Of china and Germany Europe is in the red tenyear yield near 1. 95 that moved 30 basis points since last weeks fed meeting. Our road map begins with disney and the streaming wars deals with amazon and apple and 52 surge in studio, shares up 5 ahead of the bell. Plus, billionaire battles Elizabeth Warren staying on the attack, saying theyre crying about her wealth tax this as billionaire Mike Bloomberg considers a run for president. As we said, closing out a big week for stocks, new records and reach as investors weigh more china tariff rollback talk first up, though, jim, a very special show coming up tonight. Yeah, look, were at the place, i think, epicenter of what i regard as being the new wing of our defense. That i say that because it was in 1959 they created this academy. It is a very special place and im glad i have that accompany music. We want to talk about not just what is going on here, but what goes on after service, why were bringing in Kevin Johnson from starbucks. Hes one of the most committed, along with jamie dimon, not just in saying, but actually doing, hiring people that graduate from military and looking for jobs. So im proud to be here. Im proud that theyre letting us be here we kind of invaded their turf and i cant wait to speak to them the campus, the air force academy. Many, many years ago. Just incredible. You grew up not that far my parents are maybe, i dont know, 20 minutes from there. Gorgeous country, jim. We cant wait, given your history of taking shows on the road, but especially this time it is going to be special to watch. Lets get to disney too kind, carl. You talked about it with joe a few moments ago. The story is well known, beating on the top and bottom lines. Boosted by studio entertainment revenue, Strong Box Office this year, the results come just days before disney plus goes live on the 12th Julia Boorstin talked to iger after the call, heres what he had to say we have distribution deals with a number of different entities, were pleased to announce today a deal with amazon we have deals with apple, we have deals with samsung, with microsoft, with lg, with google. Significant, significant progress in terms of distribution deals and amazon being the latest one. Jim, youre framing igers risk taking move here and some pretty historic terms. Well, look, this is the new generation, what has to happen think about all the different outlets. Thats where millennials are millennials, look, we work for comcast and comcast is doing a lot of things. It is like you get it and have to turn it off if you dont want it it will become a default channel. If we hadnt done this, there really couldnt be a way to survive. Thats my interpretation when he said, but, boy, he was calm, cool and collected when this man goes up against skeptical analysts, they just kind of melt like the wicked witch of the well, various west and east. Yeah, i think he has a lot of confidence in the strategy that he has embraced and been thinking about for a long time it was, what, that summer of 2015, i guess, when we first started to see the discussion of it in their call, jim, you remember the weakness of course at that time at espn we went on and on about it he started to wonder if we were too focused on it, if you recall the fact is he was focused on it as well. And that a lot of that thinking then led to, of course, the transaction to acquire all of those assets from fox, roughly two years ago. Battle with comcast that took place there. They ultimately did prevail, to where we are right now and bob iger does have a great deal of confidence in the rollout of this strategy i remember him talking to him on the day they introduced disney plus last spring, and him talking about the changing landscape and the significant way that the fact he needed to embrace it and be there to potentially position the company in the way that it currently is. The questions will remain in terms of the tape rate to your point. It will be available on all of the platforms. But still have to have people say they want to buy it, what is the interface in term of how the ease of use and other things, they have been working on that for some time. But there is no doubt this is going to be a very significant player in these streaming wars as we watch the continued erosion of the bundles, slow, but steady not even that slow, really, i should say, actually not from the direct broadcast satellite companies, though yesterday, we heard from dish, they reported 66,000 subdeclines which was not much at all. It is impressive, i guess, in retrospect the falloff in Linear Television watching, jim, it is happening and it is accelerating were losing more viewers off linear this year than we did the year before. It has been like that for a few years. No,it is extraordinary. Lets face it. When you listen to that call, there is probably maybe 45 seconds devoted to espn. It is like that we used to think about with abc i remember when abc started going down as an importance to the pastiche of disney and it was amazing to think, thats impossible, if that goes down, it will take the company down. We stopped talking about scattered pricing. Now, i kept waiting for someone to say, wait a second, bob, espn is falling apart, which by the way, it is not, he started talking about how espn pluses had chris berman he answered all the objections i remember when they first opened Walt Disney World and people said maybe theyre giving up on mickey mouse they seemed to always reinvent themselves these are very difficult reinventions it was very interesting, i think most shocking thing i just saw on the shot we had was david was not wearing a tie and iger wasnt and it threw me more than the fact that im at the air force academy. Im not wearing one because youre not next to me. I know that would be not something i would be allowed to do given youre 2,000, 3,000 miles away, maybe i can get away with it, jim. I think iger has given me clearance to do that too if he can do it, i can do it. I thought it was a great call the analysts are littlpuchins shouldnt be allowed to ask any questions. Thats ridiculous whats interesting is that hyperbole. I know. But they are moving beyond the near term pressures. Thats the beauty of what hes been able to accomplish so far, hes gotten investors focused on this product, on its success, on its importance to disney and, i mean, all right, we still will talk about theme parks, which werent bad. Hong kong was under pressure or china, well talk about the studio, but really and espn a little bit all we talk about at disney plus and thats what the stock price is moving on. Well, david, the greatest part of this story line last night was that they like it in the netherlands. It plays in the thats like peoria it plays with the dutch, so it has to work here and i found myself thinking, yeah, of course. And i said, like what does that have to do with anything iger has me thinking, if amsterdam if amsterdam likes it, new york will like it. And he can actually say stuff like that and we say, well, yeah, sure, netherlands, thats our target market. Hes magical magical kingdom of a conference call. There is the cover of business week, which we talked about yesterday. You mentioned parks, barclays to the degree people are looking to quibble, did have a piece earlier in the week about the star wars attraction at disney land, not seeing attendance pick up as much as prior rollouts like avatar. How much is that worth worrying about, if at all well, i think he did provide a couple of explanations about why there may not be as many people i felt good about it im not worried. I think he he likes to answer the objections and also really kind of see around the corner like you mentioned with hong kong im actually not worried about that at all. The only thing im worried abou is how good some of the things hes talking about with different divisions of fox, how good are they . And i was surprised that they only added 500,000 subs to hulu. I thought it was a juggernaut. I expected a million, a million and a half you have to bet, didnt you that hulu was a disappointment . Yeah, it was. It came in below similar to netflix and well raise questions about that in the marketplace. They are devoting fx programming to hulu. That will be showing up on the hulu platform. Perhaps that will help a bit but, yeah, that was below i think what people had been anticipating, carl. Yeah. Jim, well talk about disney, of course, all morning long. The other big story this morning is the battle against the billionaires is heating up president ial