Transcripts For CNBC Squawk On The Street 20200124

shanghai disney closing, mcdonald's closing in five cities and 70,000 movie theaters going dark shares of intel are soaring ahead of the open. the chipmaker forecasting a cloud spending slowdown ahead, stock trades at levels not seen since 2000 apple shares more than doubling in the past year, raising its semiconductor orders for the new phone. does that stock have more room to run we're going to start with the coronavirus. here is what we know so far. china's national health commission 26 died from the fast-spreading virus total number of cases rising to $926 expanded travel lockdown affecting more than 36 people in 11 cities. shanghai disney is shuttered for a while. mcdonald's suspending business in five cities due to the virus but world health organization says the outbreak has yet to constitute a global health emergency, jim, we'll reconvene in ten days to reconsider. >> i thought that was important. they obviously can declare it that and just make it so that we are shut down. a lot of people this is handled better than sars i have to question that. what do we know about this thing? does it get better with "x"? do you need to go to a hospital? will the hospitals are overwhelmed? >> just sow panic? >> you think they sit in wuhan and watch me >> the response between now and 2003 with sars with better anthony fauci thinks so. >> anthony is a very good guy. >> they are closing 70,000 movie theaters >> they had the party at 10,000 people, did you read that? party of 10,000 people over the weekend. that's some party. it was a big party when i read the number of cities i don't care i care if you wear a mask, do you get it if you don't shake hands do you get it i had dr. mark b ri istow doing business in the heart of ebola and said you have to understand if you fist bump instead of shake hands you'll determine you don't get ebola. i would like to hear something like that. >> we should all be fist bumping. by the way the flu is a bad thing to get and you don't want to get that either we should all be doing that. in terms of the economic ramifications of this so far, in china you could imagine the impact on companies such as disney perhaps, given shanghai disney is closed now richard gelfand's company, frequent guest with the movie theater. >> how about alibaba, how about we buy alibaba stay at home if i don't want it to be america but you'd be buying amazon alibaba, stay at home and shop they love to shop. >> it's an idea but it does appear right now it's confined to in terms of any concerns about the economics of it, and what we follow here it's confined to china at this point and/or the concern about overall depressing economics, economic growth in various places it's not moving around the world yet. >> deutsche had a comparison yesterday that it's spreading faster than sars was spreading at this stage. we've gone from one city to ten. >> right, but that was one out of every ten with sars died. we're not getting that >> no. >> what we'd love to know, can you get a hospital bed if you go to the hospital? hospitals in shanghai hospital typically is one hospital per 500,000, a different kind of ratio than we have i wonder if you stay at home, and you have it and you don't get whatever they're giving people, do you die >> i don't know. sorry. >> "the journal" has a harrowing people on people trying to catch the last trains out of wuhan, just incredible, the rush to get tickets. there are some estimates out today that it could shave a full point off of china gdp mostly because it's siphoning off the money that they might have been planning to spend on stimulus this year >> that's true our government when you get them off line thinks the real gdp in china is 3%. if it cuts to 2% it's less than ours i'm not scared, david, no panic. carl, when i think about it, don't you -- wouldn't you like to know how they're treating people who have it they just gave this to the w.h.o. their confidence level, i like their confidence level >> they're building a hospital for this >> from scratch. >> look at the cranes. >> that looks like the scene in "gone with the wind" with the burning of atlanta it's the burning of atlanta. >> not cranes, they have 100 diggers out there already. >> they have a lot of people >> they built it in like a week. >> the eighth army built bridges in days. >> when you look at airlines and luxury stocks. >> i think they're bad for now >> you still do? >> yes >> the epidemiology is not -- >> i think the airlines are going to go down i like estee laud's t estee lau. can we give it a couple of days? hong kong will be in a depression hong kong is where to go to shop >> macau >> hong kong has its own issues greatly depressed economy. >> procter & gamble talked about hong kong. look, the sharp comeback after sars, stock went down say the stocks went down 30. they went up 50 almost immediately. you have to bet the smart people in the world are going to solve this thing i know moderna i met them at the health care conference, they're working on everything because they have a big base they use amazon web services to come up with vaccines. they have nothing currently in play glaxo is the best vaccine in the world, they have nothing cooking. i'd like to know who has something and like to know whether if you buy a mask from 3m which reports next week, clorox is up three points because it kills everything. bleach kills everything. >> that's why we use those things here every morning. >> i do, but i wiped it twice. >> i'm glad you did. i'm glad you did >> taking no chances >> it's an easy hedge >> it is >> hype it down, get sick. >> the ceo of clorox come on the show many times and said there's nothing that kills like clorox >> i had the flu last year and just as soon not get it again. >> i got it from you >> as you see my colleague is concerned about viruses. >> i don't like them if you're older than "x" what happens. >> maybe that's what it is >> it's not like the chinese put a trip tick. >> he's moved into the age group. >> the elderly e extreme heat do you stay indoors >> he's much more vulnerable >> i spend an hour on medicare versus cobra versus my plan. >> let me know what you later what you found out >> like five years from now? intel up sharply, dow component petter expected quarterly results, stronger powered chips for data centers upbeat guidance a 5% div hike. interview with bob swan on "squawk alley. >> bob did a great job bob was a financial guy. he's spending a huge amount of money to meet 25% capacity to meet for the single digit with low single digit pc world. the data center is amazing i had mobile i on recently, they're making real money, david, that's autonomous he mentioned the gee rujerusalet the demand side is shocking. internet of things side shocking this was a great quarter >> part of the worries are the supply side of intel jpm 80 to 68, the compares are going to be tough. amd will run in with better supply in the second half of the year >> i thought that downgrade was fascinating. amd, nvidia and intel cannot unmeet the demand because no one thought this cycle would snap back so quickly in the data center but that's facebook and alphabet amazon >> they say they're on track to deliver the ten nanometer plus this year. >> yes >> they're talking about the seven nanometer transistor process on track to deliver it in the end of 2021 sometimes it bears mentioning just how thin, i can't even do it with my fingers how thin these are. >> jenson wang from nvidia has sa said moore's law has maxed out, smaller, better, powerful, make a better simulation. 10% of the stock was retired in the last two years, that's okay, david. i have to tell you when i go over it, i am just in awe there could be so much business that they cannot meet demand in pcs that's because pcs accelerated in the fourth quarter which leads me to believe, david, that the reason why hp is confident is going to go up -- >> because this shows demand >> correlation they say the fourth quarter, that's hp, blows the number away now they'll meet the demand for hp because q1 is bet per >> hp has a strong quarter, that would be important, no doubt >> david, it busts the whole theory that board of directors that you suggested that they put up >> xerox put up yesterday. >> hired guns. >> some although not, it's not a bad thing. not like carl icahn's driver and cook at all >> it's a charade. i'm calling it a charade when hewlett-packard reports on the read-through from intel, you're not going to be able to catch this stock >> first we'll hear from xerox and see what's going on there. we'll be watching that closely, if they were to consider entering into some sort of at least talks with xerox, in part based on their view xerox is not a falling knife in terms of its own business so that will be an important quarter and we'll get hp >> i'm trying to figure out why the company is confident this intel quarter had so many read-throughs. lisa su, that stock is so bid up that it is a worry because remember the stock was at 33 then they reported the quarter, dropped to 30. i said the quarter was great, people ignored me and next thing it was at 50 this quarter it could go down to 47, 48 and pick it up. the world is her oyster. >> on the backdrop of taiwan semi, skyworks the supply pack between broadcom and apple >> i thought liam griffin did a remarkable job for skyworks. the stock is bid up. 6% cell phone got a lot of other things he's doing 5g, talks about a primmer on what 5g is versus what people think it is excellent conference call. it should be listened to the stock rallied so much that people are concerned >> is there a sense that the broadcom deal is taking air out of the skyworks quarter, might be a supply shift on the apple front? >> i think people are conflating that the demand for samsung, demand for china is -- liam can't make it he's got a supply problem himself. and the fact the stock is down, it was up $1 at one point. the conference call was good people are looking for reasons to sell. i'm not worried about skyworks it was a stock i said would go