tv Squawk on the Street CNBC December 31, 2018 9:00am-11:00am EST
our guest host today, chief investment strategist and portfolio manager. we have no time left so i have to say good-bye. but thank you to your both and happy new year happy new year to everyone out there as well. >> kelly, thanks for being here today. >> thanks for having me. everyone should watch the squawk 2018 package if they didn't see it >> right now it's time for "squawk on the street. ♪ good morning and welcome to "squawk on the street. taking a look at u.s. futures. looks like we're set to end what turned out to be a bumpy month and tumultuous year on a positive note.
dow futures up 181 nasdaq up 50 full trading day today as for the picture in europe, most european indices are actually down for the year, much more than the u.s. markets it's a mixed picture right now with the ftse 100 in the uk lower. france and spain higher. germany down double digits for the year let's just show you what's going on with the ten year crude oil got slammed in the last few weeks trading just below $46 a barrel on wti the ten-year yield has fallen pretty sharply in the last few weeks. 2.73 is your yield we'll see if that rally can hold our road map for the hour is going to start with stocks, looking to stage a year-end rally. futures pointing to a sharply higher open. renewed opens for china/u.s. trade progress >> plus, shutdown day ten. the partial government shutdown now in its second week as democrats prepare to take control of the house >> and speaking of that year for
stocks, only two sectors closing in positive territory. where health care proved the top performer for 2018 >> as mentioned, stocks are set for a strong open on this final trading day of 2018, spurred by optimism about u.s./china trade talks. over the weekend, president trump tweeting, just had a long and very good call with president xi of china. deal is moving along very well if made, it will be a very comprehensive, covering all subjects, areas, and points of dispute. big progress being made. but all three major averages are on track for their worst yearly performance since 2008 s&p down 7% so far this year it also comes on the back of a very poor factory report from china. manufacturing there is actually contracting. it's shrinking for the first time since 2016, coming in below forecasts. >> to be frank, i don't know how much the market pays attention anymore to the tweets that say great progress being made. it's results you want to see there's a lot of stuff going on
end of year. seasonality, pension rebalance continuing we're talking about tens of billions of dollars coming out of bonds and going into stocks maybe that's why you're seeing this sort of end of year pickup. >> i wouldn't say the market is specifically reacting to the tweet, but i do think that the idea there's a process now with trade talk, perhaps there's an urgency on both sides to come to some kind of deal, in part because of chinese economic weakness and here for the president to get some kind of win. >> how about u.s. market weakness >> exactly and also, as we discussed friday, with the stock market down a lot, the stakes are a little lower it's not like trade is just a potential negative right now we're not pricing in great progress so i do think that it's part of the mix. to your point, scott, we're still feeding off massive oversold conditions that we set last week. it's still basically about a
springback effect. yes, the pension stuff is part of that. the pension is only rebalancing so violently because stocks are down so much we're saying the same thing when we're talking about pension money coming through the big question to me is once we get whatever this bounce is going to give us, then you're going see true buying and january follow through >> so what are investors so concerned about? by all accounts, trump tweets, but also tea leaves out of china last week as well indicate some progress and we know now that there is a meeting happening the week of january 7th. it's low level it's some deputy ustr, deputy treasury folks but if things go well, we could see higher level meetings in the works. there's concerns about the economy. those are out there. we've seen some indications of slowing, not much indication of recession. we're going to get a jobs report on friday. we're going to get the adp private sector report on thursday these are critical pieces of data that won't be affected by the shutdown then the fed and on the fed, there's all this talk about a fed mistake, is the
fed tightening too much into a lowdown? powell is going to speak on friday he's on a panel with bernanke and yellen, which is like a dream panel f you like those things we'll see if his message corroborates the more flexible posture we haereard from willias on cnbc. >> we do have some softening of expectations also on growth. g goldman sachs taking down their view of next year to 2%. taking down their view of rate hikes to one they were out there on an island they were looking for four i think most people looked at that and said, really? how are you going to get to four given a lot of the expectations and forecasts, which are starting to come down on global growth >> now people are saying how are you going to get to one? increasing talk the fed is not going to move at all on rate hikes next year. some saying the fed will start cutting rates because of weakness i also thought it was notable that goldman is not giving in yet on their balance sheet call.
they still see this quantitative tightening but more and more people are talking about this, that that is creating a tightening of financial conditions, whether it's feeding through the real economy or not it's certainly feeding through the stock prices >> it's feeding through psychology >> to your point, psychology that the fed is going to make a mistake, that this auto pilot comment they made gave this inflexibility feel wait a minute, why aren't they seeing what we're seeing why aren't they more reactive to what the conditions say they should be? >> i realize that's where that psychology sits right now. it's not clear to me that we have such visibility into next year that we can declare right now that one or two rate hikes next year are a mistake. by the way, last year at this time, we didn't see four coming. we didn't see the conditions for four coming. we got the four in the market was around three, i think, at this time last year. maybe that's where the mark should have stayed i sort of feel like there's enough flexibility in the fed's position right now, at least they feel there is, that they
don't have to capitulate the way goldman is right now but the market has priced them out. the market is just going to call the fed's bluff right now. >> yeah. all right, for a closer look at the markets, let's bring in a couple voices to discuss all of it global market strategist at jpmorgan asset management. jared bernstein is former economic adviser to vice president biden. good to have both of you with us david, you first how do you see it in context of what we've just discussed here >> i think what it all boils down to is how investorsthink about the distribution of outcome, the uncertainty around growth, the uncertainty around trade, the uncertainty around the fed. coming into december, you really had no idea what 2019 was going to hold. like we were chatting about before, the risks really seem tilted to the downside i think one of the bigger risks that people may be failing to appreciate next year is if we get a deal with china and economic growth does continue at a fairly moderate pace, the
stock market could go back up. that will put powell in a position where he's going to want to hike rates there's going to be a balancing act in 2019 between an improvement in the fundamental, an improvement in the political outlook, but also the response from the fed as that uncertainty gets removed from the picture. we still view the fundamentals as supportive but think it will be choppier than it's been >> jared, you have an op-ed in the post talking about a number of things the market needs to get -- questions that need to be answered in 2019 >> yeah, that's true so for example, we've just talked about the federal reserve. i thought david made a great point. be careful what you wish for i think my op-ed predicts a growth slowdown, which is a conventional prediction right now as fiscal stimulus fades in 2019 whether that slowdown takes us from a trend growth rate of around 3% to 2% or whether we hit the predicted 1%, now you're looking at the difference
between returning to trend growth or something that feels more like a growth recession that's a big deal. if on the outside you get a better economic performance as you guys were just discussing, you know, then the fed has to push harder. i will add one point to this that maybe kind of gets to the uncertainty question the unemployment rate right now is 70 basis points below what the fed considers to be full employment now, unless they're willing to completely chuck their model out the window, which they're not, the idea of zero rate hikes when the fed is looking at an unemployment rate that's way below their estimated natural rate is surely wrong if the market is going to really price in zero rate hikes next year, they're going to once again be unhappy when the fed raises at least one or two times. >> yeah. you know, there's this op-ed today which raises some interesting questions, guys, of all the risks. maybe the biggest wild card for
2019 is the president himself. he wrote in the headline, president trump flirting with mutually assured economic destruction. the markets are finally waking up to donald trump as president and all that comes with it, policies which he really takes apart. the stagflationary effects of all of it, immigration being bad for jobs, the sugar high of the tax cuts, this notion that the markets were willing to say, okay, the president was all bark, no bite. now it's the reality of twlheres a lot of bite with that bark >> exactly we started out with corporate tax reform now we've moved on to trade, where obviously the worst-case scenario would quite detrimental to both the markets and the economy. as we think about the trajectory for politics and policy next year, i think people are going to really need to focus in on the signal and ignore the noise.
