Eamon javers joins us this morning with the latest. Good morning. Reporter good morning, carl. Its oddly quiet here at the white house today. We dont see Senior Administration officials out here defending the president or making arguments we dont see any events scheduled with the president publicly, other than his departure later on this afternoon. Nonetheless, the president has been venting some of his frustration that we saw boil over in that letter to nancy pelosi yesterday and continues in tweets this morning the president saying can you believe that ill be impeached today by the radical left do nothing democrats and i did nothing wrong. A terrible thing read the transcripts this should never happen to another president again. Say a prayer and, carl, having covered the last impeachment, so far today this day feels very different than the day on which the president president bill clinton was impeached back in the late 1990s on that day, there was a real sense of uncertainty about what would happen it was magnified by the fact that the sexual scandals going on at that time were sort of evolving and hitting a lot of figures, including the speaker of the house, the man we thought would be speaker of the house, bob livingston, resigning on that same day in dramatic fashion. We dont see any of that chaos or high drama today. In fact everyone in washington now assumes they know whats going to happen here and the forecast is for the president to be impeached today and then acquitted by the senate in january. Well see if that forecast holds true, carl. Eamon, his twitter account is especially active today, mostly retweeting others this morning at least do we think that sense of calm will translate to battle creek tonight . Reporter i dont i think this is the calm before the storm to use an overuse cliche the president is clearly taking to twitter venting some of that frustration. Tonight aides like the idea that theyll have a split screen moment tonight the house of representatives may still be impeaching the president even as he takes to the stage in battle creek, michigan hes going to be in front of they estimate about 10,000 adoring fans in a state that he needs to win, that hes looking to win in 2020 and the message will be america loves the president , or at least these supporters in michigan love the president and the president i think there will deliver his response to whats going on here in washington today eamon, thank you. Reporter you bet. So how do todays impeachment proceedings impact investors . As the end of 2019 quickly approaches, joining us is ben mandel along with yanna barton ben, ill start with you the fact that this does seem to be an event, these impeachment proceedings, that the market is largely shrugging off, why why is that the case with clinton the market did not shrug it off so why such a different reaction this time around i think theres a consensus thats crystallized around this idea that it gets through the house but not the senate and so thats from a market perspective, that seems fully baked into the cake. And i think thats right for the most part. Its worth considering what are the ways in which that would have an impact on the economy and markets were that to kind of derail in either direction and i think for us, we think about the interaction with trade policy as something thats very important, so weve rung the alarm bell twice this year on Recession Risks, both having to do with trade risks. Once in may when we were threatening to put tariffs on all of mexican imports, again in the summer when it looked like we were on this path with china and so thats come down. I think the question is would impeachment in either direction have a bearing on how aggressive u. S. Trade policy is and actually to be frank, i dont think it does. So i think were comfortable with the consensus view that this is an event but not a significant event from a market perspective. I think the consensus is right. Yanna, i want to get your thoughts on this if impeachment does not have a bearing on the market right now, meantime what we have seen is some pretty meaty legislation finally begin to make its way through congress simultaneously. Does that have an impact on the market here, whether its usmca, spendsi spending bill, drug prices,som of the other things that are poised to become reality thats a great point, morgan. I think at the end of the day while we are infatuated by the politics, i think the market is focused on the policies driving the markets. They are looking forward and i think they are shrugging off the event, it will be a nonevent come january what will have an impact and hopefully a positive one, the trade policies, tariff resolutions and talks that really lead to positive implication to the sentiment Capital Spending and so forth. So i think thats what the markets are telling us slowly were seeing that come through in terms of earnings revisions and growth expectations into the next year. Ben, once were in january, the first trading day, well be about 60 days from super tuesday, right its coming right down on us so i think even if were looking forward, theres a political question is there probably more market turmoil if there appears to be a moderate democrat in a leading position who might actually beat the president , or if theres a more leftleaning democrat who has less of a chance of beating the president but is more hostile to corporate interests i think we can approach that with a degree of humility when people made two mistakes, the consensus on who was going to be elected and also the Market Reaction to that a lot can happen in 60 days. Its probably not going to be clear who the democratic frontrunner is until super tuesday. So until then, i think that