Exchange. David faber is in los angeles. More from david in a moment. Meanwhile premarket steady ahead of busy week of earnings. Nikkei takes a spill overnight catching up to the yen and Oil Steady Near 46. Our road map begins with Warren Buffett speaking out in omaha. Were going to bring you highlights, no deal for halliburton and hughes calling off their 28 billion merger. And simon hobbs live from cuba on a Carnival Cruise ship. First up buffett weighing in on the markets, fed and earlier this morning on cnbc. This is what he told becky about the president ial election and the economy. If you ask me whether electing the wrong president can permanently damage the u. S. Economy, the answer is no. I mean, weve had 44 president s so far. This country will move forward regardless. And theres no need to make America Great again. America is greater than its ever been at this point, but its going to become ever greater. Talked about koch, talked about ibm, talked about jeff bezos, called him a genius. And pushing back on that warning we got from icahn last week. I think one of the things he does is make you realize longer term if you decide to own companies, stocks of Good Companies that are undervalued are going to do well. And i think its really important for people at home to recognize this is how they should be thinking about their portfolio. Now, i know he also favors index funds, and thats absolutely fine, but theres nothing the matter with being a little selfdirected and having an index fund, staying in. What i loved about what he thinks is he just recalls the really bad times. This is not a bad time. He puts bad times into perspective, but now, remember were average up 25 on this day because of that thats right. You talked about the buffett bias. Of course theyre going to have results on friday. And they talked about over the weekend operating net over at Burlington Northern, its going to be hit. Yeah, i mean, i think one of the things you have to realize is group by rail, burlington is one of their specialties because of the bakken. Its next year the problem will surface, not this year. It may look much better than it is. David, its going to be interesting to see how some of buffetts comments today and over the weekend resonate out where you are. Yeah, without a doubt its an Interesting Group as you guys well know here at the milken conference. Amazing people not just in the world of finance but medicine, Life Sciences or so many different areas, or government, it is a very interesting mix you get here. And fascinating panels. Guys, i dont know what you thought. I know buffett had a lot to say about ibm and other things, his comments on amazon were also fairly interesting in part because hes a large shareholder in walmart and yet it did sound, didnt it jim, as though he wasnt sure he should be. Unless i wasnt listening closely enough. You know, i was listening, i said, okay, now were going to because i love amazon i got to sell walmart, but he doesnt ever do that. Lets understand theres only been a couple instances in all the years weve ever heard him say, you know what, im not happy with that situation. Yes, i think that if you like amazon as much as you heard, theres really counterintuitive to own anything walmart. Now, Charlie Munger talked about costco where hes on the board. And just pointblank said why didnt they do the deal with American Express . I mean, my jaw dropped. That was basically saying, look, American Express, what were you thinking . I mean, what were you thinking . And i just said, well, if im American Express, im like, geez. Munger had a couple zingers. The other favorite says i like the idea of Artificial Intelligence because were so short of the real thing. Yeah, that was bad. I cant wait to hear what scott wapner has with bill ackman because i think that the number of times that valeant was referred to as being a sewer may be a new record on the network. Yes. I mean, kind of a sewer really does not conote that you really want to buy a lot of their drugs. And, david, i dont know if you heard it but these guys and the rest of wall street that i see are saying that valeant is really in a lot of trouble. And yet weve got bill ackman saying it could be the buy of the century. We got to solve this. Ackman will be on with scott at noon. Yeah. I dont know, david, do you think its a sewer . Or more of like, you know, maybe a not great house. I think, listen, weve talked for a long time and actually we talk when the stock was far higher about the many challenges faced by a Company Whose strategy was based on what seemed to be a very low tax rate and an aggress i Acquisition Policy and with those acquired companies what weve learned, jim, is perhaps we didnt appreciate how much they raised drug prices. All that said mr. Ackman will come on and im sure give very Strong Defense of his very large position there of his significant place on the board of directors for a company that has to be change board of directors up very much across the board and a new ceo taking a seat, i guess, any day now in mr. Papa. And the stock is, what, low to mid 30s, right, jim . Yes. Drive given that debt load will they sell a significant asset . No shortage of questions. I know guys who want to try to venture into the stock recently. Sometimes theyve been right in the past. Right. I think Charlie Munger talked about the idea of the actual price rise and the impact it had on patients in some of the work he does and i think these will all be things that maybe scott wapner ought to play to bill ackman because it made me feel like, wow, valeant very cheap on the cash flow basis, but when it comes to the actual nittygritty of being in the medical business, these guys dont seem to