Russias vice premiere have resumed low level talks. Stocks seeking to rebound. Futures seeking a rebound despite a drop from home depot. Hgsquared its going to have a new additional Head Quarters targets include big media i trust it. Making it. More than 600 after a strong start to november s p half a percent. Yesterday was one of those days apple, were getting it down every day. Supplier. Yesterday was a day where i felt hedge funds. When it comes to names like nvidia, it is right which is negative for the year after being up 50 six weeks ago. Heres something you never want an upgrade of nvidia based on the fact that the quarter is not that good, guidance isnt that good and thats why you buy it last time i looked that was not so good. Its not ge. Thats the benchmark. Susquehanna ups it to positive take the target to 250 they say the odds of a guidance miss are high. Guidance miss for one of the highest multiple stocks. I think nvidia is great. Let them report. If there is a guidance miss the stock is not going to go up. Weve seen that time and again guidance miss sends stocks down, not up it isnt like people say, ah, finally, a guidance miss they say, a guidance miss not everybody sees this. Nvidia, ahhh, right . Right it is that type of a market where regardless of what you report for the previous quarter, its all about but there are different times and different sentiments why now are investors responding so dramatically to a lack of guidance even if t by the way, lets call it what they expected but not better. Its china, they do international. Its that china is slowing and then domestic, its the fellow who speaks tomorrow the man who has said i have to break the economy, break the economy. Jared yes the first one is brereak the second one is brake. I was doing burn down the village but that was too cliche. What do you say . Talk about that a bit later. Powell is going to speak in dallas the first chance to hear from him since the fed meeting. If hes even directionally dovish, jim, what happens then rally rally. How much . If he says the following, you know what, ive been watching inflation inputs, 12 straight days, i see the Housing Prices have clearly rolled over im very concerned about china tariffs. We ought to have one fed hike and then im going to listen to cramer he doesnt say that. One fed hike and then were going to wait. Thats going to be the all clear to buy which is why people why that hedge fund now they want to preserve the year, thats got to be rolling when you do nothing but try to preserve the year their years are not preserved. Theyre going to sell. The hedge fund is broken. They wont make the playoffs . Wouldnt sit here and say that next year theyll have in flows and still be at 3 trillion or whatever the number is but anecdotally none of the big ones, theyre all down, many down getting close to double digits for the year because they were all the same stocks which always seems to happen theyre not a hedge effectively and then they all take risk off at the same time and suffer. You needed to be a mccormick, clorox, American Electric power, Simon Property group okay. Right. So who is in those nobody. Thats why theyre up. Instead theyre all in pg e. No, they werent in that. They were in that faang thing that somebody created. Of course. Moron moron. I have just about any knowledge of faang white fang, ew. Jack london oh, my. To build a fire. When he burns the money at the end, thats a hedge fund thing thats what they do. They burn the money thats our strategy. Home depot not only beats but does raise their guidance. They see 975 versus 942. Comps 995 versus 93 tax rate did help. This is the current quarter. This is a good example of what you asked me about. This was a good quarter and everyone was thinking that this is a housing stock, not a retailer this was a retail kind of number they beat the comps. I really only care about the comps. Suddenly were talking there were other people to hire. Home depot was good. Sells at 20 times earnings people are afraid. Theyre afraid theyre saying it is related to housing which is tanking are you yawning . Im not yawning what is with all the doom and gloom . China. We just added 250,000 jobs last friday. Powell hates that 3. 7 . Powell hates that but gdp by the way, i sound like a cheerleader i sound like larry kudlow. I was thinking the same thing. If you mention king dollar and red china rising, im telling you, thats the end. When did you switch sides . No, i did not. Can you believe him oh, my god, hes become me. Youve become me. Discuss the facts. And im against you. Whatever i am, youre against me. Meneur says we see continued strength we believe this is a testament to the overall copy of strength of demand in the Home Improvement market i think if you got rid of the negativity, this is where they would go. I have heard people say this wasnt a good number since when are com store sales not indicative if this goes down, i saw leaowe going down yeah, you do. Listen, i am trying to keep track of it so when all the negativity clears, say j. Powell says tomorrow, ive been thinking i do not want to send this economy dont you want to come n. Whos trustworthy . It will come back to home depot. You mentioned closing stores. Theres a list to make moves to get smaller in the last couple of days. Kelloggs thinking of selling brands dea deaggio. Macys. Macys, wasnt that something . Yes yes. Is that is that from strength or is it defensive . Great question. Thats why for instance, we were all discussing before i came over here, use strength ge, bakery using a company i think the answer was, no, because the stock is at a level, its hideous. Right the message doesnt look great in terms of the timing of it although it is something conceivably that investors would want them to do in terms of flexibility in terms of the sale of 62 stake which they have for some of it, not all of it. A percent. But you asked about the lockup, which was july 2019 proposition. Now it is. That was positive. It is positive. Ge shares are up a bit. It should it should be. As a result of yet another way that they conceivably can Access Capital to lower leverage the company which is something they were very much focused on in our conversation yesterday. Its not a small cap company. Not a big cap company. Apple, the biggest company, every day you come in. I mean, i almost came in today and said, im going to cut handsets you have to cut handsets to some level where it looks like theyre not selling off. I think this is china. I know you did. By the way, alibabas singles day came in a bit below some peoples expectations. That was unbelievable apple sold the most. There were concerns about Electronic Devices in singles day that spilled over into apple. And today not only does b of a take a bite of neutral on apple po ducts, then you have goldman trimming their numbers on iphone numbers again. We need everyone to trim. Only after everyone trims do you get a buy. Everyone has to trim and Start Talking about service because right now all were doing is hearing now i know why they wont tell us about the vote it became selffulfilling. Momentum is real david, momentum is real. Im sure it is. So is star wars. People didnt talk about it. They had a good quarter. Qualcomm qualcomm qualcomm. Qualcomm. They dont sell into apple anymore for now. No, but im saying handset slowdown around the world is the prevailing theme it doesnt matter, it can be chow ming. It doesnt matter. Meanwhile, the other once trillion Dollar Company has lost 200 million in value and it doesnt sell handsets so amazon sells sells headquarters. Sells everything. They sell everything. Theyve been hammered. I think amazon is over done i recognize as part of this giant etf called faang it cant find its footing the etfs are in control. Etfs and algos. Has alphabet done anything wrong to deserve this . Its done nothing. But if you poison alphabet, it doesnt. Shy lock, really . Bingo all the worlds a stage davids really a player. Mer chande and jack london in the a block. We cant teach about the market. All people do is cut when we come back the dojs chief as the president targets it later on this morning, take a look at the premarket. Futures have been fading from the highs. Well talk about auto tariffs in a little bit phil lebeau is at the giga factor more on amazon hq 2 when we come backment dont go away its incredible. I was dealing with people who were speculating real estate guys nashville, real estate guys philadelphia really felt that it was coming their way and they went and bought thinking if they waited until after they would lose. Now theyre long nashville and philadelphia. Well, may not be the worst thing. Housing has peaked across the country. Housing has peaked they bought into a declining market they have no cause of action my housing, wouldnt buy commercial, you would buy housing . Anything. Anything maybe we are going to look back at the genuine peak of real estate was all of these people who went and bought betting that it was going to be that. Can you imagine the entire process has been fascinating to watch interesting and google the wall street journal is going to take and the cfo spoke about this its going to take the employee count in new york up by 7 or 8,000 employees. I think its fascinating. Without any talk, any discussion, any search, anything. Yeah, you dont need this. But amazon has kept everybody on