risk premium adds a little volatility but not a lot of direction at the beginning of the year. Keep in mind, thats all taking place against the backdrop of an economy globally thats looking a little better next year than it did this year so the fact that the Global Industrials im sorry, the Global Industrial sector manufacturing had a very difficult 2019, and thats starting to improve, starting to stabilize in our forecast, it improves over the course of the next year. So i think thats a relatively constructive backdrop. Keep in mind Recession Risk is a little bit lower than it was recently and Monetary Policy is a back stop so all of that is a relatively favorable environment for risk assets. So weve been edging into equities a little bit less into credit and duration. Although consensus is were not going to get the rate cuts next year, i woke up and theres headlines about eu trade, theres headlines about working with india on a potential deal obviously chinese are not confirming phase one how much do you think the market is overestimating the simplicity of the trade dynamic right now well, whats interesting is that imagine if all these headwinds become tailwinds or at least some form of resolution and thats exactly what were seeing in the marketplace right now. When you turn back to politics, i think there were areas of the market that got really punished. Health care has been a perfect example where its second worst performer to date, particularly because we dont know who the frontrunner might be. And whoever it is, will obviously have a negative implications to the policies that relate to that space. But looking forward, i think the missing link of the leadership that weve seen is really Investors Sentiment and consumer really backing up the trend here and what you need to say is really the sentiment coming through on the Capital Spending side so once we know what the rules of engagement are, i think what youre seeing, you will see a lot more resolution come through and, again, revenues and Earnings Growth story will come to fruition and thats what were seeing were still extremely positive on the equity market i think the wall that weve climbed to date has been extraordinary but its been on the heels of multiple expansion with no earnings to speak of if that reverses, i think you can see a really healthy run into the next year. So, ben, what does worry you next year . On the trade question, i dont think its totally off the question, first of all the ink is not even on the paper, never mind dry on this phase one agreement, so theres some downside and convexity there. But the complexion of the trade issue is very different. Weve had some resolution on nafta, on u. S. china, theres this bilateral deal with japan but you still have a lot of openended issues with europe, the wto is effectively being dismantled so i think what were seeing is were in the middle of the process of going from multilateral trading system to one thats much more regional and bilateral. Thats going to be a bumpy ride. But more broadly going into an election, does the president s thinking, is it more im going to look like a fighter and get hawkish or maybe more hawkish or i want stability for the economy sake and i get more dovish, at least on trade . In principle i think you can have it both ways. You can be a fighter against europe where it doesnt have global systemic implications for markets. The idea is right to back away from u. S. china and move on to these smaller, not irrelevant, but from a market perspective. So i think you can be a fighter and a peace maker at the same time lets see. We certainly will see im sure were not done talking about all of this by any means ben and yana, thank you for joining us today well, tech tops 2019 as the best performer so far this year. Our next guest says there may be more room to run before the year ends dan niles, Hedge Fund Manager and the founder of apple one Capital Partners joins us now. Dan, good morning. Good morning, john. Well, its been a tough year to call. You told us that around midyear, i think it was august. You made a call midyear about semi conductors. Semi conductors have continued to do well you were iffy on the iphone launch, the iphone 11. Thats done pretty well. Whats going on here what did you get wrong and what do you see happening as we head into 2020 . Yeah, i mean i think everybody has been surprised at how strong the u. S. Economy has held up given all the things going on in trade. Obviously getting to a phase one trade deal, thats been great. The other thing quite honestly i didnt really count on was the fed starting to go through qe again. Theyre saying its not qe but at the point youre buying 60 billion a month, i think most people would say that is qe. And youve had the fed obviously being very dovish going forward. So all of those things lining up, obviously getting through the brexit, the vote this last weekend where Boris Johnson won a landslide, that takes disorderly brexit off the table and so when you look at that the market just keeps melting up and thats why i put out that tweet on monday morning under my handle saying when the market is up 20 , over 20 going into the last two weeks of the year, it gains another 1. 