Transcripts For CNBC Squawk Box 20240713

You must be 68 because im 66 thats tom cruise talking ive been told we have to interrupt this briefly to get to walmart numbers which have just crossed. Walmart is out with Fourth Quarter and full year earnings 1. 38 adjusted versus estimate of 1. 43 141. 67 billion. Analysts expecting 142. 488 billion. The majority of stores in chile have been disrupted and some totally destroyed. Theyll be holding an investor day discussing this more in depth. Shares are down 2 in early going. In u. S. Comparable growth streak does continue 1. 9 also below analyst expectation of 2. 3 for the quarter. U. S. E commerce net sales grew 35 . Coming year expectations to grow at least 30 speaking with the cfo, quote, the quarter started off and ended strong despite softness in some categories like media and gaming on the coronavirus, they are monstering the situation and focused on the safety and wellbeing of customers and associates he says sales are still okay the fear is mixed towards food walmart is not seeing any major impact from the u. S. On the coronavirus. Also right now, the Coronavirus Impact is not factored into the full year guidance that does expect that e commerce losses would be flat to lower and global ecommerce sales would preach 50 billion ill be sitting down with ceo doug mcmillon. A lot to talk about for the year coming up. At 9 00 at 9 00 investor day starts at 8 00. A busy day. Couldnt do 8 30 . Couldnt do 3 30 p. M. It was the way it worked out. Here i am i think im even going to come back later in the show. Thank you lets talk to Charlie Oshea now. Retail analyst at moodys. Shares trading down and coming into this with. We saw costco numbers that set the tone and maybe get some revenue. Disappointing in some cat goegoe and others amazon had a nice quarter and hit the margin to price the sales. We knew we were getting highly promotional Holiday Season they were spending a ton of money on shipping and Everything Else when do we get past the worst on that . When do the margins bottom and start to improve amazon will be spending on 2020 walmart is in good shape target in great shape. Costco and others are great shape. When you build an online network, it is a second business you see that win out over time we are not there yet u. S. Comps, 2 . Was expected to be more like 2. 5 the area this is kind of a mystery to me is the toy business we saw target comment on toys being softer on holiday. That has dampened Consumer Behavior there is no place to go for just toys spreading things out no super hot toy for the holiday. Walmart is still the highest retailer in the world. Aa 2 costco is a aa 3 getting amazon into the prime one paper category target is an aa 2. They are continuing to perform really well at the expense of the guys atthe other end of th food chain watching shares of apple for a couple of days already the Company Announcing it would not meet forecast because of lower chinese resulting from the covid19 outbreak. Apple says it still expects supply shortages it is not like they had a good idea of what the revenue was going to be. You could drive a truck through 4 billion i think that included the conservative forecast. 63 now they are not going to hit the low end. The frightening thing is the uncertainty. They cant even give guidance on where that revenue is going to be until we get until april. I think thats a concern it is a concern for walmart and retailers for all of these manufacturers. We just dont know where thats going to land. I think market watchers immediately started crunching through every other company that could possibly have similar problems there is a lot of them it would be nice to knownow. Given that their suppliers manufacturing plants were surpliers as well. You could have had the secondary as well. That are down 2 to 4 compared to a few months ago. The share price action is muted particularly given the fact that it is up about 120 since then the only point i would factor in, shares were up prior 30 days we are giving up another few days the broader nasdaq had been stronger i think you could have seen a stronger share price reaction. There would be a selloff that was fundamentally based. Share price down about 0. 6 off the gdp to the low fives japanese gdp was terrible and others that came in with a forecast huge drop because of coronavirus fears. That said, shanghai was slightly higher, up five basis points europe is down a little bit. All being offset because of the concern that the stimulus will outweigh this. Given the threeday weekend and new numbers on the coronavirus. Lets get over to eunice now i dont know what to think eunice the number of confirmed cases now has risen to more than 73 y 000. Death toll higher by 98. I feel like there is a degree of positive news that it wasnt worse over the weekend is there a reason to believe it is slowing and efforts are baring fruit you are not the only one that i noticed looked at the numbers and thought that way new infections are dropping. Today, it was under 2,000 for one day. The numbers with he got for yesterday. That hasnt happened since january 30 there is some reason to think that the authorities clamp down is working you would hope it would work because effectively, 760 Million People in china are under quarantine or lockdown the other measure they took is to quarantine cash they are now disinfecting and destroying it. The impact on business has been disruptive there was a survey that came out that said three quarters of the members didnt have enough staff to run a full production line. They cited a lack of workers over the challenges the next two to four weeks. They are not the only ones one of the big events theyve postponed has been the auto show the National Peoples congress here is also going to be delayed. I thought of you lawmakers are going to be discussing whether or not to delay that event next monday or whether or not to end the practice of eating exotic animals for good and ending the wildlife trade that could be a longer term decisioni decision that could snuf out the issue of having animals and people mixed up together and viruss that could come from that eunice, this is joanne the question about the people kept at home once the quarantine is over, how long will it take to get these factories back up and running again . It is difficult to know there is no official estimate. When i speak to suppliers, most of them are planning for the disrupt at least to the end of march or april that is where they are targeting. Weve been hearing about how Truck Drivers are sleeping on the highway because they dont want to get stuck in quarantine in either city or sometimes cities dont want them in their city a lot of suppliers cant find workers how are you do you ever wake up i wake up scared over here i do not just about coronavirus but about a lot of things. How is it for you now . It must be terrifying, isnt it . Um, well it comes in waves. Sometimes you do get nervous the other day, i saw one of our security guards wearing a hazmat suit that through me off. I got a little jarred because they have disinfection stations i asked what they were using they are using bleach. We dont know if thats really healthy for you. I do get nervous i hope it is going to be okay. Keep reporting the news. You hear stuff we probably dont hear coming from the affected areas in hubei and others you see people in horrific conditions that is really difficult thank you mean it, thank you very much coming up, the race for the white house is heating up. Democratic candidates prepare for the debate in las vegas. For the first time, Michael Bloomberg has qualified and someone tweeted, you should be the next bond. You no you. Theyd have to retrofit all the sets i dont think you are going to do that. You are not scottish, are you . They are not all scottish the actors but bond was. You knew that well dig through the numbers. I cant wait for that movie i agree with dom chu next, i predicted it. Every day, i predicted it. Polls are one thing. When people put their money down. Do you have money on him . I did not i did have xavier and North Carolina if you have questions for Warren Buffett, now is the time to ask tweet us with the hashtag askwarren well be right back. Announcer todays big number, 533 million thats the current value of rkirs new position in super market giant kroger, announced on friday. 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. Every year, our analysts visit thousands of companies, in a multitude of countries, where we get to know the people that drive a companys growth and gain new perspectives. Thats why we go beyond the numbers. T. Rowe price. Invest with confidence. Thats why we go beyond the numbers. [ fastpaced drumming ] this just happened former new york mayor Michael Bloomberg has qualified for tomorrows debate in las vegas joining us now, founder and ceo of predict it. Registered users can buy and sell shares in Political Races you have other stuff on there but lets focus on political stuff for now. I can show you a poll that they are different by 20 points at a time if i did tell the truth, i dont know if i would show up. When people put money down, it does make a difference if you put a little bit of money on a proposition, it clears your head it is funny you say that something that actually matters have you found in the actual results that you track and are more accurate . Where do you stand markets are really efficient at disstilling risk and value into odds and price. Much more than polling what you want to have happen what you yourself have happen. In reaction to the poll and timeliness. How accurate do you find that it is it varies. If it is a year before the election, it is one thing. A month before, is another i watched Elizabeth Warren fall to 40 cents. I watched biden before it was clear there was issues, he was down in single digits. When does real money start changing hands just in the democratic nomination market, we had 100 million shares change hands. It is still changing what is fun about it you dont have to stay in the contract until it ends to make money. You can love Bernie Sanders at 35 cents and love him. You buy him. Wait for something to happen he will go up and you can sell those if you think it is too high there have been weird things. I saw bloomberg move up to two but hes still not really registering for eventually becoming president in the president ial nomination. I think sanders is still well above him but below trump. Does 55 cents for trump, is that still a 50 50 proposition. How do you read it i cant dispute the thinking of the traders a week is a life of politics especially today a lot can change between now and then reelection of trump is trading at 55 cents. 