Transcripts For CNBC Squawk On The Street 20240713

Negative year in five years. Plus, new highs in striking distance stocks set for what would be a muted open after another round of wall street records. And the shipping wars, amazon blocking sellers from using fedex ground for prime fedex does report tonight after the bell lets kick off with boeing, though now on track for four straight declines the Company Confirming it will suspend production of the max beginning in january as regulators make it clear they will take their time in approving the jets return to service. Boeing says the decision is driven by a number of factors including the extension of certification into next year southwest, jim, is delaying return until april now thats the second delay in two months. They cant get this right and throughout this, the thing that people talk about, speak to large Money Managers look i do, we cant move the move this to 400 this thing gets through, we cant. Well stand there and buy the stock. Not going to let it go under 300. We want every share we can get it is a matter of when not if. My problem with that is it is the it keeps getting pushed out. This stock was down 12 at one point last night and there came the buyers. These buys arevoracious and relentless, as if something fabulous is about to occur now, there isnt anything fabulous about to occur. But these people are afraid of something good happening so they just stick with it. Yes. They stick with it. The dividend is safe for now at least at current levels yes cash flow is going to be significantly impacted as we know what is even more amazing is the impact this will have on Overall Economic growth of the United States. It is the biggest the most important export we have, pork will replace it. Pork will replace boeing 737 max . Yes it will. Something has to somethings got to give. Backyard pig farms, forget about it. If we can raise enough. We can. Takes 48 months to make enough pigs we have enough pigs now for them, the fact that this matters is completely ridiculous. Boeing 737 max or the pork . The boeing versus pork. You cant help but bring up pork within two minutes. It is not guns and butter it is planes and pigs. Planes and wow thats good. Ive seen some estimates, macro impact on q1 gdp,. 3. Everybodys got some of the Companies Like spirit were spun off by boeing they were, like, companies that were boeing captive they cant make it up. Spirit aerosystems. We want to hear what larry culp has tosay over 1. 3 billion in terms of the hit . We know american is furious. American airlines. We know gary kelly is furious. He told us in october. Take a listen. Ive been very clear, were not happy about our situation. You know, we put we put our future in the hands of boeing and the max and were grounded of course that interview was the same one in which he sort of raised the idea maybe we start looking at other planes. Look, i think the reason why everyone thinks it is going to 400, you got to keep looking airbus doesnt have any planes available. No. Not for years. No. Southwest took some money already, but there is going to be more coming, i guess. A new negotiation about what theyre due from boeing. Thats why people are worried about the cash flow, is how much does boeing owe. Lets not forget, everybody is captive. There are just not enough planes being built. And ate lot of the thing, emire has a huge fleet of the gigantic boeing, airbus planes and airbus put a fortune in the gigantic planes and there is airports that can handle the emirates plane, the gigantic yeah. I dont know if i i asked for piano bar in that bar. They have some great d pianos are heavy, but that bar, it is like casa blanca during the movie. Those planes thats what airbus went wrong. They built the wrong plane, we cant get the 737 there are no planes. What a chance for the chinese. But, no. No too busy stealing our secrets. There is, i mean, you can if anybody that covers aviation knows the chinese have ambitions to have their they have a planemaker. They do five years behind. They havent been able to steal enough, appropriate. You talk about it with the execs, theyre all very theyre very, very careful not to use the terms that im using. Theyre just saying the joint ventures are offer unbelievable opportunities for the chinese and they havent pulled it off. Spend a lot of money building aircraft carriers, but, no, no planes so that this is just look at this stock. Honestly why is this stock under 300 . You buy it at 300 . Yes do you think it will get there . The buying power of funds that are in this stock, knowing that there is no real competition is incredible. And what happens as they tell me when they get this right what happens when the 737 is certified . Where does this stock go they have a a long time to get things going again, in terms of getting production back up. Why is the stock not below 300 because of all of the reasons youre pointing out. Right right. Hope springs eternal. It is a duopoly, we pointed that out, 150 times. We did it 151 times larry culp needs to be heard from larry culp, ceo of General Electric, ge, needs to be heard from. He has a better view of this. If youre out there, were happy to hear from you let me give him a jingle during the break. Do that. Ill bring up the stock market, aiming for more milestones the day after hitting all time highs, first record close for the dow since november s p had its 29th record close of the year, within striking distance of 3200 if the s p, jim, can get two more percentage points, were talking the best year since 97. That is incredible. 97 was the beginning of when we realized the internet was going to be the greatest thing on earth, we had a tremendous wind tell moment. Now, the other day were getting overbought, i have, david had a picture of these are these are upgrades. These are upgrades theyre just upgrades. Look at these will you look at this. These are upgrades. It is incredible. The tale of one city. The best of times, period. Should i be concerned about that thats my point there is too many upgrades. Really goldman sachs, which has done nothing. Oh, my god. I guess goldman. Today it is mike mayo, to 280. We upgrade goldman, why because goldman is now telling the truth about goldman. Which is . That theyre transparent. They have a lot of good things coming read that upgrade and i said there is nothing in that upgrade other than that goldman is going to have an Analyst Meeting and they didnt used to have Analyst Meetings nothing else in that upgrade you want to buy all that stocks outperform the s p this year substantially as have all the major is that a good you want truth . Read the unilever, read the unilever piece from unilever they used to be the old they did the they were all in the underdeveloped economies. Yes theyre getting crushed there. This is one of the stock stories of the day, this is an enormous company, of course. They are firm on eps, the sales talking about india not so good, and, i dont know, they say Southeast Asia i say this, i think procter in the developed countries is crushing it. A huge quarter with procter. If procter is down, might want to buy it. Unilever, im saying i have an upgrade of relatively new ceo still. Ive got so many positive things here, that i could throw this at you, david and you would be happy. I would be happy if you threw it at me you know what im calling it in a piece tonight this is the year of magical stock picking. I love a lot in there. Fantastic. Do some reps with that. Yeah, you could get some shoulder action. Micron, second consecutive day of upgrades. Another upgrade fatuous upgrade. Max out here. 737 max out oh there it goes. Sorry here is the micron upgrade dont it says dont worry about this quarter okay, thats great how about im grabbing an upgrade how about just close your eyes, david. I got lilly. Can you see this which one is the upgrade which one is the upgrade it is ridiculous. I got the lilly presentation on neumalin. Sales are flat thats diabetes. Biopharma. Which one see biohaven theyre all lilly. There is an Analyst Meeting and i got bricks on my shelf im trying to do homework. You ought to give it a shot. Really . Homework. Is your argument that sell side may be getting a little too thats my really . I just cant read one more upgrade on the micron piece. It is, like, this quarter is not going to be that good. What is going to happen when they report . Just it is just with seven points, upgrade after upgrade after upgrade. There is a viacom piece today that said using pt, price target. Thank you for that. Of 73. 73. Stocks 39. 75. I listened to david faber eviscerate i did not eviscerate anybody. I asked him a couple of questions. Thats part of the problem. And 73 price tag. There is no end to it. Quick take, safety and efficacy of loxo. Thats good. Loxo how about how about veggie cream cheese, though this thing is unbelievable how many positives we have were going to it is crazy it is good the guy left. Jim is not kidding. Were going to get to other upgrades of u. P. S. , j j, cramers mad dash, count down to the opening bell futures look good here a downgrade of lennar. Doesnt get the game plan. Squawk on the street back in a moment. Dont dgo away. Breaking news on Industrial Production Rick Santelli has that in chicago. Rick yes, our november read on Industrial Production is up 1. 