Transcripts For CNBC Squawk Box 20240713

Also take a look at whats happening in the treasury market 10year is yielding 1. 816 counting zeros here four commons 12 zeros Google Parent Company alphabet now has 12 zeros, also four commas becoming the fourth u. S. Tech company to reach a 1 trillion valuation joining apple, microsoft and amazon, amazon has since dipped below that mark cramer last night talking about another member is microsoft. Weighing in on the controversy on apple and how much it should aid Law Enforcement by opening locked e locked iphones or maybe creating a backdoor for Law Enforcement you cannot be cool. You have to be cool on your own. You have to take pride on the digital capability you have built. No press release with us or anyone else will do it you will need to build your dig call capability and by the way trust. There is a conversation about privacy already. We have to engender the trust. You as retailers are the keepers of the most important data you have to build trust. Whether importance or privacy, they are front and center issues that was before his interview with jim with jim, he did talk specifically about what he thinks about weighing in with apple. Maybe we can get the actual sound bite that was interesting well get that ready and cue that up in just a minute well come back to that. Wework getting some new investor interest this morning. A reporting that singapore Investor Trust bridge has held talks with wework china over increasing their stake of the china branch the plan values wework china at around 1 billion. The proposal was submitted to softbank last year wework currently owns 59 of wework china with the remainder held by other investors. It is like a lot of the same money. If you can get effectively, that means you could get a little less than 5 million. You sort of have to make the decision, do you want to be in china or not it is just weird when you have so many intertwined interests on both sides. Also yesterday, nbc announcing details of its streaming service at an event in new york city yesterday. Dubbed peacock it will have an adsupported free version and two paid versions starting at 4. 99 the Company Expects peacock to break even in 2024 when it will be reaching they hope between 30 to 35 million users. This is very different from other streaming services out there that are trying to copy netflix to this point. This will be ad supported. Theyll be able to widen the distribution a key point made yesterday is that they care about distribution they will look to find ways to expand like theyve done with cox. They pointed out that you can get disney plus free for verizon users. They do want this to have very broad distribution linda runs advertising for nbc made the point that there is not enough inventory advertising inventory. That they want dignal inventory. Thats where they see the opportunity. It makes a lot of sense the other question is peacock will do interesting things putting late night on at 8 00 p. M. At night. Is that a different audience no. Does it not include us . No. By the way it would be great for us does it peel off viewers at 11 30 if you are running carriage fees against Cable Systems who are paying, they think for what used to look like Linear Television and you are pulling certain programming forward. It is a fascinating major shift in the television landscape. It is good. I dont need the ago vags. Im not watching the late night guys, im not. I see sound bites. If thats what most of it is, then yeah. It is good i think the hybrid adfree model is the way to go there is times where im watching something, i dont mind i can get up from are times i dont mind a commercial im not sure it sells me anything but instead of these places where youve got to do it, youve got to pay for it and it will cost them i think consumers would rather take some ads then you have 10 streaming services you write a check to each month i told you a week ago, it looked like a coiled spring it is getting close to an alltime high. 47. 27 who is counting. Earlier, we mentioned cramers interview. Here is what he said over apples issue with privacy as a citizen and user, i care deeply about privacy but i also care about Public Safety both of these have to be in balance. We have to come up with mechanisms things like backdoors are just bad ideas. The cloud app is a good first step thats what i would have anticipated he would have said the idea that he supported apples position on this there are times when these Companies Compete but this is an issue that unites them all being forced to create a backdoor any government could demand they hand over. Well see more of the interview later. A 2020 election update, a National Poll finding that sanders is steadily climbing and hes now tied with joe biden 20 of registered democrats said they would back sanders. Up two Percentage Points 19 supported biden, 12 supported Elizabeth Warren 9 backed former new york mayor michael bloomberg. Thats the other story. Hes up to 9 without participating in any debates and others would support pete buttigieg. And more from andrew yang. Stock market undervalued or over valued . Overvalued. Big tech. Regulate or break up you cant oversimplify. You need to dig in and solve the problems you are concerned about. Fed chair powells tenure, approve or disapprove . Somewhere in between. Recession in 2020, likely or unlikely id say a slightdown turn in 2020 is likely what would you do put more economic buying power into peoples hands so we have a trickle up economy. When asked about the facebook social ad policy, he said they need to step up and verify the truth of ads they have on their platform the numbers of 20 for biden is that down or has bernie steps up i wonder if the numbers that are now supporting bloomberg came from biden during the primaries, whatever extreme position is where it moves biden has to go left and during the national election, he has to come back. Bernie sanders is a socialist. Youve got an actual socialist hes starting to move up everybody else has to move that way. Except for the republican in the party who is now at 9 im not sure biden has to move it is a battle for the soul of the democratic party. It is 50 50 right now. It is weird because the energy is with the youthful but all being thrown on to a 78yearold man. Do you console i had date the 12 0er the 9 that bloomberg may or may not have . In both cases you end up with just above 30. I think you get a broker and convince make it is mike a broker convention after the first or second vote they are released and allowed to vote for whoever you want to. They would come from behind or come from nowhere. If you were betting, if you had a dollar, you could go 25, 25, 25 in other political ad news this, we are very pleased with, i think. The impact of bloombergs ad spending ratchet it up, baby. Cable is the place to go for cable. We will welcome your ad money here put it wherever you want, mike he spent 217 million so far on digital and tv advertising that represents about three quarters of the amount of all the other candidates combined. Including donald trump tv ad rates have jumped 45 in houston after bloombergs campaign bought 1 million worth of ads ive seen them run one after another. You buy up all the inventory and dont allow anyone else on we are open for business. Bloomberg spent 21 million in texas 8. 4 million in pennsylvania the journal says he spent more than 16 million on google ads nearly 7 million on facebook. As a result hes gone from 1 to 9 in the polls in nearly a month and a half there is a reason he got in he wants a mainstream candidate to beat trump. He said he wouldnt get in if he thought joe could do it. He apparently came that conclusion and hes going for it hes not going to get half baked. Am i allowed to say half assed you already did half baked. I came up with that fast half baked alaska. We love him. Hes confident i have to say hes the most confident, accomplished person he is. When we return, well talk about breaking news overnight. China posting the weakest growth rate in 29 years as the trade war takes a bite out of the economy. U. S. Equity futures across the board. Dow future up by 58 points closing above 3,300 yesterday for the first time nasdaq indicated up by about 28. Squawk box will be right back. Announcer todays big number, 64 thats how many s p 500 stocks e p t s time highs yesterday a ths seanother record when you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. China releasing Economic Growth rate. Eunice yoon has the latest read on chinas gdp chinas economy grew at the slowest pace but did perk up at the end of the year coming in at 6. 1 q4 at 6 because of the trade war. The Department Data is raising hopes that there could be a recovery manufacturing investment at 3. 1 prompting some research to raise their estimates for 2020 socgen and pitch upped estimates to 5. 9 and oxford to improved outlook. Why they would want to see the economy around 6 . They basically made a promise to the country that incomes would double from 2010 to 2020 the phase one trade deal helped to manage expectations for brother this year. Research firm economics expects the trade deal will lift gdp up 0. 3 fi fitch sees a 2 rise they are seeing quite a bit of anxiety over the economy here. Eunice yoon, good to see you. I get to see you there on the screen nice to see you. Well continue our conversation about markets. Major averages breaking through 3,300. Our next guest has some cautious out look joining us now to discuss his view and where to invest Charles Campbell is here, the managing partner at mam partners come on, man we are getting so close. We are close. 3,500 is less than 6 away but we have been up less than 50 the last three years im not sure they discounted the by lateral damage. If we take market share from other countries, they are not just going to stand back and not react or recallate in some way they will engage they said yesterday, we are going to stand by france as they engage and support them completely sort of walk through right now you can look at the chart and see. Im not a technical analyst, you can see which way it is supposed to be going. Tell me what will turn it. There could be a couple of catalysts. You have the aspect that the trade deal which weve announced, weve spent almost three years in the making, completing it. It lasts less than three years, you are thinking about a multibillion cap x program and you dont know what is going to happen beyond december 2021, your uncertainty will be relatively high. The biggest head wind wasnt the tariffs themselves, it was corporate and consumer uncertainty. That is still there. That is a head wind. In addition. If the market continues to melt up, you get up to 3,500 level, Federal Reserve officials will begin to discuss market levels that is a problem. What is discounted now is a cut only starting in september, october by staying on hold through 2020 even though they turn dovish because we have a number rotating in and out. That is a problem and part discounted at all. I hope you are wrong but appreciate your perspective. I imagine you hope your wrong too. I do. But this is a base case. Facebook under fire. Facing a new lawsuit and some harsh words from the speaker of the house. Well talk about that when squawk box returns after this. 