53. Okay. Bernie is 28. Bloomberg is 15. Down since he got into the debate hes got to up his game a little a lot of traders will be watching him when you consider the fixed odds spending, how do you track the spending i know you guys only start in 2014, what is the overall weight of dollars waged on your marketplace versus the fixed odds spending market fixed odds is the largest spending of this type in the United States. You have to get your money over to the uk. Somewhere figure out how youll get paid back. If you are on u. S. Soil, open a predicted account. You can start making projections. Clearly Sports Betting is increasing you get around any of those issues it has been more than that. Issuing a no action letter you to operate in the United States. Given that size, do you have concern of stakes leading into this it is shares, not dollars you can have shares change hands at a penny, 5 cents, 10 cents. We wouldnt have done this if it was clearly permissible. Instead of going off shore there are limits for instance, to the 100 million question there is a maximum of 850 you can put into any of these. Because bloomberg why couldnt he, why couldnt he buy a corner of the market and put himself at 100 . Off shore, he could do that but in the United States, he cant do that. There is identification veribility there is a cap it is implaqractical to come in. 100 million shares, what is it dollars. I have no idea. The volume presumably in betting markets massively goes off of trading hands. I dont know about that i think the volume are probably not too dissimilar the uk is the number one betting site. This is structured like a stock market bernie at 48 cents. Biden, Elizabeth Warren is half of hillary at 3 cents. Thats unbelievable. Bernie looks like hes supposed to be the nominee right now. Hes just under 50 where did this support come from it likely came from other candidates who are failing that would also have to do with the demographics of those making bets, i assume. The accuracy is pointed at that and a number of things. Overall since 2014, the market has accurately predicted these things we didnt even talk senate and house. Well look at those now. Thank you. Still to come, a round up of todays billionaire stories and what jeff bezos will plan to do with 10 billion and why elon musk said what he said about bill gates i got that vibe, got that vibe got that vibe, yeah, i aint petty, looking fly, looking fly, looking fly, yeah, they aint ready. I can shine, i can shine, i can shine. Imma do what im made to do. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Doprevagen is the number oneild mempharmacistrecommendeding . Chasing them at the same time. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. I appreciate what makes each person unique. Thats why i like liberty mutual. They get that no two people are alike and customize your Car Insurance so you only pay for what you need. Almost done. What do you think . I dont see it. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Wewithout the planet cooler getting warmer. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Amazon Ceo Jeff Bezos has announced hes committing 10 billion in the fight of Climate Change in the new fund on the matter yesterday. He says the money will help back scientists, activists and oranges and efforts to help protect our planet hell start issuing grants this summer i hope we can stop this bad weather. It is really getting out of hand we have to get rid of all these storms a tiff between musk and bill gates. I might use it on clean water. It is a new fund. He can direct it to clean water. That would be good. He bought an all electric Porsche Taycan he said his porsche is a premium priced car and is very, very cool he saved up for that on twitter elon musk responded to a user who wondered why gates chose a taycan over a tesla. He said, my conversations with bill gates have been underwhelming. It is hard. Elon is an absolute genius. It is hard for him to criticize bill gates he also has no filter i empathize andrew told me, the taycan, you dont go as far but you can accelerate more. Does andrew have one with of these . Hes looking at a minivan all these Car Companies were massively behind well have flying autonomous electric cars in like ay and a half printed by 3d printers. Coming up, the biggest movers including apple and walmart. Well dive into those when we return through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. good morning welcome back to squawk box. Apple says it wont meet its quarterly revenue. Lower iphone supply globally and demand as a result of the covid19 outbreak. It is down but given the recent runup, it doesnt seem that awful for apple share holders. Walmart cfo did tell cnbc the Quarter Ended strongly and that the new year has begun the same way. The stock is paired its losses down u. S. Equity futures will see the nasdaq down 70 the dow jones indicated down over 150, the s p indicated down 13 and change. Still to come, the fallout from the coronavirus and talking about the outbreak this morning caller the coronavirus is different it is big. It is going to par lialyze chin. I think we should pay more attention to this. We should try to resist our inclination to buy the dip hell join us at 7 00 a. M catch us live, on the go on the kap. Well be right back. We have like 40 years of data thats incredibly valuable . I. I dont know. When did we introduce siracha . Not soon enough. These are our sales. By product, by region. Set against evolving demographics. You can actually see taste trends. Since when can we do that . Since we started working with bdends. announcer people who know, know bdo. We were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. Shipstation. The acan not only recognize of ofinayou in a crowd, but recognize whats important to you in terms of your goals get 1to1 goalbased advice where and when you want and realtime goal tracking online. Ameriprise financial now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Apples revenue warning has investors looking at other Tech Companies that could be hurt joining us now, he says they may have avoided the worst of the coronavirus thanks to the trade war. Mike, first of all, lets hit the apple news this morning. To what extent were you surprised given this guidance cut given the forecast not entirely surprising if you look at china right now there are over 150 Million People with some kind of restriction. Thats over 10 of the population when people cant travel, they cant buy phones or ipads. Their production is in china, so they get hit on supply and demand when they did their earnings call, they gave a wide band. Im sure they didnt exactly know the effect. No surprise there, really. Share price down 3 in the premarket does it surprise you it is not more than that the truth is, people dont really know the deep impact of what the coronavirus will do we try to keep up with what they are saying about it. It is not really well super understood do they say there due to the do downgrade, do people think this will be short or medium term and will bounce back it looks like sometime between now and the summer and doesnt go beyond the summer the Ripple Effect as opposed to a longlasting effect. Compared to the component manufacturer, which one are you focused on that could be hit there are so many looking at consumer Electronic Company like sonos they have resisters to cpus and all sorts of components. If people cant get to the factory, it could hit anything it depends on where the factory is and if there is a lockdown there. It really depends on where the factory is sonos has the advantage for now of not selling a lot in china. For now, their demand isnt affected the tariffs created the number moving to other geography and doing significant portion of manufacturing in malaysia. That dampens the effect. Doing the final assembly in malaysia that should be okay. All of the component flow for now coming from china. For now, it looks okay not totally sure yet the effects may widen. How do you look at the enormous run that was up 120 on the guidance warning it is an amazing company. Every time you think apple has reached its peek and cant do anything more, it does it again. One of the gems of our industrial system, i would say more big tech once again a better than 30day performance distraction if your view it is really hard to say. Weve talked about this notion that is the tech sector stretched or not probably two or three years we have stretched the companies and leaders in consumer and on the enterprise side like workday and the broader theme in commerce wear where technology is becoming the heartbeat of every kind of business all over the world. These Companies Continue to perform well, add product lines. There is just more demand for these things thank you for joining us. Coming up, the u. S. Is evacuating passengers from the diamond cruise ship. How prepared is the United States to handle an outbreak well ask the former fda commissioner hell join us next on squawk box. Announcer dont forget to subscribe to our podcast youll get interyviews, origina content. Subscribe to squawk pod today. Like this lamp. And we use those insights to show you what they might consider buying next. Midcentury modern, nice. That way, you can keep sending them offers for the perfect products. And that keeps them coming back. Hows that for changing whats possible . Yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. He sits on the board with pfizer its good to see you this morning. This should be twice a week, three times a week maybe that we have you on at this point. Theres been mortality rates in terms of who gets it and is able to handle it more. Do you have things that you didnt know or that is indicating to you that you didnt know . I dont think theres George Anthony nett genetic factors china put out detailed data on who has been effected and who has died and youre seeing people under the age of 20 arent being stricken. Only 2 of the cases were under the age of 20. 