hopeful senator Elizabeth Warren taking another swipe last night at north carolinas a t university. You may have heard billionaires on tv recently crying about that two cent wealth tax aw aw but we ask the top 1 10 of 1 to pitch in two cents on their fortunes, we can invest in an entire generation. All that as reports that a billionaire is preparing to enter the president ial race. Former new york mayor Michael Bloomberg is expected to file paper work this week in at least one state with an early deadline, alabama, which the deadline is today. Though an adviser says bloomberg has not made a final decision to run. Got other states with deadlines next week, like new hampshire. So this picture will solidify here pretty quickly. Yeah. Now, there are other states where they dont have deadlines or where independents can republicans can vote but needed to get he needed to do this if he was going to be considering it carl, it is funny, you spend as much time as i do talking to people as often as you can or meeting with people at lunch or going to conferences, any number of them will talk about bloomberg over the last few weeks. Hes bored hes looking for something to do he knows he cant win. Hes not going to run. Thats what i kept hearing i was somewhat surprised to see this decision. Just because while many people believed he wanted to do it, he consistently, ive been told, by people who didnt think he could prevail in a democrat eke primary, perhaps in some fashion the calculus has changed recently because of the ascension of Elizabeth Warren. The line of biden is collapsing, maybe he does believe that bidens erosion in recent weeks clears a path i heard the chatter that this is something that mayor bloomberg wants to do. I want to hear him speak not that long ago and he was talking about very wistfully about how hes just too old. I wonder whether the age of the people hes running against made him feel like that it is not sunrise senior living. There is a lot of chance to be in the middle of how people the age group. I have to tell you, the senator warren stuff resonates there is not enough billionaires to go around and i wish it is funny, i mean, does she want the billionaires to lose all their money . Like maybe they go, maybe the billionaires should be investing, say, in party city. Gap. What does she want the billionaires to do theyre stuck being billionaires there is not much they can do there. They were very successful. Unless they lose right . Does she want them to just invest in really bad cannabis stocks so theyre theyre the men of the people . They have to generate a return to pay their tax bill every year by the way, i thought it was 2 after 50 million on whatever is additional above that. But i thought it was 6 at a billion now under the medicare proposal, carl maybe i got to go to robert frank who covers all of this i think it is more than two cents if youre a billionaire. Do you give if it is a 40 foot yacht, do you give, say, 10 other feet to the people meanwhile sell the yacht. Sell the just asking. That wont go over well. Ubs has this report out today, the number of billionaires, their wealth, fell laster where for the first time in three years and china, jim not in the just global and thatmints a new billionaire every two to two and a half days. Two to two and a half days, wow. Look, i got to tell you, i listen to that senator warren has to say, she has great stuf to say about how billionaires shouldnt have more votes than everybody else i think were not in a yonker state where a billionaire has more votes the thing shes missing out, these people are they have no choice theyre billionaires thats just kind of what happened i do get sick of the billionaires telling me thee grew up in a humble background it is america. Everybody was humble at one point. Im humble, youre humble, this guy is humble. They all have their mythology, i know, yeah. Listen, i get that part, right, jim. Right enough of that but i do think that senator warren, shes running against them and theyre taking the darn bait listen, americas billionaires, i know you watch, shut up shut up and give the money away. Stop talking stop crying. Stop giving her the grist. I would love i love billionaires to shut up and give some money to causes, hey, give some money to her, then shell really be confounded yeah, youre right. No response to that. Jim, when we come back, a special Rocky Mountain mad dash as we count down to the opening bell take another look at the premarket here we got to get to navarro making comments on trade today. Upgrades of mcdonalds, United Rentals and others when we come back vo the flock blindly flying south for the winter. They never stray from their predetermined path. But this season, a more thrilling journey is calling. Defy the laws of human nature. At the season of audi sales event. All right, we got 12 minutes before we get started with trading at the New York Stock Exchange jim, however, is not next to me as you can see hes at the air force academy in colorado doesnt stop us from doing a mad dash jim, art peck will be stepping down as the chief executive at the gap. Thoughts yeah, well, he fell into the gap. More likely to say pushed into the gap. This say man who has been there for a long time. Big data, by the way, what he wasnt interested in was finding things that people want to buy and make it so it is relevant. Gap has become irrelevant. And i dont know how anyone i dont think this is really a monumental task, david, to get this thing to turn around. Art was clearly not they were going to split the company in two. I think lusitania and titanic, both not great role models, and it didnt work they may still split it. Talking about that but art is gone. And the gap is fading away because it is not a place that people like it go. It turns out thats important. Right though they are going to still split into old navy and then the gap, banana and athleta. That is still happening and fisher comes in, hes already done it once before as interim ceo, but the numbers arent pointing in the right direction. No. I pick those two ship metaphors because the idea that old navy, the only thing left, it still draws a crowd. It doesnt matter if the dogs wont eat it, it doesnt matter what kind of dog food you say is new and improved and gap has not been able to be new and improved it has the same darn look. Except the gap in rome, they had really attractive things, it just seems like it is someone was mentioning this morning, 40 off, 40 off, 40 off you need to be every day low price or need to be online. And these guys are neither i feel bad for them, david but they are part of the mall infection. And they are irrelevant. There is no maybe they got to roll out the rome gap relevant coming up that rome gap is gorgeous. Maybe one day, you know, on our retail round about, well hit that too before that we go through the big movers of the morning. You see them right there disney one of the keys the other two also havent reported earnings. We have a lot more on tap for you, more on disney, activision, blizzard, and other things dont go anywhere. Val, vern. Im off to college and im not gonna be around. Im worried about my parents retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. 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. 