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tv   Squawk on the Street  CNBC  December 13, 2019 9:00am-11:00am EST

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administration had agreed to a phase one trade deal they'll break that silence at 9:30 a.m. eastern, which is 9:30 p.m. -- 10:30. it is night. so it must be important. it is a news conference to talk about economics and trade it says futures were up. join us next week. "squawk on the street" is next ♪ >> good morning, welcome to "squawk on the street. i'm david faber with jim cramer. we're live from the new york stock exchange carl has this morning off. let's give you a look at futures as we get ready to wrap up the trading week you can see we are set up for a higher open. road map this morning does start with trade volatility, of course china and the u.s. closing in on a phase one deal president trump reportedly signing off. but so far no confirmation from
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china. of course, we are going to get that 9:30 a.m. press conference. stocks as you saw look to higher -- look to a higher open. don't worry about china iphone weakness why one key analyst thinks apple's china woes are overblown. and two big tech names are moving in opposite directions. oracle is falling on a revenue miss adobe rallying on an earnings beat we got broadcom to get to, costco, number of earnings this morning. let's start with the broader market investors are trying to digest conflicti ining headlines. the chinese commerce ministry set to hold a news conference half an hour from now. and, jim, we don't have a heads up in terms of what they're going to discuss whether or not we're going to learn about their view as in, yes, we're all in or not. >> kayla tausche last night, basically, you don't know where we are it is in flux. at 5:00 a.m. it was x, at 7:00,
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it was that, 8:30, new view. but the one thing is certain, this story that made the rounds, that the president has put out that he'll roll back half the tariffs, and cancel december tariffs, that's a deal that the chinese want, that's not -- that is false. >> you're hearing that's not true. >> false. >> you're saying flat out i heard you say it on "squawk box," your reporting indicates -- >> a deal, but not that deal that's what i'm saying >> what deal is it there would be december 15th tariffs, no. >> there could be at 9:30. >> you're talking about the rollback of the existing 360 billion. >> that's not on the table the idea that somehow the president is saying, here's what i'm offering, i'm understanding that's not the case. that doesn't mean it is not going to be a deal i'm saying that grand comprehensive deal is not what is in play what is in play is a deal that is not as big, and it is
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sometimes difficult to -- for even the white house to understand how did the story get out there, that we're offering this when we're not, and so they're kind of baffled. i bet a ton of money that's not the president's -- >> listen, okay. your reporting says otherwise. and -- >> look, i don't want to be -- >> i'm not -- >> i'm not saying that there is -- that there is no deal. i'm saying you're not going to -- the deal that the journal put in play is not the deal i understand i think a deal is possible not going to be that -- >> listen, we talked about it for years now. and endlessly to no apparent end. so here we are yet again >> i think, look, to say it is in flux is to say it is in flux. there is no, like, hey, david, during the commercial, i'll give you what is really happening i didn't like that it is not. >> i know. i know i guess we'll just wait and see.
