Good thursday morning, happ new year jon fortt with Morgan Brennan and mike santoli live at the new york stock exchange. Carl has the morning off it is the first trading day of the month and the year stocks are rallying to kickoff 2020 fresh record highs for all major indexes. Bob pisani is with us to breakdown what could push the markets higher. What a different january 2nd makes. Remember this time last year, a year, what a difference. January 1st, last year, look whats going on, the market was pricing in earnings recession. Remember that phrase stocks were cheap. Fast forward a year. The opposite is happening. The recession didnt happen, earnings recession didnt happen, the economy is strong, stocks have gotten on the expensive side so the issue is whether we can finally return to Earnings Growth after an essentially flat year in 2019 most strategists are expecting mid Single DigitsEarnings Growth which would take pressure off the higher multiple the market has now early reports from Companies Reporting the end of november are mixed with big names like fedex, nike, micron, general mills, carnival. First quarter earnings reduced by analysts. A few others have seen estimates increase overall, the trend is lower than expected looking at risk in 2020, the markets are at new highs because many believe risk from trade and tariffs is lower theres lower risk risk from the fed many believe is lower, theyll likely remain neutral. Job growth, risk to u. S. Consumer also a lit lowbit lowe. A lot of people bring up buy backs. We have been buying back stocks, but people feel there may be a limit with that. Global growth is bottoming and turning around is high risk. Many believe there will be a bottom in the Global Economy thats been a big driver of the stock market nothing changed in europe, and few Structural Reforms another thing that shows up, wage growth concerns many believe wages are higher years to come, putting pressure on margins you guys know the stock market is a game of expectations. The thing that happened last year is we had low expectations, starting the year. Prices were lower. Now it is the opposite we have high prices, high multiple the expectations are high. Like you know, it is better for lower expectations than Higher Expectations thats the thing that concerns me most now. Yeah. So whats an investor to do with that talk about it. Bob, stick around. Bring in jason hellstein of oppenheimerer. Jason, you look at 2019, alphabet was up 28 , still did not outperform the s p so coming out of a year like that, you have outperform ratings on netflix, alphabet, uber, facebook given that the bar is so high, whats going to underperform theres a ranking we think certain stocks will be better than others within that list, we rank uber as having the most up side, 50 price target, followed by netflix at 19, google at 14, facebook at 12, and then 10 up side for amazon. But to answer your alphabet, google question specifically, you have a catalyst, a story sin dar becoming ceo of alphabet and google, we think that will take the pressure off the other investments and allow them to take more cash for buy back. Expectation is theyll have 120 billion of net cash and they dont need that much we think for that name specifically you have a catalyst for 2020 mike santoli, apple market cap is a trillion dollars, plus a disney, enough change to throw in a workday how does an investor avoid that, not to say apple will do badly, but it is heavily weighted in the s p, nasdaq 100. What are people saying about how you limit exposure to names like that i think implicitly what the market decided is not so much that it is the sum of the parts but that the massive profit base of apple, had been the most Profitable Company in the world is going to last longer than a year ago it is about the duration of it, not so much about hey, there will be lots of cool new stuff apple will deliver be aware that people have been buying apple aggressively for all sorts of reasons that have nothing to do with whats going on at the company. Theyre part of all of the indexes, it is the biggest component of the s p value index, so that might change as they rebalance thats a good indication how you have a lot of people that are kind of chasing it now it is a momentum stock, very high quality, and quality and Balance Sheet have been two things that worked the earnings keep expanding to deal with multiples, so were not dealing with a stupidly overpriced multiple for apple. One reason it stays in the value camp essentially. But now it is a premium for the s p. Well see if it can still qualify on that basis. Bobs point, the idea of value versus growth, thought we were seeing a rotation in the second half of last year if you look at what has continued to outperform, it is tech stocks, growth names. Any reason to think it doesnt change again i am not entirely in that camp value did well bank stocks were value stocks middle of the year beginning in october, they took off. We saw yields showing signs of bottoming. The fed did do a little liquidity, ill get emails, but it changed things. Value moved in particularly oil moved over 60, a lot of people were calling for Energy Stocks to do better for