed late last night. Well tell what you potential outcomes could mean for the markets and your money it is friday, december 13, 2019. Squawk box begins right now. Good morning. Welcome to squawk box. We are live from the marketsite on time square take a look at the futures this morning. Surging after a record day yesterday. The dow close after hitting the 16th interday high s p 500 reporting 27th record close of the year. Dow futures indicated up by another 134. S p up by about 13 points and the nasdaq indicated up by 44 points this morning. On the idea if a trade deal is done, you could see some
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