down when they reported but liam griffin does a remarkable job, certainly better than the patriots did, happens to be a big patriots fan >> you see mahomes' merchandise will outpace brady's this year >> isn't that unbelievable >> one day it's got to happen. >> happening right now >> march of time >> who do you think brady will play for >> not anybody >> won't be a manning for the first time in 20 years >> he lives in summit, will he move >> retiring after a great career with the new york giants >> pat schurmur is gone, couple houses for sale. >> i can't imagine brady playing for anybody but the new england patriots >> broadcom 4% yield very good. the rf was good. that's a good sale i'm happy there. >> you are >> i'm very sanguine, uber sanguine >> you haven't used that in a while. we'll get to cramer's mad dash a final look at the premarket and get to apple, tesla, a downgrade of comcast, all of that when we come back in a minute good morning! oh no, here comes the neighbor probably to brag about how amazing his xfinity customer service is. i'm mike, i'm so busy. good thing xfinity has two-hour appointment windows. they have night and weekend appointments too. he's here. bill? karolyn? nope! no, just a couple of rocks. download the my account app to manage your appointments making today's xfinity customer service simple, easy, awesome. i'll pass. all right we got 13 minutes before we wrap up trading for the week and get started with trading at the nyse. we hit intel earnings, american express out with earnings. >> i'll start with a query because the ceo is mr. squery. what will millenials not leave home without >> their water bottles >> you nalgian hound, you. no, american express the card. >> oh. >> the campaign is working get this, ten straight quarters of 8% plus growth. an amazing number of millenials signing up, fee based now much less just the kind of episodic interest rate thing. david, 50% of the sign-ups of the new cards, millenials and they love it they love resi, they love the services they love the points it's working it's reverting to the way it used to be, when you get out of college, you graduate and get the card, the ad campaign by the way of the woman, you know, with the card, the haircut, working, and i'm very impressed i think that this can go much higher >> really? >> much higher >> much higher >> because it has a lower multiple versus the much beloved visa and mastercard and they're asset light, they don't have any sort of worry about default. i'm not worried about the defaults at all. they get them started early and they're addicted, just like we used to be i am a member since 1908 a80 anm proud. it's happening again and that is the ceo, squerrey, underskatate fella, remarkable. the numbers are fantastic. david, you're talking about a wholesale redo, making it so that they have these incredibly valuable new cardholders who will be with them for life because of the good things david, when you get the points, don't you love the points? >> i like the points, yes. >> all the services, the resi is good i had resi at the top of the longshoreman, my expensive restaurant in growth >> a lovely restaurant lovely >> thank you so much i think american express goes higher and you can buy it here >> okay, all right we'll keep an eye on shares of amex a reminder for all of you, you can always watch us live, not just on your television, that old-fashioned device hanging in your living room you can watch us on our app. on the go, any time, download it today. we got a lot mor"sawk te quonhe street" including the opening bell, right after this and a live bookkeeper's helping customize it for our business. (live bookkeeper) you're all set up! (janine) great! (vo) get set up right with a live bookkeeper with intuit quickbooks. ♪ and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. weveryone, looknk isn'tat your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. to challenge your thinking and test your execution. but great minds are driven to seek out the complex. they see what others don't, from an angle others won't take. they learn that embracing those challenges is what sets them apart. i am justin rose, and we are morgan stanley. dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere. zblat openi >> announcer: the opening bell is brought to you by nuveeen, a leader in income, alternatives and responsible investing. some video rolling in of shanghai disney, which has been closed indefinitely. disney made the announcement in the past few hours, that we will continue to carefully monitor the situation, be in close contact with the government and renounce the opening date upon confirmation we wish our guests a healthy and happy spring festival. emphasis on the healthy, as this is clearly, will be an issue for the quarter. >> the stock yesterday trying to figure out how much was a read-through with comcast. maybe david has an issue, some thoughts and how much is read-through on th if it's a read-through related to comcast that's negative, it's not. >> i think yesterday's decline was partially a read-through on comcast, given the weakness we saw of course in disney -- excuse me, in disney but in v viacom and discovery >> disney is in better shape >> the disney plus numbers are key when we hear from the company and expectations are going to be very strong. after getting the initial read we haven't heard anything. there is going to be a lot of focus on that. >> shanghai disney is an important part but to your point, you know, the impact from the comcast -- we'll talk more about that is on the other purer plays when it comes to those that are still very much a part of the cable ecosystem >> you may be getting an opportunity to buy disney say at the end of the day or maybe monday, if there's more, sadly if there's more illness because that's not, that's a short term reason to sell disney. it's a hedge fund reason because disney plus is a long-term reason to buy disney all i hear is great things >> ubs cuts our parent to neutral today. >> yes that hurt. >> sees 2020 as an investment year, operating cash flow they see next year at 2% on the video ramp, programming renewals, and then of course the comps from the political ads that we won't have in 2021 >> yes ebitda growth deceleration, which is not what we want to hear >> right yesterday we talked a lot about the fact that they seemed to really be saying video was not of great importance even though it contributes to the largest amount of revenue at the company. you cited during the call as well that 50 basis points of margin expansion as opposed to what had been anticipated and what people are looking at is wait a second, they increased price in the video service they jacked up prices for your broadcast networks and everything else and still they have margins not be where we anticipated, so how much are they spending on sky on peacock on wireless? and that's sort of where people are focused. >> why doesn't anyone take advantage what have brian roberts said how good sky would be italy with the big penetration, big country. the numbers you see from sky is so underpenetrated versus the united states. they didn't play that up on the call >> no. they didn't, but people -- they didn't necessarily give you a lot of -- a lot of granularity when it came to the margin erosion versus what was expected >> no, right >> or except we know these things are expensive peacock we know what the number also be in terms of the 2 billion spent. not that large but it's something. wireless spending a good amount to acquire a lot of subscribers. >> the downgrade said where they could be wrong is peacock. i went over that conference call for comcast, went over a bunch of times two ways to look at the conference call. one is that the spend is going to come back very quickly. [ cheers and applause the other is to say listen 2021 the first time we're seeing anything good. if that's the case the stock goes lower [ chants of "usa" >> let's get the opening bell, you'll hear chants of "usa" because at the big board it's major league baseball. [ bell ringing ] the usa softball olympic team highlighting its partnership, division 4 celebrating the recent ipo olympics, fewer than 180 days away, something like that? >> it is incredible. i was looking at the schedule for us, it's like wow, right on top of us. obviously an event that has helped comcast over the years. pretty terrific. >> without a doubt and back to peacock, the main launch is going to be and you'll see olympic events on that streaming service which is a good time to launch it. >> how does it compare to cbs all access >> leading the horse to water, aren't you >> what about cbs all access >> come on, i'm making you drink here >> listen, cbs all access is an important part of the overall strategy at viacom, programming for other streaming services and having their own and pluto is their ad supported entrance as well >> you know, in the old days, when i was pre-jimmy chill, when i was jimmy psycho, and worked with my ex-wife i'll call her that first time on tv, karen cramer, i talk to her every day. she'd remind me when i was so wrong i'd have to wear a post-it on my forehead and get a soft pretzel for her or diet coke and have to walk right-hand 100 wall street one time and mortify myself i am going to have to wear, if this breaks 35, okay, i am going to do the show with a post-it on my head. >> can i put the post-it on your head >> you could epoxy it, use phil swift. i'm phil swift >> yesterday as we just said, the broadcast related companies so to speak, fox, viacom, discovery down sharply netflix was up in part because of the conference call that we referenced, comcast shares are down another 2% this morning there is weakness as well in the names i just mentioned, though not nearly as much as there was yesterday because of the idea discussed during the comcast loss of video sub losses accelerating a bad sign if you are part of the ecosystem as we are. at&t, warner, tbs, tnt, those are important networks that contribute a lot there as well so all of them conceivably if numbers are going