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The opening bell in 3 1 2 minutes. Busy friday. We talked some disney and some gap. Jim, the other big story is navarro, saying that there is no agreement to remove any of the existing tariffs as a condition of phase one but some reports today that he said maybe you postpone december 15 where are we on trade this morning . Look, when we hear navarro, what we need to be thinking is President Trump. So, i mean, the idea there is this guy out there, who is kind of off the reservation, who is a bomb thrower, well, i got to tell you, thats just through a wrong analysis i think secretary mnuchin and larry kudlow, i think they want a compromise but the thing that came down yesterday, they were discussing fentanyl and what did they say there is still no decline in the amount of fentanyl that comes in from to jfk airport when there is when theyre talking about fentanyl, theyre not talking about rolling back tariffs. Lets understand that there is a false news perspective to those who think that the president is in there, rolling up his sleeves and rolling back tariffs thats not the game plan if youre buying stocks because of that, you will lose money yeah. Apparently told npr this morning, want to save some ammo for phases two and three navarro. Yeah. Theyre not interested in phases that phase is we care about phases in this country less than the chinese. It is really interesting, the chinese have been vocal behind the scenes if there can be such a thing of what our president is going to do. I find it fanciful they know what hes going to do. He doesnt know what hes going to do. President xi does . Are they dreaming over there honestly werbs g honestly, we got to start realizing they can make mistakes there is nothing about the communist Chinese Party that shows me it is invincible and always right and this long game, you can play the belong game for 100 year and still be wrong given all that, it is interesting to see some of the macro desks. Yesterday, jpmorgan, this morning it is bamle saying they see ism going back above 55. Jpm unwinding the gold hedge, you got the fed Balance Sheet back above 4 trillion and the value of negative yielding debt back below 12 trillion around the world as this as curves all around the world have steepened. Thats 12 trillion down from the high of 16, right . Not that long ago. Although still a conundrum, as we watch our own ten year at 2 , jim. Positive. Thats what we wanted to see, right . This is the only market ive seen, david, when rates shoot up, we start applauding. Maybe it did go too low. Funniest one just in terms of a lets say wall street funny man, legendary wall street funny man is the rush to own caterpillar up here by Goldman Sachs when they didnt like it in the 130s. This is what is going on wall street is trying to buy the cyclicals. Probably time to buy the drug stocks opening bell on the s p 500 at the cnbc real Time Exchange and the big board, it is juniper industrial holdings, a Blank Check Company targeting north American Industrial bissell brating brat i celebrating an ipo and with that, jim, you mentioned the goldman call, where they upgrade tariffs and United Rentals and oshkosh all on the idea that Construction Equipment inventories are peaking and rental utilization rates are bottoming. Yeah, thats a tough call one thing you have to do is anticipate moves rather than be after moves. I believe caterpillar can have more upside, my travel trust owns a big position in it. The fact is that now if we do get more tariffs, then youre going to be youre buying caterpillar probably 15 points too high more if we this is just a hapless call, frankly. It is a reactionary call and it those calls tend not to work. Im far more into the calls that are about Creative Destruction and what google is doing to the Online Travel agencies and the disruption that im seeing, once again, by out west, by the facebooks and the traditional media companies, it is still worth talking about, because i find it is top of mind for a lot of traders i deal w h with. Couple of stocks to watch this morning wapt i want to start off with alibaba, we tried to talk about that often, singles day coming up, 30 billion last year, i think it is over five years ago i was actually there on the ground interviewing jack ma at the time but it grows every year. But more importantly the stories now out today, a number of dfrn pla different places including the wall street journal saying theyre going to move ahead with what could be a 10 to 15 billion offering to list on the Hong Kong Exchange and there have been a lot of questions concern among some of the investors that ive spoken to, what would be the dilution from the potential listing there in hong kong and despite the unrest in that city. They are moving ahead or these reports all have that being the case interesting because theyre going to be raising obviously capital. It is straight equity there, will have an equity listing as opposed to adr listing here. But also because, remember they wanted to list in hong kong but the requirements there, the structure they had, they didnt meet the requirements. That changed, they now do they came to new york in part as a second choice, but, jim, it will be the first time that the actual users of the product are able to buy the stock at least in their local market. Because all the investors here dont use alibaba. But over there, theyre a lot more familiar with the company in terms of at least actually using the product. True. Ive used the product for one of our restaurants. Fabulous product and i do believe that what is going to happen is a good thing. Alibabas financials look remarkably like United States financials unlike the junk they pump out where it is really impossible to understand alibaba looks and acts like an American Company david, singles day, we talk about that, thats the celebration of rapacious naked capitalism, which i find funny, given the fact that they are communists, but do you think it is going to be up again . Because just the general belief that really it is gift giving time and so everybody should feel like they should go spend a lot of money is that the kind of post malice way they deal with it . It is it is a reflection of the consumer economy in china and the ability of people to spend every year it has gone up substantially in terms of what they have done they brought it globally as you know not just about now the Chinese Market, they do it in other areas where they have the platform as well, jim. But, yeah. Expectations are obviously it is going to be up celebrating people who are single, sending their gifts to them it started as sort of almost a marketing ploy and became this real thing they had earnings recently that were well received as well with still very, very significant top line growth at the overall company. Well, david, is this kind of like what remember, amazon developed a kind of singles day thing. You got that Amazon Holiday that tends to not really be all that religious or president ial. It seems like they actually have taken their cue from a from the communist chinese who are extraordinary givers yes, they are yes, they are. They got a lot of billionaires over there what was that number how many billionaires minted in china, how often one every two to two and a half days. On a larger base, obviously, right . Larger base, okay. They used to execute billionaires over there. I know that is not warrens theme, but remember they executed them or sent them to concentration camps. Thats never going to be the case here. I want to make that point. Thats true they did continue to disappear people over there, chairman wu, remember him there was a fentanyl seller that disappeared yesterday, they said theyre going to execute him, but gave him a twoyear stay maybe he goes free again but the white house is concerned about the amount of fentanyl that comes in. I think people feel like im jobijo joking about that. This say precondition to any rollback, the fentanyl sales have to stop here. Hey, you know what, theyre not giving fentanyl to each other there on singles day right theyre not. Thankfully right yeah. Right they give it to us for singles day. Yeah. Unfortunate. Jim, moving on to some stocks, yesterday we saw this incredible decline in shares of expedia as well as trip adviser in part because of changes and their inability to have to get as much out of Search Engine optimization the rise of the platforms for the travel companies and people going directly to those platforms as opposed to going through google search. Give me your take here as we watch shares of expedia rebounding ever so slightly after that dramatic fall yesterday. Well, i have my old life, when i was involved with the street. Com, periodically you get these google algorithm changes, you would see number one or two in the queue and then youre number 17 in the queue and you dont get any any signal at all that google will do this. Remember, there was a yelp call last night, where this is something that happened to yelp. What happened is all the guys dropped dramatically expedia raised its rates to a lot of hotels, a lot of inns, a lot of motels, they dont like that either. Expedia was trying to make it up by charging its clients a lot and they are they are so down in the queue for google, well, they were all shocked. They didnt see it coming. Google good midnight changes and google is one of the powerful forces on earth. Yes, in part it points out the power of the platform itself, it changes like that can have that kind of impact and then, of course, the solution is to, hey, it benefits the same player that changed your place in the algo amazing amount of leverage. They let the government ought to investigate them for that well, that is kind of the plan yeah. The algo what happens, ive