the 2010s. Dramatic underperformer in the last decade, tends to be that mean reversion im not entirely in the camp that everyone will pay anything for growth i think there are some elements here of value that can do very well jason, you cover netflix, you also cover roku. That stock did extraordinarily well in 2019 we have been talking about streaming wars, how 2020 is a big year to see how that plays out. How is an investor to play that, what are the milestones to look for to decide whether it is time to buy or sell sure. You talk about momentum stock, that would be the top of the list very highly value. Big opportunity if theyre successful next week is Consumer Electronics show the company historically puts out metrics on streaming hours and active accounts. Investors are trying to gauge what will be good enough then the question will be when they start to collect revenue for helping the disney plus, apple plus generate subscribers. As you reported, disney was incredibly promotional within the Fourth Quarter, deals with verizon, a lot of discounts. After that initial period ends, the rokus, relationship with amazon becomes a primary way you generate new subs. And they can exploit that for revenue. Thats what investors should be looking for. Jason, where is amazon headed this year. Saw the stock up double digits last year, still underperformed the Broader Market for most of 2019, amazon was probably most investors top positions. The company did a very good job managing expectations around margin pressure from one day prime, we started to see margin pressure around aws. The question in the short term, can they maintain growth at aws relative to what the pressure from microsoft and building pressure from google, and will investors tolerate pressure there if they can sustain revenue. For that stock specifically, they had a great Fourth Quarter on the ecommerce side aws probably did slow, but thats been the trend. The question is what is the tone for next year with margin around aws. Yeah. Were going to talk more amazon with mark mahaney later in the hour bob pisani, jason, thanks. Thank you. Still to come on squawk alley, what about chip stocks, can they continue the surge into 2020 we talk about it with a top analyst after the break. Stay with us and tie it all together with a worldclass software experience. We ended up creating, as you all know, so much more. Peloton is truly a category of one and were just getting started. Now, lets do this. Together, we are going further than we ever thought possible. Its a thirteenhour flight, tfifteen minutes until we board. Oh yeah, we gotta take off. You downloaded the Td Ameritrade mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. 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. Chip stocks coming off a big year, nvidia, micron seeing gains. A and dpch leading that group. Can the surge continue through 2020 how do you think about this group . What do you think is priced in in terms of strength and durability of the semi cycle investors anticipated a bottom, they bought stocks aggressively stocks retreat at five year valuation lows, sometimes seven year lows, it was up almost 60 . Whether it can continue next year, i think it will. The main take away is any trade resolution, even sub optimal, will drive chip stocks higher for a couple of reasons. Number one, business on the ground in china is pretty much frozen all of the companies i talk to that sell into china, nobody wants to build any inventory, they dont know what tariff rates will be. If youre a big Chinese Company or small company, youre not building territory then theyll start to rebuild. Second thing, historically levels of distribution inventory. Theres not a lot of excess inventory in the channel we saw a lot of significant order rate cuts starting in october of 2018, so were pretty much done with inventory correction that lasted more than a year, were coming to the bottom if we see a stimulus plan coming out of china, see a resolution on trade, then were going to see restocking in demand, it will pick up again says theres limited number of inventory, you could see a big rebuild. Where does intel versus amd go from here intel has pc chip supply issues. A and d could do well for awhile, only until intel got its act together things seem to have changed there. Is 2020 pivotal to see whether the narrative on that mega battle in chips has changed . This has been historical narrative on the cpu side as well as data center side i think that will continue the Bigger Picture is a return to spending by hyper scalers facebook, google, and microsoft and amazon, there was a big inventory correction in hyper scale spending the past year they returned to build out the data center. Thats having positive impact on intel and nvidia and other companies in the supply chain. There will be a number of catalysts next year for the Semiconductor Industry in addition to trade resolution were going to have 5g 5g on the smart phone side, all of my conversations in asia, discussions, talking between 175 million to 250,000,005g phones the rf content, semiconductor content will go up two to four x per phone. More frequency bands, more amplifiers and filters