i think there will continue to be noise out of not only washington but out of the uk and italy and really major economies around the world focusing on what can actually affect policy is going to be particularly important that said, it is a little less friendly than it was in 2017 >> speaking of that, big news today, jared democratic senator elizabeth warren, everybody's talking about it officially launching an exploratory committee for 2020 i think investors need to know and want to know right now whether 2020 democrats are going to be the party of elizabeth warren or the party of someone a little more moderate, perhaps, like a mike bloomberg. how do you answer that >> democrats themselves don't know that yet. that's how i answer it and i'm sure i'm right about that it's going to be a big field it's no surprise that she got in, although i grant you, it's breaking news. and i think that the kind of progressive to moderate continuum will be reflected on a large primary stage.
the democratic party is not all about the far left progressive wing that's an important part of the party. it's more important than it's ever been. and frankly, i share many of its aspirations for much better policy, whether we're talking about health care, inequality, fiscal policy, taxes so i think there are a lot of great aspirations there, but there's still a moderate wing in the party. that will be represented as well listen, just quickly, getting back to the economy for a second i do think that one way to look at this is a strong american consumer, you know, against the other components of gdp. in a way it's c versus i plus g plus net exports government is going to be fading in terms of fiscal policy. the investment promises of the tax cut have disappointed. i think we're going to be looking at increasingly negative exports. you can never discount the
american consumer though we're a 70% consumption economy. >> david, we've been stewing in this economy and investors playing defense for three months, at least how do you think we're positioned how do you think in aggregate investors are positioned do we start with a blank sheet of paper next year you mentioned the risk versus reward is everybody looking too much at the risks in the short term? >> i think there's a lot of focus on the risk in the short term that could lead the markets to at a minimum stay choppy as people come back to work and volumes begin to normalize, i think what investors are looking for is clarity on these big-picture issues the biggest risk that stems from all of this is with uncertainty, if everybody decides to wait and see to buy that car, decide to wait and see whether or not to build that manufacturing plant, that's how you end up with a real economic slowdown if we can get to a point where policy is no longer leading to this wait and see mentality, i not only think it propels the
market higher but keeps us out of recession, at least over the next 12 months >> guys, happy new year to you both we'll talk to you soon be well. all right. still to come, former commerce secretary carlos gutierrez we'll get his perspective on the u.s./china trade talks first, a look at this year's top performers in the dow. merck and pfizer leading the pack, followed by microsoft, nike, and visa more "squawk on the street" when we return.
the government shutdown continues into a second week with no end in sight >> scott, the president has been very clear that he wants money for the wall in any government funding bill what's less clear is what actually counts as a wall. john kelly, the president's outgoing chief of staff, told "the los angeles times," quote, to be honest, it's not a wall. he said the president will say wall, oftentimes frankly he'll say barrier or fencing, now he's tended towards steel slats, but we left a solid concrete wall early on in the administration when we asked people what they needed and where they needed it.
south carolina senator lindsey graham echoed that idea after he had lunch with the president at the white house yesterday and suggested that the wall is just symbolic >> the wall has become a metaphor for border security and what we're talking about is a physical barrier where it makes sense. in the past, every democrat has voted for these physical barriers it can't be just about because trump wants it, we no longer agree with it. there's nothing immoral about a physical barrier along the border in places that make sense. so there'll never be a deal at the end of this year, the beginning of next that doesn't have money for the physical barriers that we all have in the past agreed we need. >> but then this morning, the president himself weighed in on twitter and appeared to walk it all back here's what he said. he wrote, an all concrete wall was never abandoned. some areas will be all concrete, but border patrol prefers a wall that's see through
make sense to me guys, this is why democrats are so wary of making any deal with the president. it's also why the senate says it will not vote on any bill without the president's public backing. back over to you. >> and it appears pretty much certain that we're going to enter 2019 with a government at least partially shutdown thank you for the update from washington heading into the final trading session of the year, futur futures indicating a strong open for stock. dow futures up 182 optimism about the u.s./china trade situation. as we head to break, take a look at this year's worst performing stocks on the s&p 500. koty, the beauty companying, losing more than two-thirds of its value. ge, we covered that a lot. squawk on the street will be right back
♪ eight minutes before the opening bell with us now, kenny is back welcome. nice to see you. >> you as well happy new year >> so you expected a santa claus rally. while it might not feel like it, to a lot of people we're actually getting it. >> certainly getting it. off the lows, it feels like a rally. if you consider the last five days, you're basically just in the money now. >> i hear you, but -- >> strict interpretation >> but talk to those people who have lived through the last eight weeks. it's been kind of ugly i think part of what santa claus did do, and i made this point last week, was created this opportunity. i actually think there's huge opportunities. lots of value created. yes, it was difficult to go through. yes, it was painful.