60 were between 30 and 60 so a lot of middle aged people are getting more advanced disease because china is only keeping track of people that have significant symptoms. Mild and moderate cases are unreported do you see any slow down in the rate of spread they were briefly optimistic and then changed the record they were using was it not as bad over the weekend or are the reasons for hope or do we believe what were hearing . Japan appears to be on the cusp of an outbreak so if you start to see this become epidemic in other nations or have other nations experiencing large outbreaks thats going to be extremely worrisome that were not going to be able to control this globally you have seen a decline in cases where they have imposed effectively martial law. So since theyre all locked up in their house you expect to see reported cases go down in other china cities and we dont know whether or not there could be epidemics taking route in other cities in china right now. As you get more information about this disease and where its going, do you have a sense of how this compares even to other epidemics in the past and even to the flu . We know in the United States as many as 60,000 people die from the flu just in the United States how is this comparing . How are we going to look back on this are we reacting properly overreacting under reacting this is extremely worrisome theres a lot we dont know right now. If you remember with the swine flu when that initially took route it was first diagnosed in april of 20099 it appears to be the case that its probably more contagious than seasonal flu and has more potential to cause death and disease. The case fatality rate how many people die could be as high as 2 and maybe it will settle down at. 5 once we have all the data in flu is. 1 to. 05 s that significant the number of new infections might be as high as three or four with flu its 1. 3 with the seasonal flu so its 1. 3 meaning theres 1. 3 new infections but with coronavirus it appears to be on the order of 2 or 3. I wonder if you still feel there will be pockets here in the United States and does bringing back the diamond princess patients is that something that could exacerbate that or increase the possibility of that, scott well, they keep control over those individuals and it does appear we might have spread that were not detecting now and were just implementing a surveillance system. All right thank you. Thanks to joann for joining us what are you doing got to go do your real job a misths is morning well talk about the numbers with former walmart ceo bill simon. Fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Wenot the exception. Sh food being the global norm, at emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Bloomberg qualified for tomorrow nights debate as the second hour of squawk box begins right now. Good morning and welcome back to squawk box this morning on cnbc. Andrew and becky are off today metropolitan capital president and fast money contributor are you ready . Im ready for you. Do you have good stuff to talk about i hope so. The backdrop is you need to be a jack of all trades, do you not . Is this what you were expecting six months ago i cant say that i was expecting it andi dont quite get into it but this market seems to be insulated from everything until it isnt. Which it will one day be. Thats a triple effect i wouldnt see that gain you take it you immediately assume that im sarcastic. You immediately assume that . You need no introduction almost president of egypt, right . Didnt they beg you to take it on theres so much going on. All right. Wall streets Fourth Quarter results missing analyst estimates despite online sales having their best quarter of the year sales open for at least 12 months and its website were up 1. 9 so comp sales in the u. S. Were up 1. 9 . Shares were down more than right now. Bill simon joins us now. Bilks a very good morning to you. Thanks for joining us. I guess headline first of all on the quarter. Whats your take away. Q4 that was expecting some softness following target. Shares declining further than where they were already priced in i wouldnt be too concerned with the quarter itself theres interesting things in the full year report that i would be keeping an eye on but a lot of retailers reported a strong black friday cyber monday and strong final week but this Holiday Season we had the shortest period between thanksgiving and christmas a lotof retailers reported softness in there and thats what walmart is saying for the year operating income is still a challenge. When you peel apart it concerns me about where the sales are coming from. In terms of the factor that maybe you have great online sales but its pressuring margins. Thats right. If you look at the Segment Results in the press release this morning you can see that the u. S. Sales were up 1. 9 but the ecommerce sales was over 200 basis points so the net effect was the brick and Mortar Stores stand alone declined in same store sales and so the report of increasing grocery online sales which is what is happening and walmart needs to do that amazons Online Business is coming at a really severe cost to operating income. That was 29 billion a year ago. They have been generating 40 billion or 50 billion has come at an impact at a loss so its very, very expensive. It might be expensive its not coming in relative to the share price overall over the last couple of years so you accept its the right strategy even if it doesnt mean every single financial metric celebrates that factor. Exactly shareholders are dictating that thats the path that they take the question is for me at some stage, when do you start seeing operating Income Growth . How does the third strategy transition into, you know, an increase in improving operating income the other piece for me that i would be looking at and its in the release is they indicated all the changes that they have undergone and a new ceo in the u. S. , the new chief her chanmer new ceo at sams club theres a lot going on there particularly in the u. S. Segment which is the engine to this whole venture. It funds the ability to do all the other investments in international and in ecommerce and the new ceo is a talented executive but any time theres a transition, you know, you have to keep an eye on things. Given what we heard from apple yesterday, how do you think that is related to walmart for the next quarter but also longer term in terms of where it suppli supplies. Walmarts dependence on china is overestimated by many the grocery business is enormous a few years ago they reported that about 2thirds of what they sold was either made or grown in the u. S. China represents about 20 represented about 20 of the balance with that. With all the trade tariff, you know, discussions going on over the last two years, Many Companies including walmart had either moved or made plans for alternate supply lines so i think, and i heard you guys talking about it in the prior segment, nobody really knows where this virus is going but in the current context it would be too early to assume that there would be anything that would be a Significant Impact to walmarts business. Walmart in china, i dont know thats probably kind of but how much actually of walmarts products are touched in some way, shape or form by what happens in china what percentage would you say . Theres large portions of particular product lines so a lot of the apparel is its a big piece of business dont get the wrong idea its a big margin driver but it isnt a huge volume play and over the last two years walmart and virtually everybody else has found alternate supply lines to deal with what they thought would be, you know, really harmful tariffs and so theres other alternatives i think a lot of the toys that historically come out of china and plastics but toys have been a relatively flat to declining segment anyway so the exposure from china to walmart has been overblown. Let me ask you a question about the margin so the margins didnt depress as they spend and get online sales. Where do you think is a goal margin that they can reach what i would be looking for is margin stability. What theyre doing and its a good strategy is transitioning their food business to a Digital Business they order online and pick up in store and grocery delivery is a really strong, strategic advantage that they have in the ecommerce battle with walmart and amazon but that comes at a cost you have to pay somebody to put it on the shelf and then pay somebody else to walk around the store and take it off the shelf. So by definition thats a lower margin than the brick and mortar grocery sale and i have been looking at where that stabilizes and its probably going to cost 400 basis points to their food margin so as you evaluate how much of that is buy online and pick up in store delivery and you evaluate how theyre able to offset some of the margin and theyre brilliant at developing operating efficiencies i would be looking at a margin somewhere between what their typical margin is in the mid to high 20s to something that would be slightly lower than that. Thank you for joining us. You bet 9 00 a. M. Eastern time. A cnbc interview you dont want to miss that. Apple may not meet its revenue forecast due to supply constraints. As a result of the outbreak well discuss that after the break. Investors on the hunt for you. Partnered with black rock to launch a new fund. Lets get a check on the market. Squawk box coming right back gasps and screams i got in yes woah oh yes yes yes yes this is a moment you plan for. To start a College Savings plan, find an advisor at massmutual. Com wheneveryone is different. A, which is why Xfinity Mobile created a different kind of wireless network. One that saves you money by letting you design your own data giving you more choice and control compared to other top wireless carriers. Now you can choose unlimited, shared data, or mix lines of each and switch any line, anytime. No one else lets you do that. Design your own data with Xfinity Mobile. Its wireless reimagined. Simple. Easy. Awesome. One of the places that were going to keep a close eye on is the entire supply chain for apple. Theres a ton of Companies Many of them publicly traded here in the u. S. That are going to be effected among them some of the Analog Semiconductor stocks out there. One of them being sky Work Solutions which is off over 2. 