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i don't know -- i know how you feel about it in terms of jim cramer and your view on china. you probably are not happy with the idea of just getting larger farm purchases for whatever it is. >> i'm nobody. i'm a tv guy, whose father worked for companies that were wiped out by the chinese, okay i come in with a -- with a -- my father died after 15 years of working for the chinese and loved them they were great to him elderly, but i analyzed the industry it is not like i woke up like why did my dad go in with his boxers into the bedroom close the door and not come out. i figured it out it is one of the industries they targeted what i'm saying is that we -- it is intellectual property and it is theft those are the issues the president -- fentanyl. >> i haven't heard anything about fentanyl. >> believe me. >> in this phase one is that going to be -- >> they thought there would be a lot of arrests with fentanyl and
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there hasn't that's what's in play. >> all right, what is the market going to do at 9:30 if we get the chinese assenting and saying we feel as good about this as was indicated yesterday bit president. >> the financials rally continues. caterpillar rally continues. energy rally continues materials rally continues. the fedex union pacific rally continues. >> a lot of rallies. >> a lot of rallies. >> yeah. >> look, if you favor a deal, which i have said, yes, i don't, like, that's not the point >> no. >> whether i do or not -- >> not what your own opinion is. >> i favor the eagles winning the super bowl i'm a realist. i'm not going to say therefore let me tell you how it is going to happen. i think right now there is momentum for a deal, but it is not for the deal that we read in the papers. >> okay. well -- >> that's why earnings are so -- >> this point you're making may be a point of contention then if it is true and therefore it could be that it makes it less likely that
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they get to the finish line, jim, if there is an unwillingness to roll back, as you say is the case. >> i'll make this point to our viewers at home. i don't like to talk about how we do reporting, but, you know, you spend a lot of time chasing stories that aren't true and you think if there is going to be a roleback, you know the market is going to love that, wall street wants a deal, wall street is made up of people who are dollar signs represented by men. they do not care about what happens with the country, they just want a deal, so stocks can go higher. the president is not in that camp. >> i get you listen, as somebody who has done his fair share of reporting, this is a story that -- >> why don't you get that phone call go ahead, grab that. >> i would like to you would think this person would know i'm on television now -- >> are you facetiming? facetime, i'll take care of it >> i would say reporting on this is very, very difficult. >> thank you. >> because you have so many different people who claim to know things and not everybody is on the same page when you think they should be
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that's where we stand, why i would rather talk earnings -- >> let's talk about earnings >> uk election or anything else. at least there we can deal with things -- one guy has got, like, a dog and multiple families and stuff and the other guy seems really boring. >> which of the earnings this morning are you particularly happy and/or sad about whether it is adobe or broadcom or costco or -- >> i thought costco was amazing. >> you did >> yeah. because galante is a hero of mine, cfo. sea cucumbers, he's like a -- he's like groucho marx on his calls, so brilliant, and when he says is that they are seeing no inflation. they are seeing big time spending by consumers with big screen tvs, apple products, one of the healthiest scenes he's ever seen, the tariffs, next to
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meaningless. they had fewer skews, they pivot, orthey do private label when they think the tariffs have gotten in too high david what i'm saying is that the second largest retailer, not talking about some joker. >> no, this is a very -- in terms of its place. >> no inflation, great consumer, tariffs don't matter. >> you wonder why we got where we are this is galante. it is revered in the business. he's so funny. >> yeah. >> i parse every word he has to say, he's such a genius. >> same store sales numbers are pretty impressive. >> very impressive >> canada up 2.9, international. u.s. the strongest e-commerce -- >> he made -- there was an outage, talking lou cernia last night. everybody should know they are
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not a big online retailer, 5% of business it didn't affect them. but there were some unbelievable numbers in that call, david, you know where they really love costco >> where >> shanghai. >> get this number >> galante gives us. >> tell me. >> so much apple the average costco in the world has somewhere in the mid to high 60,000 member households, okay they have locations in other countries in asia, which might be 100 -- 120,000 after a few years, maybe one or two years. this one is more than fwtwice tt now than shanghai. the biggest problem, long lines in shanghai. >> high class problem. >> 25 million people waiting to join there is 100 million people who belong to costco the costco model is loved in china so much, they're like trying to figure out how many costcos they can put in shanghai chinese love costco.