in the end, there's a lot of value created. that, in fact, may be the present from santa claus >> it sounds like you feel like this is over what gives you that kind of confidence >> well, i just get this because i think that the pendulum went way too far to the left. i think when people and portfolio managers come back and everyone recognizes and realizes some of the damage that's been done and the opportunity is out there, i think it protects it to the downside i'm looking for 2019 to be this year where we're going to get action on trade. we're going to see the fed probably pull back so therefore, i think there's some underlying currents and strengths that's going to help the market move ahead. >> biggest risk of '19 is trade or the fed >> i think the biggest risk continues to be the fed. i think the trade thing is going to happen. although, i think the fed is going to pull back i know they've said three instead of four. >> like zero what does pull back mean >> i think they'll end up with one hike in 2019 >> so what's the risk there? >> i think the -- they'll continue with the roll off on
the balance sheet, but physically, i think they'll only go through one rate hike i'm not sure when it's going to be i don't think it's going to be in march if anything, it'll probably be in the summertime. >> seems like there's a soft consensus out there that, yes, we might have seen some kind of climactic low, but it's going to chop around a lot. the leadership is broken >> that's exactly right. the market will thrash because there's been such internal damage not ol' onnly to the inds but so many individual stock until those stocks find a foundation, some stability, you're going to continue to get this action. i think it'll lessen over time, as it always does, and you'll start to build this base >> you need some of these big tech stocks, right the f.a.n.g.s, which may not trade together like they had in the past but you need them. if they led you down, don't they have to lead you back up >> i think they do i think financials have to lead you back up.
>> well, good luck with that >> yeah. i think you have to start looking at which f.a.n.g. stocks or which tech stocks will be the ones to lead us back up versus the ones that need to thrash around you can't throw tech out >> we'll see what happens today on this final trading day. kenny, thank you happy new year ays opening bell just moment aw who says our bank isn't tech enough?
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you are watching cnbc's "squawk on the street" live from the financial capital of the world, where the opening bell is set to ring in just about two minutes here looking for a positive start to the markets on the back of a tweet from president trump talking about progress being made with china, had a phone call with xi, but also some indications last week from china that they were working toward this january 7th or week of january 7th trade meeting between the u.s. and china after very weak factory data from china. the first contraction we've actually seen in their manufacturing activity since 2016 whether that's going to factor in and carry us through beyond
this last trading day, because we have all sorts of year-end quirks >> i think at the moment it works in the favor of this upward drift because of how sold out we got a week ago and the fact that people maybe want some exposure going in. i keep saying, in january, your risk budget rebuilds again if you're an investor, a bank, anybody, you can start to think about taking more risk because you don't have to kind of hunker down for the year-end snapshot maybe that's going to happen i do think china is definitely part of the mix. interestingly, we're going to finish the year almost certainly with a down single-digit percentage year in the s&p 500 if you look back at previous times, that doesn't really help you that much. 2000 was one of them that was the beginning of a bear market >> as far as what comes next >> 1990 was another one where you had almost a 20% down move from the high. you ended the year down single digits it ended up being the beginning of a new bull market hard to handicap that. >> all right
you are watching the opening bell and the s&p 500 at cnbc realtime exchange here at the big board. over at the nasdaq, the times square alliance getting ready for tonight's festivities at times square >> so get ready to start talking about the january effect, right? >> didn't really work this year. >> as january goes, so goes the year >> let's talk about what they all mean though. >> go ahead. >> so originally, the january effect was small caps outperform because of tax selling you have the makings of that in terms of that first meeting. the january indicator in terms of how january goes, so goes the year, that didn't work this year although, they often say the first week of january is an early warning sign for the rest of january honestly honestly, in 2018 a lot of that
stuff didn't work. we should be clear about that. the january indicator didn't work sell in may, you can argue one way or the other it was fine until the period you were supposed to buy back, which was in october >> what really didn't work was december is historically the strongest month of the year for stocks we're closing out the worst december since the great depression s&p had 14 record closing highs this past january. it didn't another one until august 19 record closes this year again, we're still going to end down >> 14 the first month of the year five more in august and september, then it was done. >> it's interesting as we just visited with kenny, you were talking about the sectors that maybe need to lead you back up, tech being one of them and these big f.a.n.g. names he mentioned financials too. i made the comment, good luck with that because is there really that much optimism around that space given where rates are and where economic expectations
have gone to >> there isn't, really although, you know, i think we have to keep in mind that what we thought 2018 was going to look like one year ago is not really much what it looked like. everybody had reason to be bullish on the financials. you had the fed hiking, and you had good sweet spot of the economic cycle, plus the tax cuts they were huge beneficiaries of that and feeding the buybacks. i think the fact there's not an obvious bull case today doesn't necessarily tell you how it's going to play out. >> there is one bull case. that is that they're so cheap and beaten down. goldman sachs is the worst performing dow member of the year, down more than 30% you've got worse groups like energy, but just how cheap are they, and what are they factoring in, in terms of an economic slowdown? by the way, there was a lot of angst this year about the yield curve inverting, holding down groups like the financials, causing concerns about recession. that actually never happened in terms of the twos and tens there was a lot of angst about a bear market. that actually never happened if
you count 20% exactly off the highs in the s&p 500 we got a few points away from that so i think there's still this debate, guys, about whether we're actually in a bull market. while the s&p didn't reach that and the yield curve didn't invert, we certainly got some pretty negative signals. there was a bail market in small caps, in transports, in the banks. >> and way below your 200-day average. the trend is lower some peoplewill say -- the majority of stocks went down by far. it's a gray area i don't know if you have to make a declaration one way or the other. >> it's not that long, either, until we're going to get earnings reports you're going to get commentary from corporate america, which by and large has been positive. ye ask ceos how things are going, they're great. we're not seeing much of a slowdown yes, we're following the tariff action and see pickup in costs, but you're going to get real, real commentary now with a lot to factor in
fed, trade, everything else going on within washington and without. >> i guess we don't know is what happened in the markets. is the flare-up in credit concerns going to make people pay down debt and be careful about the balance sheet a little more than they otherwise would and is there a sense out there that being cautious is in tune with the time? there's really no benefit to seeing things will be great. stocks being lower, 15% off their highs or whatever they are at the moment, that drains risk out of the market. >> also, have we seen the bulk of the use of cash companies returned so much money. i think over half a trillion dollars of cash they held overseas this year they brought that back repatriation to take advantage of the tax changes "wall street journal" says that's slowing that was a big source of support potentially. also, capital expenditures have been slowing and not as high as hoped going into the end of the