2 on average to finish the year. This year with a lot of these risks behind us thats why it happens that way and thats why people talk about a santa claus rally or a january effect. We were just looking at some of your favorite picks heading into 2020 on trends like 5g, chips, et cetera, et cetera. One thing i didnt see up there was cloud. And so i look at names like sal salesforce, adobe, sap, vmware are those less significant than the 5g plays some say 5g will start to have an impact in 2021, not 2020. Yeah, we actually do like the cloud but were looking at it more from the hardware side. So, you know, if you look at the cloud, probably about six to nine months of digestion going on there what youve seen is youve started to see the demand on the hardware side start to pick up again. Public cloud is only 15 of the workload today but thats growing at about 30 per year so thats obviously going up quite a bit. People get amd, for example, we own that one their Data Processor sales were 50 . We like nvidia as well where the numbers have been coming down for about a year those started to go up again their Data Center Revenues were up 11 in their most recent quarter. So we actually do like the cloud. Weve gone through the six to ninemonth digestion phase and now that should start to turn back on as you look into next year. Dan, u. S. china trade deal or not, there has been arguably this shift happening, this decoupling happening between the u. S. And china in terms of tech, whether its chips or some of the other key technologies to watch right now. Its been happening for the last couple of years as china has been investing to start to lower its reliance on u. S. Technology. Number of executives ive spoken to both on camera and off have voiced concerns that what this trade war has done is basically accelerated chinas move to cutaway from dependence on u. S. Chips and other Tech Companies how do you see it, and what does that mean in terms of investments in 2020 and beyond in the sector . Yeah, morgan, i think you brought up probably the most important point from a fundamental basis when you look at 2020. Youre absolutely correct. China now views getting into areas like semi conductors, technology, as something of a National Security issue. Its not just even a financial opportunity. And so unfortunately i think what youre going to see happen or not necessarily unfortunately, but what youre going to see happen is theres going to end up being almost two ecosystems starting to develop where the chinese do not want to have reliance on u. S. Technology products for example, if you look at huaweis new 5g phone that just came out, when that was torn down, there were no u. S. Chips in it at all youre going to start to see memory production starting to ramp up early this next year where theyre going go from 0 of the Worldwide Market in drams, for example, which are chips that go into everything, its goingto get to 5 and kee climbing so i think when you get to the back half of next year in particular, its going to get very interesting because a lot of the new phones that come out, typically u. S. Wireless companies, for example, they gain content every year. Every year it goes up. I think what will get interesting is the end of next year when you go into the holiday season, you may see chinese phones that dont have u. S. Chips in them right now the market doesnt care stocks are going up, which means they go up even more apple sounds great and air pods are sold out until january 13th, i think i saw when i looked online so the market just follows the path of least resistance, which is higher. But eventually you will go back to focusing on fundamentals and the point you brought up i think is one of the most important. Dan niles of alpha one making calls and naming names, which i appreciate a lot of people will shy away from that, but right or wrong, you put yourself on the record we love it viewers love it. Dan, thanks. Thank you, jon, appreciate it when we come back, fedex obviously getting slammed here, down almost 10 after that big miss well discuss. Plus, peloton parody how one congressionacaide l ndat use a widely mocked ad to campaign [spokesman] if youve tried college but never finished, group cheering snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu amazon is in the spotlight today. A new report from Business Insider says the company is helping protect some of its vendors from the trump tariffs by paying up to 25 more for the goods it resells the report says amazon buys products wholesale for these suppliers commonly called first party vendors. Erica poe is managing partner thats invested in Ecommerce Companies and farhud mangi welcome. Theres been so much coverage of amazon and discussion of Regulatory Risk, practices regarding vendors, is that why returns on the year have been subpar on a relative basis to faang i dont know the direct correlation but heres a good thing amazon is doing. Theyre protecting the consumer by paying more wholesale for the products and selling them for the same price for once despite all of the criticism that amazon gets, theyre doing a good thing. Certainly with victims in its path far out, if you look at fedex today. This war between them and fedex has been sort of ramping up i mean its interesting. What a read, amazon is now shipping almost half of its own stuff. So they are kind of building up their own Delivery Network, which we kind of knew for a while. I saw these amazon trucks delivering stuff to me ive got to say i think they are more reliable than when another carrier delivers it. So maybe thats their obsession, Customer Service so thats what theyre winning on. Eric, is amazon going too far in a lot of these different areas . We were just talking about this New York Times piece about the cloud and how they might be crowding out by copying some of the people trying to operate on their cloud and the enterprise space. We were talking about shipping with fedex is it brazen, is it okay, is it just the way Big Companies do business some of it is brazen. Making an exact copy of a shoe, now, you cant copyright a shoe, right . So anybody can copy it but to say, hey, this is an exact copy, im going to sell it to you for half the price. Its not biodegradable, thats