edge and they had an enormous amount of publicity afforded it as this search has gone on and on and on. Only people say to end in two places where certainly not necessarily going to be the key driver of the economy and other places would have benefitted so much more. Do you think it was just a sham no. No i can understand exactly why they would have chosen both of those areas. Because of labor availability yeah, the labor availability. Ive talked about the fact that you have this new university, tech graduates on Roosevelt Island its a stone throw mayor bloomberg put it into being. The transport knelt work, the airports, the access to a lot of different things. Meanwhile, i dont know if you saw the tweet from acosiocortez. Weve been getting calls and outreach from queens residents the communitys response, outrage. Outrage. And where is all of this labor that youre talking about . I cant even get a general manager. The pool in this country does justify drones. These are these are theyre not going to be hiring these are high end jobs were talking about. These people, are they sitting around on a couch watching netflix no, its a very competitive market yes conceivably you want to be somewhere where theyre coming out of school, nearby or want to be where theyre living. Well take a quick break. Well get cramers mad dash after a brief interruption countdown to the opening bell. Futures get closer and closer to the flat line. Back in a minute hes got wide feet. With edgetoedge intelligence youve got near real time inventory updates. Hell find the same shoes in your store that he found online hell be one happy, very forgetful wide footed customer. At t provides edge to edge intelligence. It can do so much for your business, the list goes on and on. Thats the power of. If your customer also forgets socks you could send him a coupon for that item. Is it because so many go after it the same way, chasing after shortterm returns . Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view. Uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. Partner with pgim. The Global Investment management businesses of prudential financial, inc. Time for a mad dash as we get you ready for the opening bell nine minutes from now a couple of positives in this market for those who are long conceivably in looking for them. This may be one. Remember i talked about how home depot Comp Store Sales should control but negativity is so gloomy. Caterpill caterpillar. Asia pacific machines up 20 north american machines up 21 latin america up 23 world machines total for retail sales up 18 david, these are good numbers. Do you think any of them would care thats the question. I dont know. I would have to ask you since youre the reining expert. G20 has become binary as my friend Stephanie Lee talks about. If g 20 can get a deal. Talking about china deal . Yes then youll have this information and buy it. That will send a lot of things up not just cap. Thats the problem. Theres these binary events. Either one of those happening is fairly low. Thats exactly right. Im saying theyre white swans but, yes, but i think that the likelihood that both are high even though those numbers are strong youre saying that continuing rate hikes from the fed and continued tension and no resolution to trade with china. Right those are october. Tell me about november now i am caterpillar is great. There is a time where they sent the time up. We have this big mac crow negativity im trying to do this and find it palpable. We won the super bowl and we were booed coming off the first half thats how i feel about th numbers. Theyre booing, david. Still reining champs. So is cat but theyre booing. Giants won last night, david. Yes, giants won last night. Your team in brooklyn, nets suffered a big injury. Thats right. My new team is the sixers my team is whatever is hot. My team is the satsin my daughter went to tulane. Love the saints. Yeah. Welcome to emirates mr. Jones. Just sit back, relax and let us entertain you. With over 3,500 channels of entertainment, including the latest movies and box sets from around the world. we even have live sports and news channels. and your free wifi will start shortly. Enjoy your flight mr. Jones. Worlds best inflight entertainment. Fly emirates. Fly better. Worlds best inflight entertainment. Sometimes, they just drop in. Obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. whistles come on. Come on, squirt. dog barking whatever your financial goals are, a u. S. Bank Wealth Management advisor can help make them a reality. Talk to one today. U. S. Bank the power of possible. Just under four minutes high speed and a raise we will be there we need some optimism i think hes still there. The wbto. Its a very big issue for Vice President pence thats an over issue id love to address the notion of the nontrade issues if we get anything regarding if they point to a ceasefire, so to speak, in buenos aries how much is it worth . There you go. There you go the job from opec didnt have much look, i think that powell has a great case to be able to say, you know what, all of my hard work is starting to pay off and i do think that if the president wanted to say, you know what, we have to engage in serious talks, then people are going to Start Talking, is it like nafta. Then i pick up the paper today, are the democrats going to stop the nafta agreement. Its push me, pull you we cannot seem to get any momentum going i want all of the negatives washed out if powell blinks, thats the most important thing that could happen because theres so many things that could go right if we thought that 5 pergs percent mortgage was the high for the year wouldnt that be something yesterday the banks fell apart they fell apart. They fell apart. Is that a goldman story, one mdp . Ive been trying to put that. Shoot me, ive been positive on goldman since 1982, probably earlier, but i do think the goldman exposure, Bloomberg Intelligence gave a number around 2 billion i dont know look, im never going to say somebody isnt exposed because thats always been revealed as the wrong thing to say right . Were talking about malaysia here just to explain to people right right. Not well understood. No, its not. Even now. Yeah, its really complicated. I know one thing, the stock goes down every day there are a lot of stocks that seem to go down every day. Oil goes down every day. Speaking of oil, jim, below 59 today we know how long its been, days of decline the president said that the price should be lower based on supply doesnt that mean that in fact if thats true that saudi and russia should cut . Yeah, they should they absolutely should we are shipping a gigantic amount of oil and its all by tanker not using this country. Ill tell you whats bizarrely in short supply at this moment, natural gas. Its going to 4 h how is that happening cold snap and mismatch in the pipeline lets get to the opening bell here s p at the bottom of your screen cnbc real time exchange. The big board this morning, celebrating the first day of trading and the spinoff from eqt corporation. Yes. Speaking of which at the nasdaq. They focused on electrophysiology helping people with abnormal heart rate and rhythms. I think, carl, that when oil goes down, people fear recession. We just keep hearing recession i dont think ill make one point. Were not going into recession that is way too negative we need things like nvidia and apple and people cut, cut, cut, its not that bad. Thats what we really want nvidia is not as bad as the cut then it goes higher but it has to be not as bad as the cut. It has to be not as bad. Home depot has a hole. Home depot is like braveheart. You did tweet this morning can home depot save us today yeah. Or will the president set us back by attacking somebody well, the president , somebody home depot is down 4 which is really unbelievable and as the president , who hes attacking today . Nothing yet . So far nothing. How about cnn, hows that going . They filed they filed a lawsuit. Against who the white house. Against the president of the United States . I guess hes there so hes part of it. Kind of sour. They named the president , john kelly, bill schein, Sarah Sanders and the secret service. Secret service. How about the military . You know, it is interesting to find randall stevenson, the man who runs at t in the middle of these kinds of decisions now. Im sure somewhat unexpected for him that he would be involved or certainly have to seen off on one would expect, its not upwards of cnn stevenson spoke about it yesterday i believe as well. It is humbling. As the cfo, hes very pro administration. Yeah. Stevenson has made no secret of his support generally for republicans but can i just say that home depots absurd home depot is not dead home depot for Advance Auto Parts to be up 17 on a very small comp beat and home depot to be down i mean, sales at five one inventorys up almost ten. That doesnt get your attention . No. I want to know what carol says theyve got hurricane related sales that are good. Look, its not perfect nobodys perfect kind of like joey brown at the end of yeah. Right my man nobodys perfect. Nobodys perfect. Best. Youve got to end there boy, ill tell you nvidia is going to help the ndx today on that susquehanna upgrade. Nvidia, its down 100 points for heavens sakes doesnt that matter . We have stocks down so big its incredible remarkable job. The stock is up 32 thank