been ive been in where i woke up the next morning, say, look, the street, were number 17, what happened . And then the person who is in charge says, oh, they changed the algo last nighting good th did they give us a heads up no, they just changed it so capricious that they change the algo at midnight and you suddenly are no longer a factor. The train is great when it is a tailwind, tougher when it is a head wind. Jim, zillow group, narrower than expected loss, revenue ahead, good forecast. You seem to think maybe the home flip model might have traction here. I have been very doubtful do you really want to get in the home flip business when rates are going Mortgage Rates going to zero and you werent doing well this was a remarkable quarter. They did talk about a marine veteran by the name of tim, they did a little kind of allegory able to sell his house and buy his house in six days. It resonated i was on the call, i said, i dont know, i didnt like this model. Maybe they have hope for it. And people are buying into it. So they have got the agents, that business kind of peaked now theyre in the home foot business now everybody was in the home foot business in 2007 and 2008 got blitzed. These guys may have technologically solved a lot of problems im still skeptical. But less skeptical than i was before this quarter. Guys, wanted to stay focused to a certain extent on xerox and hp inc. In todays faber report. It will go quiet for a bit as the hp board takes in the offer, of course. It received a couple of days ago, 22, 17 of which is cash, remainor in xerox Stock Exchange and decides what it wants to do. Beyond that statement we got from them a couple of days ago this would be deliberating and responding and making a decision as to whether they want to either entertain talks to potentially be acquired and or say no way, not at this price at least. Could be next week could be from what i understand at least perhaps as long as a couple of weeks before we hear from them. But in the meantime, a couple of points of history i think are worth sharing here, learned along the way, you know, in hps initial response, they had referenced the fact that the two companies were well acquainted and had had conversations in the past that was not the very distant past that was the very recent past. In fact, as recently as two months ago, hewlettpackard had been in talks to acquire xerox according to people familiar with the situation those talks went on for quite some time, im told. Number of weeks, they even occurred after they announced the departure of weisler and so they took place in late august, in september and they did involve what was the exchange of information, in person meetings, they conducted due diligence, some portion of due diligence, they discussed synergies, signed off on the fact that they believe the regulatory requirements for the deal would be met, there wouldnt be any real regulatory opposition to it but according to people spoken to, hp wanted more time. They wanted another three months to continue to do due diligence. Xerox said no, were done. Now, there may be disputes about why in fact they walked awith e from it. Are there questions about xeroxs business in terms of Going Forward from here, whether or not they have taken the costs out and now have to look for some sort of revenue increase which they do not believe perhaps would be forth coming. That remains sort of questions but these two companies talk very recently is the key here. With hchl with hp nrinitially wanting to y them they have entered some cooperation agreements, just about consolidation in their business, xerox finally said after what was fairly significant talks, okay, were not going to let you go another three months were going back to focus on getting out of this joint venture, which they successfully did, which they closed on today, we should point out. The 2. 3 billion that theyre getting from pulling out of the 57yearold joint venture they had with fuji film and the elimination of any ability of fuji to potentially block a potential deal so now xerox makes their move, and now we sit and wait, but it is interesting to note that these two companies very recently, jim, had discussed a deal, hp was engaged, it does appear they didnt push back on the synergies or on regulatory, but they wanted more time and xerox wasnt willing to give it to them in terms of more due diligence. I think that they know about how they have it, i would describe it as a return based framework to evaluate m a. Meaning no one from in the work that i do is saying, hey, this was never going to happen, it is stupid there is another sense, which some of the people i think at hp believe that xerox is a little too desperate because they want there is a plan that enrique laid out that i think has some resonance but, youre right, david, i think if they felt there could be a better return, they would do this. They dont think there is a great return versus their own plan i think youve been dead right on everything, which is that it just does not seem to be a lot of antipathy there does seem to be people believe in hp, why dont you give us a try, xerox what is the hurry . Why cant you wait a bit the tenor of all this is, hey, you know what, these guys are good guys. It is in the what we think and when you talk about whether it will be a proxy fight, i think a lot of hp feel that wont happen, there isnt animosity, no animosity this and would spike animosity. Do you hear proxy because what i hear is, wow, that would be a surprise, we like them, we wouldnt think they would do that. I think it is a distinct possibility that xerox would they seem to be very anxious to try to get somethingen to. Y you can ask the reasons why. It wouldnt surprise me if in fact they get a full rejection that they would want to bring it to shareholders, jim but, thats a little ways down the road the first thing we have to wait for here, of course, is simply hps actual response and whether it will result in some sort of conversation, which clearly they already had to a large extent or whether it will be a rejection and then xerox has to decide what theyre going to do carl, i no he know we got to ge the broader markets. Bob pisani, disney adding 35. Good morning, bob. Were off the lows. A reversal of the trends this week consumer staples, defensive down this week, theyre up energy is giving up a lot of the gains. Tech flat, banks small giving up the gains. What a great week it has been for banks. You got a 20 basis point move in the tenyear and thats creating some very interest in rotation, a lot of theories whether this will last. Banks up nicely this week. New highs and a lot of the regional banks, Home Builders getting hit. Utilities are down i dont know how far this goes with the yield change, but it has a lot of people talking about what is go on. If you look at what is going on, we have seen etf flows, all into bond funds this year, continuing, people are astonished 15 increase in the amount of money assets under management for fixed income this year, kind of flat for equities in etf. People still putting money the question is are they going to stop doing that if they feel there is a bottom in yields at this point some of the stocks are arguing this could provide fuel going into the end of the year if money goes out of bonds and into stocks we have seen that this week. Thats whats been going on in terms of the flows we all know what the longterm story is,mostly at time, we al agree, bond yields stay lower for longer, aging population, lower yields in exchnk fchanger safety demand outstripping supply globally for bonds at the low yields nobody saying there is go to be a revolution talking about what might happen going into the end of the year here alibaba, jim, and david, were talking about it here, this is a very interesting for a simple reason theyre going to be listing in hong kong, secondary, they list here, thats a pretty small amount for a 490 billion market cap. It raises the question about why are they listing with 10 billion. A lot of people feel that they want to expand their ownership base they got 600 million users in china. Think they might be interested in owning alibaba stock. I think so that makes sense to me will chinese investors value alibaba higher than u. S. Investors have been . It is trading at 25 times forward earnings they dont need the cash maybe there is hope out there theyll get the stock price higher there is some evidence to support this look at alibaba, they first started talking about this listing, vague, but it was way back in may, it was right about here, and you can see alibaba has been outperforming not only the u. S. Market, but the Chinese Market ever since that and it has been particularly strong in the last few weeks as it becomes clear to the listing is actually now very, very real. So i dont know. Maybe another theory is that they want to back stop in case china, u. S. Relations go south and things really get bad. Thats a little cynical. That may be playing into this. A lot of interest over there and possibly getting into alibaba. 