Transcripts For CNBC Squawk Box 20240713

He will be traveling to washington hell be here a couple of days saying negotiating teams from both sides remain in close communication. President trump saying hes going to later travel to beijing to begin talks on the next phase. I think well talk to eunice we never know until we know. The last thing we heard from eunice was, you know, the president says there is a signing next week but havent heard anything from the chinese side she did point out that it was good for the chinese to have this happening now ahead of the Lunar New Year too my point is that they would never say anything and deliberately stay and let us conjecture it is always bad they never signed off on this the day before the market pulled back a little after someone said something that the chinese are uncomfortable with something until we hear right from the Commerce Ministry. Just a lot of times sitting there, what they looked like. They are more reserved and are tweeting about this stuff. Anyway, looking good. Hope springs eternal maybe it wont just got to wait until it happens. Lets move on. You cant say it anymore. Expressions that were once expressions. Full figured person, you might say. The dow now within striking distance of record highs global Asset Allocation and here on set covering the economic angel, head of u. S. Economics research at barclays im going to go to you first. Just thinking about you know, there was a view, even just 48 hours ago that we were on the verge of something terrible. Then we have the china deal that may now happen is this smooth sailing ahead i think so. I think 2020 is going to be a decent year, not as great as 2019 but that is a hard year to top. Generally, the question always is around these headlines is it systemic to the markets. Maybe not so much to the world at large but to the fundamentals to the market and what is the mechanism to this headline from the market it would have to be sharply Rising Oil Prices and that is not so far happening maybe the market ran up a little bit towards the end of the year. It went up and maybe some traders are repositioning. Beyond that. I dont think it is really going to drive the markets what is going to drive the market is earnings rallying the anticipation of the earnings rebound pe up 30 . The opposite of 2018 so now in 2020, Earnings Growth has to come through for the market to be justified in its rally leading up to this year. From where im sitting, it looks like i should be able to achieve 8 Earnings Growth and 2 dividends. Maybe a little bit of a multiple expression that is my base case for 2020. Before we get to you, michael. Explain the compression issue in your mind. So the market takes turns if you have very bearish people on your show, theyll say 2019 was a sugar market earnings are up 1 how could that be sustainable. The issue is that the pe and the e take turns at inflection points earnings were up 22 and down 28 . When you look at the two years together 18 and 19, earnings were up 23 . S p up 26 when you add in the dividends, basically, the market did what earnings did. There is nothing to see. Now that the market ramped up, that is in anticipationof the global rebound of some sort. Thats why now the market has to grow to that valuation usually as the earnings pick up, which i expect to happen in 2020, the pe takes a backseat. Not a meaningful amount but maybe a point in 2020. You want to disagree with him . No. That is very much in line with what we are thinking unless you get conflict that disrupts oil prices and gets to the point quickly, level and speed, that will be kind of what disrupts the expectation we agree with that trendlike growth, modest growth in equity markets. Given the different composesition of what we are seeing today the joongoing tension that doest really disrupt oil maybe oil is a little higher maybe you could argue it is a net positive for brother in the u. S. Does jay powell sit on his hands the entire year . We think, yes it is clear they want to could we get byron in here, he tends to see surprises. He thinks at some point, theyll end up moving. Which direction he thinks lower bunch of crazy stuff. Yes there are ways in which you can get that for sure. The point of his surprise is that they are surprises. Things that dont really happen they do thats when it is a big surprise go ahead. Theyve cut 75 basis points already to protect the economy from various head winds. We are potentially getting one now. The growth has to be very soft there has to be a lot of noise we have the gm automotive strike, which well get some pay back from. Boeing will be an ongoing issue. The fed will have to be looking through some of these noises to ascertain, oh, growth has fallen off more i think the hurdle will be quite high michael, thank you. Nice to see you. Thank you. A dramatic 24 hours for the man who is now an International Fugitive he broke his silence and defended his decision to leave japan. Viewe viewers watched much of this yesterday. Michelle carusocabrera was there. He had a lot to get off his chest. There was something left for you that he needed to talk to you about too, which is awesome. Reporter yes it was helpful to drill into a little detail and to be able to ask follow ups carlos ghosn is likely never to face trial in japan but he is trying to clear his name in the court of public opinion. He didnt face accusations just in japan but also in the United States this is an sec complaint settled in september which they claimed he and nissan was trying to hide he was going to receive an extra 140 million in compensation in his retirement i asked him directly were you trying to defer this money into retirement no. I was not deferring anything when you defer, it means you acquired something i didnt acquire anything. The fact that we have an agreement with the sec is no admit or denial. They signed it it just means on the side of japan. You cannot open two sides at the same time. It is too much they didnt require anything socalled deferred compensation was not signed by the board or any director it was kind of a memo ive done to myself with the help of somebody to keep track of the difference between my compensation as the ceo of nissan and the average ceo of a Similar Company followed by where we have the report about Co Compensation tha thats it. We are saying it was not fixed or decided it was not paid. There is no reason for the whole thing. I can tell you and again, i shouldnt talk about the case in the United States. I committed no denial and no acceptance when i read it, it sounds like the reason you couldnt get the money is because you hadnt retired yet. You werent supposed to get it until after. After you retire, the person deciding on compensation is on the board and you are not part of the board how can you say if it is decided if the people that have to pronounce on this compensation are unknown. As you retire, you dont know who is managing the company, what kind of decision has been made how can you report a compensation which has not been defined because we dont know exactly what is the amount, has not been decided because the people who will decide will come in years to come it hasnt been paid. It doesnt make sense. If people were to Pay Attention to the reports, they could leave with the impression that over time, whether on purpose or poor bookkeeping, there was commingling of your personal with Corporate Finances where there . Everything is built in order to help you think that nissan has built a very good case with the help of other people who are specialists of these kind of things they built an image. They attacked through legal and they attacked through the media. It was very well done. A lot of people think this guy is shady hes doing all of the things, et cetera while i was in prison, i couldnt defend myself everything was done for me not to be able to talk when i wanted to make a press conference in tokyo, they came back with the charges immediately. We also spoke about the incredible and daring escape out of japan well carry that part of the interview for you guys in the next hour. Michelle, sitting there, what did you think of his responses to your question about the charges . Is there something in the middle between being absolutely innocent, absolutely guilty and what you were able to deuce . What is your gut feeling when you read the whole complaint, the narrative that the sec or the prosecutors paints is that they really wanted to pay him more money they couldnt figure out a way to avoid disclosure, they decided he wasnt going to get any. Whenever you read a complaint, you think that person is guilty. Thats the nature of a complaint. Second, if they decided he was never going to get the money, does japan really want to keep him under house arrest more than a year on an issue like that it seems extreme there is certainly a local cultural constraint in japan for paying ceos a lot of money yet these Companies Compete internationally for top talent you can see what do you do you can see some kind of rational to try to make up for that compensation in some way. Maybe you construct houses, maybe other perks in order to compensate them because you are worried about losing them in what is now very much the International Global market. Thank you, michelle he talked about becoming the gener ceo of General Motors. And he wished he had taken that job. He didnt answer michelles pointed question about the commingling. She asked the right questions. You can see more of that interview right now at cnbc. Com. Coming up when we return, new details on the crash of the boeing 737800 that took place in iran yesterday. Well tell you what irans officials said overnight about all of it. Squawk returns with more after this dont get mad. Get e trade, dawg. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. An update on the boeing 737800 that crashed yesterday saying witnesses reported seeing the plane on fire immediately before the crash he said no radio messages were received by the pilot regarding unusual circumstances. The head of iran agency said black box recorders had been handed over to the investigator and initial information had been passed on to ukraine, u. S. , sweden and canada. It is unclear whether those will be analyzed by another country at this point. President trump pulling back from further military action after irans missile strike on bases that housed u. S. Troops caused no casualties he told iran he would further tighten sanctions. Here is what he said in recent days, he was planning new attacks on american targets but we stopped him soleimanis hands were drenched in both american and iranian blood. He should have been terminated long ago yesterday, cabinet secretaries and officials held briefings for all 535 members of Congress Views mixed. Democrats criticized the briefing and justification for the strikes. Other officials praised the president for the decision to strike one of two republicans who had a different view the briefing lasted 75 minutes where opinion the briefers left. This is not my biggest problem, which i would add was probably the worst briefing i have seen on a military issue in the nine years i have served in the United States senate what i found so distressing is that one of the messages we received from the briefers was do not debate, do not discuss the issue of the appropriateness of further military intervention against iran if you do, youll be emboldening iran House Speaker pelosi said the house will vote today on a war power resolution which would limit the president s ability to take action on iran. I saw last night on bret bares show. It was like night and day. Pointed out that mike lee and rand paul, there are republicans saying one thing and those two guys are completely different. Very libertarian i wouldnt even say there on the left im saying they are in their own group on the right in a group of two you said left im not saying left they are very libertarian we know rand paul tom cotton, we all wish we had his military record. Hes pretty admirable. Every president since 2001 has been operating under that agreement. It has been 19 years thats why libertarians are innocenced they think there needs to be another vote on it and with the information about exactly what was going on the week prior there is still a question mark probably doesnt mart the senate needs four senators to turn. There is only two. You need a clear evidence there is something imminent coming or that his actions warrant the action in and of itself right i agree with that except for one incident if you are going to say publicly, you are going to say what the imminent thing is you have also made the argument which is that this is just a bad guy, we have to get rid of him if you show the argument of something imminent, you have to show what that was it is unclear. He had finished casing the embassy to determine the vulnerabilities. The embassy is u. S. Territory. The attack right there is enough what do you think hes there planning a Christmas Party there . Hes still there in baghdad planning Something Else. Have the president of the administration articulate that im not telling you all our cia intelligence youd be the last person since you are part of the administration, i understand that well tell you about a new app that answers the robo calls and annoys the spamers thats next. We made usaa insurance for members like kate. A former army medic, made of the flexibility to handle whatever monday has in store and tackle four things at once. So when her car got hit, she didnt worry. She simply filed a claim on her usaa app and said. I got this. Usaa insurance is made the way kate needs it easy. She can even pick her payment plan so its easy on her budget and her life. Usaa. What youre made of, were made for. Usaa now you can, with shipsticks. 