5 right now on the heels of apples 3. 5 declines right now. This stock is still up about 39 . Still one of those stocks a component maker of apple going into the red this morning. Lets take a look at another one as well. This is another Wireless Communications Company Matching the move premarket well finish off as one of the biggest semiconductors out there. Down 2 so far this morning. Ill send things back to you. Shares of apple lower this morning. The company wont meet its quarterly revenue forecast because of lower iphone supply globally also factoring in demand resulting from the coronavirus outbreak newer growth is doing well for the china and this is tragic for china and the people globally being impacted and we see largely supply related and a little bit of demand impacting in china for the company. They went out of the way to talk about the stores being closed and when the demand could be satisfied but you think as long as that stays solid and its a supply issue that the longterm story remains exact so we shouldnt be that concerned . You have a wearables business that grew north of 40 and one testify key comments is that theyre still seeing very Strong Demand outside of china and expectations are in line at this front and a terrible human toll and a temporary impact for the supply chain in a chinese demand impact side. What would be the data point that says well be back on point. Were going to get information from apple suppliers and have a better understanding of the people working in these manufacturing facilities that are coming back to work and travel nor china and is beginning to get back to normal. From the physical component side i dont think theres a supply issue for the moment but its the people, the labor being able to assemble the devices. So well get more information in the coming 48 weeks and we think as you get into late april when apple updates its earnings well have much better visibility the longer term story which is what we are most focused on is that. Is there a negative outcomposable . Depending on what happens with the outbreak could all bets be off . How would that play out . Its what the outbreak looks like for physical q2. We did lower our revenue forecast below the low end due to lost leverage down to close to 10 on the quarter. It didnt change the longer Term Forecast due to the degree that it expands and becomes more severe on the global basis and has a broader impact on Global Demand wed take that into account but were not seeing that today. I think the point is going to be monitoring how fast do they get up and running and when do the stores in china start to reopen. Mohammed, rosey outlook or thats the most likely outcome 4 to 8 weeks things settle down and were back on track . What do you think . I worry less about apple than about the bigger message which is you are see mull tanously disrupting demand and supply from the second largest economy in the world. I think most people expect a trade ar its a great buying opportunity. Do you feel this could be as well in the past supply constraints. I dont see that happening here. I see it as delayed. Stick around coming up, bill gates has a new ride the electric porsche and he actually is excited about his new car. About a material possession. I cant believe thats possible and its not a Tesla Details after the break. And a programming note, if you have questions for legendary investor who is this guy . Warren buffet . No, Warren Buffett that guy now is your chance to ask. Tweet them to us with t the askwarren and the oracle will answer them on monday were coming right back. We see heating breakthroughs clearing the air for billions. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Earlier this morning we learned Mike Bloomberg qualified for tomorrow nights president ial debate. If its good for anything its good for ratings i may have to. Andrew ross sorkin is here in spirit and now on the phone as well he joins us with the details and immediately i think its interesting that you say that these proposals would not immediately be rejected by an Elizabeth Warren or a Bernie Sanders and i think thats notable because it shows bloombergs hand on where he thinks he needs to go. Is that the right take on this i mean, i think thats going to be at least the initial take. It is at least for him relative to many of the positions that think he was dead previously among many things is the idea of a financial transaction tax that is something that at least historically he has been against but is something that Bernie Sanders has been more. Biden andothers have talked about. We will see where they end up in their plans as well. Theres an effort to strengthen the rule, again something that mayor bloomberg was actually quite vocal about in 2010 and 11 as being against he has a slightly different modification to it and justification for what he wants to do to strengthen it but again something that was on the left by Elizabeth Warren and others he talked about when to strengthen the Consumer Financial Protection Bureau and gives credit to Elizabeth Warren for creating it. Thats something that President Trump and under mulvaney if you remember one to really strip that unit down he wants a dedicated team to fight corporate crime and prosecute individuals and not just corporations of course this has been one of the great controversies since the financial crisis but given bloombergs relationship with industry and wall street and his personal ties and connection with the titans of business, the decision to be this forward and this vocal about it theres a lot going on its a multipage proposal this morning. When we look down the list that you have shared with us, a lot of them do feel quite sound bite like whether youre talking about the cfpb which senator warren is such a big supporter of or quite the buzz word when it comes to Financial Regulation how does he explain the you turns that he has made well, i spent time on the phone trying to understand because it does feel like a 180 given the comments he made on that publicly historically if you remember the way that investments are measured whether they fall under that or not was always about the intent. Was it the intent of the bank to take this risk for themselves to intent of the bank to take the risk for a client. He says it shouldnt be measured like that so he has a different measure but still wants to keep and not just keep but strengthen the rule so he does have ustification if it does eventually become bloomberg dont you think that bernie supporters have to have something to get them to the voting booth theyre going to be unhappy. This would be a way of at least drawing some of them to the polls because they would maybe go for bloomberg versus trump in this case. He has to move left doesnt he to try to get bernie supporters to join him as he is the even actual nominee theres elements of this plan on wall street. Especially the financial transaction tax that would have a real impact on daytoday wall street on everything my kids are watching cartoons theyre not watching squawk right now. Tough to tell the difference sometimes. Do you think that you can put in for getting your vacation day back i havent thought of that but its a very good idea. So lets discuss later. Did i need to get up early to come in is the other question . This would be a great precedent for getting Vacation Days back with a quick little phone call its a great idea. Great strategy joe. You know, i am always i always admit that i do miss you and i want you to come back so well see you or not until thursday though right . Will you be here tomorrow ill be there tomorrow. Becky wont be back tomorrow. But i look forward to seeing you, thanks. Thanks joe. When we return e ntthhu for yields squawk box back in a couple of minutes. What if he gets lonely . What if he gets bored . Oh, hey. Just in case he gets hungry. What if he gets sad . What if he gets. Hey, hey, hey. I think its time we say goodbye. Okay. [ toilet flushing ] kohler revolution 360 with continuousclean. Stays clean five times longer. Its okay, dad. Only from kohler. Rowithout the Commission Fees and account minimums. So, you can start investing wherever you are even on the bus. Download now and get your first stock on us. Robinhood. On a flexible wealth plan. And with new brokerage accounts, your cash is automatically invested at a rate thats at least 20 times more than other advisory firms. Personalized advice. Unmatched value. At fidelity, you can have both. Welcome back announcing a 1 billion actively managed fund for retail inves r investo investors. Joining us is michael weiss. Tell us what this is its a new fund. So this is a new fund its the first of its type its a billion dollar fund. So its not a billion from day one. Correct were going to roll into that and people have to build a portfolio over time. If you think about it being managed by yield street and assets its part of the Asset Classes that we have introduced to the market. So this is to give access to other Asset Classes and liquid investments they wouldnt have access