you im saying these are corrections, they are not the end of things as we know it. Thats why we can bounce so i am i am arguing for doing nothing. I am arguing for staying the course, looking for things to buy, not sell right here concerned that when travel trust sold emerson, i love emerson. Why did you sell because if china is slowing, then you need to be domestic i think powell blinks before china gets solved. Okay. Thats my thinking. China blinks before Powell Powell blinks because of navarro. Larry is at odds with the na ra navarro. They didnt name larry, did they no. How about navarro no. No no . How do you get they were pretty selective yes this has to do with taking away of the press credentials. Oh, okay. Not the china trade as you well know. I dont want larry sued. No, larrys fine. Hes going to be joining us in an hour from now dell raheem, is he sued no, he sues, he doesnt get sued. You hear it all the time, right . What . They sued the president , cnn. At t sued the president of the United States. Thats why this is a great country. At t. Randall stevenson. You cannot sue the president. Is randall the plaintiff . I suppose he this is the i dont know. I look to you i look to you. It is the oddest story ive come across in terms of ill tell you another odd one. The ceo of flip card which is now owned by walmart resigns Effective Immediately after an investigation into what they called a serious personal misconduct episode, which he strongly denies. Buyers now say he september a lett sent a letter to employees thats integral im not going to be as negative as everybody else im not going to succumb to it good, then ill bring it up its up 2 and above 8 a share. 70. The relationship with baker hughes in terms of longterm collaboration on equipment its. All right and i tried to pin them down and the rest is gone in due course. I thought this was very possible theres the plaintiff thats an action would have, should have, could have but this is good. This is good because now we want to take that liquidity issue off the table, the one that john inch is signaling. Larry kudlow doesnt believe the liquidity issue is on the table. Of the 40 billion in credit lines theyve only pulled down two but they have potentially as much as 70 billion in liquidity. His focus has been on leverage. Understood. It was much more about leverage and just moving in the completely wrong direction, of course that does get to the same. Heres one. It gets bad. Two in, only one leaves master blaster buffet versus tusa we need warren buffet in there remember he said he said that he liked it he liked it at 18. It was not going to go under at 13 there were rumors. What kind of terms would buffet get it . 8. 6 thats what hes willing to take he asks for the toughest terms. He gets the deal, nobody else gets a deal like he does you dont think its a crisis for ge of course its a crisis aerospace. Health care is worth 40 billion. And thats worth more that be that had to be doing 7. 6 billion in ebida. Whats the multiple on that . Can you high ball power no. Why do you say that because you cant. Why not because of the joint liabilities across you cant hive off power, certainly is my understanding. What are you going to do its losing money. You cant do it. Youve got to stabilize it cordoned it off. I dont know. You cordoned it off by stabilizing it. Hes moving headquarters, right . Well, they have a new building that theyve been on the waterfront in boston but theyre not going to no, im talking about the southern part frmgt. Im sorry. Moving headquarters amazon is different than moving headquarters are you watching the shares of the equity or the bonds in ges case . Bonds didnt trade as bad as i thought they would be. Cbs spreads blew out a little bit. Thats what he talked about, blow out of cbs spreads. But this was a good thing i wanted them to do this baker hughes trade and break the lockup what i dont like to do is be a secondguesser boy, i wish theyd break the lockup and say, no, thats not enough no, lets see. Breathing room i think this gives them breathing room breathing room got it. Got it what . Donald trump, john kelly, bill schein, Sarah Huckabee sanders and the United States secret service, what do they all have in common theyre being sued. Correct well, thats great. What kind of relief which are down half a percent but, by the way, dont think its related to this because verizon is down half a percent verizon, by the way, the greatest stock. Verizon is the number one stock. Unbelievable and, you know, they fired tim armstrong, nobody cares. They didnt fire him no, he left he left. Heres the entire lawsuit i correct that. Will you review that what does it want trump what is this . Remember when dan rather said, mr. President , are you nixon and we thought it was a revolution. Nixon said, are you running for president . Rather said, no, sir, are you . That press conference it was, however okay. Caterpillar and intel helping out here lets get to bob pisani. Declining stocks. Global trade it reports that Steve Mnuchin was talking to his chinese counterpart. We saw him move up between 8 00 and 12 00. Thats when the story started coming out sectors today, beaten up sectors doing better smh finally lifting a little bit. Its horrible down 12 or 13 meadows and mining awful theyre lifting. Arca natural gas, thats open. Thats up 1 1 2 i want to show you something rather extraordinary here. Another 2 today. Natural gas is up. 3. 20 two weeks ago. Its extraordinary you very rarely get these divergences. Take a look at it. The companies have eog out there. Cabot oil and gas. All on the up side others are more not doing as well also the faang names, obviously apple is down a little bit apple has dropped below the 200 moving day average 194, just positive below that number. Its very simple chinas tariffs, global slowdown, europe and china and the Fund Managers, bank of america monthly survey Fund Managers all around the world. China trade, six straight months is the number one concern. 1 3 of them mentioned that fed tightening a quarter those are the two big things for the past three or four months trying to slow it down up there at 14 most crowded trades out there long faang stocks and bat stocks 30 say thats the longest trade out there. Short u. S. Treasuries and long dollars. Lets look at this the long faang is coming unwound. Short u. S. Treasuries, id say the jury is still out. The long dollar, thats definitely still working for everybody. No signs of that coming unwound, at least not right now here. Small caps, i want to talk about a little bit here. I mentioned it yesterday the russell 2,000 is down 11 . The s p is down 6 the nasdaq 100 is down 10. 200 day and the russell 2000, thats kind of important i dont quite know what to make about it theres a lot of debate about what this is trying to tell us its not clear obviously higher rates are challenging for small companies. Thats an issue. We do have somewhat weaker growth the Earnings Growth for russell 2000 is not those are fewer earnings fewer than large caps have some people are trying to argue this is telegraphing not global growth, domestic growth remember, these are small caps this is very hotly debated its not out there the numbers dont indicate that. The markets are discounting mechanisms and right now the argument is whats 2019 going to look like in domestic growth here Dow Jones Industrials well off the high here, carl. 13 points for the dow. Back to you. Bob, thank you very much. Lets get to the bond pits as well Rick Santelli is at the cme group. Good morning, rick. Reporter good morning, carl. Rates werent open but they have continued to melt a bit. If you look at october 15 start to twoyear note yields youll see that they have turned from their 297 cycle high close going back ten years, that high occurred on the 8th, and its given up about 8, 9 basis points here if you continue to look at the rest of the curve, lets look at an Early September start to 10year. Whats important here is that weve slipped about 7, 8 basis points from recent cycle highs what weve left in our wake is a double top does that mean thats the double top . Most likely not. However, it does mean a bit of a reprieve from some of the rates moving higher. That seems to fit quite well with the recent volatility in the equity markets dollar index it has given up a little today and with the markets closure yesterday it really took off as you see. It took off to levels that we havent seen since june of 2017. If you open the charts and the dollar index up to the end of october, you can clearly see that weve retaken that 97 handle weve taken the end of october highs out and of course weve taken all those volatility levels that were in august out so technically maybe the dollar index isnt going to go up straight up but it certainly has a tailwind from a technical perspective. Finally, many are talking china is the main reason and trade is the main reason for stocks giving up so much ground and, indeed, makes perfect sense, but we dont know for sure, but i can tell you we continue to see the dollar at very lofty levels against the chinese yuan as you see on this early october chart from this year and virtually, virtually other than the end of october were hovering at higher levels than ten years. Rick santelli thank you. Still to come this morning as we said earlier, larry kudlow will talk about tariffs and the