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Four App Developers are suing. This move marks the latest in facebooks growing battles with small App Developers that have built their business on access to facebooks user data. House Speaker Pelosi ripping into facebook adding to the pressure the company is facing on capitol hill. The facebook Business Model is strictly to make money. They dont care about the impact on children, truth or where this is all coming from all they want are their tax cuts and no antitrust action against them thats tough talk coming from a California Legislature i just feel better and better about my whole stance with facebook do you remember that video that is clearly a fake video of her pushed out it was not taken down. Wasnt off by that much do you know whether can i buy one of tho one of those pens dubbed the impeachment pens i think they could make a lot of money on them. You think that should be a campaign thing we all need something for what is going on. Wouldnt you want one . A commemorative pen that speaks volumes. Next week, well be coming to you live from davos a holidayshorted trading week but we are going to start tuesday at 5 00 a. M. Who can do a fourhour show . Do people know we are all wired up and to get to a bathroom, you need to unwire, go through all the layers, go through the metal detector, take a brief quiz. Are you okay with this are you going to tell me depends. Thats gross dont you have a big thing coming up . President trump is exhibited to address World Leaders hes supposed to be speaking 5 30 to 6 00 a. M. East coast which is 11 30 to noon davos time im going to try to talk to him. Thats a squawk tradition. He didnt go last year we have a huge lineup of other big people including other president s, jamie dimon, jp morgan uber ceo and dozens more it is always a big deal. It is cold we have to walk everywhere it might be worth it it is a beautiful back drop it is so many top leaders and government will be there its the one time we can see them all together. I can see how the other half moves and thinks im there. You live like the other half. What half them weve talked about it a lot. The davos syndrome if im going to have a nickname, it will be tanya like patty herst she turned into. I always want to not let that happen remember the jamie dimon line about what davos is about. Billionaires telling millionaires what to think you know in the past what ive called you. There is neandrathal man there is davos man seriously, how many meetings are you leading this year . I dont know. A lot. If you take your shoes off, could you count it i dont know. We have a commercial break you could solve a lot of the worlds problems while we are there in addition to doing a fourhour show coming up, retailer gap you are going on and on you dont need any pr or a personal agent gap backing off its plan to spin off old navy stacks react ahead here is a look at yesterdays s p 500 winners and losers that was wonderful. It was great. Pretty good it wasnt bad. I didnt really like it it was terrible. It was bad. Awful boo. Stay restless with the icon that does the same. The new rx, crafted by lexus. Lease the 2020 rx 350 for 419 a month for 36 months. Experience amazing at your lexus dealer. You still have service . Call the Insurance Company sfx [phone ringing] its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool and when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk while our competition continues to talk. Nongmo, made with naturally sundown vitamins are all sourced colors and flavors and are gluten dairy free. Theyre all clean. All the time. Even if sometimes were not. Sundown vitamins. All clean. All the time. Good morning. We are live at the Nasdaq Marketsite futures are indicated higher this morning massive momentum pushing stocks up again and again two days ago, the dow went above 29,000 s p 500 crossed 3,300 yesterday. Nasdaq looks like it will open another 29 points. A few stocks to watch. Gap is dropping plans to spin off old navy working to stem sliding sales. That move is surprising as a few months ago, they said they were sticking to the plan after the departure of ceo it announced that the head of its gap brands is leaving. Enough to add 5. 5 to the stock. Revenue was shy as the railroad hauled less freight. The Company Expects a slight improvement and stronger performance in the second half as well. Coming up, well tell you why some nfl owners are absolutely livid with the sports newest owner david tepper and peacock takes flight well have thelatest of what i means for the battle for your screen you can watch us live on the go on the cnbc app. Listen to us no video on that pod thing audio squawk pod is pretty good too, im told. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. We were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. David tepper bought Carolina Panthers in 2017 hes a huge steelers fan it is a way in. There he is becoming the nfls richest owner. He hasnt been shy about splashing the cash around promising to build a new worldclass practice facility for the team recently signed rookie head coach to a 60 million contract. The other nfl owners are not too happy about the spending spree joining us now is jabari, our cnbc sports business reporter. I could see that there is a lot of them belichick is 12. Sand shawn payton, tom around a 10 area. Gruden is around 10 million those coaches, none of them can block. Right . Everything they can. Shouldnt they just be happy they got this great thing going on and these unbelievably profitable businesses. Why are they wining . There is nothing that owners want more than more money. If i can bin by paying someone less money, come on. When they come foo an industry, they try to make a mark. All of those guys, mark cuban the same way bought the mavericks came in with a smash he made his mark they try to make his mark. David stern fined the heck out of cuban because he was opening his mouth. Do they eventually tamp down wheres it more business as usual or do they stick around . I think they learn the business i think mark cubon is phenomenal he understood what he could and could not do one of the first moves was sign denis rodman at 38 david tepper is trying to do the same thing if the panthers win the super bowl, he looks like the new guy on the block he loses, he looks like the guy that just bought a toy hes never coached a game all of those coaches before, they won super bowls who says this guy says hes going to be here 30 or 40 fans you said hes a steelers fan. If hes building off the rooney model, well see well see if tepper folds under fire i like the idea of being a longterm owner and making longterm decisions. If you are an opener who can look at and deal with the long term, you can make does decisions. Ive covered the spurs basically my career. They put emphasis on longevity coach pop, 11 to 12 million. If im Bill Belichick and i see matt come into one game. Im looking at my owner saying, it is time to bump me up it is an eagle thing too i like the owners i could see that. Imagine how i felt researching the story. They are talking millions and i look at my check are there Profit Margins . It is but not in that way for the head coaches they get the increase. You want to win, you want to play, you got to pay youve got to pay for the right guy. Are any of these owners losing money these new rookie head coaches come in with fouryear deals theyve got to prove themselves. David got an inexperienced guy i like the guy hes like me to give him that amount of money without proving anything i would be upset too you are meeting up business. This is what netflix did to tv taking new guys off the street, giving them full seasons of pilot episodes who do people want in the super bowl i know what i want. 49ers. I think 49ers and the chiefs would be phenomenal. You have a young quarterback of mahomes going up against the oldest team and i kansas city fan base so you are winning all around. That would be good. It would be thank you read his full piece on cnbc. Com. Bring a little more energy get up for a workout, maybe go to the gym first coffee. Thank you no problem. When we come back, new analyses on the tax plans of Elizabeth Warren and Bernie Sanders and the impact they would haven othe United States. Thats next here on squawk box. Spend a bit today, knowing were prepared for tomorrow. Wow dad, do you think you overdid it maybe . I dont think so. What do you think, peanut . Nope honey, do you think we overdid it . Overdid what . See . We dont think so, son. Technically, grandparents cant overdo it. Its impossible. Well planned, well invested, well protected. Voya. Be confident to and through retirement. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk welcome back, everybody. The American Action forum has an analysis of proposed wealth taxes by Bernie Sanders and Elizabeth Warren and found they would reduce wage growth for more on that report, lets bring in American Action Forum President and former director of the cbo and people tend to paint these two candidates with the same brush is there a differentiation between the two of them and their budgets in terms of the budget deficit and what it would mean for growth . Theres not a big difference in their proposals the top rate in the sanders proposal is 8 in the warren proposal is 6 you find out that under sanders workers lose about 1. 6 trillion in wage income under warren its 1. 2 trillion so theyre the same. Bernies stuff is just a little bit bigger. In terms of what that means for growth, how do you take the numbers and then try to figure out gdp . What happens to it over time this is a decline in gdp and the question is where does it come from . These proposals have been portrayed as were going to take money from a few rich people not any consequence for the middle class we wanted to find out if that was true and again, those numbers that would land on the middle class, what are those numbers what are the taxes that eat into that how would they see that . That would show up as smaller paychecks. In is the same conversation in the tariff world we know they have to send a check to the government but do they raise prices for consumers and shed the burden and shift it anywhere else in the economy its the same thing going on in the wealth tax and indeed over long periods of time about 63 cents of every dollar would end up as lower wages for people going to work chlts its interesting that you havent heard any of the other Democratic Candidates making arguments like this. They may not have embraced the same structure but i havent heard any of them on the stage saying im not embracing the taxes because of what it means for workers and the economy. I do think thats interesting and these have been cleverly advertised as small taxes on a few rich people. And as it turns out theyre not a small tax. If you make 6 of return on your capital its taking all of it and more these are draconian taxes. Its not surprising that if you had a tax on a lot of investable capital youll have consequences. The reason most of th on is there is a sense that there is a huge problem with inequality in this country right now. How would you suggest theres a better way to deal with it than the proposals that we have seen from warren and sanders. Thats exactly the way that well think about it one of the messages of this paper is its not wrong to have a progressive tax system its dangerous to do it this way. We should have higher marginal rates. We have seen a push toward higher rates and focus on tax and capital income and tax capital income because they think only the rich have it but thats the same capital income that funds pensions for firefighters and policemen the same income that schoolteachers need when they retire so you have to be a little bit careful about going after the real fundamental thing that allows an economy to grow the active saving, investing and creating productive. Great to talk to you. We have news on airbnb this morning. Airbnb perhaps the biggest ipo planned for 2020 the Company Announcing this morning that its going to change its Corporate Governance structure a bit to involve all stakeholders and not just investors. It now plans to take into account Community Shareholders and employees. I spoke to brian last night about all of this. I dont want to be one of the ceos that says were trying to do all of this great stuff and then treat board meetings like every other board meeting. Instead of having a shareholder day in the future theyll have a stakeholder day in the future. Theyll tie all of their compensation and bonuses around not just metrics that would have historically included how the actual math of the company went. Theyre creating a special committee on the board called the stakeholder committee. He says this is the future of where this is all going. Well see how it all plays out well talk more about that in the 7 00 a. M. Hour still to come, the newest member of the trillion dollar club. Used to start with a g changed their name and start with an a. You probably know who they are were showing it to you on the screen so surprise. What massive tech valuations mean for your portfolio. Squawk returns with that and more in just a moment. I can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Talk to your advisor or consultant Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. The trillion club. Joining the exclusive group. The Peacock Streaming Service has been unveiled as the second hour of squawk box begins right now. Good morning, welcome back to squawk box right here. Im Andrew Ross Sorkin take a look at u. S. Equity futures at this hour green arrows once again. The dow looks like it would open up about 67 points higher. Nasdaq up about 32 points and the s p 5008. 