Transcripts For CNBC Squawk Box 20240713

Exchange this is epic as well why do you get squawk box specific mugs. I dont think we have that on closing bell. You think your set down at the ant kuwaited New York Stock Exchange the whole Stock Exchange is our tv set. The whole future is nasdaq. Its moving forward. The specialists, the middle man. You want to be here, my friend its a lovely new set. It is. I wonder how much these costs, these mugs. I love the New York Stock Exchange we love both. Just kidding we do get territorial once in a while. Im glad you like our new sets and our mugs dont take that with you treasury yields this morning, i looked 190 on the ten year recession fears have faded trade concerns are so 2019, i think. Arent they . Theyre just so 2019 the dollar. Thats supposed to weaken im doing another show today exchange. So am i. Closing bell. Thats your normal show what happened over the weekend . U. S. Military carried out precision defense strikes in syria against a Militia Group following a string of attacks on iraqi bases that hosts u. S. Service members. It includes weapon Storage Facilities used by iranianbacked Militia Group to plan attacks on Coalition Forces we have some oil prices for you there up just about a third of 1 interesting actually how big the gains have been for wti to date. Oil is up 30 . You wonder if that gets in gear, which would be part of what i was talking about with paulson a weaker dollar, stronger commodities things like that were going to do possibly probably not, 29 for the s p. Thats the best since 29. 3 as we stand. 29. 6 would be the best for two decades. You have an endless parade of shmos that come on. We have all the wrong guys too. 29 . 29 . I have guys stuck at 2,700 2750 i have them at 2,500 i have francois whatever his name at ubs and mike wilson the star of Morgan Stanley what happened . Theyre all going to be pontiff kagt about 2020 now and take them seriously again, right . And its the classic we think its going to be 6 or 7 but more volatility this late in the cycle. There you go. Cautiously optimistic but. You cant call them out its hard. Clearly this 29 , in a little perspective because of the q4 selloff. That said, look at q4 so strong. So theres momentum. The buy side, sell side guys, they have financial. Guys that listen to them that work for the firm, have to tell their clients what their guys are saying, and thats important, i guess but really the most important thing to keep the job is not saying anything. Saying we could go up. But buy side guys when you actually have to invest money, either you know what youre doing or it doesnt last very few up 29 they are being found out you have to argue the trend over the last decade has been away. If you have skin in the game. I might listen more closely. Ill take my own opinion half the time. Controversy brewing on twitter. I thought that one was going to be given to me. It has controversy and twitter in it. Controversy and twitter late friday night President Trump retweet adipost that included the name of the alleged whistleblower who anyone in the world who doesnt know who it is at this point its pretty sad. Any way, that complaint led to his impeachment by saturday morning the post seemed to disappeared on many users feeds, twitter took it off then appeared on saturday twitter said an outage caused tweets on some accounts including President Trumps to be visible to some but not to others the president repeated will called for the whistleblower to be unmasked. This was the first time hes directly sent the alleged name even though it was a retweet it included the name first time he has done it in the twitter feed to 68 million followers who also saw one of my tweets about low income wages going up that i retweeted something from axios and axios retweeted something from axios got some of the info from the journal or from the bureau of labor statistics i just retweeted that and he retweeted they had that ready to go. Any way, i did it but dont they hate all the trump deranged people out there are sending stuff to me now. I thought from that you would have got more praise than criticism. Im kidding there are some handles theyre allowed to have about the president are for you, the decorum that you brits have in most instances well, we had decorum. Except the house of commons but you know what i mean the stuff they say about trump. But thats twitter. Is that what twitter is we know thats not necessarily representative. Mine is usually quiet got pictures of my dogs, my kids things like that. You bait some of the haters. I do. I dont answer i send a picture of truch. So you have to expect to be i have a picture of trump with the queen right below it is hillary at a book signing at a costco with one person a lot of people still havent gotten over have you seen that one i havent seen the picture. Its a two shot hes up there having lunch with the queen. Shes down there signing like crickets any way, you want to tesla . But, the division is interesting. Terrible. In that the only hope you have back home is because theres a big that jurorty, maybe the Division Goes away a little bit the past year has been as divisive as we ever had. I imagine that will be the case for 2020. Its going to be weird because people with the trump derangment syndrome off the 63 million deplorables. They dont care. They might reemerge in november what are these people that think whats our country going to be like if he gets reelected with these people who have been resisting for three and a half, four years, their life maybe they have a reason to live thats Boris Johnsons take i think the optimistic take is that, a, a brexit cant be stopped now. Maybe that stops being an issue that people argue about every single day but i think the more optimistic thing longer term that people would argue is that if he is to win back the seats he has won in the north of england in five years time, it will be only if he delivered a very centrist agenda which some people can take as a positive well have to see. Im told to move on to tesla has begun delivering model three electric cars built at its shanghai factory little less than a year that the company begin work at the plant. One took the opportunity to propose marriage to his girlfriend the deliveries are ahead of schedule teslas target date was to get the factory up and running was january 25th took 357 days to bring it on online this is the first wholly owned foreign car plant in china well above 420. 431. Why do you mention 420 . Its when they were going to be bought out. Yeah 4 31 never been that high. Its been a great run strong year. It has. Im trying to figure out whether it makes sense the subsidies are still in the path to profitability is still somewhat unknown at this point. But benefit of the doubt has gone back. Well have a segment on it today. Are you ready for that of course have you done the preparation . Whoa look at you. Look at you. That a boy thats awesome. Did you see any movies recently not in the movie theater. I caught up with the old ones, obviously rewatched love actually as you mugs at christmas time. Love actually yeah, those wonderful. Are you joking . No, im not. Do you have beaches do you have that on a dvd. Dont know what that is. Star wars rise of the sky walker. The holiday. Thats another classic. Topped the Weekend Box Office star wars did for the secondstraight week bringing in estimated 72 million in north american ticket sales. That brings its global total to nearly 725 million. Sonys you man ji the next level finished second bringing in 35 million domestically its global total is up to 472 million and depending on ticket sales today and tomorrow, 2019 could finish as the second or third best year in cinematic history. Total haul of 11. 4 billion in u. S. Ticket sales. Cats is not doing so well. No. Cats was a disaster. You have not seen once upon a time in hollywood . That was so boring. I loved hat. Really . I watched it again on a plane coming back. There was no story line. You have to this is one i try to explain to you the 60s and 70s. The silent black and white ones you love. There were shows like bounty hunter, which Leonardo Brad Pitt was brilliant in that the music was phenomenal you werent born i want to seeene at the end s hilarious. I cried a at that scene. With laughter. No. It was funny. When you grew up in that period it was very tumultuous in the 60s. 1760. 1969. It was capped off by this horrific senseless murder by hippies and the people that died did not deserve to die, believe me to watch it get flipped over where it doesnt happen and everybody is happy and they walk off together it just really was i wish i could go back and change it. Thats why its called once upon a time in hollywood. I get that. I read about so great. I dont know, i thought brad pitt, brandi lets go. Block busters versus oscar winne winners. You dont think any movies started until the year 2000. Its really after 2012 that movies get good. Coming up, well get between andrew and you, were going to get ready youre younger than andrew. Yeah. Quite a bit, in fact. Well get you ready for the final two trading days of 2019 u. S. Equity futures at this hour are in the red but just by a hair, down 13 on the dow nasdaq down 11 s p down 4 then sales force founder mark benioff is calling facebook the new cigarettes well show you what he said later this hour. Well be right back. Announcer todays big number, 335 thats how much the s p tech sector is up in the past decade. Making it the Top Performing index in that period everything your trip needs, for everyone you love. Expedia. For everyone you love. Looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Lets talk markets now as we wind down trading in 2019 and approaching new year joining us for that gabriel grigo covering the economic angle is brett ryan. Am i right, brett, great issues are so 2019. Arent they . Still on your plate . Well, if they reemerge right now we have a little visibility, but theyre still out there. The next thing is were transitioning from trade uncertainty with the election. And historically you have seen lower business spending during election years as businesses sort of hold back and right now you have a big divide between the two parties in terms of how they see taxes and in the future so we have trade uncertainty going to domestic uncertainty. Articles of impeachment sitting on the speakers desk. First time a guy or gal has been impeached in his first term. Just bizarre the market is probably seeing political gridlock at the moment and the fed on the sidelines with the still dovish bias and in a low inflationary environment with the fed not concerned about inflation and still having a dovish bias and this political gridlock, thats probably a good setup for markets actually you think inflation will become a story this year no. You zmoedont . No, not for a while the next two to three years we see them cutting rates in 2021 in order to boost inflation. Could get inflation across the atlantic and therefore see the dollar weaken relatively speaking in the year ahead dollar has been weakening a little bit i dont think we have that Much Movement in the dollar given that Central Banks all have done their policy and on the sidelines now. The interesting thing is the feds policy review is one of the major themes were going to talk about for the next six months thats going to take them probably in a dovish direction towards some form of average inflation targeting. And how they go about achieving that whether they cut rates to prove it or whether they go for Something Like an opportunistic they dont hike into stronger inflation will be important for markets. Was that your rumsfeld quote that i saw you worry about unknowns but its the unknowns that are the ones to worry about . Whose quote was that yeah, that was mine sounds like a yogi berra, the unknown unknowns are something to be concerned about. What is it in 2021 that no one is talking about that could derail everybody is feeling pretty good after this last year in terms of the economy and in terms of the markets. Historically every time you have an environment with a lot of optimism or complacency and dont see lot of obstacles down the road any idea yes i would say one of the probably more worrying scenarios would be some kind of radical outcome the mid term election, which seems unlikely right now but you never know its the president ial. Yes, yes. Youre talking about at the national, president ial level yes its unlikely right now but you also might expect circumstances that may lead to an extreme outcome in those elections and that could totally not only if that happened also the perception of the possibility that then can happen can probably derail the market a little bit that would be one slightly unknown. Ive seen this in previous elections where different people rise then you take a really good look at them and then they fall and then someone theres a rebound of someone else and then they rise. John kerry wasnt going to get in