Transcripts For CNBC Squawk Box 20240713

S p down just over a point and the dow down around 27 points. A lot of this watching what was happening in the market. Seeing the facts and circumstances that yield has continued to pick up as well getting to washington lawmakers voting along party lines to impeach the president we have more now good morning the House Chamber got a little roudy as leaders from both parties made their final speeches democrats did not choose this impeach. We did not wish for it i see coming out of a president who will put his head down and do his job. He will put the American People first. Ultimately, both articles did pass on mere party line votes and the discussion has merely shifted to what comes next House Speaker was not committal when asked whether the democrats will send the article over to the senate she even got a little combative after the vote well make a decision when we see what they are doing on the senate side. That is a decision well make fluently the Senate Majority leader does plan to meet with Chuck Schumer on the parameters for a trial before the end of the week mcconnell is scheduled to update us on his plans about 9 30 eastern. Lets talk more about how that impeach process could impact the markets and your portfolio. Joining us is senior Portfolio Manager at qma and Portfolio Manager at nedham growth fund. Talking about how the markets at this point, if they dont see anything new, it is business as usual. How concerned are you and what would be the potential for changing things . Not concerned at all. It is kind of a nonevent it is virtually zero chance the president is removed i dont think it will change i dont see it as a market factor at all. What about you . If we can get past this and Start Talking about the economy and companies again. I dont think it is impactful for companies we are meeting with it is much more about trade when when does this phase one come in more on the impeachment piece. I agree, nonfactor at this moment i dont think hes leaving office but the question is whether you think this helps or hurts his chances in 2020 which i think will have a big impact on the markets i think you are right on. Also, does it change congress . Does this get a wave of excitement Going Forward this year that theyll take back the house. You think this stirs the base i think the public is smart and sees beyond this when you see them talk about how they didnt hope for this. This is something they started planning on inaugural day. This is a push i think it rallies the base. They would have taken any version they could get of this i think the left wing has absolutely wanted this from day one. Shee didnt want this to happen. She was pushed into it. She couldnt control the house dependent on which narration fit. The end goal was to impeach 45 they had hats on this. Selling hats and shirts on this. This was the end goal on this. A little weird, elon pointed out that they are not sending the articles quite yet they are waiting to figure it out. Does that drag this on longer . Yes, i thinks that the key. Ill direct this to you. Do you think this forces the narrative to be the donothing dems or does this force them to do something Going Forward to the point that this does impact markets we dont know how this plays out. I think it cuts both ways. It has to. To me, it is not clear i also could make the argument that potentially depending to how it gets dripped out and how the marketing takes place. The democrats that believe what they believe arent going to move. And the republicans, there is only an increment al amount. The question is whether the people in the middle look at this and hear enough good things or bad to decide im going to go with thens it very dependent on who the democratic nominee is thats why they went for impeach because they didnt feel Strong Enough about any of the field of candidates. They had to go with this im not sure i agree on that completely you think Elizabeth Warren is strong you think joe biden is a strong candidate . I agree that the Democratic Party does not have a clear, strong candidate i think there is a question mark about why they did this. I think there is a lot of people in the party that did this not because they believe they didnt have a Strong Enough candidate i believe they just want to get donald trump and win the next election. Thats also true. What we are looking at is are we going to have more probusiness policies because of this you mean after the election you are talking about nothing getting done between now and the election per se . Right we would love to see more investment come in right now, weve been going through that down turn where there hasnt been enough a couple of things have been happening. A lot of uncertainty out there and some executives pointing to the trade talks. The idea that we are going through this battle with china there are plenty of ceos that have said that is a reason china is a huge part. These are longterm decisions. Will we continue in china . If you look at certain sectors, retail other higher tech companies, those are moving out to avoid tariffs. The companies we are talking to are evaluating it. They are decisions they need to make but they need a little more clarity. When you see the market up as much as it has been in november an december. It is not about what is happening in washington but bottoming the manufacturing and the banks that have cut rates. The fact that we are likely to get better Global Growth next year we are going to give you an update on the trade war which is another issue now. China sayingov overnight that it is in contact with the u. S unveiling a new list of tariff exceptions for u. S. Imports. Details continue to trickle out. New waiver will go out december 26 the last one for the year covering six items, most of them chemical products. The content will be made public after the initial public signing. The program will address a trade deal in an exclusive interview today. That will happen at 10 15 on squawk on the street interesting we assume this trade deal will get something signed the lack of details spells out the lack of clarity and agreement on two sides between the fine details it is not getting more negative right i heard somebody say, theyve stopped throwing rocks and thats a good thing clearly, there are some still some major items that have not been resolved. Ip is a big item we need to continue to fight for. Forced transfers, it is ip, those are the main reasons the way we are getting there might be a different set of circumstances. The truth is no matter what we get done, even if we dont get done anything in short order, it is still better than it was because now the world has kind of seen that they have to diversify around this china supply chain you have to go to different countries. You cant put your eggs in one basket let me ask a shortterm question, i wonder in terms of window dressing. It has been a strong year for the markets. Is there pressure to sell in the final days so people can lock in the gains . No i see shaking heads. People want to push those taxable gains. If you are not a taxpayer, maybe you are window dressing. Pushing those an extra year may be a good strategy if you are waiting to buy, it might be a good year we view cash as strategic we are looking for opportunities to deploy it i see the market as strong between now and the spring the tone is really set for the year investors are going to continue to go with what has worked okay. Thank you both coming up, we have a lot more on squawk box. Harsh reviews not going to stop becky but harsh reviews for the Skywalker Saga will it have affect . No. Becky says no well see. Plus new details on why some parents are choosing to fight in the College Admissions cheating scandal. Well return right after this. Announcer todays big number, 8. 1 trillion. Thats how much the market cap of the s p 500 has gained since President Trump waeltes ecd. That is an increase of about 44 . May your holidays glow bright and all your dreams take flight. Lease the c 300 sedan for just 399 a month at the mercedesbenz winter event. Hurry in today. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. This one breaks my heart the first reviews for the new star wars movie are in and they are not great. Currently holds a 58 rotten score on Rotten Tomatoes some say that people have said instead of making a movie people would love it is a people would love not to hate richard ropper acknowledged the plot pit fall but still gave it four stars eventually to fetch 1. 4 billion to 1. 8 billion. My guess is that it is not going to stop the die hard fans. There are enough people that are so invested in this series and now with their children exactly yes. You are going to take them regardless of what the reviews are. The Rotten Tomatoes is the worst since phantom menace. And that stunk you will go we will go you will go. If you grew up as part of the star wars generation, you went the thing though for disney is that they have built these franchises and now have the Star Wars Center at the theme park. The hope has to be when you buy into a franchise like this, that you cannot just take the folks that grew up on it but build an entire new generation on it. I think our kids may be part of that our kids definitely are weve been Brain Washing them for years. There is an element to this there is a higher bar than to our children they are comparing this to what theyve already watched. This may be leaps and bounds above what they are already watching and they are getting hooked with the mandalorian there are all these tenticles. They have the theme parks there are so many different layers of this i dont think it hurts them im disappointed to see it as a huge star wars fan well see i also think these reviews. I wasnt concerned until i saw it was Rotten Tomatoes interesting it has the credibility for you. When are you going to see it . We were expectingsoon but i think well wait until next week i expect a full review. The wall street journal reporting a new analysis of one of the biggest questions in the College Admissions cheating scandal. Why some parents are holding out and others have pled guilty. Lawyers for some investors the designer and the actress arguing that the case isnt as straight forward as the government first claimed. Claiming the parents were diseved by the ring leader and others disputing the fact arguing that it fails to approve on the defense odds are that others that have pled guilty and completed those prison terms the people that cooperated early on got better offers now they flip back because they dont see the upside and are going to end up with long prison terms. Why agree to this . The prison terms were astounding when you start to look at what they did. What they did was wrong looking at how the place will play out she recognized what she did was wrong. Took her punishment. The push for the Higher Education for fewer and fewer spots. There are only so many spots for this we talk all the time about how it has to be equal opportunity when you have a mother and father that go to a certain college and it is a 40 legacy the bigger issue when we look at this. Figuring that gave them a better way of getting in. Thats the legal way the idea this was happening is a step beyond that even if you didnt go in the front door and do the legal cheating you go in the backdoor. It is cheating. No matter how you slice it. Thats where people finally said this is not fair. It is part of the inequality debate philosophical question would you prefer there be no helping legacy i went to a state school. I dont care i think the legacy angel of this, it should be everyone is on equal footing no legacy and no charitable contribution it should be anonymous. You shouldnt be able to put your name on the side of a building it smells. I would love to see one of the great philanthropy of our time give money to a school with that stipulation there are some schools now where students dont pay at all. The question is whether it could be completely legacy free charity. It is much harder to have any of those deals tabiking place well continue this debate. Coming up, countdown to liftoff. The next step in the mission to return to the moon well talk to nasas administrator after the break. At fidelity, online u. S. Stocks and etfs are commissionfree. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk apple card. Is a new kind of credit card, created by apple, so its simple and transparent with a new level of privacy and security. It lives here and here on your iphone, and it will save you 6 on Holiday Gifts at apple; like iphone, apple watch, airpods pro and so much more. Apply in as little as a minute, right in the wallet app. Apply in as little as a vo ute, in every trip. Theres room for more than just the business you came for. Whether thats keeping up with what you always do. Or training for something youve never done before. crowd cheering thats room for possibility. Welcome back instagram is banning socalled social media influences from promoting vaping products and weapons on their platforms ecig makers have been using influencers to push products anyway that will now end. This is the first time instagram has put restrictions stepping up and really taking on this fight, which they are getting kudos for. It shouldnt go without being mentioned that authorities were cracking down on the same day. They were looking into how influencers were promoting things and how Cigarette Companies were behind the move sort of behind it it is true this was a work around if you want to say that those influencers are advertising. They are half the time you dont know whether the influencer is being paid or not. They are. Just an assumption, they are being paid the way the system is set up, if im ive never had a better mug you have to disclose it on the thing. No one does hello, are we stupid if somebody tells me it is the greatest thing theyve ever used, unless i kind of know them the genuine influencers will say paid they are making millions off of it. Now there is a whole nether world of people selling the stuff. We all assume it. The kids dont assume it thats the thing where is the perception you are developing right when we come back, chips are on the move well break down microns earning report after this break. