Transcripts For CNBC Squawk Box 20240713

We are down across the board these would be losses for the week that will end four weeks of gain weve seen up to this point. Does this count as the first week of 2020, even though it is only two days . We could look at the fiveday thing and if it is up, we could say that is the first week this is up as we see crude oil prices jumping we see that wti is up 4. 1 the gain to 63. 72 a barrel ice brent up by 4. 3 Natural Gas Prices up. Crude is the real focus as tensions are on the rise in the middle east. The market is up 30 from last year that is a place for people to look this year as for gains. We are moving crude from 60. We are not moving from 62 but based on the tensions rising you think about the heighten tensions and what this will mean for the potential repercussions in the middle east the idea of additional strikes of any ships going through the straits of hormuz, people will be watching that closely theyve been blessing with the Oil Production for months. We always look forward at the beginning of each year and talk about what could possibly derail when you do all these check marks and everything seems bullish. We have been talking about rumsfeld comments the unknown, unknown. The possibility of a full fledged conflict that we thought was off the table after the American Public wanted nothing to do with that and after afghanistan and iraq trump has said again and again that he doesnt want to do that. Hes an isolationist except for opens a repossibility that there could be a full fledged shooting war something a lot more than what we had expected. Aemon jafers is with us. Rumsfeld said god knows encountered a lot of unknown unknowns after the shock and awe he was pushing for thats right. The unknown unknown is what this means for the u. S. Policy does this represent a major turning point. Is this just a Tactical Response to the situation on the ground in baghdad it is a huge escalation no matter what way you look at it we have a tweet from john bolton the former National Security advisor who left the white house. He says, congratulations to all of those involved in eliminating soleimani. Long in the making the head of the quds force hope this is the first step to regime change in tehran. The question is whether this tweet from ambassador bolton represents anybody still inside the reputation we dont know much about this strike specifically yet. We know it happened nearby the airport where soleimani was riding in a vehicle. Who is Qasem Soleimani and why such Significant Development he led irans quds force an enormously politically and military significant force inside the region. Syria, iraq, iran and elsewhere. He was actively planning attacks on u. S. Diplomats and on bases in iraq. He approved attacks on the u. S. Embassy and forces say he has been involved in proving attacks on americans in iraq for years at the direction of the president , u. S. Military has taken Decisive Action for killing soleimani the head of the quds force, u. S. Designated terrorist designation. The question is what future iranian attack plans will be in the wake on this strike of soleimani by the United States side the enormous figure inside iraq and iran in its hierarchy. Could there be a cyber response, economic response in the region and the like no official comment from the white house. Well wait and see if the president says anything. Hell be vacationing this morning and is expected to give a speech to evangelicals this morning. He is expected on tv this morning. Interesting, the bolton tweet. When you said that, i go, oh, here we go i was with i was wondering because weve seen some of his comments about President Trumps handling of north korea that was critical. We shouldnt be surprised. Even President Trump said hes ready for conflict anywhere. Trump said he was more hawkish than trump the question is does the tweet represent what others in the administration are thinking and has trump come to that way of thinking you probably dont follow every member of congress i follow the person who handles some of President Trumps social media. Looking on the way in, there is probably 30 retweeted quotes from republicans in the senate and the house by him just with huge backing of this on the other side, youve already heard from senator warn and biden and others if you dont have time to follow every Single Member of congress, follow him and you can see all in one little direction, who are sort of echoing boltons comments that this needed to be done thats the only thing the president has tweeted. Similar to our shot there. This is from last night there is our american flag. Aemon, mayor did he blazio says we will harden any of the targets here in new york city. Here we are sitting in times square the challenge for Law Enforcement there is the same as 9 11 you cant harden everything. The attacker has the benefit in that respect the question is, does iran want to clearly you would imagine the incentive is to respond dramatically do they want to invite an american response inside iran . The United States has escalated dramatically will iran escalate dramatically or will they see the attacks Cyber Attacks, proxy attacks . Or Additional Nuclear things. Goes back to the unknowns unknown unknowns. Who knows. Well see. There is a lot of rhetoric the cover of the New York Post yesterday or the day before was that quote frthat the u. S. Cannt do a thing im not saying that pushed President Trump but rhetoric matters on both sides. There is a lot more detail here, joe. Including who exactly was involved or killed in this strike we dont know all of the names of the people traveling with soleimani who may have died in this strike and what they were doing. And why he was in baghdad in the first place. Was this Something Else entirely we do need to hear from the president of the United States as well. What was he trying to achieve here and what does he want americans to be prepared for there is the thought of war it has been from the administration side that this guy was in a caravan planning more attacks on americans. Thats why he was over there they are already saying that and that it was preempted by this that plays into the democratic response. A lot of them are leading the samts with the idea that soleimani was a terrible person responsible for a lot of deaths. Biden is saying, we should have killed but we shouldnt have killed him. He was seen as a threat to the United States and forces in the area and had blood on his hands but what is the next step . What are we expecting . Where is this all leading . That seems to be the general consensus response in the last couple of hours. In a nice way of saying what iran exports across middle east for years and this guy was like one of the main mischief makers. The chief of the Iranian Intelligence on too much exporting iranian policy and miss chi mischief from around the world what did you feel when you heard that this happened, col. Did you keep emotions out of it or the ramifications there is a lot of emotions on be both sides soleimani has been targeted a long time. He has been an independent operator in the middle east. Gets very little super vision. A lot of talk about his ultimately taking a political post inside iran once he retired from the military. As head of the quds force as you guys have been suggesting earlier making mischief for a long time controlling a lot of the proxies in the middle east and elsewhere was there in iraq to talk to the malitias that are proxies of the iranians to further the mission and command further and so on. Soleimani was behind the deaths of a lot of americans. Including those aboard the uss cole conducted by the quds proxy. That was 20 years ago very nearly 15 years ago 2001. Something like that. How time flies. Hes been working on this for a long long time what is interesting here is what happens next one of the independent variables is his replacement his replacement will not get the free hand soleimani had. There will be a lot of super vision from at ttehran theyll see if his replacement can conduct himself without the super vision what will happen next military, approximately attacks, threats to shipping and so on. Attacks on the main land of the United States rather than just American Interest in the middle east, those are tacks are unlikely because what has been demonstrated is that the administration is probably going to respond unpleasantly. I dont think iran wants to get engaged in gender attacks on the main land of iran. It will be approximately attacks, continued attacks on American Interests in the middle east what will happen in iraq and in syria from tehran. We are looking at live pictures now of mourners in the streets of tehran. The question is what does this do to the people there we heard from john bolton saying he is hoping this is the first step in regime change. Soleimani was a popular figure polls show he was more popular and more liked than the president of tehran. What does this do for the political statement in iran . I never thought there was any hope of a regime change in iran. You remember some years ago, there were a Million People in the streets protesting a day after heads were breaken two days later, there was nobody in the streets regime change is extremely unlikely dont forget that the military establishment is closely related to and intertwined with the government they are selfreinforcing regime change under any circumstances was never likely this is going to make it less likely back then, it is all politicized. The point was made that it was no psychological or financial or any kind of support from the administration or United States. That that was an opportunity that was missed to try to engender and arab spring in iran you dont believe that you said the crowds dispersed . Why. So their hearts and minds may have been in it but they didnt have a chance to keep going. No. It is interesting they bring up the whole regime change. One thing likely to the action that there are moderates among the mulahs for example are the economic sanctions against both individuals and institutions plus increased sanctions outside iran that skirt those sanctions. That includes American Allies as well either sanctions or serious discussions behind closed doors. So if you are going to squeeze iran, the best way to do it is economically we need to integrate all the power. Use diplomacy and economics and military force where it is required i cant imagine one of our objectives achievable objectives is regime change inside iran because they are so closely intertwined there. Col. Just is a week ago, there was a story in the New York Times saying the entire region had changed and saudi a rab r rab arabia was changing and reaching out because they didnt think they have the backing of the Trump Administration what happened . Did thing change because the United States is now protecting its own interest in the middle east and was concerned about attacks on americans yeah. You raise a good point about both the convergence and divergence of interests. There is a proxy war in the middle east with fights for influence between iraq and saudi arabia these are ethnic fights as well as anything else one of the things that were obvious to those fighting in the middle east both allies in iran and the United States. This administration was interested in withdraw before and after the administration in 16 so there was a perception that the United States was going to withdraw from the United States but first withdraw to the middle east that engendered a great deal of activity on both sides what appears to have happened is no big change in our objectives. This will be perceived as a Tactical Response to what happened to the embassy and what happened so there is not going to be any perception that United States will become a foul weather friend that it will fight through thick and thin i think that the United States will reinforce and does not have any objectives there that include everybody else allies of the president talk about current and former members of congress. Gingrich said this is a perfect response that doesnt necessarily widen what happens but does send a message. Up to this point, a lot of what iran has been doing targeted oil and tankers and saudi production it has been financial. A lot of our response has been financial in terms of ratcheting up sanctions on iran do you think that irans response could be financial like that, not oil. Not killing troops could it stay compartment alliesed in a financial arena or would this spread . Dont forget that iran with proxies there, doesnt have complete control over them it is possible it does have physical attacks that iran cant control or is only going to marginally support i think we are liable to see a lot of activity in other areas of influence that you suggest Cyber Attacks both by iran and its proxies and economic attacks as well. Dont forget the United States are terrible at Cyber Defense but we are really good at offense. You can expect counter attacks of Something Like that with cyber too, we did that with iran before we did it before. Well look for it to happen again. Col. Thank you. Thank you for the Quick Response we appreciate you coming on this morning, thanks. When we return, more on the killing of irans top general. China reacting overnight and eunice yoon here to tell us what this means for u. S. china relations. You can see the futures indicated down for the dow s p down by about 42 points and the s p down the s p down right now, 1,551. 