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You download from google play or Apple App Store install it and youll be protected from millions of unwanted calls what if someone calls me i dont have in my contact list i need to talk to. Our algorithm is determining which calls are wanted versus unwanted so there is a difference . Okay. I group them all together. I feel like messing with them myself you do. I do. I pick up the phone, it says please hold. They tell me to hold and i know whats coming. I do because i want to mess with him. Most of these calls are illegal. They lie through their teeth this is your electric company, this is your credit card company, which is isnt, ive been monitoring your action, your card, your warranty there are a lot of examiners out there. The irs the economics are so lopsided youve probably gotten calls in chinese. They know 1 of the population speaks chinese if they make 100 calls, one person will answer if this technology works, how come the phone companies havent bought this. I know more people who have ripped out the hard lines because they are so sick of this dont you get them on the cell phone yef but dont the phone companies have more of a complaint on this it is a complex problem to solve. Tracers are trying to help combat and put the ownness on carriers to do more. Ca carriers do get paid to connect calls. I would imagine they would love to put an end to these. Why doesnt everybody have one of these apps . People havent figured out these exist. Our app once you put it on your phone will stop these calls. Our answer bots Start Talking about. What is the economics to you . We are a subscription model we have a free trial try it, make sure it works what is the monthly fee 3. 99 a month can i listen to your app. You can i can absolutely. We have a spasm box where you can listen back and hear our answer bots talking about and wasting their time you can create your own. Do you do that part just for fun . It is definitely fun and entertaining you can use imperson nators or create your own. Why arent you just hanging up when we talk to them, we are wasting time that is time where they cant hurt someone else. They cant reach into your wallet and steel your money or identity the purpose of keeping them on the line for you is that . Absolutely. We want to waist spamers time dont you want to feel good about getting them back . Just the economics. You are saying in a clean way do it where you are not actually wasting time why not give it back to them feel good about that sorkin. Let yourself go. Im a capitolist. Im trying to understand the market for consumers it is great talking back to them and getting revenge. It feels good. But people need to be careful. Their whole point is to reach into your market and steel your money. If you talk to them, the person on the other side their job is to try to figure out how to separate you from your money how do we feel about them the people on the other end . We shouldnt not have a lot of pity. If you are trying to reach into someones pocket and stealing money. That is different from telemarketers are annoying you might get a movie made about you. Maybe there is a reason. Thank you for coming in china confirming the vice premier will visit washington for the phase one signing next week a live report from beijing next. A look at yesterdays s p 500 winners and losers 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. I can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Good morning welcome back to squawk box on cnbc live from the marketsite in time square. U. S. Equity few you ares up about 160 points s p up about 18 or so, nasdaq up about 55 we have a news cycle really the half life of these, we are back at china in case you are wondering why the markets are up today. Iran is so yesterday it is not yet. Lets hope it is the market today did you see yesterday, the market was up 250 points at 3 00, there was some explosions in the green zone. It turns out they were your garden variety shiite rockets. They werent missiles from iran but they knocked 100 points off the dow. China confirming the vice premier will visit washington next week for the wednesday signing of the phase one trade deal eunice yoon joins us now with more we talked about this last week remember you saying we havent heard from anyone here i saids that the way they do things that doesnt mean they are not coming they wait and dangle it out there for us thats true but it is good. Because we get to get excited like three times they might be coming, it is rumored they might be coming, then that they are coming and they are coming so we get four pops from the stock market thats right. I was thinking about you, joe. The chinese are much more reserved asian culture generally is much more reserved. The chinese specifically are reserved when it comes to these type of negotiations they dont want everything to be out there. As you were saying, the Commerce Ministry did confirm, liu he will be heading to washington they will have the final discussions over that time he put the certainty at 90 that the deal was going to be signed, meaning that that was the positive this is the first time the chinese have acknowledged that the trade deal is going to be signed on january 15 after President Trump tweeted that he wha was going to be signing this deal with highlevel chinese representatives. The Chinese Ministry today wouldnt confirm if the vice premier will head to washington with the title of special envoy to president xi. President xi will not have his name on the trade deal that means he wont be responsible if there are any problems with the trade deal this announcement comes when there is more data coming out showing moderation but still weakness in the Manufacturing Sector Producer Prices improved coming in at mine aus 0. 5 from a year ago. Consumer prices remained steady because of a drop in pork prices commerce said china was going to increase imports of pork, not necessarily from the United States but it would be increasing ahead of the Lunar New Year holiday i understand. More reserve thats okay. They need to know that the enemies of what this administration is trying to do over here seize upon every delay or nonconfirmation by china to say that administration here is full of crap and that they are overplaying and hyping and saying they are getting more than they are and manipulating markets. They immediately believe the chinese. Joe, the chinese would say maybe the Trump Administration or the americans should rush and get everything out there and get everything out there if they dont have everything signed and sealed it would be to go slowly and nail it down we have the entire media here saying that. They dont need to say that. Big news from the duke and duchess of sussex. Im trying to figure this out. I have some theories. Didnt we fight a war so that we didnt have to care what the royal family is doing . Well get you up to speed and what has to do with them and their incomes next some people spend their whole life saying they want to be royalty. You want to step into the title . I may not be so good with the the role well have more from our interview with carlos ghosn. Details emerging from his appearance yesterday and a reminder, you can always watch us live on the go on the cnbc app. Well be right back. Were carvana, the company who invented car vending machines and buying a car 100 online. Now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. Our Retirement Plan with voya gives us confidence. So we can spend a bit today, knowing were prepared for tomorrow. Wow, do you think you overdid it maybe . Overdid what . Well planned, well invested, well protected. Voya. Be confident to and through retirement. I am totally blind. And non24 can throw my days and nights out of sync, keeping me from the things i love to do. Talk to your doctor, and call 8442142424. Live shot of Buckingham Palace a place you will not be seeing Meghan Markle and harry. They plan to step back as senior members of the royal family and plan to split their time between north america that could be giving up a lot of money or even making a lot of money. This is one of the greatest cover. Here it is, megxit all anyone wants to talk about today. Speak for yourself. Tell us. Lets get into the business of the monarchy. Prince harry and Meghan Markle say they will work to become financial independent. They are only giving up a fraction of the Family Income keeping much of their wealth the Government Funds come from the sovereign grant. That is taxpayer income for royal duties and appearances the total grants last year to all the royals was around 100 million. Only about 3 million went to harry and meghan paying about 5 of their official Office Expenses, which is their life but they can call it expenses. 3 million is only 5 of their costs . Right of total Office Expenses they will lose that funding but keep their royal home at frog more and keep their security and the biggest source of income from the family. Harry inherited about 14 million from Princess Diana. That amount estimated about over 20 million. And the billion dollar private estate funded by prince charles. They say they value the ability to earn a professional income which in the current structure they are prohibited from doing they are going to start a charity. The family is in the real estate business. That is going on that is throwing off a lot of cash running this familys life but they are not allowed to get additional income outside of that now theyll be able to i assume every company or person will try to sponsor them theyll become like nascar what will happen here . It will be a delicate balance. They dont want to be seen as being too commercial that would put them at a bad spot with the British Public where they are already not liked. They put out word saying nobody in the royal family knew anything about this. What, you made this royal family including the queen . Right its not unprecedented Princess Diana was no longer an official royal after she divorced Charles Prince andrew for Different Reasons not a member of the royal family. How much money can these guys make if they really wanted to do pizza commercials and stuff like that kim kardashian. Next week is a big one for Bank Earnings mm some stocks are trading at levels not seen since the financial crisis Gerard Cassidy lets start well go right from bottoms up, not top down. Get a little at the end. But whats your top picks, bank america, gerard . Yes, it is. Thank you for having me. I think the outlook for bank of america is quite strong, as you know, the u. S. Economy this year is expected to grow at around 2 this company is the best play on the american economy, especially the consumer when you look at the growth and loans over the last six months, data coming from the Federal Reserve on every friday afternoon the long growth is growing at 12 to 13 a year and bank of america is one of the leading consumer lenders as you know on top of that, they have a very strong focus on delivering positive operating leverage by controlling the Expense Growth i think the ceo is one of the most underrated ceos in the United States. Hes very low key guy the stock looks pretty good for sure his performance there do they they dont need high Interest Rates, right, banks they need a steep yield curve. Consumer seems flush and you get to loan more and Everything Else its kind of a mixed bag some people would like higher rates on a steeper yield curve but thats not essential for these guys to do well . I think you summed it up well it certainly helps to get a steeper yield curve. See the tenyear Government Bond yield by this Time Next Year 2 1 4 that would be very good for bank of america and all the other banks. The loan growth is still there we expect it to come in 3 to 5 . Do your other picks second pick, gained 31 in the past year, pnc, Pittsburgh National whats next for that bank . Yep when you take a look at pnc, pnc has done a very good job of growing their business outside of the their midatlantic footprint. During the crisis they picked up National City at 20 cents on the dollar they did a great job with that now theyre growing their business denovo outside of the ed midatlantic through the commercial business. You might remember banks when they expand outside their footprint and do it with loans they oftentimes get in trouble during a downturn. 