5 points higher. Records continue to fall on wall street. Theres been 11 trading sessions in 2020 and so far already closed in record territory five times. Also its made an all time intraday high 8 times. As this rally goes on you see more and more Big Companies getting bigger and bigger market caps it welcomes the fourth u. S. Tech company to reach a 1 trillion valuation after a late surge yesterday. It joins apple, microsoft and amazon that have dipped back below the mark joining us is mike santoli and also egor who is the managing director of Predictive Analytics and gentlemen, welcome to both of you. Thank you for having me. Mike, lets talk first about alphabet and what it has just done by getting into the trillion club. Not a surprise been waiting for this to happen. This is the market that we have so those three stocks that now have a trillion or more market value together, 3. 7 trillion in market value essentially no net debt and roughly 150 billion this year together in net income theyre trading together at 25 times about this years profits. Thats kind of where we would be at a, you know, later stage bull Market Making new highs. Doesnt mean that we stay there but if you look back to late 99, microsoft hit 600 billion at its peak this is about where we would be if you accounted for inflation. Some of those stocks climbed to those levels. Except they were 4050 times earnings and not 25. Its built on the profitability of the winner take most tech businesses. In terms of the new records we set every day how much is coming from big tech stocks like this and how much is coming from other arenas its more representative of the big Growth Stocks like these. They account for 18 of the s p 500. 15 of the overall stock market. Thats a lot but its not to the exclusion of Everything Else because the majority, Something Like 80 of all stocks are above the 200 day average. When you hear numbers like this, does it make sense to you . Where the earnings from these companies have been or does it make you nervous. You have all the big cap names in the market. When you see short squeezes like this, how does that play out . It has a little bit this year because were seeing an increase across the board so even though the market is going up shorts are actually legging into their positions throughout january. Is that an implication of a healthy market where you have some players actively bidding things up and others that are actively shorting . You need both sides of the market for the market to be healthy. We have a lot of shorts in there putting their stakes in the ground a lot of names that they think are overpriced at the moment. Most short selling happens in funds that are both long and short, right so the long side is going up to new records. Youd scale up your shorts if youre not trapped in something but also if you talk about tesla and apple swapping back and forth, apple is 14 or 15 times as big market capwise as tesla so the shorts in apple is like 1 of the flow, right . 1 of flow to apple and 20 of the flow to tesla. Thats a more important way at looking at the company. Exactly we see that its not comparing to ams apples to apples. Amazon is big. Its also a hedge people are looking at shorting apple. Some of the big cap names as a hedge instead of shorting a spy or a nasdaq etf. Some of the other big ones were looking at the stocks right now that have seen a lot of activity beyond meat, peleton and smile direct three companies that went public this year and then netflix so much in the news what has the short activity been there . Its really interesting because we have seen a ton of shorting in january and over the past month 15 million shares short over the past 30 days so even though the stock is rising people are shorting into the name theyre seeing a lot of activity that is overpricing the stock at the moment thank you for coming in. Wall street expecting boeing to write down billions more on the 737 max and theres a new estimate from a analyst this morning. Well have the details next. You leave it to me. Ill get your taxes in an ok place. What . Just as soon as my audits over, this gets my undivided attention. You take a lot of trips to the islands, phil . Pretty great, right . Oh phils legally dead. Fell off a boat. Going by denis now. Celery. Long story. What do we got here. Oh. Not going to want to see this. I dont think this is going to work. Just ok is not ok. At t has americas best network, now with our best plans, at our best prices, starting at 35 a line for 4 lines. New from at t. Bigger write downs now for boeing in the wake of the 737 max crisis bank of america is now estimating the total cost to be as high as 20 billion cnbc. Com aviation reporter wrote the story and joins us now so whats happening . So boeing reports at the end of the month of course and investors are looking for messages from calhoun the new ceo that took over this week the charge that boeing took in july wasnt the end of it. That was a 5. 6 billion pretax charge looks like it can go up to 10 or 11 billion now and investors are looking for some of that to be reported before earnings on the 29th. So the question is when you look at the 5 billion which was clearly off was that because they didnt know what they were doing . Because it was premeditated . This is where its going to get interesting later on with all the shareholder losses i imagine is going to happen. Boeing didnt know and a lot of people including the airlines, investors said over and over again before he lost his job that this plane is going to be flying by the end of the year or at least have the faa approval to fly by the end of the year and thats not happening. Were taking the plane out of american, southwest, united taking the plane out until june. At this point, they say june, is there any reason to think that it will be ready to think it will be ready to go by july or june . Because with the Pilot Training thats going to be required that all takes time. Thats a good point boeing did that about Simulator Training they are now saying Simulator Training thats going to take a long time. That matters for the airlines in particular too just in terms of the summer crush when you see a lot of people traveling. Im sure that well put a squeeze on them. Yes. The airlines could come back and negotiate more money from boeing than they already squeezed out of them. Thats possible american and southwest already had their agreements from boeing and thats 2019 only thats why theyre saying 20 billion. I know that you didnt raise this idea, im raising it, but i have been hearing more and more about this in part because i talked to lawyers recently shareholders are going to sue and theres going to be all sorts of depositions and discovery around mails. In terms of the damage, you said that everybody thought this was going to come sooner everybody thought this was going to come sooner because boeing told everybody it was going to come sooner so the question is whether you think theres going to be emails and other things that show there were people inside of boeing saying its not going to come sooner. Were getting more emails. The house lawmakers of the Transportation Committee say the emails that we have now are not enough and peter that chairs the Committee Said where are your surveillance pu superiors . We have these emails but we want to see the emails from the people that manage those people. So theres more to come and that investigation is not over. Okay. Leslie, thank you. You can check out the article right now on cnbc. Com. Coming up, peacock struts its stuff Nbc Universal unveiling pricing and content details for the new streaming service. Coming up, details, thats next. Time now for todays after lack trivia question, where did dr. Martin luther king jr. Attend college the answer when cnbc squawk box return s. Coach saban convinced us. We are committing to aflac. 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 now the answer to todays after la aflac trivia question. Where did Martin Luther king jr. Attend college the answer, morehouse college. He started his College Education at the age of 15 and received a degree in sociology. The future of television is coming into focus. Comcast unveiling details of the streaming Service Called peacock. Peacock hopes to stand out by offering a free ad supported service. Steve burke explained the strategy at the companys presentation yesterday we think theres a clear opportunity to create a streaming platform that we own and operate that give people what they want when they want it and allow us to monetize we also think were able to take advantage of this opportunity and play a leadership role in the on demand streaming world. That unique positioning comes from all the content with more than 600 movies available including titles from universal pictures, dreamworks, films like et and jaws. The more than 400 tv shows including saturday night live, will and grace and the office and the pricing is tiered starting with a free ad supported option or for 10 a mo month no commercials he is also a cnbc contributor and probably one of the two or three people most responsible for cnbc when the industry was facing something similar i wanted to put the peacock logo on cnbc and the Peacock Police showed up in my office and said no way. It isnt going to happen dont even breathe it. We will have revolution from the broadcast affiliates. Not for long. We had to prove that cnbc wasnt a threat i have to tell you its a recreation of a broadcast network in streaming form and you dont even hear the issue of what about the broadcast affiliates what are they going to think theyre still a big part of the business and how are different Cable Operators, take comeca comcast out of it given that theyre the parent its available to anybody on peacock but on lineal available at 11 30. When it comes to the Cable Operators including comecast they have adopted a very different view about what happens to programming because cord cutting to them actually benefits their core business because they know people need the broadband part of the Cable Service cable is where they go for it. The margins on the video business have gotten worse and worse so they actually improve their margins as people cut the cord plus it will ultimately be distributed by most of the cable industry and theyll look at this as something that helps them navigate their relationships with broadband subscribers through offering this content Service Phase one is finished now let the games begin . Well see what actually happens. The streaming wars are on i look at this, im surprised at discussion of the content. Meaning that he has put all the major shows that he has contributed in the police and crime family on here and that is going to actually be a very substantial part of this. All the talk has been in the streaming wars who gets friends, who gets o office but these one hour crime dramas actually have a lot of staying power. I can speak in my own household. My wife, my daughterinlaw will watch svu over and over. So theres a lot of guts to this in terms of that kind of programming as well. Are they right to take the embrace and to make the embrace and call it peacock and be so different than it was when cnbc was launching . This is a whole different way. Wall street looks at it a different way too. Look at disney. Disney said were all in on this and disney has gotten 50 billion almost of Additional Market cap by showing it is really all in. It ultimately does give them some reward. Its a very different strategy in terms of look, ad supported is something that can sustain this kind of service where everybody is much more focused on the direct to consumer pricing. Looking at ad revenue over the next four years when theyre talking about 30 to 35 million subscribers, i think like disney theyll blow past the number so theyre setting expectations low so if youre talking about 2. 