and finally got it. I have seen this before. Warren was up. Shes sort of down and out biden up and down. Hes back up but bernie i keep reading these articles dont count bernie out and it could actually happen. That would be i dont think he could get elected president maybe it doesnt happen but it could jolt the Market Perception changes, that in itself before the outcome could have an effect. Trade youre not concerned about even if the deal doesnt necessarily come through, you think the market has been too focussed on that. Personally im not. People are getting a sense after so many false alarms that at the end of the day, the percentage of gdp that is under threat especially for the United States relatively modest. Therefore there is no deep Macro Economic they shouldnt have a strong impact. I had this feeling all along a lot of people given the false alarms have a similar idea i wouldnt worry about that too much. Do you have a closing comment on political theres a few things. One, republicans senator controlled by the republicans. Its not just what happens with the presidency who is going to control the senate here. The opposite of 2016, you have 23 of 35 senate seats up for reelection that are gop seats now the democrats need to flip four and win the white house to take control of the senate or they need to flip five in order to keep two to flip it without winning the presidency so ucheven if Bernie Sanders wi and republicans retain the senate, nothing happens and were in gridlock and Bernie Sanders presidency doesnt do much like wise donald trump wins and its a democrat senate, were still in gridlock. Different permeations here that i think people need investors need to think about. We got predict it biden still at 25 cents. Bernie at 17 cents Elizabeth Warren is below andrew yang i dont know what finally and its early not a lot of liquidity or betting going on yet thats something to keep an eye on brett, thank you you were an Israeli Special forces or something . What were you . I was in para troopers in an elite unit. How many times dud you jump out of a perfectly good airplane, like again and again and again, never learned that everything is fine, dont jump. Its not a bet you wanted to keep doing over and over we always thank people for their service here thank you for your service there. Thank you for your service here today. Nothing compared to being an israeli para trooper pleasure nonetheless. Still to come the new tax law changed the math contributions in america we have new data on just how much americans are giving coming up you leave it to me. Ill get your taxes in an ok place. What . Just as soon as my audits over, this gets my undivided attention. You take a lot of trips to the caymans, phil . Pretty great, right . Oh phils legally dead. Fell off a boat. Going by denis now. Celery. Long story. What do we got here. Oh. Not going to want to see this. I dont think this is going to work. Just ok is not ok. At t has americas best network, now with our best plans, at our best prices, starting at 35 a line for 4 lines. New from at t dont get mad. Get e trade, dawg. But he wanted snow for thelace holidays. So we built a snow globe. Ill get that later. Dylan but the one thing we could both agree on was getting geico to help with homeowners insurance. What . Switching and saving was really easy i love you what . Sweetie hands off the glass. Ugh call geico and see how easy saving on homeowners and condo insurance can be. I love her time for the executive edge, Charitable Giving may be down, but its not out according the a new report we are joined with all the details with kayla good morning. More taxpayers are using the higher standard deduction so fewer americans are itemizing the charitable donation and led charitable donation to fall since the tax cut in jobs act was enacted. It was noted a bad as originally projected. In 2018 they anticipated giving to causes besides education and health would drop to 30 billion in 2019 and rise to 34 billion in 2022. But data out from the jct now raises those estimates to 33 and 37 billion respectively a 9 rise the chronicle of philanthropy wealthy individuals still itemizing their taxes are giving higher amounts and large wellknown charities are reaping the benefits the middle class donors who are impakcted by this tax chang tend to give to Human Services charities, Disaster Relief charities, those sorts of charities. So the change in tax law affected middle class donors united way is among the nonprofits working to change part of this tax law but its been unsuccessful so far kayla, clearly its changing year over year, but the more interesting comparison i always think is the u. S. Versus any other nation in the world is just by far and ahead in Charitable Giving because of the ability to discount against taxes at all in the first place. Right and really, wolf, its hard to grasp at this point because theres not that much official data thats available. We only have the projected estimates. The irs is going through tax filings for the 2018 tax year because so many people delayed their filing until october, so of course it takes quite a bit of time to actually go through those and make the stats available to make an apples to apples comparison. Wrand the people are annoyed or pleased with the president s tax law either way, this is probably not the make or break factor. No, but it certainly is something that is a headline that is concerning you know, one thing that a lot of taxpayers did was they used these itemized deductions to make gifts to charities, especially at the end of the year im sure your phone or other peoples phones are ringing off the hook with asks from organizations of all ilk, but for most people who are choosing to take that higher standardized deduction instead simply not an option. See you again later. Coming up, protests escalating in hong kong. We have an update on what demonstrators are planning for new years eve and new years day. Squawk box coming right back mywws been an amazing journey. Its almost like a challenge everyday to see how well i can eat and still enjoy myself all day long. I wake up every morning to see how much weight ive lost and how much better i look. Myww join for free lose 10 lbs. On us. I am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Apple card. Is a new kind of credit card, created by apple, so its simple and transparent with a new level of privacy and security. It lives here and here. And it will save you 6 on products at apple; like iphone, apple watch, airpods pro and so much more. Apply in as little as a minute, right in the wallet app. Apply in as little as a minute, beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Good morning and welcome back to squawk box live on cnbc in times square u. S. Equity futures are flat this morning down 15 on the dow nasdaq down about 12 s p down 4 1 4 and closing out the year with some pretty incredible gains s p, for example, up over 29 , so well see what happens today and tomorrow, but if it goes up another halfa percent or so, that would be the best performance since 1997. Yep 29. 6 it needs to eke out from the 29. 3 . Update from hong kong, organizers are planning protests for new years eve and new years day aimed at disrupting festivities and shopping clashes have picked up after christmas eve. Tear gas was thrown at protesters chinese scientist has been sentenced to three years in prison over his work you might recall last year in creating the worlds first gene edited humans, babies. He jiankui said in november of last year he used this technology known as gene editing to change the genes of twin girls to protected them from getting infected with the aids virus. The announcement was met with backlash in china and globally about the ethics of his research he was convicted of illegally practicing medicine. What can investors expect for the year ahead well talk luxury homes and the market next. Then later, all three major averages up at least 20 this year so, how can investors ride the rally into 2020 . Well talk with some top strategists and use thater tm loosely. Stay tuned youre watching s ining squawk cnbc legendary terrain in telluride, the unparalleled landscape of park city, or the famed peaks of whistler, youve faced the hassle of lugging your gear through the airport. With ship skis, youre just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. With unrivaled pricing, real time tracking ship skis delivers, hassle free. Ship ahead and go catch those first tracks on fresh snow. Ship skis. Your skis. Delivered. Actions speak louder than words. She was a school teacher. My dad joined the navy and helped prosecute the nazis in nuremberg. Their values are why i walked away from my business, took the giving pledge to give my money to good causes, and why i spent the last ten years fighting corporate insiders who put profits over people. Im tom steyer, and i approve this message. Because, right now, America Needs more than words. We need action. The 2019 Luxury Real Estate market faced a fair amount of oversupply and is ending the year with a number of bigticket sales including three units purchased by jeff bezos for 80 million. Whats next for 2020 in the new yorks Luxury Real Estate market, joining us is cody, cofounder of Bespoke Real Estate a company that facilitated nine of the 12 deals over 20 million this year. Its bifurcated, i guess so your point is 20 and over is talking about this to most of our viewers may not be that relevant we cant afford 20 million houses but you say over 20 is great its just the 10 to 20 where it wasnt quite as good. I think if you look at the quantity of sales over 10 million and above, it was down 13. 5 year over year, 19 to 18, but if you really break it down by segment, 10 to 15, 15 to 20, 20 plus the 30 plus market is outperforming ahead of fiveyear high the 20 to 30 plus market is relatively flat year over year the problem child that we identified is between 10 and 15. Its down 30 year over year since 2016 its down 42 so i think if youre looking at the quantity of sale differentiation, thats really the segment that people need to focus in on and look at it and i think new yorkers at large are saying im not getting enough value so theyre screaming to the market, im going elsewhere, quality of life is better, Tax Implications are different, i think if up brutal legislation, the media constantly bombarding the negativity around the macro market, people are going to look and say is my 10 to 15 million in new york city going to go gar . The answer is no people are looking elsewhere but if you have a different price segment, i think you need to take a very myopic and micro view of the segment and not just look at the market as a whole and the narrative needs to change around what is the luxury segment of the market. The mansion tax for new york city, when did that go into Effect People did things before that, right . And it has hurt, has it not. The Second Quarter was the highest the largest quantity of sales that new york city has ever seen. So it went in the Third Quarter. It kicked in at the end of the Second Quarter third and Fourth Quarter excuse me have been pretty terrible because i think a lot of people have been focussing on getting that purchase in between the mansion tax took effect. The bloomberg headline is new york citys Luxury Real Estate market was battered in 2019. Is that true i dont think i think it was battered from an intention perspective. I think the bias was overwhelming i think when people are walking on the strieets and all they her is negative, thats macro perspective, its hard for people to get granular about their investment my goal is to change the psychology on how people are viewing their micro markets. Youre in that business you have to put on a happy face, but contract signed for homes priced at 4 million or more fell 16 year overyear in 2019. It did. Consumers are looking at the value theyre getting for that amount of money. 4 million is no small chunk of change, so developers, sellers they need to come up with a really specific hyper targeted sales tactic to help delineate their product. The brokerage model, put up a listing on the internet and hope the market shows efficiency and brings you a buyer is over you really need to be specific and Hire Resources that are going to be accountable and give you quantifiable value throughout the process of selling your home. What are the typical other macro factors that you ases that makes you think its going to be a good year or bad year . S p 500 up strongly this year. Does that always one for one lead the a strong year not one for one sentiment is everything. A lot of people are ultrahigh with individuals, their lifestyle is not going to change that much, but when they purchase that asset or when they take that investment, thats going to be dictated by the overall emotion of the market. So, it doesnt hurt that the market the equity markets are thriving, so theyll take money out of that market and put it back into a hard asset like real estate but its a timing perspective. The hamptons, for example, they just had its best quarter in five years, 23 trades over 10 million in the Fourth Quarter. Thats indicative of where peoples sentiment are. How does it work itself out is there an oversupply yeah. Theres an oversupply. The condo market in new york city represents 60 of the 10 million plus market. Youre going to see a longer absorpti absorption. 