25 times forward earnings, you know, thats pretty modest for a company that is still growing, what, 40 a year right now back to you. Bob, thanks bob pisani to the bond pits as well, check in with rick santelli. The ten year getting close to 1. 95 hey, rick. It is i listened to what bob said and, you know, there is a refrain some people refer to this refrain toward the fed, some to the market, some to both on rates. Lower for longer the cubs won a world series in 2016, carl and everybody thought there was going to be a dynasty. Well, whenever i hear lower for longer, i somehow think of that notion lower for longer might not be what it is cracked up to be. Just consider all these one week charts, which happen to also be month to date chart. Two year note, 12 basis points on the week. Ten year, up 22 basis points on the week along with a 30year bond. Yesterday many were talking about one of the most aggressive days since november 8, 2016, donald trump won the election. Not quite. We hit a nice update yesterday, almost ten basis points on the long end but on that day, in november 2016, we closed up 20 basis points on the one section after Election Results bunds, bunds and gilts, look at the bund chart, the gilt, theyre each up 14 basis points on the week. And finally there is the dollar index. It is up over 1 , whether you look at it month to date or on the week over a cent. And this is coming off of what was a horrible october with regard to the dollar index when it dropped double what it already gained back in the first week of november and finally, anybody who participated in the auctions, most likely is on the losing side of what will be settlement next week. We want to watch these levels closely. Carl, jim, david, back to you. Rick, well see you in a few minutes for some data. When we come back, the war on wealth, former Federal Reserve chairman blinder will weigh in on that. S p 3084 dont go away. We made usaa insurance for members like martin. An air force veteran made of doing whats right, not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa man can i find an Investment Firm that has a truly longterm view . It begins by being privately owned. With more than 85 years of experience over multiple market cycles. With Portfolio Managers who are encouraged to do whats right over whats popular. Focused on helping me achieve my investors unique goals. Can i find an Investment Firm that gets long term the way i do . With capital group, i can. 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Their awardwinning 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 its like my streaming service. Well exactly. Well except now, youre binge learning. Oh, i like that. Thank you, i just came up with that. Youre funny. Learn fast with the Td Ameritrade education center. Call 8662967451 or visit tdameritrade. Com learn. Get started today, and for a limited time, get up to 800 when you open and fund an account. Thats 8662967451, or tdameritrade. Com learn. As we said at the top of the hour, jim has a very special show tell us what we are going to see. We are going to speak to the troops these are great men and women who have dedicated themselves to our country. This is a school that doesnt fuel arou fool around. You have to be incredible in a athletics and academics. Here, it is academics first. Anyone more than Kevin Johnson that hires the troops the most and maybe jamie dimon. I would throw anthony noto in there and come pacast as well home depot home depot too and even for disabled all of these Companies Really care but kevin has been developing a new ex military program for stores run by military i think thats important jim, well see you tonight. Cant wait save travels home. Mad monday at 6 00 p. M. Eastern time david, it is called a windsor not. Ill show you how you do it. You shouldnt be wearing one of those jackets and no tie. You look ridiculous with a tie on at the military base. Why dont you wear your stupid tshirt on monday im ready for you, buddy more after this your employe thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Tell him were flexible. Dont worry. My dutch is ok. Just ok . This man is very bendy. Tell him we need this merger. He says he needs a hug. Its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Oh, wow. You two are going to have such a great trip. Yeah, have fun thanks to you, we will. Aw, stop. This is why voya helps reach todays goals. All while helping you to and through retirement. Um, you guys are just going for a week, right . Yeah thats right. Can you help with these . Oh. Um, were more of the plan, invest and protect kind of help. Sorry, little paws, so. But have fun send a postcard voya. Helping you to and through retirement. Whether your beauty routine is 3or 57,. Make natures bounty hair skin and nails step one. Its the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. Natures bounty, because youre better off healthy. Welcome back. Cme floor, breaking news wholesale inventories. The september final, which is the number we see minus. 3, we toss that and replace it with minus. 4 that is the weakest level with regard to inventory build going back to october 2017 the wholesale trade sales, that is unchanged sales looking a lot better, dropping inventory all of this going to what is going on with the notion of trade globally 95. 7, that is a preliminary read well have a final read in a few weeks. Thats the best read since july of this year when we were at 98. 4 carl, rates continue to stick to the upside but are starting to slip a bit under 1. 90 a key area we need to watch that closely. Rick, thank you welcome back im Carl Quintanilla with you. Reason for this stick up in the markets, the president now on the wire saying he has not agreed to roll back tariffs on china, although china would like him to do so that runs a foul from the comments we got from china a few days ago they warned us of the very same thing the disappoint risk it real out there. The road map continues with billionaire battle as Michael Bloomberg considers entering the race. Magic for the mouse house disney shares up for the quarter. And record setting week can the health of the economy support a continued rally . We did get the 10year close to 1. 95 this morning a bit of a dropoff as the president said hes not yet agreed to roll back tariffs. Says a china trade deal will be signed in the United States. Thats relatively new. Doesnt get more specific on the venue at least on this information. Clearly being buffeted by trade news echoing those comments that navarro made his point was dont look at roll backs more interested in delaying or postponing those due to kick in on december 15, trying to save ammunition for phase two or three. Which speaks to the whole idea of uncertainty in the markets. Something that has been lifted through the week now it appears there is a bit more uncertainty added with this new news today that there is no done deal yet. Right by the way, trade news around the world has been fairly constructive china exports were down but not nearly as much as the estimate germany had much better numbers. Weve seen a bunch of macrodesks today, it is bank of america chip prices and semiconductors maybe it does get back that is a reacceleration of the bull cycle much focus of what is going on in manufacturing right now, given what we are seeing overseas well hear a sound from the president in a little bit. For the time being, we are holding. Meanwhile, Michael Bloomberg considering joining the president ial debate. Good morning, Michael Bloomberg would be the richest man to ever run for president. Bloomberg sending staffers to alabama to qualify before the primary there. He has not made a serious condition but is considering a potential run. His net worth is 52 billion, the eighth richest man in america. Hes 17 times richer than the president. His fortune comes from the news empire bloomberg that he founded. Mainly focused on gun control, climate change, education and health care. He helped several antigun candidates in