80 an ounce. Americans are compassionate and hardworking. We arent failing. Our politicians are failing. Thats why im running for president. To end the corporate takeover of the government. And give more power to the American People. Thats how well win healthcare, fair wages, and clean air and water as a right. Im tom steyer and i approve this message. China reacting to the u. S. Air strike eunice yoon with more. China is involved in this entire thing. We may not talk about phase one and phase two but a big part of the story as well. Well likely see iran move closer and closer to chinas or bit. China did respond urging restraint. It is set especially for the United States. The Foreign Ministry added that it opposes the use of force and International Relations and said the sovereignty and tore torry of iraq should be respected. As you know, sovereignty issues and safe guarding are important for china because they are worried about overseeing what happens to other countries the overall impact will be likely that iran will build this relationship even closer with china. Just this week, the foreign minister of iran was in beijing. The foreign minister said both countries need to stand up against bullying and unilateralism. This is his fourth visit there after xi earlier had said that china would continue to promote development from iran no matter how the situation changes. The relationship strategic because china wants to build its road and Belt Initiative also oil so china is one of the biggest importers of iranian oil despite the sanctions because of the relationship that china thinks is very important. In terms of sovereign issues, how does china propose to get involved chinas leader, kind of foe meanting the issues. It doesnt specify what it meant by that. At the same time, any time the chinese see an issue that appears as though it is going to infringe upon sovereignty of another nation, they are very quick to respond that way. A lot of it is because they are lying down that line to say because of the United States and other countries shouldnt get involved in other countrys affairs. But it seems like that is what iran has been doing. This is dealing with regional issues and the chaos theyve been spreading throughout the region but from the chinese perspective, they would see this as iraq suddenly having its territory infringed upon that could lead to steps where maybe the u. S. Would decide one day that it wants to have a strike on china because of an issue it feels is important. Anyway you look at this, it complicates the trade talks on another level . What is also interesting is that from chinas perspective, there has been a line of thinking that the u. S. Has been very much involved in the middle east while that has been happening, china will do what it needs to do in order to build up strength and what it needs to do in the region so not necessarily all bad from chinas perspective. Ive got that side of the aisle. I dont have everybody else to watch how the democrats are responding are we expecting a wag the dog tweet from someone schumer is probably ready from a wag the dog to diverse attention from impeachment, et cetera. This is early still this is not an individual that democrats want to exactly i think you are right. To me, this clearly wasnt wag the dog. This was years of this guy murdering americans and u. S. Troops it is tough to say that this wasnt a diversionary tactic but thats not to mean one of them will say coming up, well talk to a top analyst about what this escalation means for defense stocks to managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Were changing whats possible every single day. And if you run a business, that means a lot. We create Financing Options for your customers. To help them get the things they love instantly. Our data provides insights into what your shoppers have already bought. So you can offer them what they might consider buying next. Our technology and Financial Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . Find the best instructors in the world, and tie it all together with a worldclass software experience. We ended up creating, as you all know, so much more. Peloton is truly a category of one and were just getting started. Now, lets do this. Together, we are going further than we ever thought possible. Good morning welcome back to squawk box. Stocks and oil prices reacting sharply to the u. S. Killing of irans Top Commander general us equity furs show down about 360 points s p futures down by about 45 the nasdaq down by 143 points. That would give back all of the gains the markets saw in the first trading day of the year. Nbc has more on what is happening in this situation. Good morning reporter good morning. The president was being briefed last night the secretary of defense and his new National Security advisor is down here at maralago with the president. He has to decide who he is going to brief will he be calling House Speaker pelosi and read in both sides of the aisle. What foreign calls is he going to make . We have a statement out from the british that urges both sides to deescalate well have to see what the president s rhetoric will be like they are sticking to the idea that this is defensive in nature when you look at the statements they look almost written by an attorney or whether the president will do more of a celebration of the death of soleimani. It is a decision for the president to make. Well see what where he goes he is scheduled to speak to an evaluati evangelical group today in miami. That will be his first time on camera. There is a great deal of assets in the region. If the u. S. And pentagon wants to escalate this, they can talk about the sort of assets they have and if they are going to turn Aircraft Carriers around. There is the uss trueman that is in the sea there. Look for statements from the pentagon on force movement and how the president touches this in the next 12 to 24 hours thank you very much well be checking back with him in the next hour lets talk about the impact of the escalation with iran in the Defense Sector to our guest now, markets overhaul show big declines if you look at raytheon, those stocks do go higher. I think the defense threat is pretty broad irans efforts to detablize the middle east. Chinas defense spending has tripled. There is russia and the threat the threat is global we are not into ground wars and things the mideast tends on that. Versus china and others are more cyber focused. Generally bodes positive for defense names. Raytheon is most exposed with 30 middle east and 5 is saudi. What happens in terms of defense spending based on some of these so the budget is set to be 738 billion that is a level the defense secretary and President Trump has said is a decent level we have to bear in mind. Although investors see that up as 3 growth that is up when he took over the budget, it was over 350 billion. It is up a big amount. Defense tends to outperform in defense every year but in 2012 what other names should we be watching you mentioned raytheon already north rup has expose your to space. That is an area for growth when you think about the next plays we are not big on munitions and ground wars. The next mission will be not just iraq but in space until yesterday until yesterday going back to my starting comments the defense threat is broad and very complicated you were talking about irans relationship with china and where is china spending. China is spending in space thinking of all the different ramifications of this. We hear about a lot of employees, the younger employees mad that their tech firms are doing any business at all with the Defense Department and then Something Like this comes about and from my point of view the world is a dangerous place that is an insane view point to take that we dont need to take strong or bolster our defenses which brings me then to the notion of what would millennials think of a conflict in the middle east. You think about the u. S. Public is war weary which we were after afghanistan and iraq President Trump just pulled out of syria he wants to get out of there suddenly, we get pulled back in. How long would the u. S. Public now be behind some type of extended action right right now, it seems like you have at least a little while if it was extended or. Depends on how it escalates it changes too going back to your point on millennials. We saw it Service Stocks up 80 last year in our group the new threat is more technology i stick to that view i dont think it is ground wars and soldiers fighting each other. I think thats the defense seconds view as well. Thank you when we return, we are more of the latest news out of iran. Look at crude oil prices right now up about 4 . Well be right back. 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. 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Daily cash you get back every day. And no fees. Not even hidden ones. Oh, and if you happen to be somewhere that doesnt accept apple pay yet, theres this. Nice. You can see crude prices jumping as tensions escalate u. S. Killed irans Top Commander in an air strike we look at reaction in the energy market. Reporter good morning. The u. S. Air strike and the death of the general soleimani is seen as one of the most substantial leaders. Khamenei vowing to retaliate concern now about the impact to transportation of oil in the strait of hormuz the risk of retaliation is being reflected in oil prices at this hour prizing over 4 the biggest oneday move in over a month. The biggest producers are trading higher any disruption could lead to a substantial supply and delays. They are saying iran is confronted with a range confronting oil. Attacks from hezbollah and increasing the risk of instability across the middle east those risks sending the japanese yen, gold Prices Higher, the dollar also weeker at a ninemonth low thank you for more on this, lets bring in dryden pence you are also a retired general what do you think about this as it has played out . Happy new year to you it is true where we are today is vastly different from where we were 10 years ago. A cut off in the oil in the strait of hermuz will not affect those areas as much. And what the president has at his disposal broadening economic sanctions now. That has been with some effect now i think the ultimate sanction the president is able to use is the drone strike it is a game changer it is important that it is focused and measured looking at the impact of the oil markets. Do you think that is the full reflection of what we could see and should see with retaliation. I think if up 4 , up 2 a barrel isnt really pricing in what this sort of represents to me this is a Huge Development this gentleman was sort of the minister of plausible stability. Those attacks that they can never quite trace where it leads to, he was the guy he got general orders from the eya tolla to do this stuff the stakes here are quite high iran will have to do something or theyll completely lose face. Thats why the oil market is on tinter hooks when you say theyll have to do something, what is your expectation . Are you talking proxy actions, Cyber Attacks or attacks on ships moving through the strait . I think more oil attacks and attacks on exports to the world. I agree that the attack on the strait of hormuz is unlikely japan and china would be the most harmed, so they would be isolating themselves almost cutting off their own nose to spite their face more mischief in iraq. Tweeting, i spoke today with the chinese member to discuss President Trumps decision to eliminate the threat to american lives and reiterated our commitment towards deescalation. Is it possible iran intentionally or through proxies that it cant control really ratchets this up with a largescale attack on u. S. Troops, not just u. S. Assets, not oil but where they really cause Something Bigger than this i think that is really a great question there is two big risks here. First is disorganized reaction and then organized the first one, they are going to go to friday prayers there will be a lot of people spinning up a lot of people in all of the mosques you run a real risk of a disorganized reaction to this, of people getting intense. Sumai was a very revered person. Taking him out with a real thing. You will loose a little control of what is going on. You dont know that will happen within the areas inside iraq. That is a big risk. The first hostage crisis was a disorganized thing that occurred the second thing is a more organized response planned. Measured and carried out by iran that will take a little more time quickly, does this change what you do with the money you run today . Do you take money off the table or wait and see what happens we have been heavily into defense stocks and well continue to do that. I think we have money on the side to put to work if this creates some volatility. Whatever volatility we have is short lived. Thank you for your time well talk to both of you soon coming up, much more on the escalation between the u. S. And iran news out overnight that tesla is cutting the price of its model three in china tnkhas to a government subsidy thats next. Squawk box is coming right 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. Tesla announcing overnight its cutting the starting price for