2020 wont be much getter you have a. O. C. , amazon, crazy rhetoric. A lot of chatter. Right and they could do anything at any time soaking the rich ask sort of in vogue, sit not Bernie Sanders might be the candidate. People are weary of what is to come. People need a home for new york city, its a primary home for those spending that amount of money people can do business anywhere in the world so theyre looking to expand their horizons and find other markets that are better quality of life, lower Tax Implications and better overall investment. Do you think there will be a surge of transactions before the election or not . I do. Looking at the data right now, the first and Second Quarter will be a fertile market wont be terrible or great like any election cycle, the Third Quarter really just calms down and people wait to see who is going to come in the office and the implication of that legislation. So it usually just kind of putters down towards the third and Fourth Quarter people dont know whats to come. What about International Buyers have they seen any pickup . More volatility gives new york a better chance to take on foreign buyers if you look at hong kong and brexit back in stable conditions, a lot of people still see new york as a safe asset. I wouldnt say its overwhelming for an investment but its not terrible cody, thank you pleasure. Thanks for having me appreciate it. Shanghai surprise that was your one bomb, was it not . It was not, no. Shouldnt have done that with your wife at the time. I had a lot of good movies. You had some good ones since then that was mystic river pretty good yeah. He had blonde hair in that one. Thats my reference the most, yeah before 2010 he hasnt seen anything since 2012. G1 and g2 not on your radar . God father 1 and 2 i like them. Couldnt sit through it no, no. I like those i wouldnt watch them again, though i annoyed scott by saying i didnt think top gun was one of the greatest of all time still liked it but not one of the greatest. Still to come, the crowded streaming landscape gets a new competitor early next year well talk about media in 2020 announcer dont forget to subscribe to our podcast youll get interviews, original content, and behind the scenes access look for us on Apple Podcast or our favorite podcast app and scribe today introducing new Vicks Vapopatch easy to wear, with soothing vicks vapors for her, for you, for the whole family. New Vicks Vapopatch. Breathe easy. The streaming wars were kicked up a couple of notches with disney plus and apple tv plus both coming online late in this year. Where is the battle headed next. Julia boorstin has the 2020 playbook reporter in 2020 well see the shifting power dynamic between media giants and tech titans battling for viewers. First, netflix will lose more subscribers in the u. S. As a slew of new streaming apps gain traction with nbc universals peacock launching in april and hbo max launching in may, and disney plus and apple plus, netflix will face steep competition for subscribers in the u. S. Putting pressure to continue investing in content and to focus on International Growth second, ad supported streaming with the ad free subscription business, netflix pioneered now crowded, consumers, advertisers and content creators will shift focus to streaming ad supported content for free third, the success of streaming video will eat into the box office which will decline next year all that streaming content raising the bar for going to the movies in a declining box office lacking the bigname franchises that broke records this year is likely to put pressure on studios bottom lines. Joining us now for more on the streaming trends and what to watch next year is alex hearn and cecelia gang very good morning to you both. Cecelia, ill start with you with a broad question with where we stand here at the end of the year in terms of the growth were seeing for streaming services, whichever streaming service they might be going towards, versus the cord cutting on traditional broadcast does one overall offset the other so that theres net growth or not oh, yeah. The streaming subs are growing at a pace that really have eclipsed the cable industry subscriber base. The last year, the last decade really was truly the year where internet streaming took over cable and we will see its just been dispersed more throughout Different Services that are provided. I agree with everything julia had in her presentation on what to expect. The streaming wars are just beginning. Theyre just getting into this and using their ability to use content that theyve purchased to extent their services over wireless and the cable lines its going to be a really interesting fight going forward. Alex, i guess one big secondary effect of this is Media Companies becoming much more global in their focus as opposed to regional with some occasional foreign sales its netflix has proven that its better to be totally global yeah. I think thats definitely the case at the same time, the view here from brittain is somewhat different. We have a much smaller number of International Streaming services that have made it here disney plus hasnt launched. Hbo max shows no sign of a british invasion and we have a strong number of players the bbc is the strongest in the u. K. It and the other terrestrial performers have britt box. I think the internationality fight isnt as easily won as some of the American Companies think it will be they may own a lot of the content, but home grown material wherever you are is surprisingly popular. Its not all about who owns friends or the office or frasier. Celia, do you think weve seen the bulk of that in the next decade or we wont see anymore big media mergers . I think youre going to see a lot more m a activity picking up this is the whole reason why at t bought time warner in 2018 was to purchase that very, very valuable content which includes hbo and warner studios this is the vision that at t had was to bring all of that content to a streaming service for its at t wireless and telecom subscribers. Youre going to see much more m a activity between the pipes and the content providers and to merge together to bring services that are bundled in many ways like their own private sort of streaming Cable Service and the infrastructure as well youre going to see content providers merge. This is just the beginning there are Big Questions as to where verizon stands in all of this really Big Questions as to how the Big Tech Companies in Silicon Valley will adjust as well to try to get more into a piece of this action big question is on where youtube goes forward in terms of how it competes against some of these big streaming service providers. This is, again, just the beginning. Going to move on toanother story we were discussing earlier. Sai salesforce founder marc benioff. You can see facebook is the new cigarettes for our society its something that badly needs to be regulated. Not good for us. The company is out for our kids and theyre certainly not exactly about truth in advertising. Even they have said that thats why were really in squarely a crisis of trust when the core vendor themselves cannot say that trust is our most important value. Alex, whats the view over in europe in terms of regulation likelihood of regulation on these companies . There is i mean, there is already regulation, right . Europe has far, far stronger regulations on technology and data use than america does even california, ccpa is not quite up there with gdpr in terms of the restrictions it pushes at the same time, its only going to get stricter over the next year. It looks like Boris Johnsons government will once it moves brexit forward turn its eyes to some sort of nationwide Technology Regulator which would be one of the first in the world and across europe the anticompetitive regulation really shows no sign of holding up were going to see the Competition Commission pull some action against google, probably pull some action against apple for the first time its not a good year to be an American Tech Company in europe. Well have to leave it at that thank you both very much thank you coming up, only two days of trading are left in this decade, although some people think next december is the end of the decade because it starts in 2011 anyway, were going to get you set for todays opening and how santa claus rallies. I was going to do that thing. Coming to the Cancer Treatment centers of america, they treat the whole person. I dont have to go anywhere else. They care about me as a person beyond just being a cancer patient. Theyre my second family. So close with just two trading days left in 2019, the s p is less than. 4 of a percent away in posing its best year since 1997. Taking off tesla delivering its first china made model 3 as its stock tops 430. And big dollars at the big screen the u. S. Box office on track to ring up its second highest haul of all time as the second hour of squawk box begins right now. Good morning welcome back to squawk box here on cnbc im joe kernen along with wilfred frost. Becky and andrew are off today u. S. Equity futures at this hour have been around the flat line i was going to say theyve improved its been a great nine year run. Nine years. Yes, it has. The decade. The decade ends really in december of next year. In your view. If you think about it. Were going to disagree on this. Its better to round things i mean, and its sort of in a simple way its easier to think december. Why dont we end it 2023 to start . Three years out . You know, we do base ten. Not everyone even does base ten. Some do base eight heres whats making headlines at this hour walt disney is wrapping up a blockbuster year at the movies star wars, the rise of skywalker topped the box office. So far this year, six disney movies have taken in more than 1 billion in receipts. Disney has accounted for nearly 40 of all u. S. Box Office Receipts in 2019 and two economic reports will hit the tape this morning the Chicago Purchasing Managers index is out at 9 45 eastern time 15 minutes later the National Association of realtors will issue the november report on pending home sales the price of gold moving lower the precious metal remains on pace for the largest yearly gain for 2010 even though inflation hasnt been an issue analysts say theyre getting a host of support for geopolitical support and global tensions. I dont know if i buy that it almost hit 2000 five years ago. Now to the markets joining us for that is kathy ie strategies kevin mann hes chief Investment Officer at smart trust. So rounding up s p 30 this year yes, if we assume that this decade ends tomorrow right this could be the fifth time in the last decade that the s p has finished with a gain of more than 30 . In the four previous cases, joe, the following year was positive by an average gain of over 18 while im not that optimistic for next year, if i look at consensus earnings estimates and i apply a reasonable multiple, that gives us a 9 gain for next year thats not too bad i do think the bulk of those gains will come during the first half of the year with the market likely trading so we know who is ultimately going to know who is going to be in the oval office. Is it earnings estimate for next year . Yes. Any room for further multiple expansion . I think there is. It will be earmarked by the big three, earnings, economy and the election if you look at where earnings are, we anticipate them growing over 2019 but not at the same growth rate we saw in 2018 slower but still growing. Are you comfortable being in a basically a consensus that mid to high mid single digit gains this year is in the cards . I mean, the market could go down 10 , it could go down 20 . Could go up 10, 20, 30 again yeah. Youre right in it seems like youre in a bell curve in the center. Right in the 8 to 10 range. Is that likely to happen . I think it is, joe. If you look at the strength of the consumer coming out of the record Holiday Shopping. A 15 low Unemployment Rate. Wages still rising at 3. 