to in order to give them a high yield that youre getting in the s p 500. Our core focus and mission is how do we have great Financial Independence for millions of people you do that be helping generate income so its an Income Generation Fund thats what were looking to do and to take advantage of the team that black rock has globally so new york, singapore and the u. K. So i can see how black rock and im going to simplify provides the part of the portfolio and that i get. What do you tell your customers if suddenly ample and predictable liquidity leads to changes . So thats a great topic we believe that retail makes decisions based on fear. If you look at the last couple of cycles retail does not participate in the Value Creation theyre on the other side of the trade. They sell too quickly. It isnt going to be a highly liquid fund. Only after the first year can you get them based on the Funds Management in the board. So we believe we shouldnt be effected by shortterm price volatility the dow was down before i came in here 170 points thats difficult for retail to deal with. On the whole its been up and a great run for the market but we believe that Retail Investors want to find a way to generate consistent income as opposed to having palpatations where theyre moving up and down. This marks very low yields for treasuries and bonds and theres only demand because theyre desperate for that small yield pick up and if rates went the other way youd suffer. I dont think the entire statement is accurate. I say all the time we have to think about it and prepare for that and what does that mean also the indicators in the market seem to be strong but with regards to retail theres a much different story going on and people arent paying that much attention if you look at investors life we started out in debt. We have student debt, housing debt and credit card debt. Only in our 30s do we enter into some sort of stability but now most of our money sin vested in etf and equities and ira only 10 of people roughly ever end up in alternatives at the ages of 60 and above the average age is 42. Were bringing back the curtain by over 23years. The reality is that people dont have access. Thank you for joining us. Thank you for having me. Youre welcome. Coming up, the coronavirus and Business Apple one of Many American companies with operations in china and one of the first major Tech Companies that say it may not meet revenue forecasts squawk box coming right back sfx [phone ringing] you still have service . Call the Insurance Company its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool the move would be a major blow to both companies theyre at the heart of a battle for tech dominance between the u. S. And china and listen up. Yes. Bill gates says electri electric porsche and he praised tesla for helping drive the market for electric cars but his is a premium priced car and is very cool. He said my conversations with gates have been underwhelming to be honest. We have had this discussion. I did see one and its very cool i will say that. How much of it is the sound . No, its all about brakes. Im talking about my car. Its very agile. I will never not have one. I dont want that to end it would be the last thing that youd sell . No, i dont mean that i just mean im not going to care when im 90 im still going to have one. Are you going to be able to get out of it . Maybe not we got to go squawk box will be right back. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. And save even more when you say bring my own phone into your voice remote. Thats simple, easy, awesome. Click, call or visit a store today. Open in the u. S. For at least 12 months and up 1. 9 . The 2. 3 and multiplies by what walmart shares and its a big number the shares are fine. Down three quarters of a percent. It may be one of an extraordinary number of items that impacts business and the result could be a hefty number of write offs. Steve joins us with that story hey, steve. In a historical way the First Quarter for u. S. Growth may end up being a write off quarter the number of extraordinary items keep mounting to the point where the First Quarter growth report may end up looking like a tech start up with a bunch of one off items to write off coronavirus should shave 01 off. We still have residual tariffs it may not appear in the First Quarter. The entire country was above normal it fell 4 in january. So where is the cnbc update . For the First Quarter its at 1. 4 that may be optimistic and many see this second squart rebound but you can imagine two effects of corona. Its the u. S. In the First Quarter and a Second Quarter comes from the fall off in supply manufacturers cant get the stuff they need so you have the fall off in shares the longer the outbreak lasts the longer the Recovery Time for the supply chains will be. Results in a First Quarter dip followed by a strong Second Quarter bounce that may be why the market is writing off the apple numbers last night the tail risk is that the one off items combine to threaten the expansion making it more than zwrus a single write off we are deeply conditioned to think of every one as containable, temporary and reversible and that has resulted in massive profits for the markets. I just get a sense that this is different. Im more cautious. I just want more data before i can confidently say it in terms of economic and corporate effects. Thats how much how big do you think the stimulus in china has injected so far is and will continue to be its great for financial asset prices it doesnt do anything to get peopleback or supply. I dont have a forecast. Does that mean that corona virus has to get worse than it is right now or if the worst Case Scenario doesnt play out will you come back and say im wrong. First i understand why people buy this dip and lets not forget Central Banks provided support. Right and we have significant loosening going on. Does it have to get worse for you if it doesnt get better quickly and steve made that point in one of the charts, if it doesnt get better quickly, then youll get this cascading sudden stop and then the second leg. Its not just demand its supply. Right all ight this would be a supply lead or a supply driven downturn in the sense that supply is not up for demand we dont know how that works the other thing that i want to add is i dont want to make people more concerned than they should be. But if you go back and look at the National Bureau of Economic Research wrote about the 2001 recession the bubble breaking was not enough in itself to cause the recession. And it caused the downturn whether or not were here and we get a quick turnawround which is a reasonable bet im not saying that conventional wisdom is wrong. Im saying theres a case out there to think about and price in the tail risk here. Can i ask you something off topic . What do you think we should do what bloomberg is talking about is a unit with greater expertise than we currently have with what. In terms of the doj, the headline there about the doj. We had a pretty good point and they arent necessarily drastically different. The thing that stands out that is new for a probusiness profinance industry is a financial transaction tax. Is that the same excuse . Its on the debate stage. You cant have it both ways. Do you remember a couple of years ago kerry was in the lead and out of the lead. Do you remember mccain he was in the lead and then he wasnt theres a fight going on its what were going to decide and what interesting to watch it. All right mohammed and karen and tonight well be right back. As of 12pm today, i am debt free every time it takes care of something for us, we celebrate. How often does that. Got it. Servicenow the smarter way to workflow. And the tesla bull with the 7,000 price target joins us for the hour the final hour of squawk box begins right now. Good morning and welcome to squawk box on cnbc i asked her about the jet pack over who is it the crowned prince the crowned prince of dubai. Takes off vertically. Did you come in on one of those . I was thinking that becky and andrew are off today our guest hosts. The chief economic adviser. Its just an overall and its just an overall feeling. I just called up cnbc website. Top story. Coronavirus. Japan is on the cusp of outbreak to almost inspire fear i thought in that interview what was so interesting was theyre not seeing the very young being hit. What that probably means is that the fatality rate is much higher. So that you notice you may notknow has improved i dont think he thinks its 100 now but that big change had some of his fears on that front were going to touch on all of these things Courtney Reagan is all over that story. He is covering apples revenue guidance warning and good morning sleepy head we start at 6 00 but its good to have you on now anyway josh, whats going on. Thank you, joe. So as you noted apple dropping big news saying that it wont be able to meet original guidance for the current quarter. But now demand within china is weaker than expected also saying supply will be constrained the facilities are reopening but ramping more slowly than expected in a memo to his employees, tim cook is saying we are experiencing a slower return to normal conditions than we had anticipated. Consumers will ultimately buy apple products when they can get their hands on them but the time line is unclear for investors right now. What is the length of this outbreak other Tech Companies are possibly impacted oo and the managing partner joins us and the first question is on the share price reaction we have seen and theres guidance because of the issue. If i was expected to be down by 5 today and its the second time in six quarters that they missed numbers at that point, if you look at the stock that was a well telegraphed miss but the trajectory downward was 35 . Theyre reviewing this as something transitional one of the Key Takeaways is a stock reaction i think its validation and what apple is doing in china. In terms of the underlying aspect as well is that something were going to see a lot of