1. That is solid. Better than the under 1 we were expecting. We did lose a tenth on a revision have minus six to minus. 7 utilization rates, 77. 3, that is subsequentially a plus as well pretty good numbers. Earlier we had good numbers, lets go to the charts lets go back to january of 2007 on Housing Starts this morning that number is the second best number in 12 years permits, how about we start in january 07 again. The best numbers since may of 2007 if you look at twoday chart of 10s, were within yesterdays range, right in the middle, actually we didnt get any sort of bump on the early data points because in many ways, it seems as though equities and the general state of less uncertainty due to bigger issues potentially getting resolved seems to be the driving force and both seem to be moving together if we open the chart up month to date on 10s, see what i mean, big sweeping arc and the top is around 190, the area you want to Pay Attention to carl, jim, david, back to you. All right, i will take it, thank you, Rick Santelli now to a mad dash, we count down to the opening bell. We have 14 minutes before we get started with trading here at the New York Stock Exchange. J j. It is now a defensive stock again. Hold to buy. Bear case, 24 billion in legal liability, of course talc and opiate, 6 per share the market is dramatically overstating the legal liability from both talc and from opiate the problem is that if there were a headline, that came out about some jury or somebody that ruled negatively on talc, you say why did i pay 143 . It is defensive until it is not. I think j j is a Great American company, that was part of the disclosure in the lawsuit, it came out that i actually sent an email saying could you please send me any information about the lawsuits from your Great American company and it was just it was disclosed. I think reuters questioned why i used the word great. Right i said, because it is aaa Balance Sheet, long, good i realized im being defensive about calling an American Company great . Im not saying make america great, im saying there is a great drug company but this is a great company. I do fear that the headline risk so why dont you wait until they lose a case, like a million cases. Politics. This is just warren. It is falling in the polls. Yes, it is. How does yes, this is it is an inverse chart of Elizabeth Warrens poll numbers. This is where she attacked this is where she attacked kupperman. Right right and people realize, wait a second, the guy is giving away every penny, he spent his life being charitable, but he is the guy she targets . I mean, i that was ill advised, david dont you think hes an unrelenting human being. Why doesnt she target people who dont give money away . Right it was a bridge too far and thats what i wouldnt necessarily connect it with lee as much as say the medicare plan. It is a simile. Push it back the third year push it push it back. Defensive these are the kinds of pieces i dont like what will happen is they will lose a case. Thats when the person should say buy. Not now. Okay. All right okay. Im just saying that the happy days are here again is exactly had it is not happy. Be careful im a little i am a little more circumspect boeing, j j, the upgrades. Boeing is up today, david, it is it is there is no kryptonite anywhere. Superman. Yes nothing to fear all right, we got a lot more squawk on the street. Stick around well count you down the onipeng bell next. Caterpillar right there. Yes is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. So wim searching for info on options trading, and look, it feels like im just wasting time. Wasted time is wasted opportunity. Exactly. Thats why Td Ameritrade designed a firstofitskind, personalized education center. See, you just oh, this is easy. Yeah, and thats oh, just what i need. Courses on options trading, webcasts, tutorials. Yeah. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well exactly. Well except now, youre binge learning. Oh, i like that. Thank you, i just came up with that. Youre funny. Learn fast with the Td Ameritrade education center. Call 8662967451 or visit tdameritrade. Com learn. Get started today, and for a limited time, get up to 800 when you open and fund an account. Thats 8662967451, or tdameritrade. Com learn. Market on pace for a fifth day of gains, and another record high for the s p and nasdaq. Investors look past the boeing news once again. Opening bell in eight minutes. Steyer im about to say two words that will make washington insiders very uncomfortable term limits. You and i both know we need term limits, that congress shouldnt be a lifetime appointment. But members of congress, and the corporations whove bought our democracy hate term limits. Too bad. Im tom steyer and i approve this message because the only way we get universal healthcare, address Climate Change and make our economy more fair is to change business as usual in washington. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. Busy Tuesday Morning tons of sell side research, largely positive if youre watching boeing today, the number to watch is 322. 50. Thats the number at which it ended 2018 so thats the point of which it would lose its gains for the year. The thing that keeps happening is just when you think something is it has gotten too bullish, the Company Called log me in just got acquired. Log me in we use that. Incredibly expensive company. It just got a bid. Tall grass energy. 86. 50 private equity. Thats crazy. Okay. If you say so. It is crazy where are all the buyers when the stock were dramatically lower. There is so much private equity money out there. There is so much equity money trying to find Something Like a boeing, where frankly you understand, there is a limit to how how many aircraft you can put in storage, they told you that from the beginning. Inventory needs to be managed. They told you that they know the schedule, they have to work around the schedule, they know they dont control the timing the regulators people are happy buying boeing. Know all of that they want to buy a Technology Company that some people think it is overvalued log me in gets a bid so many ways to win that the analysts feel like, you know what, i got to capitulate and be more positive. Thats what i think is happening. Capitulation by an analyst community, truly believe that this was go to be a bad year it turned out not to be. Yeah. Of course, we do have rosenblat backing up Credit Suisse on apple saying china sales were down 30 year on year in november rosenblat has a sale at 150 target. 150 target is indicative of someone trying to make a case. Maybe hes thinking two for one split. When you have been fighting this stock for 129 points, and all you do is reiterate what the other guy said the other day, which is that was a bad month. Tell me how december will be now that we have a trade agreement so i just find that maybe it causes people to trade around apple. No 150 price target, i think you might lose the right to be able to be taken seriously. Other big story is amazon temporarily blocking some Third Party Sellers from using fedex ground delivery for prime. That ban applies to shipments the company is trying to fulfill the promise of one day delivery during the holidays. Fedex said the decision affects a minuscule amount of its business. So vicious. Well find out more tonight when they report. When they report. They do very little business together we should point out. And theyre completely phasing it out. Third Party Sellers telling Third Party Sellers, but, again, thats amazon, right . Amazon wants control of it. Takes care of everything for the very often for many of the Third Party Sellers. Dont want you to be angry at amazon for third party seller. There is a piece again that amazon best idea using 2400. 2400 price target. I do think that Amazon Amazon has done nothing of late so down 1300 when the president assassinated over the postage stuff. But there is one you want to buy it got a lot of upside. I think very youny wh think what has a lof upside. Good quarter. Really . Yeah. Amazon web services is doing a remarkable job log me in. Im reading the log me in press release. Stock is 8605. I have not checked in on this. It is a 4. 