1 thats suggesting that the economy should still grow. We still have phase 2 of trade we have the unknown of the elections. There wont be a year without volatility so diversification. They said its weird, it goes both ways, right but what is the economic backdrop a light impact of the fed easing over the last year so we should see positive growth roughly around the 2 area give or take. Were not looking for a big move up or down from the recent trend, which has been slowing towards that, what we think is a sustainable 2 trend inflation looks like it is going to stay relatively soft although we think theres a little bit of room to move up from here. So sort of a steady as you go. Looking at the ten year now 191. Where do you think its going for the year we see some room for it to move up. We have upper end 2 1 4, 2 1 2 that isnt because we see a big move in inflation or a big move in growth, we think the market in this quarter got too low on expectations of a lot more easing, of the slowdown in the Global Economy and bond yields are really set in the Global Economy and we think that the pmis are starting to show a little bit of stability, maybe even a little bit of strength so theres some room to move up to the quarter area. To what extent does the consumer pick up purely down to the fed easing and to what extent is it a structural growth that holds through the next 12 to 24 months regardless of what the fed does i think as long as the Unemployment Rate is as low as it is and employment growth is healthy well see a healthy consumer so weve gotten a little bit of a boost from the fed shifting to a really easy policy and weve but weve still got very low unemployment and as long as thats the case, well continue to see reasonable consumer spending. What are your issues this year the big concern we have in the bond market is the high yield market spreads you know, yields versus treasuries are very, very narrow on a historical basis we know that a lot of companies are not earning enough to generate the cash flow they need to pay their bond holders. Covenants have been weakened were concerned about valuations there and were very cautious in the high yield market now. So its not trade trade we think is just a long, slow drawn out process the escalation of trade conflicts that we saw earlier this year has now turned into deescalation so were not as concerned unless it starts to escalate again and whats the other thing i was going to ask you about this . So we do not have the specter of a recision what was your highest percentage i mean, youre all looking into the abyss in the last 12 months did you ever get to 40 . No, we didnt if you look at the probability based on the yield curve alone, you could get to 40 or 50 earlier this year when we had the yield curve inversion but we also look at credit spreads. Credit spreads never really got to the point where they were signaling a tightening in Credit Conditions or the inability of companies to get financing for me thats the big one. You can have an inverted yield curve without getting a recession as long as credit curves are easy. The fed easing has helped out quite a bit. When you look at some of the Sector Performance in the years past, its pretty divergent. 48 technologies led the charge. Can that repeat next year, that level of sector leadership the first two quarters of next year i think were going to see a continuation of the strong consumer that will help consumer discretionary, notably ecommerce. Well see a continuation of the trend in biotech 28 yields announced in 2019. We think thats going to continue in 2020 mostly because downward pressure being put on drug prices. A lot of these major revenue producing drugs coming off a patent being subject to generic pricing and the fact that a lot of the Large Pharmaceutical Companies have cash on their balance sheets, dont have their own pipeline to turn to. Those are two areas. In terms of other risk areas, not only do we see trade as a potential risk, additional tariffs if they are introduced remember, we have four new voting members of the fed coming on board we all assume the fed is going to do nothing in 2020. Thats the potential uncertainty and potential risk. Thank you. Youre welcome. The 21st century, what day did that start on the very first of 19 january 1, 2001 the Third Millennium began january 1st, 2001. Back in a. D. There was one d. C. And then there was 1 a. D there was never any zero you skipped the zero then. Going back all the way in the ages, all the centuries and millennia, they all end the very first day of the 21st century was january 1st, 2001. That was the first day of the 21st century i would say the first i can show you. Were going to do it your way but its not its not strictly speaking the correct way to do it. The first thing about zero is 0. 1. There was no zero year i just explained that to you. In 2000, the start of that decade. Decade, not century were talking were talking about the end of the decade. Why should we change decades for millennials. Ill give this to you do you understand what im saying now ill take my decade and ill give you the century and were on air at the end of the century. Can i get you to say that the 21st century started january 1st we have to go to break. Tesla delivering its first china made model 3 coming next first, make sure to subscribe to our podcast, squawk pod. Get it wherever you get your squawk pod. 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. Welcome back to squawk box. Making headlines today, tesla delivered its first model 3 cars built at the shanghai factory. A little less than a year since the Company Began working on the 2 billion plant this is the first wholly owned foreign car plant in china and shares of tesla have been exceeding all everyones expectations all the way up to 430 and other news on elon musk. He says his Boring Company las vegas tunnel will hopefully be ready next year. Musk said, quote, foreignco is completing the first tunnel next year coming up, a new year means new laws in many parts of the country and Contessa Brewer joins us with some of the more interesting ones if you were doing the tesla square we would call you contesla. The boring tunnel, i wanted to jump in there laws that affect Small Businesses, laws that affect gig workers, laws that affect senior citizens, laws that affect pot smokers. Weve got something for everybody in 2020. Im going to bring you the big changes coming up after this on squawk box. For your worst sore throat pain, try Vicks Vapocool drops. Its not candy, its powerful relief. Ahhh vaporize sore throat pain with Vicks Vapocool drops and try new vapocool spray. Lets get ready to rumble. The Associated Press have named the two athletes of the decade of the week Serena Williams was named there could be someone great in the year ahead. Could be strictly speaking. The 2010s. The younger of the williams sisters broke all sorts of records over the last ten years becoming the most dominant tennis player. She won a dozen grand slams. U. S. Gymnast simone biles was the runner up for the honor but was named female athlete of the year lebron is the aps male athlete of the decade. He has taken his team to eight of the last nine nba finals winning it all twice with the heat and then once in his in his hometown cleveland with the calves now hes trying to bring another championship to the lakers patriots Quarterback Tom Brady was the male athlete of the decade runner up we should have one more year to actually factor in. In your family do you celebrate new years the end of january . No. This is just a point that i was making if you were to be it all started when i said some people think that it should end next december. You actually agree that the end of the decade is we do it by convention. We do it that way, but it does get complicated when you look at centuries and millennia. The Third Millennium didnt start until 2001. Going to be a good show when we do that one. I would think as a millennial youd want to get the millennial part right because you as old people agree, im the most representative millennial. Contesla agrees. I think he is representative of many of that. Youre not living with your parents and playing video games, are you . You dont want to be representative i always want to be who i am, joe. Okay. Whatever box you want to try to put me in okay. All right. As for that, londons landmark clock tower big ben will ring the bell at midnight tomorrow on new years eve the 315 foot tall tower has been covered in scaffolding for the last ten years the iron work was repainted and the stone work was carved and repaired for a 5. 2 billion restoration. Wow, thats expensivexpensive. It wont be completed until 2021 which is the start of the new decade. Exactly it will bring in employment, wealth, privacy. Contessa brewer joined us see, i can do it Contessa Brewer joins us with more pretty good, isnt it . I was interested to see whether there would be a fight erupting over the athlete of the decade but, no, were back on numbers. No. This is cnbc so thats rather appropriate, isnt it . It is. At the federal level, the secure act, part of the 1. 4 trillion budget deal includes changes to help people save for retirement workers will be allowed to make ira contributions past the age of 70. 5 and they wont have to begin drawing until 72 previously it was 70. 5 Small Businesses can join forces to offer 401k plans and will be required to offer plans to longterm parttime workers with a few exceptions nearly half of the nations minimum wage workers will get a raise with 21 states hiking their minimum wages according to the National Employment law project. Its been fixed at 7. 25 an hour for more than a decade and 21 states remain there. Companies are stepping up. Amazon, bank of america and others have said they will get 15 an hour more mcdonalds will no longer lobby against minimum wage increases we have a labor law to classify gig workers. Uber argues its exempt because drivers arent part of its usual course of business lyft has warned that rule will hurt drivers who prefer a flexible schedule. In california i did hear some of those arguments from drivers in Washington State a new law makes noncompete agreements unenforceable for workers making less than 100,000 a year lobbying by amazon was key in lowering that threshold to 100,000 exempting many seattlebased employees. And illinois has more than 200 new laws coming onto the books their legislature has been busy. The one grabbing the most attention, Recreational Marijuana will be legal. The industry agrees that can be a 2 billion market in illinois alone. Also the states Artificial Intelligence video act requires employers to tell applicants if theyre using ai to have job interviews and how this is used. This is in the land of no duh. Roads should be safer because a law now bans drivers from watching streaming videos. That wasnt illegal already one would think that it would be rolled under distracted driving or things that apparently you needed to spell it out you cant send a text. Or legally smoke pot just for the fun of it until now. Now thats all changing. The minimum wage point i think, it makes sense that the states are the final arbiters on that wow, 7. 25 can you imagine trying to make a living on that . The other thing i should mention is illinois is changing and tackling in large part some laws to address the rise of me too. Theyre getting rid of a statute of limitations on major sex crimes or where the victim is a minor. Theyre also enforcing mandatory Sexual Harassment training were seeing that played out across the country some big changes for 2020 because of that. Contesla, thank you. Thanks, contessa. Still to come on squawk box, santa claus is coming to wall street. The bulls hope were in a traditional rally period find out if he delivers or if investors lose their shirts. Plus, banking on a new year. The s p financials up 29 in 2019 well debate the big changes likely to drive it in 2020 were back in a couple of minutes. 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. Good morning and welcome back to squawk box on cnbc live from the Nasdaq Market site in times square. U. S. Equity futures at this hour are almost completely even but it is red. We had fair value. We closed higher on friday were down 2. 