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they're still selling diamond rings there, couple hundred thousand, if you want to spruce up your wife's wardrobe. >> i think i'll pass on that, thank you for that update. >> even with kirkland signature diamond ring i got a guy. >> jim, back to trade for a moment, we do have a new tweet >> oh, no. >> from the president. and i want to share that with everybody. i haven't seen it myself let's put it up here wall street journal story and the china deal is completely wrong, especially the statement on tariffs i guess what this does say is that the president may be watching occasionally and confirming, objection, my colleague's reporting here that we have been hearing for the last 10, 15 minutes or so. >> it is good to be right. >> it is good to be right. >> good to be right. >> when i used to break stories, i don't as often, always great to see -- you see it in print, you knew it was right. you knew you were 11000% right,
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you still said did i hear something wrong? >> i've been in this business for a long time, i covered fsu for a while. i can cover anything. >> futures starting to decline >> can we talk about orkle >> yes, let's talk about oracle. >> i'm telling you, this company is being confused with a company that doesn't have a lot of growth and not doing well larry ellison, i always have been a huge fan -- >> now the soul ceo of the company, and the company did say ellison did indicate they're not going back to a dual ceo passing, of course, of mark hurd which he shared the ceo duties with miss katz, she will be the sole ceo. >> i miss mark so proud of saver. she stuck with it. >> you talked about them being vulnerable. >> what they're doing, yes, they're pivoting, though, they
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have identified who is really weak they have identified that sap is somebody they can come after hard for enterprise resource planning, and i know neil bushry may not want to hear this, but they have a product, they have a product autonomous database patent that patches itself so they have enterprise, erp, sales force doesn't have, they have human capital management, they think they can take from workday and they have this autonomous database product that patches itself what i'm saying is that they are -- that ellison has got some niches he'll blow into big businesses cheap stock they buy back stock endlessly. >> talking about a competitor and somebody who has through the years always shown that they can change when necessary and meet the changes that are taking place in their business effectively and it's oracle. >> that's what the analysts are
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missing. i had edwards life sciences on last week. they make it so your heart will last longer. they came up with a product that -- it is -- i met with them, i think the most incredibly great technology, they go with enterprise resource planning, oracle, can go with anybody. the list -- i mention there is a list of maybe 30 companies that ellison talks about. ellis ellison, not that he ever left, but to go up against -- i know marc benioff loves ellison loves him. reveres him. he's so competitive. i think ellison is laying out a great strategy here of them returning to dominance in certain areas. which he may say he never lost that dominance. >> we still got adobe to get to, still got broadcom which i -- hold off i want to recap what has happened here in the last 15 minutes. we'll take a quick break we started the hour, of course, talking about possibility of a
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china trade deal jim's reporting had indicated that these reports of a rollback in existing tariffs as being part of that said deal was incorre incorrect. and moments ago, the president backing up jim's reporting, saying the wall street journal story and the china deal is completely wrong, especially the statement on tariffs the question, of course, then becomes what are we going to hear from the chinese 16 minutes from now, because if in fact we are unwilling to roll back tariffs as appears to be the case and we understand that perhaps that has been a key part of what the chinese are looking for because remember they wanted to be a win-win, we'll see maybe we're not as close to a potential deal as we thought let's take a break we'll keep an eye, of course, on the s&p. it did reverse course based on jim's reporting and the president's tweeting let's get to a mad dash from jim as well. we got a half hour -- 15 minutes until we get to opening bell here should prove to be an interesting one.
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all right, let's get to a mad dash, as we count you down to the opening bell and press conference from the chinese, i think 9:30 p.m. in china don't know what we're going to hear but more earnings to digest, broadcom is a feature for your mad dash. >> everyone is all over the place in broadcom. as the call went on, the stock was up 10, it went down 2, then
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3. i think people should step away and understand hoch tan made that pivot when he bought ca, the deal is working. the problem is people don't understand how the semantic deals work rick hill sold him rick is driven rick hill sold them to this part of semantic that they really need to do a major reorg for and the reason why this was a defensive call, there was not enough known about semantic and people are negative on semantic. cisco came at them with both barrels. cisco is offering exactly the same silicon that they're offering so there was a cisco post that tom couldn't answer and a broader question of how good semantic is. take it all away. >> what about the chip business? >> yes, thank you. the networking business is what matters. and it is doing well and side show has gotten in way of the story. >> have they gotten past earlier
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this year. lower target because of huawei and -- >> accelerated i think people should step back and if they're looking at broadcom, rick hill did not sell him a bag of hammers and hock is very smart the deal was fantastic the gross margins are terrific the analysts are baffled, where the opportunity comes in to buy the stock. >> okay. so we'll keep an eye on those shares you believe if they're down today, a worthwhile time to step in. >> i know rick was not happy with the way semantic was being run. but hock tan, every deal he's come in and bought, he's never been happier with how the companies were he sees them not as they are, but as they will be. bet with hock tan. >> huawei, we mentioned, there is a look at the room where the press conference will take place