5 billion of ad revenue off of 30 to 35 million subscribers youre talking about pricing your ad inventory at astronomical rates thats really the game here. Astronomical for digital or astronomical for what they would be paying on the traditional broadcast model . The hulu type inventory is going for cpms today and comcast is still an owner of hulu. They see the data and they know how successful the pricing of hulu as an ad service is and thats way above the cpms that theyre getting on the broadcast game and the broadcast game has been a bit of a head scratcher as of late ratings decline. Theyre declining substantially but as they decline they have been able to take up the pricing on the broadcast network because its more scarce to reach people that game i dont think has that much more steam in it this is about okay we have to create another form of high priced advertising there isnt that much advertising in the advertising supported video on demand space. Thats the opportunity. This is a huge opportunity. Do you think its too much . Well, youre beginning to see the budgets really shift there and theres not that much inventory and that puts pressure on the inventory and puts pricing there. And there will be a ton of advertising the shifting to Late Night Television to earlier in the day is really brilliant. Thats a way of getting the audience that does not exist for that kind of first rate programming but its also a little scary in terms of what it means for whats supposed to remain of Traditional Television which is supposed to be about life events. Fresh daily stuff. Sports now theyre beginning to say hey, were not just going to put scripted entertainment programming on peacock, were going to put the fresh daily stuff there as well. Do you remember when all the affiliates and their 11 00 news when, i dont know, whoever is in the league with late night it would impact the bottom line of all the local affiliates. Huge and it still does. So just in closing, youre not really that bullish on the whole streaming business because its going to be cut throat but you think comecacast has an advantage because anybody that streams needs broadband anyway do you think disney has problems in terms of stock price . Well, i think you can say it. Its ahead of itself. Its a bit ahead of itself relative to what has been accomplished having said that you cant take anything away from them, how much early subscribers they got on disney plus thats a huge thing. Comcast as a Cable Company i think is well hedged the issue for all the Traditional Companies is streaming they have to get into. They got to put their shoulder behind it but the downdraft in the traditional business is going to be much steeper than most investors have priced in. All right thank you. And a note wait a second, nbc is the Parent Company of cnbc it says here. Good to know. Im glad you recognized that. The topic of media and our Parent Company we want to wish a happy 25th this cant be right. 25th anniversary to the golf channel and our colleagues over there. It launched as the first single sport Cable Network in 1995. It continues to be much watched tv for any golf or sports fan and arnie was affiliated. Thats when comcast got going before they had nbc and that was a cable Industry Club deal so to speak and the club brought it along and look where it is today. The lump in my throat i miss him and love him. The congratulations on 25 great years. It will mean a lot more i think. Still to come, microsoft and black rock among the Companies Making commitments to sustainability well show you what the microsoft ceo said to jim cramer last night squawk box will be right back. Sometimes, the pressures of todays world can make it tough to take care of yourself. But natures bounty has innovative ways to help you maintain balance and help keep you active and wellrested. Because hey, tomorrows coming up fast. Natures bounty. Because youre better off healthy. Natures bounty. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. It is not just investors it takplans to take into account host communities, shareholders and employees. It plans to base its compensation on this i spoke exclusively with the ceo last night and he told me i dont want to be one of those ceos to say were trying to do all of this great stuff but then we treat board meetings like any other board meeting. Theyre planning a stake holder day instead of a shareholder day. But its obviously going to include all of these other people this is what he says is the future of the way businesses are going to operate of course this is a company thats going to likely go public later this year. The biggest ipo of the year when it happens and interestingly to some degree you have to argue that the traditional shareholder will be diminished in this. It seems like its going to be a three ring circus. He says its not were trying not to trade one off against the other but he said look the future of all of these companies is to do this. This is some what what the business round table has talked about. Formalize it. In a very, very meaningfully designed way. Does every one of those stakeholders have the same influence or is there a pecking order of the stakeholders . I pushed him on that and i think that he was talking about, you know, we dont want to trade one off the other. I think invariably some are going to have to have more power than others. Right now regulators more than any other stakeholder in his company probably are the most important. Doing this before the ipo, i can understand why he would want to do that to fend off the regulators and tamp down criticism thats come through but i dont know if he realizes how difficult it is to be a Public Company because of all the ceos that have taken their companies private again and said forget it, thats when theyre dealing with shareholders. So suddenly say, i get having your employees at the table. That makes a lot of sense but to say people that have no affiliation with the company, i think they need to do a much better job of addressing the complaints but i dont know if you want them at the stakeholders meeting having an equal say in whats happening. Do the customers that are customers and hosts that are customers of the host. The person that happens to live next door they have really good complaints thats what they should do a better job of addressing but do you want to bring them all into one meet wrg this ing where thi happening . Address the people calling your customer complaint lines. I imagine theyll have direct listing as opposed to an ipo in terms of how you think this is going to happen which will be an interesting thing they have historically not needed additional cash to raise. Hes a smart guy. Hes a very, very smart guy the question is how this all works itself out. Meantime, the ceo of microsoft is laying out his companys plan for going carbon negative in the next decade. He spoke to jim cramer exclusively last night on mad money about it. By 2030 to become carbon negative to in fact, go back in history all the way to our founding in 1975, look at all of our Energy Consumption and make sure that we recapture that and of course we also know that its not just about what we do, its the ecosystem and the innovation we need breakthroughs so were putting a billion dollars in an innovation fund. Were very excited its a small part of what all of us will have to do to achieve more. Microsoft and blackrock are a couple of major Companies Making big changes to focus on sustainability its a conversation. I imagine well have more in davos next week. But to talk to us about corporate and this investing strategy is chairman and former nasdaq ceo of this place the cnbc contributor and author of market mover. Lessons from a decade of change at nasdaq. Good morning to both of you. Good morning. The question that we keep asking is is this real or marketing . I thought what larry put out this week was quite real and actually quite hardcore. I read it a few times of course. And i thought the message, which we have been arguing too is the reason theyre doing this financial Value Creation and i thought he made an argument in there about alpha risk and beta. On alpha he said companies that invest with trend understanding the importance of moving to a lower Carbon Society and all the industries that that will effect will have disproportionate returns. This is one of the biggest not dealing with it is a huge risk factor. Utilities that didnt deal with carbon in europe lost 80 of their value. They have gone bankrupt by not understanding risk in this related space and then finally if youre blackrock you can also think about the beta part of this longterm Capital Markets are going to be effected if we dont tackle carbon in a meaningful way. It was very hardcore. Let me ask you about this microsoft seems to be doing what black rock is asking it to do. Having said that, its going to come at a real cost to be carbon negative not just on an annual basis but to recapture all the carbon that Companies Put out since 1975 the question is, should companies be doing this independe independently . Or is this something that you think only really works if governments, probably frankly across the world mandate it so that it actually happens in a more strategic fashion. First i would compliment microsoft for the first time identifying the fact that we have to go carbon negative i think thats a step but you have to understand how small of a step it is microsoft is responsible for 10 million tons of carbon the world is producing 36 billion. Thats increasing right now. So i think what i read about going Carbon Neutral, you have to recognize that has to be the country and primarily its going to be in asia when you look at the carbon production happening today its growing in asia were up to 36 billion tons. So i would say this, to think that were going to go Carbon Neutral and save whatever environmental risk we have isnt going to happen. We have to go carbon negative and satya has identified that. And do you think the Investment Community is going to ascribe a higher valuation to a company like microsoft because of these efforts and when you talk about doing some