25 on the dow s p indicated down less than 2 and the nasdaq has improved a little it wasdown double digits earlier. Its down 6 now. As investors put 2019 in the books, heres bob pisani with 2020s playbook. Reporter the direct listing craze will peak. First against all odds Energy Stocks will outperform the s p 500. Its been a lost decade for Energy Investors with oil stocks up just 6 in ten years, but a combination of high dividend yields and relatively low earnings multiples will make several Oil Companies much more attractive in 2020 bank of america, for example, believes exxon mobil could move up 50 to 100 as it sells assets, expands production and doubles the cash flow by 2025. Second, lower rates in 2020 . Not necessarily. Many Central Banks dont seem to want it. Shifting political winds in germany will lead to the passage of large scale stimulus programs there to boost its slower economy. European bond yields will move back towards positive territory. That will force money out of u. S. Bonds and into european bonds all while pushing u. S. Yields higher and keeping the bank rally here going. Finally, the direct listing craze will peak when airbnb goes public via direct listing. Its all the rage right now. Private Equity Investors disappointed with ipo returns this year are pushing direct listings to cut costs and allow employees and private equity to sell shares but no one asked the buy side direct listings, spotify and slack are both underperforming the overall market and a disappointing airbnb debut will convince many that allowing early investors to sell all at once may not be right for everyone lets dive into the financials and joining us now anton shuts. Thank you so much for joining us firstly on the banks broadly, will the next decade be easier or harder in terms of regulation depends on whos in control of the house, the senate and who the president is if you think about even in a worstcase scenario though, is it reasonable to say its hard to go back to how it was at the start of the decade for banks . Certainly you know, i think if you think about the start of the decade, regulations were pretty tough. Capital levels were lower. Theyve built quite a bit and you think about all the new agencies form like a cfpb that have put a lot of heavy regulations in place some of those regulations have changed. Some of the regulators have changed and i think administrations are responsible for that. In terms of the shape of the u. S. Banking industry, weve seen a couple of deals like the creation of truest and sun trust. Will there be many more of those and why havent there been a bit more than there have been . Sure. Clearly scale matters. The industry spends about 150 billion a year on technology so bb t and sun trust got together. Regulators dont want many Large Financial Companies out there so i think theres been an antimerger regulation out there. They want to limit the size and scope of some of the biggest financials. As opposed to the year ahead as opposed to the decade ahead, whats your view well, clearly negative rates have been failed policy. I dont think it stimulated anybody. I think if europe starts to spend money well see rates rise well see a better yield i think housing activity is incredibly strong. Thats helping the economy andn the u. S. Towards the regionals, more geared towards that or the bigger guys, investment banks . I like the regionals because there will be a lot of consolidation but its going to be not among the biggest of the big. Maybe we see one more deal getting involved with u. S. Bank or pnc, but i think youre going to see lots of deals among the smaller companies. We see a couple of pretty good sized ones 70 billion company. We saw one in texas with Texas Capital get together and create a 48 billion company. Theyre underneath the radar but theyre pretty good sized deals and create good efficiencies youre seeing markets that are strong like that also attract, you know, business, better growth some of the bigger banks may want to get into the markets where they dont have exposure. One of the bigger events in january with earnings will be the Goldman Sachs investor days. What are your hopes for that is that attracttivelily priced the stock has been attractive for quite some time. I think the real cloud is their settlement over the 1 mbd issue, and its potentially big, right . They have a settlement in the u. S. , they have a settlement abroad everybody would like to get that cloud away from them and focus on the business. And the real question is what is Goldman Sachs . Is it a Consumer Lending company . Is it an Investor Bank is it an industrial Lending Company . What is the new goldman . I think that investor day will be important to lay some of that out. Look at the apple card thats been both a plus and a negative for them. Anton, thank you for joining us. My pleasure. Coming up, marc benioff is not one to mince words or hold his opinion to himself facebook is his latest target. Find out what he has to say about the social media giant next todays big number 335 thats how much the s p tech sector is up in the past decade making it the Top Performing index in that period beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Can be a sign your feeling digestive systemhed down isnt working at its best. Taking metamucil every day can help. Its psyllium fiber forms a gel that traps and removes the waste that weighs you down. It also helps lower cholesterol and slows sugar absorption, promoting healthy blood sugar levels. So, start feeling lighter and more energetic by taking metamucil every day. Take the metamucil twoweek challenge, lighten up. Just take metamucil every day for two weeks. Available at your local retailer. Welcome back to squawk box. The futures right now a little bit of red on the screen a tick positive, back to the red. Essentially with the s p staring at 29. 3 gains as of fridays close. 29. 6 would be the best in two decades if it closed up for the year a quick look at currencies as well. The dollar also not doing too much this morning. The yen and the euro and the pound covering a little bit over the last week or so. Crude prices up 0. 6 very, very strong year for wti crude. Not so f this morning the china based electric vehicle maker neoreport reported a lowen expected layer increased deliveries in china despite electric vehicle subsidies. Restaurant Brands International said alex pisada will leave the company in march after two years. The companys most recent results negatively impacted and meantime burger king and popeyes chain have more positive performances. Astrazeneca has linparza as a first line treatment for disease. Trading pretty close to new highs. Salesforce founder marc benioff says facebook is a new cigarette for our society. He made the comments on an interview in cnn. You can see facebook as the new cigarettes for our society its something that badly needs to be regulated. Its something thats not good for us its something that the company is out for our kids and theyre certainly not exactly about truth in advertising, even they have said that thats why were really in squarely a crisis in trust when the core vendor cannot say that trust is our most important value. He said facebook is not fundamentally doing good things to improve the state of the world and he called for it to be regulated or split up. That comes also after his comments that capitalism is dead we need a new capitalism we have to reshape capitalism. Mr. Benioffs net worth is 7 billion. The rise of skywalker brought in 72 million in domestic ticket sales. That brought the total to 725 million. While sonys jumangi finished second 2019 could finish as the second or third best year in cinematic history. They expect 11. 4 billion in u. S. Ticket sales. Star wars showing the reviews dont mean anything. That was poorly reviewed. Didnt open like the others. Didnt open like the others were in sequel hell. You have to admit its great when they put a new movie. Theyre rare now its true when its not a sequel. There are a lot of purists of old stuff. Its ruining the current state of cinema. There are some good things are you going to see 1917 . I am going to see that for sure that looks great. It does look good im kind of torn on that criticism because you cant argue with the numbers domestic ticket sales, true. 5 bucks now theyre 20 to get in. Oh, sure. When you see the other end of the extreme of the kind of artistic directors criticizing whats making money, thats a little bit rich, if you will, as well could you sit through a 2 1 2 hour super hero movie and watch the cgi for 2 1 2 hours . No. I liked for example, when they put batman and superman in the same movie, thats a step too far. This sounds like seinfeld. Metropolis and gotham, they cant exist in the same world. That annoyed me. Avengers and g a new report on Holiday Shopping put captain america and james bond in the same movie, that would be beyond for me where are you on the james bond is he scottish can he be a woman . Could he be where are you on that he cant be. He cant be a woman its called james bond. Jamie bond. If you want to bring out a new franchise 008, 006, whatever, im all for that. Im surprised this is the first conservative thinking where you care about tradition. Based on ian flemings novels. Exactly that doesnt mean things cant be modernized, right you love that. No. Its like you can bring out, which i loved, wonder woman, great. But i dont think you can bring out james bond as a woman in my view. Okay. All right. I cant wait for the new one. Get in these we have to tread lightly on this stuff. Why i think you need to. I think thats legitimate somebodys going to return 100 billion worth of goods oh, consumers, from november to january, up 5 from a year ago Online Purchases are said to be three times more likely to be returned did you sit through the irishman . Not yet. If you thought once upon a time in hollywood was long, wait until you sit through that. It will be a struggle what andrew said andrew loyd webber. No. You were talking about him earlier. We were. Now this is which andrew your friend, andrew ross sorkin. Another threenamed andrew. You can watch it as if it was a tv show. Four installments. I might do that. Havent gotten around to it. Toms shoe creditors have agreed to take over a company. Theyre known for donating the shoes for every one they sold. They were warned that they would not be able to pay a 300 million loan due next year i know the guy that is the founder here i just wondered about how that works. Hard to give away well intentioned obviously, but youre either for profit or not for profit hard to do both. You can see you run into some issues. Right now news on a popular holiday gift amazon is being sued for alleged security flaws in the ring security cameras an al what bama homeowner says it leaves you vulnerable to cyber attacks. Still to come on squawk box, talking trade. Stay tuned in a couple of minutes. Dont forget to subscribe to our podcast. Youll get interviews, original content, and behindthescenes access look for us on Apple Podcasts or bsibtosqfavorite podcast app and sucre uawk pod today. 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. Welcome back its been more than a week since the u. S. And china agreed on a phase one trade deal we still dont know some of the outstanding details. Kayla tausche joins us as 2019 comes to a close reporter china and the u. S. Are aiming to sign that in january with a legal review of the 86 pages of the text ongoing. China publicly is adhering to the pledges. China will honor its commitments that it made to the u. S. The Commerce Ministry said its proactively dealt with the trade deals. They have two new permits for products by corteva formerly part of dow dupont that stock is up 12 in the last month. Despite the positive moves, there are still flashpoints that exist. Upcoming elections in taiwan on january 11st and demonstrations in hong kong on new years dave could invite more tension. Even so he, President Trump said last week he and president xi could still sign the deal themselves although china has yet to confirm that. Wilf kayla, could things stay the way they are and still be considered phase one is done even without anything formally being signed reporter it really depends, wilf there is this text that has been negotiated and it has been agreed to in principle what happens to that 86 pages of text on all of these issues that have been negotiated for the last two years nearly, thats really the big question because if china is willing to negotiate some of those items but not actually sign the paperwork, then that leaves a gray area as to whether theyre going to backtrack on those programs at some point in the future. Kayla, thanks very much for that joe rubin, president of Washington Strategy group joins us to discuss that very good morning to you good morning. Thanks for joining us what do you make of whats been agreed to in phase one so far and do you applaud the deal thats been reached . Well, what weve seen so far is unclear and thats the danger right now is that we have a holiday gift package that was given to the American People and weve opened the gift. We like it now its being put in the closet and theres no more gift left. And so we have no signed deal. The details have not yet been provided publicly of what is in the 86page document Congress Certainly is not in the loop so a lot of unknowns and thats the real fear here is that this is more like a pause, a politically timed pause than an actual hard trade deal that opens up market access, protects American Intellectual Property Rights and really gets this relationship back on solid ground. Is your expectation that it will be signed or not . Well, thats the rumoring and certainly weve heard before from President Trump that he had a deal or hes had close deals and always an optimistic tone and then at the 11th hour something changes. So predicting the president s pen is never a real safe bet but certainly theyve made enough noise in the last couple of weeks and one would think in the near term the phase one pause would be signed but that is not the end of the story by any stretch. U. S. Economy amidst all of this is clearly doing just fine. Youve been in to china recently whattest your whats your assessment of the chinese . Thank you i was in china for a couple of weeks back in the spring it is a booming economy. It is a tremendous location for investment cities are continually growing construction is significant and its a real opportunity for American Workers and American Business and thats a real danger with this trade war is sort of a selfinflicted wound of significant proportions our farm economy that was looking at the market in china, 1. 