to be worse this year than last year in terms of losses from subs at comcast the question also begs well is directv going to have bottom the way they said it had. >> you read through at&t it was negative >> yes, potentially negative for at&t as well so there are a lot of ramifications. what i come back to we know the bundle is breaking apart quickly, maybe more so sports is what holds it together the nfl becomes even more important. viacom will enter a renegotiation with the nfl for cbs, fox it's so important to them as well what are we going to see there if you were to have one of the big streamers sign a big nfl deal as well, that would be a serious moment >> you see how much cash, alphabet more than $60 billion in cash. if they decide and they've not done well in sports. if they decide to go sports -- >> on youtube? >> why not >> listen, it would be a significant moment news and sports keeps it >> bob backish you interviewed, the c oh, of viacom talks about how the nfl values the production >> fox will say the same thing >> right, but at one point you got to value the check at a certain point the check, but the nfl obviously does matter this is the jim nance tony romo factor, they like that, the keynote. >> it's hard to imagine the nfl won't be available on major broadcast networks >> why >> because they like it, they want it. but it doesn't mean they can't apportion certain parts of the nfl on the others as well, get more for less from the viacoms and foxes >> this is the major sports story of the nfl, when i go to the super bowl all i want to ask people would you be okay on youtube? would you watch? >> high quality. there's nothing worse than streaming a football game and having it buffer or interrupt. >> no, no, it's -- >> to your broader point, guys, the street is not interested in hearing about investment spending in media or discover financial today. >> no. >> there's a difference between that and axp >> ax. has an asset light model discover, i don't know, why own that why own synchrony american express is up a couple of bucks, why, because they have growth and haven't had to spend a lot for growth they are marquee, and because they have cache. discover card, i whip out the discover card, people say don't leave home without it. do this he in. >> i haven't thought much about the discover card. >> how about diner's club in >> the card that pays you back, isn't it does it still pay you back >> diner's club my grandfather had a diner's club >> my grandfather did. >> in the '60s >> it was cache writ large symphony, synchrony, sorry, i know they're nice. >> a year ago 22.6 >> i'm glad you mentioned that, because i've taken note in so many of the earnings of the tax rates and i don't have it in front of me now and it's not -- we'll get the number i guess i don't see anybody paying 21. everything's 16, 15, adjusted, 14 take a look. i mean, it's amazing there is no revenue going to the treasury from corporate america. >> that is incredible the tax rates. we were marveling the other day, comcast tax rate, they're all pretty low >> most of them are really low, well below what at least was anticipated when obvious lit big tax bill from '17 went into effect and we expected they would be lower to 21 but they are below that. >> it's really a great point >> in the teens. i'm glad carl mentioned that >> apple doing it last night on "mad money" we had what the high man on this morning, webb bush geez, the expectations have been -- >> on apple? >> whoa. >> price target increases again today at cowan, rosenblatt, webb bush, dan goes to 400 >> rosenblatt has a sell and raises his price target, the counter intuitive. isn't it oxymoronic, fatuous, smacks more of fiction than fact >> look at that short. >> that's amazing. one reason why we are where we are. i have to ask you some are arguing oil below 55 today, the ten-year, the curve, copper, none of it's ratifying the enthusiasm in stocks >> that's china. >> is it >> these funds, they say oh, they got coronavirus, let's just sell because worldwide growth is going to fall. the permian doesn't stop pumping. a lot of our oil, thank you to brazil, is going to china. the exports in our natural gas and liquids sent all over the place. we don't shut down remember, the late great aubrey mcclennan said that's the problem with oil people don't say we ought to pump less because the economy slowed they're always full out and that's been a big problem. the permian is full out. they're high grading, they have the rig probably go down when we get it today from baker hughes at the same time they're getting more per rig we're just pumping like mad and the growth will be not as fast as last year, but if they, we had any demand, they would put more money >> sure. >> schlumberger cut american down by 50%. occidental is worth watching >> we'll continue to watch occidental, the efforts there to incorporate that >> vicki is getting greener. >> and the synergy numbers that were so significant and important to the success of that deal and there's a look at occi. >> not a great chart >> not great at all. >> every oil company looks terrible >> it's almost a week since we got the closing, over a week since we got the closing arguments in sprint and -mo versus the states. >> any day they said >> i think it's still most likely not going to be until let's call it a number of weeks from now >> really? they said deliberation >> judge moreira wolf, there's something i don't know i want to share something i do know that i think is expected by the market but it's important to sort of put out there, based on conversations with the number of people close to the situation, they're not going to appeal this they are not going to appeal this ruling if in fact judge moreira rules against the deal >> why not >> my understanding is that the parties are highly unlikely to appeal there had been a thought, you could imagine perhaps that they'd want to go further and go on, and appeal it. no is what i'm continuing to hear so once we hear from judge moreira, either he upholds the current deal and the consent decree entered into by the doj that involves so many different things, involving dish, becoming potentially a key xet for compe 5g wireless market they don't have a merger agreement in force if it goes against them they're done, they walk away >> comcast is spending a lot of money. >> if the deal goes against the parties, jim, there's an important point i don't think we've made enough, it's bad for takeovers in general you've got a deal that the doj and the fcc have said yes to and then the states come out and say no, and actually then if they were to succeed in that, if you're brian roberts and want to do something, you're like how am i supposed to do anything when i have to worry that there's another line i've got to get through after the doj says yes some state doj raising their hand and benefitting from the exposure, saying i'm going to take to you court. >> that's a major prop >> create another hurd toll m&a, certainly high-profile m&a that involves other consumer related nature such as your phone or phone service. so we're watching it closely >> it's a hot button for me. >> all right guys, amex and intel adding 75 points to the dow. intel near a 20-year high. bob pisani >> carl, we're up because of intel and amex and a little bit because of boeing that's really helping us out take a look at the sectors the concerns about what's going on in china is not going away. coronavirus is there semis up because intel is dragging everything up transports still weak. airlines on the weak side. energy is still not bouncing at all, and there is your china etf, the broadest etf still weak there. this coronavirus is still not going away the effects of that. if you look at some of the names, las vegas sands down 2. freeport getting clobbered down 10%. haliburton is weak, cruise lines, airlines on the weak side this is not going away if you look at other things, i think the important thing today is earnings and the manufacturing numbers. we got very good numbers on intel, the numbers were terrific overall and it's dragging up all of the semiconductor stocks as you can see here elsewhere, american express, good numbers here, the guidance about in line with expectations, that's the 2020 guidance for american express that is a new high right there for american express the important thing here is spending is good, card growth is good looking at the effects on the consumer and u.s. spending the numbers were excellent overall. new high for american ekts prxps remember the story it's the global economy bottoming, is it or not the numbers were encouraging overnight on the manufacturing numbers. japan's numbers were generally better than expected euro zone better, uk better. the numbers still show contraction, that's key but the numbers are not as bad as they were a few months ago and inching towards possibly moving positive that doesn't sound amazing but believe or not that's encouraging news overall the four pillars that move the stock market, this is one of them whether or not we get a bottom in the global manufacturing so the strong u.s. consumer, number one, number two the fed being neutral, number three a trade truce and number four, the four forces moving, global economy bottoming these manufacturing numbers are helpful about that particular thesis. back to you. >> bob, thank you very much. let's get to the bond pits rick santelli at the cme group in chicago we've watched the flash pmis roll in from around the world. rick >> reporter: pmis improving, giving a little bit more optimistic picture but anybody who really gets too optimistic ought to read christine lagarde's comments from the ecb meeting and press conference yesterday. maybe they're tired of their experiment with negative rates maybe they understand it doesn't do what it's advertised to potentially accomplish, but they're not disappearing any time soon. look at a two-day of two-year note yields, unchanged on the day which is about as good as it gets for yields lately but down five on the week one week of tens minus monday