president s economic agenda in the wake of the mid term elections. Dow struggling to hold on to gains here up 16 points. S p up 11. Were back in a minute the new Capital One Savor card. Earn 4 cash back on dining and 4 on entertainment. Now when you go out, you cash in. Whats in your wallet . Hey, what are you guys doing here . Weve been helping you prepare and invest for retirement since day one. Why would we leave now . Because im retired now. So . Were voya. We stay with you to and through retirement. With solutions to help provide income throughout. So youll still be here to help me make smart choices . Well, with your finances that is. We had nothing to do with that, uh, tie. Or the suit. Or the shirt. Voya. Helping you to and through retirement. I have so many people saying that its certainly something that people look at. Will you break them up . They were talking about this years ago. They were talking about this same subject, monopoly, years ago, long before i was in office. Do you think you will be the man to do it a lot of people thought it would happen and the Previous Administration stopped it from happening. But youre in charge now. I am definitely in charge and we are certainly looking at it. This is antitrust . Antitrust. For amazon . For all three. Thats the president telling axios the administration is looking into whether google, amazon have violated antitrust law. Amazon has publish aid blog post confirming that new york city and Northern Virginia will be the site of its new headquarters, investing 5 billion, creating more than 50,000 jobs, jim. I think that these are companies that i dont want to put words in his mouth but historically he thought these were Great American company doesing great things and hes an independent man. The Justice Department is not. You may say hes in charge, the president. The Justice Department has maintained its independence. Being a monopoly is not necessarily beyond being a monopoly, that is the test. Right you must be trying to put people out. Now the best game if i were the president , they took this up to really hurt the competition, then theyre able to undercut everybody but thats such a thin case. What do you do when your monopoly is disinflationary . See, i think that theyre jewels i dont get the i dont get it i think you can prove beyond a shadow of a doubt that they have low costs and, therefore, they do good. I do not get that theyre doing monopolistic practices, no more than walmart did when walmart wiped out all the mom and pops. In addition to crystal city and long island city, nashville what . Will be a new Operations Center of excellence with 5,000 job. My guy killed it my guy killed it. Betting on nashville. He killed it on the nashville. Numbers are fairly large when you look at the press release, 2. 5 billion being spent in new york and also, of course, in Northern Virginia as well. In queens it will be 4 million square feet of energyefficient office space, to expand 8 million square feet. Estimated incremental tax revenue, they say, of more than 10 billion over the next 20 years. Do they have Eminent Domain thats why you can argue they have Eminent Domain . I dont know. There is a lot of commercial space there, there is, and a lot more potentially in that part of new york city. I think the narrative focused on by the city. Etsys in brooklyn, amazon is in queens. And google is on the west side of manhattan. Theyre going to stick it to the man. I want etsy in this fight against amazon. Really . Im taking etsy you have to give me some points, though. I dont think etsy will have 8 million square feet. Im not going to do it straight up. Do you know who has been following this amazon race for us for a long time scott cohn. Yes. Have you been to every candidate city if not its been pretty close. Weve been to almost every one of them and we certainly have been to all the winners, including nashville just a couple of weeks ago. And its very interesting how this has played out over time. What do you make of the decision here . Any color as to what you think went into it, given the ill say the debate right now about whether or not amazons intentions and the way they went about this were pure. Well, i mean, i think all we can do at this point ill take them at their word, when they set out to do this hq2 competition back in september of last year that they really wanted to put everything in one place. They wanted to create a Critical Mass similar to what they have in seattle and the fact is that in the end, they could not find a single city in north america with enough tech workers to handle that and that speaks to the growing tech worker shortage that weve been talking about for several years now. The fact is that what amazon set out to do, if their intentions were pure, they could not do it. Says a lot about how they did this as opposed to fox con, run ing up against labor restraints in wisconsin. One of the lowest unemployment rates in the country, 1 for a lot of that state. 1 . Scott, what do you make of the nashville news well, we graded all of the cities, all the 20 finalist cities and nashville, tennessee, did among the best it got an a minus. It has a very Strong Economy it has friendly regulations, all of that. What it didnt have and what its weakness was was in the workforce, that it didnt have of all the finalists we looked at the percentage of stem workers, Science Technology engineering math workers in all these places, nashville had the lowest so, that was going to be a difficult obstacle for it to face in the overall competition, but theres so much going for that city that they im kind of surprised that the other finalists also didnt get a piece of this. And the reports have been we may see that, that there may be other investments and, clearly, one of the other stories in all of this is all of the data that amazon has amassed about all of these cities not just whats there, because a lot of that is publicly available, but what their governments were willing to offer. Now they know that these places, all these cities have shown their cards. Absolutely. A lot of data is now in the hands of amazon. Scott, well talk to you more about this this morning. Scott cohn on the hq2 race jim, mad money tonight zebra technologies, one of my absolute favorite. Bar code the nfl, try to figure out what peoples heart rates are anders is so good. I cant wait tonight dont get too negative. Okay. I wont. Okay. Thank you. You take care of yourself. I dont want you to get too negative. It will be all right. When we come back more, a. Amazon on hq2 now that it is official, and Law Enforcement officer for antitrust mte, atrs Makan Delrahim dont go away. When my hot water heater failed, she was pregnant, inlaws were coming, a little bit of water, it really it rocked our world. I had no idea the amount of damage that water could do. We called usaa. And they greeted me as they always do. Sergeant baker, how are you . They were on it. It was unbelievable. Having insurance is something everyone needs, but having usaa now thats a privilege. Were the bakers and were usaa members for life. Usaa. Get your insurance quote today. Whooo want to take your next vacation to new heights . Tripadvisor now lets you book over a hundred thousand tours, attractions, and experiences in destinations around the world like new york from bus tours, to breathtaking adventures, tripadvisor makes it easy to find and book Amazing Things to do. And you can cancel most bookings up to 24 hours in advance for a full refund. So you can make your next trip. Monumental good morning welcome back to squawk on the street. Im david faber along with Morgan Brennan and mike santoli. Carl had to go quickly to an assignment this morning. Lets bring you uptodate at the nyc, somewhat of a bit of a mixed picture. Since i tend to ignore the dow, the market is higher with the nasdaq and s p both in positive territory. We got a big announcement from amazon a few moments ago on where its going to be putting its hq2s not just two weve got a lot of good guests coming up as well this morning also lets get to our road map. A lineup of great guests, u. S. Attorney Makan Delrahim will join us exclusively in a few minutes, big implications for Corporate America and mma from the decisions from his Justice Department. And with the dow dropping more than 600 points, National Economic director larry kudlow is on with us as well to talk about that selloff. Banks crushed yesterday, trying to bounce today with Goldman Sachs alone on monday. Kbw ceo tom michaud is here to tell us whats up next with financials. That news from amazon, making it official, announcing where its hq2 or hq2s will be located. As expected and has been reported for a couple of weeks, it will be new york city and Northern Virginia, or roughly the washington, d. C. Metro area. Nashville also going to get a center that will create 5,000 jobs Courtney Reagan and dia oelick are with us. Courtney reagan is in long island city, queens. Courtn courtney reporter good morning, david. Feels a lot like seattle out here today, cold and windy in long island city, an area of queens, western most part of queens, near manhattan for those not familiar, one subway stop in from manhattan. This is an area that will see a very big economic boom amazon saying they will bring at least 4 million square feet of office space, potentially up to 8 million square feet of office space with an average salary of 150,000 thats about double what the current average is for Queens County that, according to state book is around 77,000. Amazon also says theyre going to invest in schools and in infrastructure, as well as green space. Infrastructure has been somewhat of a concern, as has housing it is expensive to live in this area of the country. Rent is about 3100 and then the median unit Housing Price in Queens County is around 462,000 amazon will also be paying 5 billion in taxes to this area or, excuse me, 10 billion in taxes over ten years so, that is something that the governor is very excited about, Governor Andrew Cuomo and mayor bill diblasio as well, who said last night on a local news station that this is the biggest single Development Deal in new york city. Not everybody is happy about this joint statement from a state senator as well as a local city councilman, jimmy van brener basically says the burden should not be on the 99 to prove we are worthy of the 1 presence in our communities but rather for amazon to prove it would be a responsible corporate neighbor so they want to see some Infrastructure Development they are afraid that the community may not be able to handle this influx that remains to be seen. It is a very big announcement and very big day here in long island city. Back over to you, david. Courtney, yeah, 1. 