its china made model 3 sedan by 16 after receiving government subsidies the company is expected to receive the Fourth Quarter delivery numbers today joining us is tim higgins, wall street journal reporter. Tim, how did this happen it sounds bullish. Stock has already made a move. Will the numbers that tesla finally reports, will it justify the move above 420 well, wall street analysts in general are thinking that theyre going to hit their target and thats 360,000 to 400,000 vehicles this year which means they need to do 106,000 in the Fourth Quarter we sue a huge push to get the car in other peoples hands. Norwood, netherlands elon musk can sell in the store new years eve to try to get the vehicles in peoples hands what does this mean with the china subsidy . U. S. Tax credit is going to end. This doesnt make up for that, does it . I guess its certainly a positive. Well, its the marketing of a new era. The u. S. Tax incentive, started off at 7500 and phased out over last year went away on wednesday really helped the tesla get going in the u. S it helped foster an electric Vehicle Market and were seeing the same thing in china. Now its a little bit different. Its a race essentially for tesla to take advantage of that because that incentive is scheduled to go out of be phased out later this year so essentially getting the factory online was a huge push last year. Theyve started that theyve started deliveries in the last few days and now the goal is to crank out as many cars as they can to get the vehicles in peoples hands the price reduction that weve seen in the last few hours really brings down the starting price to a psychological level below 300,000 rnb which was seen as a key thing to competing against other vehicles in that market yeah. I wonder, can tesla be one of the major suppliers there . And, you know, the gdp per capita, chinas still pretty low. Can a lot of people afford these cars well, one thing, china market is one of the largest luxury car markets in the world its where electric vehicles are growing. Those pieces of ingredients are seen by the bulls as being very advantageous for tesla the challenge, however, is that the overall auto market has been on the decline for 17 months and eb market has not been doing so great recently as the government pulls back on some of those subsidies. You do the numbers on percentages, you know, over 1 billion people and i guess not Everyone Needs a vehicle to afford one of them the numbers are there. Thanks, tim, appreciate your getting up so early this morning. Thank you. Thank you still to come this morning, oil prices reacting to news out overnight that irans Top Commander was killed in a drone strike now wti up 4. 1 to 63. 72 per barrel well have what this means to the markets next. Plus, mike axios joins us xto lkbo t cpan ne tta autheamig trail. 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. 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. Breaking news. Top iranian general killed in an airstrike. Oil prices moving higher stocks moving lower. The second hour of squawk box continues right now. Good morning, welcome back to squawk box here on cnbc im joe kernen along with becky quick. One major story, Global Markets reacting to the u. S. Killing ka sell so Qasem Soleimani the s p gained 27 yesterday. Were down 43. I think the nasdaq gained about 117 yesterday. Down 133 all three indices measuring where we are for the year. They would now be down after a really blockbuster start yesterday. This is one of the unknown unknowns that we were talking about. You never know we know that theres issues in the mid east, but you never know when an actual shooting war, its unclear whether that happens. Hopefully not. But weve talked that its not only iran but irans proxies the market is obviously concerned but concern what is it, 1. 25 , 1. 5 . Same with oil prices 4 is a big move obviously but its not weve seen much bigger moves in the past. I think he thinks this is not a fair reflection of the risk that now exist in the middle east. Get to the details of the strike, hans nichols joins us. What can you tell us reporter well, secretary mike pompeo has had a very busy morning. He is calling a lot of his counterparts across the world. Hes tweeting out hes talked to the germans, hes talked to the british, two individuals in iraq, one in the parliament and the prime ministers office. It gives you a sense of the fractured nature hes spoken to the qatar ri. He spoke to a member of the polit bureau in china. The president will be receiving updates all morning. He spoke with the secretary of defense last night as well as National Security advisor. Well see the key question Going Forward here is whats the president s rhetoric is he going to couch this as being purely defensive, which is initially what a lot of the legal arguments have been . You heard that from secretary esper yesterday. That the u. S. Has an inherent right for a preemptive defense or does it get couched in something broader. You heard from the president s National Foreign security advisor john bolton talking about now is the time for regime change weve never heard that from trump. All weve heard is he wants to talk and you cant go after u. S. Embassies and thats what this response is. We have to wait until the president s rhetoric is. If there are any announcements from the pentagon on Additional Forces moving into the theater you have the u. S. S. Baton that has a deck full of marines somewhere in the mediterranean you have an Aircraft Carrier the truman in the north arabian sea. If that starts steaming up towards the gulf, the strait, thats another level and the pentagon isposturing for offense and defense. Hans nichols. Joining us to talk more about all of this is bernard haikel. Also dan jurgen. Bernard, lets start with you. You say this is a more important killing than al baghdadi or osama bin laden. Why . I think so because in the previous cases the organizations have been decimated by the time they were killed this man was leading an organization that was still fully functional and clearly ready to engage in another attack on u. S. Targets and its on the basis of that u. S. Intelligence that the president has decided to take him out. How do you know that for sure thats the claim. Okay. Because weve mentioned that weve mentioned that and certainly it makes it hard to criticize the action and its almost unmeasured action with him gone, does that change the organization or does iran simply step up its actions using someone else putting them into that role i mean, it loses iran loses a very powerful symbol, but the organization that he leads is a real institution with, you know, fungible people that can be moved around and they have assets, they have sleeper cells in europe, probably in the United States. They have nonstate actors throughout the middle east so they have lots of options including the use of drones and cruz missiles like they did in the september attack on Saudi Oil Installations so i would expect an asymmetrical response from the iranians and they will bide their time. I think structurally theyre quite structural and coherent regardless of the death of this man. Dan, we see the markets reactions with the dow futures down close to 350 points how do you reassess these risks given the actions . I think this increases risk 1 1 2 soleimani basically had a shouting match with trump where he said, youre a gambler. He said, were the masters of asymmetrical warfare thats a message that will continue some are worried whats going to happen in iraq they could attack other countries in the region where they would think the u. S. Would be less likely to reply. We are in an escalation track. I think the other thing to say is that soleimani is probably the most influential person in the last two decades in the middle east given his mastery from lebanon, hezbollah. He was the one who turned syria down for assad in the civil war. Of course he was to a considerable degree running the show in iraq, yemen. All of it was focused recently on trying to push the United States out and claiming his sort of final victory over iraq. So he said that youre quoting him with the asymmetric risk comment looks like the risk might have been cut both ways for him. Yeah. He said trump was a gambler. I think he was gambling. Yeah, looks like it. Thinking he could push the u. S. Out after the thing at the embassy, get a vote against the u. S. Being there which turned out to be a very bad gamble. Exactly, yeah. And he had gone from being very mysterious shadowy figure to being almost a kind of celebrity in the region. Dan, we had john kilduff on in the last hour he does not think that the oil markets are sufficiently pricing in the risk given the potential for escalation here. What do you think . I think theyre in that wait and see. They were after apcake that lasted about a day and a half here as bernie has said, this is something thats going to unfold there are going to be a series of steps and i think well see the market continue to react so right now its in a kind of waiting phase to see what are the next steps. Bernie, what would be some of the sort of things that they would do in the meantime. First, i think the iranians seriously miscalculated by thinking that President Trump was not going to ever retaliate. Because they thought he wanted out of the region they nt waed o wanted out the region they attacked a bunch of ships, attacked saudi arabia. There was never a frontal response by the United States. Now there is that response and i think they will be calculating many times over. If they do retaliate, it will probably be through third parties so they have plausible deniability. Everyone will know its them. Because they dont want they dont want a frontal attack the United States is the most powerful force in that statement. It makes it the most powerful country in the middle east and the iranians know it. Well, i say after apcake they had not so much plausible deniability as implausible deniability. It was pretty clear what they did. As bernie says, they would like some deniability but on the other hand they would like their fingerprints on it so the people do know. And the pressure in iran will be to do Something Else i think theres going to be a vacuum he had a unique role because he was everywhere his relationships, his knowledge, his maneuverability i think it will be hard to find somebody else who is so central who had his authority. Obviously there is succession. He was uniquely powerful man. Bernie, you think that iran will be measured but they dont completely control all of the groups that they act as proxies for. The proxy groups who are responsible for some of the things on the ground i mean, thats their claim. My sense is when you look at how their proxies behave, often it is very much a command and control situation where the iranians are very much in control. So dont believe that if theres something that happens, it is because it came directed by iran absolutely. How does this change the politics for the rest of the region what does saudi arabia do . Look, i expect that the saudis and the israelis are probably really happy that this man has been taken out because he was a real menace to them, but the saudis in particular are very limited in what they can do they feel very vulnerable. One way in which the iranians can respond to this is to attack. Right saudi arabia as well as the United Arab Emirates an attack on building, infrastructure, Desalination Plant would be a major catastrophe for these countries. Thats of course what apcake really demonstrated, the vulnerability of this whole region you mentioned israel something that was unfolding was a war between a war. A low level conflict was beginning between israel and basically the cuz force with soleimani with them being put on the northern border of israel. If this was yesterday, we would have said, thats a potentially very insent air ri situation so that situation is still there as well. Dan, bernie, want to thank you both for your time this morning. Thank you. Coming up, this mornings stocks to watch. Well go back to what we normally do, at least temporarily. Plus, continuing coverage of this mornings top story Global Market reaction of the u. S. Air strike that killed irans top military leader who was actually implicated in the coal attack 18 years ago hes been breathing and Walking Around for that long not anymore. Squawk box will be right back. With technology that helps you offer shoppers a better experience. Take your companys app. We can add in all sorts of capabilities, which help your customers manage rewards, offers, and payments on the fly. And now, applying for credit can happen in a flash. That way, more people can start shopping with you on the spot, wherever they are. Hows that for changing whats possible . Keeping watch on u. S. Market reaction to the u. S. Military strike in baghdad. Heres the other stories including business wise. Tesla has cut the starting price for its china made model 3 is he dance. It comes after it received subsidies for the electric vehicles over there. The new price is 16 lower just under 43,000. I just wonder, is that the amount of the subsidy . Did they hand the entire subsidy back to the customer was it 60 before . I dont know. Im not sure. 17,000. And the one question we had a tesla analyst this week whos very bullish, what really matters are the margins. Can