4 billion people looking at that market as its next great opportunity has now taken a major blow farm debt is on the rise bankruptcies are on the rise but chinas not stopping its growth even though it has taken a pause and a hit. That economy is significant. When you go to china, you see it you see the cities far out in the distance beyond beijing. 10 Million People in these cities so its a market that we need to have access to. Whats your take on usmca overall . Well, usmca certainly there was a breakthrough Speaker Pelosi and richie neil chairman of ways and means getting what they thought is kind of an agreement with labor that could really get democrats on board its the kind of agreement that is in many ways being seen as a model for future deals but certainly the political back and forth, the need to sort of redo what was already done for the marginal improvement is a hard pill to swallow for American Business and to have a negotiation like usmca now followed by sort of uncertain trade negotiation, there is a lot of uncertainty in trade relationship right now the political tensions in the Democratic Party as im sure you covered are very real. The concerns about labor and the environment, workers rights, these arent going away any time soon the positive for mca is that it lays out a template for how democrats and republicans can Work Together on trade. Does it not give you hope and optimism that a china deal gets finalized, gets over the line . Well, if china is going to agree to the kinds of protections that we saw with mexico and canada, i think youre going to see a lot of bipartisan support for it, but the question of how far will china go, the pressure by President Trump, is he leveraging it effectively . Did he do this sort of phase one agreement to try to capture some gains or is it really more for his own political interest these are open questions if one looks at mca and wants to see an american bipartisan level of support for trade, thats an angle to look at in this trade deal we still dont know the details of it though thats whats concerning we have not yet even after a couple of weeks of discussion about it, not yet seen the actual spes going to benefit and how thats going to be executed. Joel, thanks so much for joining us thank you. Peter navarro will join squawk box at 8 a. M. Eastern time. Coming up, 309 days until the president ial election. From trade to taxes, were going to talk about the big Economic Issues on the campaign futures right now are indicated flat this morning. Couldnt get much flatter. Well be right back. The final countdown begins just two trading days remain in 2019 and the s p is taking aim at its best year since the late 90s. Tesla, the electric car maker delivering from the shanghai factory. If 2019 was a setup in the streaming battle, 2020 is when the real fight begins. Well tell you who has a head start as the final hour of squawk box begins right now. Good morning welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with wilfred frost. Becky and andrew are off today this gentleman here, not Everybody Knows, not Everybody Knows that pedigree. Pretty cool. Thank you right do you think Everybody Knows i dont know. Nixon frost that frost which right . He was a great a great journalist but a great dad. Great dad and if we have time, do we have that picture which is frost, not nixon, by the way. Depends not all of us are so down on nixon. U. S. Equity futures at this h r hour down 8 on the dow. Treasury yields, about 1. 9, 1. 92 no relation to jack frost, for example . No. Are we going to drag out that picture . Which one my favorite. Never been on air. So good, isnt it what, when my mum used to dress us as matching little girls essentially. Not that theres anything wrong sitting on the steps of Buckingham Palace is cool. That wasnt Buckingham Palace. Thats how i see it anyway mum will be pleased you thought her house had that name one of the lesser palaces. Yeah. Tights and sort of sat continue shirts extraordinary. Little hats, too, right when you give me grief for how i turned out, put it in that youve come a long way. So here are some of the stories investors will be talking about today. Tesla delivered the first model 3s they made at the factory in shanghai 15 tesla employees were the first to get their hands on them and one proposed we havent gotten yes or no on that what was the answer . Need to know basis. Tesla began work on it. They will ramp those up in january. Were going to talk more about tesla later in the hour. Disneys new Star Wars Film reined supreme. The rise of skywalker earned 72 million in north american ticket sales. They have 725 million in ticket sales for the year around 40 of the 2019 u. S. Box Office Receipts. And the price of gold slightly lower this morning however the precious metal remains on pace for the largest yearly gain since 2010 gold is getting help from the markets for a threemonth surge in the middle of the year. The s p has returned over 50 since President Trump was elected which is more than double the 23 average market return of president s three years into their term going all the way back to 1928 thats according to Bespoke Investment group joining us how democrats can run against this economy in 2020, former u. S. Congressman and cnbc contributor barney frank and joe watkins, former white house aide to george h. W. Bush and republican strategist. And, mr. Chairman, congressman, ill start with you. We happened to intro the segment with stock market gains. Thats going to give you such a you can drive a truck through the opening that that gives you for whether that is representative of the economy as a whole, but so lets focus on the Unemployment Rate or some of the gains were seeing in low wage workers now in addition to great stock market gains the economy, is that something that the democrats should focus on or should they focus on everything else, character issues, putins put pppet, all f the things we hear i dont endorse any of your points, joe. Some different people will talk about Different Things i do think the question of fairness and equity and distribution remains very important one. I think we also have what i believe is the greatest mistake in the economic program, which was the decision to do a significant tax cut thats benefitting largely the wealthiest and the major corporations instead of putting that revenue into infrastructure. For the longer term i think the economy suffers, and the fact is that the tax cut did not work according to what it was supposed to do it was supposed to give us 3 annual growth and through the supply side mechanism moderate the deficit. Exactly the opposite happened with regard to the deficit the deficit has gone way up. By the way, i welcome some aspects of the trump policy on both trade and the importance of looking at the impact it has on lower income americans and the fact that the deficit can go up without havingnegative consequences to the economy, i welcome Donald Trumps vindication of those long standing liberal principles. I guess, congressman, ill get joe involved here, the fairness narrative, you know, plays into income inequality and not everyone benefits from a stock market or even from an economy but lately, joe, weve seen, you know, the Unemployment Rate at 50year lows and minority unemployment at somewhat historic lows weve seen some of the wage gains that you would hope for when labor gets tight. Youre seeing some of that happen even the fairness argument that democrats have is sort of not what it used to be you say that they should be running on the economy that seems like a tough thing. They have impeachment, russia, ukraine, would you run on the economy . I wouldnt run on the economy if i was a democrat. We know income inequality, in capitalism there are winners and losers Something Like 76 of americans think the economy is not just good but very good thats a 9 increase since last year the highest number since the year 2001. It means that a lot of americans are very, very confident about the direction in which the economy is headeds and thats good news for the president. Makes it hard for democrats to run against the president , to run against his tax cuts the only thing they have to offer in its place if youre Elizabeth Warren or Bernie Sanders are Big Government programs that call for massive spending and raising taxes Elizabeth Warren has said she wants to raise taxes on the very wealthy and Bernie Sanders, of course, would like to raise taxes around the board and the down side for democrats, i think, is significant in that regard i think that a lot of americans, even if they dont like what the president has said in some other areas, will like their pocketbook they like the fact that the economy is headed in the right direction. The recession fears have gone in the opposite direction and that the president has made good on the trade agreements, on lowering taxes, on lowering regulation, on lowering the rate of unemployment. All of the things that economists look at and that Americans Care about hes been able to at least say thus far that hes exceeded all of that. Thanks. Congressman, you know, would you ascribe any of the economic facts that joe said, whether you consider them facts or not, but just the perception that things are going pretty well in this country, does any of it have to do with deregulation that President Trump ushered in this has not helped extend corporate privatebility . Profitability . The trump policy has helped he is the uber kansian we have demand side economics. The deficit has gone way up. Spending is up both in the military and domestically. Tax revenues are down so the deficit goes up and, yeah, i do give ironically, its not what trump said we were going to get. What we havent got with regard to the corporate taxes, that has not produced the significant productivity increases productivity is lagging. The good shortterm boost here, but its not good for the economy long term. Secondly i would say, mr. Watkins inconsistently quotes the polls. Yes, the polls do say that a lot of people think the economy is going well but he then den know grates the question of raising taxes on the wealthy the polls show a great deal of support for that theres a specific micro economic argument by the way, health care. I believe that medicare for all is a mistake politically as well as administratively. On the question of protecting what was done under president obama and health care and expanding it, the republicans have succeeded in getting a court to say theyre going to maybe throw out the whole thing. Thats a very good issue for democrats. The question of protection of people with preexisting conditions the extension of medicare in a number of states republican governors were opposed to accepting the medicaid extension were over ridden by referenda. The polls show this, they remain very significant there are other issues as well economy is a mixed bag. Wasnt overall tax revenue pretty close to flat in 2011 it was kind of flat. We did spend more. I think yeah, and the deficit is way up i heard you you said tax revenue ive got to say this. You said it was down. I dont understand you want more kansian stimulus with infrastructure you sounded like you were disparaging the kansian im not i never said anything like that. What i said is this, i, by the way, welcome this discrediting of the notion that the deficit is such a troubled thing i dont understand how any republican who voted for a balanced budget can with a straight face defend the deficit. But youre okay with it yeah. My the reason i talk about infrastructure is this i would rather i would actually do two things at once give a kansian stimulus but do it in a way that affects the longterm economy. What youve seen is a lot of stock buy back which i dont think a lot of economists think that was a good thing. Thats a sign of shareholder influence which i guess theoretically they have a right to do. We would have been better off with infrastructure. Productivity is down. Some of the buybacks came from repatriating earnings shareholders get their money back, they redeploy it into other capital. That part was good, but there was buybacks beyond that. Thats right. I dont know if i would say they are bad, barney i dont think you can say blank, blank. Most economists say buybacks are bad. I disagree with you joe yeah. I just think that at the end of the day if you want to look at the politics of this, the politics are difficult for democrats but they want to make the mainstay of their argument the economy. I think a majority of americans feel good about the direction that were headed. There were level headed americans