year as a result of some of the tax changes. we'll watch that >> i'm looking at apple as well. we talked about the f.a.n.g.s as a group, but apple has had a really disappointing end to the year that stock over the last three months down by about 30% there's an interesting stat that cnbc.com had on the website. the last time the stock fell this much was may of 2016. it was down 33% from its 52-week high over the next 12 months, it rallied 75%. if you're bullish on 2019, you may need that to happen again or somewhere close to that. >> the index is going to need some of those mega caps to have a move apple is way back down to i would say the lower end of its valuation range in the last ten years. the question is, what did you get in 2016? you did have one more exciting iphone cycle people actually weren't expecting much out of it and it ended up being a good one. then a more disappointing one after that a lot has to go right besides the stock being, you know, sold
out. but it's definitely worth noting that apple is a streaky stock. it actually goes its own way for these long periods in 2012, it was the only stock that work the. >> it's going to end '18 as no longer the largest market cap. microsoft still has that an interesting thing apple hits a trillion dollars in market cap in '18 then has this big slide. who would have thought -- >> which almost rang the bell, by the way >> the race for a trillion, remember the countdown >> who would have thought microsoft, old tech, so-called, even though it's the cloud that propelled them to this biggest market cap in the world stat who thought microsoft would take it >> when apple was in the running, you probably would have said amazon or alphabet. i do want to point out individual movers. up disney up 1.5% today. they reached an agreement to be carried on verizon for espn. so that was a removal of a potential negative
just a general sense out there that the street is giving disney time to figure out the direct to consumer business at a time when the stock itself has a valuation at the lower end of its range. it's trading at a discount to the market it didn't really used to trade at a discount. i'm looking at the year to date performance with today's 1.5% gain is up 1.4%. clearly an outperformer in the market this year it also benefits from the rotation toward quality brand name franchise >> the gloom and doom around espn calmed down >> oh, absolutely. now the doom is more about, you know, can they actually make the over the top work, how much is it going to cost to actually market that app and can they make a good play for a netflix-like product >> now you can get back to the old conversation of iger and success. stop being fixated on espn maybe they got past a little bit of that. >> it's gone to the backseat for a little while also, a lot of stuff you could
worry about if you wanted to, but right now it seems to be mostly the direct to consumer. >> i was going to point out amazon also as an individual mover. the journal saying they're planning to aggressively expand the store count of whole foods so amazon's whole foods acquisition continuing to grow that could benefit some of the more organic food companies. amazon for the year looks like it's going to close out with a gain of almost 30% this has also been a battleground stock a lot of people say it's indicative of this big selloff we've had over the last few months because it's down, what, more than 20% from its highs also went into bear market >> it's down, yeah, 26% off its highs. it's interesting because in another market or another price for amazon, you'd say, oh, great, they're going to expand one of their lower margin businesses, but people give amazon the benefit of the doubt. they feel like they have the data they know what the right market is to go to. they've probably helped pick up the operation side of whole
foods a little bit, which was considered to be mismanaged. as you say, it went from under $1200 a share to 2,000 in almost a straight line. now it's back off to 1500. if you look at a very long-term trend, it's the kind of stock where you say, okay, at least you haven't broken the trend, which you can't say for a lot of big ones >> 742 billion, just doing a market cap check there all right. bob is on the floor with us as always with more on what is moving this morning. the dow up 250 here at the open. >> nice start. europe's mostly up, what's open. asia is mostly on the closed side take a look at the sectors consumer discretionary you were talking about amazon. that's up about 2% right now semiconductors doing well. most major sectors are moving to the upside bank stocks, health care, consumer staples lagging a little bit the defensive names are a little quieter. in terms of the f.a.n.g. names, you were mentioning amazon
what was amazon, 1307 five, six, seven days ago over 1500 now. apple doing well facebook also bouncing in fact, there's a lot of v-shaped chart patterns out there. look at the s&p 500. remember, the closing low was 2350 this is just two weeks 2351, that's a v-shape we' we've regained probably half of the losses since december 14th, which is when things started heading south very quickly, surprised a lot of people. nice little return here. the market issues, i'd say they still haven't gone away. tariffs, the tweets on china certainly positive overnight that was a help. but the china pmi was weaker. the fed's rate hike path is still uncertain. the big debate, what i've been pointing out, whether you're on one side of the other of the growth or no growth for earn in addition 2019. remember, when we came into the fourth quarter, earnings were up
for 2019 about 8%. they have slowly been coming down but not dramatically. today we're at 7.2% for earnings on the s&p 500 we were about 8% just a short while ago. so slowly coming to the downside again, a lot of people are now on zero. probably the majority are 3%, 4%, 5% growth. if you're at zero, obviously you think the market is dead water, dead money in 2019 if you think 4%, 5% earnings growth, then you usually have room for the market to expand a little bit here. so again, 7.2% for 2019 earnings growth for sectors, rarely will you see this kind of dispersion from the worst to the best. health care, 4%. utilities up those are the only two that are up industrials down you got more than 20% declines in energy stocks you very rarely get a 25%, 30% dispersion from the hoo ig igh e
low sector, but that's what we're getting this year. finally, here's something very interesting. people say this is going to be a down year. right now s&p is down about 6% consecutive down years are very, very rare. the probability that 2019 will be a down year if 2018 is, is very rare. in fact, it's actually only happened four times. and we're checking this information. we have had only once when there were four straight down years. that was 1929 to 1932. we have only had twice where there's three straight down years, 1939 to 1941 and 2000 to 2002 in fact, that was the last time we had two consecutive down years. that's how rare consecutive down years are. so all the other down years were just one off there were 12 where we were down one and up the next year the point is, hopefully here, scott, 2019 is not going to follow any kind of -- will follow the historical pattern and will be an up year >> bob, thanks so much
let's go to chicago now. the bond pits, that's where we find rick santelli at the cme group. >> good morning. as i look at the board, all maturities are up basically one basis point. fives are unchanged. the point is as you look at a year to date chart of two-year note yields, we've come down a lot. but even as we sit at 2.52, which is close to unchanged, we are up 65 basis points we settle at 1.88. if you look at a two-day of tens, you can clearly see we've been toying with 2.71. we settle at 2.72, these are levels we haven't closed at since february a year to date chart, here we hover at 2.73. we're now up 32 basis points we settled, as you see on the year to date chart, around 2.41. well off we've given up a lot of ground