you show me increasing margins . Its great news in terms of being able to get new cars out the door hows your translation skills not good. A lot of zeroes. Yeah. Two Gene Sequencing Companies have called off a 1 point be point 2 billion takeover deal. Illumina had planned to buy smaller rival pacific biosciences. It was a transaction that was originally announced way back in november of 2018 Companies Point to the lengthy, yeah, approval process that had an uncertain outcome the ftc filed a complaint to block the deal. The Federal Reserve is out with the minutes of its most recent policy meeting. That comes this afternoon. The release will take place at 2 p. M. Eastern the fed left rates unchanged as you know back in the mid december meet joog still to come this morning, what investors need to know about geopolitical tensions invescos top political strategist will join us next its down 300 points which is annian i annism an improvement they were down by 400. S p down by 40 points and we will be back. Time for todays aflac trivia question. The Mars Exploration rover spirit landed on mars on this day in 2004. How long did it remain active . The answer when cnbcs squawk box continues why aflac . Because Health Insurance doesnt always pay it all. Aflac after surgery we had extra bills followed up visits, deductibles. We thought Health Insurance had us covered up for everything, but it didnt. Aflac gives you money directly to help you with those things. I want to thank my wife, my mom, the duck. Get help with expenses Health Insurance doesnt cover. Get to know us at aflac. Com new fixodent ultra dual power provides you with an unbeatable hold and strong seal against food infiltrations. Fixodent. And forget it. If you listen to the political it sounds like we have a failed society. But nothing could be further from the truth. Americans are compassionate and hardworking. We arent failing. Our politicians are failing. Thats why im running for president. To end the corporate takeover of the government. And give more power to the American People. Thats how well win healthcare, fair wages, and clean air and water as a right. Im tom steyer and i approve this message. Now the answer to todays aflac trivia question. The Mars Exploration rover spirit landed on mars on this day in 2004. How long did it remain active . The answer, seven years. Welcome back to squawk box. Theres the futures. Theyre now down 275 points. At this point were up for the year were down 35 on the s p, down 275 on the dow nasdaq down 108. About flat i guess on the nasdaq and the s p is still down, i think,since it gained 27 yesterday. The dow was up 330 so thats slightly higher. Now were doing a twoday cumulative look at how were starting 2020. Thats better. We were down about 370 did you see anything worse than 370 . I saw 388 at one point. Joining us now, brian leavitt, Global Market strategist for north america at invesco. Recently youve been feeling okay about the stock market and prospects for 2020 yes does this change anything for you . No. I dont think this changes the larger over arching narrative. Look, what do we know as investors . We know geopolitical instability brings this forward. This could persist we have to look at what the retaliation looks like but the reality is the big mac crow stories have not changed and id be very surprised if we look back a year from now, two years from now and say this was the event that ended the elongated business and market cycle. In the past, and be we dont want to over state whats happened so far, but even military conflicts that become much more widespread or that, you know, turn into something much larger arent necessarily market killers. That is correct that is correct. You could go back to that quote that warren buffet had during the 2008 financial crisis where he said in the 20th century we endured two world wars and any number of things and the dow went from 40 to i remember when the iraq war i remember when the markets actually gone up. Exactly. But what investors need to focus on again, ill come back to t the big mac crow narrative. Its still a slow growth world inflation is benign. Policys accommodative equity is cheap. These type of events in a dangerous world happen we saw it last year with the Saudi Oil Fields and yet it was a year that markets were up 30 . What most investors would like to know is when geopolitical uncertainties strike and when you get to the near record highs, markets are actually positive 12 months. Tom is making more comments he says the u. S. Remains committed to deescalation with iran but the act against soleimani was lawful what i was getting to about the stock market the way it reacts to conflict is one thing, but i was just going to get to, but then again, the oil markets right. If the straits of hormuz or there was a serious supply disruption, it was 100 oil right. Globally, then i could see some type of effect on the dploeblg ee c Global Economy thats a different story. For a long time Commodity Prices have been relatively stable and supportive for u. S. Consumption. Yeah, any type of spike could slow Economic Activity but remember we have policy levers to be able to respond to that. So this is an environment where the Federal Reserve has stepped in to support growth each step along the way and if conditions get too tight in the United States, whether thats from the yield curve flattening, the dollar strengthening, Commodity Prices moving, i think policy makers will step in . You think a situation like this could force the feds hand . I dont think that the fed is going to move as a result of, you know, what weve seen overnight. Yeah. Yet i think youd have to watch financial conditions if you get to a place where we were last summer where the yield curve had inverted and, you know, we have concerns about Commodity Prices, concerns about the dollar then, yeah, the Federal Reserve would act if they believed we were in a period of price instability, deflationary impulses, then the fed would respond. No, i dont think the fed responds to this immediately. Okay. All right, brian thank you. Thank you. You were already coming in, right . I was already coming in. You had to bone up on all of this like many of us exactly. Things change be ready be ready for anything. When we come back, Global Leaders abroad and politicians here at home are responding to news of the u. S. Attack that killed a top Iranian Military commander. We will bring you those headlines next right now as we head to a break, take a look at the Airline Stocks biggest decliner, oil prices are surging and fuel costs are the Biggest Issue for the Airlines American airlines is down 2. 78 . Southwest down 2. 81 squawk box will be right back. Welcome back to squawk box, everyone this morning the futures are down dow futures indicated down by 278 points believe it or not, that is some pretty significant improvement from where we were earlier this morning when the markets were down by over 380 points. S p futures down by 36 nasdaq down by 118 eamon javers is here good morning again. Reporter good morning again to you, becky. No statement from the president on that strike outside of the Baghdad Airport. But he is tweeting a number of accounts including this from the state department, a travel warning for americans in iraq saying that all consular operations at the embassy in baghdad have been suspended. U. S. Citizens should not approach the embassy in baghdad. Were getting tweets from the secretary of state mike pompeo whos been speaking with various people around the world. I reiterated our commitment to deescalation says the secretary of state we dont have a lot of details on the strike which happened around 8 p. M. Last night it did take place Near Baghdad International Airport right in the heart of baghdad in iraq he was riding in a vehicle that was hit by an airstrike. The United States has claimed credit for that airstrike. A little bit about Qasem Soleimani himself. Very high ranking official inside of iran he led the quds force. According to the United States hes actively planning attacks on u. S. Diplomats. United states saying soleimani was responsible for the deaths of Many Americans from 2003 onward this is somebody that is enormously influential both militarily and politically the iranians are vowing revenge. Not clear what form or where that might happen. Well wait and see what the white house has to say as well eamon, thank you. Stay with us lets bring in mike allen, axios cofounder michael, good morning. Good to see you. Its nice to see that were getting the same sort of analysis and response from both sides of the aisle this morning. Read that assar camp its amazing but we did read it that way we caught on yeah. Yes. Youre very subtle but i see what you do at axios. I see the snarky no, im kidding. Thats that other guy, swan, who i love anyway, you want to just summarize some of the comments i think we have some tweets from senator warren i want to talk about joe biden, actually, at some point. But across the board, the right was pretty positive about taking this guy out, that we can say. Very much so. We want to be clear. America now is on a war footing and the responses from both sides reflect that so you have republican senators saying the president is following through new years eve. He said iran is going to pay a very big price, all caps, and were seeing there response from democrats. Senator warren pointing out that this was a bad actor, he was responsible for hundreds of american deaths and yet warning against escalation you were asking about biden. Former Vice President saying the president threw a stick of dynamite in a tinder box those are candidates though. Listen to what Speaker Pelosi said Speaker Pelosi whos third in power in the government says congress was not consulted in her statement she uses the word escalation twice. She says she wants congress to be briefed not only on next steps here but also on the escalation and deployment of american troops. Is there anything to do that . To do Something Like this does the president have to consult with congress to take out this guy after what happened at the embassy . That will be debated and disputed for sure congress will interject itself into the soup here. The great Jonathan Swan said sources close to the trump National Security team say that something the white house has been very worried about and is prepared for is a Cyber Reaction from iran. Yes. That there could be a cyber attack that is the surest way that iran could attack stateside we heard the general saying on morning joe the u. S. Is vulnerable in the cyber realm. Thats of great interest to your ruiers that is the asymmetric response well be watching for. People keep saying asymmetric response, mike what does that mean . Yeah, so its a nonsuper power attacking a super power, as you know, and you can do that through cyber, you can do that through attacks elsewhere, maybe not directly on American Interests and so finding other ways to respond and theyre sure to, thats why theres so much alarm around the world no chance iran doesnt respond the question is how, where, who are they going to take on . Ive got people sending in some comments from the late john mccain speaking about this guy, years ago. When are we going to do something . Is this going to go unchallenged are we going to let this are we going to let this slide it goes all the way back to the coal if you can believe that. Yes. And probably thousands of americans. Do you have any firsthand knowledge on whether we know he was there planning more attacks on americans the white house is saying that do you have separate evidence that thats true can we believe that . So the administration is saying they have intelligence about planning attacks, but just look at what hes done look at the track record back when general David Petraeus was commander of Coalition Forces in iraq, he was warning an evil person, this is someone who through ieds, other devices cost Many American lives and is someone who greatly increased both the risk and the toll for americans. I think democrats and the president ial candidates on the democratic side, mike, you can correct me if im wrong, i think theyre treading a little bit lightly because this is a very bad guy. Its tough to say anything my point earlier was that if they just let it all hang out, we would have heard wag the dog by now, and we havent heard that because were in the middle of impeachment and all these other things that would have been schumer, i still think hes going to say that at this point, that this is a wag the dog because he had the latest email or whatever is that above what theyre likely to do on the left the first half of what youre saying for sure is true, and that is look at what has been done look at what has been planned. Look at the pictures weve seen from the last few days very few americans are going to object to that, but this is a great risk and the New York Times pointing out this morning, this is something that george w. Bush and barack obama walked away from all of the coverage in the region, long in american siteghs when i read Vice President bidens comments against the bin laden raid for the second iraq war. Against the first. For splitting iraq into three. Against the surge. Secretary gates, who was president obamas defense secretary i could tell this is where you were going. You know that quote of course. You