45 of revenues come from fees so theyre not as reliant on lending as some of the other banks. That was National City was cleveland. City national is l. A. Thats correct. City national is l. A. National city was cleveland. Thats correct. One had the symbol cnbc close to it. Your third pick quick . Very close. Third pick is truest financial this is the new name as you may recall bb t and sun trust, biggest merger in almost 20 years. We expect them to generate meaningful cost savings. We think it will be the real leader in the southeastern part of the United States you have the mix of two very strong regional banks, one out of atlanta, the other out of North Carolina but that would be the real winner, especially when it comes to cost savings in 2020. Two perennial takeouts finally cute that theyre together now thank you, gerard. We have to run okay. We have two big hours ahead. When we return, were watching two major stories out the middle east more details emerging from the Ukraine Airline crash. Well bring you the latest on that plus what is the threat of a retaliatory cyberattack from iran will join us to break down what you may need to know youre watching squawk on the street on cnbc. Were carvana, the company who invented car vending machines and buying a car 100 online. Now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. Mar gains for wall street. Futures pointing to a higher open ghosn speaks out. These allegations are untrue and i should never been arrested in the first place. His decision to flee japan and the details surrounding that escape in a one on one interview is coming up. Cyberattack from iran in the works . What you need to know and how businesses should prepare straight ahead is the second hour of squawk box begins right now. Good morning and welcome back to squawk box. U. S. Equity futures at this hour, lets show you whats going on dow looks like it would open 165 points higher. S p 500 looking to open 18 points higher and nasdaq looking to open up about 60 points higher as well as we continue to move up, up, up, up, up. Carlos ghosn did not hold back and did not back down the past 24 hours the former Auto Industry titan held his first News Conference since jumping bail he was animated, fiercely defended himself against charges of financial misconduct. He then talked one on one with michelle ka rue sew cabrera who joins us from beirut with some more of her interview with mr. Ghosn. Hey, michelle. Reporter good morning, joe yes, carlos ghosn managed to orchestrate an international cloak and dagger escape even though he was under house arrest, couldnt use the internet, couldnt speak with Close Associates including his wife so i started by asking, how did you do it . Well, i did myself. Obviously it was with the help of some people that i got to know but as you know, im not going to develop this because im going to expose them you can imagine im not going to take any risk with people who have really dared to give me help into how to leave japan without creating any trouble which was the case. But tell me, youre stuck in a box for several hours, right breathing through air holes. What is that like . Im not going to confirm or say anything what i can tell you is its obviously you have lots of anxiety when you are in a period where you are transiting out of the country but still not out of reach. But when you go through an experience like mine, ive been arrested in 19 of november, 2018, and been through very, very tough times with a lot of adventure, i would say, youre numb somehow your ability to feel the situation in which you are is diminished because you protect yourself by numbing yourself so, i would say that it will be fair to say that between november 19, 2018, 30th of december, 2019, when i arrived to beirut was a little bit of a period where its kind of parenthesis in my life i thought i was feeling completely different somehow i am reborn since i arrived here so when you tell me your emotion, yes, i had some emotion but they were diminished compared what im feeling now. When you finally got out and got to lebanon. Its a rebirth. Its a rebirth first time i have seen the face of my wife in the house of her parents. I cant tell you the joy i had to just be simply with her after spending nine months not being able to talk to her, not being able to see her with absolutely no end in sight for this kind of ridiculous ban they put on me. It was it has a special taste. In a certain way it helps you put back priority in your life who are the people who are the most important, what you think you should be doing. Im a different man today. How much did it cost . Ive seen a lot of numbers circulating in the press i think they are very, very generous in general. Too high. Yeah. So thats what i can tell you. I dont think you need this kind of money to be able to organize. Obviously the simpler it is the better it is, the more chance you have to be successful and the more discreet youll be. What if you have to spend the rest of your life in lebanon, though, are you ready for that its better than spending the rest of my life in japan just this morning reuters reports that lebanese officials have posted a travel ban on carlos ghosn hes not allowed to leave the country. Not sure if its in response to a red poll poested by interpol he said he loves japan and the japanese people. You look at his twitter page, which was created just in the last april of last year, the middle of all of the troubles he was in, its clearly designed for a japanese audience. His name is also there in japanese hes looking at a japanese pagoda, im sure now that he has much more ability to speak on the International Stage youll see changes to that. Guys wow yeah. I loved the smile, michelle, when you asked him about what it was like to be in a box for several hours. You know, he smirked at that, smiled at that because you had him. He almost talked about that. It was amazing to hear him be reflective on some of these things yeah. It must have been an incredible experience to go through and im sure people would still like to hear very much the details about how it was done considering the Different Levels of constraint that he was under as he put it together. I mean, try to organize just anything into our lives and its really hard never mind Something Like that. Ten hours in a box versus a year and a half in a japanese custody. Or for the rest of your life. Im sure that was i mean, you cant be claustrophobic. That would be tough. But if youre not claustrophobic, i think i could do it. This is what you got to do to get out of here, put a few more holes in ill take my chances, right . Its roar shack for everybody, isnt it. You think could i, would i, et cetera how much could you see through the holes . How much can you breathe, et cetera i do want to say i heard your comments last hour about how he responded to the questions about the accusations. And youre right, becky. Hes going to have to be much more precise about answering some of those questions if hes really going to win in the court of International Public opinion. Right he gave some explanations and the wall street journal editorial page today, by the way, gave him a glowing response to what he said and have long talked about issues in japan but hell have to get a little more precise about the issues. Michelle, what do you think his longterm goals slash prospects are. What do you think he thinks what is a win for him at this point . So i think hes already got a big win. Hes out of japan. And hes not under arrest anymore. And he can see his wife, whom he clearly loves very much. Theyre obviously very devoted to each other. I think now he begins to think, okay, what is a win . Is it clearing his name . Is it getting exonerated in some form or fashion . Do you try to mount a trial somewhere else does he negotiate a bargain from a distance with the japanese then he was asked during the News Conference yesterday about some kind of Public Service role here in lebanon. You know, who knows. This country is a financial wreck and a mess so they could certainly use somebody with a little more acuity in the financial realm to help with the restructuring thats inevitably going to be needed here and will be very difficult considering the political constraints. Michelle, thanks. Back home to the markets here, despite geopolitical concerns the nasdaq and the s p hit new highs in yesterdays session. The s p 500 is on pace for its sixth positive week out of seven. Up 52 since the election of President Trump. Jim paulson says look for the s p to reach somewhere between 35 and 3,600 jim joins us now alongwith ric bernstein, ceo and chief Investment Officer of rich bernstein advisers and a cnbc contributor. Ill get to you in a second, jim. Good to see both of you. Rich, i duly noted recently you pulled your horns in a little bit. I want an honest answer. Was it six months ago you got less bull snish. Exactly right. What would you say in terms of the 29 we got last year, youre now looking at missing 15 would you say . Joe, i think yeah. What do you think 15 . From the point of view of managing a portfolio everybody that about right, 15 yeah. A lot of our ek witty portfolios outperformed last year you get a momentum rally, which is where we are, fundamentals are still deteriorating, do you buy into that momentum rally or sell into that momentum rally . Managing risk. Exactly all were doing is calming down as we get to this momentum phase and as the market keeps going up youre at a point in time where that still works, that explanation . Absolutely. You saw francois bearish since 2400 he gets up to 3250 he needs to throw in the towel, say i had no idea which i was talking about, which he didnt obviously. If you get to if we go another 15 and its 30 that you miss, then this explanation doesnt work. I can sympathize with francois as a cell side strategist your idea is you have to put an idea out there. You have to differentiate yourself and youre not being measured in terms of performance per se as a money manager, youre being mansioned relative to performance. The only way i can answer is to say that our biggest equity portfolio outperformed. But you may it may go down 15 over the next six months. Right. It will look great. Or it may go up more and youll say, geez, i probably should have capitulated we dont know. Paulson, what do you think . I know you dont need to talk about rich specifically. So youre you were bullish all last year, right yep. And you had been bearish prior to that . Yeah, in 18, yeah. 2018 3,600 this year i think its possible who knows. Its not that much. By the way, i have high regard for rich. Thank you, jim. Yeah. Nothing but high regard. You know why by the grace of god go you. Thats right. Ive been there and probably be back there before the year is out. Right joe, here is what i guess i think is i would like to see some pressure on the market before i get too overly cautious for this market. In other words, you know, i think the fundamentals might even be improving a little bit right now. Were seeing economic surprise and decease pick up. They oecd world leading economic index has bottomed out and picked up overall. Were certainly seeing better reports in the United States with a clear acceleration here going on we might do 2. 4 growth for the full year of last year. But against that, you know, whats to take the market down right now . Are bond yields going up too much are shortterm Interest Rates rising too much . Is inflation a real threat for the stock market is there too much tightening by the Federal Reserve . Is there too much tightening by fiscal authorities is there truly over the skis, over the top, optimism, full on run into the stock market where everyone is going crazy in i dont see any of that. And i think before we end this run, at least we can always have a pullback, but before we end this run, theres got to be some pressure brought to this stock market i just dont see it yet. So, the way i view it, and i should in the Mutual Admiration Society point out i love jim as well but i think when you manage money you have to try to say what are people going to be talking about a year from today . And i agree with jim that right now theres nothing thats glaring. Theres nothing thats saying that we should be under our desks in the fetal position. Theres nothing like that. But the question is if corporate profits dont pick up, what happens to employment . It will be the second year of basically flat to down earnings for major corporations i dont know any cfo who says im going to hire people when my earnings are flat to down for two years in a row i think people will cfos, ceos will be under pressure to cut costs, to manage the business better. You think about it what is the number one consensus that the household sector is fine everybody believes the household sector is healthy. Thats true. But what people are missing, adp yesterday year on year was the weakest its been in this cycle. Noek talks about it. Those are the type of issues you have to put on your radar and say people will talk about it a year from today. Go ahead. But rich, you know, i think to suggest that growth wont stay at least stay where its at is a big assumption. Look what weve done weve taken the long term cost of capital, the ten year yield and dropped it in a half the last year. We exploded the money supply we upped quantitative easing we have greater fiscal juice are you suggesting that none of that is going to work . I think a little bit of is probably going to work and keep us healthy at least far while. This was really nice you two guys, mutual admiration. You agree a lot politically. I got paulson to admit in a trump sanders election he would go trump i was unable to get from you. You didnt know that. From you i got the opposite answer i hope your clients realize. Any way, its okay im not going to shame you rich and jim, thank you oth. Thanks a lot. Coming up when we return, more naming and shaming. Plus, iran signaling it will not share the black boxes from a boeing 737 800 crash that took place minutes after takeoff from teheran and just hours after a missile attack on u. S. Forces. We have an update on all of it just minutes away. First, as we head to a break, check out down sharply after the retailer reported a drop in holiday sales. Lowest end oifts previous forecast i dont know if you saw the bed, bath and beyond news the other day. Wow. Squawk on the street returns right after this attention. This gets my ud you take a lot of trips to the caymans, phil . Pretty great, right . Oh phils legally dead. Fell off a boat. Going by denis now. Celery. Long story. What do we got here. Oh. Not going to want to see this. I dont think this is going to work. Just ok is not ok. At t has americas best network, now with our best plans, at our best prices, starting at 35 a line for 4 lines. New from at t 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. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Welcome back, everybody. Here is whats in the headlines at this hour hp ink is once again rejecting a takeover bid from xerox. The computer and printer maker says the fact that xerox lined up financing does not change its view that the bid undervalues hp xerox first put forth its 33 billion offer back in november Jp Morgan Chase is raising the fee on its popular sapphire reserve card the increase of 100 will bring the annual fee to 550 the bank will add some extra perks involving food delivery service, door dash and lyft twitter is planning to tegs new features that would allow users to limit who can reply to their tweets interesting. The move is an effort to lessen harassment on twitter and was unveiled in a presentation at the Consumer Electronics show. Anyone takers who can reply to you yeah. You would like that thats better than a block. I see some of the people that are following me now im not going to tweet i like to know. Most of the time. There are times when i dont and there are people who write things that arent the nicest things but the feedback is valuable, dont you think . No. I do like being able to gauge to some extent but i also think youre not getting a true read of the population when youre just basing it on twitter responses. Its like one metric. The stuff that trends very extreme. The things i see on twitter, no theyre so over the top, so wrong about almost 99 of what goes on in the world. Thats from people you dont block. When we return, what caused a boeing 737 800 to crash just minutes after takeoff . Neither boeing nor the u. S. Government may never know after the break. Announcer time now for todays aflac trivia question. In what year did apple launch unes the answer when cnbc squawk box continues why aflac . Because Health Insurance doesnt always pay it all. Aflac after surgery we had extra bills followed up visits, deductibles. We thought Health Insurance had us covered up for everything, but it didnt. Aflac gives you money directly to help you with those things. I want to thank my wife, my mom, the duck. Get help with expenses Health Insurance doesnt cover. Get to know us at aflac. Com the unparalleled landscape of park city, or the famed peaks of whistler, youve faced the hassle of lugging your gear through the airport. With ship skis, youre just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. With unrivaled pricing, real time tracking ship skis delivers, hassle free. Ship ahead and go catch those first tracks on fresh snow. Ship skis. Your skis. Delivered. Announcer now the answer to todays aflac trivia question. In what year did apple launch itunes twoun. The crash of the boeing jet remains a mystery. The cause is unclear with a variety of conflicting reports from technical failure to engine fire some aviation Safety Experts and pilots are calling the incident unusual. Teheran has signaled that it will not turn over the black box flight recorders to boeing or to the United States and phil lebeau joins us now with more and unusual is a word you would use for any modern day boeing or airbus jet liner to jash two minutes into takeoff because theres 50,000 flights a day by definition its unusual joe, ill go further than that ive talked with a number of people who have been or are Safety Experts who handle crash investigations of commercial airlines all of them said the same thing yesterday. This doesnt add up. This is suspicious it just doesnt make sense here. I should point out here one piece of new news, the head of Ukraines National Security and Defense Council says that he and others will be meeting with iranian officials perhaps to get a better sense of what might have happened here but the experts across the board, theyre all questioning the circumstances of this crash. The 737 800 for Ukrainian International airlines crashed just two minutes after takeoff and here is what you have to keep in mind it was a normal climb to 7,900 feet there was no may day call from the pilots the telemetry data, everything, gps, boom, went off the map at the same time. That doesnt happen if theres a mechanical failure or engine fire these planes are built or generally speaking theyre equipped so that the pilots in some fashion can try to get back to the airport, find some place to safely land the plane as you take a look at shares of boeing, keep in mind that this aircraft, this investigation, typically you would see the ntsb and boeing go to a crash site, but boeing and the ntsb because of the sanctions with iran, because of the political turmoil may not be able to get in there and iran has essentially said, were not turning it over to you guys whether or not they turn it over to somebody else that remains to be seen. Take a look at shares of boeing, the downgrade yesterday. Both of them due to concerns about the greater costs for the 737 max. Not because of the crash in iran but this is a story that hopefully over the next day or two as whether its the ukrainians, canadians or swiss who are also expected to go to iran hopefully well get more information. But as of right now, none of this adds up to the experts. Phil, thank you for that. Joining us right now to continue this conversation is seth caplan seth you looked at all the flight data the situation in iran right now, and o all of the conjecture, speculation and otherwise. How do you read it yeah. You can construct, you know, devils advocate scenarios where something could have happened. And everything phil said is true so for example, the fact that the pilots didnt put out a distress call. Look, in the cockpit the rule is aifuate, navigate, communicate in that order. Something goes so wrong that a pilot has to decide between trying to fix the problem and trying to communicate to controllers whats going on, the pilot is going to choose trying to fix the problem that said, you know the iranians have come out and said this morning that witnesses saw the plane turn back perhaps witnesses from the ground this would be, perhaps bauds of some technical problem. Pretty difficult to understand how the pilots could have that much control of the plane and yet again just disappear in terms of communication all this obviously happening in the context of everything going on in the world. Look, in the past there have been crashes that have seemed to be suspicious. There was American Airlines 587 after 9 11 we all thought terrorism and it wasnt this is all devils advocate, highly suspicious. In terms of your read, as an analyst, Investment Community thats looking at these things do you write this off . Should this be part of any type of calculation as an investor in this business . Right so, the outcome of the investigation obviously isnt going to bring back the people but in terms of implications of boeing, engine maker cfm partly owned by ge, airlines around the world obviously a big difference between whether this was terrorism or human error or Something Else and whether it was something mechanical with the plane. Yeah, the more we see here and think this through, you have to believe that the starting point here is that this is a oneoff of some kind of there have been irresponsible statements coming from all the parties here, including the ukrainians said these pilots are so experienced this couldnt possibly be pilot error. The starting point here is that something very strange happened. Why this plane could be targeted or whether it was something supposed to target Something Else you know, who knows. Hard to imagine why you would target this plane and these people but very suspicious. Phil, you want to jump in i would just echo what seths saying im telling you, usually when these accidents happen, andrew, when you talk with the experts, they sit there and they say, you know, this is kind of interesting. I would like to see this piece of data. It was within a couple of hours yesterday that almost everybody that ive talked with has said the same thing, they said, im sorry. Theres no way this this adds up now, nobody wanted to come out and explicitly say, look, is it possible there was an antiaircraft missile that hit this plane because of the heightened tensions in iraq . Nobody wanted to come out and explicitly say that, but they all danced around it and they all said i would like to know. So far we know that nbc has reached out to the reporters who cover the pentagon they have reached out. So far officially the u. S. Says theres no indication that there was any antiaircraft missile fire that might have brought down this plane, but again, im just going back to what everybody says as theyre looking at all the data, none of this adds up. Finally, seth, phil alluded to it earlier, the 737 max in terms of timeline, any new thoughts on whats to be believed here . Well, the big news this week was something that phil reported a couple days ago and other media outlets, the fact that boeing now seems to say, yeah, you need simulator training. Simulator time for a pilot to transition from the ng we have been talking about here to the max which is essentially the Third Generation of the 737. Thats a big deal. Because boeing was doing Anything Possible to avoid that. That was a major selling point of this plane. Sort of this twopronged approach hey, revolutionary economics, lots of fuel savings and all the rest of it but drop it into your fleet. Pilots can transition seamlessly like the 800 or a max 8, 7 or 9. And now boeing itself conceding that thats probably not likely. Thats a long term issue for boeing because the plane is just a little less valuable there compared to the air bus competing product, which was again a selling point. Airlines will be taking that into account when they calculate what this plane is worth. Seth, thank you phil, always good to see you appreciate it. Still to come on squawk box, how likely is it that iran would launch a cyberattack we will debate that after the break. And then Mike Bloombergs jobs plan is out well speak to the cochair of his campaign. The rise of tesla. Elon musk has the company hitting on all cylinders or electric motors. Why investors are loving the stock. Well talk about that straight ahead. Squawk box will be right back. Connections. Patterns. You can see what others cant. D Defense Department has confirmed that iran launched 16 short range Ballistic Missiles from at least three locations. At least 11 hit the Al Asad Air Base no one was killed. Nothing major was damaged, but defense secretary mark esper says the u. S. Military remains poised and ready for any more action from iran one of the Major Concerns is teherans potential to launch a cyberattack in retaliation for the death of that iranian general. Joining us now, raleigh flynn, president of the Foreign Policy Research Institute and former executive cia counterterrorism sender in terms of being good at this, we have to say irans pretty as demonstrated some pretty good capabilities in cyber terrorism in the past, we think, any way thats absolutely right iran has a pretty robust capability of tools to conduct cyberattacks from malware, malicious malware. They have perpetrated a lot of attacks over the last five or six, seven eight years and not only technical attacks but disinformation kinds of attacks. They have defaced websites over the weekend. They it looks like theyre the perpetrators of a Disinformation Campaign against former National Security adviser john bolton we ourselves at fpri, the Foreign Policy Research Institute are the target of what we think is a probable iranian Disinformation Campaign to spread false information about u. S. Intentions in iraq the middle east. Wow so it could be a u. S. Person it could be an individual. It could be an entity. They can do all these things whats the most likely target would you think, raleigh transportation system, financial, federal