on the smart phone side infrastructure side, number of base stations built out by china mobile, same in south korea, will increase. Theres a lot of semiconductor content there. Second thing is memory memory is a key component to the overall Semiconductor Industry memory pricing is bottomed there are checks indicating pricing could be up 30, 40 next year were getting into a recovery and memory as well begs the question, what is your top pick within the sector . I feel like it is an important conversation to have, certainly key trends in 2020, many of them have already been anticipated by investors. I think thats a fair point and valuations are getting stretched. Were talking about back to peak levels of three or four years ago. However, the only thing i would say, consensus estimates are factoring 2 year over year growth, first half versus first half of last year. Thats not a lot of growth thats an easy compare, first half of last year, the group was down 17 we are coming off an easy compare. Thats one thing i want to say i agree we need estimate revisions upwards for 2020 and 2021 my top pick is on semiconductor which is basically supplies, image sensors, Power Management shifts for autonomous driving, Factory Automation forecast 3 of long term earnings in the next two to three years, the stock is around 25, long term earnings basis is cheap. Also like micron, the valuation will start to expand on price to book basis as investors realize that were coming out of a recovery, going into recovery and seeing demand. Micron is 1. 7 times book value median book value over seven years is two times so it is not that much to go and on 5g side, we like skyworks, supplying rf content in smart phones. Those stocks have run, but we think content will be significant. All of the oems are building aggressively, apple, samsung, or chinese oem. Whether they sell through or not is another story, but theyre building themes to play still after last year. Thank you. When we return, mark mahaneys top ten internet surprises, alphabet and amazon and others in there. Might not do what you expect were back after a quick break diarrhea . Pepto diarrhea to the rescue. Its 3x concentrated liquid formula coats and kills bacteria to relieve diarrhea. The leading competitor only treats symptoms it does nothing to kill the bacteria. Treat diarrhea at its source with pepto diarrhea. Details trickling out about Carlos Ghosns escape from japan. Phil lebeau has the latest to catch us up. Hey, mike, the big question is how was carlos ghosn able to be brought out of japan without anybody detecting him. He was under house arrest, they had cameras on his house, guards outside his house. Sometime near as we can determine between sunday and monday, taken by private jet first to turkey, then to beirut. Turkey today arrested some pilots linked to the ghosn escape, not charged with anything, but questioned by the turkish government in the last half hour, heard from carlos ghosn saying there has been speculation in the media that my wife carole and other members of the family played a role in my departure from japan all such speculation is inaccurate and false i alone arranged for my departure, my family had no role whatsoever meanwhile, police in japan have raided the home where carlos ghosn was at, and theyre trying to get clues, trying to figure out how did this happen and we have yet to hear from them, jon, in terms of explanation. Believe me, it doesnt take a Rocket Scientist to figure out, japan has egg on their face now for having somebody under house arrest with guards and cameras, and yet he popped up in lebanon monday, and a lot of people in japan are going what how did that happen . Phil lebeau, we are eagerly awaiting details to see if there are instrument cases involved among other things meanwhile, european markets are set to close in a few minutes. Seema mody has a breakdown, a lot of green i see. Thats right, jon a very strong start to the new year for european equities, boosted by fresh stimulus measures out of china, also shaking off a weak pmi reading from the uk. In terms of whats leading us higher, cyclical groups, financials, minors, and look at the european 600 banking index, hitting the highest level since may last year, in part because Analysts Expect captain requirements for european banks to stabilize in 2020 after years of increases now, despite gains and cool down in trade tensions between the u. S. And china, hong kong protests are creating challenges for the european banks hsbc forced to close branches, suspend some atms after protesters vandalized two iconic bronze line statues outside the main offices they defaced them as retribution closing an account linked to the prodemocracy movement and the uk is facing backlash over its stance on the hong kong protests multiple outlets reporting that china has temporarily blocked a planned crossborder listing between shanghai and london stock exchange, due to its support for the protesters certainly a development story, one were watching as it becomes more pertinent to the financial story. Thank you very much. Time for a news update sue herera has that for us back at hq. Good morning, sue. Good morning, mike. Here