3 billion deal. Thats what im talking about. For log me in and, again, it is it is elliott. It is elliott. It is elliott. Elliott is doing the deal their private equity arm so to speak. They call it they call it the ever green coast capital, 8605. It is grate compaa great com. Do you use the proiduct a day before media reports speculated. But 16 time 16 times earnings. It wasnt expensive. There are so Many Companies and so much money chasing very few stocks, stopped having the wi willynilly, but wework put an end to the idea, how much more money can you lose it does have the 45 day go shop, typical with these private equity type deals. Elliott and log me in, i know we got to talk about stock was higher in february. Yeah. Came down a lot they scooped up. There is the opening bell as jim pointed out earlier, caterpillar here today, celebrating the 90th listing anniversary. Jim wearing the cap. Chicago now people think, what is playing in peoria well, theyre located in chicago. Yes they were in peoria, though. At the nasdaq, procure a. M. , Exchange Traded product issuer how will cat be affected by phase one signing . I think caterpillar, jim, such a different ceo, told me at lunch that you should be focus on oil and gas more than china oil and gas is actually more important than china talking about 5 , 6 they tried to diversify, they saw a lot of negativity come and in the meantime, the stock traded down to 116, 117. It has been pretty much traded up since then. It is much more like emerson, kind of a story of, you know what, if china starts growing again, then theyll do well. Fitch, i think did up their forecast for growth in china back to above 6. Got the baltic freight starting to do better. We have free port doing better there is a big theory that china as we stop fighting china, china will get better. I agree with that. But i do think that caterpillar is much more a function of the fact that they diversified a way and jim will be stood there and kept buying back shares, onethird, 120, 115, buy, buy, buy, good dividend thats changed the episodic nature of caterpillar, which bought at the high and did nothing he just has been in there, look at catcaterpillar, it acts look premium growth stock three month rolling sales have stabilized after having rough patch in the middle of the year premium, think about it, the dollar, the dollar has been so manipulated, everyone else taking money away, doing so well, lowering and debasing currency against cat, it still wins it is the best manufacturer and the best manufacturer wins. Back to log me, i read ahead, Francisco Partners is partnered with elliott Francisco Partners is the lead in this log me in deal they are we just got word of about ten minutes ago or so. 8605 a share 4. 3 billion Francisco Partners and elliott together. This is a company that had people thought it lost the way Connectivity Company and they get a deal so if you were buying a this thing all the way down they didnt get their high. Interesting. But, still you could have look where you could have bought it at. Thats true a number of press reports, about a potential sale and stock moved up tha 25 premium. You can see the move up. Do you not feel the excesses, bullishness that just cant miss and thats usually not equity has been somewhat still somewhat cautious there is there has been a little bit of a blip in the financing market, private equity, is deals out there that i heard about tall grass energy. A little bit of trouble in terms of large financing if needed had i dont want to overstate it, but a little bit there pe looking for trying to still look for things are not cheap. They need billion dollar deals. Things are not cheap. I keep coming back to the tall grass. Very often many years without would you please acknowledge me on the tall grass. Where are we going on tall grass . It completed they got a bid. They bought they got the rest of the bid was they bought the rest of the company. Got it. Map there wyoming, has the rex line from ohio to wyoming and then to kushing. You have to focus on that. I should focus on that . Blackstone, heres what they get. Express natural gas runs from ohio back to the midwest, east from the rockies, the pony express, crude oil from colorado, in wyoming to kushing. This is done by blackstone im saying, again, this is we got to put money to work lets throw 3 billion in tall grass energy, even though i dont see a single pipe worth not a believer . No. Okay. Tends to do fairly good deals. Not always, but i dont like i dont care for wyoming, i dont like the pipeline deal and i dont want another pipe for kushing got all those already. You were here, sitting here for many years talking about the lack of pipelines. Then we have too many pipes. How did the time go by that all the everybody listened to the show cramer says we got to Start Building a lot of pipes. Thats the way it works. I understand. A lot goes on in that mind, most of us dont want to know half of it. Money to burn. Come on a week where the journal did the piece on shale investment in the permian and elsewhere, it is dragging down nonresidential fixed investment overall for the economy. It is lets remember that when the rigs, even though the rig count is down dramatically, the rigs are much more prolific the rigs are more focund we have we need to have gigantic Port Infrastructure built out to handle all the oil we have to ship. You get that area where sempra is sending stuff cameron, free port, lng factories, lng, like you wouldnt believe, greatest works programs in america. Who talks about it they are enormous Infrastructure Projects that have been financed to the tune of tens of billions when you add them all up. Ge has been building them mcdermott, not that great a company. Beckde beckdell biggest jobs programs in america. We dont talk about it perhaps enough or explain it sometimes you need to take pictures of this stuff aerial photos of these enormous terminals, we call them trains. Im going to yes, called trains im going to take a bottle of no, im going to bang that lng, launch one of of the lngs. Nice. I am. You want me to do korbel . Sure. Champagne, direct from flint, michigan like that . Sure. Im not a champagne fan. So crystal. I want to come back to the court case, important one taking place up on pearl street here. Theyre not Getting Started today in the states versus tmobile and sprint until about noon the judge will start then. Youre going to have one witness and then charlie ergen, founder and ceo of dish, chairman of dish, will take the stand. Gee, i wonder what hes going to say, yes, i think were going to be a strong wireless nationwide competitor thats what one would imagine. There are cases where attorneys general from states have come in and blocked yes, there was somebody who sent you an email, when i said i was unaware of when the doj had agreed to a deal, and stated ags had come after one but there was a valero deal years ago. California blocked. Yeah. Pretty good. In this case, jim, i think people in the courtroom and i have not yet been able to attend, but people tell me they went in with the expectation that the judge would be perhaps sympathetic, certainly stto the states it could be an easy case 4 goes to 3, typical metrics to measure competition all in favor of saying you cant allow that but he has certainly taken his time in wanting to hear while the states made an adequate go of making their case, im told, listen, the judge seemed open to as he should, of course, listening to the arguments from tmobile and sprint that rebut the case that 4 to 3 will be anticompetitive and is going to cost consumers more money. You did have sprint interestingly talking about their plan b, saying if this deal doesnt happen, plan b is really to become a regional carrier, focusing on 41 dense urban markets that cover 78 of the u. S. Population. And it is still being studied, but thats the sort of the idea they want to that sprint is putting out there. Hey, you dont let us go through, were not going to be the competitor that you think we are. While we do have 2. 5 gig spectrum, we dont have enough adequate coverage, we have a lack of free cash flow, in terms of Balance Sheet capacity to truly take this nationwide and so sprint is making it clear, they wont be able to compete as a nationwide 5g carrier. And so it will be interesting. So, in other words, what youre saying, david, is youre going to get three either way . Thats what sprint would have you believe. Right. That, you know, while marcella came to the company in 14, sort of stabilized things, that their buildout plan, this nontraditional approach they took in terms of dense fiction of the 2. 5 spectrum using small cells and these other radios that it didnt really work didnt work as well as they thought. Didnt create the network they hoped it would where they could really add a lot of capacity and a lot of customers and so they are saying, yeah, you let us go, you break this thing up, we end up with a lot of churn, not enough cash flow, and an inability to compete nationwide so, yes, jim, that is the argument theyre making. Where will the judge come down on their viability as a competitor after, if in fact he says 4 to 3 is not something i can allow . I dont know geez. A lot of if he says that. We should be camping out. Thats probably the Biggest Court Case interesting one and, again, investors at dish will be watching to hear mr. Ergen, if he provides any additional detail. I saw him at goldman saks, but he hasnt offered a great deal in terms of his plan. They can grill him. They can. Ive got to tell you, im following this one because of the 5g i really have been convinced by john legere, of course, tmobile moving on, that we will not be able to have credible 5g competitor without that merger i actually believe it. You believe it . I do believe it. You may be right. And the chinese are ahead of us in 5g like splitting it when the russians were ahead of us. It is. Very similar we would have president kennedy, talking about, remember, president kennedy said im aware we got to get to the moon, yeah im saying like seven years, that speech. Not because it is easy, but because it is hard netflix is getting mileage out of this 8k, 90 of subs from overseas, the debate continues to how profitable the new subs are. It is important because almost every one of the surveys that was negative was involving domestic that may be a false way to look at netflix ive been on the fence about netflix because ive been reading those stories domestic peek i said im using