government, local . Well, theyre not stupid. They understand they have very good capabilities. Theyre not on the level of russia or china. But they perfectly understand that the United States is very powerful and is not going to tolerate, you know, a catastrophic attack. Community have in the military have very good cyber defenses, as do certain industries, such as financial services, which by law are required to have very good cyber programs against cyber securities types of attacks. I think more likely are attacks are what occurred against ourselves. They spoofed our website, they didnt hack us, and put a bogus article on it allegedly written by one of our senior fellows it probably started in arabic in the beginning. And was spread all around iraq the middle east. So i think theyll probably go for lesser targets they dont want us to retaliate against us they have felt that before about ten years ago they didnt have any capability like this to speak of but Cyber Capabilities are cheap. Theres very little barrier to entry. And following the stucks net attack, they really got smart and decided we have to defend ourselves. They have very cape they have very much capabilitiecapabiliti raleigh, that sounds like a real warning call for American Business you think about North Carolina and what they did with sony. Are those the type of i think thats absolutely right. So smart businesses should have Good Governance policies and procedures that their employees are well versed in the most common attack is a phishing attack, clicking on the stupid links that we all get all the time some of them look very good. The other issue is they can be in your system, in your networks and you dont know it. They lurk there for a long time. In our case at fpri, they put up a bogus website that looked just like our site, had a slightly different web address, but they put it up last august but they didnt choose to use it until new years eve they have capabilities probably ready to go. And the other thing i might add were not certain of attribution. Attribution is devilishly difficult to ascertain its possible russia could also be behind some of these attacks because theyre also super capable at this. They have been doing it for decades and decades. Its amazing to me. Im trying to figure out how to download this spam thing for these spam calls, raleigh. I dont think im capable of these people have a lot of time on their hands thats very sophisticated. Thats incredible. Any way, well have you back hopefully not after an incident, rally, but well have you back to talk more, too short. Thank you. Thanks. When we come back, we have this mornings Market Movers check out the future ahead of the open on wall street. Dow would open at new highs here if we stay at these levels dow futures up by 153 point. S p and nasdaq both closed at new highs yesterday. S p is indicated up by 16 points this morning the nasdaq up by 56. Reminder you can always watch us live on the go, on the cnbc app. Well be right back. Before we talk about taxsmart investing, whats new . Well, audreys expecting. Twins grandparents we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. Welcome back to squawk box. Hp ink is once again rejecting a takeover bid from xerox. Saying the fact that xerox has lined up financing doesnt change its view that the bid undervalues hp xerox first put forth the offer back in november check out very persistent they are not giving up. And then meanwhile, by the way, check out shares of kohls this morning. Those shares are down sharply after the retailer reported a drop in holiday sales and guiding its full year earnings to the low end of its previous forecast thats now. When we come back, greg fisher will join us to talk about the president ial candidates job plan and the 2020 election. Then, elon musk would smash all pay records and become the worlds richest man if his ambitious new incentives work. The details of the said payoff are straight ahead squawk box will be right back. The world is customized to you. Built for you. So why isnt it all about you, when it comes to your money . So. Whats on your mind . We are edward jones, a 97yearold firm built for right now. With one Financial Advisor per office, were all about knowing whats important to you the one who matters. Edward jones. Its time for investing to feel individual. Looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 99. 99 per month. Act now, and get 1 year free of wifi pro. Call today. Comcast business. Beyond fast. Signs itself President Trump also saying hes going to travel to beijing later to begin talks on the next phase. All right, coming up, well be right back congressman, senator isnt he . Angus king, one or the other. A senator. Who is counting will join us to talk of the latest details of iran out of washington and then later, good news for teslas stock, the last few months, could mean even better news for elon musks paycheck. Its all congress. Youre a member of one house of congress. Nice try, guys. Talk about how to turn him into the richest n t wmainheorld squawk box will be right back. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. A. Announcer watching that resilience of the rally, weighing geopolitical risks. What to know about the first trades futures shaking off tensions the middle east. Stocks pushing to new highs as tensions ease between the u. S. And iran al ons chief economic adviser will join us this hour. Carlos ghosn breaks his silence. Look what theyve done. The whole thing doesnt make sense. For me its obvious. The former nissan chief speaking out against what he says is a plot against him and elon musks moon shot payday the tesla chief well on the way of earning an astronomical bonus. The final hour of squawk box begins right now good morning and welcomeback to squawk box here on cnbc, live from the Nasdaq Market site in times square im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures solidly green. 141 points on the dow. S p up 16 nasdaq indicated 52 or so tenyear closer to 1. 86 this morning. Mike bloomberg announcing his president ial jobs plan calls for raising the minimum wage to 15 an hour and increasing Labor Protections for workers. Joining us for a look at that plan and at bloombergs campaign, greg fisher. He is cochair of Mike Bloombergs 2020 campaign and sir, its good to see you today. Good morning. Good to be with you. Lets talk about how bloombergs campaign is going at this point mayor bloombergs numbers have increased. They now have him edging above Pete Buttigieg at 10 cents just below Elizabeth Warren and well below bernie and joe biden at this point whats the plan of attack . How you moving about this . How do you plan to move up in the polls, which have not been quite as kind. Well, lets start at beginning. Were in week seven of the campaign the kind of progress we made has been incredible. Were on plan. Were building Incredible Organization and people are responding to mike and in a fantastic way. You know, when we roll out our jobs plan, what people want and what our party needs, we need a nominee to fight on jobs theres nobody better positioned thats ever run for office that has the credibility that mike has in terms of creating jobs in the private sector, in the Public Sector and understands where the economy is today but where its going tomorrow and most importantly how we can position americans all across the country to prosper from that. No question major bloomberg has certainly some business bona fides, a job creator and someone who did well for the economy of new york when he was here. But running against President Trump who also has a very Strong Economy seems like a tricky proposition. How do you find weaknesses there . What are the specifics not really when you look at the economy today. Its working in the big picture standpoint when you ask people that are middle income workers, low income workers, the economy is not working for them so mikes plan is about attacking this problem because right now wealth and income is concentrated in two few hands in too fu places. Its about spreading the economy across the country mikes plan does that through education, federal research and development, by going through the Community Colleges and really being more responsive to todays economy so everybody feels like they have a bright and hopeful future thats whats missing in todays economy, is bipassing way too many people. It sounds like the Trump Campaign taking a page out of their book from 2015 when they were running kind of going at this the first time around where he went to states where a lot of workers felt like they had been left behind. Is that the same sort of situation . Well, with the difference that mike can get outcomes and results like he has throughout his entire career. Trumps promises have totally fallen flat. Mike has an informed way to take a look at the economy and make sure the people know what the jobs of tomorrow are and how we get those jobs so, what mike has shown all along obviously throughout his career he has the vision, he has the plan and team that can come together and then he executes the plan he does it for the good of his citizens he does it for his customers and thats what this plan is all about. So, its much better informed. Then also relies on the fact that people have got to move into a new economy they need assistance to do that. And you can do that whether its through the Community Colleges, whether its 1 million apprenticeships and internships that are part of this program. So theres just a lot more depth and substance behind mikes plan you certainly expect that from him. Im just wondering about strategy i understand you guys got to stay on message and stuff, but you sure its the right tact to just say, yeah, hes fallen flat on every one of his promises, President Trump and everything you see everyday, whether its the jobs market or the Unemployment Rate at 3. 5 or the stock market hits a series of new highs. Is it best to just say, yeah, thats not really happening. Dont Pay Attention to that. We can do well actually do good why dont you say it was the obama economy that he inherited it and just said he has the wind at his back. The house, the Democratic House has been working with the economy . Why not acknowledge that the economy is pretty good, instead of sounding like youre baghdad bob just saying no, things are actually awful mike will make better. Come on. Im trying to help. This is what we get back and forth to you have to get out of times square. Im trying to help you not look silly by looking at the economy and saying its awful. It just sounds crazy to me. Awful for who and good for who if you get out of the new york bubble what you find is people are struggling, right . How many people are working two jobs, three jobs and theyre still not getting by theres no question as i said at the beginning, the big picture is doing okay. Its not working for everybody mikes campaign is about spreading prosperity and opportunity throughout the country. The question i have is how you effectively going to placate the more Progressive Left in this sort of grand conversation thats happening here insofar as you have Elizabeth Warren and you have Bernie Sanders and to some degree to make this work i imagine you have to think you have to capture some of them to win the nomination and so, what has to happen in terms of how that works . Well, when people look at mikes past and his policies and where hes at on the issues that are critical to us today, obviously jobs is number one without a good economy no, no, no. I get that i understand look, i was just having conversation with a very liberal 27yearold woman who i mentioned mayor bloomberg to her and she looked at me and she said hes disqualified disqualified why greg, youre talking about income inequality and he has 60 billion. She said hes a billionaire i said what do you mean hes a billionaire thats a problem. When people understand mikes biography and midle class kid, who, yes, took advantage of American Dream and made that theres nothing wrong with that. No. When they look at where he you dont need to persuade me im asking you you persuade the 27yearolds clearly thats what youre seeing in the first seven weeks of this campaign he has positioned them from a jobs standpoint to take our country to a whole new place here is what we know we know that if we have a candidate that is too far to the left, whether that be elizabeth or bernie, we dont have a chance in the general. Making sure we have a new person in the white house how do you im not going to vote for elizabeth or not going to vote for bernie the democrats have got to elect a nominee to win this general. How do you persuade that progressive member of the left who historically wanted to vote for an Elizabeth Warren or wanted to vote for Bernie Sanders, thats a bad vote, that vote wont work and that you need to get them to the middle my question to you is what is the argument that you think youre going to proffer thats going to get him there or do you write that part of the party off, which by the way, may be a strategy. Maybe its a workable strategy im just asking. Okay. Im sorry, guys. Im not hearing you. Thats okay that makes sense we apologize it sounds like we have probably lost