525 billion in what theyre calling performance based direct incentives over time from the state of new york, based on those jobs being created over a tenyear period. Courtney is in queens. Diana oelick is in crystal city, and has more about basing hq2 there, too, diana. Reporter the same reasons they chose long island city, youre miles from downtown interesting that amazon is saying these are highpaying jobs, 150,000 on average. The median home price is 600,000 different from long island city, here in crystal city you have a lot of space you walk around, see a lot of vacant retail, office space. They will have a lot of space to move in here jg smith is one of the biggest owners and operators here. Looking to buy homes that they would flip or rent to amazon employees. What theyre not saying is how many would be hired from this market as opposed to those who would move into this market. Theres a big highend boom in apartment construction theres a lot to soak up the governor of virginia saying that virginia put together a proposal for amazon that we believe represents a new model of Economic Development for the 21st century this area is not new to tech, though weve seen a lot of tech incubators moving into crystal city we have, of course, aol headquarters in Northern Virginia and a lot of development around that. Its a big tech hub when the first Big Tech Companies began moving in here you have that whole tech corridor, potentially a lot more tech workers to choose from. Again, this will be the same kind ofboone to this area that it will to new york city. Diana, thank you. Amazon shares are down half a percent. They moved lower after we got this announcement. Stocks mixed this morning in general. Renewed trade talk has markets edging higher this morning big story, though . The big techled selloff head of equity strategy and ann milletti, wells Fargo Management good morning to you both. Good morning. Morning. Barry, ill start with you. Laundry list of factors being cited for the markets roller coaster ride as of late. What do you see as the biggest drivers and how is that shaping your Investment Strategy right now . The market for the last year has been in a trading range, 26, 2900 its in a trading range until proven otherwise the biggest far factors, the only real factors. Everything else is derivative of these factors, is what will the fed do wwjd, what will injujerome do a trade. Will trump, at g20, roll over and fall for the old well buy more of your stuff trick that japan used in the 1980s or will he keep pushing for a better and better deal . So trade and the fed, those are the only two things that matter. Everything else is a derivitive. Ann, do you agree with that two macro issues do seem to be driving it. The market caught the flu and it is really focused on those two issues versus the first two quarters of the year where the market didnt really care about those issues as you inch closer into 19 and the investors expect, the stock market accepts that there will be a deceleration in growth, albeit still decent growth, Interest Rates will matter more. I think thats why its starting to affect and if he cant the market. Ann, what does that mean for you, as youre kind of looking at the position of the market right now . Weve had six or eight weeks, lot of damage done to a lot of sectors of the market. Is it something where a lot of value has been surfaced in this process or do you feel as if were still captive to some of those macro kind of swing factors . Yeah. Look, i think we are captive to those. But its not going to freeze me. Or our teams i think what we are paid to do is to go out and really look for opportunities and the market has presented us with opportunities and were looking at those one thing were trying to do is stay away from the crowds. If you look at what happened, you had a lot of momentum going into certain names, the fang and other names like that. And when you catch a flu or Something Like that and the crowd gets it, those areas get impacted more. So, were looking for areas of the quiet, where other investors might be ignoring more were taking it slow you dont have to put all your money to work today but there are good opportunities presenting themselves. And, again im a bottomup stock picker so i look at that on a bottoms up Basis Company by company. Barry, underperforming the broader markets especially as of late are they a canary in the coal mine as far as future Economic Growth as far as small cap in general, you would think there would be more of a domestic preference with u. S. Growth outperforming the world but they are high beta. In the market downdrafts they have been hit pretty hard. Theyre also sensitive in different ways to Interest Rates. Weve been focused on staples, health care, telecommunications, particularly things like cocacola, laboratories, duke energy, verizon, because those stocks, to us, are both defensive and because next year i expect more of a bull flattening in the yield curve, the long end coming down, theyll get their big push next year to the top as the curve inverts and the fed is forced to possibly cut rates. Just quickly, ann, before we go, what are the quieter areas you find yourself looking at right now . Right now, energy is a space where certainly the market does not like and critics are having a hard time going up the oil pricing. Thats an area where i think there are attractive investments if youre a longterm investor buying a basket of names that are in the permean, konto, goe, names like that, good balance sheets, good depth of inventory, Proven Management teams there. And then i would say with the tech wreck that weve seen, there are very highquality companies with very good growth rates and one interesting thing that im seeing is a lot of m a happen in the last several weeks after the downturn, and a lot of it is happening in technology were looking around in that space, too, for opportunity. Some stocks for investors to check out. Thank you both for joining us today. Barry bannister and ann milletti. Thank you. Quite a show still ahead u. S. Assistant attorney general for antitrust Makan Delrahim joins us next. And later National Economic Council Director larry kudlow is llth us the day after the seoff. Dont go anywhere. Welcome back to squawk on the street. Im david faber, very excited to introduce Makan Delrahim very nice to have you for an official interview here this morning. And, makan, let me get right to it i cant remember a period of time, certainly, in the recent past where weve had more discussions, at least, both at the executive level by the president , but generally speaking as well about the power of big business, in particular the power of some of our Key Technology companies youre no stranger to whats going on in the news how seriously do you think about paurt of big, if i can put it that simply, and what it means from an antitrust perspective we discussed this before. One of our roles in the antitrust law is to make sure that when Companies Get big we have no problem with companies being big. When they get big, we want to make sure they behave properly new competitors and ultimately consumers and businesses will benefit from that. Im sure you may have seen this article interestingly theres been lots of good press for our interview, not to mention the president that well get to. Tim lu, law professor that specializes in antitrust this weekend talked about the merger act of 1950 but also said it would be understandable if you assumed it had been repealed but it remains on the books. It mainly has been evaded, eroded and ideological drift, yielding hesitant enforcers and a hostile judiciary. How do you respond to criticisms like that . Look i respect him quite a bit. Hes great he has been very thoughtful. He has certainly been thoughtful on the at t time warner merger we challenged. Its been pretty well calibrated do we have challenges . Absolutely those are good challenges and checks and balances on our powers we go to the court system. We have to prove our case. We