the wrong numbers. This is very positive. Im not ready to be converted like i was with tesla. Now a big tesla bull but this was positive. Yeah. Tesla, that thing has become a monster. You want to lets check in on tesla now. Down a little today. Speaking of space, 381, that will be a high for the past 12 months thats a your valero thing was the ftc. The ftc. Yes not the doj. Okay. All right. I sent it to you so you would remember. I know you did. I think that tesla has been one of those stocks this period where it levitates and netflix, that was just a dramatic change in how we should value netflix. Very important six, seven more buck and all time high. When is the last time we said tesla, all time high. What a year look at that thing. Thats netflix. Sorry. People are saying tesla will be there are people who are looking for big profit in 2020 many people by profit in 2021. No one heard from elon musk. It is smart, hes not tweet iin. The chinese gigafactory. Hes got so much go on, that guy. The one in nevada starting to impact regional employment i saw fed charts about employment near reno. Incredible. Few more charging stations tesla and solar city are together hes got spacex, neurolink dont forget about that one, they will plant stuff in your brain. My wife is buying the tiles the tiles are cheaper and theyre guaranteed and give you power. Hyperlink, other thing i have the power. You can get the power, shingles, roof shingles and that goes to your power charging station, in your garage, which then allows you to power your stuff all over the place. I got the power. You got the power i got the power. Dont fight the power. No. The x, the gold wing, cools i mean, i am so darn cool. Yeah, we used to have a saying, youre as cool as i wont say it. To bob pisani on the heels of what was an opening high for the s p. Youre all cool in my book. 2 to 1 advancing to declining stocks not as strong as yesterday good open overall, new highs remember, boeing weighing on the dow, not as much as yesterday. Down 3 points. We got goldman, we got johnson johnson, caterpillar all helping here want to look through the sectors here we have a mini rally going on in china stocks, biggest one i watched, broadest ownership of china stocks here. Were sitting at eight month high, up last several days in a row. Emerging markets recently, the dollar has been weak, they have been advancing as well keep an eye on these neglected groups here. Semis strong, of course. We had another upgrade of micron over there at web bush securities thats helping energy, oil is over 60 again today. We dont pay much attention to that but thats it. Consumer staples, a little weakness here on some of the food stocks. Unilever, talked about this earlier, weak over in europe just doesnt look like a big mac row issue with them. They saw some weakness south asia, north america. They lowered their Sales Guidance to the lower end of 3 to 5 range. Unilever down big. Here in the u. S. , mixed, conagra, general mills, on the flat side. I dont think there is a big mac row call here in the food stocks wasnt to focus on why were at new highs again. It is important to review what i call the four horse men that has gotten us to new highs the fed neutral, number one. The u. S. Economy, recession chances have faded, rather notably in the last few months lets call it a truce on the trade deal i want to focus on this, though, the global growth. We have been very carefully looking for signs of bottoming global growth. Industrial production today pretty good. Some china numbers recently pretty good. The boeing announcement is troublesome, a lot of emails about people making comments, we might have an 0. 3 impact on the gdp, the United States as well as elsewhere thats a very large number and a lot of people are concerned about that there is boeing right now, impact there, 323. 322. 50 is where they ended the year, 2018 were essentially flat on the year saffron weak here, deal with General Electric, they make the engines for the plane. There is going to be some kind of cash flow hit to General Electric Spirit Aerosystems as well, theyre boeings biggest supplier, out of kansas, they make the max fuselage. Thats been down the last couple of days. Senior plc, in england, they ma make a wide variety of parts for the company as well. Thats getting hit now after being flat yesterday so this is rippling through the Global Supply chain and it shows you that a little bit of events that are unexpected can sort of impact that global bottoming story. Want to pay close attention to this and how it develops back to you. Thank you very much meanwhile, Pete Buttigieg getting big backing for his spre president ial bid reed hastings, reportedly hosted a glitzy fundraiser for mayor pete ini palo alto last night. He received donations from 39 billionaires in the first 11 months of 2019 wow. Tutor jones mentioned, hes my man i wonder what Elizabeth Warren is thinking. Driven off that would have sided with her otherwise. Has she alienated a group of people who may have been natural supporters you think there may have been a lof a lot of natural supporters for her among the wealthy americans . I do. I think many billionaires were willing to understand the double tax system, where taxing the corporate level and the personal level and a vat tax as well. I think when she decided to go after i know you that the Lee Cooperman to me is more important than to you, but when she decided to go after charitable billionaires, i think that people felt, you know what, im not immunized one bit. Ive done my whole life, ive tried to do the right thing and still get attacked and the billionaire tax is something that there has been a lot of research that says it doesnt raise a lot of money one thing it does do is alienate the people who might have been with her instead of mayor pete. Also, maybe being a little insincere about why he teared up on the air, not about having to pay the money. Thats what she tried to imply. True. Right i think that cant really do what she did and expect that there will be millionaires who want to go for her because there you dont want she made a lot of people afraid. Thats what i talked about last night on mad money. It doesnt do good to have people afraid of you good to have People United with you and under common with you im not giving her tips for her campaign, but she scared people and thats why i think other people are flocking to other candidates dont forget bernie sanders, by the way his support stays right here. It doesnt go anywhere, very good point. All young people. Well, i dont know. They text a lot. Be sure to check out our podcast by the way listen to the opening bell hour, squawk on the street, wherever you listen to podcasts a lot out there, but ours is the best dow is up 16 its been reported that theres a cyberattack on business every 39 seconds. Ouch. I dont even want to think about it. Comcast business has a solution. We go beyond fast with a cloudbased Security System that automatically updates, so you always have the latest protection. Phishing. Malware. Risky sites. It can help block all of that. Its one less thing for us to worry about. 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Appointments available now. Whats on mad tonight . One of my favorites david ricks. One of the most consumer friendly people. Indiana. Probably feels bad because of that beat down they suffered last night at the hands of the saints based in indiana. Got it. I was watching drew brees, that guy can throw. But see, my guy is from indiana. Oh, well. Frank ricks. Go buffalo. Wrong team there, david. Go buffalo. Andrew luck, no longer the quarterback. Im aware of mr. Luck. Right. Like a he did higher than that. Was he higher Richard Sherman had a 4. 0. Mad money at 6 00 p. M. No way. Fmefeorr d chair Alan Greenspan. The dow is up 8. Johnsbut were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Cme group vo than just the business theryou came for. More whether thats getting a taste of where you are, or bringing some of that flavor back home. Thats room for possibility. Lets get to living is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Good Tuesday Morning welcome back to squawk on the street. Im carl kwipts with david faber, mike santoli in for sara eisen at post nine of the New York Stock Exchange. Did get a record high for the s p at the open. Looking for a fifth day of gains as boeing continues to be somewhat of a headwind for the dow. Our road map begins with their big suspension, the Company Announcing a production halt of the max with the stock nearing negative territory for the year. Plus an exclusive with former fed chair Alan Greenspan and get his thoughts on the trade war, record rally and more. Amazon as fedex fight preventing sellers from using fedex ground for prime shipments as the shipping wars heat up. Boeing, on track for what would be a fourth straight day of losses after the company confirmed it will suspend the production of the grounded 737 max beginning in january phil lebeau is here, something were always excited about, but youre following this story wherever you are and this is a significant development. The question becomes they made the announcement, we talked yesterday it was expected. Now that theyve done it, how long does this last . Nobody is saying for sure, so the general feeling is, when you talk with people within boeing, talk with people at the faa who are talking with the folks at boeing, most analysts also expect it will be most of the First Quarter. Thats not a definitive, just the expectation. As of right now no layoffs are planned. How do you look at the First Quarter . What are the times frames. Recertification, early to mid february, deliveries might resume mid to late february. Then you have production in mid to late march. What about the airlines that have the max in the fleet when will those go back into service. Southwest joined american pushing it back into april, back into the southwest schedule on april 14th, and as you take a look at shares of boeing the big question is, how much will the cash burn be impacted by the change in production now that they are not going to be building at all starting in january. Jpmorgan bring doug the price target from 370 to 400, in that note the analyst said theyre still going to have a cash burn in his estimate of 1 billion a month. Its not like they turned off the costs completely they have brought them down, and they will for the First Quarter. Its still there. 