his audio connection. We went past the window when we were supposed to be doing this it was not us arguing back and forth. We dont have that benefit, me and you i hear you no matter what and you hear me no matter what. Our apologies to graeg fischer. And apologies, too. I thought you werent listening to me, greg. Clearly you werent listening to me because you couldnt hear me. That was me. Thats a regular daily occurrence. Were used to this. Meanwhile, fed vice chair richard set to speak here in new york at the council on Foreign Relations and our own steve leashman joins us with the details about what to expect whats going on . The fed vice chair richard saying the current stance of Monetary Policy, quote, likely to remain appropriate. Its not on a preset course but it would take a lot to change the current stance of policy the u. S. Economy begins going back to your recent conversation begins 2020, quote n a good place. Specifically he says theres no evidence that the strong labor market we had is pushing up inflation, bob wages going up and pushing up prices no evidence of that. Also. Interestingly he says the global head winds that cause the fed to reduce rates in 2019 may be beginning to ease, seeing some evidence of that, he says the shift in Monetary Policy in 2019 clarida calls, quote, well timed and helped keep the outlook on track its purchases of repos as appropriate. The fed may move away from active repos gradually later this year but nothing definitive on that. Hes the main guy on Monetary Policy you want to listen to for changes and were not seeing much change this idea of the fed being on hold. The two most interesting things i thought were this idea that hes global head winds may begin to ease. Fy had to take anything away from this, he sounds like any concerns about the economy are kind of easing at this point so the idea that they would ease further forget about that at least for now unless the situation changes. I think the fed positioned itself for maybe not the situation with iran but certainly for the trade situation to get worse and that gets back if i might to the question that i asked the fed chair back at the recent press conference i said, okay you pointed us to this paradigm of 1998 where you cut rates as insurance. Well, mr. Chairman we still had 2001. You took him back are you taking these back and he said, no, the situation is different. So even though the head winds are easing, it should not at least given the framework that the chairman laid out create the concern that the fed is going to take those cuts back he wrote this speech before the morning. This morning we found out that china is saying, yes, we will be able to sign the trade deal, phase one of the trade deal with the United States. Thats going to happen on the 15th if that was the one thing the fed was positioning itself for things to get worse, we find out today that at least thats not the view this morning. Now i get to use a little bit of reporting that i did over the weekend in san diego 13 other economists. I was there as a reporter. Did you have a fishing rod with you i did not, joe. That was a mistake i made. You are correct. I should have trying to write off another trip to reporting. You know i bought a sevenpiece rod that fits in my overnight bag. We can talk about that separately its allowed me to do additional fishing with my reporting trips. I did not fish but i did report. Two things first of all, the president is only not putting on those december tariffs the september tariffs remain in place. In general, there were several papers presented suggesting that both the existing tariffs had had a negative effect both on employment and on overall growth and one way to think about this, becky, we began 2019 with an expectation of well, the administration thought three lets say wall street was 2 growth at a 3 funds rate. Were ending the year we ended the year 2 growth rate with 1. 65 growth rate we got to where we were going but we needed a lot more stimulus to get there. And perhaps there were many things out there we have to go i want you to tell me when these overwhelming macro forces holding inflation down ease. Whether its technology, the gig economy, amazon, the digital revolution, the internet, whatever you want to call it, something is different it seems like to me and rates got to go up eventually, but what if inflation doesnt come back even with wage pressure then why should they i figure they got to you have to tell me when this technology. This is the Big Development of our time. Thats what i think. Apologies to the guy. Not only just inflation but the change in the fed. The fed is no longer believing what you just said, which is that we have to go back. I know. Maybe we dont powell is firmly prove that. This is a huge thing. Talk about at 8 30 are people having kids again . Were turning into japan people need to have kids go have sex. Theres immigration talk about that later. There is still immigration. Go have sex. All right we got to do we have to fix immigration, illegal immigration. We have to let more people in. We just have now ill get all these negative tweets. Go forth and multiply would be a better way of saying that steve, well see you in a little bit. On your morning show, joe said what you should be doing. Why are you watching us. Other top stories investors will talk about today. Carlos ghosn defending his decision to flee japan where he was being held on bail speaking to michelle carusocabrera, ghosn blasted the plot against him and fiercely defended himself against charges of misconduct. We want to end all of this. I want to speak. I want to be able to defend myself i want a Justice System where attack and defense have same rights and its balanced. And let the truth happen i was in a system where its not about the truth. Its about winning its about confession. Ghosn declined to provide specifics on his dramatic escape from japan because he didnt want to get anyone who helped him in trouble it involved a former u. S. Army green beret and ghosn hiding in a Music Equipment case. Kohls and jcpenney lower this morning after weak Holiday Season sales reported. Kohls also said that it expects full year earnings to come in at the bottom end of an already lowered forecast jcpenney market cap is now below 4 million dollars. Kohls down to 45. 80. Jcpenney down 2. 5 , a decline of 3 cents trading at 1. 17 a share. Also ver ryon is eliminating annual contracts traditional bundles for its fios customers. Allow them to switch their selections monthly, much like netflix. Yep and in geopolitical news, President Trump pulling back from further military action after irans missile strikes on bases that housed u. S. Troops cause nod casualties but told iran he would further tighten u. S. Sanctions hee is what he said about the decision to kill irans top commander. In recent days he was planning new attacks on american targets. But we stopped him soleimanis hands were drenched in both american and iranian blood. He should have been terminated long ago yesterday cabinet secretaries and other officials held briefings for all 535 members of congress and joining us right now is senator an gus king who serves on the Armed Services and intelligence committees. Good morning to you and thank you for joining us. Good morning. Tell us about what you learned from those briefings well, i make it a policy not to talk about specifics of classified briefings, so i really dont want to go into details. I think im a member of the Senate Intelligence committee, so i had had a classified briefing the day before on the intelligence surrounding the soleimani strike so i didnt really learn much new in the briefing yesterday. I think what really got under peoples skin and no doubt youve seen mike lees reaction, was the suggestion by the briefers that it was somehow unpatriotic or supporting the enemy or Something Like that to debate where we go from here on iran the fundamental question of war powers and congresss role in deciding whether the country should commit to a war and i think that was the sort of overall unclassified thing that really bothered people was the suggestion that, you know, it was patriotic to even debate whether we should be going forward. And i certainly agree with mike lee on that one. I think its not only Something Congress might want to do, its what congress should do under its constitutional responsibility. Senator, since you mentioned mike lee, lets just show the audience what mike lee said specifically and then we can talk about it. Sure. Roll that tape for a second the briefing lasted only 75 minutes. Whereupon our briefers left. This however, is not the biggest problem i have with the briefing which i would add was probably the worst briefing i have seen at least on a military issue in the nine years i have served in the United States senate when i found so distressing about that briefing was that one of the messages we received from the briefers was do not debate, do not discuss the issue of the appropriateness of further military intervention against iran and that if you do, youll be emboldening iran. Senator, youre saying you agree with mike lee . Absolutely. I think over the years the congress has gradually abdicated its power, particularly in terms of committing the country to war to the president not just this president but this goes back for many years the last Time Congress declared war was in 1942 and there had been these authorizations, one right after september 11th, one right before the iraq war. Neither of which apply to whats going on with iran so, many of us are deeply concerned about this congress doesnt want to take these kind of votes. They dont want to take that responsibility president s havent ewe serped this Power Congress has given it away i think what really bothered mike yesterday, and you saw it in the clip, was the suggestion that we shouldnt be debating it because that emboldens the enemy. That just doesnt fly in terms of what our constitutional responsibility is. Were you satisfied with the president s and administrations explanation for the killing of the commander . Well, i think they made a good case that this guy deserved to be killed and nobody on this side of the ocean is mourning his death. I mean, he was a very, very dangerous and bad guy. The question that i had that im not fully satisfied is why last friday why was what was what had happened that provoked this rather startling strike at this particular moment in time . Hes been a bad guy for 20 years. And both the bush and the Obama Administration had opportunities to take him out and decided not to because of the fallout and were already seeing the fallout. I think probably the most significant is two weeks ago there were protests in iran against the Iranian Regime and now the protests in iran are against us we essentially unified the iranian people and undercut whatever success the maximum pressure, the sanctions campaign was taking the other piece, of course, is it now looks like theres an even chance well be pushed out of iraq by the iraqis and ironically one of soleimanis goals was to get us out of iraq and we may have hastened that goal by this action. So im not im theres a lot of detail that we dont have about the strike i think the timing still is subject to question, but the fallout spretty negative. The timing would have been questionable whether it was a good idea or not. I looked at your notes theres a ben franklin close you do the benefits and the things that arent benefits and you add them up. You had 11 reasons why this was a bad move to kill soleimani you couldnt come up with a single reason whether he orchestrated an attack on the u. S. Embassy, which is american territory. Whether he killed 600 americans and maimed 600 americans whether he killed thousands of people and we finally have a chance when hes ramping things up and still fomenting terrorism, he was called a terrorist by the Obama Administration he was designated a terrorist. Absolutely. Just keep saying why now, why now, why now, without coming up with a single positive that could result from this seems to me that weve taken partisan rank or even to killing a terrorist you cant say its a good thing because trump is a bad guy. You didnt ask me that question you said are there positives to taking out soleimani, i would say absolutely there are he was a master mind he had a great deal of charisma, the president said he has blood on his hands, particularly of americans in iraq during the iraq struggle. And that was theres no question he was a terrible guy and taking him out is a positive but you have to also weigh that against the negatives and at this very moment we would be having a very different discussion right now if the iranian missiles had killed americans night before last, 24 hours ago we were on the brink of a serious war and so you have to weigh all of those things together. Okay. And im just not sure but clearly as i said at the very beginning, soleimani was a bad guy. Its a good thing that hes gone the question is on balance right now has it improved, has it made us safer the middle east has it made americans safer in that region . I dont think so okay. Senator, its good to see you. We appreciate your perspective as