a massive retail deal reportedl in the making. and history in the making. at the 92nd academy awards it is is monday, february 10, 2020 "worldwide exchange" begins right now. snshgsz ♪ pk. good morning i'm dominic chu in for brian sullivan we had history at the oscars last night where south korea's "parasite" took top honors for a picture in a field that included quentin tarantino and martin sco sco scorsce. congratulations to "parasite" but i'm intrigued what that movie is all about here is how stock futures are looking this monday morning. we have movement to the downside ever so slightly 61 points is the implied open on the dow to the down side of these futures moves. the s&p off by five points and the nasdaq down by eight we had triple digit moves yesterday in the dow -- or or friday to the downside we'll see if that carries over into today's trading the bond market a big focus. we're seeing a slight downtick to yields, ever so slight. two-year note yield, 1.93% let us go worldwide. we'll check the early trade in europe seeing red as well all pretty much down, in line 1.5% some nordic markets in the green, but for the most part, red across the european continent. let's check out asia it was a bit mixed as well the shanghai composite was actually positive, but the hang seng in hong kong move to the downside and half percentage point to move down that brings us to our top story this earning month china is set to start getting back to work though businesses across the country remain closed today despite the government's efforts to restart the economy after extended holiday break over the coronavirus 910 people are now dead, making the outbreak deadlier than the sars epidemic in 2003. more than 40,000 worldwide are also infected. the ripple effects across the business landscape are continuing as well factories operated by foxconn, china's largest employer and apple contractor, remain closed after chinese authorities reportedly rejected its proposal to resume operations, citing fears over that outbreak now, this as e-commerce giant alibaba said it's extending its holiday break through february 16th, or perhaps even later. ali airbnb will suspend its bookings in beijing through the rest of february citing the outbreak for coronavirus is a concern and kia motors says it's suspending production at south korean plants due to parts shortages linked to the outbreak so, what does this all mean? our own eunice yoon is monitoring the situation live in beijing. as we talk about the movements for supply chain, technology and industrial manufacturing seems to be the most impacted. is that right? >> yeah, that's right. but a lot of factories in various entries are being impacted a lot today was supposed to bethe da when all of china was supposed to go back to work for most, that didn't happen what the companies are grappling with appears to be an uncoordinated restrictions as well as requirements that vary from province to province and city to city at the end of the day are leading to a lot of factories e being closed for the manufacturing power house guangdong province the factories are required to quarantine workers coming from other areas and also to source enough masks and goggles for every single worker. so, it's only after they meet these requirements that the factories then would have to try to get approval from the local authorities to reopen. also, some localities are changing their productions date. certain districts within guangdong are urging a delay zhejiang and in henan, where one much foxconn major apple phone factories is, they are delaying until february 24th. it's a really mixed bag in terms of the picture of what's happening around the country that said, some factories did reopen today i talked with ford they said today they reopened their plants in chongqing and guanzhou tesla reopened today that was covered a lot in the state press. in fact, the state press was showing how staff was being bussed into the shanghai factory and that each staffer was taking up one row and all of them, of course, were wearing masks i think, dom, what this really shows us is it's going to a lot more time -- at what point china gets back to normal. >> back to normal. it's safe to say it's not going to happen any time soon given the trajectory of the coronavirus outbreak there's also a sense right now that the people's bank of china stands ready and willing to do whatever it takes. not to steal a mario drahgi term, but they will do whatever they have to to keep the economy stable any chatter, any commentary as to whether they would add more liquidity to the system? >> as you said, the central bank made it quite clear that they are ready and prepared to try to support the economy. if that means stimulus in terms of liquidity, it's likely they would do so. beijing authorities have said they allocated $10 billion for the prevention and control of this coronavirus there's a lot of money being thrown at this problem from the top authorities because they want to get a handle on the situation because they can understand, as we all well know, the economic fallout and potential impact it could have around the world. >> eunice yoon live from beijing with