2 billion currently per month. The estimate from the analyst, yes. How quick so given that timeline, when do you think the first passenger flight would happen well, maybe april again this is all contingent on everything moving and having recertification in mid early to mid february. In line with what southwest said. Basically thats what airlines have been doing, if we get certification by mid february, its likely that, you know, well pov it back into early april. United march 4th, dont be surprised if we hear from them if not today in the next couple days. What about the Employee Base here, not laying them off, theyre furloughing them theyre not furloughing. Theyre continuing to pay them. The important thing is, thats not a rocksolid guarantee. That is the companys intention as of now. I think theyre earnest in that intention that they dont plan to lets say this thing continues to get pushed up and the Second Quarter where there may not be production, then they might have to reassess the situation. As of right now they are not planning on any layoffses . Did that surprise you Second Quarter, in the past i would say yes it would surprise me, now given the way the timeline keeps getting moved back further and further i would not be surprised phil, always appreciate your incredible coverage. Nice to see you here. Fun to be here. Phil lebeau. What does the struggle of the biggest dow component mean for the overall economy . Steve liesman is back at hq with a look at those numbers. Hey, steve. Good morning. Boeings decision to halt production of the 737 max is big enough to move the needle on overall u. S. Economic growth, at least for a quarter, and maybe more it could have a large impact on First Quarter Gross Domestic Product than last years government shutdown. We asked a bunch of economists at jpmorgan 0 to 5, oxford 0. 5 this is for the First Quarter. And thats what it would mean for that quarter jpmorgan writes, it should have a noticeable effect on First Quarter growth, however u. S. Annual economic output is over 20 trillion. Challenges affecting one company like boeing rarely leave a large input on the overall contour of the expansion. The First Quarter outlook was weak forecasts before the boeing shutdown to be the low point of the current slowdown now it could come in closer to 1 for that First Quarter of 2020 now when production comes back, its going to start to add to gdp and they will make up lost ground the question, how long the stoppage lasts boeing as phil was talking about, now more than 400 737 maxes in inventory imagine them drawing down inventory before making new planes the rebound to growth may not show up until later in 2020. I will be talking with new york fed president John Williams about the 2020 outlook for the economy and fed along with the repo market, much in question, at this time tomorrow. Carl all right steve, wish we had more time to chat but thank you for that. Steve liesman. Stock still aiming for their fifth day of gains s p did hit a record high. Joining us this morning, jpmorgans chair of Global Research joyce chang and brian bellski. Great to see the two of you. Good morning. Great to be here. If right at jpmorgan, the max is half a point, what sort of offset the benefit we thought we were going to get from usmca and phase one . I think you will see some of the u. S. Exceptionalism fading and we have u. S. Growth next year at 1. 7 , compared to 2. 3 this year. That fiscal support is coming off. The question we have is, is there really better value in some of the International Markets as we look into 2020. You did say you advised favoring em, europe and japan . Yeah. Over the United States i mean were still pretty constructive on u. S. Equities, at 3400 at the end of the year, but emerging markets was really the laggard this year and with more stability in china, we think the valuations are more attractive and were still watching some of the technical factors in the market as well. Brian from your view, how are we set up here its going to be a great calendar year in terms of returns on a flat Earnings Base coming after a pretty poor year on a strong earnings gain in 2018 so going into next year, its been common to say well, earnings should pick up single digits, maybe the market does the same we didnt get that kind of synchronicity the past couple years. Its one of the things you think, what is going on given the fact that you want to be a fundamental investor and per your point earnings were great last year, but why because of the tax cuts and people bought back stock this year was a confluence of events we write about where we talk theres analysis paralysis thats what caught investors behind the 8 ball this year with respect to trying to time the market with macro factors like too negative based on the yield curve and missed the forest through the trees. I dont think going forward, i dont think its so much a point of american excellence, i think its about american stability on a fundamental perspective. Take a look at the standard deviation of Earnings Growth its exceedingly stable relative to the rest of the world i know joyces call and respect the call and i think its a great call, but it was the same call last year, right. If you were overweighting emerging markets, you dramatically underperformed this year on a Global Portfolio one of the things people want to think about, mike, probably going to Start Talking about this, when the calendar turns january 1, the funds and global funds are going to force your portfolio to buy u. S. Stocks because they are underweight i think youre going to have another lift off to begin the year. Yeah. The european broad european stock index just clicked to a 20year high, meaning it just eclipsed a high from 20 years ago. Do you think thats telling you the rest of the world is actually picking up or is it kind of a global liquidity push . I think the Fourth Quarter is actually the worst quarter for manufacturing. You should see a bit of an uplift, but its a modest uplift here i actually agree on the 3400 base case. For the u. S. , but i think that outside of the u. S. , you have better value one thing were actually more concerned about is that some of these systemic strategies are building up again, probably at the 75th percentile right now on u. S. Equities, so we do see in terms of their exposure. Fundamental investors we think are average, but we think the systemic strategies actually are building up again. Were a little bit more cautious on the u. S. Here given the valuations, although we have a constructive base case ahead for the it but emerging markets was the real laggard you know, even with more clarity in the uk, we dont see that as an opportunity, except for a few domestic, not the ftse 100. You mentioned technical factors . The technical factors, systemic trading on the repo trading theres a much more proactive approach by the fed. 250 billion injected, 640 bill in total when you look at the year end it would not shock me if you have some of the spikes on the last trading day again, and on the systemic strategy repo rate. In the rates and systemic strategy you get like little mini shocks that weve seen. I think thats become part of what is normal in the markets. Do you agree . I mean powell addressed this at length last week. It could be but i think the Bigger Picture is, whats going to be the longer term rate with respect to how were looking in terms of riskfree rates and premiums and what the 10year will do next year its clear the fed will not do anything next year until after the election theres been too much near term focus on the repo rate and its settled down quite a bit its difficult to make a call that something is going to happen in the last few days given the fact that its been a tough year on wall street in 2019 i think people will be on vacation i think the trend of the market will start kicking in the first couple weeks of 2020 when you say that the 10year yield, i assume you mean its not going anywhere i think the fed funds rate is not going anywhere the 10year yields could creep higher and you will see a stooerp yield curve which benefits our bullish case on financials, money setter banks which you talked about some of the banks hitting 2007 high, principally