know that quote. Of course. Said in his book, biden has been wrong about every major security and Foreign Policy issue for the last 40 years. I cant help it, when i know that and i read this, it just for me, its painted what i will say, this will be very interesting in the next few hours. Vice President Biden was there weve seen the pictures of the Vice President in the situation room unlike so many other people on the trail, he knows the intelligence, knows the options, knows the choices and so in hearing his view of what weve done here, what was considered, why it wasnt done in the past always going to be extremely illuminating eamon i want to bring you a little bit of information from Richard Engel who has spoken with the president of iraq on the telephone. Richard engel reporting that the iraqi president saying the situation in iraq is very fragile and precarious iraq cannot be condemned to another cycle of violence. The situation now is very dangerous, no doubt, and that is why i am urging calm thats the reaction from the iraqi side of all of this. There will be some questions about whether the iraqis were looped into this, participated in it in any way or whether this came as news to them as it did to us. Eamon brought us the bolton comment earlier. Were you surprised i thought he was voted off the island hes back. Hes back with what he was saying about the president s handling of north korea, i was surprised he would be so positive i guess he you know, if its hawkish, hes for it. A different way to say it is not being positive, being realistic. He, too, knows the intelligence. Obviously incredible differences, some of which we have heard about, some of which we have not, that he had internally, both expressed and unexpress unexpressed, but what he said there is very helpful reflection of what they knew, what they were thinking about, what was considered when this decision was made. Okay. That was you with the Vice President. That was your interview when you were asking him you were kind of i dont know, you probably didnt like that. Vice President Biden on axios and hbo, we were in iowa and Vice President you kept asking him about hunter. What got into you . The Vice President knows hes going to be asked about that we asked him about a lot else, too. We had a very illuminating conversation including life on the trail and his record. Call me, mike, so we can really talk, will you . Your efforts this morning to get eamon and me in trouble, so far weve stopped your efforts. Im not why would you get in trouble questions questions. Anyway, eamon, thank you. Youre welcome. Eamon, see you soon thank you all. Orui cere tovagofhe sty still ahead. M, because its tailored to you take the personal assessment and get matched with a proven weight loss plan. Find out which customized plan can make losing weight easier for you myww. Join for free lose 10 lbs. On us. Welcome back, everybody. Two big calls out on apple this morning. Bank of america raising its price target from 330 to 290 and rbc raising its price target looking for 333 from 295 that stock briefly topped 300 yesterday. The market cap stands at 1. 3 trillion to put it in context, thats nearly 11 ibms joining us to talk about apples rally is patrick are you still an investor in apple . I wish. No its a long, long time ago i was thinking yesterday when we invested in apple, it had a 60 million valuation. Try multiplying that. It went down and they oh, god, that fs a short run. It was 9 billion then yeah. Now its 9 trillion. 1. 3 trillion. Yeah. Im not saying its ever going to be there. You know, its interesting because a year ago today apple stock tumbled. Very big day took on the entire market because apple said it was seeing tensions with the china trade talks and slower sales in china and other places. It started out at 150, went down to 140, ended up at 300 its been a great run for apple. This has been a terrific year. Frankly, i dont see how its going to stop. I was looking the other day, as i counted them they had 21 new product introductions last year, and the refinements. The new ear buds and Different Things like that. Pro you know, you have facial recognition. Everything changes a little bit. But its not its amazing the last year and a half, maybe two years i think investors look at this stock very differently, too. No longer necessarily a tech company. Also a Consumer Products company that has built an ecosystem. I live right near an apple store. Theres never a store without a line i live in a residential city you go to the 59th street store, theres always a line. Someone is coming to an apple store for something. And to me i think the new applications in the Health Care Area and what theyre going to do with the watch and what theyre going to be able to tell you about not just your sleep. I mean, they can measure almost anything out of this just incredible. You top that off with the air buds which i dont have the latest numbers. Voice canceling ones . Yeah. Ive got to believe its going to be approaching 100 million of these and growing like crazy im sure it was a very Big Christmas present. They have a great engine going. Alan, you said you couldnt see anything stopping this a year ago today people were very concerned about the china trade talks. Tim cooks done a better job than anybody in walking a fine line there is a chance the trade talks go south and that tensions flair back up. There are always exogenous factors that affect the markets. I woke up every day and something affected something i owned. I had no knowledge of. It hit us. I want to be somewhere where i can get closer to the action was it to make more money no, it wasnt that was a good move it was enjoyment. More just in being involved in the early stages of building businesses, which is how we got involved in apple. Apple was at that stage. No one did. Anybody walking by has an iphone, how do you invent something and then do it again with the air pods . Thats what i said. I dont know how you knock them off. Something else is going to come along. Every day theres Something Else music comes from apple, my tv will come from apple. You read about richard i saw that. Hes joining and hes a formidable resource. Weve all watched bright little lies and game of thrones. Hes a very Creative Force they want me to do this alan, im willing to wait until youre gone a long time. No, im willing to wait until you do it a trump tweet . Do you mind if i do that at least youre apologizing before you do it. President trump just tweeting iran never won a war but never lost a negotiation i guess thats a dig at the John Kerry Barack Obama interesting first tweet it is as i said, i apologize i didnt want to set you off. Why dont we talk about biden coming out with record numbers. Record numbers of what . Raising money. Fundraising so did bernie. Bernie had twice as much. Bernie always does. Biden youre spinning bidens paul try numbers positively. 22 until. Now that were talking about iraq. If you spend your money wisely you dont need as much money as the other guy look at it from that standpoint. While youre here, i want to talk to you about david stern. Good friend of yours a friend of the show you were with us on the day he went in for surgery a couple of weeks ago. Obviously youve known him well. We talked yesterday about the incredible impact he had on the nba. He took over the league when it was troubled built it into an amazing place 30 years as the commissioner even Rodger Goodell said he was the commissioner of all commissioners. What are your thoughts on this day . David is a very special guy he joined us accidently he met you had hired him before the nba and after. Hired is not we didnt hire david he was trying to figure out what he wanted to do for the rest of his life, as a lot of people do. I said, why dont you come and sit in on one of our meetings. We have regular meetings every monday morning he kind of liked it. It was a whole new world to him. He didnt know the lexicon the most charming thing about him is he would ask questions that im sure there was sass over the last five years i would say he was a venture capitalist. He started investing not just sports, every company that came in it added to it. It enhanced our image. They all wanted him as an advisor. Diane, his wife, had to do that. He was an advisor, he was on the board. He probably had his own portfolio thats maybe not quite as big as ours were investors together in things he had an image far beyond the sports industry. You walked down the street with him. He was stopped by everybody. He was controversial had a great curiosity. He will be sorrily missed. This monday well have an empty seat at our meeting. A quiet moment of silence. We really will miss him because he always added to the conversation no matter what it was. He managed he built a business. Thats the thing it wasnt just being a commissioner of basketball, it was he had a huge business he was running. He took that the league, Charles Barkley mentioned this yesterday, that he joined he was in the draft in 1984 just affidavit took over the nba. He pointed out that average player salary when he started in 1984 was 250,000. Now its 9 million because of what he did with the International Building up and with the television rights, which ithink multiplied 30 fol over his 30 years. Yeah. He got the owners angry at times. He got the players angry took some courageous decisions the Magic Johnson decision was a very courageous one at the time. The right one, i think certainly had a big impact on peoples perception of that horrible disease and Magic Johnson is still around to celebrate it pete cassario as well pretty close. Yeah. And a tumultuous year. To navigate through that without knowing what the future was going to bring made all of our dreams he was like that in venture capital. Just to wrap it up, when he came just for fun i gave him ill tell you a story, i gave him a card which said david stern intern then we everybody in the office said he cant be an intern he was a special advisor, but one day, i dont remember a few years ago, im a friend of bob deniro as well he played the movie the intern. Thats right. Thats right the elderly guy yeah. Of having a lunch with david stern, the intern, and bob deniro, the intern we went up to a place and bob ate lunch at 3 00 in the afternoon. We had lunch in an empty restaurant and i put these two 75yearold interns together nice. David stern the intern special advisor is going to be missed by a lot of people. Alan, thank you very much for being with us today. Alan patrikoff as we remember david stern. When we come back, gold prices jumping on news that the u. S. Killed irans Top Commander. Gold prices at 1 j. 549. 30. For instance, we know how your customers shop. And what theyve already purchased. ,549. 30. 1,549. 30. And we use those insights to show you what they might consider buying next. Midcentury modern, nice. That way, you can keep sending them offers for the perfect products. And that keeps them coming back. Hows that for changing whats possible . Welcome back, everybody. Take a look at the futures this morning on news that irans Top Commander was killed by a u. S. Drone strike in iraq you can see the dow futures indicated down by 276 points that is improved over what we saw earlier when they were looking at the futures down more than 380 points. S p futures down 36. Nasdaq off 118 new details this morning in carl Carlos Ghosns escape. Page pay the and phil lebeau phil, lets start with you what do we know this morning reporter becky, the private jet Company Based out of turkey has filed a criminal complaint against one of its employees because, remember, there were two private jets that got carlos ghosn from japan, then to turkey, then on to lebanon and the company, mng jets out with a Statement Today saying that it has filed a criminal complaint against one of its employees because it did not know that one of its jets going from osaka, japan, to turkey to ferry mr. Ghosn who was not on the manifest so this is the beginning of getting a few more details about how carlos ghosn got out of japan and eventually to lebanon because right now we dont have a whole lot to go on besides this page, lets talk more about what happens next. Now that he is in lebanon, what happens to the trial in japan which, by the way, it looked like it was going to be postponed until next year anyway, 2021 what happens right thats my understanding. The trial was set for later next year, however, at this point since he is considered a fugitive by japan, the trial will not go forward. The case will remain pending against him in the event that japan is ever able to bring them back within their jurisdiction to try him it is also possible that japan can seek the assistance of lebanon, not just in returning mr. Ghosn but pursuing criminal charges against him in that country. Thats also a possibility. Do you think lebanon would go along with that . No, i dont think theyre going to go along with that. As everyone knows, interpol will notify a country that they are requesting the arrest or detention that is a suspect or facing sentence, but i do not think lebanon is not going along with that. Interpol cannot force lebanon to do that. He has substantial ties and citizenship in lebanon theyre going to accept the notice probably but not act on it. What is japans next move japan can do a couple of things first, they can