always. Hope to see you again soon. Coming up, elon musk closes in on a gigantic payday. You wont belief what the ceo tesla stands to gain with shares of the electric car maker keep climbing. The challenges of learning how and buy a boeing jet liner went down and when that crash happened in iran fell out of the sky. A lot even people that think its technical think its unusual. Former Transportation Safety investigator will join us next u wchg quk ed yoreatinsawbox on cnbc beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. The crash of a boeing 737 800 jet in iran remains a mystery right now. The cause is unclear with a variety of conflicting reports from technical failure to an engine fire. And teheran signaled that it will not turn over the black box flight recorders to the u. S. Or boeing from more what to kpnt on the crash investigation and what investigators would like to know, greg five, former investigator with the ntsb and our own phil lebeau. Lets start with you on this, greg as a former investigator yourself, obviously we dont have many details. But what do you think of what you know so far, what are you reading to try to determine what potentially happened there is lot of speculation out there, of course theres a lot of information that came out within minutes, if not hours, of this event talking about engine failures. I think that with this rampant speculation, of course, theyre building a story line over there to try to cover up maybe Something Else thats going on so, for investigators, the key here is to step back and actually do an investigative process and look for not only problems with the aircraft but things that may have occurred outside the aircraft and in this case because it was a conflict zone the airplane was flying in an area where there were missiles that had been launched. You always have to include looking at the external part was this aircraft hit by a missile. Was there an on board device was there terrorism. You cannot come out within hours and say that all of these things are off the table and that sit a pure mechanical malfunction. With the reports suggesting that teheran will not give the black box recorders to either boeing or to the United States, does that concern you about the idea of an independent investigation . I think the independence of this investigation really then moves to a transparent investigation. The flight data recorder in the cockpit voice recorder are going to provide a lot of investigation to investigators and with that in mind, its the fidelity of the data its one thing to download the data if you dont know how to do it or dont do it completely or you filter that data, all of a sudden now the story line could change in this particular instance, i understand why they may not come to the United States and boeing, but they may need the United States and boeing at some point to help them specially if these boxes are damaged. There are other organizations around the world that can read these boxes out over in the uk, france, canada, places like that, even russia. But the fact is if theres any kind of damage to these boxes, theyre going to need the assistance of the ntsb and boeing phil . Greg, i would be curious from your perspective because i talked with a number of former crash investigators, folks who specialize in this like you do, what you saw in the limited video and i know that the video is very limited, of basically a fire ball as it comes down to the ground does that look consistent with anything that youve ever seen or have studied in the past when it comes to an engine failure or some type of mechanical issue on a plane that has crashed you bring up a good point that is, of course, we do have video. It is very crude video it does show a fire ball coming down, which is apparently the aftermath of some event. So the video itself just shows the result of whatever took place in flight. The key now is to determine whether or not that was a mechanical malfunction that may have caused that level of destruction in the air similar to that of twa or is there other ed, whether its off the cockpit voice recorder, the flight data recorder or the external evidence that is wreckage ive seen pictures there looks to be evidence similar to the evidence of mh17, the shoot down where there was a missile that exploded there is evidence of that just in the pictures ive seen. So, its going to be very important for investigators to carefully go over all of those pieces when you look at the size of the debris field and the fact that there is no main impact crater, it suggests that something happened in flight it was very catastrophic and an engine failure, just a benign engine failure will not do that to an aircraft like that greg, we want to thank you for joining us and phil, thank you, too okay coming up when we return, all of wall street knows tesla has been on a tear lately the stocks doubled in the last three months but what you probably dont know or may not remember is that nudging ceo elon musk closer to a potential 11 figure pay outsnch well tell you why and the milestones hell have to hit to secure that funding when squawk box returns coming up, breaking Economic Data the latest look at jobless claims is next after a quick break. Were coming right back. I love the new myww program, because its tailored to you . Take the personal assessment and get matched with a proven weight loss plan. Find out which customized plan can make losing weight easier for you myww join today with the ww triple play welcome back to squawk box. Ten seconds, we are live from the Nasdaq Market site but we are now uhoh, five seconds away from the latest jobless claims we have the numbers. Your time is impeccable, andrew 214,000, that is down, what, 9,000 from the slightly revised 223,000, which was reported as 222. 214,000 pretty good number if you look at continuing claims, they moved up a bit from 1. 728, well call it just shy of 1. 73 million and just over 1. 8 million. Maybe the issue is in the Rearview Mirror we have holidays that may be some distorting issues here with regard to states and reporting, but for all practical purposes we do seem to be leveling off a bit in the low 200s. Obviously pretty good level. And when you consider how good the adp jobs number was yesterday, traders are getting a bit excited there could be a whisper number to the upside tomorrow from bureau labor of statistics if you look at Interest Rates as they were marked yesterday afternoon, were basically at the same places. So a lot of calm in the markets with some of the iranian issues, of course, will continue to monitor. And, we will, of course, be looking some of those auctions, 78 billion worth of auctions will be completed today with 16 billion of 30year bonds andrew, back to you. Rick, thank you for that. Meantime, steve leashman joins us with more rick is right as usual this idea that you had a slight up tick, measurable up tick that caused some people some concern with jobless claims. They were up in the 225, 230 area now theyve come back down theres certainly going to be some seasonality in all this thats important but ultimately were down to 224,000 on the fourweek moving average thats down from 233 it does suggest some softness in the job market but not necessarily too much to worry about. We used to be 300,000 was the number to worry about. That came out of 250 we havent really hit it yet looks like at the moment 230, 235. There are some layoffs to work through the system we heard about some the other day as well as related to boeing and the impact of boeing on both employment and overall output or gdp for the first quarter. Steve, lets talk about jobs because at this time tomorrow we actually will have the jobs report we can dig in a little deeper to it i understand that you have a story about how one wall street bank is actually trying to leverage big data to get a better picture of u. S. Job growth which is it . Its bank of america part of a continuing story doing big data and economics most wall street forecasters are looking for a modest cooling in the job market but a new looks for new big data looking for a sharper slow down. 160 is the number and thats down from a number north of 200,000 in the last report Unemployment Rates seen at 3. 5 . Average hourly wage should be strong at 0. 3. Theres that strong adp number another piece of big data looking for 202,000 in the private sector but could bit lower . B of a has a new model what it does is ingaggregates ad anonymizes direct deposit data from its accounts at the bank and try to forecast private sector employment. It looks payroll growth of 54 street census 160. Hold on, not even b of a is using this solely. Chief economist Michelle Meyer told me its just an input into the b of a job model and forecasting 140. So it might have led the bank to a below average forecast as input into its model the data, limited by b of a market share, just north of 10 . The data is seasonably adjusted. As we reported some poor people, many poor people dont have Bank Accounts these are early days for the promise of big day to give a clearer picture of broad economy. The fed uses credit card spending data to get a better picture of retail sales. Using big data on apparel for part of its Inflation Report over time the data series along with the kind of data b of a is using to forecast payrolls could give a better picture of u. S. Economy in realtime. You just said their deposit its are 10 . If you think about it, wall street is 10 of all total retail sales thats a pretty good indication. Not bad. The numbers 10 of all deposits, but they do interact with one out of every two households mortgage or Something Else along the lines and only using the deposits and what they can see . My understanding it is anonymized and aggregated direct deposit data im guessing hats off to them for making this public they give it to the customers. They give it to the media. Thats an important function of big data we can all use it. My understanding is they just see do you have a check . Do you not have a check . That sounds very similar to adp and what they do theyre a payroll processors too. Adp is folding in all this other stuff, the claims data adp has a big formula. They take the raw data and muck it up. This is a seasonably adjusted one of the thoughts of this b of a data when i talk with michelle myers, they dont adjust for births and deaths. You would think that would be a relatively she thinks thats a small part i think thats right the other part is theres geographical biases. Lets say theyre not big in the midwest and the midwest has a big downturn in manufacturing, they may not pick that up if its not geographically adjusted of course theres the income side of things which is more people who are wealthier have more accounts or poor people have fewer or very few accounts. The question of privacy always comes up with big data, too. Its a huge issue and as i understand it, they are taking steps to make sure that this is not something that comes to the personal basis. Its anonymized. I dont think the economists, the people who do the data crunching ever see anything but an aggregated number or anonymized number. Theyre sensitive to this. I asked them about it three times and they said were taking my guess is that the data is more at risk before its anonymized. Right same thing adp has all this information, too. They know exactly what your paycheck is. Theyre the ones writing the checks. People need to worry about their data i dont think this is a place they need to worry about. Its interesting, steve thank you. Were going to follow this. My take is this, this is preproduction days of the model ford when it comes to big data. Right. Were not there yet but there is going to be an automobile it is going to go fast and its going to matter. And its going to matter in a lot of different areas economics great. Think of health care really make serious changes. Health care is huge i think were going to overtime if these banks jp morgan, wells fargo, decide that they need to play a public role for social good, theyre going to be able to give us a lot better picture of the economy. That could take care a lot thats a shout out to jamie diamond. Give us the data, jamie. Strong start to the year for tesla. This is a fascinating story. If the stock continues to rise, elon musk could be in for a very big payday shares closed at a record just above 492 a share the stock sup more than 15 since january 1st and its doubled in the last three months teslas market cap is now close to 89 billion thats more than gm and ford combined though those Companies Large net debt loads do make their total enterprise values larger than teslas tesla reaches 100 billion market cap and sustains that level, elon musk stands to make a lot more money hes certainly seems energized on twitter earlier this morning saying i put the art in fart. What . What does that even mean unclear. Joining us right now my son will like that. Musks moonshot Compensation Plan, reporter at the wall street journal, tim former vice chairman of the General Motors and cnbc contributor guys, i dont know if you remember this because i remember reporting and talking to elon musk about this in 2018. Farts no. I broke the story about