down one basis point on the day, however it's down ten basis points on the week twos are down five, tens are down ten so far there's been five basis points of flattening on the yield curve, that is a dynamic to pay attention to. open it up to october for tens and even though tens have been closing at the lowest levels since early december, because on that closing day we were around 171, but here is the issue look at that chart there's not a lot to the left here we could easily be at the lowest yield since october and extend the comp. and this is a global issue. look at the weekend bund two weeks ago at minus 15. here we are now at minus 31 and of course i don't know that you're going to see any slowdown to the recent selling pushing those yields down. i know friend of cnbc peter bookvar brought up the point, who would own these? americans could be sliced and diced into some of your funds and when you have negative interest rates doesn't mean you can't make money you have to find people behind thaw want to buy it after you sell it and the dollar index, the happy story of the year, good power to it and looks like it will close the same date as the extreme in bunds, early december carl, jim and david, back to you. >> thank you, rick santelli. own this day in 2006, disney agreed to acquire pixar, a $7.4 billion deal it was all stocked 2.3 shares of disney at the time pixar's ceo was steve jobs and bob iger was at the helm of disney i spoke with them both that day after the deal had been announced. >> we're convinced that bob really understands pixar, and we think we have some appreciation of disney and love the assets, getting the characters in the theme parks and express them throughout all of disney's incredible assets. >> the most important thing for the company to do is to create high quality condition dent and within that sort of strategic imperative is to make sure that animation is healthy at the company. for animation to get right at disney, i felt strongly about bringing pixar in and that was the reasoning behind it. >> if you read iger's book, he spends a good deal of time talking about how he wooed jobs, how they became very close as well and became or got to a shared division of pixar and disney there are a lot of investors you're paying awfully high price for this thing, in retrospect of course that was not an argument worth making >> there were a lot of things that happened made that work beyond the price kept great people. >> of course john lasseter who ran disney animation and it was the first of what were a series of deals we talked about that transformed disney almost all of which, all were, we'll see about fox because it's early days but all of which were significant, and successful for the company regardless of what he paid for them >> right, if you didn't know better you'd think the whole time he was planning disney plus >> right that was far from it, but in retrospect, how could pixar be anything but part of disney? i remember at the time saying jobs, i get it, but bob, man, you're paying a high -- >> what was the interview? >> which one >> jobs? >> he could be testy you know that. he could be. he could be. he wasn't on that day. he was in a good mood. >> tunido you think he liked yo? >> i don't think he thought of me whatsoever. i doubt he had an idea who was on the other end of the camera >> did he know you were the east coast distributor of the flu >> he didn't know anything, not kidding, nothing >> thought you were a spy, you were a mayfair, what is it, mayfly, the 30-second life >> i guess >> i'm trying to figure out the analogy because i think that was a great interview. i actually remember the interview. >> you do? >> yes, i do, and i remember isaacson's book the reverence he had for iger as opposed to everyone else in the world >> they became close iger sat on the apple board until -- >> recently, until the competition. iger's great book starts with the terrible news about steve jobs that was when you knew you had a gripping book. he started right with that >> it was a really excellent book >> fabulous book >> check out our podcast, "squawk on the street," wherever you get podcasts losing some ground here as we were looking for the flash pmis to show some stabilization, but the u.s. pmi misses at 51.7, we were looking for 52.4. we're back after a break ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ through the at&t network, edge-to-edge intelligence stock trading with jim is next from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. which is why xfinity mobile data,is a different kindent. of wireless network that lets you design your own data. choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to top wireless carriers. save up to $400 a year when you switch. plus, save even more with $150 off galaxy a70. click, call or visit a store today. time for jim and stock trading. >> we often talk about there is no "i" in team delivering what i think is the best single quarter and that is because it is a collaboration software, no "i" and it is working. they have accelerating revenue growth, billion dollar run rate. remarkable bunch of guys had them on. they came on wearing like timber land shoes and flannel shirts. because they're different. and this is a stock to watch it is not done going higher. it has terrific, terrific take up, and they're from australia so we hope that they're well obviously because australia, with the fires >> very tough times. next week, jim, fed meeting. gdp. inflation. usmca. and the busiest week of earnings >> next week is a week where you really have to, it's a caffeine week there is no sleeping next week i tend not to like sleeping next week i know dr. oz says that's bad. he was on our air. but no sleep is the way to handle that. you can sleep on saturday. go to the super bowl i can sleep during the halftime. i'm not that big a fan of those singers. >> okay. yeah don't sleep. i mean, why, if you're getting three hours why bother what's the difference anyway between three and nothing? >> the guy's got horse sense >> what's tonight on "mad? >> we got the game plan. i'll talk about some of these stocks getting hammered. which ones do you buy? the one i am looking at is estee lauder very soon i'll tell people to pull the trigger very soon. they're still going to wear makeup even if they're at home >> we'll see you tonight "mad money" 6:00 p.m when we come back the latest on the coronavirus and the impact on the global economy, global health dow uisp 101 still on pace for the worst week since late the worst week since late november. but we're 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 you're born we never stop taking care of you. good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber. sara eisen is on assignment. market enjoying a day, dow up 112. solid intel, of course covering the coronavirus out of china containing the coronavirus the total number of people affected rising as u.s. businesses begin to close some store fronts overseas >> plus, stocks are hitting new record highs how investors should be preparing for what will be next week the busiest week of earnings >> and the boeing impact what the issues surrounding the still grounded 737 max mean for the growth of the u.s. economy >> we'll start with the latest on the coronavirus china is intensifying efforts to contain the outbreak at least 26 people have died from the fast spreading virus. the total number of cases in china now rising to 909. now more than 36 million people are being quarantined and to put that number in some perspective it is roughly the total population of the largest 18 u.s. cities combined we'll go to beijing for the latest on this eunice >> reporter: thanks so much, carl now that so many cities are under lockdown the focus is on whether the government really has the resources and the ability to manage the situation on the ground. there's been several reports coming out of wuhan, which is the epicenter of the outbreak, which suggests that the hospitals don't have enough space, not enough doctors. they don't have the testing kits to diagnose new cases or even the medical staff who are trained to use them. the defense ministry said tonight that they were sending, it is sending in military medics in order to support the civilian doctors. now, wuhan is also borrowing a practice by beijing that beijing had conducted during the sars outbreak in 2003, building a hospital out of prefabricated materials in a matter of days. that wuhan facility is going to be -- will have about a thousand beds now, as a sign of how seriously beijing wants to contain the outbreak from going national, it is taking even more extreme measures to stop people from doing what they would normally be doing over the lunar new year holiday. that is travel as well as go out. so as of this weekend china is closing all 70,000 movie theaters travel agencies can no longer sell tour groups, tour packages for domestic or overseas travel. and parts of the great wall have been shut down u.s. companies also being affected disney said it is going to be shuttering its shanghai theme park from saturday this park would normally be seeing thousands, hundreds of thousands of people during this seven-day lunar new year holiday. one thing, though, that you can do, guys, is you can watch tv, so beijing said it will continue with the broadcast of the lunar new year gala and they've been coordinating production houses to try to get television series that normally wouldn't be seen in hubai province or wuhan direct to that so more people can stay home and watch what is on television. one thing, carl. no foreign imports that's what the propaganda ministry said explicitly >> seems to be in character with what we know about chinese media, eunice. thank you. eunice yoon in beijing mcdonald's as we said announcing it is temporarily suspending business in five cities in china as the virus and the death toll continues to rise andrew charles joins us to talk about that and, gentlemen, happy friday good to see you. >> thank you >> andrew, it is such a small slice of the global restaurant