the coronavirus. markets are back to pre-coronavirus levels after last week's 3% rally for the s&p 500. i'm joined by ceo chantiqua investors. have investors factored in the lasting effect of this swri russ and if so, it doesn't seem like they're that worried. >> if you compare coronavirus to sars on the impact of the chinese economy, you have to expect the impact could be larger at a time when chinese growth is slower when sars hit, chinese factories were significantly faster. if you have factories shut down, if you have travel that's effectively been, you know, contained and quarantines in various ways, cruise ships quarantines r that will have an impact and that will have follow-on impacts to other markets. anybody who's manufacturing in china, anybody importing from china. quite frankly, all of the commodity markets that support all of this. >> so, let's assume there will be some kind of an impact, that the markets are not pricing this in where exactly where the rubber meet the road? where will the most impact be felt what parts of the market, is it macro? is it treasuries, gold, currencies, or specific stocks, industries in the market that get hit hardest? >> the parts of the market that get hardest are already getting hit. you've already seen oil take a tumble on the idea that chinese demand is going to be significantly lower. industrial metals have had a massive impact in the last week on the back of this news and they were already in a weak space. energy companies that were supposed to have a big bounce this year just can't seem to get their feet under them. so, you're already seeing significant impact i think the place we haven't seen any impact is the tech space. growth continues to power forward even in sort of these mixed times in the s&p so i think that's probably the place where it's not really very well valued you still have highly valued companies in the tech space that have significant lingages to this. >> the latest there. technology could be a big impact we'll watch the oil markets swp. thank you very much. we appreciate your thoughts here when we come back on the show, a major retail deal reportedly in the making we have the exclusive, exclusive report coming up plus, history made across the atlantic and boeing had a major role to play a good story there and then later on, breaking down the data with fidelity. what their findings and data show and what it could mean for your portfolio or 401(k) a very busy hour still ahead when "worldwide exchange" returns. ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's 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. ♪ ♪ high protein low sugar tastes great! high protein low sugar so good! high protein low sugar mmmm, birthday cake! and try pure protein delicious protein shakes that's a live shot of chicago, illinois, where it's 4:13 a.m. central time windy there in the windy city. welcome back to the show let's get a look at some of the other top stories we're following this morning kate rogers is here with those kate, there's a lot of news today. >> a lot of news today good monday morning, dom china is warning france against treating huawei differently from its european competitors when it comes to future 5g equipment contracts. in a statement released over the weekend the chinese embassy in paris warned a different treaty would be blatant discrimination and disguise protectionism the justice department is closing its anti-trust investigation into ford, honda, bmw and volkswagen, saying it sees no evidence of collusion among the companies in connection to a july agreement with the four automakers and california for stricter tail pipe emissions the trump administration had said the state can set its oe emission standards. and l brands is selling victoria's secret to sycamore partners in a deal that could be announced early this week. no word on what leadership role l brands ceo would be under. he has been under criticism for his close ties to jeffrey epstein. l brands also owns stronger performing bath and body works a lot on the victoria's secret and the investigation into the company's culture. >> perhaps listeners didn't see that the premarket move on l brands is up about 6% for those l brands shares. we would point out from a context actual point of view, if you look over the last -- the year-to-date period is up 30% but still down 12% over the course of the past one year or 12-month period. there are a lot of investor worries about the future of l brands >> not to be forgotten, bath & body works is doing well we talk about victoria's secret doing well but that part is doing well kate rogers, thank you very much. 20 years ago today, we take a look back at the rise and fall of one of the dot-com era's darlings and ask if history is doomed to repeat itself. you remember that sock puppet? probably the most iconic sock puppet from the.com comair ra. today's big number 5.4% that's jpmorgan's gdp growth forecast for china in 2020 the firm lowering its expectation due to disruptions caused by the coronavirus outbreak whether your beauty routine is 3 steps... or 57, make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or 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sprint