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about 10 minutes from now, we're told chinese officials will offer their first comment on these talks with the u.s fluid. yesterday, things seemed very positive our market reflected that. jim mentioned all the different sectors that might move up, were we to get confirmation that a deal is close. his reporting indicated there was an unwillingness in the part of the u.s. to roll back existing tariffs on some $360 billion worth of chinese imports. those tariffs, by the way, are between 15 and 25% depending on what you're talking about. the president confirming, jim's reporting moments ago, we'll see what the chinese have to say, jim. while we wait, let's keep talking earnings you mentioned broadcom, adobe, you had shotten ryan. >> his theme is everybody has a story to tell. reality, when you see what adobe
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is doing with its $11 billion in sales whether it be in how to design websites, the e-commerce websites, two acquisitions he made, magenta and mar quetta, people were questioning it, there were stories about how well the retail market is, the e-commerce retail market is measured by him. and it is incredibly strong. david, they have a suite of new problems, called fresco, that are just amazing and they do ar artificial intelligence. i don't know, they got some offerings and you know what is most on fire one >> tell me. >> the old document business >> really? >> yes >> the document business out of nowhere, people going to adobe photo shop. >> it is more or less new highs for adobe. parabollic move, of course in terms of between 16 and 2018 >> still 20%, how many companies have 11 billion in sales
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that's the holy grail. that's the sales force issue it is why i continue to believe in -- and have been steadfast since it is 150. >> i can remember when it figured into my world a bit in terms of could anybody ever buy it, would microsoft step up. now it is too big. $148 billion market company capy going higher hardly anybody can do it. >> it is on the prowl challenging sales force. one time, sales force and adobe were closer. they're not as close now they compete. >> adobe has a larger market cap than sales force you spoke to -- you spoke to shawn last night you spoke to him about china trade. here is what he had to say. >> we're all for making sure economic boundaries don't exist and that people can conduct trade fairly but we have so much opportunity, we are not overly concerned with what is happening in china and the trade war specifically right
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now. >> true. they have so much business i don't know -- every one of the companies, when you're on the call, for costco and website was down, you immediately start thinking, okay, how important it is to have this thing up every minute and who designs these sites who makes them, it is adobe. you can make your company look like walmart with adobe products david, the products, it is one of the stories, not on like nvidia, you have to use their products to know how great they are. >> right. >> i bet you your kids use their products my kids do >> fairly certain they do. they teach me how i can make something looks better than anything that was made in "mad men,". >> that was ga good episode we're seven, six minutes away potentially from the start of the press conference in china.
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where we potentially will learn, actually learn something about where things stand between the u.s. and china given all the different stories that we have heard in the last 48 hours, 24 to 48 hours. there is a look at some of the picks you have, jim, if in fact we get a deal. explain this to me. >> starting for the left, the phase one is supposeed to be our banks being more unfettered in china. credit cards, american express is in the queue for the longest. mastercard and visa, goldman, that's one of the areas they want to grow, so does bank of america. jpmorgan, i'm sticking with, they got the best brand name citi is next apple, of course, we all know. that's yesterday yesterday's business the rest of the companies are largely 5g or internet of things with big stakes in china easy ones, caterpillar, honeywell, by the way, comments yesterday, mattel is about -- mattel and hasbro are the ones
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that have this weekend on the line toy tariffs. i say buy mattel, mattel is further along in getting out of china than hasbro. and then people still think home depot is levered i'm not as much. target, quite levered, not as much they have something at stake walmart does too dollar tree got hurt dollar tree got hurt by tariffs. that can bounce back fedex, union pacific, met with the president yesterday. >> that's quite a list we'll get an answer, maybe, in terms of getting a much better sense as to where things stand a few minutes from now let's take a quick break on "squawk on the street. we're back with an opening bell and important press conference we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it - with hassle-free claims, he got paid before his neighbor even got started. because doing right by our members, that's what's right.
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you're watching cnbc's "squawk on the street. opening bell a little more than two minutes from now did want to share some news as well from our parent company, comcast. news about comcast and nbc universal. steve burk who for the last eight years has led nbc universal, been a part of comcast for a very long period of time, of course, really the number two to brian roberts, will be stepping down when his contract expires in august reports say nbc universal film and entertainment chairman jeff shell will succeed him that has not been confirmed. our partners at are reporting this as well, that mr. burke does plan to step down when his contract expires. there is a look at jeff shell. burke, one of the most highly respected executives in the entertainment business nbc universal, of course, joined comcast in 1998, had been a disney stuff for some time, as you know, as well.