that worry if you want to raise taxes, especially on the wealthy. Entrepreneurs, people who create jobs, that thats going to have an adverse impact on the rate of unemployment as well as other things. Joe, the polls you cite the polls you cite take the opposite on that last point. The polls are not the way you make economic policies there is increased support for increasing taxes on the wealthy. The point i want to make again is productivity is again, i do think you get a shortterm rush from the degree of stimulus but i wish it had been instead put into significant productivity improvements that come from infrastructure and also extended employment yes, unemployment is down but jobs at uber and other places are not good jobs and they dont have health care im willing to look at the fact that the president since the president s been in office hes helped create 440 over 444,000 new factory jobs i mean, these are the people who right are important in ohio, wisconsin, pennsylvania and those key states. Yes, and there are other factors that go the other way, including health care. I think the biggest gift the democrats got was the republicans who brought a lawsuit that threatens to undo the whole obamacare and what that means is theres no support for people with preexisting conditions you do not have the extension of medicate to a lot of the poorest states in the country and medicare on the macro, i think thats not a big deal for it. But the micro, both fairness and specifically health care, is very important and to go back to your question, joe, i see no sign that deregulation let me just take the area that i know best, which is financial reform. Theres been very little substantial change in financial reform and despite the right wings argument, theres no evidence that thats in any way impeded the economy. The banks are doing fine theres no shortage of loan money available. No, i dont think deregulation has been the thing i think Climate Change dont go there. Hey, barney why would i not go to Climate Change. The phantom menace. Listen to this wait, the phantom menace of Climate Change c o2 c o2. I hope i hope republicans continue to argue pollution and plastics and how about some of the over sulfur dioxide how about getting people clean water. How about Chemical Waste Nuclear Waste . Youre worried about one extra c o2 molecule . No, im worried about all of those and trump is weakening our efforts in every area you talked about. Barney no, in every area you talked about trump is weakening our efforts to have that. I dont agree with Barney Franks politics but he consistently proves hes reasonable, logical and willing to engage in great debate. Joe squawk, we need more conversations like this. Do you agree with that, barney yes, i do thats why im always eager to come on the show, even in the snow this morning. Perfect lets end it there happy new year. Happy new year to you, joe. You got hit by two joes today. Double whammy. Thats right. Thank you both. Thanks, guys, i enjoyed this. And a programming note, white house trade advisor Peter Navarro is going to join squawk box tomorrow morning. Are you here again tomorrow morning . No. Somebody is. Oh, beckys back. Theyre not it might be just you that would be unbelievable. It might break. Might go off the charts. Becky will be back tomorrow morning at 8 a. M. Eastern time weve got breaking trade news the South China Morning Post reporting that chinas vice premiere lu will visit washington for a phase one trade deal signing this week. Flat. Coming up, tv fans are about to get a new wave of streaming options in the new year. Dont have enough streaming. One really good one. Thats the one that you need to get. Phenomenal the battle for eye balls is already underway squk xitcnawbo wh bc artin. An air force veteran made of doing whats right, not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa 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. 2020 may be the year at variety winners and losers whats best. Return to one. Pause the service the activity and its not nearly as big of a hassle. Because of temptations theyre the ones that are advertising. Charge for it. It is truly going to be a freeforall in 2020, the first half is going to be so interesting to see how all of these new services are rolled out, how theyre marketed, how theyre positioned there seems to be kind of a conventional wisdom in the industry that we will see kind of a rebundling that a lot of these streaming services will look a lot more like traditional cable that we know today in terms of having an aggregator that will offer Different Services and theres a feeling that there will be room for ad supported and there will be room for the very high end just as hbo and show time have existed with adsupported cable for the years. Boy, there will be a lot of interest in early february when disney has the first Quarterly Earnings since the launch of disney plus. There will be a lot of pressure to show real subscriber gains not just seven day free trial downloads of the app there is so much to watch this year. Do you think we see rebundling again just now of o. T. T. Products as opposed to cable products if we do, is there an advantage for the likes of comcast and at t because they deliver the broadband in the first place as well well, the broadband is an absolute indus putable household utility is really taking root as people become more and more addicted to these streaming services that are coming completely over the top. That is absolutely the advantage for big cable. At t and verizon want to get in on that with the rollout of 5g to make their High Speed Internet Services much better, and were seeing an interesting phenomenon where some of these streaming channels are being actually picked up by traditional Cable Operators and running almost as linear channels so youre seeing a blending that is very interesting and i think that we will by the end of the year we will see people coming forward trying to explain to consumers were going to help you navigate all of this confusion with these options and one aggregated bundle i think you will see somebody coming up with Something Like that. So how about the cable bundle itself so where things are getting worse . Things are evening out sports and news . Its live stuff . Like what stays . Its really well, certainly live news, sports. Obviously that is the bet for traditional linear television, but its really interesting right now to see Companies Like disney and like at t theyre essentially hedging their bets comcast. Disney in particular launching espn plus, launching disney plus. Its a hedge for if that cablee cable subscribers continue to dwindle as wt taking disney with their the platforms theyve built, have a hedge to taking all of their channels completely over the top. Will that happen in 12 months . Probably not, but it doesnt you know, even comcast is saying theyre not chasing low margin video customers anymore. They are looking for the high end video and broadband, broadband, broadband. For streaming you need broadband, dont you yes, you do i was thinking davos again. No tv. Im watching like law and order reruns in french. Thats the best i can do if i had netflix, i could be a millennial i would not need anything else. You dont have netflix . No, over there. If i can have a smart tv i dont know where im going to be if its a smart tv you can watch it on your ipad. I know, on a small little i know. You dont have time for that because youre out schmoozing at all of those cocktail parties, right . No. Freezing walking. The globalization of netflix, if youre in davos or dubuque you can i can live on that and id be a millennial. But the globalization of the competition for video, for the traditional heavy weights in the u. S. , the disneys, the at ts, the warner medias, the fact that theyre now poised to compete literally direct head to head around the world as opposed to in the past all the big Entertainment Companies sold their shows to other distributors in other markets. The fact that the whole world is the playing field, that is also a massive sea change for a Television Business that had traditionally been regional. The more content stays king and its always going to be king we seem to be arguing about when youre arguing about pipes, doesnt matter what pipes it is. You need to focus on content the more money involved, more conten full . Half full outlook on media without baby yoda and the man Delorean Disney plus doesnt have the same sizzle. Cnbc, king. Thank you, right agreed. Closing bell, king. Absolutely. We agree, joe. Still to come a note of caution as markets break and rebreak records almost daily. Should investors be putting more attention on what could go wrong in the year ahead . We will discuss. Plus, tesla hits a big milestone in china welte yl llou what the company was able to deliver. Were back in a couple of minutes. Welcome back to squawk box. Futures essentially flat most of the morning. Weve got the dow slightly higher s p and nasdaq a little bit lower. Strong gains year to date with just two trading days remaining. Were up 29. 3 european markets coming up, the tech battle to find the new year there are more than a few that will be critical its an important day for teslas ambitions outside the United States. Company stock already near alltime highs well tell you about todays big accomplishment in china. Stay tuned youre watching squawk box on cnbc welcome back to squawk box. Live from the Nasdaq Market square news flash that was it. Thats according to the numbers. Data compiling for the hedge fund research. More there. Lending tree its still up. Over the past month. Amazon for alleged security flaws. Wall street breaking year. Mike santelli. On another basis with it the s p. That has been reversed people are trading. Joon pull backs have almost become routine in recent years maybe a shakeout is something you should expect. The broader trend remains positive i compare whats going on somewhat with the readings of early 2017 if you have that big launch to new highs after a long period of sideways action is what weve seen in the market right now you did have a slowing down of the rally. You had a little more choppiness and then of course that built to a much more important blowup pop in 2018. Right now i think its a matter of lets see how the market handles a very optimistic entry into january when you have potentially a lot of house money, pent up profit taking it seems like everyone agrees a 2 or better growth economy, 2 or less treasury yields and 2 or less inflation is the perfect formula right now. Well see if that can persist. Mike, i guess the other question is where the sector leadership will come from. Year to date, the likes of tech up almost 50 . Yeah. It kind of on the surface accentuates your point its hard to see it repeat itself straight up again. Exactly, wilf the index has become concentrated its only been five or six stocks driving the market. Thats not true. Right now the very largest stocks are now a very heavy proportion of the overall s p 500 even though its a relatively broad rally in other words, most stocks are going up i think the thing to keep a watch on are the cyclical sectors, things like industrials and financials through much of the consumer discretionary, once were past this trade decision point, whatever we can call this deal, now thats receded and we can give the economy the benefit of the doubt that its going to accelerate from here even if we dont see the numbers just yet doing so. Mike, thanks so much. See you again later today. Now were going to switch gears and go from a big milestone in the markets to teslas milestone in china the Company Started delivering model 3 vehicles built in its new factory in shanghai. 