other companies have to learn as well. Theres no doubt that they have seen more of this its what ultimately leaves me with this question as all of these Companies Want with apple the second is sure apple be in china. And the answer is absolutely that was debated. And its the second largest tech company in terms of exposure to china. Thats a huge opportunity. And its important to talk about apples hardware business that Companies Like google and alibaba dont have problems around manufacturing so i suspect that investors that have long talked about apples multiples should be more in a lower range because of hardware and use this as an example of what a hardware business can do. And ultimately it builds a moet around apples business and and its next to impossible. And its that kind of barrier. And its in china and then they add in china for china so we will be in china to meet chinese demand but were going to be more careful as well. And i ultimately believe if you step back and look at the Global Economy and think about it and think about the richest opportunities from a geo perspective. And its at the top of the list and whatever the approach i think this is a unique asset in terms of a u. S. Based company that has a large exposure. I suspect before we get into the early years of 5g that number would get into the 20 range for apple. Are you surprised not to see more of a reaction in apple share price . They have been telegraphing this we have all been concerned to see this prolong beyond the lunar week off so to us its not surprising i will say electric vehicle sales were down 54 in january. Analysts missed efforts on the top and bottom line. Courtney joins us. Again you left us . Youre somewhere else though. I came down to the Stock Exchange got a lot of walmart action here today joe. So the Fourth Quarter did come in below expectations. Some actually completely destroyed. That was not anticipated u. S. Comparable sales growth streak did continue up 1. 9 but its below estimates for a growth of 2. 3 and net sales grew 35 in the coming year. Expectations are for this metric to see at least 30 growth the initial Earnings Guidance was for an adjusted 5 to 5. 15. Thats compared to the 5. 22 wall street estimate beloc below consensus which is on going now before the u. S. Stock exchange the cfo did tell me that the guidance does not include any impact from coronavirus. In fact, most of those, actually almost all of them were still open in hina it will be flat to lower compared to the year before the company wrapped up with global net ecommerce shares. And then more on the coronavirus and it may have some margin pressure and wall street is not seeing any major impacts for the coronavirus. We have a lot more to talk about coming up in the 9 00 a. M. Hour. Ill be sitting down exclusively with doug mcmillon. Back to you guys. Glad youre doing that courtney it could be earlier. It will be on closing bell late in the day. I watch every day. I know that you do. You text saying how much you love it. I do. Love you both. Senior analyst, partner and Portfolio Manager. Its really solid Investment Firm right i mean, its a good name, is it not . What could ever go wrong there its just hard to imagine. Its very solid. Awesome. So coronavirus is sort of something out of the companys control. We know about it its a given online sales and the continuing efforts. One is that walmart a couple of dozen years ago moved into grocery and that move which was widely pinned at the time really lead foot traffic to stay steady and youre still seeing same store sales growth in an industry that was under a lot of pressure margins are so slim but it keeps the traffic going in your view it creates a strong backdrop against companies. Youre seeing bankruptcy all over the landscape you have to drive foot traffic it was about describing commerce sales 35 thats great but what that really means is the 1. 9 same store sales number and it means that the bricks and mortar sales were down and media and gaming being mentioned amazon comes to mind and amazon has aws and advertising that has huge margins arent they using those and will they not continue to use those as loss leaders to walmart but interestingly you have amazon thats moving from being a virtual merchant to now a bricks and mortar merchant getting into grocery and getting into daily distribution of goods to people where walmart has been doing that for years. Do you have any contrary views or hes got it right i think the subtlety that we would add there is that there may be actually higher profits in grocery going forward. And you have a purpose built store that customers dont walk in and you can have lower operating expenses and lower cap exand roughly the same sales as a Small Grocery store and that could be higher than walmart since 2002 or 2003 so thats where we think theres an incredibleopportunity. They have been going down at walmart and maybe stabilizing now. Every company is going to have to do more with technology if theyre going to have to survive in this environment. All right well, well end it there thank you. Shes going to be with us for the rest of the show. Still to come, china begins to restart its economic engine. Well update you on businesses coming back online and those still closed due to the coronavirus. Take a look at shares of tesla up big this morning. 5. 6 the stock getting two price upgrades this morning at bernstein and Morgan Stanley though the price upgrades are some what below the price target which is 7,000. 7,000. There we go well discuss that in detail coming up. sensei beautiful. But support the leg when i started cobra kai, the lack of control over my business made me a little intense. But now i practice a different philosophy. Quickbooks helps me get paid, manage cash flow, and run payroll. And now im back on top. With koala kai. Hey more mercy. vo save over 40 hours a month with intuit quickbooks. The easy way to a happier business. [ fastpaced drumming ] coming up the latest on the coronavirus, a live report from china is coming up next. As we head to break take a look at the shares of apple lower after the coronavirus related revenue guidance the warning coming up. Coming up our guest host kathie wood revisits tesla. This stock in our models this stock is going to 4,000. Are tesla investors in for more skyrocketing share prices that cveonrsation is coming up when squawk box returns. Ade usar 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 new details. The number of confirmed cases has risen to 73,000. The death toll is higher the latest on the fears and the impact of Public Health and business lets welcome eunice. What can you tell us well, joe, state tv is quoting president xi jingping as saying china will meet its Economic Growth target for the year and they see continued disruption to the supply chain and this comes as most people suspect the big political event, the National Peoples conference which is set for march is going to be delayed. Lawmakers are supposed to discuss that next monday now this all comes as they take more extreme measures to try to contain the virus. The central bank has devised a plan to deep clean chinas cash. So the way this works is that cash is going to be sanitized with uv light and then for 7 days it will be quarentined for most of the parts of china but in the epicenter the quarentine will be for 14 days and then money that is in hospitals or comes from the market or Public Transportation at the epicenter is going to be destroyed and by that i mean state media say that the money will be shredded and then its going to be packed into bricks and then sent to the local power plant where its going to be inscinerated and turned into energy. Thats very interesting thank you so much. As always. You nice for us in china lets welcome in the senior director of new york citys health and Hospital System Wide Special Pathogens Program and also the central investigator for the special pathogens preparedness recently featured in the Netflix Docuseries pandemic. Thank you for having me. When we see the big spike in reporting numbers middle of last week from china and since then coming down a little bit does it make you think that were past the worst of this or can we not say this yet its way too early to tell and with this trend we need to take it with a grain of salt were still very early on in the outbreak and i think that theres still a lot that we still dont know theres Still Community transmission happening not just in china but in other countries around the world. This is why around the nation, hospital and Health Care Systems are preparing for the worst Case Scenario. In terms of how people were treated on that do you support that and one level that felt like almost a human rights abuse. So obviously a number of different Infectious Diseases and the decision that was made and continues and right now it seems that it was perhaps not a great decision but i think that. I think its a good way to obvio obviously go. The best case in this current epidemic is that the virus, you know basically calms down and were able to get it under control. Not just in china but worldwide. It doesnt seem this is a respiratory virus. Theyre hard to contain. Just from the nature of the virus itself worst Case Scenario its going to continue to infect individuals until we have a vaccine available. All the people had it because of that and what is the feeling of the 1 . Thats right. Its over 80 . And i think for every individual thats actually going to the hospital, theres more that are do have the coronavirus disease but they arent going to the hospital. Is it higher mortality rate than the average flu it is but its lower than sars and mers. So i think in that context, this is a mild virus. But again, too early to tell. How did that teeter out was it harder person to person transmission this is better so it seems like its the flu and obviously much more transmissable. And its compared to the sars outbreak that we saw its most important to highlight the number of people that have recovered from