count. i wonder how you're modeling this, if at all. >> sure. we really aren't when you think about mcdonald's, less than 2% or so of their operating profits are derived from china we're taking this opportunity to look through the short-term impact from this tragic virus. >> bob, same to you. i mean, whether it's mcdonald's or i might broaden it out slightly to talk about retail and luxury goods if, in fact, this ends up being a situation where a lot of buyers and shoppers are kept from moving around for several weeks, let's say, what could the impact more broadly be on mcdonald's or retail at large? >> you know, specifically within the restaurant companies, i think one of the key parts of their business has been the fact that they developed, you know, the delivery process in china. and that's a very important piece. that part of the business actually may do better during a period of time like this than their dine in business so it is kind of a back end benefit potentially although obviously any time you close a restaurant you're going to lose, you know, the value of the incremental experience that typically you would collect. >> andrew, i guess the question is, just at what point it might become material in terms of just general slowing of economic consumer spending and growth and things like that what are you watching for as we try to monitor the potential impact across your coverage group? >> sure. you know, this is going to be more impactful for companies like yum and starbucks in our coverage which derive over 10% of their profits or so from china. as it relates to mcdonald's, you know, i would say as we head into next week this is one where there is about a 0.8 correlation between the multiple and u.s. same store sales we think things will be in line. we're modeling a pretty healthy 5% comp as we think about the u.s. for this quarter. i would also say for this as well this will be a great opportunity for the new ceo to really outweigh his thoughts on the business as well and the opportunity to compete in the u.s. as well as in value it is a key market for growth for them but it is licensed as well we're not anticipating any long-term impact but certainly monitoring any ongoing developments >> bob, the print next week is going to be interesting because there's a lot of fronts to watch. there's delivery, certainly the dollar could be an issue this year rivals are trying to move in on breakfast. i see the social media game out of wendy's continues to be a bunch of trash talk. what will you be looking for going into the print >> mcdonald's is going to be very aggressive. they have been so recently through the course of the past quarter they stepped the promotional effort up and we think the end of the quarter on a fairly strong note particularly here in the u.s as we look at the new year, mcdonald's is not, you know, intending on giving up any market share i think their promotional plan around breakfast, around chicken, around value, around premium items, is going to remain very aggressive and i think it's going to prove to be a very good year for the company despite the fact that there may be a little bump in the road as it relates to china. >> andrew, the story out of china up until the coronavirus has been about protein inflation and people wonder whether or not that dynamic spreads to the u.s. is fruit inflation and especially in protein going to be a huge headwind in 2020 >> yeah. so pork inflation is the one to keep an eye on the usda estimated about 30% of chinese pork production has really been wiped out because of the unfortunate african swine fever. and so i'd say that would be the number one thing to look out for. beef is still very fluent at this point and the risk of contagion is something being discussed as well and we'll find out more from mcdonald's next week and the way that is impacting it but certainly looking at protein inflation is going to be key here as we look at mcdonald's. fortunately, it is a very franchise model so they are somewhat immune within their own model from the fluctuations within commodity prices. but it's something obviously on a store level basis that matters especially if you have franchisees investing into remodels to make their stores modernized >> andrew, you mentioned yum, more exposed to the chinese market i know also you might be a little cautious on the stock in general for perhaps other reasons. why do you feel that is not as well positioned? stock is already down 12% off the high >> yeah, so is it relates to yum we're keeping a close eye on pizza hut's u.s. business. it is only about 8% or 9% of the operating income but we think this is poised to present a drag overall eps to yum not only we think same store sales are under performing and causing challenges for the business, can certainly serve as a distraction to management teams, to the new management team especially if they recently acquired the burger and plan to grow that aggressively one thing we look for in the yum release beyond pizza hut same store sales is the impact to bad debt expense and how their collections went during the quarter as well as we look forward. >> lrlt, guys. as we said, that is going to be one of the more interesting reports of next week and there are a bunch of them we'll be looking forward to andrew and bob, thanks >> my pleasure >> thank you when we come back more records for wall street. welcome back to "squawk on the street." the nasdaq as you can see right there is up. it's hitting a new record high at least intraday, all time high in fact this morning out ahead of what is going to be a very busy, in fact the busiest week for earnings next week mcdonald's, apple, facebook, all of them reporting. joining us now at post 9 is senior chairman roger altman it's a funny time, roger stocks at all-time highs but we've got the ten-year yield sort of softening. oil is coming down you know, i'm curious. you spent a lot of time in board rooms talking to ceos. what are you hearing out there >> well, i think the economic outlook here in the united states remains solid but it's a split screen outlook in the sense that the consumer side of the economy, remember that's two-thirds of gdp, the bulk of it, is strong. household net worth is way up. the figures are actually amazing on that. driven by housing values, which were very up in 2019 and of course by the stock market and consumer net worth is way up and consumer confidence levels are right around all-time highs. that side of the economy is strong the business investment side is weak cap x is weak. we're in a mini recession from a manufacturing point of view. and that's why some we mention like wti and the ten-year yield are down but i think the economic outlook remains pretty solid and we're probably going to have a 2.25% year, something like that on real growth in the united states and some of that is driven by, or a little bit of it is drink drink -- driven by a synchronized global recovery like was referred to in davos a couple days ago and that reflects the strong monetary easing around the world. it is just relentless and that alsop rates wi always operates with a lag so fundamentals with the exception of manufacturing are good >> you speak of a lag. we'll get usmca signed momentarily i think and obviously we got that trade deal you've been promising. it took a while. longer than you expected but we got it with china. is there going to be a lag or are we going to see the effects of that this year? >> well, i think the effects of those are really to lower the trade tension factor i mean, when we were sitting here three months ago, six months ago, nine months ago, we were talking a lot about the impact of trade tensions, especially u.s./china on confidence, on market levels, and so forth right now the trade tension index if there was such a thing would be well down and i think that, itself, is a positive exactly the impact of the trade deals, themselves. i mean, we've all seen the forecasts on growth factors, the china deal, pretty modest. factor on growth maybe 1.2 of a point also on a lag basis. so i think the biggest impact to these agreements is on trade tensions and lowering them and therefore improving generally confidence and we see the market despite the virus it issues at an all-time high >> richard fisher is out today he says the repo operations are a derivative of qe kudlow said it this week caplan said it it is going to be one of the first questions powell gets next week if he tries to disabuse the market of the notion it is going to be around forever, what happens? >> well, i think we are going to see qe in various forms, if you think of the fed balance sheet itself for example as a key measure of that, then the fed balance sheet is growing again and is that going to change over the short term, carl i don't think so some people define qe one way. some people define it another way. but if you just think of growth and the fed balance sheet as a measure of that, i think we're in another period of that growing, which is -- >> for years >> i don't know the answer to that but it wouldn't surprise me if we're a very long way from what you would call a long-term reduction in the fed balance sheet. so i don't think this is going to be any where near as aggressive as obviously we saw a few years ago when we were trying to come out of that deep hole but i think if the fed balance sheet is growing and it's probably a long time before it's going to start to be reduced >> the market is obviously very comfortable with whatever is going on financial stress levels are at pretty much record lows. that side of things looks fine with regard to this sort of confidence comeback or not, this generation of ceos seems like they take any excuse to become cautious so is it the election going to be the next thing to say, maybe we have to wait around before we make any big decisions or do you see it coming back before that? >> i don't know if it's an excuse the election is a big uncertainty whatever your mindset a year ago was it just is because you can see stark differences between the two sides and