virginia this week they hope he can pull the party towards the center bloomberg said the wedge tax is probably unconstitutional and we shouldnt be embarrassed about capitalism Elizabeth Warren responded saying another example of the wealthy only wanting the system to work for them showing the calculator showing that bloomberg would pay 3 billion in taxes Bernie Sanders tweeting, the billionaire class is scared and they should be scared. More coming up, sara fagen joining us and more coming from the white house. Happy friday, good to see you. Sara, frank said this morning, if he had been advising bloomberg, he would have said to run as an independent. How much fert al youground is tr on the dem side . I kind of agree on this one bloomberg rightly recognized it is difficult to get on ballot as independent. It is easier to do it under one of the party structures. But i also think Michael Bloomberg has seen an opening. Joe biden has run a lack luster campaign rightly, many liberals in this country believe Elizabeth Warren and Bernie Sanders are too liberal to beat donald trump i agree with that. Hes got to take them head on and try to beat that mantle. Eamon, what do you think sorry, dont have him . What is your reaction . There is the hope that he could at the very least pull the debate back to the center and highlight how extreme Elizabeth Warren and Bernie Sanders are. His personal polling operation is one of the best funded and most sophisticated in the country. What that is showing him is, a, he might have a chance some of that could be ego driven we know people who are close to the former mayor and speak to him. Theyve said, he would do it if he thought he could win. Any idea what changed . Two things. Number one, he clearly sees that the current front runner is Bernie Sanders and Elizabeth Warren, do not have a chance against this president in the swing states the second thing is that he felt that their positions and policies could be detrimental to the country. There is probably more of an emotional quotient what has changed is the electability of the front runners and the desire to do Anything Possible to beat this president. You said moments ago, he should have run as an independent. He should have thought of that similarly, i cant win, there for i wont do it. Do you think he has a chance as a democrat i think he might. His polling operation is very good his team is very good. He has some of the best working for him. They will run a good campaign. I think it is a long shot. It is still very early in this process. We are going to see people up and down, december, january, february, march. This will go on quite some time. It is crazy to think this could go to a convention for the democrats. There will be many opportunities for him to gain share as other parts. If this gets down to a threeperson race. If hes the tbd moderate, hell be the nominee another comment made was potential support for bloomberg is invisible right now because some states dont give place to independent polling. I think thats right. I think some republicans would be attracted to. We talk about him like hes a moderate hes not he has moved quite far to the left not so much on Economic Issues you think about the soda tax, that is pretty far a feel from mainstream thought i dont assume he can be a moderate candidate in the end. At least in the democratic primary, hes a moderate he will do a better job litigating his argument than joe biden has. I think that is an argument the country should have. Hes right, people shouldnt be embarrassed by their success the front runners have demonized wealth and success and there is a lot of democrats and a lot of republicans very fearful of that the markets are moving lower by comments from President Trump that he has not agreed yet to roll back the tariffs. What is your take on how this process is Going Forward and what that means in terms of negotiating with the chinese well, the president as we know, you know, tends to be fairly open, fairly direct, says what hes thinking that is unusual in american politics and it has repercussions as you pointed out with the markets i dont know that it means anything it could be posturing to the chinese. It could be that hell change his mind at 4 00 today weve seen that before as far as the process itself, it is so unusual because it is so out in the open. Previously, there would be a very organized process where diplomats, more junior people ran this through in a private setting and a president only spoke when a deal was complete or once or twice during the process. Thats just not the way he does things as a relt, we spend a lot of time talking about it. It may mean a lot. It may mean nothing. When you look at polling and strategy, do you think bloomberg whether democrats or independents, can he overcome his wealth in this very populous, some would say pitch fork environment i think he will do well with his wedge. He does a lot for the Arts Education and helping sick people he should celebrate his wedgalth it would be ironic if that was the debate and it was a democrat that convinced the country that having wealth is good and paying taxes is fine as long as it is fair and proportional. He could maybe attract a lot of independents that wouldnt love the president. However, if the campaign is only about gun control issues, taking away big goals, health care for all. If he tries to compete with these democrats on issues of the left, hes not going to be successful the people who love Elizabeth Warren and appreciate her, hes never going to match her on that hes going to have to carve out a different piece of the democratic Prime Minister and be thinking more general of the people who may not support the president. Thank you you are always so good on this watching the debate central to us that is the wealth debate. A couple of other headlines. The president will issue the final statement on vaping next week and hes thinking about attending the may day parade in russia why would you do that okay two stops moving in opposite directions disney is up, what should investors expect on that streaming service. We had shares of gap are down following the ce os some what abrupt exit. Wh iats ahead for that company that comes next right here most people think of verizon as a reliable phone company. woman but to businesses, were a reliable partner. We Keep Companies ready for whats next. man we weave security into their business. Virtualize their operations. woman and build ai customer experiences. We also keep them ready for the next big opportunity. Like 5g. Almost all the fortune 500 partner with us. woman when it comes to digital transformation. Verizon keeps business ready. It has been a record setting week but the markets dropping now with the latest headlines on trade. Does the overall economy support the recent rally, we have more it looks to be positive for three areas but there are reasons for skepticism the first area is the potential of some kind of trade deal at least doesnt get worse but the market has been fooled there before second, the forecast that the u. S. Is at or near the bottom of the slow down and that growth improves from here third, Interest Rates remain low and staying on a high bar for rates. Growth to slow and it bounces back up to trend to 2 for the Second Quarter of 2020 there is a wide range of use here on how small the economy gets and bounces back. Ubs sees growth below a half a point before bouncing back in the second half. They wrote, the slow down is already in train from tariffs already implemented. Slowing down no further than 1 . Previous data pointed to a growing risk that ongoing weakness spilled over. That no longer seems to be the case indicative of an economy that remains in expansion both agree on this, the fed is out of the picture either with a cut or a hike for now. The december funds futures with just a 7 probability of a rate cut. So a back drop of perhaps improving growth not a bad back drop for a rally. Thanks for that our guests with us now, good to see you. Greg, given everything steve just said, are you going to chase this no, i dont think so. The prompts are pretty valid but the market has become more optimistic about a trade deal and potential tariff roll backs. I see trid more potentialally to the down side. When you look at earnings estimates is expecting a kind of strong rebound into next year, weve seen to be the lows in terms of corporate Earnings Growth the risk is to the down side, not the upside seen some others saying your bullish markets raising maybe your year end target a few weeks away rising yields create potential in q 1 i think there is very low possibility of Interest Rates breaking out at 1. 