have to prove it with good, strong evidence. We also have to prove it with sound economics and over the last 30, 40 years, weve had pretty strong and bipartisan consensus on what the balance, and the right balance for antitrust enforcement is. Now, are there areas that, you know do we wish to go a different way . Are there cases we lose . Absolutely. Right do you agree with his contention then that theres a direct link between business and the distortion of the democratic process . I dont think so. We have to be vigilant thats why the antitrust laws were enacted in the first place, to make sure that no Single Company or group of companies have inordinate amount of power that affects our lives theres been quite a bit of debate about these platforms what does that mean . Are they Touching Every aspect of our lives should they be this big . Should the government step in and somehow regulate their growth how close do you look at that issue when it comes to, in particular again, were talking about platforms, amazon, facebook or alphabet, the existence of these enormous platforms and the influence they have how seriously do you investigate it right now in terms of trying to get some answers . We look at it whenever theres been challenges, the Justice Department brought a case on the ebooks matter a couple of years ago where some publishers and apple had gotten together and successfully resolved that matter were not picking winners and losers we are not trying to choose which technologies frankly, were just not smart enough to be doing that. All we can do is make sure that markets are free for new entrants to come in and topple the old ones. Do you believe thats the case right now weve had this discussion previously this idea that somehow its stymied by these giants who can presumably prevent capital flowing to new ideas because nobody wants to get into business to compete with them. I dont know if thats true i dont know if theres actual evidence of that in certain areas definitely different investors but Silicon Valley and the Venture Capital world, in this country in particularly, is alive and well. Youre having new companies pop up every now and then. But thats what we do. Antitrust laws need to be there to make sure that they do not prevent the next competitor to come in. That was exactly what the Justice Department did in microsoft 20 years ago and a lot of people were worried about the power microsoft had, particularly when they were trying to suffocate the internet browser because it was challenge ing their monopoly. How do you respond to the president s tweets im sure you hear about them if you dont read them directly yesterday, American Cable Association has big problems with comcast, our parent company, by the way. They say that comcast routinely violates antitrust laws when you see or hear Something Like that, whats your reaction . Look, the Previous Administration brought an antitrust case against comcast when they bought nbc and settled in a decree that just expired. I think we owe that to the American Consumer to continue to make sure that markets are working, despite any decree. One thing ive been criticized and, i think, praised for is that i dont believe these behavioral dissent decrees as a solution to the merger we tell a company to hold its natural tendencies and incentives to make a profit and they evaporate after five, seven, ten years it makes no sense. Seven years before were trying to guess where the market is i believe in structural solutions. Thats what we suggest zpld thats why you went after at t time warner, vertical merger that it was parts of it, not the whole merger but parts where there was anticompetitive concern that was the solution we had provided we also have members of congress who are all very vigilant about antitrust enforcement and comcast in particular, as well as at t and other media because they affect so Many Americans lives. When the president writes nothing more than an expensive lobbyist for amazon as it uses protection against antitrust claims, which many feel should be brought again, as the man who runs enforcement for the antitrust division, when you hear Something Like that from the executive, is there a response that you have . We hear that from executive and legislative. By the way, these types of concerns raised about amazon are bipartisan senators raise them, the president has raised it. Again, its great that we have such a debate about free markets and the antitrust laws are there to protect the free markets. As far as what we do in our enforcement, we need the evidence, the economics. We go to court and politics, you know, that goes on between various aspects of the government dont affect our decisions to make these cases. In the couple of minutes we have left, mak a n, let me hit a couple of quick things time warner at t, when are you going to go to court again court of appeals will be hearing the oral arguments december 6th the parties, we had agreed with them to hold the turner assets separate until the end of february and so theyre supposed to be running that business separately so that in the event the court of appeals overturns the District Courts decision as we argue and i think they should. You think they should whether or not they will well, i think theres been a lot of support for our appeal. You know, you had those the 29 or so economists, law professors, some of the countrys biggest experts who supported our case because, frankly, the courts decision, lower courts decision had real serious flaws in economic logic. Well see what happens there if it does, we hope there will be a decision before the end of february and then well take it from there. Talking about timelines, can you give us any sense as to when the department of justice will complete its review of tmobile and sprints deal . A lot of times, in that particular transaction we also review it, but also the federal Communications Commission has a role in that transaction and i believe theres been what they call the time clock over at the fcc for 180 days that has been stopped. I dont believe that has been restarted. So our timing will coincide together i dont know exactly when it is, but, you know, i announced a number of reforms with the hope that if the parties cooperate with us, well be moving things forward and we hope to get every transaction reviewed within six months. The most important market for most people when it comes to the bill they pay, some would say simple violation antitrust law. Well, yes, except for simple violations of antitrust law require evidence and the economics. So, were reviewing the evidence in this case and if thats what the economics and the evidence shows, that it would substantially lessen competition, we would block it if it doesnt, i dont think we have a magical number for any particular industry, which is what ive said in the past. Does leaving a feebled competitor in other words sprint wouldnt be able to compete if it was truly left independent . That is one of the considerations that goes into a number of factors we would review to see, you know, what would happen to the competitive landscape. Does that what youre insinuating, does that mean there will only be then two competitors if this merger doesnt happen and one of them would fail or both of them might fail without this merger those would be factors we would consider i dont know if the evidence fully supports that. And, finally, your future some say, well, theres an opening now for attorney general of the United States would you be interested . I have the best job, i think, in the government, running the antitrust division. Its the job i wanted and i think the president has made a superb choice, as deputy Rod Rosenstein said, in Matt Whitaker meantime theres a process im looking forward to see who will be the next ag. I have the best job in the country. Thank you for taking the time to talk with us. Thank you for having me. Makan delrahim joining us. Great discussion there. Coming up, major indexes are trying to recover after the dow fell, down about 87 points its down on some news this morning. Broad market of the s p is right around the flat line. National Economic Council director larry kudlow joins us in a few minutes stay with us this is a tomato you can track from farm, to pot, to jar, to table. And serve with confidence that its safe. This is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. This is a shipment transferred two hundred times, transparently tracked from port to port. This is the ibm blockchain, built for smarter business. Built to run on the ibm cloud. Welcome back the yearlong wait is over amazon announcing moments ago it plans to split its headquarters between two sites, one in new york city, one in Northern Virginia Virginia Governor Ralph Northram thank you for joining us today. Good morning. Thank you so much for having me on today. In this release, you mention this is a new model of Economic Development for the 21st century. What does that mean . What did you offer amazon to lure them to arlington i think we have put a very modest and disciplined package on the table weve had relationships with amazon over the years. Over 70 of our commitment is focused on education, workforce training for those 21st century jobs and also infrastructure and transportation so, you know, this is something that i think will really help amazon we welcome them to virginia but it