brazen but on the other hand theyre following the playbook of all the big Tech Companies which is use your platform with the amount of data that you have and all the Customer Interactions and then start another business. Amazon started this with the Cloud BusinessCloud Business is the most profitable part of amazon probably a 40 billion business. Standalone would be worth a lot of money now theyre going into shipping. Theyre definitely going to be a competitor to fedex and to u. P. S. They deliver almost as many packages as fedex today. Now we see this in advertising as well. The advertising business is growing leaps and bounds and doesnt rival google yet but is definitely going very fast so youve seen this with uber, uber eats, uber freight. You see this with facebook and the messaging business, google with cloud and a. I. , so this is the same playbook that all big Tech Companies are using. You mean going vertical at scale . And attacking somebody elses business getting out of their lane to attack somebody elses business. Or it comes as amazon blocking sellers from using f fedex. That stock is down 10 . That isnt the worth move for the stock but brings us closer to a fresh 52week low there are companyspecific things happening at fedex, but they are also very impacted by the macro environment slowing, Global Economic growth, all of the trade frictions weve seen, 40 in quarterly profit, 3 drop in revenue, cut earnings forecast for the fourth time this calendar year and the fifth time since last december heres how ceo, founder and chairman fred smith categorized the quarter on the Conference Call last night. The quarter just ended as an anomaly because of the compressed shipping season before christmas and the volumes that will largely fall in our third fiscal quarter in addition, this quarter has seen significant all right so we just showed you a picture of alan graf, but that was fred smith that was speaking right there, basically calling a bottom to all the pain that fedex has been seeing over the past year plus but saying that it is going to probably take a few quarters to materialize. Basically theres three big factors that are pressuring fedex right now. Its got these headwinds from the macro trade issues which has been affecting fedexs air shipments, which is really the most profitable or one of the mostprofitable businesses for the company. Thats the express unit where youre seeing a lot of that pain meantime it is continuing to invest billions of dollars for its ecommerce strategy including expanding to sevenday delivery higherthanexpected costs there and when you are talking about ground youre talking about lower margins because youre talking about shipments from warehouses to peoples door steps. Lastly, at t integration, its still a drag but youre seeing a drag from amazon as well this is a company that chose to cut ties and not renew certain contracts with amazon as amazon continues to build out its own logistics and Delivery Network that is having an impact on this company even as u. P. S. Continue to work with amazon. I have a feeling were not done talking about that story, especially on a day where amazon also has agreed to lease another 10 boeing 737800 cargo planes which is going to bring its numbers for its air fleet up close to 80 over the next year to two years yeah, in a time when fuel isnt that expensive, when the economy is booming, all other things if they were equal, obviously theyre not, you would have thought fedex would be doing just fine as ecommerce overall continues to expand. But its those Little Details around competition and investment that can snag an investor. And certainly fedex said that they are going to start cutting some of their numbers, reducing flight hours by 8 after this peak season. Reducing cap ex, which is key. They have held steady on their cap exnumb numbers to 7 of rev. But this is a longer term bet by fred smith in terms of drawing a line in the sand to reinvent the company and take on amazon as it takes on more of its own deliveries our favorite fan fiction this morning is that bezos wants to bang this thing down and then buy it do you want to put odds on that . He has an advantage because he has complete data visibility all the way from the consumer to the delivery he could decide which is the best delivery way to do it in the future youll have drones, youll have robots on the streets, and hell be able to mix and match between airplanes and trucks and drones and this in a much better way than fedex can. So the network is not even worth buying whole maybe not why would you want to buy some old planes. Have you got a thought on that i think the one thing i would say is that amazon risks getting sloppy a little bit as it grows quickly. Were seeing we saw a bunch of stories this year about the messiness of its marketplace, the lax rules they have about letting products in. The wall street journal had a great story about how people dumpster dive and then sell stuff on amazons marketplace. Their warehouses dont have a great record kind of getting sloppy all over the network as it grows very quickly. I think thats a risk. Guys, lets finish up with uber officially announcing the launch of its new app uber works. The company is partnering with staff agencies to pair shift workers with shifts for other jobs you were just making this pointed about getting into other peoples lanes. In the case of uber, theres two things going on. Their core business is not profitable theres no visibility to profitability because theyre both subsidizing the consumer, the passenger as well as the driver and they have to stop doing that in order to make money. So what theyre trying to do is amor tize their business and with now works but theres another