is whats happening at this hour, everyone australian Prime Minister scott more son confronted by angry residents as he toured new south wales. Locals criticized him for lack of equipment provided to deal with the devastating wildfires there. I am not surprised people are feeling, thats why i came here to be here, see it for myself, offer what help i could. You cant in every circumstance, everyone understands that. A hong kong legislator repeatedly sprayed in the face by police with pepper spray during a protest last night as hundreds of thousands packed the streets for a new years day protest march. Berkeley, california imposed a 25 cent fee on cups in restaurants and shops. It is called disposable free dining went into effect yesterday backers say it is meant to reduce number of cups that are thrown away. A number of states across the country ushering new measures like that this year. Thats the news update this hour back to you guys, morgan i have mixed feelings about that, sue. Not going to lie. A lot of people do. Sue herera, thank you. Two hours into the first trading day of 2020. Stocks rallying to fresh inter day highs. The nasdaq above 9,000 dont go anywhere. Back after a quick break legendary terrain in telluride, 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. Welcome back to squawk alley. Rbc out with the top ten internet surprises of 2020 analyst behind the note joins us now. Mark, happy new year all right. I think we might have had a technical difficulty there well bring in mark once he is up and running meantime, getting a check where we stand with major averages the dow up 172 points. The s p is also up threetenths of a percent saw fresh record inter day highs for all averages in the first trading day of 2020, and of course one of the sectors thats leading gains are the tech stocks once again. They are indeed we were talking about semiconductors, amd, a strong start to the year, up 4 . Across the board with tech hardware tech has worked all last year and into the new year. All right i think we have mark mahaney up and running again. Mark, going to welcome you back to squawk alley. Happy new year thanks for joining us. Happy new year, morgan. All right so the top ten internet surprises in 2020. Youve got some that are certainly i think stoking some debate right now, uber and lyft, achieving profitability in 2020. How did you get there . Thats probably our Biggest Surprise look, what were trying to do is come up with thought provoking ideas, try to get a sense where the debates are on the street, maybe provide entertainment value, too uber and lyft both surprised the street, one, with magnitude of losses this last year, in 2019, and projections for this year, they also surprised the street by saying they would pri up profitability to 2021. We think it is not a probability but possibility they achieve it this year. Uber has an advantage, they have more levers to pull, selling indy eats asset which is generating a couple hundred million in ebitda losses and getting leverage against insurance costs. This would be a surprise we like both stocks. Uber is the number one pick for the year, theyll improve the path to profitability. If they can get close, stock can materially outperform. Certainly probably to dig into that further, one of the other surprises is that the 2019 ipos roar back how do you see that, is that a fundamental story for hard hit names that went public in 2019 well leave it there morgan, thats the right question we are doubling down on uber lyft point there are other assets, pinterest and even chewy, online pet retailer we thought were good assets. A lot of them had lock up expirations, stocks were probably mispriced at the time of ipo, but the market went through growth to value orientation quickly, and timing wasnt good for some of the assets we think there are good assets in there, clearly underperformed, all seven u. S. Listed internet ipos materially or somewhat underperformed that creates a little opportunity to the up side uber, lyft, pinterest, oversold, people can step in on negative sentiment, and generate returns. Mark, going against the prevailing thought on amazon, basically saying you think profitability will plummet this year, that amazon will continue to spend heavily over and above what the street currently thinks what are you seeing there, how much of a jolt would it be to investors . So mike, you and i looked at amazon for many years here amazon is a company thats never shied away from investment opportunities. Theres a quote from the cfo must have been seven years ago, every once in a while like to show how profitable we could be and go back into investment mode showed that the first half of 2019, reached record high profit margin levels and Free Cash Flow levels, then started getting back into investment mode. The streets guess is margins continue to expand because of the margin mix, positive margin mix from Cloud Computing and advertising. I wouldnt put it past amazon to double down on one day investment initiative, double down on physical store retail experiments like amazon go i wouldnt put it past them to double down on Enterprise Sales force build out for aws. Amazon cannot afford