because its been a chase trade, right you talked about the last couple days how investors have been so under exposed financials and that kind of poses to the value trade. Wing think value and sickly kills you want to know what youre getting into and the value trade in the United States has a long ways to go. I would rather by value in the United States than try to apply value in emerging markets or europe. Finally, kaplan on the tape this morning, saying you can run a tighter labor force without risking inflation. Seems to be consensus on the committee. Do you think tlkd be a surprise on that in 2020 . I think the inflation and the growth expectations are pretty muted right now. If theres any surprise its one more ease. Thats not out of the question in the Second Quarter of the year we have to see what the fed review brings, but we are wondering whether theyre going to move to a more flexible inflation targeting where they actually try to overshoot. I think the First Quarter of the year as mike has pointed out is the weakest quarter. I do see value as well in looking at energy, materials, the industrials, similar to brian, but we are seeing growth still coming off in the u. S. And we are at record highs ten more years of the bull. Remember that. Ten more years of the bull. No rate moves. No rate moves next year. Thanks, guys. Good to see you both thanks. Great to be here. The latest numbers are out. For that we get to Rick Santelli hi, carl. October read on jolts is really solid. All todays data has been solid. 7 million, about 260,000 better than we were expecting and a revision last month to 7 million 32,000 last month is the only month in a long string, year and a half long that would comp to an under 7 million number, all the way back the march of last year. The reason i bring it up is that this number series, the opening and job openings and Labor Turnovers is like taxes in illinois it keeps pretty much going up. It did give the market a bit of a boost. We saw long and rates move a basis point or so. Thank you, mr. Santelli when we come back here, amazon fedex fight the latest in the shipping wars. Theyre heating up as we head into that final stretch of buying the Holiday Gifts and getting them to your house later, an exclusive with former fed chairman Alan Greenspan. Well talk about the trade war, the Global Economy, record run among stocks and a lot more. Theres a big show still ahead dont go anywhere. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. The esg or at least the focus on esg, record amounts of money pouring into socially responsible funds, but that is now attracting potentially greater scrutiny from the securities and Exchange Commission joining us is sec commissioner easter pierce. Nice to have you with us this morning. Thanks, david. We have been seeing, at least i think at some expressions from your concerns, in terms of trying to understand the metrics by which corporations will be measured, if i can put it simply, in terms of applying these esg standards, do we actually have standards we can really believe no, i think the first issue is we dont even know what esg means. I think defining that would be an important first step before trying to develop metrics. What do you think it means . I think it means Different Things to different people and its a way for people to signal that theyre trendy and theyre investing in a way thats consistent with those trends, but it also enables them to have a fair amount of discretion about what theyre doing when theyre investing using that label. So thats my concern un, people have been thinking about esg type issues for as long as theyve been investing because obviously it matters how a company treats its employees, how it treats the community in which it operates. Those kinds of things have always been important. Governance has always been important. And so the idea that these things are new i think is wrong. They have been incorporated by investment managers, Asset Managers and by companies for a long time and so im not even sure we need to try to define those things right well as we pointed out, of course, and as weve seen this year, a lot of money is moving into funds that at least have an overlay of esg what is the s. E. C. Looking at right now in terms of trying to help investors understand what the fund should be doing when they say they have an esg focus . Well, i think, again, theres nothing new here were looking at what a fund says to investors about what it does and making sure that what it says matches up with what it actually does. Thats really the fundamental role of the s. E. C. Is to make sure that if someone is taking your money to manage it for you, what the person is telling you is accurate about how the money is being managed, whether thats managing according to some kind of model or using an esg strategy you have to be up front with investors about what youre doing. Commissioner pierce, the usda certifies whats organic, there are standards they set out there and i guess producers have to abide by them if they want to call their product organic could something similar happen from esg from a similar agency again, i think given that esg encompasses so many Different Things, im not sure that you could come up with a clear standard even on Core Financial reporting issues, its really difficult across the diversity of companies to figure out how to compare from company to company, and thats why we have a the lot of work going on on core accounting standards thats where i think the s. E. C. Has more to say than it does on a nebulous category of esg standards. Right but there is, to be fair, an effort underway to try to measure these things within peer groups and even across the board. Im aware of it certainly and i assume you are as well yeah. You raise a good point and those efforts are Fine Industries may want to sit down with their investors and understand what it is the investors want from them and then come up with some metrics that work for those particular industries and thats fine i think those private sector efforts can be valuable and theyre going on, but i dont know that we at the s. E. C. Need to be involved in that we have a touch stone wisconshi materiality and that applies a range of issues that Companies Deal with. We expect companies to be disclosing the risks that they face, the material risks they face and sometimes those are in the area that some people might categorize as esg, but there already are rules on the books that have them disclosing those things. Right but i think its fair to say or at least it certainly seems of the expectation, this is not going anywhere its only going to get more popular, it would seem, as an approach youve got an entire generation that seems much more focused on sort of all the Different Things that a corporation does, not just in terms of delivering shareholder value. Would you agree with that and would you think were going to have to evolve in some way to be able to adequately measure esg well, again, you know, i think there are efforts going on to measure individual components of what people call esg and thats fine. But in terms of evolving, you know, having corporations accountable to one group and that is shareholders, is a really valuable way to make sure that they are doing the most that they can do for society and so i dont think trying to give corporations and their managers multiple targets to multiple audiences to please is really a very wise idea i think it could end up hurting the very objectives that people who focus a lot on esg purport to care about. How would that be the case . Well, so weve seen that when when companies do well, when they contribute to the economy and the economy does well, people start to care more about things like the environment. We can actually dot best by having good, strong, Economic Growth the way to do that is to have companies focus on their longterm financial value and thats what a shareholder focus cares about, is the longterm financial value of the company then people can take the their earnings from those and do with it whatever they want but i think the really valuable point is to make sure that Companies Know what their objective is, that is to increaser that longterm financial value. From listening to you then, you certainly it appears to me you dont you would rather there is no esg at all absolutely not. I think people should be able to invest their money in any way they choose. Im the last person to want to tell people you should or shouldnt care about these particular things when you invest, but i think when i look at my role as a securities regulator, its to get investors information that is material to their longterm financial investing decisions. Investors care about lots of other things the things i care about are probably not the same things you care about and so the notion that we can come together and we can get our regulator to focus on amore fis set, i think were fooling ourselves. I think were going to continue this conversation and debate this is not going anywhere appreciate your time. Thank you so much as were talking the president tweeting this morning, would be so great if the fed would further lower Interest Rates and quantitative ease. The dollar is very strong against other currencies and theres almost no inflation. This is the time to do it. Exports would zoom dollar