across the granite state with just 24 hours left to win over voters in new hampshire, the presidential hopefuls are campaigning around the clock for the nation's first primary according to "the boston globe's" final tracking poll released overnight, bernie sanders has a commanding lead at 27% support. pete buttigieg is in second at 19%, amy klobuchar surging to third after a strong debate performance on friday night. nasa's solar orbiter launched off from cape canaveral. this is another quest in the secrets to unlock the sun. the goal is to send back the first images of the sun's north and south poles. and feast your eyes on one of nature's wonders. a waterfall defying gravity by flowing in reverse you can see the winds whipping water up and over those hills. this happening in sydney, australia. it's caused by a trifecta of strong winds, torrential rain and flooding dom, back to you. >> stunning footage for sure great video. thank you very much for that update. straight ahead on the show, we are live in our nation's capital with the latest budget figures from the white house plus, instant market reactions to those numbers and why a new version of "back to the future" is going viral with a little help from elon musk. yes, elon musk later on, breaking down the data with fidelity, insight and analysis you won't find anywhere else all of that coming right up. man: can i find an investment firm that has a truly long-term view? it begins by being privately owned. with more than 85 years of experience over multiple market cycles. with portfolio managers who are encouraged to do what's right over what's popular. focused on helping me achieve my investors' unique goals. can i find an investment firm that gets long term the way i do? with capital group, i can. talk to your advisor or consultant for investment risks and information. but when allergies attack,f any the excitement fades. allegra helps you say yes with the fastest non-drowsy allergy relief and turning a half hearted yes, into an all in yes. allegra. live your life, not your allergies. investors facing whiplash as stocks search for direction to kick off the new trade thering week big losses to help close out last week. president trump set to unveil his $4.8 trillion budget proposal aiming to slash social programs and roll out more tax cuts we're live in washington, d.c. with the details there an historic night at the oscars with a stunning win in the best picture category. the second half of "worldwide exchange" starts right now ♪ welcome back to the show i'm dominic chu in for brian sullivan here's how your money investments are looking as we're halfway through the 5:00 a.m. eastern hour stock futures are down by 59 points that's the implied open for the dow if these moves hold into regular cash equities, the nasdaq would fall by 7 or 8. bond market a slight tick lower. ten-year treasury note yield a hair below 1.57% the two-year benchmark treasury yield, 1.389% at this stage. let's check on the asian markets. japan, hong kong and shanghai, it was a miss mixed session. knee ka i and hang seng down by 0.5% shanghai up by 0.5%. let's swing that globe around to what's happening with the european trade we are seeing similar percentage moves across most of the major forces in europe all down by almost 0.5 of 1% at this stage the notable green markets, we see sweden and italy flashing some positivity in the european trade. president trump is set to unveil his election year budget proposal later on today with a $4.8 trillion price tag. we're joined with more what can you tell us about this particular budget and how will it resonate with economists and investors out there? >> as you said, the white house will release its natural budget today. and 4.8 trillion is not the only big number the white house is projecting the economy will grow at an average rate of 3% for the next 15 years that is almost double the forecast from the nonpartisan congressional budget office. it's expecting growth to clock in at 1.6 or 1.7%. the key difference is the trump administration's budget makes three big assumptions. first, that that's another big tax cut. the white house says a $1.4 trillion placeholder in its budget for what could eventually become tax cuts 2.0. second, it assumes interest rates remain low despite the stronger economy and, third, the administration is proposing $4.4 trillion in spending reductions over a decade with half of that coming to changes to popular social safety net programs they say the spending cuts coupled with the rosy forecast will allow it to eventually eliminate our trillion dollar deficit. even the trump administration says that can't happen in a decade the cbo takes 15 years. >> we've seen some initial numbers. what are the points that could be the most contentious with regard to how it will play out with lawmakers in washington, d.c. >> well, certainly the president's border wall has been one of the issues that has led to a government shutdown in the past this budget the president is also going to be looking for $2 billion in order to build the border wall. that could be a poison pill with any negotiations in the future broadly, this