research theres so many different definitions and we still have issues understanding what the numbers are so an esg measurement is by definition quite mushy so when larry announces hes going to use esg that could be quite significant and it could be quite insignificant it depends on what measurements that youre using and how youre using them but i would say one thing with respect to esg if you get the g part right, the governance people primarily focus on the e but if you get the governance part right the e and the s will take care of itself. Two points on this, one, i dont think satyas announcement yesterday was so directed at the financial markets. I think it was much more directed in a broader sense. They are a Human Capital driven company. Young people today care about where theyre working. And i thought that was a statement that you can trust us. We put ocietys interests alon side our own and its a statement designed to attract people much more. A harder philosophical question Big Companies like a microsoft with big Balance Sheets and income statements can afford to do these things. So maybe theyre the ones that lead the way in that regard. However if theyre successful its going to put a lot of pressure along the rest of the other businesses and smaller businesses that cant afford to do these things and how youre supposed to think about that. To change behavior, you have to change context. The people that change context are your customers, your investors and government and policy regulation and so microsoft along with others is trying to change context larry f irgsink is trying to ch context from an investor point of view. If it puts pressure in a balanced way everybody has an inventive to improve. Is it the job of business to do this . I would say this, we have to recognize that were really just arranging deck chairs by these moves. You have every year 36 billion tons of carbon going into the atmosphere that is increasing right . Now if we take these efforts and we cut the rate of growth. So instead of 36 going to 50, we go to 40 thats a good thing. But the attention, the publicity, the money, the government have to focus on the fact that we have to get carbon out of the air so i applaud what microsoft is doing. I think thats real. Bla blackrock could mean anything so im not sure but at the end of the day were just arranging debt chairs. You have to get the carbon out of the air we put it in we have to take it out when you look at the year 1900 we were Still Producing 2 billion tons of carbon per year. So for us to think were going to Carbon Neutral, less carbon produced in the air than existed in 1900 is just pure fantasy so we have to focus. Thank you thank you for joining us question is how do you do this and also manage growth. Absolutely. Its about shareholder value and value for society and others yeah. Thank you still to come, stocks to watch ahead of the opening bell but you can always watch us live on the go on the cnbc app. Well be right back. I consulted with your grandmothers doctor. We can do the screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Lets put a social media theme for our edition of movers. Well start with a couple in the green and the red. Shares of snap higher around 3 on 200,000 shares of premarket volume after they get upgraded to a bye from a prior neutral. They cited things like a Management Team focused on user growth and more optimism about ad spending and 50,000 shares premarket at this stage. And downgraded that stock to a neutral bye and they also cut the price target from 35 to 37. They cited among other things continued spending and i vestment in safety and security protocols and other operating expenses pressuring profits despite a big year ahead from the social Media Company like the president ial election the olympics and others and those shares are down right now and well end on shares of pintrested higher on 85,000 shares of premarket volume its been held from overweight to equal weight and the target goes up from 30 to 28 they cited among other things attract evaluations given the underperformance over the last year and shares up 4 much more when we come back after the break. Cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. A simple, modern way to pay yourself from your portfolio. 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So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. All people. Bernie sanders climbing in popularity now tied. Robert frank has the details of a new cost analysis on that plan plans for thelth cahealth care Green New Deal would not be that sanders plans would cost over 60 trillion, thats with a t over the next decade. Thats more than the current total projecting spending of the government of 52 trillion it would be 2. 5 times bigger than fdrs new deal that would grow spending by only 12 of gdp buttigieg would grow by 2 and biden by 1 . His Green New Deal adds another 16 trillion. His jobs giving every american that wants one a job, 7. 5 trillion on top of that cancelling all student debt and add universal health care. Its unclear though how to raise the other 40 trillion or more thank you, robert, Research Fellow and now the Vice President of strategy and polic it seems crazy to me hes a socialist why is he leading the race for democratic nomination . I think we need much more public spending and Public Investment in order to grow the economy. This is a problem right now that we have very little productive investment and the plans that were talking about investing in children, investing in health care, adapting to climate change, these are the kinds of longterm investments that set us up to be successful in the 21st century your previous guest mentioned this is similar to what we did in world war ii and that spending layed the foundation for success in the 20th century. Now we need to be successful in the 21st century. Thats a lot of spending. Just if you take each one and by itself thats a lot of spending. If you add up all the proposals on the left, including the Bernie Sanders medicaid for all plan, youre looking at 47 to 92 trillion of spending over the ten years. Theres simply no way that taxes on the wealthy can do that the Heritage Foundation did a study and looked at what would happen if you con firefightefisy single dollar. It raises 32 trillion over 10 years and it wouldnt be feasible because you would drive the she into the ground but that would only pay for a fraction of the 92 trillion in spending the secret is and i think the secret is starting to get out is that if you want the european style welfare state youre going to have to have the european style tax program and i dont think that people get recognized what that looks like but if you go to france the payroll taxes are 50 . If you make 100,000 per year in france, youre going to pay about 52,000 a year in taxes compared to just 35,000 a year and for the lower middle class, its a much higher rate there as well 40,000 a year in europe youre going to pay about 6,000 more per taxes period than in the u. S. Now interesting piece in the journal, its an oped piece but they just have quotes from biden, warren, sanders, about the state of the country, state of the economy anyway, the party out of power has to make the case for change but the challenge for democrats pitching carnage would be persuading americans that they shouldnt believe the economy they see all around them with their own eyes do you have a comment on that . Yeah. I think that we have a sense that the economy is doing well because stock markets are high but average americans arent necessarily feeling that same buoyancy i think about 50 of americans dont even own stock or have a stake in the stock market. Okay. Theres the unemployment rate. Theres the wage gains. The wage gains coming off welfare and off disability. The wage gains at the bottom 50 are twice the wage gains of the top 1 now its not to say that we dont have an inequality problem but directionally were going the other way right now. I know that the stock market doesnt benefit everyone but when theres a stock market crash, you tell me what the rest of the economy looks like when the stock market is forecasting those type of Economic Conditions its just. This is not just about the stock market all of those, you go back 20 years. You go back 30 years, the really average Household Income is in the double digits for the typical family and thats record amounts of Capital Investments record income and near record low unemployment and because were a free market system if we want the european welfare state a look at how the average family is doing in germany for instance our average income in this country, thats after tax income is 11,000 higher per family on average. We are doing well. Were doing better its because of our free market system that a lot of the candidates on the left are promising to dismantle. But there is overlap between the bernie voters and the trump voters we forget that but there was quite a bit of overlap between the two voters and some voters were going to vote for one or the other and a lot of that is because the economy is doing well but theres a lot of people left behind by housing, education and health care costs. So how do you address those because that, i think, is what is helping bernie is to address those problems thats right. I think they would welcome a debate over whether or not were doing as well as we should directionally the trend may be improving. Americans as you said still cant pay for health care, for education. And for child care and significantly these are the investments that will grow the economy in the longterm we are falling behind on the Human Capital investments. We are falling behind on new industries, previous guests were talking about business, preparing for decarbonization and i think the country needs to do that as well. For only 30 trillion to tackle the. 04 co2 in the air. It just so happens those three sectors, health care, education, housing, those are the three sectors that the federal government has and they have caused that rampant inflation. Joel, thank you wow. Thank you. Thank you guys. When we come back, former agricultural secretary will join us to talk about the impact of two big trade deals on farmers and the American Economy i can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Talk to your advisor or consultant but were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Proud as a peacock. The following program is brought to you in living color on nbc. Our Parent Company unveiling its new streaming service, peacock. Details on the pricing, the lineup and the fierce competition just ahead. And 12 zeros. Alphabet joins the trillion Dollar Market Cap Club the final hour of squawk box begins right now. Good morning and welcome to squawk box on cnbc live from the Nasdaq Market site in times square u. S. Equity futures at this hour are strong once again a little bit after a really strong session yesterday were up about 54 points on the dow. The nasdaq up about 27 and change and the s p 500 up about 7 treasury yields right now are right about where they were. Ill quickly say im in touch with david. Theyre going to make us im not going to say what he says about the market. Im going to tell you that im going to tell you what he says about the markets in about ten minutes. But i am going to tell you what he said about his allegiances between the panthers and the steelers he told me, this is a direct quote and i have to read it. I was born in pittsburgh but i married the Carolina Panthers. Who is first in your heart your wife or your mom . And if you say anything but your wife, i will let you stay at my place tonight. I thought that was pretty good so hes a panthers fan but still loves the steelers. As a mother that wounds you you have to let them go sooner or later and you know who recently was a good illustration of this . Who mother versus wife. We know where he is coming down and shes the queen. You continue follow the royals closely though. How do you ever forget about diana. Meantime, we have stories to tell you about investors are going to be talking a lot about the new member of the fourcomma club. Alphabet remains on watch this morning after googles parent market valuing the company topping a trillion dollars with a t. Its now 5 trillion thats more than 17 of the s p 500. Abandoning its plans to spin off its Old Navy Brand into a publicly traded company. Thats spiked on the news. Sales have slowed in recent months casting doubt on its separate entity. Its like bad news is good news. I dont even understand the thought process at this point. I think they realize that they were not going to get a lot of value it probably needs to have its own private equity fix internally before you do Something Like that. And then wall street expecting bigger write downs for boeing in the wake of that 737 max crisis cnbc. Com reporting bank of america estimating the total cost of the planes grounding to be as high as 20 billion if they return to viservice by jun or july. Boeing taking a 5. 