the implications from policy if one side wins the presidency and holds congress versus the other side. i think it is an authentic uncertainty and perfectly legitimate for people to say i'm going to wait and see what happens here before i'm aggressive i think that is historically the case generally although this election is probably a little greater uncertainty than many. probably going to be quite a close election among other things so that's a legitimate thing i don't think it's really ceos looking for an excuse. i think it is really a big uncertainty. >> that goes to the final question here, which was, of course, you spent a lot of time advising companies whether or not they should be doing deals or when they're in the midst of doing them 24 days in it's been pretty quiet when it comes to mergers and acquisition activity is that a sign of what's to come >> no, i don't think so. i was just looking this morning at the analysts' forecasts for, you know, all of the firms that are publicly owned that are in major factors and advisory, and m & a, and the analysts for 2020 are optimistic now, they may be right >> you have a better sense than they do. >> i understand, but it's an index. i only have a sense of our business >> yeah. >> they have a sense of other people's business. so to me the fundamentals, i've said this often, but it's generally been correct, i think, the fundamentals remain strong we have record low interest rates. we have robust to put it mildly -- >> are ceos willing to do big things are they willing to sort of consider doing a big thing and many of them perhaps want to act before the election? >> well, i think if you just look at the -- say we're sitting here in nine months or the end of the year and we are looking at what were global deal totals, dollar volume, number of deals i don't think at the moment you would say they're going to be down 2020 versus 2019. i'm not suggesting they'll be strongly up because even though 2019 was somewhat down from 2018 these have been strong years generally by any historical standard but i don't think there's evidence that deal volume in 2020 is going to be down i don't. the fundamentals are just so strong you know, the election could play into this the uncertainties about china approvals, uncertainty about u.s. antitrust policy. things like that but i think right now if you were to get honest answers from the major participants in the business they'd say their backlogs are strong. >> good. that's what i like to hear keeps me busy as well. roger, thank you >> thank you, david. thanks, guys >> we do have a second confirmed case of the coronavirus in this country. let's get to meg >> reporter: the cdc is confirming a second patient who traveled to wuhan, china has been confirmed with the novel coronavirus. she is a woman in her 60s, a resident of chicago. she returned to the country on january 13th and the cdc says she traveled before she was symptomatic. they say the risk to the general public nationally and in chicago is low they say currently she is clinically doing well and is in stable condition she's in isolation in the hospital primarily for reasons of concern about spread. they are tracing her contacts. they say generally since she returned she did not have much close contact outside of her home so they are reiterating, again, they think the immediate risk to the u.s. public is low at this time of course, the first case has been confirmed in washington state a couple days ago. that patient we have heard is also doing well. public health officials say this is evolving. they do expect to see potentially more travel related cases or cases passed between humans here in the u.s. and they urge people to be vigilant if they've traveled to that part of the world. however, right now seeing the immediate risk to the u.s. population is low. we'll bring you more, carl back to you. >> all right thank you for that that has taken the wind out of the market's sails s&p has gone red ten-year yield at a two-week low. as we go to break take a look at the best performing stocks on the dow for the week i love the new myww program, because it's tailored to you! ...take the personal assessment and get matched with a proven weight loss plan. find out which customized plan can make losing weight easier for you! myww join for less than a $1 a day. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk now for our etf spotlight taking a look this morning at the vaneck semiconductor etf the ticker smh and sosfx each hitting a new intraday record high today's catalyst upbeat quarterly results and guidance from intel shares of the dow component now up more than 7% in response along with american express for most of the -- responsible for most of the upside in the dow this morning with american express. john, obviously intel seemed to have beat in the right ways for the street >> yeah, mike. sometimes i'm tempted to think of earnings reports in terms of offense and defense. i think intel played some really great defense in this quarter. maybe is what happens when a cfo becomes the ceo. on the top line they had $20.21 billion in revenue. almost a billion better than expectations eps strong as well this was really driven by a few customers. the megascale cloud players. so think amazon, microsoft, google, maybe a couple others. what's tricky about those players is it's unclear when they're in a buying cycle and when they're in a digesting cycle. well, intel argues they're in a buying cycle now their revenue from them, that's data center cloud, up 48% year over year. and intel projecting that in the current quarter that buying is going to continue to be pretty strong also some left over pc demand from intel's been having trouble keeping up with that as was the case in the holiday season the question is what happens from here throughout the rest of the year intel's guidance for the second half of the year was pretty soft they're saying part of that is because, like i said, these megascale cloud players you never know when they'll start to digest intel not saying if they specifically expect that digestion to happen in the second half. just, hey. it might so we're being careful also some questions on pc demand in the second half and the expected competition from amd, general weaker total addressable market expected in pcs the second half of the year. so a really interesting quarter made more interesting by the masterful way in which the executives manage expectations here >> when you say megacloud play digestion, what, what their growth would slow down they wouldn't buy as much therefore? >> exactly, david. like four quarters ago that happened intel got hit with that. all of a sudden these megascale cloud players are buying less than we expected they are in the mode of now just trying to build out customers on the hardware they've already bought they shifted pretty quickly into now building out more hardware we heard from microsoft and amazon over the past few weeks they're ramping up their sales forces and we see in intel's earnings that they're also ramping up their spending on hardware is that going to continue throughout -- usually it is one or the other, right? you build out the infrastructure >> sell it >> you sell it they're doing both at the same time you would think they're going to pull back on one eventually unless demand just continues to be so strong throughout 2020 that it's a race to the finish >> interesting john, thanks when we come back right here, what are the issues surrounding the still grounded max mean for the growth of the u.s. economy ♪ ♪ seefrom today's weather tong, tomorrow's business trends. with esri location technology, you can see what others can't. ♪ that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. good morning everyone. i'm sue herera with your cnbc news update at this hour six people were killed and several injured in a shooting in a southwestern german town a suspect has been arrested and no further suspects are believed to be at large initial information suggests the suspect, a german citizen, and one or more of the victims knew each other vice president pence holding a long meeting with pope francis at the vatican in fact, it was twice as long between the meeting back in 2017 pence wasaccompanied by his wife and their daughter-in-law thousands of iraqis rallying in baghdad after a prominent cleric called for a million strong protest against the american military presence many antigovernment protesters, though, fear it could over shadow their demonstrations, which have challenged the iran backed shiite group's grip on power. here at home one person is missing following a large explosion at an industrial building in houston early this morning. it damaged naer earby buildings homes. one person was taken to the hospital and a fire burned at that site hours after the explosion. you are up to date that is the news update this hour carl, back downtown to you >> all right sue, thank you very much let's take a look at shares of boeing this morning down double digits over the past two months with the delays on the max continuing yesterday we talked to two ceos of airlines on what the uncertainty means for their respective companies >> i think it's three months on and we're still talking about the same thing so, no on that point there is nothing to be happy about. i feel like there's been progress made but not enough and, yet, we need to get this thing done and get the max up in the air. >> we are honestly disappointed to see the return to service date likely moving back. we had it in our schedule for june 5th and we'll need to reassess and clearly move that back so that's never good news. >> how will the delays impact the overall economy? our steve liesman is back at hq as the treasury secretary at least, steve, has had some numbers on this in the past 24 hours. >> yeah. it's interesting uncertainty for the airlines and the broader economy. news that boeing is pushing back the 737 max's return to service beyond mid year plorompting another round of cuts to growth forecasts for this year. now the second quarter