budget, the amount that the president is expecting to spend on discretionary programs, that number is less than the amount the president agreed to with democrats just last year. democrats are already saying that the president is reneging on his promise we know it's not a working policy document but it does tell you where the president's priorities are heading into this election year. >> the latest with the budget talks and budget proposal being put out there by president trump. let's get more reaction to president trump's new budget proposal joining me, tim seymour, also a cnbc contributor and "fast money" trader. let's talk about the budget. >> good morning. >> good morning, tim you saw some of the reports. you've seen ylan's story what exactly does wall street -- what exactly do exists think is the actual benefit or drawback from the potential budget proposals? >> talking about 3% gdp for the next 15 years is pretty extraordinary because the greatest economy of all time has never printed 3% under this administration so if you think about the world we live in today, the reality is maybe this isn't germane to long-term tax discussion but gdp rates are being cut to the united states, even though it's significantly lower from the rest of the world. the global economy is going to be 1.3% in q1. we know the headwind from coronavirus. i think the reality is projecting out gdp in the context of talking about that $1.4 billion tax cut holder is a very important dynamic for wall street it's a very important dynamic for thinking about the markets and the construct in the current administration into a political season when the market hasn't priced in anyone but trump at this incident positive i think this is more fuel for at least the current environment where with the fed sitting where they are and the administration sitting where they are, it's wall street positive. >> $1.4 trillion reserved for tax skuts a big deal we'll see if that can jump start any part of the economy at this stage. another big story for investsers is the coronavirus china is attempting to get back to work in some way, although some businesses remain closed despite the government's efforts to restart commerce and industry following that that extended lunar new year holiday sources say foxconn's factory in shenzhen remains closed after chinese authorities rejected its request to resume operations foxconn, a key manufacturer in the supply chain for apple so, is the economic impact not just on china but the world perhaps being understated if the technology and industrial supply chain cannot get back up to speed in a short amount of time? >> right that's the question. what are we talking about? i think the status quo has a dramatic rebound by march. we know february was probably worse than expected and getting back to either estimates of the global economy, the supply chain we know we have significant disruption for february. the timeline i would say stocks have priced that in. in other words, they basically shrugged and said, we don't see a long-term impact if you look at the performance of semiconductors, if you look at the -- you can see it's been sympathetic on kind of the headline days. for the most part, we haven't seen the kind of correction that tells you people think this is anything more than a hiccup. if i think about my experience investing in sars, investing in asia specifically back in 2002, 2003, that's what people should do and if you think about the context of global markets priced to perfection coming into this without this expectation, and without a sense that this could be something more than -- look, this has been a tragedy of global proportion, especially in china. we don't know the extent of it but the expectation is this is a short-term hiccup. >> semiconductors somewhat underperforming the broader market in terms of the s&p tim, on this day in history two decades ago, two decades, a little known company made its public market debut. >> we're coming to you from one crazy dog part now that you can get whatever you want at pets.com it's like mardi gras >> pets.com, yes, the sock puppet pets.com surged 30% on its first day of trading to more than 14 bucks a share. fast forward just eight months from then, the stock would be at $1, and by november the company would be out of money, forced to shut down, bankrupt. take us back to that day and if you see any signs of something bubbly or similar to today is it fair to call any part of the market today akin to what it was back in the mid to late 1990s? >> poor pets.com we do this over and over again and it's a relevant comparison for markets if you look at price to sales ratios or even pe ratios, we are back to those go go days. people that talk about it is multiple of the s&p are able to show a lower rate environment and lower discount rate and start to draw many different fundamental, structural reasons why we could still be okay here. i think if you look at the earnings profile much q4, we had mega cap tech stocks saying they beat the top and bottom line and they're taking market share and you're seeing the core of the nasdaq 100 i know that's kind of tough to say about amazon i think stocks are largely