in a very short period of time we've even lost the midpoint closing yield of the year, which is around 2.81, hovering about seven, eight basis points lower than that. we're really going out, even though we're higher on all maturities, at a level that very few analysts would have suspected, especially after the jolting january we had do keep in mind, the low yield of the year was basically the first print of the year and pretty much all maturities think about that we need to be cognizant of the fact that treasuries usually like to start out the year with a bang there's many years over the last 15 where extremes are made early in the year. finally, the dollar. it's down about a fifth of a cent we haven't settled below 96 since october. what's interesting here, especially on a day where we've been talking about china with their december manufacturing pmi out today. it was 49.4, the lowest since february of 2016 so we want to keep a close eye
not only on fx but general rates around the globe the dollar on the year to date chart settled just above 92 last year now we're hovering right around 96 so a little less than 4%, obviously, and well off the low levels that may be the big story of the year mike, back to you. >> all right, rick great context there. appreciate that. now let's get to bertha coombs with a look at today's nasdaq movers >> good morning, mike. we're seeing a bounce here across the board, particularly with tech names. they are moving higher and leading the nasdaq higher at this hour. we've got the s&p tech index, particularly semiconductors showing strength here in the earl live going. but they are both down for the year and for the quarter amazon has been one of the big behemoths and big impact stocks here on the nasdaq the nasdaq composite on pace to be down for the first year after
breaking a six-year winning streak amazon expected to expand whole foods to make it easier to provide delivery in areas where they don't already have it amazon shares, however, having a horrible quarter year to date, still up nearly 30%. that's among the best of the f.a.n.g. names that's really helping to hold the nasdaq up so far this year among the worst is apple before that, let's take a look at apple for three months. looks like it's going to be its worst quarter since 2001 following september 11th, on pace for one of its worst years since 2008, snapping a two-year win streak among the other f.a.n.g. names that are likely to be threatened, apple and alphabet both look to be threatened by the epic, the creator of
fortnite, in the new app service. we're watching alphabet. it's flat. we'll see whether it ends up being up for the year at the end of the day sarah? >> yeah, sort of a make or break day for the year for alphabet. bertha, thank you. when we return, health care on track to finish 2018 as this year's top performing s&p sector, and the only one right now that is actually in the black for the year we'll look at whether it can continue its upward momentum in the new year when "squawk on the street" comes right back with the dow up 225
the businesses are pretty resilient. maybe we've got a resolution on policy, but how does that carry over into 2019 if it does at all. >> sure. we see a lot of these trends continuing one of the biggest ones, government health care they create better health care outcomes for less money. we see that as a positive trend for names like san teen, malena. we see good potential for guidance boosts as we think they're running around a year ahead of their turnaround guidance and other companies like cigna, we think they've set pretty conservative synergy guidants. another area that we really look
at here is the fact that they are defensive plays. so in a rising interest rate environment that's positive for insurers, for san teen uld could increase and if you have rising unemployment, they could double their growth rate in a recession, so that could be a real growth drive. >> are we still going to have at least the potential for a political headline risk. how does that fit into the outlook for health care providers? >> sure. there's going to be some overhang related to texas versus azar the stocks formed well when there were much more lawsuits going on
giving chances for companies like centene, a real chance to break out here as investors start to realize there's no risk to medicate or expansions going away. >> besides centene, do you think of others? >> we like anthem. we think 2018 is going to be a great year to show off their vertical inthe egation. >> sarah jaymes, thanks very much. >> as we head to break, let's take a look at how the stocks are fairing. it's been a tough end of year for many tough all of year for facebook that stock down 25% or just
good morning and welcome back to "squawk" on the box. i'm sara eisen here with scott walker and mike santoli on this new year's eve live from post 9 at the new york stock exchange let's take a look at the markets. we do have an end of year-rally here the dow is up 213, all on some on city micptimioptm he's tweeting he's made big
folks on wall street like barry saying that the fed is missing something. >> right well, i agree with barry, sara i think he's absolutely right that we're pretty close to neutral and the fed is beginning to realize with the reaction function coming through. so i think the market's getting that confidence is that they're not raising interest rates with what they were going to. they may not rads at all in the is coming year i think in the real time, they' they're adjusting to that.
the street is still at 173 and too high so they've already locked a slowdown in earnings and growth and that's going to impact the upside in 2019. >> what you're saying is you're putting it all on the fed? if the fed doesn't get off of its perceived path, it has nowhere to reach, is that what you're saying? >> it's interesting. you mentioned trade earlier in the show the white house feels like the fed is leaning against them, which is really not their intention, but their goal is to lean against a strong economy. we just don't happen to have that, so we should stop leaning. if we don't get progress on trade, it would be remarkable because with the fed leaning against them
you're going to see that reaction going in. the stocks are going to do better. >> maybe also it could help, which has been hit particularly hard let's see. you know, i hear a lot from both of you fed, it's fed, it's fed. there's other blame surely oil prices are down 25%. energy is the worst performing sector there's been a strong correlation there. look at what's been happening in italy with brexit, which is still very uncertain with the base case. they're going to crash out of the eu on march 29th a pretty good slowdown in china, which we've learned overnight has shrunken itself activity this isn't all about the fed. >> that's prettyteresting, sara there's been geopolitical issues around the world, the european issue. i'd say that's been ongoing for many years the european financial crisis
and the ensuing issues since then have been there the banking sector and europe really hasn't been fully recapitalized, so those issues have been there for several years and the markets have continued to do well despite those issues so i think the wall of worry has always been there. it's more a question of what is the cost of capital? how does that factor into valuations and how does that value in with what the investors are making? that's the cost of piece that's making capital cost higher and that's going to make people rethink valuation and how to deploy the assets all over the world. >> in other words, the fed policy is making things sting a little bit more. thank you for joining us. when we come back, a fresh round of negotiations with china set to begin in the new year as investors' concerns continue carlos gutierrez joins us with his thoughts >> and could pension funds be behind some of the market
but i know the importance of having time to do what you love. at comcast we know our customers' time is valuable. that's why we have 2-hour appointment windows, including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome. a number of recent notes suggests that the volatility could be linked to pension funds. >> that's right, scott
december 31st is the deadline to do so. but this december has been different from others in years past that's because the market has defined so furiously nearly 15% in first three weeks of the month that created a problem for pension funds because it shrank the proportion of equities in t the portfolios so when it came time to rebalance in recent days as the end of the year drew near, pension funds are reported to have been buying up historically large amount of equities a recent note from wells fargo said that analysts there estimate that $60 billion in outflows from bonds to equities were part of this rebalancing. wells fargo writes in their recent note that these rebalancing amounts are among the largest that they have seen. wells fargo said they're looking for a respite from market