is in play just this morning bank of america lowering its second quarter forecast by 0.3 to 2% as a result of the boeing news. in their commentary they write, the longer the shutdown persists the higher the risk of negative multiplier effects as workers laid off spend less, hurting the economy more broadly economists cut around a half point when boeing last month announced it would halt production they dialed the redowned in the second quarter now some are forced to take out the eraser again pushing into the third. covering the high frequency data as well as anybody out there he takes a half point off the first, another 0.6 off the second and now has to put it back into the third quarter. you see the fall off in civilian aircraft shipments in the data and this feeds into overall growth and has a big impact in the single quarter and another hit comes from the decline in exports. now, some economists have been skeptical of boeing's pronouncements and never built in the rebound so they don't have to make a change. jpmorgan writing to me, we've been holding off on where we put the bounce back until we have a tangible sense of when it will occur. of course gdp doesn't capture all the impact spirit airways which makes fuselages for the max announced it would layoff 2800 workers boeing has said it will not layoff workers the new ceo david calhoun saying this week production of the max would begin months before delivery starts. >> trouble for economists and investors. the next time boeing meads a deadline for the return of the max will be the first time, carl >> and, steve, it's a global story, too, right? so many of the suppliers are from countries other than the united states. >> that's right. i know it is quite remarkable for people it is for me that a single product, a single plane can affect gdp but it really shows you how much activity is involved in the production of these planes and how central it is to the u.s. economy and as you say the broader global economy in the way that boeing has set this up i guess there are certain efficiency reasons for it but maybe also some geopolitical reasons for it is the production and the manufacture of parts are global. >> steve, thanks steve has been looking at that impact all day long. our steve liesman. with us to weigh in more with boeing is pulitzer prize winning author jim stewart author of "deep state" and joins us jim, welcome back. >> good morning. >> parallels with wells fargo? >> well, yeah. let me explain this. it really struck me this week when i saw the discipline being meted out. they were companies with sterling reputations, the gold standard in their industries they have the buffet stamp of approval you know, national champions for the united states. and i have to wonder in both cases did that reputation go to their heads? was there a certain kind of hubris that let them feel we're so good that we can cut corners? that our very, you know, absolutely rock solid reputations enable us to perhaps get away with some things that other companies who didn't operate under that umbrella could do i mean, it's been very dismaying to see two things. one boeing, you know, obviously we see the e-mails it's not just the flight thing that controls the notes but there were a lot of other spots now showing up where corners were cut you know, people's lives are at stake here the same thing at wells fargo which always had such a great reputation for customer service, you know, cheating these customers and tricking them into the accounts then in the case of wells, they retaliated against people who tried to bring this against their attention. i haven't seen that yet in boeing but one thing i am very curious about, we've seen e-mails of people questioning what was going on there. well who got those e-mails where did that go? why didn't that reach the top of the company? was there a culture there that discouraged internal criticism that is a serious problem. >> calhoun has mentioned micro cultures in his calls this week. >> right and i think that is something, you know, the ceos sometimes say well i didn't know about this specific thing or whatever which i can understand they probably didn't but they should have known about the culture they created in both of these cases a fixation on profits at the expense of their customers and i think the minute that happens in any company, that is cancerous >> if you play it forward from there, obviously at one point the ceo thought maybe boeing didn't have to go. that fell away new ceo. also a different interaction with regulators for a long lasting, on a long lasting basis, right obviously the faa is now probably having a different posture. >> you know, there is a new ceo at boeing. i think that's great and i think they probably waited too long. but the first thing i thought when i heard this latest announcement was, oh, no here they go again making predictions about when the faa is going to approve this i realize boeing has to make material decisions about how it is running its own company based on some kind of projection but if it was me i would be hedging this thing like crazy unless there is something concrete that led me to believe that, yeah, june is now going to be the magic time in which case i would disclose that. this is such material information for boeing stock, for the airlines stocks, for the broad market, for the economy as we've just seen in this very good report we just had here this is incredibly important information. i think they have to stop making predictions that don't come true they do not control the faa decision or its timing >> a boeing engineer might come back and argue, look our plane and the training required was appropriate for a u.s. pilot but as we know these machines go all the way around the world where pilots some say are not as well trained. that is a legitimate comeback? >> well, i have to be skeptical given that there were two crashes that killed hundreds of people they must know that they deal with a wide variety of operators around the world and i don't, honestly, think that is a very good defense >> what responsibility does the board at wells and/or boeing have here? should there be changes there as well obviously calhoun was on that board for ten or 11 years before ascending to the ceo role. >> i think there's a lot of responsibility on the board and especially once the problems became known i can understand a board member saying, we're not managers the information flow is controlled by the ceo. we didn't know about all of this i can understand this. but when the crisis became public they then were on notice and i think both in the case of wells and in the case of boeing how this crisis was handled afterwards was very troubling and that is where the board has a lot to answer for. the retaliation certainly at wells fargo against people who were trying to do the right thing. tracing it to -- why wasn't the ceo answering these e-mails to him from disgruntled and worried employees, heart felt e-mails saying, this company is running off the rails? and again, inside boeing are they looking into that culture that did not let these issues surface or reach the levels they should have where there were serious concerns i think the board really does have to take responsibility for that >> how about finally consumer adoption customers are still putting their money with wells what do you think is going to be critical in getting people to be comfortable flying the plane once it's reinstated >> well, that is going to be a big challenge. i still have confidence that boeing has the expertise looking at the broad view they have a great track record. it's been very puzzling why this has been so difficult for them to solve these particular problems but honestly i think when this thing takes off again it'll probably be the safest plane in the world. they just have to be able to get that message across. but it's going to take time. >> another topic to dive into perhaps down the road for you, jim. thanks for your time good to see you. jim stewart. as we go to break, take a look at shares of american express hitting a new all-time high today on the heels of its earnings beat, getting a boost from higher car fees as well as increased spending from its users. and that is in a weak tape for financial stocks new york state is building for the future of your business. with a nation-leading $150 billion commitment to infrastructure, we're creating state of the art, 21st century transportation hubs, constructing new bridges, bringing high-speed internet to every corner of the state, and committing to low-cost clean energy. with infrastructure built for the future, the companies of tomorrow can thrive here today. see your future at esd.ny.gov. market passing a hundred billion dollars this week. more gains in store for the electric car maker find out more on trading nation.cnbc.m. resqwkn e reet" coming up. robinhood believes now is the time to do money. without the commission fees and account minimums. so, you can start investing wherever you are - even on the bus. download now and get your first stock on us. robinhood. time to send it over to rick santelli for the santelli exchange >> good morning. thanks,david i'd like to welcome my first-time guest jeff sherman. it is a lot colder here than california >> sure. definitely thanks for having me, rick >> absolutely. every thursday we learn what the fed's balance sheet did and we were just discussing it. so a few whiskers under 4.2 trillion when you think about the fed's balance sheet and the fact they're not doing qe but they are, are you shocked to see stocks have performed well >> not at all. i think we were discussing this. if you overlay the fed's balance sheet with a price of the s&p 500 they're moving in lock step, right? so it is the only game in town still is the fed the fed, the easing, liquidity they can call it qe, call it fixing the repo problem but as you mentioned what it is doing is pumping liquidity and the money has to flow somewhere and it is flowing into not just stocks but risk assets all across the u.s >> another issue