priced to perfection because central banks are able to do to markets what they can't necessarily do to economies. we're going to go into a period where we've already started to see the central bank reaction to the coronavirus. i think equities are going go to continue to rally from this. it doesn't mean i think they should be disregarding the references to pet.com and sock puppets. i think we have a case where as long as the central banks are stirring this punch bowl, that's the issue. on wednesday we had general powell with the humphrey hawkins testimony. we need to listen every time the fed speaks, even though i don't think they'll be talking about taking away the punch bowl we didn't have the central bank ingredient in the dotcom boom and investors need to think about that central banks feel as if they're supposed to support markets. that's want my idea of what they're supposed to do but that's what they are doing. >> we'll see if they choose to fight the fed. tim seymour. thank you very much. great to get your thoughts let's get a look at top stories. indicate rogers is here with those. kate, fun and games. >> we'll talk it off with mattel, who is looking to reduce manufacturing operations in an effort to cut costs. according to "the wall street journal" they plan to close a factory in canada some time this year after shuttering two in asia last year they previously announced plans to close and sell a factory in mexico the move is part of mattel's plan to stabilize amid continuing weak sales. puerto rico struck a deal with bondholders to reduce the size of its debt. officials announced the island reached the agreement to restructure $35 billion of debt obligations. that will help reduce the debt by $24 billion puerto rico began defaulting on some of its debts in 2015. amazon and sony are the latest companies to pull out of the mobile world congress. both companies are citing coronavirus concerns for the decision that event is set to take place later this month in barcelona. it will be interesting to see how many companies wind up going. concerns about the virus continue to escalate. >> big stories thank you very much. coming up on the show, hollywood's historic night as new ground is broken during the 92nd annual academy awards we'll go live to los angeles for a full recap of the night's big winners. all those oscars when "worldwide chgerernafr is ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's 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. ♪ ♪ welcome back that's a live shot of 30 rock in new york city. the tight labormarket is affecting industries across the country and the department of veterans affairs administration is no exception. the agency is tasked with caring for the nation's 19 million veterans and currently has some 3,000 job openings posted on a usajobs.com website ranging from custodians, human resources and, of course, primary care physicians our kate rogers has a look at a new program that could help stem the bleeding with regards to helping qualified people to work >> this interesting program has come from a first-year harvard med student who really feels the weight of caring for the nation's veterans. >> when someone lets you know they put the flag on their shoulder and joined the military for our country, i think you feel even that extra little bit of desire to make sure you're there for them >> before arriving at harvard, he and two underclassmates envisioned a shadow program at va medical ospital they toon took it to capitol hill, which helped future med students get the experience they need for applications and keep them atune to veterans' specific needs in their medical career. the va opens a much needed pipeline to future health care providers. the va is working to provide expanded care, which offers vets the ability to seek care outside of the va system, integrating the va into the wider health care system which the va has helped 1.7 million vets obtain care in less than a year but more doctors are needed nationwide >> our biggest challenge is to find those doctors and nurses out there who would be happy coming to work with us in lieu of that, we have to create a network whereby we touch every area of american health to find those folks we can use to get our veterans taken care of. >> the va has reported 49,000 vacancies but 3,000 short of full staffing per congressional appropriations the va offers bonuses and relocation expenses to help recruitment in this talent crunch help us understand this better is this a va specific issue, i'm speaking to doctors and nurses, finding qualified medical professionals or is this a broader macro picture in the u.s. with regard to a shortage of medical professionals which is the more important aspect with regard to how it's going to impact the va >> that's a great question the doctor shortage nationwide is something we've been covering in this series projections say we could be short over 120,000 primary care physicians across the country by 2022 we're living longer, the population is aging and the current cohort of doctors that are working are also aging out of the system because there's a lot of retirements that's hitting the va. we did speak