5 to 2 for the 10year. The fed learned their lesson in 18 by overtightening i think that makes a very positive back drop for Economic Growth to continue that is good enough for Earnings Growth to expand over the next year or two. Greg, youve been studying some of the down side risk to the 2020 elections of course the quarter where super tuesday falls. Do you believe there are candidates that could provide more of a risk to the markets ahead of the polling right now it is interesting in terms of next year is some of the breaths between the democratic field we heard about bloomberg potentially entering that race there is a huge speculation of what the democratic candidate could be and a huge gulf there a lot before we hit the iowa primary through to super tuesday. Things like large cap tech and health care could be impacted by volatility coming around that primary. Areas that could see more regulation the elections arent until november is this something that coincides with the primary or maybe there is a little break before the election there is potential itself and depends on the primary if we had biden or bloomberg winning the primary, there is much less market risk in the back end of the year if we have warren or sanders taking over, then the gulf looks massive. The impact could be much more material we think we should be focused on february and march and depending on what happens in that period, that may or may not drive volvo tillity. We had reports of the chinese deal being delayed and the president saying no we havent it is hard to knock the s p far away to 0. Are our nerves being deadened to trade headlines . I think they have become moderate what is more important is how u. S. Companies are positioned. Theyve never been positioned better i think the optimist are going to be rewarded over the balance of the year in spite of these uncertainties. Thank you have a great weekend when we return, disney dominance deals with amazon and apple and a surge of in studio entertainment. That pop up 26 on the year. Well discuss when squawk on the street returns. As your life grows, so do your needs. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . What would you like the power to do . I cowe can do theyour screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Good morning. Here is your cnbc news update. Mulvaney did not show up for his deposition hearing public hearings are set to begin next week. From morocco, ivanka trump weighs in on the impeachment inquiry. She shares her fathers view that the investigation is about overturning the 2016 election. To us, it has been like this from the beginning we are totally laser focused for wins for the American People at home, new york city is finalizingplans to relocate th famous charging bull statue. It will be placed somewhere near the New York Stock Exchange. A spokes woman said the move is being made to protect the safety of new yorkers always a big crowd around that bull thats the news update this hour back to you. Thank you. Disney is the big story today. Days before the new streaming sefrg is set to launch disney beating expectations on the top and bottom line driven by success at the movie studio and at its Parks Division analysts issue positive notes. The big news is about its streaming business bob iger announcing partnership with amazon and hulu and espn plus added more than a million subscribers last quarter disneys media subscription did perform better than expected i asked how much their streaming investments threatened disneys core business. We dont believe what we are doing is damaging our bred and butter we are doing a couple of things. Giving consumers an opportunity to watch sports in new, more modern and veconvenient ways. We are establishing a path for us to continued success or propertibili traditional Business Model be a transition we have to make one notable weakness was Hong Kong Disney which suffered a decline in tourism due to the protests if those trends continue, it could see a decline of 275 million in operating in that Parks Division in the next fiscal year. Back over to you thank you time for our etf spotlight looking at the Retail Sector one name dragging that sector lower. Gap, shares tumbling down over 7 after the Company Announced their ceo will be stepping down and be temporarily replaced by the son of gaps founder analysts begin to doubt the companys looming split of old navy and gap stock now down over 30 for the year certainly a pivotal time for a wellknown brand why the wealth tax would make inequality worse well get our guests take next you may have heard some billionaires on tv crying about that two cent wealth tax awe. Awe. But he wanted snow for thelace holidays. So we built a snow globe. Ill get that later. Dylan but the one thing we could both agree on was getting geico to help with homeowners insurance. What . Switching and saving was really easy i love you what . Sweetie hands off the glass. Ugh call geico and see how easy saving on homeowners and condo insurance can be. I love her more money . More problems. Costing the wealthiest nearly a billion dollars in 2018. But dont feel bad bullish as ever on billionaires. In the annual report, ubs writes, quote, the billionaire effect is alive and well across the world and shows no sign of slowing. What is the difference between the super super wealthy becoming 400 billion less wealthy versus the rest of us. Thank you for having me this morning here look, numbers look big percentage wise. It might be relatively small billionaire wealth decline to 8. 5 trillion. If we put it in perspective, it is up 35 . That is an additional 2. 2 trillion. You say it caused a lot of billionaires to put too much assets into cash are you advising clients to put cash into higher yielding areas . Our clients are doing quite a bit. Our clients may be ultraconservative. They take their risk and their business and the rest of their money may be in treasuries most are investment savvy are working with advisors are working in Family Offices are not in cash for large part they are diversifying for tougher times. They are as part of this research, we did the survey for 100 advisors around the world that cover more than 100 billionaires they are telling us a third of them have sold businesses over the last 12 months and 30 expect more to sell over the next year. They are turning around and investing that into a wide range of private companies so they are still investing but diversifying their exposure in terms of business and geographic exposure it looks like american billionaires are one place across the globe that didnt see their assets fall last year. What made the u. S. Stand out what did the u. S. Billionaires do right tech billionaires are concentrated in the u. S. We see some in china they saw their wedalth increase more than any other sector our numbers from the end of 2018 it incorporates the decline in the Fourth Quarter and none of the rekofcovery since then. China for the most part in 2018. None of that was reflected in the numbers. U. S. , did fairly better. Thats why you are seeing better numbers in the u. S not unimportant to keep track but why do you do this report beyond just finding out who is rich thats a great question not for billionaires to read but for everybody else billionaires are a force they are a small percentage but their Economic Impact is really big either through philanthropy, sustainable vesting or leadership through what they build because it creates jobs. Billionaires we follow employ 27. 