originally what his Compensation Plan was going to be and everybody looked like the whole thing was coo coo and made no sense and that, a, he would never get there and b, this was a terrible idea. Is there a chance that tweet is not related to anything were talking about . Possibly. Thats iran. Cyber hack. Let me start with tim in terms of this Compensation Plan. Hes got to reach 100 billion but also has to reach some other metrics as well, right absolutely. Theres 12 over the course of this package this is the first one hitting that market cap figure but also hitting a revenue. Theyve already done those hitting the market cap will be the final one to unlock that first one on payday. Not only does he get the payday, one thing keeps the skin in the game he gets shares and has to hold the shares for five years. You have been bearish about this company for a very, very long time does this make sense to you . Yes, it does because it forces the performance to be maintained he cant just hit a peak and then let it go again right and frankly, over the past few months, maybe close to a year ive seen a lot of progress in tesla i have seen a lot of more maturity in the behavior of elon musk i see less hype, less talk about and probable future and frankly more performance and to me, it looks like the company is stabilized model s production is stable and up. Entering new markets and its beginning to look like a fairly well run automobile company. So hold on. Stop the presses, bob. Whats happened . Well, my criticism was never of the cars. My criticism was the way elon musk was running the company. I thought it was the model question, whether they can actually make the economics of it work in your mind well, yeah. Did they have massive fix cost and the margins they were making on the cars they were producing were inadequate to soak up the fixed cost consequently they were constantly running losses. And one of the things i said he should engage in massive cost cutting which is what any reasonable ceo would do under the circumstances and of course hes finally done that he cut the fixed cost. The other thing that happened which is partly happenstance, partly planning but whatever it is its worked out and thats that the model 3 which was planned as an entrylevel ev and was supposed to sell at 33,000 at which point it never would have made any economic sense but that vehicle now in peoples minds, in the buyers minds is sort of an electric equivalent to medium sized premium sedans like bmw and mercedesbenz and the average transaction price im guessing is around 55 to 60,000. Well, at that point i will bet you the margins on a model 3 are as good as they are on a model s and they are selling a ton of them just opened the factory in shanghai. Bob, are you buying shares . Well, its a little late for that and the stock is crazy hold on we started this conversation by compensation and that is dependent in large part elons competition on the stock you still think the stock is crazy . I think its always been crazy. Its always been too high. But will it go another 20 too high im saying that that 100 billion market cap could well be attained, at which point with all the other metrics in place elon musk is the founder, the ceo, the creator of the company, he deserves every penny of it. Im just bob, do you can you shed any light put the art in fart tweet . Do you have any insight into what that means or is it code for something . There it is right there. The art in fart relies to the app in tesla allows a driver to push a button on the Steering Wheel. Ive been hacked. I have been hacked i did not yes, you did. I did not do that i dont remember you have try to stay professional and talk. Joe has been working twitter tim and bob cant see the screen. Apparently somebody hacked out so who found out about the what does it mean . Apparently this is what a twitter person would i have no idea about this. Theres an app in tesla that allows a driver to put a button on the Steering Wheel and make fart sounds. Some semblance of something here well, this is part of what elon muskss magic has done. Hes created a talking points for this car youre talking about the fart mode, the ability in the car to do all sorts of things because of the software. Something that traditional auto makers havent done. Hes creating marketing buzz on twitter not paying for advertising. We have seen that over the last three months his ability to change the conversation on tesla from one about whether it can meet its obligations and meet its goals to one of whats the future is it going to be bullet proof pickup trucks, is it going to be factory in china thats spinning out hundreds of thousands of cars on his way to millions of cars a year. Thats a lot of expectation and excitement for tesla. Okay. We will leave the conversation there. Tim and bob, thank you appreciate it. Okay. Art in fart. I didnt do that. That was hacked. The supervisors thought it was funny. If i knew you were going to take issue with that i wouldnt have done that. They told me to do it. Im surprised we havent gone totally to the gutter and talked about take us there so that you can one up me. At least then get on instagram and check out give me an idea. There is speculation that that theres a baby on the way that theres all sorts of people talking about a potential baby on the way and relating it to back to elon oh, okay. Thats where youre going. I dont know. I dont know anything. You cant do it ill handle it. I only say it the only reason i put it on your radar is because last year we actually grimes as you know, became a genuine business story. I remember, okay. All right. Even though something would normally you seem uncomfortable. Coming up i know you are. The veracity of any of it i thought you just said it. Lets go. Coming up, mohammed elerian will be with us. Allianz chief economic adviser watch us live on the go on the cnbc app, listen to ou squawk pod and follow us on twitter. Join the fun well be right back. We are under an hour to go from the opening bell on wall street senior markets congressmen they tor mike santoli joins us now with a look at some of the best performing tech names that we have seen. Good morning. Good morning. The biggest ones the markets january despite the stutter step around the iran conflict has really been last years market, late year rally only more so this is the nasdaq 100 etf against the equal weighted versus the enb what you see is beast mode by the nasdaq 100 the very largest stocks really accruing most of the value here since about december 20th, the equal weighted s p has done almost nothing this is the opposite of a typical january effect which is usually a rotation out of the huge winners into smaller caps and laggers. Not working right now. Look at the big five of the nasdaq this is the five largest market Cap Companies on the nasdaq as well as in the overall market apple, mike crow soft, alphabet, amazon, facebook together they are now worth more than 4 this is a little hiccup in google which i think is a glitch its well over 900 billion itself so what does this tell me . The market is relentlessly hunting for durable cash flows that will last a very long time. A lot of folks have been saying its too concentrated a market, its really all about sentiment and momentum i dont think that has been true weve not had a true meltup but if this keeps going well talk about that legitimately being the effect right now, guys. Mike santoli, thanks. Joining us with his view on the markets, mohammed elerian. Since weve seen the specter of a possible, much greater retaliation than what we got, its not really based right now on fundamentals. I cant ask you for a shortterm outlook on the stock market, i dont think, unless we know whats going to happen geopolitically can you speak to that and the overall environment were in right now . Thanks for having me. You heard friday on your show me saying that the most likely outcome is the market will fade the risk of reaction to the intensification of iran u. S. Conflict it works very well for markets to do so weve been conditioned to do so. And we are going to remain constructive in the short term it is very difficult to derail this market in the short term. So if you have a tactical mindset, this is a wonderful market do it through the sort of exposure you heard mike talk about, because thats what passive investors favor. They favor higher Cap Companies. But over the longer term, the list of uncertainties are building so longterm investors, the secular structural positioning is becoming harder while shortterm positioning is remaining relatively straightforward and thats the challenge for the investors. We go out a little bit longer, mohamed, and with that in mind theres going to be these, what were seeing, i dont know what youd call them, forays into political problems but unless theres a black swan, what does the year hold for stocks and bonds what does the year hold in your view overall so were unlikely to repeat a 30 equity gain, a 12 bond market gain. You know, forget about correlations for the simple reason that the two very big common Global Factors, and remember that phrase, common Global Factors, which was massive liquidity and a significant easing of trade tension. Those are unlikely to repeat so for us to have a good year, we need a new Global Factor. And that Global Factor can only be a sustained pickup in Global Growth so look for policy changes if they materialize, especially in europe and china, then we can have a good year for risk assets but if they dont, the headwinds are going to start becoming more significant as we go deeper into the year do you think that theres something that everyone missed about technology and its effects on inflation that puts us in a, what word could i use, puts us in a new normal . Yeah. Look, technology is what keeps the fed comfortable about being low for long look at the vice chairs speech today. He said International Headwinds have eased but despite that, were not going to take back the insurance cuts why . Because theres no inflation its about basically amazon, google and uber. Amazon, you disintermediate higher cost suppliers. Google gives us the tools to price shop uber brings on assets that already exist. These are generalized way beyond these companies. So the secular disInflation Forces will offset the cyclical Inflation Forces and that will keep the fed in a good place for the markets. But arent we going up will be the next move whenever it happens, mohamed, dont you think . Ive been saying to you over and over again, do not fade the rally. Do not fade the u. S. The shortterm momentum is strong, but do it with a view to the longer term. Interest rates, next move for the fed will be up yeah, but not for a long while. Not for a long while down . Up eventually. Look, i hope not down because were starting to get evidence from europe that ultra low rates take away economic dynamism, underfine the Financial Sector and contribute to Global Financial instability so we dont want too low Interest Rates, no. Wed like them to remain where they are and the handoff to happen to other policies new normal, you like that i came up with that on the fly someone else has hacked your twitter account again. No, they did. You know who im checking right now cnbc is looking into it. No, im kidding. See you later, thank you thank you thats a reference to i know. Lets get down to the cnbc bureau in washington, d. C. Jim cramer is there and he joins us jim, lets just talk very quickly about the markets. Kind of up believable to look at the dow opening at a new high once again this morning, you saw the s p 500 and the nasdaq there. Is this because were still relieved tensions didnt flare even higher with iran . Is this because were happy to see that the trade deal will get signed by the chinese . They have confirmed that there is this money waiting on the sidelines to get back in i think its a little complacency and a little resistance there are some structural issues about why inflation can remain low. Most of the analysts are catching up. They didnt see this rally coming, so now theyre trying to raise price targets to where the stocks are if not beyond and thats just a very bullish moment, not unlike what we had in january of 2017, january of 2018 and january of 2019, which is all remarkable times. Why are you in d. C. Its for mad money trying to get more information. Jimmy chill, is that a new name is that how you are with the haters. Ive adopted a new position in 2020. My daughter cece said enough, enough i follow your feed you spend more time on the bad guys than the good guys. Youre encouraging them. It happens to everybody i like the good ones you should follow his daughters advice too. Tem, thank you, drink some hot war and some tea, fix your throat well see you soon well be right back. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Make sure you join us tomorrow squawk on the street begins right now. Good thursday morning. Welcome to squawk on the street. Cramer is working out of d. C. This morning, a lot to get to with jim as alltime highs are once ghagain in sight phase one signings on track for next week. Weve got upgrades for goldman, coke, macys and more. Our rollback begins with the