to lose the leading position in the market. On cloud, sounds like theyre going to do that i want to talk about your netflix call i believe you said the surprise is that sub growth will accelerate, said it last year, and it didnt work out seems to me you point out the favorable comp. To last years price increase as one reason, then investment in original content overseas, something around 130 shows is another reason seems to me that given those two things, it shouldnt be a surprise if sub growth accelerates, that in fact would be bearish if it didnt. Yeah. The setup, however, is clearly negative on netflix, the stock is well off its highs in part because of the successful launch of disney, modestly successful launch of apple, and the fact that netflix missed two quarters in a row, u. S. Sub numbers last year recent street call is that netflixs u. S. Subs decline this year i think the outlier call, the surprise call is growth could accelerate the stock can outperform if sub growth is in line in 20 versus 19 i am intrigued by the surprise possibility that theses these could caught acceleration. That would cause dramatic outperformance, new highs in the stock which is 30, 40 higher than here. Mark, finally your thoughts on the idea that the internet gains another new dividend player what names are most likely, why do you think thats the case in 2020 so jon earlier called out one of the calls we got wrong last year, one that we got right. Surprise calls we get too many of them right, were not calling out surprises. Ebay was the surprise dividend payer last year. Three names, facebook, google, booking. All those have substantial amounts of cash, excess cash in our opinion. Already buying back stock. The next logical step, they start declaring dividend i dont think it is a problemability this year but distinct possibility one of those would announce a dividend in 2020. Mark mahaney, thank you for joining us happy new year thanks, morgan. Happy new year now unrecognizable what some google veterans call the company after a positive cal year that saw founders depart, staged walkouts by employees, reported lack of transparency. Jennifer elias here to discuss, Marshall Lowe from stonybrook, university guys, happy new year unrecognizable i kind of recognize this google. It is looking a lot like microsoft 20 years ago when it was 25 years old, having a quarter life crisis. Google is around 22 now, right on schedule. Here we are, right . Youve seen that microsoft took its reputation as the evil empire, managed to turn it around with time andthe right leadership thats the best that you can hope so it leaves the bad news and bad headlines behind. What do you think of the quarter life crisis theory and what you do with google under these circumstances, if it is entering a tough time where it has become dominant, had an underdog culture, needs control where it used to talk freedom. How does it get through this, should investors bet against it . So i think were at the beginning of a huge cultural transformation at google i think it is unavoidable. Transparency doesnt scale, dont be evil doesnt scale either it seems like google is having to struggle with some of the same content moderation frustrations that Internet Companies have had with their external users they have this history of open dialogue, of transparency, and that has been harder and harder to manage as it has gone into new businesses and new markets Employee Base ballooned over a thousand people. I think it is a multi, multi year process, and like you said, were really at the start of it. I think there will be a lot more pain before google gets out of this we heard from a number of tech executives at other Companies Just in the last couple months, suggesting all of the cultural strive within google, maybe it is a management problem. Is it . Hard to tell from this distance what the kpalkt problems are, but there are certainly problems, seen it in the way people had Higher Expectations google is held to kind of a higher standard than other platforms. We saw them coast on that reputation and transparency for a long time. Now that the founders have stepped back and Sundar Pichai is in charge, he needs to show that leadership and show the kinds of things he will stand for that may sometimes be at conflict with the values that some of the employees want to have i guess it is not surprising as you suggest when a company gets to 100,000 employees, some early generation feel theyre not comfortable the way the company is operating it is no longer exactly in that same maverick mode perhaps but i guess the only way that would matter in terms of Company Performance down the road is if google had a harder time attracting talent. Obviously thats almost job one in this industry any indications that theyre slipping at all in terms of being an attractive place for highly sought talent to work yeah. I mean, anything i say is anecdotal at this point, but yes, absolutely. I think i have been here in Silicon Valley as long as i can remember and google was the kind of place where people were you were lucky to get a job, that was the holy grail, that and facebook in more recent years, and you just dont hear the same talk