will also bring talent to the area as you know, talent attracts talent its a win win for virginia. I imagine you crunched the numbers but are you at all concerned about return on investment, tax incentives and everything offered to get them to the area . This is mainly focused on education. Thats what our commitment is in virginia, and also to infrastructure so, we think there will be a very good return on our investment and, you know, were going to provide diplomas for 25 to 35,000 virginians who dont necessarily have to work at amazon they can work at other companies in virginia. We think having the talent pool that we have now and being able to attract other talent will really help businesses grow in the commonwealth of virginia this is an exciting day for virginia. Governor, im curious on the specifics of the 573 million in performance based direct incentives, how do you go about measuring that will amazon be held to specific metrics . This is over a long period of time how do you actually go about measuring whether or not theyre meeting what theyre supposed to and the money is actually being used for what it was supposed to being used for absolutely, it is performance based. As these job come in place, they will receive their incentives. Its kind of a pay as you go it will be 25,000 jobs over 12 years. Thats phase one we also have the option of phase two, which will be 10,000, about 10,000 more jobs in addition to that over the following year so, it is a performance based incentive package we put on the table. So the return on our investment will be very good. And it will roll out as the jobs are placed in virginia. Governor, give us a little color, if you could, on this process, on the debate that took place over this long period of time did you have multiple rounds of sweetening your offer and talking to amazon about what exactly they were looking for or was it basically put in your bid and amazon selected among them it was put in our bid in. This has been going on for a number of months as i said earlier, we have already amazon has already a large footprint in virginia, over 85,000 excuse me, 8,500 employees already work in virginia we have Fulfillment Centers in virginia weve had ongoing discussions with them. Our package was put on the table. I think they like the idea of being able to come into our community here in Northern Virginia and also having the workforce training available i talk to businesses every day around the globe, and they say to me every day, ralph, if you can train our workforce, our businesses will thrive in the commonwealth of virginia so weve really put a lot of focus in that area. Governor, before we let you go, a lot of attention being set on the fact that this area is crystal city and it looks like its being rebranded National Landing. Is that the case absolutely. Why its being referred to as National Landing well, the areas around here, pentagon city, crystal city, potomac yards, this is a really good day for the Greater Washington area. Ive worked with the governor of maryland, Governor Hogan and the mayor of washington, mayor bowser weve all worked on this together this is a win win that amazon has chosen to come to this area and its great for the Greater Washington area. Governor northam of virginia, thank you for joining us today. Thanks for having me. All right well, financials rebounding a bit today after yesterdays massive selloff. The banks etf kbe down today. Joining us for a closer look, president and ceo at kbw. Good to see you. Over the course of the year its been one of the more confounding behaviors of this market everyone came in thinking that the bullish path for bank stocks was clear, didnt really play out. What do you think is weighing on the group right now . Is it just this typical, were getting close to the end of the cycle . There were two big things that happened in banking in october. October was a terrible quarter terrible month for the stocks the first is that earnings changed analyst expectations for growth in the future we, on average, took 2. 5 out of our earnings per share rate and predominantly it wasnt because the economy had turned but increasing competition i think that was number one. Number two, i dont think you can talk about a sector today without talking about etfs and passive investing. About a quarter of the flow that had come into bank stocks since the election has now left, and a lot of it left in october. So, actually, since october 24th, which was the low, bank stocks have now been outperforming, but they got creamed in october. And you mentioned that the earnings expectations got moderated a little bit what can actually change that story, if anything credit costs theyre not going to get easier, necessarily, as the cycle goes on. You just described peak profitability. Yeah. We get that question all the time the Banking Industry has recovered its profitability since the crisis so the question is, is there a 25 improvement from profitability here we dont think so. We think that the entire group of stocks is very cheap, relative to the Market Regional bank is the cheapest since 2004, very cheap relative to the market. Now youll have to pick winners and losers. I expect you would love to see a bit of a merger frenzy start up here. Is that going to happen . That is a great idea. Actually, its a good idea because i think it is happening and it will happen, but its happening a little bit more slowly because, frankly, we just have fewer banks than we used to have and i would also describe us now as being in a pause. With stocks moving like they have, very hard to do m a. I think it will still happen but applied pickup once we get stability in the stocks. Can i get back to Market Structure for a second you mentioned the role of etfs and algorithms, mike mentioned how do these things affect stock value and trade and what do we do about it . It changes the way they trade a lot. I worked on the Trading Floor for 30 years there used to be a tremendous amount of noise. I will walk out and say the market is open because all the stocks are trading electronically the speed has changed, okay, at which they trade and also the passive investment has grown to the point where theres more of a sector call to how the stocks perform. And weve got plenty of banks that we research where passive and quantitative investors own 40 to 50 of the shares so i think its going to make it harder to outperform the group ill tell you where the biggest punch is, in Corporate Governance now youve got a handful of investors voting 30 of americas shares and thats going to be a big question over time and will need more attention. Youre saying theres no price discovery then or not as much. What actually happens is theres less liquidity to people paying attention to new news and i think it will make volatility go up. And it will be an opportunity for investors who are willing to do that opportunity, i think you can trade against the machines and make money if you know the fundamentals better. Tom, thanks for stopping by appreciate it. Thank you when we return, nec director ve y kudlow joins us. Wegot more squawk on the street after the break. Chip stocks have gotten beaten up over the last few months and an analyst says a perfect storm is brewing for the group. Find out why on tradingnation. Com. Stocks are near session lows, extending that selloff from yesterday President Trump yesterday, as well, blaming the sharp downturn on the, quote, prospect of president ial harassment, by the incoming democratically control ed house of representatives. Joining us now, National Economic Council Director larry kudlow larry, always good to see you. I have to admit, i miss not having you to my right here on set. Thank you. I can at least try to reach out and touch you. Stop you, sometimes, from talking. I appreciate it very much. Larry, trade continues to be one of the big issues and certainly one we discuss with you. A strategic piece out, is the kudlow trade framework crumbling . Maybe youve seen it. I saw that. Give me your take. I saw the headline from my pal, dan clifton i didnt actually read the piece. Let me just guess. Ill lay out a framework for you, and you can go where every you want to go first of all, we are again talking with china and i think thats very, very, very positive the president initiated a phone call with president xi we now know we will discuss trade at the summit. There will be many things, trade being one of them. Were having communications at all levels of u. S. And Chinese Government i spoke to secretary mnuchin this morning about that, as part of our preparation for the g20 so without even thinking about a prediction on the outcome, we are talking to them again. You know me. I think its better to talk than not talk so, thats a plus. Were in very good negotiations with the european union. Were in very good negotiations with japan we did get the u. U. S. mexican canadian nca. So were moving ahead on trade discussions and we had a very good deal in north america, so i think its a pretty good story, to tell you the truth. Yeah. You know, larry, the piece that i reference, we referenced at the top, it actually is trying to paint a more positive prospect for an agreement but its saying that because its starting to theyre starting to say they see signs, dan clifton, of snowness coming. Investment slowdown in the third quarter, they say, is a major red