gyrations in late may may have to deal with a seismic bout of volatility before 12/31. and, of course, that's today there was a holiday week in which there were fewer market participants than normal, meaning it would take less to move stocks up or down a holiday today, it may continue throughout the trading day today. guys >> yeah. there could be an important buyer there in today's action. leslie, thank you. renewed hope on trade disputes with china. president trump tweeting just had a long and very good call with president xi. deal moving along and very well. deal is moving along very well if made, it will be very comprehensive, covering all subjects, areas, and points of
dispute. big progresses be being made carlos gutierrez is with us. do you think the president is talking up hopes or there's a for real solid hope for a deal >> i hope this is for real i can't think of a better piece of news for 2019 in that the u. u.s./china trade war is beginning to tone down that's the very best thing that can happen to markets anywhere in the world i hope it's true it will have to be very conceptual we'll wibe negotiating things in the future we'll have to have a lot of trust. i hope we do make progress and at least i hope we stay where we are and don't ratchet up any more at a bare minimum. >> mr. secretary, it's scott happy new year it's nice to see you today. >> happy new year. >> if you were running kellogg
still, what would you be doing in light of this trade war would you be hunkering down, rolling out the purse strings, buying stock back? what would you be doing? >> it's about being selective. yes, you'd probably cut down on capex where you don't believe you're going to get a return over the next five or ten years, but you will be investing where you will get a return. i don't think any company has the luxury of standing still you've got to continue to compete, you have to continue to move forward but it's where you do that and then there is the reordering of supply chains, and i think companies at this point have to start thinking about whether they move their supply chain out of china into lower cost countries, vietnam, southeast asia that's also a decision that i think every company in the world is looking at. so rebounds, seeing the supply
chain, investing where you feel comfortable, but there will be areas where companies believe it's not at the right time and, frankly, i think europe could be one of those places. >> do you think that the trade fight with china has hurt ceo confidence >> absolutely. i think, you know, confidence stems from certainty, from a sense that you understand where the environment is going and what the trade war has done is added a tremendous amount of uncertainty. so should you invest now, should you wait should you build a new plant, should you wait? a lot of companies are deciding to wait. that is going to have an impact on the economy and it's going to have an impact on both economies. >> here's what i can't tell, and i think investors are a little confused we've gotten mixed messages on this front, mr. secretary. is this going to be a "tick by tick" list of china's going to buy more u.s. made products,
china's going to have more protections for international investors, china's not going to require more in other words, is this a real workable deal, or is the u.s. trying to go after something bigger and more bigger like regime change, making china less of a trade competitor, waging some sort of technology war? that's a bigger more difficult picture to understand how it's going to resolve itself. >> i'll think that's a great question we have to realize we're not just talking about the next five years. we're talking about the next century. how is china and the u.s., how are we going to co-exist yes, i think a lot of this is trust and it's about behavior in the future there may be some things that we can negotiate in the short term like soybean purchases or opening up the market a little bit more or dropping tariffs on automobiles, things that can
help in the short term, but, of course, the big matter is the long term. and i don't think that our objective should be to change china. that is a very hard -- history will suggest it's almost impossible i think our objective should be to co-exist with china in a regime of rules where both sides abide to those rules but if our goal is to change the structure of china, change the way the economy is structured, i think it's going to be almost an impossible task over the next four years or so so being realistic about what we can get, trying to somehow regulate behavior in the future, and, yes, have some more market opening in the short term. however, i doubt that that will
lead to a reduction in the trade deficit. so the administration also needs to understand what it's pursuing what is the strategy is it to lower the trade deficit, or is it to create an environment that is open to more fair trade, that is more conducive to fairness on both sides. >> broader economy question, mr. secretary. how does a consumer look how does a consumer feel to you right now? >> you know, i would say it's a bit hesitant on one hand consumers are looking at their 401(k)s, and i'm sure they receive a bit of a shock last month and then we're seeing the begins of some inflation because of price increases due to the tariffs so things with steel, things with aluminum, other products that have been slapped with tariffs will be going up at the beginning of the year. we haven't seen that yet because a lot of retailers have forward
bought knowing that tariffs will be coming up so we'll see a lot more inflation hit the consumer in 2019 and i also think just the psychological impact of having lost, you know, 25% of your net worth will also hurt the consumer. >> finally, mr. secretary, senator elizabeth warren officially launching her 2020 exploratory committee for president. make a prediction. how is the trade issue going to play is president trump going to have more friends on the democratic side or republican side? it's hard to figure out where the politics are going to go >> it's almost coming down to an anti-trade issue was a part of it the way pro-trade issue was some time ago. yes, i think some of this will play against the president
because he'll have democrats pushing him on china, democrats pushing him on whether he's been tough enough on china. we've been talking about a conceptual deal, about behavior in the future. how will democrats feel about that deal? and the president can find himself in a position where he's being criticized by the opposition for not being tough enough, so i think that's something to look at in 2019 it will be fascinating to watch. but, yes, trade will be under the gun regrettably and immigration will be under the gun and those are two thinged we need to continue growing our economy. >> always valuable to get your thoughts happy new year carlos gutierrez, former secretary and chief of kellogg. as we head to break with almost an hour of trading, you see the markets off their highs. the dow up about 200 s&p 500 about 0.6% and the
now for our etf spotlight, dom is taking a look, asking whether these names can rebound. dom? >> traders, investors, the world over dealing with concerns about emerging crude and possibly key demands in parts of the market that's lead the s&p sector down toward the bottom of the barrel. you've got 1.0 covering it other stocks in positive territory. as a result, you have exchange rated funds as some of the underperformers in the overall scheme of things the spider s&p 500 ticker. it's lost over a quarter of its value since it hit back on may 22nd you've got the spider s&p 500
etf ticker falling by 40%. the vanek vectors services etf it's lost over half of its value since its high on may 22nd worthy of note, every stock in this sector has pulled back by 20% except for chevron which is down only 18%. exxonmobil is down 23% will that trend of outperformance from the oil major stocks like chevron and exxon continue in 2019 those oil prices very much a huge focus and, scott, they will be for the oil. major traders as well. back over to you. >> domino, thank you dom chu. we'll give you a check of the best levels of the early trading session, a 174-point gain for the dow. art cashin is with us as we close out the laugh day.