continue to try to negotiate with lebanon for a diplomatic solution here even though there is no extradition treaty and lebanon is not required to arrest mr. Ghosn, they can do it voluntarily. They can agree to help japan in this situation either for economic reasons or diplomatic reasons. The other thing that japan can do, and theyve done this already, is notify other countries around the world that in the event mr. Ghosn travels outside of lebanon, he could be arrested and subject to detention and eventual return to japan. So their options are limited but i do expect theyre going to continue to pursue the case. Phil, what happens next for carlos ghosn quick answer. Reporter he plans to talk next week and he says this is the beginning of getting his story out, about how he was wrongly accused of crimes that he did not commit. The problem with that strategy, becky, is while he wants that to be the focus, the focus right now for most of the people in the world when they look at carlos ghosn is how did you get out of this country . Its a great mystery and until those questions are answered its going to be tough for him to change the story line into, hey, here are the crimes that i was accused of heres why i didnt commit them. He may want to talk about that people want to find out how did you get out of the country. Bill aphil and page, thank yr your time. It is 8 00 on the east coast and you are watching squawk box on cnbc u. S. Kills a top iranian general. Markets reacting sharply with the futures down and oil prices spiking, we will bring you the latest on this story as the final hour of squawk box begins right now. Good morning and welcome to squawk box live on cnbc. We are at the Nasdaq Market site in times square. Im joe kernen along with becky quick. Andrew is off today. Were following the Worldwide Market reactionat this hour to the killing of the top iranian commander Qasem Soleimani in baghdad. It was from a u. S. Air strike. U. S. Equity futures are down 275 points nasdaq down 116. Thats almost exactly what were gaining yesterday. Nasdaq im sorry, s p gained 27, its down 35 so started off with a bang this year, so to speak, and were getting some of that back, most of it back well see what happens by 4 00 on friday. The treasury yields, as you might expect, rallied not yields but treasuries themselves rallied. Were at 182 we were above 190 yesterday. Lets get to eamon javers yesterday. He has the latest details on this strike and what we know at this hour. Eamon . Reporter we still dont have a full dress statement from the president of the United States yet but we have some retweets and now a tweet from him the president saying in the past couple of minutes. He said, iran never won a war but never lost a negotiation thats the statement from the president on twitter not entirely clear what he means there. Little bit cryptic its been a fairly muted response from the president of the United States throughout last night and this morning. Perhaps thats strategic by the white house to not provoke iran any further than this dramatic escalation of the killing of Qasem Soleimani last night what we do know is the strike took place near the Baghdad Airport. It was a u. S. Air strike we dont know exactly who all was killed in this strike. Soleimani is a key anything iran by some accounts the number two official politically in iran he was the head of the quds force, that is an element of the Islamic Revolutionary gard he was in charge of their intelligence and operations in iraq and syria caused the United States problems for decades in the region he was traveling in baghdad in a vehicle and there you see pictures of some of the wreckage there just off of Baghdad International airport. Wait and see whether the white house has anything further to say. Whether we see the president on camera today we are expect being him to make some remarks to an evangelical group in florida well see whether they speed up the schedule at the white house and put the president out a little bit earlier than at that political rally this evening thats already scheduled. Eamon, thanks joining us now, want to talk to kansas senator jerry moran we were going to talk about boeing, commerce, transportation committee, but we need obviously to talk about what happened in the last 24 hours. What are your comments, feelings about this move . Well, understandable. It certainly seems that 2020 continues the unturn at this of 2019 kind of a new story that has consequences to the economy, markets, also to the political environment which i work in. The Senate Reconvenes today setting the stage for all senators to be back in washington, d. C. , on monday for a full session, for, would, and today our staff are being briefed on the soleimani killing. And i would expect members of the senate to be briefed early next week. And at the moment mostly what i know, i think what most of my colleagues know maybe with a couple of exceptions of the Intel Committee and the leadership, is whats being reported on yours and other programs across the country. But it does remind us that our efforts over the last several years in Getting Energy independence have great value. It reminds us that once we commit ourselves to military action around the globe, in this case iraq, its difficult despite a desire by certainly President Trump, the American People and many members of congress to extricate ourselves from the middle east it is a difficult task to do and it reminds us that we have no choice but to continue to make certain that we do the things by investment, by research, and by technology and by personnel to make sure that our defense capabilities are significant my hope is that weve done everything we can before this attack to protect our service men and women and to protect our embassy and state department personnel, not only in iraq, in the middle east, but around the globe. Okay. So we all reported andwatched what was happening at the embassy over the past three or four days, senator we did see the president say were not going to allow this to happen we did see iran then say theres not a damn thing you can do about it do you applaud the action of assassinating this person . I hesitate to call him a gentleman. Do you applaud the assassination of what you saw happen the action that President Trump took everything that we know about general soleimani indicates that he is the perpetrator of death and the death of americans everything i know suggests the truth of attacks that were imminent against our soldiers, our military men and women and we saw exactly what was happening at the embassy so i certainly support this effort to reduce the opportunities, the desire on the part of iran to make those attempts at killing american men and women in our military and we have every right to protect, and we would expect the iraqi government, the Iraqi Military to protect our embassy in iraq. It didnt happen as, in my view it should have, and we have every right to defend ourselves. The boeing switching gears. The boeing situation, it affects us all globally. Airbus, were seeing, you know, clients and airlines around the world affected by this, but kansas as well and where are you on the management dave calhoun is the right man for the job . Was change needed . When will this be when will we see the max back up in the air . I appreciate the way that you led into the story because im fearful that there are those who might forget all the things that are a consequence of the inability to get the max 737 recertified, safety determined and back in the skies and providing air service to customers around the world it is an important one i represent wichita, the air capital of the world we are an aerospace and Aviation Center spirit arrow systems which manufactures 90 of the fuselage, 90 of the 737 is headquartered here in kansas it has huge consequences economically of course, the answer is recertification, determination of safety. Let me certainly make its not a caveat because its a central principle of mine. I didnt want anything to be decided when the 737 was grounded based upon politics it needed to be based upon science and safety, and i would say the same thing in recertification, science and safety so im not asking for any kind of shortcut, but the focus by boeing in particular and the faa needs to be getting us to the point im surprised its taken so long and perhaps new leadership at boeing can make this process work more smoothly, be more transparent and get a better relationship perhaps with the faa and get this airplane back to where it is known to be safe in the absence of that, theres a lot of damage being done and will be done in kansas certainly with lack of manufacturing boeings decision to stop production of the 737 max, that means theres a lot of jobs, at least temporarily at stake, in places like kansas and certainly while i mentioned spirit aerosystems, there are a lot of small subsuppliers, subcontractors who work for boeing in our state and the country. On behalf of all of those employees who we hope can expect a paycheck every couple of weeks, this needs to be resolved quickly. Hopefully new leadership moves the process along. Senator, youre on the aviation and space subcommittee. From watching this and kind of seeing how it played out, whats your sense of who was to blame on this . It seems like the new faa leader thought he was kind of getting bullied from the old ceo from boeing. Weve certainly had the former ceo of boeing in front of our committee. Weve had the faa administrator. Weve heard from both. I think generally its a belief that the faa is doing its job well and i think there was a desire to see a stepping up of the efforts by boeing. I think there needs to be members of congress and certainly the faa which is the most important factor here needs to be satisfied, not only is the 737 max safe but also, i mean, the training that goes with that, the pilot the Pilot Training is appropriate but also that the culture at boeing is fully committed to safety and, again, there just needs to be this reassurance that boeing is the company that we need it to be and want it to be. Secretary pompeo i guess is a favorite son, huh . Hes he is a favorite son of kansas and comes from that air capital of the world. I know. And hes in the spotlight this morning. I was thinking about the shockers, actually i was wondering if you were a shockers fan as well my wife and i, robin and i were at the shockers game on new years day. They pulled it out. And saw the shockers they did. They beat east carolina. We have a new president coming to Wichita State who happens to be from east carolina. I dont know what this says. Youre smiling. First time i got you to smile. A victory. Yes they got a little i see everything now because of drafting i got a little dicey towards the end, youve got to admit then they pulled it out. Thats good. The hope was there was an opportunity to like lead a little early that was difficult to do in that game. Yeah. I like your coach. All right and pompeo and mrs. Pompeo, huge fans of the shockers anyway, think ie hell run for senate thats been my view from the beginning for a long time now, that this is an opportunity that he would take hold. Yeah. He and i have had a number of conversations. I have no insight. Could have broken some news, senator. Yes, sir. Appreciate it. Thank you. Coming up, much more on the fallout from the u. S. Air strike that killed top iranian general Qasem Soleimani. Ian bremer will join us to discuss what this means more broadly around the world and the markets for 2020 as we head to the break, futures, dow down 240 points s p off by 31. Nasdaq off by 103. Crude oil over the last 24 hours up significantly a gain right now of 3. 