7 billion people. Thats the size of uk work force. Thats pretty big. What we did in this report is not just quantitative but qualitative. There are lessons to be learned from the economic achievements not the kind of lessons like aggressive deal making, more how they stay level headed against crisis we have found a number of personality traits which we can all learn from thank you the president made a series of News Headlines lets hear a bit of that tape. A place where unemployment we have the best employment numbers weve ever had we have almost 160 Million People unfortunately you people dont want to talk about that. [ inaudible question ] theyd like to have a roll back. They didnt agree to anything. China would like to get a roll back not a complete roll back because they know i wont do it. We are getting along very well they want to make a deal more than i do. Im very happy right now we are taking in billions china would like to make a deal more than i would. [ inaudible question ] thats sort of the trade related conversation aim reporter this is a discussion of the phase one deal with the chinese the president announced as being more or less complete back in october. They are still wrangling what is going to be in that deal i asked if for sure hes going to meet with xi jinping this year he said well see. He also didnt commit to a meeting location they had hoped to meet in chile this month there is no doubt about when and where that would happen. The president committing that he was not planning to meet there we asked be leon cooperman the billionaire who suggested if the president cant change his behavior he ought to take a victory lap and not run again in 2020 the president said he does not know cooperman and that he should thank me. He said congratulations because you are doing so well under the trump economy. Defending his tenure and says his behavior has been driven by the media. In responding to cooperman, the president saying the economy is good any bad behavior ive had is because of the media the president saying he doesnt know cooperman, seen him on television that contradicts what cooperman told cnbc saying he was at a dinner and discussed amazon. Maybe the president not remembering that dinner where they had a conversation. I know cooperman has come on air before and even said he told the president to be more of a unifier. The president told him too much anger in the country it is too difficult to do. Finally, he was asked about micha micha Michael Bloomberg. The president calling him little michael saying hes going to spend a lot of money but will ultimately fail. The president saying he knows michael very well. Not predicting any success for him. Thank you for that. Speaking of billionaires, weve been talking about the war on wealth, we are joined by alan, always good to have you. We know income and equality has continued to worsen. I am curious to your response particularly as to Bernie Sanders and or Elizabeth Warren a little bit way way up at the top. They are aimed at the top. Very vary but maybe 50 million in wealth. Not many are up there in that strat sphere it is not all black. Not all white. What is your sense that has been a progressive tax and a lot of ranges. Would it be reinstating the estate tax yes, all of the above let me add something you didnt put on the list. Especially at the top thats a jar gone term. If he is sitting on unrecognized c Capital Gains and that passes to the children, that money never gets taxed that just passes on and seems to be wrong quite a bit of money just passes from one generation to another through the loophole is are there other types of policy measures we should be looking at as a way to solve this problem i think there is a variety of things you didnt mention transfer policy america is relatively stingy on the social safety net. We have it of course that does help mitigate itself regulatory policy will always have distributional affects. They tend to be scatter shot they tend to be redistributed. That brings you to a tax policy. Do you think that tax policy is something the American Public needs to see changed again we went through a tax reform two years ago. Do you think that is a realistic thing for this country it is a fair point. This model of taxation an old tax is a good tax there is some truth to that. I wouldnt want to shut that aside. The way you phrase the question. The public does believe that rich are not taxed highly enough and does believe that should go up tax rates on the upper income bracket. That is Public Opinion with only have trillion dollar deficits in part because of the last tax bill dont hear a lot about that, do you . We dont hear a lot about those. Doesnt seem to be a great focus on them . No. You have no doubt heard that republican deficit and when a republican goes to the white house, you dont hear a word about it thats true. Nobody is talking about it we were in the trillion dollar range for a while as congress tried simulate the economy out of that. There is a good reason for that. Paul tutor jones called trump the greatest salesman of our lifetime he convinced republicans specifically that running deficits was now okay. He called it the greatest sales man, i would call it the greatest con man of all time a difference of jovocabulary in your view of trying to address inequality of warren wealth tax to garner her support or get her elected in terms of what the public understands and cares about at least when they speak to polsters is, quote, taxing the rich to economists, that is a big deal these other things you mention about Capital Gains and realization of debt, that is in the wonky part some people are paying attention to that. They have some vague feeling it relates to those under tax bill gates said if you do tax too much, you risk more saying the u. S. Is a good place to do business do you agree i do agree you can overdo it and really kill the incentive to vest the kind of things you are talking about with the proposition of Bernie Sanders and the wealth tax, does he go up to 8 if we are talking about 2 estate tax or bringing the Corporate Income tax back to none of these are going to spell the death of capitalism. We used to live there. For a long time, they came america with higher taxes than we have now. Professor, always appreciate you taking time with us. You are welcome allen blinder. As we go to break, some of the Top Performing names for the dow on the week with dow inc. And disney. Some initial dropoff from the trump headlines a few moments ago. Down 51. Does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. 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Com more squawk on the street coming up. Welcome to squawk on the street. Rick santelli on the floor of the cme group, welcoming my last guest of the week, Michael Kushma lets get into it. Risk on. Stocks going up, dollars going up, Interest Rates globally going up one thing that isnt going up are corporate and high yield and Investment Grade bond spreads. Can you talk to that topic absolutely. The big change from this year to last year is that the fed cut Interest Rates three times more important, relative to what people thought in 2019, yield expectations dropped 150 basis points or more, the Business Cycle is ongoing were not going to have recession in 2020, probably not 2021 Corporate Cash flows will be okay, and we may have a trade deal as well those combinations are perfect environment for better performance in corporate bonds. And when we look outside the u. S. , many of the metrics seem to be improving slowly, but markets in europe and even japan, Interest Rates are moving up rather aggressively what do you think the reason for that is, michael i think the reason in europe is quite clear that ecb meeting in september hinted, strongly hinted that there would be no further rate cuts, that Monetary Policy reached the maximum ability to stimulate the economy, and it was up to fiscal measures to help the economy, Going Forward rates had bottomed, and we had a rally in august into that number at very low levels, since then had profit taking with somber Economic News as well supporting the idea that we have seen the bottom short rates, bottom in long rates, et cetera. Now, when it comes to risk on, theres a volatility issue what we learned is this issue of risk parody, it is a strategy, when volatility and asset class is low, institutions buy and hold more. When volatility picks up, they liquidity and hold less. I am hearing as volatility gets more aggressive in treasuries that that normal equity strategy is in play ined income fixed debt market. Are you aware and what do you think the ramifications are . I think thats potentially very true. A big positive strategy for 2019 has been levered long fixed income fixed income bonds that generate double digit returns and if you were levered, you could talk 20 plus returns era of declining short rates and falling volatility if volatility picks up, the levered position becomes quite challenging and can generate more negative returns than even equities can do, so you have to pair back. In addition, theyve been putting mortgages in the market. Rates go up and volatility picks up, they need to hedge which moves in a negative cycle. Meaning as rates go up, you need to sell more, which exacerbates Interest Rate movements. Thank you, michael. Nice to hear your thoughts Carl Quintanilla, back to you. Rick, thank you very much. 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