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Johnsbut were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Lower carbs. Lower calories. Higher expectations. The light beer youve been waiting for has arrived. Welcome back we had some breaking news from iac. We have it now crossing the tape iac spinning off match, its dating on line service that will happen and they reached an agreement to do that today. As part of that transaction, it will be a taxfree spin off. We had joey in here. The ceo of that company, probably two months ago now where we talked about the prospect of that happening this is really part of the iac model. Which is sort of build it or fix it and spin it out unlike the model of keeping it their idea is that they can run these better if they push them out. The chairman and Senior Executive at aic who is fantastic. He has a great track record of doing just that. Weve long said iac is an anticon clom rat. We assume match group as the seventh spinoff and will join the worth of 58 billion theyve done it very well. Match is well off the highs match has its own problem when you talk about fixing it or creating it . Wasnt it facebook that has gotten into dating it is the match with fake accounts they give you that fake trial period and whatnot that has been the latest for it. It was supposed to be killed by facebook it didnt work didnt happen interesting to see. You look at the other names here hinge, okcupid, tinder i know so many people who have gotten married or met off of that people dont meet in bars or book stores anymore. How much would you pay . How much would you pay to find your partner you also have to have faith you are meeting someone real there is the bait and switch type approach. We dont like it with cars and with spouses with people shares of micron jumping chip makers earnings and revenue. Current quarter outlook below estimates. Below the bottom of their performance. That stock is up we see it at 3. 7 right now. Also look at shares of western digital. Shares rose. Both of them following the beat. Nvidia up about one percent. Herman miller shares falling sharply. Current quarter outlook fell short. The revenue outlook was at the low end of the expected range. The company sited lower orders and demand across different industry it is down by about 11. 5 . Facebook advertising news out this morning not about ads on the platform itself planning to run its first Super Bowl Ad during the game. The 60second spot will star chris rock and Sylvester Stalone and promote the groups feature advertisers are paying up to 5. 6 million up from 5. 3 million last year this will cost them 11 plus million. Does Sylvester Stalone sleep in a freezer he hasnt aged in the last 20 years. Are you kidding me . You think he has. You mean all the work hes had done he looks a little different he looks good for his age. It is incredible. But facebook is the story here you cant compete with advertising the way facebook does it. Up 55 year to date. All the head winds have kind of dissipated you think the head winds are gone i dont know if they are gone but a lot of other head winds have taken its place with antitrust and other things on the hill with impeach that they are losing focus on attacking facebook you are still laughing about the stalone thing . I cant get past it i havent heard anything else youve said. All you are thinking about is his looks . Yeah. Hes a good looking guy we all age it is the world we live in. Good skin good skin good doctors yeah. Good doctors when we come back, 2019 said to be a record breaking year for csuite departure. And coming up our guest host ter Terry Lundgren its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. 2019 is on track to be a record year for csuite departures through november 1, 480 chief executives have left their jobs. Joining us now to talk about the challenges is ey chairman and ceo. Is this a situation where it is a coincidence or are there factors that make it tougher to be a ceo these days . I would say, im six months into my role it is difficult being a ceo. There are a lot of factors you deal with today you didnt have to deal with five, 10 years ago. Such as what . Lets talk about employees. When we talk about stake holders, there is a lot of pressure so employees today, employees are incredibly demanding. You have to cater and make sure you are acquiring the best talent that is not easy how much of that is a function of a very strong job market absolutely. It is a strong job market for sure talent in particular skills. There are skills that are really short and Everyone Needs them. In particular, around technology around Technology Like ai and blockchain and rpa and so forth. You have to be able to track those people those people are demanding demanding on the ceo ill tell you a story. I was talking to our people in new york, about 3,000 people, at an event last week we were talking about our new strategy at ey and so forth. I mentioned what we are going to do around climate. One employee stood up and started clapping, the entire room started clapping. That would not have happened not even two years ago one of the things ive encountered is what is ey going to do more to promote the environment . Not just ourselves but every client, period conversations i have with eu and here in the u. S. That sounds like more than just a situation where stake holders are rising up. This sounds like an emboldened work force that can sort of push you around and maybe thats a strong jobs market it is there is a balance to it one side is talent the oerther side is the overall climate. What is going on out there geopolitical there are a lot of pressures out there, pressures around growth the idea that you have to continue to transform your company. That has to happen regardless of all of the uncertainties and other pressures. If you dont, you are not going to be around activists have played a big role in this. Ive had few meetings with ceos and cf os that get up and think of themselves as the activists to think about what they need to do. To keep the activists at bay . What did you do to get the standing ovation at ey, this will be announced at davos, we are going to put a higher emphasis, someone at a higher role that will report to me in charge of what we are doing on climate, what we are doing for ourselves and getting people much more ininvolved. I think you Just Announced it here i know. You dont have to go to davos now. Thats great it seems to me the speed of change and expectation of being able to evolve have also changed drastically over the last five to eight years absolutely. Everything is much faster. Mostly driven by technology and globalization. We talk about nationalism and so forth politically. From a business perspective, it is more global than ever supply chains are global even if you are a startup, your market almost immediately is global thats different. How do you act as a globalist in a world that is becoming increasingly more nationalized we have over 280,000 people around the world, over 150 countries. We get caught up in the nationalism versus operating globally for ourselves and our clients. You have to believe that business is always going to be better with open borders with the ability to operate globally. Tha thats what we tell our clients and what they tell us. We push that way it is not easy there are barriers we talk u. S. And china china and hong kong. Those are barriers when we operate across borders but we do it we have a culture in terms of our people working together and that helps really to see you see you in the mountains. Yes see you at davos coming up, maybe you want to stay for this one. The sec proposing a new rule that would allow more americans to buy shares in private companies . What does that mean . Well discuss that and more with a top investor announcer dont forget to subscribe to our podcast look for us on Apple Podcast or your favorite podcast app and subscribe to squawk pod today. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Welcome back to squawk box this morning 12020 right around the corner. And with the new year, a new decade coming some new public listings some of the highly anticipated public entrants, post office, palantir devin is the managing director at Venture Capital firm inside partners good morning good morning. Before we get to those names, i want to ask you about this story. I dont know if you see it here. Front page of the wall street journal. Can we get that right there . Okay, nice s. E. C. Moves to expand private market access. And the whole idea of this is that historically, as you know, so many of the gains have come in the private markets and frankly, its felt like the public has been left holding the bag. And im thinking now of uber and lyft and some of these other i. P. O. S. Historically you had to be whats called an accredited investor, somebody with a Million Dollars or more, there were rules around it now the s. E. C. Is frying to open it up to democratize private markets. Is this a good thing or not . And the reason i mention is im starting to think about wework had you owned wework in the private markets, you might have thought it was good, but you didnt have the detail and it wasnt until the detail became released publicly in the s1, that people really appreciated and understood the challenges that business had importantly, even those that had the details didnt make the best decisions first id say there is a flaw the public actually doesnt have access to these investments. You look at us, our largest investors are pension funds, and there is a massive amount of pension money, endowment money that is invested right, but managed by professionals. Managed by professionals. Were talking about the idea myself, my mother, my father look, its a debate between Investor Protection and access, right . And there is a view that would say theres lots of smart people and theyre not all rich and they should have access to investments. And the argument before this was they couldnt get access until it was handed ore to Retail Investors and as a result they were left holdth the bag. The inequality, you cant get in on this stuff. Personally i think its dangerous. Personally, you think the average joe should have access to these things . The problem is i dont think the average person is going to get access to the information they need to make an informed decision and if you look at Venture Capital, just as an asset class over a really long period of time, the returns are actually fairly concentrated and not lots of firms even professionals with access to lots of information its the definition where andrew started out, what is a credited investor. It used to be 200,000 of income, 300,000 combined with your spouse and you had to have a million in assets excluding your home. But now theyre trying to do the angle of education right where if you are sophisticated enough but who is deciding whether youre sophisticated . Is there a test, is there a series that you have to take what theyre talking about doing is not inflation indexing. Just with time, 200,000 is a lot less money, Million Dollars in assets is a lot less in ten years than it is today just by natural, youre going to have more people but i dont think what i didnt see and ive only read the article, i havent seen the documents i dont see the other side, which is how are we going to make sure that people have access to the information. The s. E. C. Does a very good job of making sure before you buy Public Markets you made the point. Look at wework, people had the information, thought they had the information, they were credited investors, smart people, in quotes, involved in this there were agents and they still made the wrong decision. My view is that i just think its very hard to create a Market Structure where small investors are going to get access to information, unless they make an informed decision put aside the fact professional investors may or may not do the same job with the information. How could it be worse than the situation at hand where theyre buying stocks that already reached maximum valuation, and theyre left holding the bag anyway whats the risk to buying at a cheaper valuation i understand, just to push back, though, how do they get huertrt more in this scenario holding the bag after everyone has made their money . To me the middle ground would be now going having read the proposal, im kind of riffing here i think the middle ground would be large Mutual Fund Companies created significant pools of capital that were professionally managed and allowed access for, in effect, a fidelitymanaged private equity fund that invested in these types of companies. I can at least understand youve got some those people are going to get that data weve got to run. We mentioned all those companies before when you first came on. Real quick, palantir doesnt go public until 2020. Airbnb airbnb probably does. Were not investors in any of them airbnb i think does go public. Palantir does go public. Post mates, i dont actually note i think it has a challenging comp universe right now. I cant remember what the last one was. Dee dee on the list others next year will be a good year for Public Markets i would other end this this. This year is the year of the enterprise and not the year of the consumer the question is will it be the year of the consumer happy holidays. Thank you for coming in. Thanks a lot. Take care you, too. When we come back, our guest host for the next hour is former macys c. E. O. Tery lundqvi gren. He will tell us which he likes well be right back. When it comes to your customers expectations, theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Good morning, welcome back to squawk box right here on cnbc im Andrew Ross Sorkin with becky quick. Joe is off today in studio for the hour, Terry Lundgren , former macys c. E. O. , in a full suit looking good. Thank you so much and youre looking