flag that tariffs are starting to impact capex are you seeing that and are you concerned about it no. I agree that the capex numbers were a little soft in q3 they had been very strong in the prior quarters and actually, david, there may be some glitches in those numbers. Kevin hasset, my colleague at cea. Numbers look better than we saw in gdp, may get a revision upwards next quarter i think thats still a strong area look, the tariffs we impose on china, because of their recalcitrant they dont seem to respond positively to our requests maybe that will change, i dont know those tariffs havent really hit yet. Theyre not in place some of these companies are worried. I understand that. Nonetheless were doing what we must do with respect to china. In my judgment, i piece deal in transfer of technology, transfer ownership, high tariffs on a number of commodities, cyber hacking. We cant let that happen so i think the president is doing the right thing. But right, but but, but, but my point to dan clifton is we are resuming talks with china it will be part of the g20 i have to believe thats a good thing and we are talking to the eu and japan, and we did get the usmca done thats not bad. Peter navarro had things to say recently in terms of when you term wall street bankers and the like, trying to get their influence felt by the white house. I think we have it i would love for you to listen to his comments and respond to them, if you can. If there is a deal, if and when there is a deal, it will be on president donald j. Trumps terms, not wall streets terms but if wall street is involved and continues to insinuate itself into these negotiations, there will be a stench around any deal thats consummated because it will have premature of Goldman Sachs and wall street so i would urge these unpaid foreign agents to stand down on this issue. Would you similarly urge wall street to stand down, larry . I would not look, Peter Navarro is a friend of mine, truly weve known each other for 20 years, but he was not speaking for the president , nor was he speaking for the administration. His remarks were way off base. They were not authorized by anybody. I actually think he did the president a great disservice look, the president can talk to whomever he can talk to. He talks to people on wall street, yes. He talks to union leaders. Youve been in some of those meetings yes. He talks to other outside advisers he has every right to do so. And the president has said, and i reflected this on your network and elsewhere, that if there is a deal to be had with china, its a deal that has to be in american interests along the asks that i just mentioned on technology and so forth. Thats got to happen so i think peter very badly misspoke he was freelancing and hes not representing the president or the administration. Larry, this is Morgan Brennan. I need to get your thoughts on the dollar, because its really bucked expectations. We saw at the beginning of the year, strengthening pretty notably this year. On one hand strong dollar tied with Strong Economy, on the other hand youre trying to increase u. S. Exports and strike some of these trade deals, encourage u. S. Companies to create more jobs at home its a headwind. How is the strong dollar being, i guess, discussed and is it being involved in shaping policy right now . Well, look, the dollar, currency matters are the purview of the Treasury Department i will only comment lightly that the dollar today, we have the best economy in the world. Investment is flowing here i regard that as a good thing. I know it goes up and down basically if you go back and run a chart 18 or 20 years, actually, the dollar is sort of right at the midpoint of that long chart, up, down, up, down in recent years, the dollar has been pretty steady, in my judgment it is on an upswing right now. By the way, one of the benefits of a steady dollar, steady, is a lower inflation rate and one of the issues ive not heard enough discussion is disinflation in the last nine months, the pcde has actually fallen from about 2. 7 to 1. 4 . Thats a terrific thing. That is supply side tax cuts were increasing the potential of the economy to grow when you create more, prices can come down. There was an inflation scare a little while ago its going away. I think this is a big plus inflation is the cruelest tax of all and i think it will give a lot of relief. Its like a tax cut for the economy. So i like that and the rest of the dollar story ill leave to mr. Mnuchin. Right now, king dollar, were attracting money all over the world. Were the hottest economy. Were crushing it right now. China is in a slump. The eu is slumping so, theyre coming to where the returns are best and the most hospitalitiable environment. Larry, with the democratic control of the house right now, obviously, a lot of the talk is stalled about feasible tax cut, things like that what is the economic agenda on a Going Forward basis that is practically possible well, look, the president has said that he is more than willing to discuss, negotiate, talk to ms. Pelosi, if she becomes the speaker and so forth, he is willing to reach across the aisle. On the other hand, if theyre more belligerent, he will fight back he was clear about that in the press Conference Last Week regarding our policy goals, we will be looking at additional tax reform, 2. 0 if you will. There are other things we are noodling inside the administration, working with the house and the senate the senate by the way is a very powerful body, so theyre not going to let our tax cuts, deregulation and Energy Reform be overturned, and if they would, the president would veto it i dont want to get ahead of the story. We have a tough budget, 5 reduction for the domestic nonentitlements. I think thats healthy for the economy. We are looking at infrastructure in many different ways you know, the president , former construction man, real estate man. Infrastructure, particularly we are working on National Economic council, i would like to do energy infrastructure, pipelines. I would like to do anything that will help terminals, shipping. We would like to revise the u. S. Shipping industry which has been dormant many years we would like to export oil to europe and asia. Very important issues. They want lng. Were going to do everything to accommodate. Final question. I want you to take us back a year or so when you and i would typically be talking before you would be coming on, you would say whats going on this morning, and i would say to you this morning if we were having that conversation, the market is worried powell will tighten to at least neutral people are worried we are going to 25 on tariffs on china earnings were pretty good, guidance wasnt as good, and people seem to be more scared in the market now your response would be if we were having that conversation what i would say corrections come and go it has been a long bull market we are way ahead of where we were in late 2016 after the president s election we had these corrections had one last winter. Were going through one now. I believe at least at close of business yesterday, the overall correction was 7 . I dont like that. I dont want anybody to lose money in their 401 k , but historically as you know, thats a rather mild correction i think the timing is helpful. I think profits are strong, tremendous Nfib Small Business confidence number, good Consumer Sentiment number isms are very strong i think this is a very healthy economy. The story in my view, everybody said we couldnt get 3 plus growth, were getting that and tax cuts and deregulation, energy, trade reforms, pardon me, i think it is all paying off. I think this is the best economy in years. I remain optimistic. Appreciate you joining us thank you. Appreciate it larry kudlow. Cnbc getting an exclusive tour inside teslas giga factory. Phil lebeau has more on whats coming up next hour. Reporter hi, mike. We are in sporarks, nevada, outside the gigafactory. Check it out 5. 5 million square feet that can more than double in size the question is what are they doing with batteries theyre building, can they bring down the cost well take you inside for an exclusive look at teslas push ua aosne hr ry ct xtou onsqwklley. indistinguishable muttering that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with td ameritrade. Welcome back to squawk on the street. Stocks switching between positive and negative territory. More than 4 lower on the day, sending stocks like marathon quk le rurhe day as well sawalyetns in less than three minutes keep it right here its not what champions do. Its what champions dont do. They dont back down. They dont settle. And they dont quit. Except for cable. Cable . Oh you can quit cable. Because we are cougars and we dont quit unless what . . . [team in unison] unless its cable quit cable and switch to directv and get the most live sports in4k more for your thing. Thats our thing. 1800directv wat t. Rowe price, hundreds of our experts go beyond the numbers to examine Investment Opportunities firsthand. Like a biotech firm that engineers a patients own cells to fight cancer. This is strategic investing. Because your investments deserve the full story. T. Rowe price. Invest with confidence. Good morning, it is 11 00 a. M. In long island city, new york, but 10 00 a. M. In nashville. Those are amazons major office locations. It is 11 00 a. M. On wall street. Squawk alley is live