6 billion charge in july to compensate airlines and other customers boeing looks for Fourth Quarter results on january 29th. The trade deal receiving overwhelming support in the senate as it passed yesterday. 8910. That gives President Trump his second trade victory this week following a signing of that phase one deal with china on wednesday. Joining us to talk more about the impact of the agreements, he also served as agricultural secretary in the Obama Administration and he is a twoterm governor from iowa. Secretary, thank you for being here today you served in the Obama Administration but you had very positive words about what happened with u. S. M. C. A. Your comments on this. What do you think about the trade deal its good news. Its going to give us an opportunity if this agreement is implemented in ways we intend it to be enefitted. And a new system put in place. All in all a good agreement for dairy and for agriculture as well maintaining the status quo wheat and dairy are big winners. To back it up for people that dont follow the dairy industry quite as closely, what have been the problems pressuring American Farmers when it comes to dairy the canadians have a supply Management System. They should be managing their problems with supply within the borders of candidate and they have an excess they began to export well below prices. What is the powder . Just whats used to make milk . It is a by product of cheese. Its a byproduct of butter its what is left after you made butter and cheese and that type of thing its 70 to 80 so any time prices are impressed, especially artificially it creates problems for Dairy Farmers and processors. What does itget used for . It gets placed in a variety of baked goods and a series of ingredients used by the pharmaceutical industry as a filler for pills and dilutes the impact of medication and that nature. The senator from pennsylvania put out a statement saying outside of a few modest modernizations and access improvements usmca is a step backwards and i could not support the passage. I respectfully disagree especially as it relates to dairy. The elimination of the class 7 pricing series and we anticipate an agreement and put in at a time when we seem to press prices for three or four years this is good news along with the chinese agreement if its carried through the and chinese follow through with the promises they made. Theres opportunities for Additional Market access in that agreement. Outside of Dairy Farmers what does it mean for agriculture on a broader base. The chinese agreement, if they follow through and purchase 40 to 50 billion of Agricultural Products thats obviously going to strengthen and stabilize farm income and prices the key here is implementation the key here is making sure that the chinese follow through with their promises theyre famous for promising theyre not as famous for following through with a promise. And in terms of keeping promises and trying to keep this under control, we passed usmca mexico majority passed and approved it but canada has not yet. The Prime Minister there has been under pretty considerable political pressure and pledged to compensate the Dairy Farmers in his country facing more competition. What would that mean to you . I think canada is going to ratify this agreement. I dont think theres a question about that i think its important that they ratify it soon theres a six month window in which they have to eliminate this class 7 pricing system. We have to get that done as quickly as possible so we restore some sense of fairness to the market. So i expect that its going to be ratified. Clearly the canadian dairy industry is a powerful political interest in canada the reality is they benefit from a supply Management System consumers dont benefit. They see higher prices for milk and Dairy Products in terms of making sure that they are enforcing this. Making sure that they make the agricultural purchases that they promised, when will we be able to check is this a two month process . A one year process or beyond well have a good sense of this in the latter part of 2020. Early 2021 industry is going to have to continue to report into the u. S. Government i think its certainly important that the u. S. Government is setting up its own separate office within the trade Representatives Office for implementation to review and make sure that the conditions of this agreement are following through. Under this agreement either party can leave at any point in time after giving notice so it is important that we monitor performance. It is important that we get these purchases made by the chinese. Well see what they purchased and how much over the course of the next 6 to 9 months and you have a good sense of whether or not this is an agreement that really will in the longterm benefit u. S. Agricultural. Thank you for your time today. You bet. Comments on the markets. Interesting. Well have them when squk x rern tus. Awbo so what are you working on . 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But natures bounty has innovative ways to help you maintain balance and help keep you active and wellrested. Because hey, tomorrows coming up fast. Natures bounty. Because youre better off healthy. Everything your trip needs, for everyone you love. Expedia. For everyone you love. Wthats why xfinity hasu made taking your internetself. And tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. It takes one to know one. He loves riding a horse thats running in terms of the market. In terms of the market. Did you make these i sent them to you. Theyre on the bottom. And that in summary said we have been long and continue that way. Now he did go on to say i think we should add a qualifier that at some point the market will get to a level that i will slow down that horse and eventually get off. Can he let us know when that happens . He said will you have some level or sign that will indicat that to you . Ill be the first to know after his wife and his mom which references back to earlier the Carolina Panthers thats the wife and the Pittsburgh Steelers are the mother so i guess what do you take away from that . Weve had people say that. Its a momentum trade. Cramer has said as much i think. How do you ten years ago he was so right. He was so this is the hard part. And if im third that might be early enough, right you will share with us at that point well, after i, you know, do everything that i need to do we dont anything but yes, i will so thats what we have and i could have just called him but i dont you dont like talking to people. I dont like talking to people number one but no, im not going to disturb him on a friday if he wanted me to call i would have called. This was a very significant call he doesnt come out and make calls like this very frequently. This seems to me like something that people should sit up and Pay Attention to he made a coup le of calls when he said to get out of things too. Its almost impossible but he has had some incredible success with major calls he made along the way and id paid attention to what he has to say here. When we come back, were going to talk about riding the peacock, the proud peacock, our Parent Company aiming to disrupt the competition in the streaming space with a new service peacock, well talk about what the platform has going for it right out of the gate but also the stiff competition its going to be facing well talk about all of it when squawk returns [ ominous music playing ] mirror, mirror on the wall. Makeup mode [ upbeat music begins ] [ verdera voice mirror ] done. Oooh, remind me to update my profile pic. [ verdera voice mirror ] okay. [ chuckling ] what do advisors look for dont just track an index, help me meet a clients need. Is the fund built to sell or built to last . Etfs are only part of a portfolio. So make it easy to explain. Give me a quality fund that helps me get clients closer to their goals. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. In studio where saturday night live is filmed she has more on what happened in the presentation and the after effects of it. Well, peacock is not trying to compete with netflix but to reinvent broadcast tv for the internet age it will have a combination of new and old shows and series in films and live news and sports there will be fewer ads than tv. Less than 5 minutes an hour and these ads will be more targeted. There will also be a premium tier with 15,000 hours of content that will be available to anyone for 5 a month with ads. Theyll make it easier to browse premium video, all different types of it at scale while the free tier aims to battle subscription fatigue. I think the plan that steve and teams from all parts of our Wonderful Company have created is a tremendous and positive Business Opportunity that will give us years of growth and new avenues of innovation that were not technologically possible a few years ago. Nbc universal forecasting that it will hit between 30,000,035 million active peacock accounts by 2024 thats less than hbo maxs forecast at 50 million subscribers and disney pluses of 60 to 90 million by then now peacocks financial forecasts are also smaller projecting 2. 5 billion in revenue by 2024 compared to hbo maxs 4 billion revenue protection and the 7 billion in estimated revenue for disney plus in that year. But unlike those services, Nbc Universal is also using peacock to incentivize cable customers to keep paying for the tv bundl that also benefits the media giant. Back to you. Thank you for that. Shares of comcast up more than 30 . Peacock is facing some very stiff competition. Hbo max, apple tv plus, disney plus, not to mention netflix and amazon and here to discuss the changing landscape is the cofounder you were at the presentation yesterday. I was. Your takeaway is what this was great for consumers. Who wouldnt want lots of content. Less ads and easy to find and the best part is as you watch, you get smarter. So its going to learn what you like and if you like watching cnbc clips or you like watching saturday night live clips youre going to get more of what you the consumer like watching. So great for the consumer i know a lot of companies that are money losing companies that are fabulous for the consumer. Tell me whether this is good for business. There is a substantial advertising opportunity. I mean, if you think about most of whats happening right now across the entire media landscape, youre seeing most of the places being created netflix, amazon, disney plus, apple tv plus, theres no place for advertising. Like literally, you know, look, you can put some sponsored Product Placement into some of these shows of course but theres really no place for advertising and youre seeing what were hearing from advertisers, you had big advertisers in the audience from eli lily to target theyre dying to find and reach consumers so youll take the ad load down dramatically and youll create a real opportunity to sell. So tom rogers was on in the last hour and one of the comments that he made though is that the rate at which nbc will have to sell those ads on peacock is going to a cpm basis will be at a substantial premium to make this work. To make the numbers work he thinks theyll have to be at a substantial premium to what, for example a hulu and others in the same space are getting square it up for us. Does that make sense if i go on right now and i want to watch, we did this test preparing for peacock day. So we went and we just tried nbcs experience so we watch an episode of this is us on the nbc ipad app. On that experience there was 8. 