coronavirus disease. Are they fine immediately or do they go through a six month period of health and respiratory issues. Were too early to tell were only six weeks in and were still following the individuals even after recovering from this. Dont we have three other viruss that repeat like the flu every year. The regular cold virus. Thats right. So i didnt realize coronavirus sounded given whats happening in china terrible but there are three that repeat. Just very quickly, it doesnt stop it and its in terms of whether we need to still hear it or not. We still have to year out from a vaccine and theyre going to continue to obviously take cent center stage but i think we have seen this during the Measles Outbreak so we might have a vaccine available and face an issue that people want the vaccine and are they going to be willing to get vaccinated. Thank you for joining us. Thank you for having me a reminder, dont miss a special report tonight called outbreak coronavirus tune in at 7 00 p. M. Eastern for all the latest on this story coming up, whats the difference between a political ad, branded content and a meme the 2020 campaign is already testing the boundaries of communication. Breaking new ground with Michael Bloombergs ads at the forefront. That story is on the way squawk box coming right back dont get mad. Get e trade, dawg. Othroughout the country for the past twelve years, mr. Michael bloomberg is here. Vo leadership in action. Mayor bloomberg and president obama worked together in the fight for gun safety laws, to improve education, and to develop innovative ways to help teens gain the skills needed to find good jobs. Obama at a time when washington is divided in old ideological battles he shows us what can be achieved when we bring people together to seek pragmatic solutions. Bloomberg im Mike Bloomberg and i approve this message. He is also unveiling proposals about how he will change financial industry regulation a Justice Department Team Dedicated to fight corporate crime including encouraging prosecutors to pursue individuals and not only corporations and enrolling them into income based programs the digital ad spending is reshaping political campaigns as candidates wage war. Robert frank joins us with that story. Good morning. Spending on digital political ads expected to top 1 billion for the first time ever. Michael bloomberg is already outspending President Trump by more than 50 . Now political ad spending could reach 1. 3 billion this election thats according to e marker that would be the highest ever and would be more than three times the spending in 2016 now about 800 million of that will go to facebook. Google will get a little over 200 million but those numbers could go higher with bloomberg he just surpassed President Trump in digital spending with 71 million compared to trumps 43 million about half of his spending is on facebook and about half on Google Bloomberg is now spending an average of 1 billion a day just on facebook five times what trump is spending right now. His campaign is saying they still lag in terms of voter data and targeting. Theyre investing in swing voters and base voters in battleground states. His biggest ad spends are in florida, arizona, pennsylvania, texas and North Carolina and georgia. In total when you include tv, radio and digital, bloomberg now spent over 400 million on this campaign by far more than any other selffunded candidate in history. Thats a guy that called me fat. You could stand to lose a few pounds we could all stand to lose a few pounds. I resembled that. You resembled it. I did. I want to sue him for defamation of character. On the plan announced this morning, wilf is right the headline here is the Financial Transactions tax of all the things that andrew mentioned and it sounds which is scary. Because its actually new and it was actually not in bloombergs tax plan which he put forward earlier this month and when i called the campaign earlier this month when they launched the plan i said is that going to be an ftt and they said absolutely not so something changed. So it sounds scarier than it is. The rate is only. 1 Bernie Sanders rate on his financial transaction tax i is. 5 thats the first thing the second thing is its not a big deal it sounds scary but it only raises about 700 billion over ten years. You compare that to bloombergs overall tax plan which is 5 trillion its a very small amount and only effects the very top number of investors and for them the average tax bill under this would be around 150 million. We have to move on. The banks fear that much. Theres already something similar. Its in the u. K. For example its not as bad as if you actually brought it back. But wait a minute, High Frequency trading and it would effect them. It will impact the trading activity. All right well we should point out that squawk box is open for business. For advertising for the bloomberg campaign. Core 100 million. Thanks. Lets continue this conversation facebook is adjusting its ad disclosure policy following a series of sponsored memes made by Mike Bloombergs campaign and causing the social media giant to reevaluate what is an ad and what is not. This is a lot to this story, sarah and i like it because really bad things could happen if you dont watch out what you do, right . If you let certain people make memes and im ready to you know, i can decide whether im able to see it or not. I dont want facebook to start censoring things but this could get we may be talking about some of this stuff in the next few weeks, right yeah. They could get really messy and do you know why i think it gets really messy stories. One of the things that were not talking about here is what happens when you have people on posts that disappear in 24 hours. The federal trade commission is not going to be able to enforce any native advertising guidelines around that and we all know that facebook struggles to police this kind of stuff too. So i agree with you its going to be a big problem. For now Mike Bloomberg is just buying memes on traditional instagram posts. If they were to move to things like stories i would be concerned. You mentioned the people that have done ads for them are known to push the envelope are they not someone getting hit nonstop for stop and frisk i dont think they should be buying meme accounts on white people humor thats not sending the right message. Those are starting to come out too. I think i agree with you joe. He has to be careful about where he places these messages but the reason hes pushing the envelope is thats what works on social media and its what works for donald trump and gets people to relate to a candidate if they speak in a relaxed humorous manner so well see if this works out for him but he has to be careful. Its the wild, wild west though is it not . And theres also plausible denieblt cant they say we didnt mean to go down that route it was farmed out to someone else are they able to do that or finally come to rest and they have to take ownership the buck stops at the campaign if youre going to place your ads on a place where you dont think youll have a brand safe conclusion if that buck stops with you i think to your point about the wild, wild west, just to bring the point out to viewers here, facebook and social platforms dont make money off of these transactions between campaigns or any kind of advertiser and the influencer or the account. Thats why these Companies Want to push them to buy actual ads because then theres some accountability the reason facebook had to change its policies is because it now says look if youre a verified political candidate well put this stuff in our ad library so that we know for future records what money was spent but its still dicey. What do you make of the comment, we played a short clip in the Previous Report from bloombergs campaign chief that suggests the president has much better data on social media and therefore the implication that his ads are having a better effect than some of the other candidates including bloomberg. Thats right. The Trump Campaign ads are way more effective than the bloomberg campaigns. What it has going for it is that it can totally spend you have to remember that the Trump Campaign has all the data from the data trust which is a partnership between a private company and the rnc. Its able to use that data to create lists on facebook to hypertarget the right people whether theyre swing voters or die hards on facebook. The campaign is a little bit starting from scratch. They have their own Digital Agency called hawk fish which is creating and mining all of its data but they dont have four years of data. A campaign from 2016 of data to rely on the way the Trump Campaign does. Is it true that this has been an attempt by bloomberg to look cool apparently some of our analysts are saying these names are fa falling flat not only are they very controversial . Thats a big ask there i dont know heres my take. Heres my take thats what he wants to do bloomberg wants to win and i think hes doing it. People are talking about it. Whether or not they think it makes them look cool i dont think thats what he is going for here he wants to be talked about and i dont think thats a horrible strategy youre just a print person. You missed youre calling. Thank you thanks so much chlts you. Youre not nervous. Thank you youre going to pivot now. Tesla shares up again this morning after two bullish calls. Stock up about 100 year to date and our guest host is not surprised. She had this to say about tesla. This stock, in our models, this stock is going to 4,000. Kathie has upgraded that to 7,000 now. We always push congrats because you had a great year. Yes. What do you think accounts for that 100 or so gain when you see how people talked about it differently today versus a year ago okay. Well, first of all, i have to give credit to three of our analysts and director of research for the kind of research the 100 number i believe is very much a function of what has happened in china. First of all, profit numbers that way surprised expectation