angle to this theyre fighting this new law in california which is likely to be similar laws passed in new york and new jersey and other big states. You mean about contractors . About contractors becoming fulltime employees, which basically is a stab in the heart of ubers Business Model if theyre not profitable today with gig workers, how are they going to be profitable when they have to pay health care and all of the other costs associated with fulltime employees theyre trying to prove also that their workers are real gig workers, theyre not employees of uber. And i guess they also may be trying to prove that people driving cars is not their Business Model i kinds of laughed at them when they tried to make that argument, but i guess if theyre launching uber works and becoming a platform for other types of work, it aids that argument at the same time, though, i wonder whose side is uber on in this arrangement are they actually going to advocate for the worker or just take advantage of the fact that there are a lot of gig workers who are looking to work even more money on the side yeah, its a good question. What an incredible story this is this company had a long kinds of saga to get to being public and they are still searching for a Business Model its crazy you know, we followed this company for a while. They seemed to have kind of a fairly straightforward thing they were doing, but theres all this Regulatory Risk theres the fundamental business doesnt work, and theyre still searching for kind of what to do with this company and this idea that everyone lots of people use, theres lots of drivers, it works on the roads people use it. But as a business, it just doesnt work farhad you always distill it into the simplest form eric, thanks for the time. Good to see you. As we head to a quick break, keeping a close eye on the market as we follow the impeachment proceedings on capitol hill fresh high earlier today for the s p and the nasdaq weve got more squawkll teth bak aey im tom er, and i approve this message. Climate is the number one priority. I would declare a state of emergency on day one. Congress has never passed an important climate bill, ever. This is a problem which continues to get worse. Ive spent a decade fighting and beating oil companies, stopping pipelines, stopping fossil fuel plants, ensuring clean energy across the country. How are we going to pull this country together . We take on the biggest challenge in history, we save the world and we do it together. European markets are closed and seema mody joins us with a look at todays action. Jon, its those comments from fedexs management on europe that are being passed around by traders today. While we have seen a slight improvement in Economic Data as of late across europe, fedex ceo fred smith flagging eurozone concerns saying the industrial economy, particularly in europe, was hit by the ricochet bullets of a u. S. china trade war and it still hasnt recovered, and germany in particular is extreme. Those comments come as fedex is still in the process of closing its 4. 4 billion acquisition of tnt express which was supposed to help it gain a stronger footprint across europe. Elsewhere, a major deal in the european auto sector Fiat Chrysler and the owner of peugot signing a 50 billion merger agreement creating the worlds fourth largest car maker. Total vehicle sales would put it ahead of both ford and gm. Its a deal, though, that will likely face antitrust scrutiny from both u. S. And european regulators. Finally, guys, dutch luxury tv and stereo maker plunging 16 after issuing Fourth Quarter guidance given pretty strong earnings from other carriers. Lets get over to sue herera for a news update. Good morning, morgan. Good morning, everybody. Heres whats happening at this hour members of the house gathering on the floor to debate and then vote on the two articles of impeachment against president trump. Republicans attempted to slow things down by presenting a motion to adjourn the session. A judge threw out Paul Manaforts new York Mortgage fraud case on double jeopardy grounds. Manaforts lawyer had argued that state charges should be dismissed because they involve some of the same allegations as the federal cases that have landed manafort behind bars. New york life will spend more than 6 billion in cash to acquire the group life and disability coverage business of insurer cigna. New york life, which is owned by policyholders and does not trade publicly said it will add millions of customers to its business. And about one out of five High School Students in the u. S. Have vaped marijuana in the past year its popularity has been booming faster than nicotine vaping. Thats according to a new report by the National Institute on drug abuse vaping nicotine, though, is still more popular about one in four High Schoolers say that they have done that within the last year you are up to date thats the news update ill send it back down to you guys on squawk alley. Lets get a check on shares of tesla closing in on not just a 52week high but an alltime high, just a couple of bucks above this level on pace for the best quarter since 2013, up some 70 in six months. Amazing story. Squawk alley is back in a moment the cnbc Trend Tracker live data board is brought to you by the cme group. [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. The president is facing an Impeachment Vote tonight ylan mui joins us with more. Reporter the last time the house impeached a president 20 years ago, of course there were no iphones, there was no social media, there was barely even an internet now Digital Advertising is the Fastest Growing type of political advertising. Cantor media projecting 1. 