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he's only 61, but he's somebody certainly well aware that there say lot to life beyond the executive suite. >> had his own way, he would be run children's hospital. >> significant board member at berkshire hathaway and jpmorgan. long time, very close friend, of course, jamie dimon, went to business school together, no word on plans there in terms of i would assume he's going to continue that's pure conjecture on my part but never -- always a bit uncomfortable to talk about your boss this appears to be -- this appears to be true don't have a lot of details in terms of his decision why, why now. in his early 60s but that's a significant transition in the media business that is going to be taking place potentially sometime this summer >> it is difficult to talk
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about -- i've known him for years and years and years. and he's a great guy, yeah his family's great i don't want him to go is what i'm saying i don't want him to retire if you can get him on the phone -- >> there is the opening bell, by the way. we can try we can try >> he has so much more to do always said in every profile, he wants to do so much more for charity, so much more for -- >> a lot of chapters to life, jim. not just one might want to think about that i don't want you going anywhere. that was the opening bell. you there is the real time exchange at our headquarters at the big board, celebrating the ipo today, solutions in china. over at the nasdaq, sprout
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social let's get to eunice yun in china. eunice >> reporter: thanks so much. that 10:30 presser was actually just delayed by half an hour they're going to be several important members of the trade negotiating team there, in particular the vice finance minister, who has been heading up the working level discussions, taking over for wen, the vice commerce minister who was taking the lead. also very important these two gentlemen and they're going to be discussing the progress that has been made in these negotiations now, beforehand the commerce ministry contacted several journalists including us asking whether or not we had any questions for any potential briefing at that time they wouldn't confirm anything we asked whether or not
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president xi jinping would accept the trade agreement that was put forth by the trump administration, but as of yet, we're going to hear, you know, an answer hopefully to that as well as anything else that the chinese feel that they need to get -- tell people at this time. >> all right, eunice, we're going to be standing by to try and find out what it is they're going to tell us in terms of updating us on that progress eunice yoon, 10:30 is when it was scheduled, now 11:00 p.m. local time, 10:00 a.m. here in the states >> that's why i didn't like the certainty of the stories last night. there are many different and conflicting constituencies, but the one thing that was changed is that the president never said that they wanted the deal and we want a deal at the exact same time that was the tweet >> yesterday, around this time, that was very positive.
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>> yes. >> both sides want a deal. >> both sides do want a deal the fact this is delayed 30 minutes is just endemic of what is going on. there is just many, many voices. >> yeah. yeah as you hear some more applause here, of course, for that chinese ipo. >> those have been -- yesterday, bob had some very sobering numbers about how the average went down, high teens, be careful of the chinese deals, be very careful. >> we went over all the major earnings, i think. you mentioned apple a bit yesterday, the feature was this note from cs, at least putting out there the possibility that china sales had slowed dramatically you get defense this morning from morgan stanley. >> that was important, the defense. >> katie yuber uberty, somebodu were saying yesterday.