is interest rates. we've just discussed the shadow boxing effect of what central banks do, keeping rates and their thumb on the scale, they're low. but when i look at 169 i don't think, wow just a couple weeks ago we had that intraday. iran moved on to basically 170 i think we're now going all the way back to octoberish since we've closed at these levels i think the close is important when you look at the market what do you see >> yeah. i think what you're seeing is there is still fear in there we've had the iranian issue. now you have this new coronavirus out there. which i think that is what people are worried about going into the weekend saying, hey. this thing seems like it's growing and growing. and so there is a little bit of fear there but we've been in this range for a while. it looks like we're testing the bottom of the range. as you said, the closers are the most important thing right now if we're not going to go higher until we get through 195. that seems to be the double top we keep seeing i think of that as august 1st. we broke 2%, right when president trump came out, announced his new round of tariffs. we've eased that but the bond market hasn't responded back to where it was and so what you're seeing here is people saying the fed is doing nothing it's complacency right now really i think people are just buying assets now and reinvesting for the time being a lot of it is the robo advisers still. people had a great year in stocks let's peel some of that off. put it back in the bond market you're seeing it capital is flowing to the u.s. and it is because woo very high interest rates globally. >> we've had a couple central bank meetings. we've had christine le gard, the bank of japan. the comments are very similar. she is envious of sweden but doesn't look to be pulling negative rates any time soon and the japanese, they don't really see the ill effects of negative rates i guess three and a half decades don't count. >> right but we pulled out a chart thai think is very important that you should show the central bankers. it's the banking stocks. in the u.s. we've hit new all-time highs right we've hit back to the new level. but if you look at the european stocks they're still trudging the lows you look at japanese stocks. they are still trudging the lows so it is evident that it is destroying the banking system. so i hope jay powell stays there. i hope we get another person like mr. powell who says we should not pursue negative interest rates and i wish bernanke would quit talking about it because it is obviously not good for the overall economy. >> sometimes central bankers ought to ride into the sunset. jeff sherman, a pleasure discussing the markets with you. mike, back to you. >> thank you very much when we return, milking millennial trends. so what are you working on? >>i'm searching for info on options trading, and look, it feels like i'm just wasting time. wasted time is wasted opportunity. >>exactly. that's why td ameritrade designed a first-of-its-kind, personalized education center. see, you just >>oh, this is easy. yeah, and that's >>oh, just what i need. courses on options trading, webcasts, tutorials. yeah. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. >>so it's like my streaming service. well exactly. well except now, you're binge learning. >>oh, i like that. thank you, i just came up with that. >>you're funny. learn fast with the td ameritrade education center. call 866-296-7451 or visit tdameritrade.com/learn. get started today, and for a limited time, get up to $800 when you open and fund an account. that's 866-296-7451, or tdameritrade.com/learn. ♪ between what is hoped for and what can be, there's a bridge. between endangered and protected, there's a bridge. between chaos and wonder, there's a bridge. there from the beginning to where we stand today. one company. one promise. if you can imagine it, we will build the bridge to get you there. cisco. the bridge to possible. that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year on your wireless bill. and save even more when you say "bring my own phone" into your voice remote. that's simple, easy, awesome. click, call or visit a store today. an alternative market has moved beyond meat to milk. plant-based milk maker calafia farms announcing new funding with plans to double down on changing millennial milk choices. the ceo joins us now to talk about this and the whole category greg, good to have you here this morning. obviously, very fast-growing category we have these numbers that almond milk is growing 6% a year since 2015, goat milk growing much faster off a much slower base as traditional milk declines in market share how big can the category get what are your assumptions for how big this gets? >> hey, mike great to be with you guys this morning. well, we think it's a bit bigger space than people think and we're really excited to look at it really not so much as a bunch of problems to be solved but there's an opportunity space that's larger than the meat protein substitute way that people have been looking at plants so far. calafia looks at it as what was called the dairy case as now something we can look at as really tasty, delicious plant substitutes across the board with everything from fluid milk to creams, hips, cheeses, everything that you can think of dairy is pervasive throughout not only all the meals but all the day parts and as an ingredient so while, you know, some people might have a burg a few times a week, really there's some kind of dairy in almost everything that we eat throughout the day so we think it's been a little under looked at by the market. >> how much brand power do you think there is in this area? we don't necessarily think of traditional dairy in every respect, especially milk, as necessarily being that powerful in terms of brand uptake a lot of entrants in the plant-based milk area as well. how do you compete for shelf space and how do you keep customers' loyalty >> yeah. well, that's just it, mike we got started as a small company, so we had to use some disruptive techniques to get in there. so what you had, you know, eight, ten years ago before we got started was a wall of half-gallon milk containers, all look the same, the industry had -- a lot of the woes of the dairy industry today are related somehow to a lack of innovation that just didn't happen during that period. the state of california, calafia farms is named after the goddess that was the original inspiration for the whole state. and then we put it in a curvy bottle and just disrupted visually that space. so we use a little bit of entrepreneurial technique to shake up the game, focused on innovation, brought a lot of flavor, brought in different commodity streams, so we started creating some excitement where before it was just thought of as just kind of a health play or a lactose intolerance kind of technical issue. and the dairy industry had a tendency to really look at things in percentages, 2%, 0%, you know, half fat, no fat, you know, and that's not really what turns the consumer on. >> greg, i wonder why you think legacy dairy players didn't see this sort of revolution and millennial tastes coming given all their data, their history, why to some it came as such a surprise >> well, you know, mike, i think it's a more fundamental problem than just the dairy industry guise or whatever because underneath it all it's more the millennials. i think to headline it that way is the access point because in a way we've all been millennialized to some extent. and a lot of our customer base and us being a brand-driven company, we've got to know that kwha's going on in the hearts and minds of the consumers what we see is the millennial fact has spread to their parents so you've got baby boomers shifting and then you've got the pre-millennials also being even more emphatic about these changes. it's not just for health it's for planetary health. underneath that, that's where the food system has to change as a whole. so what we think is, you know, is a crisis and climate change and all these things that, you know, promote the ideas of higher cost, we're looking at it as really this is a giant opportunity to clean up part of the food system, clean up the diet, get in step with what the consumer really wants, and create some financial opportunity for investment >> greg, congratulations on the investment thanks for the time this morning. appreciate it. >> all right thank you. after the break, shares of intel soaring today, nearly a two-decade high after reporting results that data center came in three times' estimates we'll talk with the ceo in a few minutes. coach saban convinced us. we are committing to aflac. why aflac? because health insurance doesn't 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 didn't. 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 doesn't cover. get to know us at aflac.com ♪ 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 it's 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. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk it is 8:00 a.m. at intel headquarters in santa clara, california it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ i'm kwicarl quintanilla wit jon fortt. shares of intel trying to keep the dow in the green, stocks up more than 8% here, close to a 20-year high we'll talk to the ceo bob swan in a few moments the dow is trying to avoid its fourth day down in a row, something it has not done since august first an important update on the coronavirus with the second confirmed case here in the u.s

Related Keywords

New York ,United States ,Freeport ,Australia ,Japan ,Shanghai ,China ,Iran ,Beijing ,California ,Togo ,Germany ,Iraq ,Baghdad ,Sweden ,Houston ,Texas ,Wuhan ,Hubei ,Chicago ,Illinois ,America ,Iranian ,Chinese ,German ,Iraqis ,Japanese ,American ,Bob Iger ,Jim Stewart ,Liam Griffin ,Sara Eisen ,Santa Clara ,Jeff Sherman ,Carl Icahn ,John Lasseter ,Carl Quintanilla ,Lisa Su ,David Calhoun ,Las Vegas ,Rick Santelli ,Morgan Stanley Dana Farber ,Brian Roberts ,Bob Swan ,Estee Lau ,Eunice Yoon ,Jenson Wang ,Jay Powell ,