think its in the medical business. Yeah, not to mention executive comp and severance which was a story regarding pearson last week. You guys mentioned ibm, buffett talked about a bunch of aspects of the company. Heres what buffett said. Well, we feel fine or we wouldnt own it. And weve never sold a share of ibm. Periodically we buy a little more although were up fairly close to 10 . Went onto say theyre more likely to be a buyer than seller over the next year. Yeah, again, to me a soft recommendation. I did not hear making a turn of a lifetime. I did not hear this is the re reinvention, i heard its okay. David, one of the things you hear from Warren Buffett. Hes not pounding hes not pounding the table. Hes not saying this is the moment. Its almost like hes a little lukewarm on some of those bigger positions, dont you think . Yeah, i guess so. Its funny i come back to his comments on amazon and how much he was praising a company he doesnt own in terms of Cloud Strategy of course what they meant in retail yet he also owns walmart and ibm, but you said mr. Buffett owns things for a very long period of time. We can remember those instances where he has chosen to hit the sell button, but they are far and few between. Whether its amex, iibm, wells fargo of course been a great success, cocacola, so many of these names been in that portfolio for such a long period of time and ibm now seems to be one of those we can add to that. Yeah. I think that when i look at ibm i think, yes, they can reinvent, but what was he in it for . For the buyback, the dividend. I remember when he said he didnt want to be in technology. I did not get warm and fuzzy about ibm from listening to him. Again, look, you feel great about the world with Warren Buffett. You feel not so hot about the stocks he has. Now, i dont think he means to be as lack of promotion as he is. I just think thats kind of his way. I would love it if he said, you know what, this is the level where you just got to go buy walmart. But i felt like, david, the real takeaway is this is the level youve got to own amazon but he didnt own any amazon. I know. Thats what i was hearing too. Which was interesting. And i love the fact he referenced bezos first annual report in his letter there and how he laid it all out. And here we are almost 20 years later and look what hes accomplished. I agree, its funny. Thats what i walked away from it as well thinking, jim. Well, Warren Buffett, ive got to tell you Charlie Munger too, they tell it like it is. Which means theyre not saying, listen, this is the greatest thing since sliced bread. They say, listen, we own these stocks, theyre good. I would have thought like cocacola the beat the drum cocacola remains the actual product, which i think many of us feels is the most challenged part of the company. Talked about sugar taxes and trying to make the argument if youre going to tax sugar, just tax sugar, dont choose a form in which sugar is delivered. Thats another story. We want to get to this historic moment underway in cuba today. For the first time in more than 50 years a u. S. Cruise ship is about to dock in havana with more than 700 passengers onboard. Our own simon hobbs joins us from onboard the carnival ship adonia in havana. Simon, good morning. Reporter good morning. It is quite literally history in the making. As you see welcome to carnivals cruise ship the adonia, which as you say is going to be the first u. S. Cruise ship ever, well over 50 years, to actually reach cuba. At the same time this is the first opportunity that cubanborn americans are going to get to walk off a vessel, a commercial vessel and onto land after of course we had numerous changes in the laws and negotiations. It was six weeks ago of course that obama was here in havana attempting to sort out relations. A lot of very happy people here waiting of course first to make land. This is also of course a big commercial opportunity. You know the likes of carnival, caribbean, norwegian have built a 60, 70 billion market value. Cuba is bigger than all the other cuban destinations, all the other caribbean destinations put together. It has unaccountable numbers of beaches and coves. And a lot of it is of course to be opened up in the years to come. Now, there will be a conversation about capacity. They dont have capacity to take many ships here. And arguably the cruise industry will say, hey, well help you a bit. Were not going to build it out for you, but moving down the line, guys, this is going to be huge. A third of the market is in the caribbean. 160 ships out there, probably even today. And all of them would like a little piece of this. Well come back to you as we actually make land. We went past the old town just now. People actually lined up down the walkway and cheered as this american cruise ship landed in havana. Perhaps a sign of how things are changing here in cuba as of course relations thaw it is still not legal for people to come here as tourists. Congress has decided not yet to make that move. And therefore people that do arrive here have to fit into the 12 exemptions to travel. And a lot of the cruise operators are helping them do that, but the rules that they have are softening so essentially as things stand at the moment you selfcertify and say, yes, i will take an agricultural tour or i will go and have dance lessons. And that would appear is enough to get around the red tape at the moment. But this is going to be a massive market moving forward. And of course for cuban americans dont forget there was a lot of anger initially when they were booking this voyage and cuban americans werent allowed to take part. Carnival really in a unique position against the Cuban Authority as a private American Business has been able to get those rules changed. Well talk about that, guys, throughout the day. Back to you. Simon hobbs in havana, simon, thanks. When we come back a look at this mornings movers as we move into the first trading day of the month. Well talk halliburton bakerhughes scrapping their merger and a big week of jobs numbers numbers, ism and last big push of earnings. More squawk on the street in a minute. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive debt can only be evaluat halliburton will pay baker hughes a 3. 5 billion breakup fee. I saw your tweet on that. This is one where i speak to a lot of people in this industry, to a person everyone said this was the dumbest deal ever and got really bad advice from lawyers. There was no chance whatsoever this would happen. This was anticompetitive. The companies were so, so adamant and so out of sync with pretty much any antitrust department. The people i talk to in the industry said this was dead the moment it was even mentioned. Which was a while ago. Shave 2 off of 2014 m a, announced m a. Look sometimes you get advice its so stupid it really is rather extraordinary. David, you know that the people you speak to yeah. This is one where youre like are these two texans gone mad here . This is the United States of america, its not the United States of texas. No, thats true. I mean, listen, the 3. 5 billion breakup fee was a reflection of what they believe was some inherent risk in the deal. But they did truly believe that the vesture package they outlined, jim, at the very beginning was going to be enough, was going to be sufficient to get antitrust approval. That clearly wasnt the case. Remember we got the 38page complaint from the department of justice, yeah, like 38 pages, going into all the specific areas in deep water and everywhere elsewhere the two companies would split market share well above what the doj believed make for a competitive market. Again, not a big surprise. You can see from the response and the stocks, guys, the market is not surprised in any way, shape or form. For halliburton of course the decline in oil the last 18 months while theyve been waiting and hoping to get this deal done thai now saying is a positive in a sense because of course that the deal economics have been damaged to such an extent as a result of that that it really doesnt matter as much any longer. As for baker hughes i wonder what the future holds for that company. They take in 3. 5 billion, and they have a lot of assets that conceivably could have been sold and might still be depending on what strategy they pursue here. But it will be interesting to see how they choose to go from here. Right. Oil Services Just not that many players. Theyve all consolidated over and over again. I immediately hear ges name and i got to tell you i totally discount that. I think thats not where ge wants to be. Ge wants to be manufacture which therefore indicate they might want to be in national oil, var co, new Digitization Technology will tell you ahead of time maintenance which is the most important when it comes to oil service equipment. This baker hughes, we go back to numbers, if we go back to the earnings its i think its maybe too high. But this is an industry where everyones scrambling and they believe this rebalance finally happens in the second half. Yeah, chinas really drilling. Drilling cut back this rather with u. S. Cut backs people forget we are a big importer of oil. Were going to import even more. The question is how much can the saudis really fired by carl icahn. Often i want to stand down, i got to call carl, i wasnt able too that. Was saying the saudis dont have the ability to make up for the current demand. The demand has picked up. The idea oil cant go to 50 is a little i think preposterous, but i think at 50 some of these producers will reopen wells and start getting some cash flow because some of these banks, they want their pound of flesh use a little bit of shakespearean stuff there. Pay me. Yes. When we come back well get cramers mad dash. Well count down to the opening bell, take another look at the premarket. Nasdaq by the way down seven in a row. Thats almost tied with an eightday losing streak back in the depths of january. Well see what happens. More squawk on the street in a minute. Here at the Td Ameritrade trader group, they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. [so i use quickbooks and run mye entire business from the cloud. I keep an eye on sales and expenses from anywhere. Even down here in the dark i can still see were having a great month. And celebrate accordingly. I run on quickbooks. Thats how i own it. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Seven memberships to the opening bell on this monday morning. Lets get jims mad dash. Couple calls on well known names. United technology, goldman cuts but remember honeywell made its move to buy them. Greg hays has done a remarkable job, but this is a sec cular trend. But aerospace has been the maybe the best single theme of this earnings season. Whether it be honeywell, whether it be United Technologies, whether it be boeing, which was a remarkable quarter. I understand its already taking off. I understand i remembered people listen to jeff and the ge call about how robust the aerospace cycle is. If it wants to come down you might want to buy this one. Interesting. Short interest on boeing had ticked up. Some worried about some things with the dreamliner, people worried about the Airline Companies themselves not doing that well. They should be worrying about a shortage of planes. If you get out of the line, you cant get back in for boeing because the chinese are such veracious buyers. Theres an industry where the negativity doesnt d