very good, too. I like the new look. Were trying to test out some, you know, be a little terry noticed he walked in and noticed immediately. Noticed immediately who are you wearing today this is corneliani. This is bloomingdales items, very special and its a great brand. There are so many great things to choose from were going to talk a lot about retail with you in just a bit. We want to get to the u. S. Equity futures at this hour. Show you whats going on at this hour dow looks like it will open up 53 points higher s p 500 well call it 4 1 2 points now nasdaq looking to open a little over 12 points heres whats making had headlines at this hour the house of representatives has approved two articles of impeachment against President Trump. The question is what will happen next and when. House Speaker Nancy Pelosi says she may delay sending those articles of impeachment on to the senate until the two sides Reach Agreement on exactly how a senate trial will be conducted iac has announced plans to separate dating Service Operator match group. Iac is currently holding a controlling stake in the tinder parent theyre going to be spinning that off as they have done with many other of their businesseses before that to this point. Barry diller making the point they are the anticonglomerate they like to spin the businesses off and they have 58 billion in market cap in the businesses theyve spun off to date match group shares up 5 and a quarter percent on the news. And the transaction is expected to be taxfree of the spinoff of the two companies, anticipate completion in the Second Quarter 2020. Moodys has cut boeings debt rating. That comes after the jet maker suspended production of the grounded 737max jet moodys says it sees longterm risk to the companys reputation boeings debt rating is still Investment Grade even after that cut. The stock this morning up by about 7 10 of a percent. And a big vote today on the trade front. The house expected to pass usmca. Kayla tasha joins us from washington with this developing story. Good morning good morning. It will be a stark contrast to the bitter talks of impeachment which fell among party lines last night they expect not just to pass, but a landslide vote thanks to the top trade official from a republican white house, adding in democrats provisions during negotiations the deal will see the u. S. Take in 3 billion in tariff revenue, thanks to auto makers choosing to pay higher levys at the border instead of sourcing more parts from america that adding to the International Trade commissions april report adding the pact would add 176,000 jobs and add onethird of a percent to gdp. One reason moderate freshmen democrats in the house are pressuring Mitch Mcconnell to take it up before the end of the year, saying, quote, we have completed the heavy lifting of negotiations and compromise and will send you a bipartisan trade agreement the president himself supports uscma cannot end up in the senates legislative graveyard the senate is not expected to take up usmca for a vote until after an impeachment trial Senate Majority leader Mitch Mcconnell said in no small words a couple weeks ago that he would not be taking this up before they broke for the holiday recess andrew okay, Kayla Tausche in washington this morning. Im sure well be talking with you more soon. We want to talk trade and economy with our guest host Terry Lundgren. What do you make of the situation . Well, i think its good news. Any trade deal is a good deal, right . And im not any trade deal is a good deal youre right. Lets just say these have been sitting in the negotiation ring for a long, long time. To have something that looks like its concluded is a good thing. Some certainty around what the agreement is i dont know enough about whether youd say this is a phenomenal agreement or not. I disagree with that. I think any deal i agree with his first statement. You think any deal is a good deal he abetter than where we started. Any decline in aggression is probably good news for businessmen sitting on the side lines, dont know whats going to happen. This has been a bipartisan effort were talking about force transfers, i. P. , both sides of the aisle have thought about this its only been politicized as of late depends on who is at 1600 pennsylvania avenue. But any deal lately theyve been in favor of this, too democrats are just as hard on china if not harder. So this has been, as i said, a bipartisan issue so any deal that we can get starting from here and even incremental at first this is a big deal because we just passed the december 15th deadline when a lot of those additional tariffs were going to be put on goods that consumers buy directly that would mean bad news for the consumer bad news for retailers no question about it. And the people were worried about retailers, but consumers should be worried about this if were not going to get a deal. Our countries, china and america, are too important to each other to not get a deal that makes sense for both sides. Both sides can live with ive been wrong about this ive said for a long time this deal is going to get done, its going to get done. It just makes sense to me that it should get done for both china as well as for the United States so i still believe that something is going to get done and were all going to feel better about it. And at the end of the day, its really important for consumers that we not get to this point where so much of the product thats coming to us is being taxed. Theres nowhere else to go people are trying to theyre trying to move to vietnam, theyre trying to move to indonesia. Theyre trying theres no way that were going to be able to move enough production out of china to make a material difference in the potential pricing impact, and thats why some type of deal, were hopeful, will get done in china as well. Were going to continue this conversation right now for more on whats next for the president and the u. S. Mca, a vote later this morning, want to bring into this conversation senator kevin cramer good morning to you, senator good morning. Good to be with you. Good to be with you you have been an advocate of this plan. I saw that you were congratulating the president on this particular deal what do you think it does to the larger u. S. china trade talk well, first of all, i think it creates momentum. I dont think you can under estimate the value of momentum good things follow good things this phase one part of the deal is very good for my state of north dakota because were an agrarian state we produce a lot of energy, we produce a lot of food and fiber. There are a lot of people who eat and consume in china so this is very, very good for the midwest, and particularly for states like north dakota the other thing it does, andrew, sometimes we dont talk enough about, and that is it creates momentum for the next trade deal whether its with the United Kingdom post brexit, whether its with the European Union every trade deal we accomplish creates momentum and leverage for the president dealing with other countries. Senator, one of the questions weve been trying to handicap this morning is the impeachment that took place yesterday. The markets seem to be shrugging it off what do you think the larger implications are politically over the next year so, its an interesting question, andrew i think the markets are a pretty good reflection of the public, and that is that they baked in it was going to happen i think they also baked in when the adults on the other side of the capital here in the United States senate take control of the situation, well be able to restore some order i think that the markets and the voters and the citizens, the investors, the worker have baked all of that in and have a great deal of confidence and thats why i think its a bit of a yawn as serious as it is its historic even as flawed as it is. I think its going to be a very good year for the United States. Senator, how confident are you in what you just touched on, that the other side of the aisle does come to the table now, especially leading into the elections where President Trump has called them the donothing democrats . Are they forced to the table, to the negotiation table and we start to really see substantive policy changes well, its a great point because obviously when democrats control the house, republicans the senate and the white house, everybody wants to win reelection to at least maintain that so you would think theres a political incentive even for Speaker Pelosi frankly, i think much of whats happening with the usmca today is a result of whats happened yesterday with impeachment in other words, i think Speaker Pelosi, shes wanted an off ramp off of impeachment before it began. But she has this radical rambunctious group that insisted on it. I think the payoff for that, for the moderates, lets do this trade deal, lets make it look a legal more progressive and they did that and so i think the give and take is played out right in front of us the last two days in a rather dramatic fashion hopefully we can do it in a less dramatic fashion next year but there is really no stopping the momentum, i dont believe, of this economy, which is going to be very difficult for democrats to run against President Trump with senator, to that end, we were trying to also handicap how this plays in 2020 in terms of what the impeachment does does it fire up the base on the republican side . Absolutely does it fire up potentially the Democratic Base . Absolutely but what does it do to the independents in the middle thats a great point because youre exactly right in my lifetime anyway, i havent seen both bases this gined up. Who that benefits its hard to say. It is the independent in most elections makes the final decision and independents are frustrated, rightfully so, by the process they saw play out in the house of representatives, which is why its so important, i believe, for the senate to not only have a fair and full process, but one that looks fair and full in other words, the people have to have confidence restored in our congress otherwise were going to see an impeachment every four to eight years in this country if we dont restore the higher standard so youre exactly right. Its the independents. Not just nationwide, but in those swing states, certainly obviously in those electoral states like places like ohio and michigan and indiana and pennsylvania theyre the ones that are going to make this theyre going to make this final decision but you have the individual congressional districts around the country where you hear about the 31 democrats in trump districts. I think its closer to 50 democrats and trump or leaning trump districts. In a wave year this could be are in jeopardy, and i suspect theyre going to be working very hard to try to restore their reputation senator cramer, 2020 is going to be a referendum on a lot of things we appreciate your time and perspective this morning happy holidays my pleasure merry christmas. When we return, its clicks versus bricks. Our guest host former macys chairman and c. E. O. Terry lundgren on the retail wars amazons dominance and what it means for the malls. In the meantime check out the futures this morning mixed day for markets yesterday. The nasdaq ended up for the sixth day in a row the dow and s p gave back towards the end of the day the dow futures indicated up 52 points quk xilbeby0. Asdaq 1 sawbo wl right back. The Retail Sector trailing behind the Broader Market this year, gaining 11 compared to the s p 500s 27 . Joining us right now to talk about the state of retailers and the consumer is our guest host for the hour, Terry Lundgren. Hes the former macys chairman and c. E. O. Terry, it has been a continued year of fallout for retailers. This seems like one of the fastest changing arenas, you watch technology affecting just about every sector sure. There are winners and losers just like there is any in any point in time when the consumer is strong, yet the overall business is generally flat in total. Pie is not growing so theres going to be winners and losers but the real winner here, becky, is the consumer because the consumer is getting their product faster theyve got complete pricing transparency they can set high demands on their own demands on what they expect from the retailers and get it life is easier. Exactly thats what brings that tremendous competition and, of course, innovation and investment in technology to make it easier. Terry, everybody worries about paying higher prices when we talk about tariffs. When i go to the store, everything is on sale. I dont know where this is coming from or how much leverage a lot of these companies have over their supply chain. And i think thats what it comes down to. The bigger ones have total control over it and can eat those costs or have someone eat those costs, but we havent really seen that enter into the retail customer having higher prices why is that . Well, ive been in the Retail Business for a long time, and i dont remember the last time that apparel prices actually went up. So because theres always improvements in the production process, the supply chain to get pricing down of course, youre competing with others so to your point, you know, its a combination of who pays for that does the retailer settle for a little lower margin or does the manufacturer settle for a little bit lower margin at the end of the day, the apparel pricing in particular has not gone up in a couple decades. Every analyst who comes in talks about the death of the mall, about how the stores that are based in the mall are seriously struggling theyre not sure how they can turn that around thats not to say every mall is going out of business, but youre looking at a lot of malls that are no longer frequented. Traffic numbers are far down thats a huge issue to companies that have built up this infrastructure in malls across the country. Whats the solution,whats the answer well, first of all, the fact is it starts with theres just too much retail space in america. I mean, america is way over spaced relative to europe, relative to asia so we start with that base we should