9 ayomave much more still to ce. St tuned, youre watching squawk box on cnbc welcome back to squawk box. Futures right now are indicated down just 227 at this point. We were down 380 and we have seen throughout the premarket session a paring of the losses nasdaq is down less than 100 the s p is indicated down about 31 or so the dow jones and nasdaq are not getting back all of yesterdays gains. The s p was down was up 27 yesterday. It will be down for the year we thought for a while the dollar might weaken as a long of people have been forecasting not going to weaken when Something Like this happens. You can see that thats off. Gold, also moving a little bit it had been before any of this happened and of course oil is up at about 63. As the fallout from the death of the iranian commander Qasem Soleimani ripples around the world, leaders are bracing for the political and strategic fallout. Joining us is ian bremer president of the eurasian group. The iranians have to retaliate. The iranians are not looking to precipitate more strikes against iran im not surprised that the markets dont seem to be overreacting here. Theyre not saying we expect conflagration in the region. You cant call trump a hawk. He was looking forex cus to go to war with iran hes had ample 50 of he wanted to pull out of the region as much as possible. Hes wanted to pull out and hes not been eager to engage in strikes. It was a red line when soleimani directly orchestrated attacks against u. S. Base, american soldiers injured, one american citizen killed. And then the embassy. And then the embassy. Im from make America Great again we focus on United States, trump, that for him was a much sharper requirement to respond the policy, i dont expect a nonnuanced answer was it a good day for the world or we dont know yet bad ramifications . The world is better off without soleimani on it. He orchestrated irans proxy and terrorist network, built it across the entire region hes directly responsible as well for the killing of hundreds of americans on the ground in iraq thats been amply documented. If it provokes more human suffering, death, maybe its a bad thing or do you leave him, contain him . He was uncontainable clearly weve had opportunities to strike this guy before, we hadnt done it. It would have been more difficult if we did it in iranian territory. The biggest policy issue in the near term is its almost impossible for the iraqis now to allow the americans to maintain a military presence on their ground that was already becoming an issue. Parliament was moving quickly towards a vote to tell the americans to leave that was obviously an embarrassment for President Trump. As youre speaking the iraqi leader is offering their condolences and theyre saying they do not want this to play out in iraqi territory. What happens if the United States is forced out of iraq one is our ability to have a supply chain and intelligence for the limited forces we have in syria is problematic. And its difficult for our other efforts in that region trump had said isis is a much greater threat to europe than to the United States so how much do the Americans Care at the end of the day opec has much less influence today than five or ten years ago. The middle east is much less important than it was five or ten years ago. Should we have a buildup of american troops or a pull back this is interesting trump has historically wanted to keep troops out of the region. Yet the total troop levels of the u. S. Today is about what it was under obama. Its increased in a couple of places like saudi arabia, decreased in others. The fact that trump has just recently in a response to an attack on the embassy said were sending more troops in, means its hard to say, oh, now we dont care were going to focus only on our much narrower interests. Weve bloodied the iranians. Thats enough. Trump is the one that pulled out of the Iranian Nuclear deal which one could say precipitated this hes the one that added sanctions to iran. So its not as if trump needs to burn fish the fact that he was prepared to escalate against the most committed enemy in the region the question is is he going to be able to in the short term glare of media say, okay, now im pulling troops out of iraq the state Department Says all american citizens should leave immediately. Makes it less likely or more likely that theres an eventual dialogue between trump and in the near term it makes it impossible trump was interested the french president tried to facilitate that. Trump said he was willing to take a phone call and the iranians said, no. He used abe, the japanese prime minister. Could you ever see the iranians completely active the way the rhetoric is, could you ever see them taking action on their threats i cant see it, can you . Its not as if we took out a low laying general. We did, but do they want a full conflict with a super power . No, they dont. But we need to keep in mind where unlike in north korea where one guy then theres everybody else they cant control if it looks like the quds force is going to implode, the risk goes up the idea this is a guy looking to wag the dog doesnt play out. Ian, thank you. Good to see you. Breaking news from tesla phil lebeau joins us tesla exceeded expectations with deliveries of 112,000 vehicles most were expecting 100, maybe 104,000. The full year number 367,500 vehicles delivered by tesla. Thats above the min number guidance, 360 to 400,000 vehicles they have begun production in china, which we have talked about at the factory there which is the newest giga factory for tesla. You see the shares moving higher the Company Exceeds expectations for q4 deliveries and tops the minimum guidelines for deliveries in 2019 guys, back to you. Phil, thank you coming up, were going to have more on the market moves that were seeing and really what they set us up for what changes about the strategy from 2020 after what we saw over the last 24 hours. The death of a leading iranian commander at the hands of the u. S. Check out the news that were seeing in the energy market. Theres the averages now you can see wti crude up about 3. 6. Wel bk. lbeac welcome back to squawk box. The futures right now have pared their losses to 230 points on the dow. 90 and change on the nasdaq. S p down just under 30 points. The Trump Administrations ban on flavored ecigarettes is getting push back. Joining us to talk more about this is mitch zeller hes the director of the fda center for tobacco products. Also our own meg tirrell director zeller, thanks for being with us. My pleasure. Lets talk about the ban. How come in the end it did not include menthol . New data came in later in september from a futures survey which showed kids who are using flavored ecigarettes greatly preferred mint to menthol. Dr. Ann schushaf testified that in order for the flavored ban to workmen thol would have to be included what do you think of this . That was made before that you have to ask cdc. The position announced yesterday is to go after the flavors that are most popular with kids in the form that is most popular with kids, that is the socalled cartridge and podbased products popularized by juul. It showed 5 million kids had used ecigarettes in the last month. A lot of kids are already using these. If mint goes away, how do you know they wont just switch to menthol . What we said in the guidance and our announcement yesterday is we have the ability to monitor and surveil whats going on and what the patterns of use are and weve made it clear that if kids migrate to the menthol, then we will have to revisit this and revisit the requirement that those products would have to get their applications in before flavors like that could be marketed. Mitch, what does success look like obviously youre taking the step of banning all these flavors where do you hope to be a year from now i think that were still in the middle of an almost epidemic use of kids use of ecigarettes. Weve learned from our research that unlike their perception of combustible cigarettes, too many kids are Walking Around thinking ecigarettes are harmless amazingly there are a bunch of kids not even knowing theres nicotine in the cigarettes success a year from now would be to reverse the trend weve been under for the last two years very disturbingly, kids using ecigarettes frequently which the government defines 20 or more of the past 30 days if we could begin to reverse those trends and the surveys we do in 2020, that would mark a change and that would be progress coupled with getting through to kids with Public Education and messages to make it clear to them that this is not a costfree proposition. That there are risks to using ecigarettes, that theres nicotine in them and you risk becoming addictive. Fda has a deadline in which all manufacturers have to apply for approval to keep the products on the market and they have to prove a net Public Health benefit given all of the data on youth use thats built up, especially for juul, how possible is it that theyll get this Regulatory Approval and can they stay on the market as you review the applications the flavors greatly preferred by kids, the mango, mint, fruit, candy, 30 days after that policy was announced yesterday, those products are going to have to be removed from the market. Theres no deadline for the applications for those products to come in to us the deadline applies to the tobacco flavors and menthol and other products that remain on the market im not going to prejudge the analysis of any individual application. The burden will be on the companies on a productbyproduct basis to demonstrate to us with all of their available science that those products should be marketed because in the words of the statute it would be appropriate for the protection of the Public Health we will absolutely be considering impact on kids but we will also be considering the role that these products can be helping in helping addicted people away from it. Mitch, thank you. We look forward to receiving updates. Thank you. Meg, great to see you thank you. Coming up, we are going to talk more about the potential Market Impact of the strike in baghdad of the killing of a top iranian leader the numbers are down crude oil is jumping, already above 60 and added some of those gains that we saw in recent weeks. Now 63 and change. Stay tuned ch mmuore ahead as squawk box comes right back at synchrony, were changing whats possible every single day. And if you run a business, that means a lot. We create Financing Options for your customers. To help them get the things they love instantly. Our data provides insights into what your shoppers have already bought. So you can offer them what they might consider buying next. Our technology and Financial Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . If you listen to the political it sounds like we have a failed society. So, how can we change but nothing could be further from the truth. Americans are compassionate and hardworking. We arent failing. Our politicians are failing. Thats why im running for president. To end the corporate takeover of the government. And give more power to the American People. Thats how well win healthcare, fair wages, and clean air and water as a right. Im tom steyer and i approve this message. Welcome back to squawk box on cnbc. Live from the Nasdaq Market site in times square. Were following breaking fwhus this morning the killing of top iranian commander kasseim Qasem Soleimani. Futures are off quite a bit off of the lows. We saw a big move in crude oil joining us to talk about the Market Impact from this event, Mohamed El Erian hes on the squawk news line cnbc market news commentator mike santoli is with us. How many sessions will we be talking about this, mohamed . Nobody knows, i understand that, because it depends on what happens from here on out between the two countries. What do you think . I suspect, joe, that the market consensus is going to be to fade this pretty quickly. It has seen this movie before, and this movie before is a spark in political tension, textbook reactions that you talked about, stocks, bonds, oil and then the markets fade that. However, the issue, joe, is not the immediate. The issue is how this plays into a much bigger theme that you and i have been discussing which is constructive shortterm momentum versus major medium term uncertainties. Mike . Yeah, i definitely agree with that the market the moves are relatively muted i think it was important to understand what the setup was in markets where you had the momentum move in equities. I think the market added back a little bit of risk premium but very muted moves. Does this end the momentum or is this a i think its a shakeout i think we were set up for Something Like this. If you think about the general view coming into this year, it was that we cleared away a bunch of uncertainties that had nagged at us. It seemed that people had a hard time coming up with what was going to disturb the up side usually something comes along. This might not be an enduring story at all it is something that at least causes people to step back a little bit im interested in seeing the bond market response treasury yields are not down that much. Theyre still kind of holding above the recent lows. That has been an interesting spot right there because a lot of people were looking at bonds at a bit of a Decision Point kind of up near their multimonth highs and yield this is probably going to keep it from going up. Its complicated, mohamed, obviously with its in iraq its an iranian general and im just wondering, what do you think the dynamics of the next six months are of that region . Look, theres three narratives out there on what this action means. One is, its about time to draw the line lets not forget iran shot down a plane. Lets not forget iran attacked a ship and iran attacked Oil Facilities the second interpretation is completely opposite that this is a hostile and unprovoked move. And then theres something in the middle between these two interpretations. So depending on what you look at you can have different scenarios. I think the key issue is what mike said. Dont forget market conditioning the market has been conditioned to expect two things one is that you dont get subsequent escalation. Why . Its in neither of the partys interests to do so two, you have Central Banks standing on the sideline waiting to see volatility. Thats why the market moves are so muted. Whats more important for iran at this point, to demonstrate that they will follow through on the revenge that theyre talking about for this or do they have enough problems economically and Everything Else in that country right now where they dont want to necessarily have, you know, a much bigger conflict with a super power . What do you think . They certainly have enough economic problems and the sanctions have been biting, but what we dont know, joe, is whether that leads them to be, quote, more desperate in order to do something and, therefore, do Something Big in order to lift the sanctions ultimately or alternatively it stops them from doing something more we just dont