to secretary, he said mental health care professionals and pcps are his big focus. the mission act would allow vets to seek that care outside of the system which puts less strain on the system the big answer is, we need more doctors across the board. >> big demographic problem for sure. it was an historic night in hollywood with new ground being broken at the 92nd annual academy awards jennifer bjorklund joins us from hollywood. take us through what was the big deal and it was a lot of history being made >> reporter: it was definitely history being made right here in hollywood, dom call it an action movie, comedy, drammer, thriller horror show, basically "parasite" that south korean movie made history becoming the first foreign language film to win best picture. that was the history-making moment last night. it capped a night that saw that film "parasite" win three other oscars, with best original film, best screenplay and best director for bong joon-ho. there were no surprises in the acting category. it would have been a huge upset if we hadn't seen joaquin phoenix winning his first oscar, title role in "joker." second oscar for renee zellweger for playing judy garland in "judy" and in supporting categories laura dern won best supporting actress in "marriage story" and brad pitt had the crowd just roaring and on their feet as he walked up to accept best supporting actor honors in "once upon a night in hollywood. netflix came in strong with 24 nominations. they only walked away with two oscars. >> thank you kate, i want to turn to you. you're a movie buff. have you seen "parasite," any of the other films out there? i know you're a batman person, so did you watch "joker". >> of course i saw "joker. i saw "marriage story. i thought that was fantastic i have not yet seen "parasite. i had to go to bed early i saw brad pitt win. i thought laura dern was amazing in "marriage story" but i have a lot more to see. and joaquin phoenix was fantastic. >> what goes to the top of your queue? what are you seeing first after seeing what happened at the oscars >> i think i have to see "parasite. what about you >> me, too not because of anything else but it's crazy to know that south korea, just overall, has become more of a pop culture center these days and now the academy awards bears it out. kate, while we have you here, you're doing a lot of work today. >> it's my pleasure. >> i love this what else are we going to be talking about today? what's trending? >> a british airways flight just made history the new york city to london route broke the fastest for the subsonic or slower than speed of light between the two cities the boeing 747 plane used in the flight reached travel speeds of more than 800 miles per hour completing the trip in just under five hours nearly two hours faster than expected and 20 minutes faster than the previous recordholder flight radar says the wind and air currents at the time of the trip was ideal for a speedy flight my question as someone two who travels, how long did they spit on the runway? two hours? i could spend that time just waiting to take off. >> no sonic boom how about some good press for boeing and a boeing plane for once. >> you're not kidding. i don't know how i feel about this air travel, you want it to be faster but that seems very fast. like is this safe? >> i want them to bring back the concorde that's just me speaking of fast. >> the delorean is known as the iconic car in "back to the futures" a they have give it a new and and exciting twist they swap it for tesla's cyber truck. the switch does look pretty seamless elon musk actually says "back to the future" was one of several '80s movies he channeled for inspiration when designing that pickup so he probably thinks that's pretty cool. >> that looks pretty awesome this is the slight conspiracy theorist says how much was funded, perhaps, by elon musk? >> a little good press for tesla after all the ups and downs last week. >> or throwing a metal ball at the window and having it break. >> that is cool. perfectly fits with "back to the future". >> i'm a child of the '80s myself thank you. samsung's highly anticipated foldable phone makes a surprise appearance during last night's oscars. a reminder, you can always watch or listen to us live on the go on the cnbc app "worldwide exchange" is back when it comes to your business internet, which is more important? ♪ ♪ okay, i wish i didn't have to choose. like the more i think about it, the more i want to jump to each room. what if i said you can have it all? ♪ ♪ comcast business gives you connectivity that goes beyond. that's what we want! that's speed, reliability, and security, all from one provider. touchdown! get started with internet and voice for an amazing price. call today. comcast business. beyond fast. welcome back the headlines you need in 60 seconds. goggle is accused of competition abuse over its search engine acovereding to the financial times, 34 companies including trip adviser and expedia have sent a letter to the european union's competition accusing google of elevating its own rental searches. the accusation comes as google prepares to appeal an anti-trust fine before europe's second