have more space because americans buy more but not as much as we do what numbers 23 1 2 square feet per capita in the United States that compares to less than 5 in most of the developed Europe Countries and even in china, its less than 5 a lot of people there, but on a per capita basis, thats relative and i think canada is 16, australia is 16. But 23 1 2 is just simply too much has to be a contraction. Certain companies are doing that voluntarily. Macys reduced 20 of their stores two years ago it was the right decision. Every one of those stores was cash flow positive today youre seeing stores like forever 21, pay less sears, not voluntarily closing stores, but doing it in reaction to the need. So the good news is that over time, supply and demand is going to come back to normal once again. Thats going to be actually good its going to be a painful process. Its going to be a painful process and its not over. But at the end of that period of time, its going to be good for those who have survived the challenge of these next few years. Thats what i feel and so ftheres going to be winners and theres going to be losers if you have a strong Balance Sheet youre going to be in good shape. If you dont, youre going to have a tough next few years. How has amazon changed the Playing Field . We watched as walmart and target have done pretty well ramping up against them i know macys. Com has been an important part of the play, too. How do you compete when they are changing the parameters every year this year its like free oneday delivery, free next day delivery heres the reality. Again, consumer wins because the consumer doesnt care that amazon doesnt make money when they sell you a sweater. They dont care about that were psyched about that. Youre psyched about that thats actually, again, good for the consumers. The retailers have to compete with that. They dont have Cloud Services that can, that can offset their profit margins, right. Aws, right. So but its the reality. You can complain about it, but the reality is youve got to compete against that so for the consumer, amazon has been actually good for getting retailers to become more aggressive, to make sure their supply chain is working, make sure theyre investing in technology, doing all those things that are important, ultimately putting the consumer at the center of their decisions. How do you feel as a merchant on the other side of this . Even though with the thirdparty merchants on top of amazon, where theyre feeling like you see the arguments being made all the time all of a sudden their products are being copied amazon is seeing that this mug is selling well. Therefore, they make a similar mug. Or they see that tie, they like that tie, they make a similar tie. Yeah, exactly retailers are doing that as well thats always happened. Its always happened. Its called private label. That was always a basis should there be a different given the scale and scope of amazon im not making the argument, but i wonder given the larger antitrust case or at least investigation thats going on into all of these Big Tech Companies, whether you think this private label idea is going to somehow change . Well, i think actually some version of private label or exclusive products is actually the key to growth for retailers in the future because if you have the same identical product and its everywhere, its sold at all different stores, theres one thing that will make you different and thats price and so if you want to lower your price and you can do that dynamically while the consumer is looking at your site, you can change your price. If you do that ultimately, theres no bottom, you know, because somebody is going to keep going lower and lower and those many of those companies, andrew, are going to go out of business again, the consumer is fine with that because theyre getting that purchase and making that purchase tradable and actionable, if you look at macys, where in the world is macys a 5. 1 billion company . I know we talked about the real estate angle its got to be worth four times what it is now what is the end game for macys you talked about the shrinking Square Footage what does it look like five years from now well, first of all, i think thats an excellent question for the c. E. O. Of macys, but ive been away from the company for the last two years what would you say it should look like five years from now . All im going to say, steve, is that i think walmart and target and others are trading at 24 times earnings. Macys trading at, what, five times or Something Like that so theyre making money. Theyve got a good Balance Sheet. You have to decide as an investor whether you think this is a good time to buy or not but actually i think for those details about what its going to look like, i know jeff gannet is going to have an investor meeting in february. I think people are looking forward to hearing that. Hell answer those questions for you. Terry, let me ask you you just laid out the reason for why amazon has been so great for consumers. Theyve driven prices down, forced other retailers to follow suit and make things easier for the consumer theres a lot of talk in washington i wouldnt say its been great for retailers. Its been great for the consumer and walmart theres a lot of talk in washington about busting up amazon and some of the other Big Tech Companies in the past its looked at its been looked at, you know, if its too big, its been looked at as a reason because consumers suffered because of a lack of competition. That would not be the case in this situation thats not the case in retail do you think amazon should be broken up . No, i dont i really dont think so at all and i look at companies you mentioned earlier like target and walmart who are doing fantastically well in the world of competing against amazon, taking them on headon, differentiating their strategy the reality is, becky, 90 of all purchases are still done in a physical store amazon is half of the Online Business so they have 5 of the market. So theres a lot of business out there. And i think Companies Like particularly like target and walmart are making all the adjustments, not just today, but have been for the last few years to get to this point investing in innovation and theyre doing a great job. I think Companies Like that are going to really excel in this quarter and forward into 2020. And to your point, walmarts twice the size walmart alone is 10 of total retail sales exactly and walmart and target, heres the beauty frankly, i think both of those companies have been slow in their online capabilities. You know, macys has been very advanced on that subject walmart and target have been slow now theyre putting their foot on the accelerator i like that. Wall street is rewarding that, too. Youre darn right it is its a good thing to have a low percentage of your business in online to date because theres nothing but up side for you. And those two companies have done a brilliant job of totally changing that. Walmart was up 40 in their Online Business. Thats a big base to begin with. And 40 on top of that, they probably wont be up that high this quarter, but know that online sales are significantly higher percent of the total business in the Fourth Quarter than they are in the first, second and third so its a lot of reasons youd be optimistic about companies that are putting their foot on the accelerator and growing aggressively the Online Business Terry Lundgren is our guest host this hour well have more from him in just a little bit coming up, stocks on the move ahead of this mornings opening bell, also a programming note. Dont want to miss this. You can catch treasury secretary Steven Mnuchin live on squawk on the street. Its going to take place at 10 15 eastern time this morning. Squawk returns right after this announcer time now for todays affleck trivia question. How many Real Christmas trees were sold in the United States in 2018 . The swaner when cnbc squawk box continues because Health Insurance doesnt always pay it all. 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With the galaxy note10, you can shoot, edit and post thumbstopping videos, all from one device. Samsung business solutions. Announcer now the answer to todays aflac trivia question. How many Real Christmas trees were sold in the United States in 2018 . The answer, 32. 8 million real trees. Just looking at a live shot of the tree in 30 rock right there. Happy holidays, everybody. Are you in the holiday mood . I hope so. Meantime, the first reviews of the new star wars movie, they are in and they arent particularly great star wars rise of skywalker currently holding only a 58 rotten score on Rotten Tomatoes. Rather than making a movie, some people might love jj who is trying to make a movie no one would hate as a result you dont feel much of anything at all critics also said the rise of sky walker said they tried to fix issues fans had with the last jedi. They acknowledged the pitfalls, but called it a solid film give it a 3 out of 4 stars the movie expected to haul 21 million. None of this is holding back the quick family, becky ready to go over the weekend im going to go see it as long as theres no jarjar binks in it. Were fans, have been for a decade, were in still to come on squawk box this morning, what is driving Holiday Shopping this year weve got the latest results of the cnbc allamerica survey coming up. And then democrats descend on los angeles for the final debate of the year a preview of what to expect tonight is straight ahead. Plus, the president impeached by the house what comes next . Well talk about that with senator pat toomey squawk box will be right back. Have you ever worked with dr. Francis . Oh yeah, hes ok. Just ok . Guess who just got reinstated well, not officially. Nervous . Yeah. Yeah me too. Dont worry about it, well figure it out. Ill see ya in there just ok is not ok. At t has americas best network, now with our best plans, at our best prices, starting at 35 a line for 4 lines. New from at t. You still have service . Call the Insurance Company sfx [phone ringing] its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool welcome back to squawk box this morning want to get over to dom chu who has the top market movers. Dom. Can i say i love the sweater look on you. Thank you it was the focus of a lot of talk among the newsroom this morning. I then asked my boss, our managing editor lacy otoole whether i could wear a swert on air. She looked at me and said no trying to mix it up its the holidays. Thats the problem, you asked. Beg for forgiveness beg for forgiveness. Im sorry, i wanted to say i love the sweater thank you guys very much you cant wear it either. Thats why i just ended that. Well see. Thanks, guys, very much lets get started with a check of shares of cisco up 10 shares of premarket volume this is the computer of networking and not theed food distributor. It was an equal weight before. The target is 53 bucs. Its 47. They cited switches and routeers, and security and applications units valuations are also attractive given the 20 drop from the highs we saw in july the share is up about a percent. Next up you have shares of apple which are down marginally. They are moving a little unchanged. Roughly 35,000 shares of volume premarket. It did hit record highs yesterday. Analysts at j. P. Morgan calling it their top pick for Technology Hardware for 20120 they cited good market position with smartphone sales and early stages of broader 5g roll outs which will drive user base services and all the stuff that goes along with it so thats a stock on the move. And then were going to end on shares of colgate palm olive down fractionally shares of premarket volume Consumer Product Company Behind tooth paste and dish soaps downgraded from neutral to buy at bank of america target price is cut to 74 from 77 they cited market share losses in tooth paste and tough comparisons Going Forward after a good year this year. Thats getting outweighed, outweigh strength in pet unit. Those shares down. My nonsweater self is going to send things back over to you dom, i think youd look good in a sweater i may not be able to wear a sweater. Im for sure going to wear holiday ties monday and tuesday. I have a plan my self maybe we can match we wont see it with your sweater on no, no, the tie needs its own with no sweater otherwise it would be covered up. Its own canvas. We have a fashion plate right over here. Terry, what do you weigh in on the holiday tie good look, easy . Totally cheesy. I think theyre great for parties and really . Trying to make a statement. But totally cheesy you know, my former company sold a lot of them. In fact, i think youd look great in one of those holiday suits. You know that Christmas Tree holiday suit corduroy pajtnts. Candy cane corduroy. J. Crew has a tuxedo blazer, satin lapels, but then a tartan red situation. Be careful not to be ever photographed in that [ laughter ] you dont think thats a good idea i just made the statement i think it would be fun for christmas parties. Totally cheesy and it would be great for you thats what he just said during the commercial break ill show it to you. Its online. On sale. I think i have the visual, but youre welcome to show it to me as well dom, thank you. Well check in with you again soon in the meantime, when we come back, shoppers are spending. With upbeat views on the economy, jobs and the jobs market and the stock market, americans can expect more presents under the tree this year were going to hear from macys former chairman and c. E. O. Terry lundgren. The president ial debate, what can investors expect as democrats tackle topics like taxes, the economy and much more squawk box will be right back. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Upbeat views on the economy has americans saying they will spend more this season Steve Liesman has more on the survey hi, becky we had a bit of september swoon. Peoples attitudes on the economy has come back strongly that seems to affect their attitudes about how much theyre going to spend 20 now saying theyll spend more that is a record in the 13 years weve been doing this survey looks like a low number, but its a pretty high number. And 51 say its the same. Thats actually a low number because they moved over into the spend more column. And just 27 , thats a pretty average number saying they will spend less of course, we want to know how much theyre going to spend. And im not sure what to do with these exact numbers because it is down, but notice the shift upwards from 2016. Weve been above 900 now for three years in a row thats 900 per person theyre going to spend on gifts. Of course, were interested in why are they spending. No big secret here 51 say their income or a family members income is higher. I like the second answer some of them have bigger families, they have to spend more 7 like the deals, but 6 say its because of higher prices. The key question weve been asking and tracking for many years and im really excited Terry Lundgren is here to talk about this later, where are they shopping the dominance of online remains, but it hasnt changed. The 43 say whats your top choice, your top one or two choices . They say online. And then followed by big box all of these first three categories have maintained their percentages over the past three years. After the big change it registered five or six years ago, well get to that in a second 14 Say Department stores, 12 say locally owned nonchain stores now, as to the online destination, there is no question 35 say they go to the amazon website. Everyone else, we ask for walmart. We ask for macys im sorry, terry, i didnt mean that personally the company. I used to work there. And everyone else is 3 or lower. Now, terry, im confused by this data i feel confident in it because we have a threeyear running track where this online destination has ratcheted up to 40 to 45 , but it hasnt grown any more yeah. So either the big box guys and the Department Stores are doing a good job theres the tale of the tape i created this is just for the discussion with terry watch what happens 2013 to 14 thats the year that online overtakes Big Box Stores and then i shifted ahead just to keep it tight. 17 and 18 and 19 theyre the same, 40 . Terry, whats going on is on the money not growing . Is our data wrong . Im open to any suggestion no, well, start with the base and the base is that 90 of all purchases, 89. 5 by Third Quarter of this year, are still purchased in a physical store. Different categories change. Right so apparel, its 80 and 20 is being done online, right . So you start with that base. Theres still a ton of business being done in the physical store environment. Secondly, weve now are developed, were developed in online purchasing. When youve got a lot of these companies have been 20, 25 of their business is now online a lot of these Department Stores so its already developed. Harder to grow on a welldeveloped i commented earlier, steve, before you got here, that i like Companies Like walmart and target who actually under developed their online sales, but aggressively funding that growth and those businesses are growing. We havent talked enough about fedex and the shipping component of this really with amazon doing what its doing in terms of building a true logistics and infrastructure, can the others ever really catch up and will the pricing become a problem for them well, i think the answer is these are sophisticated experienced companies, already have a track record on shipping and delivering but the games changed because it used to be i think fedex, i can get it to you in three days thats awesome well, thats no longer acceptable and target is pushing hard for sameday dlelivery from their stores now, the last few days. Walmart doing much of the same thats who theyre going to compete with the answer is i think its going to be like Department Stores i think its going to be like retail theres more and more competition. Prices are going to be lower, consumers are going to benefit not everybody is going to win economically with these models andrew, i want to ask you a question you cover tech so closely. Isnt whole tech space priced for neverending growth in market share market share . Is the tech world priced for the idea that that 45 who say online is my top choice is going to go to 50, 55 is the market, Big Box Stores found a way to hold their own in this competition i dont know about that i think there is a sense that the pie will grow materially and that ultimately the guys in the bricks and mortar will lose. Except for that amazon is doubling down and buying bricks and mortar by going into whole foods. Amazon realized just what i said theyre only getting a small percent of the opportunity, so they want to get in the bricks and mortar thats a more efficient way to do it. Thats the argument. Youre starting today and you can build a green field, a new model, the answer is yeah, that would be awesome in a decade from now lets hope we are, lets say were sitting here a decade from now by the grace of god by the grace of god what do you think amazon will look like in terms of the bricks and mortar piece oh, i think theyll be a significant player in bricks and mortar and theyll be in multiple categories besides food which is their primary play so far. I think they will take i think they willdefinitely they could actually buy someone. It would be easier for them. But i think theyve resisted that because of my point earlier, theyd like to start from scratch and have their own new model and ideally that would be built from scratch as opposed to when becky and i sat across from each other in the 90s in wall street journal, she covered retail and i covered the economy, retail was the sleepyest least interesting business now by the way one of the most dynamic technologically interesting and changing businesses out there. Sea keep in mind back then they thought walmart and target were dead best buy were dead remember those stories look whats happened now in the best part of the story you guys could have said to each other, if we were sitting around the table a decade from now look, two decades later. We argued about christmas every year we have to run steve, thank you when we come back, top democratic president ial candidates launch take you the stage. Well talk about that. For every family going home for the holidays, there are countless people working to help them get there. Thank you to everyone we rely on to get us home to the ones we love. Welcome back to squawk box. President ial candidates gathering in los angeles tonight for the last democratic debate of the year. Jane wells is on the west coast, of course, as she always is with more on that story hey, jane. Good morning, andrew. There will be seven candidates perhaps the one making the biggest push is the one thats not here this guy spends his time tweeting this guy gets things done. Michael bloomberg is closing in on 100 million in ad spending according to ad age thats equal to all the cash on hand of all seven people on stage here tonight lets take a look at the money money in, the latest figures from the federal Election Commission show 654 million has been raised in the president ial race so far. 654 million. Were not even in 2020 most of its been raised by democrats. As for the money going out among two major parties, 444 million spent by democrats President Trump has by far the most at 76 million but among the dems, Bernie Sanders in first with 28 million on hand. Followed by Elizabeth Warren and mayor pete then a big drop to vicepresident joe biden who has 9 million on hand followed by yang, klobuchar and the only californiian here tonight, tom steyer with 3 million on hand. But, of course, he has deep pockets. Yes, there are three billionaires running for president in this election the incumbent and two democrats. Michael bloomberg has at least joked hes not sure President Trump is a member of the tenfigure club. And, by the way, here in true blue california, guys, the biggest fundraiser, donald trump. Back to you. Really . That actually surprises me given how much even how many of the candidates are from there, too well, you know, there are quite a few republicans in california and theres only one guy theyre supporting right, right. Okay jane, thank you very much. You bet a look at how the democratic contenders should run against the trump economic agenda, lets welcome heidi heitkamp, democrat of north dakota. Shes also a cnbc contributor. Dan clifton, head of policy research, thank you both for being here senator heitkamp, what do you expect out of the debate is there going to be somebody who stands out will there be some sort of coalition around one candidate or do you think thats a ways to come no, i think its going to be more of the same weve watched these debates. I think health care will be up front given the Circuit Court decision what does that mean for health care what does it mean for Prescription Drugs i think theres going to be an interest in changing the subject from yesterdays activity and starting to talk about how you would run the country differently or different from this president and so, you know, what i hope were going to see is more contrast, not between the candidates, but more contrast with the president dan, lets talk about that. Yesterday we had a republican senator from indiana who joined us and said very similar things to what heidi just said. Yeah. The one place he sees the two sides kind of agreeing is on the health kara expects of things, specifically drug prices what does that mean for Pharma Companies . I think its hard to run against an incumbent president with a good economy. You need to identify areas where you can talk to voters about what impacts them the most Senior Citizen women is a key demographic for President Trump. He needs it to win the election. And their number one issue is Prescription Drug prices so in this budget that is going to pass the senate today, it sets up a fivemonth kick to may and tries to create a deal for Prescription Drugs and maybe other Smaller Health care initiatives. I think its something that could happen on the legislative activity given thats what moderate democrats need to win in their districts and President Trump needs to win in key states like florida. So the politics align. It wont be easy to do, but those are the types of areas that the democrats are going to need to identify to run on in an environment with a 3. 5 Unemployment Rate. Let me make this one point, and i think its critical, is that the democrats arent talking about the economy. Just getting them to that will be a big step forward. And ive been surprised by how little talk theres been about it so far in the debates dan, who do you think this really motivates we had this conversation at the top of the show. Yeah. What base does this motivate more do you think the republicans have a chance to take over the house again . From your studies, who do you think this has a bigger impact with Going Forward, the whole impeachment . The impeachment, yeah so, first, let me say when you look at the National Polls its generally split. But when you start looking in the key states, states like wisconsin, florida, overwhelming opposition to impeachment. The question is whether voters are going to vote on that and whether theyre even going to remember it a year from now. But when you look at these house districts, you have about 15 democrats last night that voted for impeachment and President Trump has outperformed those democrats in those districts so i think at the very least were setting up a very interesting Political Science environment. Whether it actually translates into the republicans winning 19 seats, that may be a little bit difficult. And it really matters who the democrats nominate if you nominate a democrat talking about wealth taxes, its going to be very hard for the House Democrats to hold orange county, california, short hills, new jersey, mcclain hill, virginia if they put up someone moderate and tax policy, some of the democrats hold those seats heidi, how do democrats run against a Strong Economy i think what youve got to do is drill down and not look at the macro numbers, but look at whats happening at the Kitchen Table level. And a lot of the states that you just mentioned, michigan, wisconsin nationally not wisconsin, but pennsylvania. You see Unemployment Rates that are much higher than the Unemployment Rate nationally in fact, the great irony of this administration is the places that are doing the best are the places that are blueest. And i have to say that everybody has focused way too much on each other in the democratic race they need to focus on the president and they need to talk about the economy. And how they are going to bring a better economy at the Kitchen Table level for the American Public and if you dont do that, if you dont Start Talking about the economy, i think you run a very great risk that you will not be successful in 2020 heidi, dan, i want to thank you both for joining us. Also want to thank Terry Lundgren who has been our guest host this hour its been great to see you, terry. Its been my pleasure is it going to be a strong christmas . A strong finish Online Shopping is over this year its about instore shopping, quick deliveries six days, its going to be a mad house this week. I think it will be the biggest shopping weekend in our history and its going to be i hope the stores are fully staffed because theres no time to make any changes now. Yeah, i know i need to get into the stores. Still things i havent done. Terry, thank you for being here. We really appreciate t. Thanks, becky thanks, andrew thank you up next, well look at the latest news out of washington. Pat toomey will join us and the u. S. Trade deal. Squawk box will be right back. R for what we do. Creating compelling, engaging, and informative content and experiences. With this merger, viacomcbs will be one of the largest and most influential content creators in the world. I know we can deliver on the full potential of this amazing new company. Weveryone, looknk i knisntat your phones. The the design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. The house votes. Article one is adopted. Article two is adopted donald trump becomes the third president in American History to be impeached. Well take an in depth look into what it could mean for the economy, the stock market and your portfolio the end of a more than 40year saga weve passed on all we know fans gearing up for tonights First Showing the star wars rise of skywalker. Were going to look back at disneys magical year at the box office and ahead to 2020 and ultra Super Premium highend luxury. Can you put that label on new yorks newest itbuilding . Maybe when its responsible for half of the citys top 20 sales this year. We will take you inside as the final hour of squawk box begins right now good morning, everybody. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with Andrew Ross Sorkin joe is out today our guest host this morning is steve grasso hes the director of Institutional Sales at stewart frankel, and a cnbc market analyst. Weve been watching the futures. It looks like the dow dow futures are up 35 points s p futures up by one. The nasdaq up by almost 5. Also been keeping an eye on the treasury markets and yields have been pushing higher. Ten year right now looks like its yielding 1. 949 so almost back to 2 want to tell you about some of the big stories investors are going to be talking about today. Heres perhaps the top one iac planning to separate match group. Iac holds a controlling stake in tinder that is expected to be a taxfree spinoff. The companies anticipate completion of the transaction in the Second Quarter of 2020 youre looking at match group up 3 , little more than 3 right now. It had been telegraphed before barry diller calling it the anticonglomerate being part of their strategy to create and bring in companies, fix them, grow them, then spin them out. What did we say the number was, 58 billion worth of values created. The project has been spun out today. The diller diaspora the companies match the 7th company. This taking place under the leadership of joe lavin so well keep our eyes on it today. Tivo will merge with xperi a little more than 53 of the combined company you can look at shares of both of those firms right now tivo up 4 xperi corp. Down 14 i dont know if im one of the last people out there, but i still have a tivo. They were early on all the technology its amazing all the sorkin tvs are set up why as dvr because i can tivo six things at one time. The tivo machine is a great thing. How can you watch all that stuff . I dont i use it like a magazine i flip around, see the stuff anyway, its a Great Service and i may be one of the last people out there. They were early with you, and its lasting with you. Not too many people to, your point, even know what it does any more they were the original. The original. They won the verb, you tivo something. First generation, i dont think the next generation is anything, they did, vr it. Maybe only myself and tom rogers take away, nobody watches live tv except for this show bingo bingo was his nameo lets tell you also, instagram making a big move in its latest organization against vaping the facebook owned company banning socalled social Media Influencers from promoting vaping and Tobacco Products as well as weapons and firearms on its platform instagram had already put a stop to ads for the products, but this is the first time the social media giant has put restrictions on the types of things that can be promoted as branded content. So were going to, were going to see what this change really means. Becky mentioning earlier that sort of getting ahead of it, at the same time you were saying the u. K. They were starting to look at how influencers were looking at doing this. Its opened up investigation in the same day to start looking into how this was happening. So i think they read the tea leaves pretty accurately do this or the regulators will do it for you. Come after you, exactly after hours of debate and countless accusations of blatant partisanship from both sides of the aisle, the house voting last night along party lines to impeach President Trump. That is just the third time in American History the president has been impeached elan joins us with more on that front. Ylan the house has completed investigations, it is done with hearings and the chamber has voted to impeach the president but the work is still not over the house has yet to send those articles of impeachment over to the Senate Democrats also need to pick their managers the lawmakers who would present the case in the senate, we had expected that would all happen right away, but some democrats are urging Speaker Pelosi to hold out until there is a better sense of what a senate trial would look like. Last night pelosi was noncommittal so far we havent seen anything that looks fair to us, so hopefully it will be fair and when we see what that is, well send it. Democrats in the senate are demanding to hear from white house witnesses during any trial. But Senate Majority leader Mitch Mcconnell has rejected that idea this is a political process this is not anything judicial about it impeachment is a political decision the house made a partisan political decision to impeach. I would anticipate we will have a largely partisan outcome in the senate im not impartial about this at all. Now, while the Impeachment Vote was happening over in the house, President Trump held a rally in michigan. He was tracking the final tally and told the crowd, guys, that hes not worried at all. Back over to you all right, ylan, thank you very much. For a look at impeachments next steps in the senate as well as the vote today on the usmca trade deal, lets bring in our next guest senator pat toomey of pennsylvania senator, what happens, what will happen when the articles come to the senate by the way, when do you think theyll get there . Thats a good question, becky. This has gotten bizarre. I didnt anticipate that Speaker Pelosi would decide to introduce this new wrinkle of sitting on the articles of impeachment. How thats going to somehow affect republican senators is a great mystery to me. Obviously there is a certain level of skepticism about this trial. The democrats are implicitly acknowledging that they mustnt have done a very good job if these witnesses are so important and they never chose to pursue the legal measures that would have compelled their testimony and so withholding this is somehow going to get us to do their work im at a loss for that, so i have no idea when shes going to send them over to the senate but if and when she does, we will take them up as we are obligated to, and well begin a trial. I think it makes a lot of sense to allow opening argument by the prosecution, allow the defense team to make their case. Probably allow for written submitted questions by senators to be answered by whomever theyre addressed to and at that point, probably a couple weeks, then i think we should sit down and decide, okay, how do we proceed. Do we need to bring in witnesses . Do we need to subpoena documents . Or are we ready to go to a vote on final conviction . Im not prepared to make that judgment today, but i think well get there after we have this, you know, this preliminary phase. We heard from Mitch Mcconnell, just played the sound bite back, how he said hes not impartial. He seems to have made up your mind his mind whats holding you up from making up your mind . Becky, the way i look at it, ive got an obligation to hear the case the house makes im going to listen to that case im also a reasonably observant citizen and ive been observing whats been going on and i have not seen anything that to me even comes close to rising to the level of an impeachable offense. So im going to listen to what is said. Im going to listen to the testimony. Im obligate today d to do that would be obfuscating if i didnt acknowledge that whats out there does president seem to be impeachable. Senator toomey, i guess youre perplexed with miss pelosi on her strategy what is the end game to string it out closer to the election or is it to deny the president the ability to narrate this story in his own words you know, im not sure because i just dont see any sort of logical outcome that serves the democrats goals, unless possibly they think that by putting the spotlight on this issue, Public Opinion will shift and there will be some kind of big pressure brought to bear on republicans to do the work that the house refused to do when they were supposed to by their own vote and by their own process, you know, get these witnesses. But im speculating. I honestly i dont know what shes thinking senator, you know, we were talking about this in the last hour independent voters and what this means to the 2020 election you know, obviously there is a view that this is going to rally the republican base, rally the Democratic Base. But the folks in the middle in those swing states that hear about the impeachment and what i imagine will be a continued sort of, you know, drum beat on this, what you think that does and not just, by the way, to the president , but to those in congress so, i think theyre getting tired of it. Theyre probably already exhausted of it. How long have we been hearing about this lets be honest. The effort predates the whole ukraine conversation by a lot. So im not im not convinced this is helping democrats politically, except it does help democrats in Congress Avoid a democratic primary challenge from the left. Lets be clear there is a political pressure thats involvedin this on thei side, but i got to believe most independent voters are really theyre through with this. Senator, lets switch gears and talk a little about usmca, that getting passed today. That is something weve been waiting for for quite sometime what do you think about this being here what will it mean lets just talk about the economy, even in your home state. Yeah, so, you know, im a bit of an outlier on this, it appears. Ive got a piece in todays wall street journal making my argument for why i think usmca moves us backwards on trade. Yep and my fundamental belief that i feel strongly about is that the purpose of renegotiating nafta and negotiating the usmca was to diminish trade and i think its very clear when you look at the end of free trade in automobiles thats manifest in this agreement, the Expiration Date on this. Very onerous labor provisions completely unprecedented in all of our trade agreements. Every trade agreement weve ever done thus far has been to expand trade. This one is designed to go in the opposite direction the good news is its impact will be modest. The detrimental aspects are concentrated in the auto sector. The Expiration Date is a problem. I think the net effect is a little bit of lost growth, marginal mostly im concerned that this not be a precedent or template for future trade agreements because then that would be a clear step away from free trade and toward protectionism President Trump had threatened to rip up the old nafta. I know you have made the point here on the program in the past that he doesnt have the authority to do that. Right but when the president speaks he has the bully pulpit and he can make things happen well, yes and no, right he can make the threat he might even believe that he has that authority but i think the evidence is unambiguous. Its not you dont have to be a constitutional scholar the fact is nafta was implemented through legislation that was voted on in congress and signed by a president. That makes it a law. The president cannot rescind the law unilaterally he cant rescind obamacare, he cantrescind a tax law, he cant rescind nafta either and so the threat to do something that he doesnt have the Legal Authority to do really shouldnt compel us to go backwards on a really important idea, which is expanding trade we are out of time. But very quickly, can you tell us what you think about this phase one of a purported deal with china on trade . Well, i mean, the headlines are encouraging. Im hoping that the substance of it measures up to the headlines and that this is enforceable but it certainly seems Like Movement in the right direction to me. Senator, thank you for your time its good to see you today thanks for having me. Okay. It is time to say goodbye to our guest host for the morning you have to take off i mean, i have a day job. I got a day job. Market opens at 9 30 see you on the air later today. I will be on the air midday some point theres a show, i heard tlrs a shhere is a show middi believe i am on air today. Steve, great to see you, sir. Great to see you. Merry christmas. Absolutely. Same to you. Coming up, when we return, a lot more on real estate, a luxury building breaking all the rules. Were going to bring you the story of a condo not far from here, so ritzy, its responsible by itself for half of new york citys top 20 sales in 2019. You do not want to miss this stay tuned were back in just a moment. What are you doing back there, junior . Since were obviously lost, im rescheduling my Xfinity Customer Service appointment. Ah, relax. I got this. Which gps are you using anyway . A Little Something called instinct. Been using it for years. Yeah, thats what im afraid of. He knows exactly where were going. My whole body is a compass. Oh boy. The my account app makes todays Xfinity Customer Service simple, easy, awesome. Not my thing. Welcome back Goldman Sachs is reportedly in talks to pay a 2 billion fine to settle the 1 mdb probe. Part of the agreement with the justice department, the bank could put a monitor in place to oversee its compliance procedures goldman has been accuse of ignoring troubling signals while billions of dollars were tarik enfrom its client. A malaysia Government Fund called 1 mdb typically in the new York Real Estate business at least, New Buildings want to get the word out about Available Space and all the amenities that are available to tenants but robert frank joins us now, hes at the table, with the story of a building thats breaking all of these rules and killing it in the process. Yeah, theyre breaking all the rules and theyre breaking all the price records. They didnt buy a single advertisement. They didnt list a single apartment or even have a sales