has come off of the highs, down for maybe ten of the last 12 days also the fed is adding to its Balance Sheet about 60 billion more growth can always be faster if youre bracing for a sub2 gdp, you want reasons why maybe it could have been quicker as we go to a break, the f. A. A. N. G. Stocks, tech being the best performing sector of the year by far. Only apple among those is in Tech Communications services has also outperformed the s p this year colin is live from washington with a look at whats on the show good morning to you coming up well give you an exclusive look inside those blue amazon vans and how they make the companys free oneday shipping possible. We also talked to the owner of one of those companies and we hear what it takes to get your package to your house on time. Im frank colin. Thats coming up after the break. Im happy to give you the tour, i love doing it. Hey jay. Jay . Charlotte oh hi. He helped me set up my watch lists. Oh, hes terrific. Excellent tennis player. Byebye. I recognize that voice. Annie . Yeah she helped me find the right bonds for my income strategy. Youre very popular around here. Theres a birthday going on. Karl he took care of my 401k rollover. Wow, you call a lot. Yeah, well its my money were talking about here. Joining us for karaoke later . Ah, id love to, but people get really emotional when i sing. Help from a team that will exceed your expectations. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. It is time now for our etf spotlight. Taking a look at the semiconductors etf, the ticker smh. It is up about 0. 4 . Semis coming off another fresh record high. Looking back over the past decade, this group significantly outperforming the nasdaq 100 and the s p 500 as well. You see there the semiconductors etf over more than 400 , focusing on one of the components, micron pulling back after Early Morning gains. Wedbush upgrading the chipmaker. Micron up half a percent, the firm saying upgrading noting improving pricing environment for chips. Up twothirds of a percent, below alltime highs amazon is pushing for free oneday delivery for the first time this Holiday Season this is the Company Announced it is blocking sellers from using fedex ground for their prime delivers deliveries with the heating wars heating up. Frank colin is live from washington and has more on the story. Frank . Good morning to you thats just the latest part of this battle that amazon has been waging against traditional shippers and in their arsenal the blue and branded amazon delivery vans has only grown 150 , that fleet globally, since june of 2018 here in seattle, the seattle area, we got an exclusive look at how those blue vans that are operated by independent owners that partner with amazon make free oneday happen. You know, we saw the drivers also the Company Built 40 more of those in 2019, part of an estimated 3 billion spend on making that free oneday delivery happen. We talked to one of the owners, a former army captain loves owning his own business but it is a challenge making free one day happen. With any challenge that you have, as long as you provide the right equipment, the right task, purpose, mindset, anything is achievable my drivers achieve it and provide feedback if something is not working i work with my partner amazon. Reporter these drivers also drive innovation you may have saw that driver taking a picture of a package dropped off, one of the new features for customers that amazon has these van drivers testing. The vans are an important part of amazons step up of its own Delivery Service you can see here, former its expected to outpace former partner fedex next year and as it continues to compete with others these vans are important, according to maria, a former top adviser to Ceo Jeff Bezos and the head of delivery experience. Historically weve worked with Large National carriers as well as regional Delivery Services and as our volume grew we saw the opportunity for more people to come and offer a great experience to our customers. Delivery Service Providers or dsvs are that important link in the chain. Reporter and free oneday shipping is seen as a growth driver for amazon. The number of americans that are prime users expected to increase by 5 in 2021. Could not be more timely, thanks lets get over to a cnbc news update at this hour. Hi, carl. Here is whats happening at this hour in an interview with the New York Times Rudy Giuliani says he provided the president with information that ambassador maria von know vich was impeding investigations and he provided details indicating that the president knew of his attempts Boris Johnson holding his first Cabinet Meeting following last weeks election victory. He has a majority to get his brexit withdraw bill through the house of commons by the end of january. Staying overseas a coal mine explosion killed 14 people in southwest china. Two people are still trapped underground. Seven people were lifted to safety after the accident. Underground gas concentration has delayed the rescue work. For the second time this month the eiffel tower has been forced to close because of the staff who operate it have gone on have strike its part of a longrunning national dispute over pension benefits that is our cnbc news update at this hour. Back to you. All right thank you. When we come back an exclusive with former fed chair Alan Greenspan, trade, the markets, Global Economy and more dow is up 33 s p 9531 dont go away. At fidelity, online u. S. Stocks and etfs are commissionfree. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk the president a few moments ago on twitter calling on the fed to cut rates more, tweeting there is almost no inflation this is the time to do it. Exports would zoom thats in the wake of a strong jobs number, phase one of china trade deal completed, record highs for stocks with us in a cnbc exclusive the former Federal Reserve chairman Alan Greenspan good to have you back. Good morning good morning to all of you. I wonder what you think about the president s push for the fed to add more stimulus repeat the question, im sorry. The question again, the president s tweet this morning, about the fed, asking them to cut rates and continue with easing, saying the dollar is too strong against other currencies and inflation is nonexistent, where is he wrong . Well, first of all, hes wrong on even discussing the issue. The Federal Reserve is a very professional outfit. They know more about how the economy functions, how it effects the money market and the Interest Rate structure far more than he does the best thing, as ive told my colleagues on numerous occasions, former colleagues i should say, on numerous occasions, that the best thing it could do is just disregard it i didnt hear this morning he made that the president made a statement. I dont im sure it was illadvised. Statements have changed over years now that we have social media to work with chair greenspan, talk about trade. Your reflections on what you thing this phase one deal with china will bring and the degree to which global trade may rebound in 2020, will it well, lets start off with what trade does. In a market economy, which Market Forces are prirmts and in many cases the only driving forces, economists over the generations have argued that maximum gdp youre going to get is in that state any forms of tariffs effectively reduce that, they distort the economy, in effect by taxing individuals countries. When we, for example, increase our tariffs, the people who are paying the price are americans it makes no sense what so ever to be moving further and so the answer to your question, if schedule one on what theyre doing now merely ehim natted all the tariffs between china and the United States, that would be a positive good for china, the u. S. , and the rest of the world. Do you believe that tariffs, as we have them now, and the potential of bringing them down over the next year, lets say, is going to be an effective tool to get them to make structural changes that weve long sought well, whom, the chinese yes. Well the chinese have been doing very peculiar things over the years. I think they are learning that its not to their selfinterest, but i wouldnt think that endeavoring to try to force them to alter by creating trade wars is to their benefit. There are no winners in a trade war. Its just a question of who loses the least. In this particular case its to the clear to me whether the u. S. Or china is being hurt more by what both of them are doing. If they could pull away and get a complete elimination of tariffs, that would be to everybodys advantage. Chairman greenspan, even beyond the tariffs on china, we also see other efforts to kind of disengage from global trade you have the uk leaving the European Union and stirrings elsewhere about people questioning the value of globalization. What does that mean, do you think, for the outlook for world growth do we have to rethink some of these aspects of globalization i think its unequivocally negative brexit is basically an unwinding of what essentially has been over the decades a major improvement in the structure of International Finance and trade. Brexit was the first populist related endeavor which has created nothing but chaos and those who believe its going to make some positive advantage by getting the United Kingdom out of the eu trading system are just making