court. samsung offered a glimpse at its new foldable phone during last night's academy awards. they showcased the galaxy flip z phone which is to be unveiled tomorrow l brands is close to a deal to sell victoria's secret. the deal with sycamore partners could be announced as soon as this week. those sources stress terms are still being negotiated and the potential deal could fall apart or be delayed. turning back to the markets now, futures pointing to some caution at the open as investors monitor the latest coronavirus developments the dow slated to open up -- oh, actually down by just 10 points. that's an improvement. the s&p is opening about flat and the nasdaq up by 12 points this as investors look ahead to another busy week of earnings reports with 60 s&p 500 companies reporting. joining me is sector strategist with fidelity. let's talk numbers you krufshlg a lot of them are we seeing a market that has some legs to keep going higher or are we do for a pullback? >> i think earnings is going to be the key driver in 2020 after rare signals we saw in 2019. that's the key indicator that i'm watching two of the leading indicators for earnings growth have turned in the last, let's call it, three to six months. the first being the oecd leading economic index and the second which is more significant, which is the small business survey and the number of companies expecting earnings growth to inflekt higher both of those suggest reacceleration in earnings growth after the poor earnings growth we've seen over the last year to the market, as much as we want to focus on what it would reaccelerate to, what's clear in history is inflections matter more than the overall level. even if you added perfected foresight and knew what earnings would be, they still carry 70% odds the inflection some leading indicators are suggesting carries 90% odds of an advancing market over the next year. that could give this equity market legs over 2020. >> could but 90% sounds pretty darn certain. a 9 out of 10 odds is this a scenario where the numbers are going to back up this notion that earnings growth and everything else, a macro environment can see the stock market keep going for quite some time >> right it's interesting when you talk about the macro market, the macro economy. when i look at numbers historically, despite the fact gdp didn't contract, if earnings accelerates, if gdp didn't contract and reaccelerate, you still see when i look at the sectors, you still see defense, like consumer staples, utilities, health care and to a lesser extent the old telecommunications industry, you see very low odds. despite the fact that even though we can talk about the market, a rotation back to the economically sensitive sectors, out of defense seems likely throughout the course of 2020. >> if this rotation pans out, we know there are rich valuations in some of these defensive oriented sectors here. there were also rich valuations in places like technologies, other places as well what does the sec it tore outlook feel like in the next year or two given those numbers you just cited >> i still see the severe dislocations persistent. definite, consumer staples, utility, and telco that's had decisive historical odds for rotation back to cyclicals. as much as you've seen that come out, we're still in the top range which is supportive of cyclicals. technology, an economically sensitive sector, when i look at the valuation relative to history, relative to the market, what i see is a very unique setup. it's still below average on earnings and free cash flow but still with top margins, operating margins. technology is still a sector where you're getting value relative to history for some of the best fundamentals the sector has put up historically. >> we just have 30 seconds left here what derails that bullish thesis, 90% odds that things keep going higher? >> i think inflation is a key indicator to watch because that allowed the fed to push this cycle higher the fed lowering interest rates three times may stimulate, if history is a good guide, bank lending numbers. >> thank you very much for those sector insights. great data we appreciate it >> "squawk box" begins right now. good morning outbreak escalating. the coronavirus death toll now above 900 as businesses in china extend work stoppages. we'll take you live to beijing. >> sources tell cnbc that l brands is nearing a deal to sell its flagship victoria's secret brand. we have details straight ahead. "parasite" making history with its best picture win at last night's oscar do we feel bad for netflix we'll show you which studios were the big winners it's monday, february 10, 2020 "squawk box" begins right now. good morning to "squawk box" becky is off today stephanie link is here for the hour she's a cnbc contributor. >> among other things. that's not -- that doesn't define her. >> it's her highest -- >> i'm most proud. >> highest ranking. >> good answer. >> take a look at u.s. equity futures. the dow looks like it would open off 9.5 points the s&p 500, we'll call it a little up, maybe a point up. the nasdaq looking to open 12 points up. we'll show you the ten-year.
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