office or release a single photo. But 220 central park south, the 69 story super tower off central park built by vornado is home to top 20 sales this year no other building has accounted for such a large share of top sales ever the latest deal is hedge funder dan ocks purchased a penthouse for 98 million. It will be his pietater since his Main Residence is in florida. A 238 million purchase for the entire third floor that is the most expensive home sold in america. The most expensive home sold in america and its not his primary home that is just the raw space. He hasnt built it out yet their neighbors will include sting and his wife trudi they paid 66 million for another penthouse. Eric schmidt, a california hardware magnate, he paid 61 million for a five bedroom and brazilian cement heiress, how that for a title, bought a smaller unit for 30 million by the time the last few units sell, the total building sales will top 3 billion. So what makes 220 so valuable . Well, its right off central park designed by robert a. M. Stern. Its got an 82foot saltwater pool squash court, basketball court, gym, golf simulator, salon room and private restaurant run by the great jean george. If youre not a billionaire, you can rent theres a three bedroom being offered rye night now for a mer9 million a month. The smaller place, how small is that . Around 3,000 square feet. All the units are trading for about 10,000 per square foot imagine that 10,000 per square foot. What is the maintenance ill take 2 feet, please. I want to know the monthly maintenance. They havent released they havent even released a single photo of anything. So we have no idea what the maintenance but the 230 million property 238 million is the monthly maintenance i dont think ken griffin knows or cares im sure of that. But youre right. Thats something we dont know but its going to be like a private club these are its not a great residential neighborhood by the way, this is sort of the sequel to 15 Central Park West where lloyd blankfein, dan lobe, denzel washington, its the same designer and a lot of the people from that building are moving into this new building and its, by the way, the only brandnew building thats right off central park so there wont be another building in front of you like all these other super towers on 57th right have this building right in front of it. So thats what makes it so valuable the rest of the market, though, not so great at 3 billion yes its amazing. And none of these people are paying taxes here in the great city of new york yes, they are some of them. Theyre getting something out of it. We mentioned the brazilian. Very few foreign buyers. Steve roth wanted it to be a very new york filled building. Is it a its a condo. They wouldnt let foreigners in my understanding, steve roth, the c. E. O. , was very selective about who he marketed to privately or who he allowed in the building red lining . Not red lining, but he was he invited some people and didnt encourage others. Lets put it that way. Very few foreign buyers, which again is very different from all the other big towers right, coop like exactly but it is a condo. All right when we come back thank you, robert good to see you. Thank you when we come back, the big phone call boeing c. E. O. Dennis miller got right before his Company Announced it was suspended production on the 737max. The details are straight ahead also disneys box office mastery in 2019, well take you through disneys magical year at the theaters and how the company is positioned as we head into 2020 stay tuned youre watching squawk box right here on cnbc we are learning more about the leadup to boeings decision to temporarily halt production of its 737max plane phil lebeau joins us now about the phone call he received over the weekend. Phil becky, it was on sunday and the phone call was from the president of the United States this is not the first time President Trump and dennis mullenberg, c. E. O. Of boeing, have had conversations over the last couple of years the phone call happened on sunday the boeing c. E. O. Told the president that the plans to halt production of the 737max would be temporary and that there will be no layoffs, but all of this raises the question about whether or not the president might take the stoppage of production and the impact on the economy to put pressure on the faa to speed up the recertification of the 737max let me remind you what the head of the faa told us just last week when we put that question to him have you heard from President Trump about the max or from anyone in the white house who has said, look, were coming up on nine months, it will be a year we need to get this plane back in the air we need to get boeing delivering planes again its good for the economy. Have you received any pressure at all no, i have not. This is my decision. This is the agencys decision. Secretary chow has been very supportive and the white house has been very supportive as well Steve Dickson referencing the fact that they will not recertify the 737 marks this year it will be pushed out to next year theres no time frame, guys. Though most people when you talk with them about this process believe were looking at late january or mid february when we are likely to see recertification. Again, thats if all of the hurdles that still need to be cleared actually happen as people are expecting them to over the next six to eight weeks. A lot of things come to mind when you hear about the phone call that the president made to the c. E. O. Of boeing my first thought would be he was calling proactively to kind much say, okay, give me an update, but just understand, i dont want you laying people off a phone call he may have made similar to barr along those lines. Do you think the phone call and the pressures put that may have been placed on boeing had any impact on their decision to, a, go ahead and halt production but not lay anyone off right now . I wouldnt be surprised if it did. But the other calculus here, becky, is the fact that boeing has said all along and this is not just something theyre saying they need to avoid layoffs because eventually theyre going to ramp up production. And when they do, it will come back fairly quickly. And the last thing you want to do if youre boeing say, look, we laid off 8,000 people we need you to come back we can only have 6000 coming back, 7,000 coming back. A thousand decided i found a different opportunity, i want to retire, or whatever the reason is thats why boeing is not laying off workers. If this is truly just a temporary halt, maybe eight weeks. You want to keep that staff there as much as possible. So while i understand what youre saying, that if youre the boeing c. E. O. , you dont want to sit there and tell the president youre going to layoff thousands. On the other hand, it really is Smart Business for boeing. Its not just something theyre saying they do not want the Production System to be too upset as they are going through this process you are only as strong as the weakest link in your supply chain. And they have suppliers who will also be in dire need sure, absolutely. Help along the way. If they layoff their workers, its going to be the same sort of situation which is why boeing has said, as much as they can, they are going to be working with their suppliers, helping their suppliers. They havent said how that help will come along. Whether its financial, in what way theyre trying to help those suppliers. But thats a huge concern for boeing phil, its great to see you you, too. We are seconds away from new jobless claims data and the latest read on manufacturing from the philadelphia fed. Take a quick look at futures, show you where things stand be at this hour were an hour away from, of course, the opening bell the dow would open up 34 points higher s p little over a point. Nasdaq up 6 1 2 points well show you the ten year real quick. All of this is going to likely change once we get the numbers ten year note at 1. 945 our good friend Rick Santelli is standing by at the cme in chicago. Awaiting those numbers sir, rick, the number. All right, survey says on initial jobless claims, remember, 252 was a big move last week. We expect it to be lower, but its not as low as we expected 234,000. We were looking for a number around 225,000 so being down only 18 really isnt cutting it as much as many thought. Now, continue to monitor, because the seasonalities really continue through into next year. As far as continuing claims, they move from 1. 67 to 1. 72 million on philly fed business outlook, forgot them. Manufacturing december up 3 10, up 3 10. Much smaller than the anticipated number, up anywhere from up 7 to up 8. Sequentially following 10. 4. And on our current account balance, the most recent read, minus 124 billion. Thats in the neighborhood expected sequentially. Thats actually a bit lower because our last look goes from 128 to 125 billion of course, with a minus sign in front of it. We still have leading Economic Indicators existing home sales. You know Something Else we have . We are flirting with 30 basis points separate being tens and twos, and the long maturities on sovereigns across the globe continue to move higher. Of course, we know that bank of japan didnt do much bank of england didnt do much the sweden central bank, greeks bang said uh riva. Back to you. See you soon. Steve liesman joins us now he has more on the numbers what do you think, steve im with rick on the idea on the claims number, which was that sort of flash point last week, the 252 number, the ratchet up, which was ascribed i think correctly to seasonal adjustments. It didnt expect as many layoffs. The week after thanksgiving is a typical season, a typical time when people lose their jobs in the holiday season, for whatever reason we can talk about that separately but the seasonals were very light. They should have expected more they did not it was a big order for it to come way back down the 234 is okay. Ill give it another week before i think theres any reason for concern here, that the jobless claims levels are elevated in a way that suggest some weakness in the jobs market its going to be an adjustment to get back there. Philly fed is more concerning to me philly fed is a region thats not quite as subjected to the trade problems as other regions. And the idea that it came in so weak suggests that some of the weakness that we thought was perhaps either bottoming or Getting Better is not happening in all parts of the manufacturing. Its been the manufacturing slow down weve been following so closely. And it really is something that has dragged down the overall economy. Its probably why were doing one and three quarters to 2 growth this quarter. What do you think the impact of usmca getting passed would be i think its a piece of the puzzle thats needed to begin to restore Business Investment confidence but i dont think its everything i think we need to see more on china. What im waiting for is one of two things, becky. Either we resolve this issue with china, or almost entirely on the other hand what happens is business learns to invest and prosper in a world with a constant rumbling of trade disputes underneath it thats what theyve done to this point no, they havent. They have stopped i mean, theyve really reduced their investment and i think but you do see a lot of investment pushing into vietnam and other places its a piece of it, yeah. What happens if they just stop hitting each other . If there is not necessarily some huge like heres a completion of everything we wanted to this point, but were ratcheting down tensions were going to go quiet because that behooves both sides its going to be big. Ive been trying to think about the effective tradein 2020. I think a lot of what the damage has been done is built in for the first half of the year i dont think Business Confidence and decisions to invest turn on a dime. I think it takes time for the boards to get together and decide, were going to do this or were going to do that. Right some of the weakness is built in in the First Quarter. Perhaps into the Second Quarter. Layer in what weve been talking about this week on the boeing production halt. Thats going to challenge First Quarter gdp. The market is going to have a lot to look through. Its all good in the right direction. Its just going to take time, i think, to do it. And im surprised rick is not wearing a party hat and otherwise hooting louder about what happened with ricks bank it went back and said goodbye to negative Interest Rates we will see if it is indeed possible for a bank to leave negative rates and leave it behind thank you, steve. Pleasure. Appreciate it thank you, rick. When we come back, it is a big day for disney if the company well, if the company existed inside the star wars universe, it would probably be the empire why . Because of its push to dominate the box office not the galaxy when we come back, were going to go to Los Angeles Live where fans are already gearing up for tonights big star wars opening. Stay tuned u wchcng bc welcome back tosquawk box. This morning, the count down is over star wars rise of skywalker opening around the world it happens today it caps an already successful year for disney. That doesnt mean its any less important. Julia boorstin joins us from the el capitan theater the star wars movie marathon good morning, a very Early Morning to you good morning. Well, i dont even know what to say to these people who have been here overnight. They havent even gone to sleep. They just got some star wars lucky charms for breakfast but this el capitan theater in hollywood is one of the 21 theaters around the country doing an overnight ninemovie star wars marathon the 500 tickets for this theater at 125 apiece sold out within minutes. Now, the movie is the rise of sky walker is set to open in 21 theaters tonight and expected to gross about 200 million Opening Weekend. That would be below the last Opening Weekend of the last two Star Wars Films, the second after avengers end game. It will be another three years before disney puts another Star Wars Film in theaters, but the media giant has a lot riding