5 minutes of ads in 44 minutes of content. Thats going to shrink from over 8. 5 to sub 5 so youre going to shrink the inventory and tell the advertiser well give the consumer a much better experience and theres going to be fewer advertisers and youre going to pay a premium. Are the advertisers going to pay a premium . Based on what i heard yesterday this is what the advertiser wants a better less repetitive i got served the same ad five times. Youre going to stop torturing me. This is based on what you heard from advertisers in the room yesterday. They want a better first of all, Consumers Want this. Five times in a row. Im getting five in a row one of the other things that theyre doing is changing the programming dynamic. Late night, for example, its two sets of viewers. Well cannibalize it theres linear programming available and for the first time youre able to see seth meyers is 12 30, does it upset the apple cart to air him at 8 00 p. M. We started on this kind of we created this hashtag good luck bundle five or six years ago and no one bought into it and no one really thought cord cutting was going to be a thing. When you look at where we are now, nbc or comecacast nbc, thii where the world is going you can fight the shift. What youre talking about is will Cable Operators like this. Im not saying do you fight the shift or should you fight the shift, is there a fight on the other end . Theyre going to be upset disney is putting content from fx on to hulu a couple of hours after it airs. Theres going to be some fx content that never airs it only airs on hulu and you dont need a cable subscription to get hul urg hulu theres no doubt about it. Consumers dont want to watch in a linear form live less and less every single day m especially outside of news and sports. Julia is in l. A. And wanted her thoughts on some of the things that you have been saying. Just to jump in on what rich has been saying, demand from advertisers, i also heard that theres huge demand for getting another place to play in the ad supported streaming market were going to see a 30 increase in ads going on to digital video this year compared to last year and a lot of that is due to the fact that tv ratings are declining, advertisers need to be able to reach the same number of people so theres a huge demand to be able to chase people where they are and then just another little nugget about hulu, i want to point out that yesterday steve burke said that it was possible that in two years when the deal with hulu expires that theyll pull back the content and will have it exclusively on peacock and i think thats when there will be a real moment where we see hulu and peacock become much more competitive with each other when theyre no longer sharing a lot of that content and thats when Nbc Universal could really ramp up. If youre an investor in comcast Parent Company of this network that were on right this second you like this. You do. The question is do you like it more . Meaning when disney plus was announced it was like a rocket ship, right . Thats not happened in this case the stock has been on the move in a nice way for the past week and a half now. Look, disney is lighting earnings on fire 2020 earnings for disney three years ago were 8. 5 dollars and are now going to be sub 5. What is this worth . Its far less expensive someone called it too too conservative this is not too conservative this is doing exactly what comecast should be doing to leverage their assets. A, would you own comcast relative to the other Cable Companies out there. Comcast is very well positioned broadband is still the core of this story this is given consumers that use comcast broadband more to do i think about this platform, im not sure that other Cable Operators are going to embrace this but charter doesnt want to do this, comcast is going to roll this out nationally. What do you think the stock should be worth . Theres a lot of Value Creation just out of broadband alone. If i gave you 10,000 and told you that you could buy any one of the companies right there, which one do you buy . I think the most exciting global opportunity where theres no you talked about the pressure on the core legacy business as you do this, whether its disney, whether its comcast, youre all going to have this pressure as you disrupt your legacy business i think you want to own the pure play which is netflix is the most exciting stock over the next 12 months the report on tuesday, if they grow global net adds thats going to be a good stock over the next few months. Comcast is resilient and had a really nice move over the last several eeks seasonally adjusted annualized units. Thats a whopper of a number well above anything that were expecting. If you look at permits theyre up 1. 416 million also seasonally adjusted and annualized down close to 4 and much of what we are seeing with regard to housing has been improving. Obviously low Interest Rates dont help but theres so much more than that but this is really a big housing start number we still have more data to go. Industrial capacity utilization, university of michigan and rates popped up a bit. This 180 has never been far from the close in ten years for literally months now and we have firmed up a bit above it some global positives with regard to economic fundamentals and of course many are optimistic post trade deal, u. S. M. C. A. That numbers will even improve further back to you. All right, rick, thank you very much. Steve and diana are here as well lets start with you because Housing Starts were something. What do you think . This is because that demand that were seeing really Strong Demand for existing homes but that really short supply of existing homes for sale. We heard from the builders that theyre seeing more people coming through the show rooms. They expect to see more sales. They had Builder Sentiment up to a 20 year high last month. This is not surprising at all. Were also seeing some of the analysts start to revisit their predictions for 2020 they actually doubled its prediction from 3 starts in 2020 to 6 so a lot of bullishness. The only weakness im seeing in a little bit so you dont have a lot of people getting ready but the number itself huge today. Your thoughts. We had a slow at least initially slow grinding rebound in housing thats been beautifully timed to offset the weakness that we had in manufacturing. It dates to about six or seven months after Interest Rates started to decline which is about what you would think in the long and variable lags that we believe Monetary Policy effects the economy. This number is the best that we had going back to diana will check me on this, march 2006 we have not been at 1. 6 million at an annual rate. We have been waiting for the Housing Market to start to better reflect the demographics out there. The need for housing the rise in the number of house holds and its been curious as to why it hasnt the big story here i think is the way that housing is probably going to add to gdp and i had a chart that i want to show you which shows the contribution of residential investment to gdp and you can see its been negative for the past 1, 2, 3, 4, 5, 6 quarters and just in the last quarter it was positive and a lot of economists whose forecast i follow for the Current Quarter see it being more positive than that. So i cant do the numbers on the fly here but you can think about an additional. 2,. 3,. 4. What is this private residential fix investment. If i could jump in here too, its also important that were seeing not just Single Family construction but multifamily taking another huge jump we were expecting to see it ease off a little bit because were going to see a will the of completions in 2020 but im seeing numbers up 74 year over year in multifamily starts 32 month to month that means that were seeing increased rental demand as well as buyer demand and thats just going to contribute to gdp more. Lets be a little skeptical for a moment here. Didnt we have some warmer than the regular december weather. Youre going to throw the weather in i love it when you throw the weather in. Let me back it up. Its a factor. You had a 25 bump in the northeast. A 37 bump in the midwest. To the extent that you can, to the extent that you also by the way have trouble finding workers. You have construction workers. You can put them to work in december you might as well. Im not taking away here perhaps it was a little bit exaggerated. You and i have been here month after month and year after year. You could probably count on one hand the number of times we have seen a 17 increase in housing these numbers especially, the new home sales as well as the construction numbers have a wide margin of error and i just think that its interesting that youre seeing more construction in multifamily even as youre seeing the for sale Housing Market heat up and the Single Family builders heat up. Theres so much formation. Household formation starting in 2020. I dont disagree. Becky, this is the way housing works its way into gdp. Okay its a whole bunch of stuff but including the added value of renovations and the added values of additional Housing Starts what that shows is that housing in the Fourth Quarter contributed. 