know, joe. But the market is going to is going to behave unless it sees a further escalation joe, i go back to the key issue has always been how to maf have i gate this tug of war youve heard me say, it goes up in stretching value. Do not say the u. S. Markets, even though they have outperformed and dont rely on liquidity. If you have the three principles, youll be able to navigate whats ahead. From the prism of investors, you dont think this becomes you dont think this becomes anything that should change your strategy different from where it was at the beginning of the year then . It depends what your strategy is my strategy has been keep a claim on the up side but increase down side protection. That is a right strategy. Remember the arab spring, mom, and we talked about it again and again and again and all the Different Countries where we saw it and there was some hope that some day iran would not be a theocracy 20 years from now will it be the status quo because people are saying this is not going to be the start of any type of regime change. Do you agree with that or is this a huge deal there is a principle that speaks to what happened in the arab spring is you cannot replace something with nothing so if youre going to bring down an existing regime, you better have clarity as to whats going to come after it if you dont, then you end up in a situation like iraq. So you have to be clear as to what comes next. These are big strategic calls, and without that answer, then you dont get clarity and you dont get stability. Mike . I was going to say, the market really doesnt attempt to get to that bottom line long term point, you know, in the immediate reflex response, thats why i think, you know, just to bring it into much more pro seic terms apples up side was on nothing than people chasing apple and people thinking the stock is an accessory. If this is an excuse to have it unwind, thats it. Its not the Market Making a considered evaluation of what the longterm regional prospects of. Mike, thank you mohamed, thanks as well. Coming up, top stocks making move ahead of the opening bell, well talk about how iran could respond to the u. S. Strike that killed a top iranian commander in baghdad stay tuned squawk box coming right back just under an hour dom chu is there middle east and conflict. Certain few places in the market that youre going to watch for the reaction oil prices are rising. The market and large midcap. Energy up. Marathon oil up 3. 5 the defends the majors up almost 2 General Dynamics in the context the energy market. Very much a winning trade. As you can remember, becky, it can move higher given the resetting of the geopolitical conflict. Dom, thank you very much. Obviously the markets and political leaders reacting to the u. S. Killing of the top iranian leader Qasem Soleimani hadley is here to talk to us about the implications. Reporter good morning, becky. What youre looking at now is a vast network, an interconnected web, a global web, frankly, that he built over decades. This is a group of proxies, allies, dependents, spies, militias that were either financed, trained, or both by iran Qasem Soleimani sat at the center of that web that means even though hes gone, that web is pretty much intact the question is, how easily controlled are the proxies, actors, state actors by iran in the following months one of the things id work out is hezbollah, lebanon has no government and hezbollah as a Political Party in that country has been very much behind the scenes and even in front of the scenes essentially pulling the strings on whos going to be next in line to lead lebanon that creates a massive instability in a country thats unstable due to their economy. A lot of people fear that this could lead to further attacks not just on u. S. Targets but also allies of the United States in the region. Not just iran, syria you have to remember that hezbollah has a finite global reach. Also, of course, the persian gulf its anybodys guess how iran may actually play this out there. Were talking about potential attacks on tankers thattest what we saw this summer we saw the fear rising not just globally but also in the u. S. Military that mines might be done in the strait of hormuz when i was out there, the u. S. Abraham lincoln said while they were remaining there, they would be easily moved into the persian gulf were there any actual means to do so. So multiple opportunities and targets for iran if they decide to go there but what we know right now is at the moment they are really focused on working the phones theyre talking to everyone from the chinese, to the europeans, all of their allies backing them on the jcpoa were backing them on ways to get the information from the United States. Theyre trying to get an International Consensus to condemn the United States, guys. Thank you, hadley thats interesting joining us everybodys got a perspective. Joining us to talk about the impact on the markets which is probably most important to our viewers, alec young, managing director of Global Markets research at ftse russell and halena ross. This is not your first rodeo, is it yeah, we took a look back at the impact of missile strikes on the market. Oh, you did this already . Yeah. Yeah people have already yeah. The spreadsheets there. I think the impact historically has been fleeting. I would say though that this guy was a key general, a key foreign operative. He helped them carry out their agenda in the middle east so i wouldnt i dont think we can dismiss this as completely a onetime event i wouldnt be surprised if there was some ripple effects in the short to intermediate term, especially given, you know, how volatile the iranians can be so, you dont want to be too dismissive of it certainly historically these events tend to be isolated events and the market doesnt really view them as recurring. So the negative impact on stocks has been historically pretty fleeting. What if oil went to 100 if they really ramped us up, closed the straits, who knows then suddenly we do worry about Global Growth and the impact on all markets, dont we . If dont we oil would be above 100. We were above 100 five years ago when you had isis on a tear in iraq now with u. S. Production, thats blunted the impact in the market if you have politics but i think we really do need to pay close attention to what the iranian response will be soleimani was considered most dangerous operative in the middle east, not just iran the question is how does the iranian leadership respond they have attacks on tankers since may, seize ships and in september, took half of saudis Oil Production offline temporarily. So they demonstrated a capacity to be very disruptive, but i think we need to Pay Attention to what comes next. Will they confine their reprisals or retaliations to economic things like oil or do you think they actually try to cause casualties among our forces there that is not a good idea, i dont think. Well, there are 5,000 u. S. Troops serving in very close proximity to iranian backed militias there is a partial drawdown of the u. S. Embassy in iraq, that happened in may, because of concerns about risk to u. S. Personnel. That is something we need to be watching very closely. President trump has essentially enforced his red line on american life. So if we have more attacks on americans, you can expect probably a very strong will we after this, i dont think we can rule it out. We had those incidents at the embassy over the weekend i do not think anything is really off the table, and if we do get an iranian response that involves the u. S. , expect a u. S. Response on iranian targets. I dont believe that this is over i think Sulaiman Ewell soleimano important to let this pass. You made a few trades did she talk you into dumping . You didnt actually. Did that change your mind on the impact on the market one thing that is interesting is everyone hates energy it is universally underweight. Millennials are divesting, Everybody Knows the bearish narrative. This is a reminder you can never get too complacent in your Market Positioning so i think this puts a there will be a geopolitical premium that goes into the oil price i think that puts a bid under the big Oil Companies. Great dividend yields there, everyone is looking for income i think people are going to maybe take a slightly more positive constructive view on energy which is good the other thing that i think is healthy about this leaving aside the geopolitical side, the market had gotten way overbought so we need to digest, stocks do better in a twostep up, onestep back dynamic. It is unfortunate it took Something Like this, but im glad to see some of the froth come out of the big momentum growth stories like the big tech stockies they needed a breather and this is it. What was the price target on january 1st of 2019 . If youre asking us did we think the market would go up 30 last year, no, we didnt. What do you think for 2020 and should we listen to you after you were wrong about last year or i mean, you know, i dont think anyone predicts 30 up year. What about this year . This year the consensus is the market goes up a little bit. Usually by will that be right . Usually it is wrong i think you want to bet on Something Else probably up a lot. Thats what ive been saying. The consensus, because it is based on information that is already priced in, usually dont get that for the unknown unknowns which happened again. Thats what matters, the stuff that nobody can predict. So helima, do you have a frequent flier to vienna it is a great city, is it not . It is a fabulous city. Six months a year what a rough job i see you over there every time, people are following you around, trying to get a selfie well, i mean, i think the emphasis on vienna is important. One of the things we have seen opec do at the last meeting was they surprised the market by doing a more aggressive cut than expected opec has been very serious about trying to push Prices Higher so if we do see further attacks on energy infrastructure, all eyes will be on whether saudi arabia is willing to basically cool off a rally, like where is their price point . Suitcase is packed, always packed. Im headed to abu dhabi next week it is already packed. Abu dhabi, not vienna. Yes that can be nice. And ill be seeing hadley nice in the winter. Thank you helima, thanks. Thank you. Down to the New York Stock Exchange jim cramer joins us, picked a good day to come back. What do you think . I was going over with my friend rusty brazil who does the best work i know on oil all morning and i think it is interesting if you look at the go out to 2023, 2024, 25, it is unchanged. Up 35 cents. Thats what i care about i think it is a great opportunity for the Oil Companies to sell futures. To be able to make it so theyre more liquid and i would not be a buyer of this group because this group is even after they took out the saudi capacity for a while, the group had a twoday up move and that was it. Dont buy them today may have to sell them tomorrow. You think it is because of the american ability to produce . At this point . Yeah. I do and i think that what the americans do is they just sit on the futures because they dont have liquidity that they like. I also think that when the futures are down, you get a lot of stocks of companies that do not belong down because there really isnt that much impact longer term. The only problem, becky, i see, were just giving up what we had for the last couple of days. That makes it so it is a little yeah. So im not telling people to jump on this one. You were an outspoken a lot of outspoken accounts about china and the administrations sort of sharp elbows there, jim. Is this similar in any way for you, just ideologically that to open another front and what does it mean for the markets . Let me tell you something i didnt hear this morning, this guy was a real bad guy and hes been killed now, when you have that happen, it sends a serious message the iranians can say theyre going to retaliate, trump say war time president and i think there are a lot of people who overseas are a little more scared of them and dont think about the election, so i dont know, i mean, a lot of times what he does, when he lobs missiles into north korea, we panicked and it turned out that people are a little more scared him overseas. They think hes crazy, i dont know i havent heard one guy say, you know what, this guy is just an awful guy, killer of u. S. Soldiers and so therefore we should get him i dont know, joe. The guy was a killer of u. S. Soldiers isnt it a win am i missing this . I was happy i know thats wrong. I dont know what the consequences could be. So we need to it is nuanced but hes a bad guy, jim. Tnkk you. Ha you. More of your comments at 9 00 okay. Well see you in a couple of minutes. Good morning and welcome to squawk on the street. Im scott wapner with jim cramer, live from the New York Stock Exchange this morning. Carl and david have the morning off. Were watching u. S. Futures closely because they are tumbling after irans top military commander, general Qasem Soleimani was killed at Baghdad Airport by a u. S. Air strike ordered by President Trump. The pentagon says soleimani was actively planning attacks on american diplomats and Service Members in iraq and throughout the region iranian Supreme Leader Ayatollah Khamenei promising, quote, severe revenge the president responding, with a tweet of his own