on the performance of this movie. First, its hoping to drive more visitors to its billiondollar star wars lands at its domestic park which got off to a slower than expected start second, its hoping to increase the value of its investment in star wars for disney plus. In addition to its star wars spin offer, the mandalorian, which is the flagship series of the launch of disney plus, there are other live action and animated series in production for that platform. Then well have to see if having seven episodes for the mandalorian available for streaming right now on disney plus ends up driving more interest for people to come out and go to this movie, or if the fact that theres so much star wars new star wars content available at home gives people more reason to stay at home and stream on the couch instead. Another risk factor for this movie is reviews the reviews on Rotten Tomatoes are just a 56 so well have to see what happens for the audience beyond that core star wars fan base guys thank you, julia. Before you go, lets just talk about the thinking about the comps, because of the great year they had, how hard is it going to be for next year . Well, look, disney has absolutely dominated the box office this year with six of the seven biggest movies the 7th is spiderman which is a coe production with sony really disney has topped every single metric this year. And i think next year is going to be interesting because, you know, they had avengers end game this year. That wrapped up the avengers story line you have the rise of sky walker wrapping up the end of the star wars story line there are a lot of reasons people are going to want to come out and see the movies this year plus you have the lion king, frozen 2 next year they have some interesting films. Steven spielbergs west side story. They have two films in the marvel universe including black widow. None of them have the franchise material as with star wars. It will be a tough year in terms of comparisons for disney next year julia, thank you for that as julia just said, disney has had a killer 2019 dominating the box office with a record six movies that have grossed over a billion dollars worldwide. Joining us right now for more on disneys Box Office Dominance in the year gone, and the year ahead, tom rogers is here, executive chairman of win view, former president of knbc cable, tivo news, maybe well talk about that brett lang is here, executive film and media for variety good morning to both of you. Ill ask you the comp question can disney keep this up . They had stuch a killer year. Two years in a row of over 3 billion in operating profit. Thats very tough to beat. But ive got to say, ive been accused of being tough on disney right reading the reviewer in your newspaper, the rise of sky walker isnt a great star wars movie, but that may be because there is no such thing and you know what . I dont think what the critics say matter at all. I dont think so either im with you im there anyway no such thing as there was never a good star wars movie right he ends it with, it is not entirely terrible. And you know what . I dont think it matters what the critics say. They are going to be a juggernaut that is going to be really tough, even for disney to ever top 10 billion in one year in box office that is my point. As long as jar jar is not in it, im going to see t. This is what becky and i were talking about earlier. The sorkin family, were all going to go watch this film. Thats because were of a generation we grew up with this and to some degree, you can argue maybe my children will be growing up with star wars to some degree. Theyre coming in a little late in the game. But there is an element of a generation that hasnt grown up with star wars and so how important is this film not just to being good enough, but to be great, to extend the franchise, not just in the theater so that you want to go back to disney world maybe the second or third time, to now go to the theme park, all of it . Well, i mean its all relative, right . Anybody else would be thrilled with an opening of 200 million. We have to put that in perspective. But if you look at what disney hoped it was getting when it acquired lukas film, it was going to be more like marvel where you have a Star Wars Film every year. It turned out they kind of did too much too fast. They were having creative problems it was a problem. Solo actually lost money. This is going to do less than the first two films in the third trilogy. And so i think that creatively theyre trying to sort of figure out what can they do to extend this brand and it could be that the future is not on the big screen where star wars revolutionized cinema. Disney streaming plus. I think julia raised an important point. Everybody has beentalking abou the investment and streaming by disney and been willing to see them take the earnings dilution on that. Content dilution is taking great movie franchises, turning them into the small screen, spinning off a few series, going to make it very difficult to have the big screen megarelease notion that has driven these six or seven films to 1 billion box office each. I think that content dilution issue they have to be careful of the flip side, the irishman is a completely different operation. Netflix numbers, they came out with the sheer number of people that are watching it, more than you would ever get in the theaters right i think thats a fascinating point because whatsgoing on here is disney is purposely disrupting its Television Business right by trying to maintain the theater window and theatricals because theyre so dominant in it while the rest of the players are trying to disrupt the theatrical business by taking movies, putting them in the Movie Theater a few weeks, then like the irishman, like marriage story, like the report going right to the small screen. And disney is the one who is trying to keep that wave from overtaking their business there. To me, the big issue this next year is going to be the window for these films do you think it does finally come down . I think every other studio thats not disney would like to see that window shortened. Right the thing thats really interesting, though, for theater owners they love disney. They love their product, they love the fact disney respects their window but disney also asks for much more onerous terms theyre asking for 65 , even 70 of box office. Usually its a 50 50 split and theyre asking for their best auditoriums thats tough the best thing Movie Theaters have going now is big cushy chairs we have to go, i apologize. The transaction with your former company, tivo and xperian, what do you think of it we sold tivo to a company that changed its name to tivo. This time tivo is the Bigger Company and theyre not using tivo for the combined company. How do you feel about that . Well, ill tell you one thing thats very relevant to this you mentioned the dvr which tivo was first at we were also first taking netflix and amazon and getting them to the tv people forget they were Computer Services through tivo we got them to the television what tivo did is so important here it made it possible to search regular tv and streaming tv all at once. Thats more necessary than ever given ate the plethora of streaming options. How do you find whats where nobodys done that really well today, but tivo was the one that started it have five Different Services and go back what is this in the end what is what . The combined company. Scale matters and this is a way for two companies that are subscale to get more scale. Tom and brent, thank you guys happy holidays you, too. When we come back, what you need to noah heftd opening bell. A rare interview with Wealth Management president andy sieg is just ahead. U e tcuned yoarwahing squawk box here on cnbc financial stocks on the verge of a breakout. Cnbc senior commentator mike santoli joins us, he has more on this trend hey, this is a feature since october. The breakout in the Financial Sector its the equal weighted of the financial index. Essentially every stock in the index in the sector is kind of votes the same way whats interesting about this, its just about at an all time breakout not quite. The highway is early 2018. You see were just about there its within pennies. We will see if we can nose above that why is the equal weight so different . Take a look at j. P. Morgan its obviously, by far, the biggest, the leadership stock in the group. Its the one that is really distinguished itself its actually as big right now bigger than b of a and Goldman Sachs. Clearly its the second biggest stock in the s p value index it really has a lot of sponsorship momentum Goldman Sachs is at a critical point i. Maybe not so sure if this is a run to the old highs again early 2018 eighth strong trend. It looks like its in good shape. Obviously, maybe yield versus to cooperate and the i dont have all Capital Markets have to cooperate. So i think its a positive sign with you its not yet decisive they will carry next year. Thank you very much joining us right now in a rare interview is the president of peril lynch Wealth Management good to be here lets talk about the trend mike was talking about do you worry things have run so far so fast . We think the trend, its been bullish. Its the economy earnings and the fed. But one of the things we have insight through our 15,000 Financial Advisers is what is the sentiment among main Street Investors . The sentiment is encouraging investors largely are wary of markets, but theyre very optimistic about their own business we find clients in the market are a little concerned those on the side lines are not really ready to put cash at work what that says to us is we are probably more midcycle in terms of this midmarket expansion. Wall street journal and other place have reported how investor versus taken a lot of money out of stock mutual funds. Thats true. Thats something you think gives us way more room to run. This is, you followed this kind of countersentiment for a while, right . Our upside scenario from our Research Department today has the s p at 3500 and change. When . Next year. End of next year . No, midnext year where we see things lining up right now, were more bullish than that. We think there is an upside scenario that can see things up 20 parts these levels. Thats a rarity we dont see people saying that they say you will be up midsingle digits. If 23 take a step back, we think this is a 30 year bull cycle. We need to remember that its been a fantastic ten years. The mistakes we see investors make today is theyre waiting to participate in the rally. Are you pounding the table with that . If you think we could be up another 20 , people are missing out the opportunity right now . We are pounding the table and point to the fact that a 6040 allocation which has been something clients and advisers have talk gd about for a long time, it may be dead today. I think its stupid you never will make enough money if up have 40 of portfolio in bonds . Well, bonds carry great deal of risk today. When you point out to clients that a 200 basis point move in rates could take the ten year down over learn , total return thats concerning. So were pointing that out very strongly. Do clients listen to that or is the 6040 message one beaten into their heads so long theyre afraid to take any alternative . Not really, it brings us to the role of individual advisers. What would be the role over the medium and long term i think we landed right on it, which it takes a trusted relationship with an ad advisor to have them help you have the discipline to be in the market when theres you know a lot thats in your gut and if your instinct that says, hey, maybe i should break away. Whats your breakdown 80 plus in equities. Me, too, im 100 equities. Still still yeah i have some cash that i make sure i got a cushion so im not locked into it i dont have anything if bonds you know, of course, in my role, natural exposed heavily to the story mike was talking about earlier. We do think financials will be a strong part of the market. Thank you thanks very much. I want to get down to jim cramer right now at the New York Stock Exchange mr. Cramer nice to see you, sir. I got to tell you, that last guest was refreshing we have so many guys that say it could be good, it could be bad wow, he was shot out of a hhow s howitzer youd be fully invested at this point look. During the period between when you get impeached and when there is a vote, the market went down during the clinton period. Thats when i think you have to buy. You know if history repeats itself, which i think it does. And when did that happen . Im trying to think of how long in between you are talking the january february, 1999 period. Yeah, yeah we have heard you could see a pull back the beginning of next year, not only for some of those reasons, watching whats happening with washington. As people look back at the year theyve had maybe for tax reasons and things, too. I totally agree with you, last night eamonafters said kissinger came back settling diplomacy behind the scenes. President xi said hed much rather deal with trump and that was Serious Business and hasnt been commented on. We will see you in just a couple of minutes. We should also mention, you dont want to miss it, a big exclusive interview with secretary treasury Steven Mnuchin that is on squawk at 10 15 eastern time stay tuned squawk returns right after this lets take one more quick look at the markets. Right now the dow futures up about 35 points. S p futures are up by 1. The nasdaq indicated up by about 8 right now. Again its been a very strong run for these markets. Pull back slightly for the s p well see what happens today make sure you join us tomorrow right now, its time for squawk on the street well, good morning, welcome to squawk in the street. Im david faber with jim cramer. Carl has this morning off. Lets give you a look at futures as we begin trading one half hour from now. You can see were set up for a slightly, not a mixed bag. Slightly open, programs. Lets get to our road map this morning. It does start with that record run for stocks the s p nearing it