Free Cash Flow numbers that completely shocked people. But also shanghai, up and running within one year for 2 billion. I wouldnt be surprised to see more plants going up in china for that reason. And the reaction of other Auto Companies now. They are scrambling. Many people ask me the question, well, wait a minute, these Auto Companies have r and d budgets and Capital Spending budgets that can run circles around tesla. Thats true. They have been focused on the internal Combustion Engine they have the wrong dna. They dont have the right kind of Technology Software developers they have mechanical engineers they have great engineers for what they do now but what they are trying to do leaping from the internal Combustion Engine to electric is very hard and we are now seeing and more people now believe that costs are falling at such a rapid rate that within two years the average electric vehicle from just a Sticker Price point of view will drop below the average internal Combustion Engine car in price. Already today total cost of ownership is lower and i do believe that is one reason that demand is taking off here. Lets talk about the china point a little bit more. Both in the shortterm how worried are you about the Coronavirus Impact but also the medium term because we have discussed this as well earlier about more Companies Wanting to rely less on china because of potential volatility but you think that the opposite is true for tesla . I think the opposite is true. If you listen to elon musk he says i wish our mayors in this country were as tech salve vvy s the average chinese city were not an auto company. Were a Technology Company battery company. A transportation as a Service Company with software as a service like margin. So the chinese get that and they for environmental reasons especially they want to proliferate it we just heard today that catl which is one of the largest Battery Manufacturers in china is going to be working with tesla to eliminate or minimize cobalt which is one of the most expensive parts of the battery so china from an ecosystem point of view is all in from this movement and tesla would be fine not only fulfilling the Chinese Consumer demand for tesla which is a status symbol. They might have u. S. Plants in china. Yes. Let me just ask you nuclear is where theyre going with that. You have a 7,000 price target so id think that youd never sell any tesla but people go crazy when youre on. Theres both positive and negative people and some are always talking about selling a third of your position or selling this why would you ever sell any and have you sold any . So, yes we can only buy. Its still 10 . You can keep it and thats the primary reason to sell primary. There are times. If its up 50 im a Portfolio Manager tesla is up 50 . Im going to make those moves. Tesla is our largest position. Youre going up 10 times in value. What could be more positive about them having been a Portfolio Manager for years, theres always another side to the story. What i want to be able to do is when that controversy comes around and the stock drops to 8 of our portfolios i want to have the room, the latitude to buy. All right but can i just say one thing whats so interesting in this whole period is that the sell side, if you look at the buy and sell ratings, the number of buy ratings has gone down as the price has escalated. The number of sell up. So 7 buys, 18 sells and even those price target increases i bet they werent associated or i dont think they were associated with an actual upgrade so what we have here is a wonderful wall of worry. The best wall of worry i ever experienced in my career with a stock or with the market ahead of the open on wall street and the latest Technical Levels in investors that need to know watch or listen to us alive on the go, on the cnbc app. Stay tuned youre watching squawk box on cnbc soft music did you know that americans that bought gold in 2005 and even now many experts predict the next gold rush is just beginning. So dont wait another day. Physical coins are easy to buy and sell, and one of the best ways to protect your life savings from the next financial meltdown. Today, the us money reserve is releasing official Gold American eagle coins at cost. For the incredible price of only 154. 00 each. These Gold American eagles are official gold coins of the United States, and are being sold for only 154. 00 each. Pick up the phone and call americas gold authority us money reserve, with nearly two decades in business, over 1 billion in transactions, and more than 500,000 clients worldwide, us money reserve is one of the most dependable gold distributors in america. Today, the us money reserve is releasing official Gold American eagle coins at cost for the incredible price of only 154. 00 each. These government issued gold coins are official us legal tender, made from solid gold, mined here in america, and fully back by the United States government, for their gold weight, purity, and content. Do not delay. Call now to purchase your Gold American eagles, for the amazing price of only 154. 00 each. Gold is now on sale at prices unseen in years, and this year could be one of the greatest gold buying opportunities of all time. Call now while vault inventory remains, and as one of the largest us gold coin distributors in the country, us money reserve has proudly served 100s of 1,000s of clients worldwide. Dont wait another minute. Call now to purchase 1 10th ounce Gold American eagles for the amazing price of only 154. 00 each. Many investors say the market is narrow our next guest completely rebukes this notion. Is that true thats true whoa. Joining us now the technical look at where the markets are headed is chris faroane, partner and head of Technical Analysis at strategis securities. You got about five Different Things to look at. The first is, what, technology and communications stocks. No, its the s p excluding those. Oh, okay. I think one of the big pushbacks weve heard its Just Technology and communication. Load are leadership they arent the only things working. S p excluding those groups is also at a new high theres other things contributing to the move, industrials have been decent what i think has not gotten enough attention, if you look at the financials, the financials have acted really well here. If we go to the next picture this is on the verge of a massive breakout from this twoyear range if you even go back further and look back to 2007, the xlf, the etf is about to make new alltime highs but when you look at the flows, these are flows over the last two months, outflows no one believes this move. Thats a good combination for financials to move higher here because on a contrarian basis whats interesting if you look across the globe its not just the u. S. Banks that held up here, despite low global bond yields negative yields these are german tens, below zero european banks are breaking out first time in two or three years theres some action out of this group, names Like Deutsche Bank and intessa, unicredit the whole group, the domestic banks or the european banks despite low yields resilient i want to show you my favorite one jpmorgan what strikes us about jp, for as good as this name has been, the analysts buy ratings, they hate it fewest number of buys on jpmorgan at any point since 2003, about 30 analysts cover the stock, only ten buys another one of the contrarian powerful combinations we like. I just love that, all the guys we have on spouting wisdom, when theyre all on one side, we know theyre wrong which is great. We have them on but we use them as a contrarian indicator. Thats great this is a good chart and the street neglects it now take the other side of this. Even though we have low bond yields the yield stock doesnt act as well as you might expect. This is verizon relative to the s p. So you had buying yields go down, making new relative lows so theres no relative advantage to owning some of these yield stocks if you look on a price basis starting to deteriorate, despite lower bond yields. Tech is still very good but there are other things like financials and banks which act better and conversely, these yield related plays really dont offer much leadership here great he messaged me about the coronavirus but trenner. Found you, hired you found me, hired me and here we are chris thank you meantime pivot down to the Stock Exchange, jim cramer joins us now good morning to you. Good morning. First question has got to be on apple i guess the size of the premarket at least stock move relative to a pretty big announcement particularly given that the january guidance was already meant to factor in corona right i am surprised its not down more because its not just supply, its demand. Demand comes down because they dont do much shopping in china and supply chain, some of the companies that need to give them the upplies, they can switch theyre six or seven plans in that you buy area that are halted but that overall i thought it would be down about ten. I dont know whether it would be down more than this. Theres not a lot of people want to sell anything people are thinking that this is, i think a lot of people felt this would happen and are just waiting for that shoe to fall. I cant come up with a reason short term to buy it i think if you believe the coronavirus is going to get better, you buy it here. Jim, we look forward to much more deep vedi analysis from you and the team on squawk on the street. Stay tuned 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. Delete it. You metwhy . An app. Hes the one. Awww. Gesundheit. I see something else. A star. With three points. Youre in a. Mercedes. Yeah, we wish. Wish granted. With four models starting under 37 thousand, there could be a mercedesbenz in your near future. Lease the a 220 sedan for just 349 a month at your local mercedesbenz dealer. Good Tuesday Morning welcome to stsquawk on the street. Im carl quintanilla, jim cramer and david faber at the new york Stock Exchange a lot of news to start a holiday shortened week walmart misses guidance, u. S