17 to gdp. And you can see its subtracted from gdp and now its going to add again and thats important and its one of the reasons why we have seen we talked about this yesterday, the estimates for the Fourth Quarter go up month after month week after week as the data has come in in part because of the strength of housing that we have had in general, the reports which are the ones that i follow for the Housing Market have tended to be negative and theres something ellsworth talking about here i dont know if we have the time but to just take this on, theres an ib out there that the more you lower Interest Rates the more you raise the price of housing because you make the Monthly Payment more affordable and so therefore you raise the total value of the asset to what extent where are we in the affordability of housing now. Are more americans or fewer americans able to afford homes at the moment . But were also seeing a reacceleration in home price games. They had been shrinking from 2018 into 2019 because of higher Mortgage Rates and now were seeing the prices go up. Now affordability is better because we saw Mortgage Rates go down and home prices were shower rir shrinking but they have gone back up again. Thank you both. Good to see you. When we come back, well talk about why he is still betting on the bull market. We have his exclusive comments to joe when squawk box comes rit ck dont get mad. Get e trade, dawg. When you look at the world, what do you see . Where others see chaos, we see patterns. Connections. Relationships. When you use location technology, you can see where things happen, before they happen. With esri location technology, you can see what others cant. Its what will give you an indication of that he told me that i would be the first to know after his wife and his mother do you think he was serious no, probably not. But as we pointed out he was very bullishand single mid to high single digits. Not just that but a lot of this has come too far too fast its very muted. So heres a guy that made 2 billion in a year i dont know if anyone has ever been better at managing money. About a year ago or two he said, you know, i dont have any intestinal fortitude that i used to have. Its more for me now, but the one guy that does at this point is tepper and thats the guy that i listen to so he never wants to weigh in but he did and ill talk about that he said if you dont say it. He said you may use it if you must but we need the chart for it the half life of saying im riding this horse should be at 3 00 p. M. Today. That and the other thing. Just so the viewer doesnt think that david tepper decided today was the day. No, he was talking about the panthers. He came right, he texted us about the Carolina Panthers. It sort of happened in the moment as opposed to coming on to tv today to tell the world get on the horse. Its important to put it into context that we were talking about and i asked what happened for your love for the steelers i was born in pittsburgh thats like my mom and my wife is the Carolina Panthers. He didnt intentionally come on to say heres what i think people should be doing. No. As a matter of fact in other conversation. This is just what im thinking. Begrudgingly after i asked him. But as long as were going back an forth i might as welsey what he thinks of this crazy market which is now up almost 100 points. Thats right. They all have a common theme and thats technology. So becky, lets talk about some of those folks that joe was just talking about we have three text stocks on the move this morning because of analyst calls. First up shares of apple are up about. 5 in the premarket trade. Roughly around 300,000 shares of volume the iphone maker and a, approximate p Services Company gets a target price hike to 368 a share. It was 296 at morgan stanley. They are updating their estimates due to new assumptions on the upcoming smartphone upgrade cycle. Around next gen of 5g wireless. Theyre also looking at shifting away from phones and those apple shares are catching a bid. Well see if they can make record highs today theyre close. Speaking of wireless, shares of qualcomm up over a percent on roughly 50,000 shares of premarket volume the computer and wireless chip maker being helpful and upgraded that stock from a buy to a prior neutral. It goes to 108 per share. It was 89 before. They cited the ramp up to 5g technology which could lead to higher average selling prices and higher royalty revenues for all of its intellectual property and 5g technology and were watching qualcomm as well. The Online Market share and option sites gets downgraded the target price goes down to 32 per share. It was at a prior 45 they cited head winds to the core marketplace business to a roll out of Internet Sales taxes and online and Multichannel Retail as well as the used goods portals like posh mark so those shares are on the move as well. Ill send things back over to you. Thank you for that. Well continue to talk about tech right now joining us is the grounded Investment Advisers partner. We talked about it earlier 5 trillion is the market cap combined with the top five Tech Companies in America Today what do you make of that and are you in the david tepper jump on the horse while its running camp im glad im on the buy side and not on the sell side today and i would add that the market capitalization doesnt change our investment thesis on any of them youre starting to see investors look at technology differently its no longer the hypercyclical business from the early 2000s. Its now consumer staple for the most part. So it can enjoy much higher and Stable Revenue streams and were bullish on tech. How concerned should we be about how big of a valuation that presents in terps of daytoday market swings this is driving so much of it. The amount that they make up of the indices and if the indices move or if we begin to see rough economic roads ahead theyll get out of the markets more largely in the largest companies. So the thing that is bringing them up because theyre such a large part of the indices can bring them down. So its hard to see that right now. Final question, if you can only buy one which one if i could only buy one, apple still. Got to be apple. Apple is still it thank you for joining us this morning. Appreciate it. We have more squawk on squawk. What to watch ahead of the opening bell on wall street. Futures pointing to a higher open on this friday morning. Dow would open up about 105 points higher. S p 500 up about 11 points and this is the dow closing the best week since august you can always watch us live on the go on the cnbc app if you have to head to work you can do it right now. Were back in just a moment. soft music did you know that americans that bought gold in 2005 and even now many experts predict the next gold rush is just beginning. So dont wait another day. Physical coins are easy to buy and sell, and one of the best ways to protect your life savings from the next financial meltdown. Today, the us money reserve is releasing official Gold American eagle coins at cost. For the incredible price of only 154. 00 each. These Gold American eagles are official gold coins of the United States, and are being sold for only 154. 00 each. 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Call now while vault inventory remains, and as one of the largest us gold coin distributors in the country, us money reserve has proudly served 100s of 1,000s of clients worldwide. Dont wait another minute. Call now to purchase 1 10th ounce Gold American eagles for the amazing price of only 154. 00 each. Welcome back were almost 100 points down weve been talking about david tepper speaking out on the markets, telling me, after just, it was certain dserendipitous t about the Carolina Panthers and the Pittsburgh Steelers. He said i love riding a horse thats running i said is that the panthers, the steelers he says no weve been long and continue that way. He said at some point the market will get to a level that i will slow down that horse and eventually get off so i tepper has been the subject of really positive comments from someone that may be the best ever in the business, so i asked him druckenmiller about tepper and his comments and stan doesnt like to opine lightly and he said of the current market i revealed a bullish posture intermediate term in an interview december 13th. Since october, when powell guaranteed that he would not rescind the insurance cuts unless inflation was persistently above target, in other words, would not change even if trade and brexit would work out since then, both worked out and the fed is still whining about inflation being below target trumps election prospects increased with two trade greements and big win in iran which democrats have responded poorly to. In his words, i am still riding the horse as well, and bullish in the immediate term. Druckenmiller and tepper are both following the momentum on this and think that up is where the market is headed in a nutshell significant yes teppers call, you put in the qualifier that i could slow this horse down, that could be hours, days or weeks. I mean, you know, i dont know how long probably important to say, too, neither one of these two gentlemen woke up thinking they would be advising or advertising what their position is you happened to be in conversation with them and this is what you gleaned from those conversations. I appreciate it, he said if you must. For people who think theyre manipulating us and trying to tell us so they can sell that was not the intent. They tell you what they think about the market right exactly, and you know what you have to worry about saying something on a Global Financial, and thats these guys have so much skin in the game they have bigger problems whether they Say Something and the buy side is so much, why even predicted all right, anyway, joining us now charmane Goldman Sachs chief private officer. Are you similar thinking or do you need to manage risk in a way that its more front and center. Weve actually had the theme of staying invested now for over ten years, so when we started during the Global Financial crisis recommending our clients actually go overweight, we have never since suggested clients actually reduce their exposure, so let answer start with the premise that clients have a good customized Strategic Asset allocation, the right mix between stocks and bonds and othe recommended clients go underweight, so we have actually been long equities this entire nearly 11 years, up 500 in addition, weve also recommended clients have a much bigger allocation to u. S. Equities, so the theme of stay invested but also the theme of american preimminence. Weve said relative to developed and emerging market countries, u. S. Is preeminent so should be underweight emerging market and other developed equity markets once everyone has this opinion, now, is there a time when you say, okay, weve ridden the horse long enough . Do you know whether were getting close to this point . There are two factors we p focus on if were in expax, the odds of positive return is 87 one definitely has a huge tailwind in terms of the current economic environment and we have a low probability of recession, so that would encourage us to continue to stay invested. The american preimminence theme we think is a longlived factor, not something thats going to disappe disappear, competitiveness, productivity, innovation, rule of law we can go through Labor Productivity there are so many factors, demographics we think these two themes have staying power. Thats the title of our outlook which is on our website, room to grow, so we actually believe theres more running to go, to use their expression of this horse. We also dont think equities are very expensive they are slightly overvalued by our metrics, theyre overvalued by about 13 . Thats not enough to start going underweight equities, and were also very sensitive to taxes for our clients. If you had a dollar invested at the trough of the equity market, and you had not sold that, the equity market has to go down, if youre a new york city resident, for example, 29 , just to make up for the taxes, so i think the idea of trying to get in and out of the market for short term trading is not beneficial, because the tax drag is going to be huge. Right so economic expansion, and we have to see much higher valuations to actually recommend getting out of the market. Thank you for, i feel like weve heard a lot of voices today and its another good one. More squawk box straight ahead. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. Next week, we will be in davos at the World Economic for numb switzerland well have interviews with jamie dimon, ray dalio, brian moynihan, David Solomon and many, many more. A huge week for us great time to check in with lots of leaders in business we want to make sure you join us were ready for the cold i have some great outfits, not for nothing, all planned out monday, tuesday, wednesday. Fashion show. Time for squawk on the street. Whats your favorite, color, baby good friday morning. Welcome to strm tsquawk on the street. Im carl quintanilla, with david faber, and tepper and druckenmiller blessed the markets momentum, helping us look past a host of downgrades, weak reports outs of transports. Housing starts the best monthly print in over a decade, and tenyear 1a3 road map the resilient ral