15 employees have put in orders. Its been just under a year since tesla began work which is a record for any global automaker in china joining us, tim meggan and craig from roth capital. If i start with you, how significant a milestone is it that this factory is up and running and theyre proving they can deliver these cars this is a big deal. A lot of people have been waiting for this for a while and its a big part of the valuation in the stock for tesla this is a very big deal. To what extent is the rally, youre in a sell rating on the stock. To what extent has the rally that weve seen this year been based on actual deliverables versus a change in broad sentiment. I think the rally over the last 2 1 2 months has come almost exclusively from china. People are expecting the largest luxury auto motive market in the world to be a really good market for tesla. Some pretty lofty expectations in there for fairly near term deliveries. Youre skeptical theyre going to hit that . I think its realistic to say 50,000 incremental model 3 cars out of the new china factory in 2020 thats a very fair guess some of the expectations are 150 plus, maybe 200. That becomes a little insane. Tim, your take on the significance of the formal opening and delivery of these cars from the shanghai factory yeah, well, hes hit it on the head there the next big question is whats their weekly rate going to be there. Are they going to get to the 3,000 a week model 3s and is there that demand . At a time when the Chinese Market has hit the skids 17 months of downward sales projections there not projections, actual results. At a time when subsidies for electric cars are going away theyre arriving maybe as the party is starting to end. Tim, how rare is it to have that 100 owned setup that tesla had in chiecna huge deal huge deal. Theyre something that other foreign oems or foreign automakers would have loved. Tesla is the first and weve seen something surprising. Weve seen the local shanghai government really support tesla in a way that surprises some longtime observers. They really want tesla to be successful in their community. Craig, can those kind of factors offset some of the skepticism about where we are in the cycle, where chinas economy is, how interested chinese consumers are in tesla we have to give them credit they qualified for local chinese credits. Its green lighted at the end of the tunnel nice outlook there theyve done a spectacular job the reality is as tim said, the market is very, very weak over there. How do you sell aggressively into a weak market there will be some solid but i think thats 50,000, not 200. How significant, craig, is the share price rally thateve seen in the last two months in terms of settling down any question marks over their future financials well, this past year there was some serious questions about the ability to raise capital we never really shared some of the most bearish sentiments. We always thought they would be able to raise capital. Right now they should raise capital. You should raise capital when you can, not when you have to kind of like when they had to earlier this year. That was one of the things that really put a low in the stock this year. I think teslas fairly well teed up for the long term i think its severely over valued and expectations a little frothy with nothing priced in forex cauti execution risk. Where do we stand, craig, for tesla and various other automakers sorry, craig my apologies tim. Im getting confused my apologies well, its starting to come weve been waiting for the traditional automakers to bring the market there their electric competitors, were seeing it with audi, porsche, mercedes, bmw. We have startups, electric pickup to the market in the not too distant future as weve seen with tesla over the last few years, weve seen competitors come and go. What teslas been able to do is capture something beyond the electric car buyer and within the mainstream and whoever wants the hot new cool thing thats what tesla has been successful at doing. Craig, you have a sell rate at a 250 price target . Yes i think the execution risk for this year is not really priced into the stock theres the potential for the heavy expenses on the startup of the facility to pinch results in the Fourth Quarter i think expectations in guidance are way too high if we have a bottom end of the range, its below 500. Craig and tim, thanks for joining us coming up, what to watch on the opening bell on wall street. Its the second to the last trading day. Actually, we have the dow possible up 6. The s p is up a point. The nasdaq down a little over 4. Well get you ready for todays market action. A reminder to subscribe to the podcast. Squawk pod, behind the scenes access and much more download it wherever you get your podcast apparently its audio, no video im told stay tuned, squawk box will be right back. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Markets keep making new highs. Investors will do well to remember the underlying technicals joining us is john rogue, senior manager at Wolf Research to remember them we may not have known them lets hear them for the first time what should we be watching going into next year. We really like gold, we really like silver and we think energy is on the come. Its shy here. Oil is did oing better than ene. Did you practice this a little bit. Use it. Lets me see the up trend. This is the up trend from here are you watching, will . Not bad. Youre not doing it with bill murray backwards from the weather guy. This is real time. A lot easier for guys like us. We like this. Its an up trend. Whats the alltime high. 1921 on gold. Got close to 2000. Where are we going to go . 2011. Why is it weve had eight, nine years of central bank excess and we never got back on this that was supposed to do it whats doing it now . I think gold was very extended, over bought into that peak it takes some time to ameliorate that condition we certainly have done it. We went sideways for a number of years and weve broken out whats the normal relationship between oil and gold usually a certain amount gold is certainly the leader with respect to the commodity. Thats out ahead thats an encouraging sign. Its not necessarily a catchup but youre moving in the same direction. You think the whole energy complex, have a better year in 2020 we do think its going to have a better year still up 7 year to date not as good as most people expected hasnt done as poorly listen, not everything will outperform but we think its on the come for next year. Does that translate into buying s p energy. No, the xle would be the appropriate etf. We like the drillers that would be Something Like slumberge. Theyre likely to lag and the juice or the gas is in the drilling equipment. Hasnt gold plateaued throughout the second half of the year how does that classify as a breakout it hasnt yet broken out but it has gone sideways its facing for the second half of the year. Getting above 1557 is going to be a breakout. The overall averages, s p. 92 well, ill start by saying this, 92 of 93 Global Markets are up year to date. The only one thats down is malaysia its been a monolithic year. The s p is up 98 . Theyre up nasdaq 38 . Its been a pretty good year. What do you attribute it to we do think we are going to normalize around the world and then we went the other way is it that simple . Continued low rates Strong Economy strong consumer. Very accommodating Central Banks. On top of that . Yeah. How about tech . Very hard to pick against tech it nearly always wins. Nearly always outperforms. It needs to rest here given what weve seen in 2019 but its hard to fight against it. The range on the ten year from the charts. You might be able to get 2 or 3 if the cyclical rally weve necessarily got to 3 a year or so ago made a low of 1. 48, thereabouts, we think it can get to 3 . The commodities in general, gold and oil across the board. Platinum is also ike it is turning. Softs are doing better there is some action in the commodity space i think people are not paying attention to. To give you an idea, we built a tankers index at the beginning of the year. Up 68 year to date. We think were good, but not that good. Okay. Pound sterling, keeps all his money, you get it and send it over there immediately, dont you, to going to be isnt that good or bad on the pound . Good for wilf. Even with brexit . We think the dollar weakens. The dollar weakens. Yes. Anything else youre also a euro guy. Youre going across the back and forth between right correlation between euro and sterling unbelievably strong a weaker dollar, probably got stronger both sterling and euro. Hard after march 31st when are you leaving end of next month january 31st. Travel the way you do, in and out constantly over year. But not between the u. S. And the uk particularly if we get a trump deal im very confused where im meant to look at the moment. Sorry dont worry about it. It is only tv thank you. Im look over here, im looking kyle, is this good . We didnt get to see you draw a straight line. I know. You saw that i what is the trend on u. S. For us, joe . What is the trend on what can you draw the trend on this one can i draw the trend on what it has been like to live for the last ten years, like this. So stop your belly aching. Stop your whining, stop your worrying, things have never been better than they are right now im going to end it right there. Okay. Thank you. Merry christmas. High five. Still to come, top tech battles that will define the new year for customers and investors. And can chip stocks keep up their supercharged growth . With trade tensions seeming to cool off, could we see a repeat of 2019 in the next 12 months . Were back in a couple of minutes. The new year will bring major battles from the biggest names in tech. Josh lipton joins us now with one of them. As we head into 2020, there are big tech fights to watch one that will certainly grab some attention, microsoft versus amazon remember, in october, microsoft secured a new massive Cloud Computing contract with the pentagon, it is called jedi. And it is worth up to 10 billion over the next ten years. Companies already now recruiting people with security clearances to work on jedi, according to sources. But amazon is contesting the pentagons decision, saying in a lawsuit that President Trump launched repeated attacks to steer jedi away from aws in order to harm jeff bezos amazon saying in that suit, the question is whether the president of the United States should be allowed to use the budget of dod to pursue his own personal and political ends. The pentagon has captured that the dod is confident in the award. Question isnt just about the money on the line, it is bragging rights. Winni winning jedi is a win that can help secure other cloud contracts. With the u. S. Government and other industries and companies that host Sensitive Data too from banks to hospitals. Back to you. That kind of discounts how hard microsoft worked to get into a position to get this deal too. Too simplistic theyll do a great job, dont you think . Listen, no question microsoft has seen huge gains this year, joe in large part because Satya Nadella continues to prove his worth as a Cloud Computing powerhouse amazon, they were, in their words, egregious errors in the process. A source with the situation tells me expect some resolution here by the spring. All the competitors were suing to make, you know, to not just rubber stamp it to amazon and all these other people were suing for so long that it gave microsoft time to get a really good product ready to go for this, right . Well, that could be the argument well see how a judge rules, joe. The judges. No one in the ninth district where is this judge . It is you know, it is in the u. S. Court of federal claims in washington, joe there was always listen, we should emphasize here, there is always the chance, by the way, there is always another appeal opportunity even after that decision the question is whether even after that, would the reaction be appetite on either side to keep this fight going. What else you got any resolutions or tech company what do you resolve to watch what is the big story in 2020 for us because youre out there with your finger on the pulse yeah, so i think some other interesting fights, joe, i watch beyond this one, i think xerox hp is another one that is going to grab a lot of attention xerox bid 22 a share for hp, hps board said no to that in part saying it is significantly undervalued, the company thats a fight to watch. The player in that fight is carl icahn. He holds stakes in both companies. Hes on the record saying that combination in his words is an obvious no brainer a Shareholder Meeting in the spring amd and intel, keep your eye on, a david and goliath story there. Amd, top performer in the s p 500 this year, gain of 150 as it has taken share from its bigger rival there, guys. Josh what about leadership . Next decade, do you think there will be a lot of shuffling early part of the decade or not . Big leaders there to stay for most of the 2021. Yeah, im just asking a year out. Next decade, next year, next decade, thats hard to say i think it depends where the puck goes to the previous decade, you know, we saw big trends in mobile and social and internet. All these Big Tech Companies certainly trying to capitalize on the next big revenue opportunity, whether it is apple and services, alphabet, selfdriving cars, and big question will be how much growth are they allowed to pursue with being on the radar of regulators and lawmakers like they are. Thanks so much for that we never get to talk. Here we are. That was really good were going to do it more. Thank you. Parting is such sweet sorrow isnt it it is just one day we had together, joe. But its been good. Its been three hours and went fast at least for us. Quick final check on the markets now. Markets are now positive at least for the dow. Make sure you join us tomorrow squawk on the street is coming up next. Everybody get up good morning welcome to squawk on the street. Im scott wapner with Morgan Brennan and mike santoli carl, jim and david have the morning off. Lets take a look at how futures are set up today and you do have, well, mixed picture across the board. The s p is onethird of 1 away from its best gain since 1997. Nasdaq up 11 of th