any more there are so many other companies, mid size startups that have huge amounts of capital, able to pay great salaries, give more up side than google does today. Put on top of that all of the issues that google is having internally, the regulatory clamp downs, externally, you name it, absolutely the language has shifted around how you hear people talk about working for google again, theres so much competition out there from an employer point of view what is it about the tech quarter life crisis that happens, when apple was in its early mid20s, right before steve jobs came back, the Company Almost imploded completely what do you think determines who gets through it and who doesnt . One of the things we just talked about were the employees, also the startups they can acquire to make the changes they need and to be successful in new markets. Just the way we saw some founders acquired by facebook have left from whats app. Google has to acquire small and medium startups. They need to show theyre not having the crisis, and come work for us, trust us, were going to do well by you and do good in the world. People expect that from google all right thank you. Still have a rally, more than a half percent in the dow to kickoff 2020. Stocks are up across the board, slipping off highs a little bit. All major indexes hitting fresh inter day highs. Back after a quick break whatsap call it the rise of reverse logistics. Frank holland explains at hq. Today, u. P. S. Will handle 1. 9 million ecommerce returns many of the returns end up in warehouses like terreno. Their stock rose 50 , it is not retail, it is a Warehouse Company for returns known as reverse logistics. That stock outperforming the market and sector, off its best year since 2014. Duke relate, black stone group doubled warehouse space, all outperforming. Warehousing companies appear poised for a boom as retailers move inventory and reverse logistics closer to urban areas, according to read of research. Areas in places like brooklyn, seattle, youre seeing some facilities achieve rent levels that would be akin to office rent. To give you a sense of scale, thats typically four or five times as high as traditional industrial rents thats what were seeing in some last mile, high demand, high density areas. Returns require 15 to 20 more space than traditional warehousing, making supply for that even tighter. One factor that could impact growth, genz they were 85 of shoppers in malls this season. Cbre says they prefer to pick up in store as opposed to sending to the house items picked up from brick and mortar have a return rate of 8 . 30 for ecommerce buys. Yes it has been a trend, as youve seen ecommerce grow, weve seen the rise of reverse logistics grow u. P. S. Calls it National Returns day, some of the big logistics plas players are making investments increasingly, theres a crop of startups looking to tackle it in more cost efficient ways arise in Third Party Logistics company, rise of them in the private sector, also publicly traded. As ecommerce grows, items sent has grown. Companies like xbo and ch robinson have seen a boom as they buy refrigerators and tires and things by ecommerce. Isnt this a bet against ai and targeting . Some startups argue as software gets better, theyll be more efficient, theyll return less stitch fix makes that argument isnt that going to reduce opportunity for some of the companies if it works . According to c barry, theyre not at the bottom of efficiency, but lose 50 billion because they dont have efficient retur returns. People want faster, Free Shipping lot of Companies Feel they dont have choice but to move inventory. Reverse logistics for those areas, these companies have something that a lot of retailers need genz prefer to pick up in store. As their spending power increases this may all shift anyway theyre old souls, i suppose. Frank, thank you thank you. As we head to break, lets look at shares of tesla, getting a boost this morning they take the price target up to 515. Higher than 420. Now the highest on the street. Oh boy. Jon jokes. Up almost 2 . More squawk alley is next. Er s made me a little intense. But now quickbooks helps me get paid, manage cash flow, and run payroll. And now im back on top. With koala kai. vo save over 40 hours a month with intuit quickbooks. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu if you listen to the political it sounds like we have a failed society. But nothing could be further from the truth. Americans are compassionate and hardworking. We arent failing. Our politicians are failing. Thats why im running for president. To end the corporate takeover of the government. And give more power to the american people. Thats how well win healthcare, fair wages, and clean air and water as a right. Im tom steyer and i approve this message. 