a mistake. Well, chairman greenspan, i dont know if you got the memo, but, you know, those who believe in globalization dont seem to be in favor right now. If this continues, do you expect that overall we can expect a decline in the growth rate worldwide in terms of the economies . Well, it depends on the forces involved. The basic problem that is exissing both in the United States and pretty much across the globe is that the populations are aging because medical is improving so significantly and that is causing people to retire much later than they ordinarily would and the consequence of that is obviously the build up of various pressures, social benefits generally as it would be called and the data unequivocally say that it rises in those social benefits are crowding out gross domestic savings worldwide without question and that in turn is effecting gross domestic investment which is a critical factor determining productivity, that is that factor which standards of living depend on most chair greenspan, im looking back at some comments you gave us in early 18, 2018, you said the outlook for the budget deficit long term is, quote, downright scary. You said it inevitably engenders some acceleration of money supply and would lead us into stagnation which you said actually and then stagflation, which feels better than stagnation, you said. Has there been anything since then thats changed your view on that i regret to say no. Whats happening is as the deficits widening, we have a trillion dollar deficit in the closing year and its going up and up and up, that causes unit money supply, usually fairly quickly, to begin to rise and money supply is a critical determinant in the inflation rate right now, its getting to look theres no real inflation for us at play here, but if we go further than we are currently, inflation is inevitably going to rise that on top of the stagnation were seeing in many areas is not very beneficial for the World Economy and not for the United States and china. Well when chair powell talks about needing to see inflation that is persistent and significant as a bar to raise fed fund, it sounds like a bar thats impossibly high probably. I cant comment on that. Chairman greenspan, obviously as you know, the Federal Reserve is back to reexam panneding its Balance Sheets and providing liquidity in the markets are there any broader implications of that is it technical mechanical adjustments or what does it mean the fed has now found itself having to i guess in normal times so to speak have to have a larger Balance Sheet well, the that is a very professional operation with those firstclass research questions. Developing models try to determine how the economy will behave understand certain circumstances. My first approximation is, that if the fed and its staff are holding a particular position, i can start from that position, but with reasonable certainty that its pretty close to the optimum one. Finally, chair greenspan, on repo, we heard last week that the volatility appears manageable, that bill purchases are going to plan, that money market pressure is subdued unlikely to have macro implications for those still hand wringing about it, should they be well just remember, that this is a very long bull market and one of the things that we do to try to get a valuation system is we take price earnings and put them inverse into earnings price ratios and then try to determine whats causing that to change. Its basically been real longterm Interest Rates in the last couple years or so, so i would say thats price earnings ratio is going to be and the question is, where are earnings going to be and thats going to depend on trade probably as the major factor, International Trade i should say certainly something that the entire market is focused on. Chair greenspan, thank you always good to talk to you my pleasure and as we go to a break, lets take a quick look at the best performing stocks in the s p. Netflix leading up more than 3. 5 this morning. More sqwkn e re en return. Stetwh [maniacal laughter] gold. Gold right, uh. Thank you, for that, bob. But i think its time we go with gbtc. Its bitcoin exposure through a traditional investment account. Nice rock. Its time to drop gold. Go digital. Go grayscale. When i see obstacles, i create opportunities. soft music when i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. U. S. Stocks hit record highs but one top strategist sees opportunity elsewhere. Find out what he likes for 2020 when trading nation. Cnbc. Com more squawk on the street coming up. Welcome back to squawk on the street. Im dominic chu. Markets jumping between positive and negative territory this morning. One sector we are keeping a close eye on today is the Consumer Discretionary one buildings permits and housing data starts come in better than expected this morning helping to lift names related to Home Construction and improvement home depot and pulte group and lowes but the data can serve as a read on the state of the consumer during this key busy Holiday Season watch those names. Now i will send it back downtown to you guys, at the new york stoengs. At the New York Stock Exchange thank you, dom. Lets send it to jon fortt for a look at whats coming up on squawk alley. Hey, david. Were on the countdown to christmas. We have the ceo of atar ee joining us with what hes got for the current season, maybe more important, how the gaming industry is building up towards next holiday thats coming up on squawk alley. [narrator] at Southern New Hampshire university, were committed to making college more affordable. Thats why were keeping our tuition the same through the year 2021. [woman] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. Yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. So it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Lets get to the cme group in chicago Rick Santelli is there with the santelli exchange. Good morning, mike. I want to welcome mark chandler. Mark, lets get right into it. Weve both been doing this a long time, the notion of the reserve and currency seems to be challenged but never seems to be successful with regard to a challenge. Now with economic sanctions and tariffs and the u. S. Using its might and Balance Sheet to try to control behavior, whether it is iran or china, doesnt this add to the fuel of the dee dollarization in countries like russia and china i agree with you. I think the weaponization of dollar, access to the dollar, treasury secretary mnuchin is denying. This will undermine the dollar in the long run. Short term, doesnt seem to be a compelling alternative if there isnt a compelling alternative, in the past thats always been where i go, then again, other things crop up. As i finished reading articles on dedollarization, central bank is buying up gold. They like gold better than dollars these days what do you think about that it is interesting of course i think theres a bifurcation in the world one setthinks the new Global Financial regime will be backed by gold. Thats why some simple banks are buying gold. I think the Federal Reserve, when you look at the numbers, what would it take to go back on the gold standard. I think the price of gold would be incredibly high, talking about thousands of dollars, 13 to 15,000 to have some part of u. S. Money supply, and also german money supply, japanese money supply bakcked by gold 6. 6 trillion a day average turnover the gold market isnt ready to absorb any fraction of those flows. The dollar index, mark, isnt really a great way to value the dollar but it is what the market uses and what most traders pay close tae close attention to were one cent higher from lofty levels do you think it is issues were discussing or other issues pulling it down the last six weeks . I will try to explain short term factors a lot of good news has been priced into the market look what happened last week uk election, usmca approved, chinese u. S. Trade agreement, unwinding some of this i think for me i am in a camp that says dollars long term bull market is coming to an end news from europe, you saw some of this weeks pmi flash, news from europe is not good, japanese economy is contracting. I think in the short run, i think this is noise about longer turn dollar up trend i think thats coming to an end. Mark, great to hear your views, as we move into potential phase two with china carl, back to you. Thank you very much. When we come back, the ceo of atari joins us to talk about the gaming industry as we head into the final leg of the Holiday Season dow up 28, were at 3193 squawk alley starts in three minutes. This is a historic moment. Demand has never been higher for what we do. Creating compelling, engaging, and informative content and experiences. With this merger, viacomcbs will be one of the largest and most influential content creators in the world. I know we can deliver on the full potential of this amazing new company. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk good morning it is 8 00 a. M. In palo alto, 11 00 a. M. On wall street, and squawk alley is live good Tuesday Morning welcome to squawk alley. I am Carl Quintanilla with jon fortt at post nine of the New York Stock Exchange. Morgan brennan has the morning off. Looking for record highs within reach. S p hit one earlier this morning. We start with techs record run on pace for its best year in abou