happy new year. >> happy new year. >> santa claus showed up, better late than ever i don't think he'll stay around long. >> he came with an empty bag he didn't come with much when he got here the viewers will have to watch i think we're at a transition phase here if i were to look at any particular group, i would home in on the stocks here. we might see the rally begin to fade. >> how important is it as you go into 2019 for that group of stocks to lead back up you know, they certainly had a big impact on the way down. >> i think you need them to be unified and consistent a couple will always look a little bit better, but if they start to fray around the edges, if facebook starts to get hit
again and fall apart, i think you want to see if they can all demonstrated unified strength, which was clearly what they had done. >> it's interesting. there are people who say those stocks are never going to trade together and now they're their own individual stories there are big questions about facebook and now questions about apple if they don't trade together again. >> well, if they don't trade together again, then we're going to have more volatility creep in there are not many groups that are going to be able to reassert leadership rather easily the financials are not going to do it. you've got as sara pointed out a brexit deadline will be looming. people for years since the original vote said nothing has
happened that's because it hasn't been implemented yet. once they get implemented, all hell will break lose we'll see. >> we saw the selling in the week of december what does that tell you if anything in terms of as we get into the new year and the calendar flips and people have a new year's performance to play with >> well, you know, it will be interesting to see as i think you may have noted earlier this morning, almost none of the seasonal patterns lived up to anything you wanted to see or do or expected i would think the middle of january should be interesting. there's a lot of money out of the fixed in equities. people waiting to get past the first two weeks to make sure there's no residual.
i would pick somewhere around january 15th. >> finally, the story of today is increasingly it looks like signs are pointing to a trade deal with china. yes, we can't fully trust the tweets, i know and we want to trust action more than words if that does happen in 2019, does that bail out the markets how much is that good for? >> it could make good for a lot. you could make my day better if you told me who initiated the call was it gxi somchai niece leaders get to see it. >> it's indicating president putin initiated that. >> that takes a little bit out of this rally. we'll have to wait and see chinese media has been saying
they believe there is hope for a deal coming up that gives it a little credibility. if it was just tweets on our side, it wouldn't be worth much of anything. >> happy healthy. >> you too. >> we're looking forward to seeing. >> thank you. let's get to sue herera. good morning, sue. >> good morning, sara. good morning, everyone here's what's happening this hour we begin with elizabeth warner she's taking the long expected step of launching an skpexplorar committee. she said, government has become a tool for the wealthy and well connected end quote. president trump's outgoing chief of staff john kelly is making headlines. in an exclusive interview with the "los angeles times," kelly claims the white house abandoned the idea of a solid concrete border wall in the early days of the administration, a key
sticking point now in the current partial government shutdown. security is tight in new york's times square where more than 1 million people are expected to ring in the new year and for the first time the nypd has said it's added drones in addition to nearly 7,000 officers and in many parts of the world it's already 2019. this video shows the spectacular fireworks display from sydney harbour. happy new year, everybody. that's the news day this hour. mike, i'll send it back to you. >> all right sow. it's the 13 1/2-hour warning, i guess. >> yes, indeed. >> for us anyway. when we come back, president trump tweeting about a possible trade deal we'll speak with two experts on where they seehe t negotiations going. "squawk on the street" will be right back
welcome back, everyone to "squawk on the street." i'm sara eisner with scott now up 166 still higher across the board. the nasdaq is actually the weakest of the three a third of 1%. industrials remaining strong and actually the defensives are underperforming. real estate, services and entries. mike, you mentioned dallas fed coming in. >> they were up mid teens. >> like richmond. >> except for chicago, which has been good. >> that's not one of the smaller ones that's the one that leads the ism. we'll see. stocks rallying still at this point at least in part on hopes for china u.s. trade talks president trump tweeteding this weekend big progress has been
made but are investors overly optimistic at this point daryl kronk. good to see you. happy new year. >> happy new year to you thanks. >> where does tray and this vigil for tangible progress for china fit within your 2019 outlook at this point? >> well, certainly the fed and trade are probably your two most prominent risks. we still this there's a good baseline for an opportunity for a trade deal in 2019 surely the administration has that incentive it's the third year the presidency wants to get growth stimulated as much aspossible. they're agreeing to roll back tariffs on autos, agreeing to buy more soybeans in the u.s there are a number of places they talked about, walking back
the maiden 2025 initiatives and efforts, so they're starting to show at least an olive branch anyway. >> i guess the question is what is priced in isn't there a sense now that earnings forecasts for next year are going to have to probably be trimmed as we go along and whatever we might kind of weigh our spirit it's not necessarily going to help that. >> yeah. it's a good point, mike. i would point to two things. one, if you look at what's called equity premiums, it's over 300 basis points today. so to put that in historical context, every time they've gotten over 300 basis points which means investors are -- it's attractive to invest in equities, 12 months forward the stockmarket has returned double digit returns, so that's a good indicator. the second thing is we're down to 14 sometimes next year's
earning valuations even if earnings do come down, at a 2.7% treasury yield, it wasn't that long ago that we were willing to pay 18, 19, 20 times on the market, so i don't think 14 times is unreasonable for next year. >> certainly, no valuation doesn't seem like it's the impediment this time i guess we're looking for catalysts, right. >> yep. >> anything strike you that could recharge the market? >> i think last week and a lot of december has been a combination of technical factors, reaching technical supportal go rhythms i think it's interesting that 50% of the s&p names put in a new 52-week low last week and only 10% of the names are above the 200-day moving average from a technical standpoint you look at that with heavy negative breadth. the technical signs are lining up that we may be putting in some kind of tradeable bottom.
bottoms are messy. it takes a while to do that. the technicals are starting to show like we rolled over and had enough intraday capitulation that that might be a very good support level. >> all right darrell, appreciate it all the best in the new year. >> thanks. you too. >> as we head to break, let's take a look at amazon. the journal reporting they're looking at a significant skpapgs expansion as whole foods grows we take a closer look at what it all means. "squawk on the street" will be back after all this.