2 billion in digital ads during the 2020 election cycle. Thats about 20 of total ad spending and only counts ads from the candidates themselves or their campaigns and doesnt include ads from outside groups and Pacs Facebook is the main beneficiary. They said political ads dont make a big difference to their bottom line but clearly it does to the candidates and impeachment is driving a lot of their dollars. President trump has spent 2. 3 million on ads relating to impeachment just since democrats began their formal inquiry thats way more than the next biggest spender, billionaire tom steyer, whose president ial campaign has bought 1. 45 million in facebook ads, the organization he founded has invested 700,000. After that America First policies, a Pro Trump Group has spent 179,000 since the inquiry began, but for the trump campaign, the real value in these ads, guys, is not just messaging but also driving action the Campaign Says that online donor growth is up nearly 50 so far this year. Guys ylan, thank you very much ylan mui obviously this is going to be an issue where once again the interaction between the social and political fallout from social media collides with the business element, which we talk about all the time. Theres the campaigns themselves there are also these thirdparty actors trying to test the limits of what they can post on facebook, with factual content or lack of factual content, misleading content in political ads. Thats going to make it wild and woolly especially post impeachment as this Campaign Season heats up. As you get this headline from buzzfeed today Facebook Says it will not remove an ad claiming that Mitch Mcconnell endorses impeaching trump. I think this is a conversation well continue to have it is a case study when you look across the social media landscape in terms of what Different Companies are doing around political advertising in general right now. Obviously all eyes are on impeachment right now. Lets talk about what it means to investors were joined by art cashen whos here good to see you. Good to be here. How would you overall characterize the markets focus of attention on impeachment today . Its dominating the media not just here but everywhere else but it is having little to no impact on the market the market has shrugged it off, nowhere near the chatter about the china deal and whatnot i think thats because they believe that the result is already known. That well get to the senate and he will be acquitted or not removed from office and then we move on to the next case, which will be the election and that probably will also not be a major factor until we get much closer to determining who the democratic nominee is. So i have a couple of mileposts that im looking at for potential volatility first, the end of january because thats when the brexit thing is really going to heat up then the very beginning of march, that will be super tuesday. And if it still looks blurry then, it could be a brokered convention, so that will be midjuly as we go into the new year, those are some of the areas or mileposts ill be looking at. So all this coverage and talk of melt up you dont disagree with necessarily no. If the calendar is clear until then i think we need to see more detail i was a little distressed, i would say, with the fedex chairmans report because it made it sounding like the economy, particularly in europe, nowhere near what it appears to us you know, were Getting Better numbers and you see the market react to some degree to that right now were facing some immediate resistance i wrote in my opening comments that 3,200 is a little resistance in the s p and 28,345 in the dow so well keep an eye on that we got very close to it. We didnt punch through. We are somewhat overbought but the market deservescredit. Its taken on all that and still with the overbought managed to make new record closings. Art, when do you expect super tuesday to become a factor is it the week before when were seeing the polling ahead of the vote or just the vote itself are we at a point where we can tell a moderate in the lead will mean Something Different from somebody further to the left in the ead . Absolutely. But again, for now it is not moving the market because its very unclear i mean, you know, Bernie Sanders is hanging on and coming on a little stronger in iowa, which, you know, you would think the market might react you might see it when Elizabeth Warren moves up in the polls, that health care would move. Its far enough away that they dont see it as to super tuesday, i would think you begin to get the attention a little bit before, but i think it really has to be how it comes out its going to be clearly over onethird of the population will be voting then things like will Mike Bloomberg have a viable chance he would love to get to a brokered convention. Hes got a tough time in the primaries, but he may be able to talk some of the democratic leadership into accepting him if his polling numbers are okay. So fedex on the call last night also said it hired labor costs. If you continue to zese see see robustness in the u. S. Economy, does that start to ding small caps. Yes, it could if we get there. You know, we had some paradoxical stuff come out there were more job openings, but when you compare the job placement and replacement, not quite as strong. So there is some smoke and mirrors in some of these numbers. But youre right, if wages begin to go up, then some of the smaller Cap Companies are going to feel the pressure art, dont go too far, well see you soon art cashin when we come back, a now infamous commercial getting spoofed again. We will tell you how squawk alley is back after a quick break. Ouse. Ouse. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Heres a live shot of the house of representatives as we get at least six hours of debate today about House Resolution 755 and a possible vote tonight about whether to impeach the presenofhenid stidt t uteates dow is up 4. Squawk alley is back after this [spokesman] if youve tried college but never finished, group cheering snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu Rick Santelli is going to have the Santelli Exchange at the cme. Rick hi. Im going to be talking to michael. Hes the chief Investment Officer of Global Fixed Income at Morgan Stanley ch michael, good morning lets get right into it. Good morning. Optimism. Its an important kind of fairy dust for the economic gears of Global Markets and you believe optimism is going to be impro improving into 2020, but not necessarily the actual data. Explain. That the a lot of the negatives which hit Financial Markets and economies in the past 12 to 18 months have disapated. Central banks have cut rates including the United States in 2019 and thats all good has a nice tail wind in 2019 brexit seemed to be get iting better although again, the johnson government in the u. K. May be adopting a more aggressive stance with regard to negotiations with the eu which may lead to a hard brexit probability at the end of next year then of course the trade situation, which has gotten a lot pbetter to where it was in september. So the optimism for 2020 is quite positive and reasonable, however, asset prices have done quite well in the Fourth Quarter of 2019. With high yields doing well, equities doing well, yet underlying indexes have not improved nearly as much as you might have suspected considering the improvement in asset prices. You know, everything you said is true. I like to try to find the most basic way to get my arms wrapped around and issue and for this issue, i chose the following chart. This is a chart of five to six weeks in the Dow Jones Industrial average and right in the middle of it was the november 2016 election and there was no Major Economic news but yet in a very short time, we went from 18,000 to 20,000 and we have never lookedd back theres optimism and i think the optimism wasnt necessarily for the person that was elected. I think it was optimism of policies not dpoipg to be implemented by Hillary Clinton who was not elected. And i do think that it turned into real positives for the economy. You need optimism to turn that straw into economic gold your thoughts on that. Inlg youre exactly right with the weak link in the u. S. And Global Economy the past couple of years has been the lack of business confidence. Consumers and householdshave done their bit they have spent money. Havent borrowed a lot, but have spent money. But corporate ceos have been unwilling to commit Corporate Cash flow to reinvestment into their businesses and grow the understood lying capable ilitief the economy. So Business Investment have been weak and thats what we need to turn around if were going to get out of this low 2 kind of growth trajectory for the u. S. Economy. That looks possible, but i would argue were not quite, im not convinced yet that for sure its going to happen. Excellent, michael, i cant argue with that and we want to see if Capital Expenditures start to increase now that global uncertainty is at a freeze thank you for your time and thaukts. Carl, back to you. Thank you very much awfully range bound today. Dows down a point s p really hanging on to the mid 3190 sidewa squawk alley is back in less than three minutes 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 while our competition continues to talk. 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. That now infamous peloton holiday ad is proving to be the gift that keeps on giving. Wendy davis, running as a democrat to represent the 21st district released a new Campaign Video spoofing peloton were going to kind of got to get back into campaign shape. Im a little bit nervous, but exciteded. Lets do this. All right so you work with what youre given and if youre looking for widespread notoriety or acceptance of an idea, thats a good start this is good for aviation gen and maybe for wendy davis. Were talk iing about her becau we were talking about peloton because we were talking b about an ad that didnt get received so well. It was a fun ad regardless of your politics. I kind of wonder whats been a bigger marketing push lately whether its this or cyber chunk, which has led to a lot of spin offs as well. This took out the controversy over elon musk taking out the traffic sign yeah. The outrage, the benefit of this social media driven outrage machine is its always hungry so theres always something new if theyre mad at you today, just wait a few minutes, theyll be mad at someone else weve talked politics so much today, and a lot of you believe its irrelevant. Tonight though, well get micron and confirmation as to whether the run semis have been on is deseved. This has been a tough one as dan niles tried to say there was f going to be bad news in semiconductors well get information from on thousand trade it. The question its difficult at these levels here, above 52 after a couple of upgrades earlier in the week well look for the vote around 7 30 for now, the judge and the half. All right, carl, thanks so much im scott wapner front and center this hour, what the tech surge means for the trade in the new year ahead. Several marquee names hitting all time highs it is 12 00 noon and this is the halftime report. The rally rolling on. Whats work ng this market right now . And historic day on capitol hill lawmakers debating whether to impeach president trump. The risks facing investors nike, mcdonalds, amazon, uber and many, many more. The best stock ideas for 2020 are straight ahead this drug stock is is up almost 20 in the past tw