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 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Welcome back californias new Consumer Privacy law is in effect it doesnt seem like anyone is completely clear on what it takes to be in compliance. What are companies doing wrong joining us to explain sarafin. Not giving consumers they have been granted, which are five rights. The right to know what data is being collected, right to access that data, right to delete that data, the right to opt out from the sale of data and the right to nondiscrimination. Not having anything in place that allows consumers to act on those rights being not addressing these requests in a timely manner. Its a bunch of pitfalls and companies are failing left and right. Its interesting to hear you say that, especially when you have some Companies Like microsoft who are taking this legislation, this regulation very seriously and not only looking to introduce it in california but on a nationwide level as well. Certainly there are thought leaders for sure Companies Like microsoft are recognizing that the Way Companies deal with data privacy is a huge differentiator in the Decision Making process for consumers. Consumers want to do business with companies that respect privacy rights 87 of customers will take their purchasing elsewhere consumers should control data and profit off of access to it im a little uncomfortable with that i got a problem with breakins in my area i will charge for admission to my house instead of making sure the wrong people dont get into my house im not sure i want a market in my data. I want people to stay away from it. Thats very fair. We want to service all of those concerns if you want your data to be kept private, that should be your right. You should be able to enforce that companies should adhere to that. Thats a big part of what we do. We have a compliance product if you say, i dont want anybody to access my data, i dont want you to sell my data, that is being enforced through our platform. There are viindividuals who sayi would like to have a share in the upside we are creating a market where thats possible. We are striving to do that in a way where its Privacy Protection none of your data is exposed its future forward but its possible does that mean that this privacy regulation in california is a tailwind or potential boon for data wallet . For us its Good Business a lot of companies are confused, they are looking for help. We make it very easy, not just related to the california Consumer Privacy act, but to gdpr in europe theres ten other regulations which are going to come into affect in 2020 we want to make it easy for companies to comply. For us its Good Business. You said earlier that 70 of consumers say they will not do business with a company they feel doesnt respect them. Is that something they say is that a survey result . By evidence, it doesnt seem people move their business elsewhere. Its a survey but it goes to show sentiment has changed. Nobody really cared about their data people werent thinking about data it was a nonissue we are now in a regime where its top of peoples mind. Companies do recognize such as microsoft that they need to make a change the first to make that change will benefit from it do you think we are going to theres challenges, legal challenges to this privacy law in california. How would you expect this to play out i guess in light of that, would you expect to see broader adoption around the rest of the country . Yeah, certainly i think it will come down to how the ccpa is enforced the California Attorney general has mentioned in the past that he will enforce this rigorously. He will especially go after companies that are dealing with data on minors i think its just about setting precedent, showing companies if you are not treating your customers data carefully, you will be held accountable i think thats going to be very, very important precedent for possibly a data regulation thank you for joining us. Thanks for having me. A quick check on todays rally. You can see that the dow is up about 177 points, s p also higher, almost a third of a percent. Nasdaq higher as well. Squawk ally runs in less than three. Lpark city,f 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. Before we go, take a look at shares of apple, up over 1. 5 to start the year approaching 300 a share market cap wise over 1. 3 trillion for those keeping score, since tim cook took over as ceo, the market cap has risen about a trillion dollars. Wow. Unmatched by any ceo who is not a why the dow and the nasdaq are the outperformers, because apple has the influence. Small cap russell is down. Theres weakness under the surface. Tech stocks are leading markets higher so is energy and industrials we see crude actually move into the red. That insight on tim cook by the way, courtesy of nbcs scott budman give credit where credit is due. Amazing how far thats come. Microsoft looking heady as you have mentioned. Microsoft and apple were the drivers in the late part of last year see if they can carry over. Happy new year, everybody im scott wapner new year, same story stocks hitting fresh record highs. How long can your money keep running . Its 12 00 noon and this is the halftime report. New year, new highs stocks starting off with a strong start as all three hit record levels. Where to invest at record highs. Bank of america has a new list with the ten best stock ideas for q1 those names are coming up. Another call to sell wells fargo. The second downgrade for the big bank in the last two weeks its our call of the day