time to go to the cme group in chicago with rick santelli with the santelli exchange back to you, rick. >> thanks, judge i'd like to welcome my last guest of 2018, peter >> thanks for having me. >> you have an interesting idea. in a year where many have looked toward buybacks potentially saving the day, post-early october. they don't seem to be the remedy needed do you think we're going see the am of buybacks in 2019 you're thinking maybe it will be a debt diet. explain. >> yeah. i think corporations are going to have to go on a debt diet we started seeing that in the third and fourth quarter this year where some companies with a lot of debt have seen pressure we've seen dividend cuts and stock buyback cuts we're going to see a huge shift where companies were able to see a balance sheet. now they're going to have to
protect it it's a big shift i think there's going to be a big slowdown which will take away some of the fears people have. >> now, that all sounds perfectly well whether they do it or not is another question but flip the tables. from an investor's standpoint, credit differentiation yields are going to be in play versus a volatile stockmarket. is treasury demand going to offset all the issues we expect for 2019 in your opinion >> i believe it will do okay if the economy starts really heating up, we're going to see a lack of demand for u.s. treasuries we're seeing a lot of digital moves where you see five, ten, 15 basis point moves that's not necessarily healthy we may get back 3% and better stabilize with a better economy. >> back to corporations, even
though they're not good markets. we saw many hinting at that last week more importantly, that debt buyback as you pointed out still exists is that going to end up being away before they reduce? is that going to slow down corporate growth in your opinion? >> yeah, i think it is going to slow down some corporate growth. corporations did the right thing. they took advantage of very, very low yields. they used their debt and balance sheet and some with huge amounts of free cash flow aren't going to be subject to this. but some who have it on their radar screens, i think they're gong to fix their balance sheets we've seen some of the big companies if they cut their buyback as little bit, they can reduce it very quickly like any other new year's resolution, it's not going to be easy for the follow-through. the easy thing is to reduce the debt, maic the stocks go higher. it's going to be difficult, but
i think it's going to happen. >> it may take a big buying turnstile away from the equity markets. peter tchir, happy new year. thank you for joining me rick santoli, back to you. >> thank you so much. >> steve liesman joins us for a closer look at whether that's the case hey, steve. >> hey, mike it's been pointed to us as one of the reasons for the recent sello selloff. is that really the case? the fed grew the balance sheet by $3.5 trillion count it up, folks second, continued inflation and growth here's some of the effects of the purchases. they think it lowered rates. they think it might have boosted stocks because people couldn't find returns anyplace else, dampening things elsewhere all of these things might be in reversal as the fed does the
opposite the effects of q. e.on the way out won't be extreme in fact, a bun of q.t. didn't happen the markets are already low. lou crandall writes or tells me it has an impact, it's small and irreleva irrelevant to me you need an analytical wormhole worth pointing out there are no stocks there as a result of purchase as a result it created as a by product what it's called reserve. the fed had an asset on the balance sheet. the offsetting liability is called excess reserve held by the seller's bank. so they've been coming down for a while. here you go. the excess reserves fell by more than $1 million. the s&p 500 went up to 2485.
many think the feds have been cavalier about estimating qt effects. peter says the psychology of reducing the balance sheet is the reverse. the fed is scaring you out of risk-free assets we will see, folks, if jerome powell gives any hint. it would be a pretty major reversal to change the policy before cutting rates, guys. >> i'm so glad you dove into this question, steve i think it's really important, but i also think you have to factor in what other central major banks are doing here they're now looking at stopping its program. the fed started, you know, tightening a long time ago, but they were pumping at full speed and i think now you're actually starting to see a change that's lower in all of the major bank
balance sheets and that is causing a bigger ripple effect on the markets. >> yeah. i think that's true for japan. i'm not sure that's true for europe are you right about that, sara europe is only stoppin >> tapering. >> so it's expected to happen next year. right? >> yes >> so what i think you're pointing to correctly is this idea of the difference between the flow and the stock and there's always been a big debate about that does it matter how much the fed is buying or not buying or does it matter how much extra they're holding? because the fed will tell you even when they're done with this balance sheet problem and by the way, the ecb will say the same thing. they're going to be holding a whole lot. trillions of dollars of extra securityies compared to what the held before the financial crisis >> so good steve liesman. >> got to do it. >> agree
embrace that now to jon fort with a look at what's coming up next. >> morning well, we are in the last morning of trading in 2018 so it's a good time to look ahead to 2019 and particularly tech stocks, which powered a lot of the action in 2018. to the up and downside what's going to be the deal with china trade with social media wo, theswi apple we'll take a look, coming up on "squawk alley.
welcome back markets are in rally mode though off the best levels of the day, but a standout, the consumer discretionary sector, one of the best performing sectors today and the best in the s&p 500 over the course of the past week. leaders include haines, best buy and amazon those amazon shares up 11% during the one-week span today, automakers and home builders among some of the biggest sector drags over the course of today's trading, early on. now back downtown to you guys at the exchange >> all right thank you. we will stick with the consumer. big year for the retail sector courtney reagan taking a look at what we can expect from retail in 2019. watch.
>> 2018 was a volatile year for retail stocks and the trend could continue in 2019 tariff uncertain thety the u.s. and china have until march 1st to come to a resolution on trade. if there's no deal, tariffs could go up to 25% leading to higher prices for shoppers retailers that sell more dmesically sourced projeducts wl have more of a cushion to off set the pressure second online profitability impatience retailers and brands have been spending billions investing in e commerce operations. while they had given retailers some time to improve, patience is running thin. strong online sales aren't enough l shareholders want to see profitability improve. if not, retail stocks will take the hit in 2019. third, store closures slow in 2017 and 2018, retail store
closures and bruftsys hit levels not seen since the financial crisis, but that should ease in 2019 while the big swath of closures should be over, retailers will be fight iing hard for sales growth while competition is higher than ever it's so much to talk about. what stands out is that some of these stocks are up double digits if for the year like kohl's or under armour and some are down like a tiffany or tapestry or gap. i'm wonderfing if we're going t sea a ver sal in fortunes and what work oed in retail and what didn't and whether it changes. >> it's interest when he cyou lk at retail. this trend has been seen in years past where you've got to know what you're looking at to try to pick those winners and losers you can't paint retail with a broad brush. you know how important consumer spending is broader economy sork
yes, we may not be buying everywhere, but we're buying some places and those mastercard numbers, the most comprehensive we have to date, up 5% so somebody got those sales. we don't know the details yet. but kohl's is a name that a lot of angalysts and market watchers are looking at as resurgence they have a new ceo. they're trying new things, so that one is doing well zwl all right. thank you. >> predictions on retail in 2019 when we come back, kara swisher will be b here to look at tech trends for 2019. "squawk aly"omle cing up next. don't go waway dow's up 142 swisher test.
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