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>> she is -- she comes from the school of don't let the facts -- you know what i mean, david? >> yes >> the facts get in the way of a lot of people's negativity i went over the last ten pieces that that gentleman did from credit suisse. kept that price target down below. never really made you money. not denigrating his work as much as to say that he does quality work, but it is not produced necessarily what the stock has done. >> right and when it comes to china and apple, there are so many cross currents there too just, again, i said this yesterday also, i can remember so many similar times when we looked at numbers, looked bad, and then they weren't born out >> and the previous piece that he had put out was that they're becoming a decline, but it wasn't a real trend. and then the next piece is it is a -- it was very trend like, katie saying it is not a trend i'm going with the idea if you keep trading this, all you do is lose money >> right. >> just keep losing money. >> you told people throughout to
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own it and apple's performance has been nothing short of shocking this year, up 72%. >> how many times do people say, time to get out, time to get out, time to trade it. and the credit swiss piece was one of those pieces. >> down yesterday, briefly and then rebounded on all the trade stuff. >> timing is -- didn't count on the idea of the tweet that rocked the world. >> right >> a lot of different things as we await this 10:00 press conference, so many things to hit. can i go back to one of my subjects would you mind if i hit ledger and yesterday's testimony? >> please do i continue to -- all my 5g guys are saying do you have a line on what the cart is going do? >> t-mobile sprint versus the states ags case, occurring not far up the street here on pearl street, judge morero's court what i can tell you, they're still talking about trying to
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settle it, with the state ags. not clear how that can't -- i don't have a lot of detail on whether they made progress that's not something unexpected. judges oftentimes are, like, come on, guys, can't you figure this out you are going -- they're already halfway through the trial, practically. yesterday ledge weagere was on stand saying among other things, we want to merge, we're no longer in a capacity to grow, the customers that we have basically make the case that together they're going to be able to offer a much better product, still be inconsiderably competitive on price, and be able to move aggressively on 5g. all the things we have heard for a year and a half now. >> i find that what-- there ar many people very simply would say, look, the more competitors we have, the lower our bill is we never had a president who wants a national policy that actually trumps, so to speak,
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the desires of individuals and the national policy to win at 5g says you have to let this deal go through. i don't think there is a lot of doubt your price -- the only reason why you think your price might go up is if sprint fails and then there is only three that's a real concern -- >> that's a question, you know, i reported on the possibility, of course, of a price renegotiation down, but that also has optics that come along with it, there are claims that sprint's business has been impacted and makes people wonder what would happen. it is unique in so many ways a, with -- can't remember a time when the doj signed off on a deal and the states have gone to court to oppose a doj approval. >> right. >> and then -- >> credit card -- >> i don't know. and then you got -- and by the way, typically, though, 4-3, 4-3, and it raises -- you talk
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about these measures they do to sort of measure anti-competitiveness, hhi, oftentimes just gets blocked and then i can't remember a deal where there was no merger agreement anymore. they don't have a breakup fee. there is -- it is expired. >> does anyone -- does anyone argue any of these briefs look at our balance sheet at sprint we cannot stay alone we have to -- >> i don't think they come out -- >> it is fundamental -- >> i have not been in the courtroom, we're relying on transcripts and things of that nature but, no, next week will be interesting. you're going to have charlie ergen hit the stand and that will be interesting testimony because, of course, some of this is dependent upon the perception that will dish truly be a nationwide 5g competitor therefore the fourth competitor, also part of it is dependent on the view of charter and comcast, verizon's capacity, are they becoming a true competitor in
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wireless we're keeping a close eye on that keeping a close eye on the overall market as well we're off the lows already the press conference, 20 minutes from now. >> terrific, worth pointing out. >> yes i think that -- there are -- there continues to be, david, ridiculous trading in so many material stocks, believing we'll have an instant turn around in the economy. only people that told me about free port the last five minutes, jim, why don't you talk about free port? understand the deep cyclicals are very much in favor >> why free port why explain -- >> copper. >> right >> just because -- >> it is a parody. it is a parody we have so few pure industrial companies left, that's the one they turn to by the way, alcoa is not doing -- aluminum prices aren't going up people want to buy -- the big hedge funds. >> yeah.
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>> they want you to buy trade fcx. that's a favorite. and i find it fatuous, david, fatuous, don't trade, own. and this stock is the hottest stock now. i think it is just insane. >> i can remember, i can see years ago now, we were talking about financial viability of this company, given its debt load, given its handful of very poorly chosen deals. >> when people think it is such a shame, i understand we just don't have a lot of big industrial companies we used to be -- trade amax, ak steel. that will merge with cliffs. free port, we used to have philips dodge, reynolds, bethlehem steel, major companies they don't exist >> you say industrial here, i don't want to confuse people, you're not saying ge, you're saying more commodity-based. >> yes people want to play
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commodity-based. they say the commodity conference is going up, you should be pushing free port. i'm not pushing anything second, this is what our company evolved to we have one. we have one. free port. >> we got a lot of technology companies, a lot >> let me give you a little -- can i get existential with you for a second >> i like that >> the early years of my trading, there was a company called phelps dodge. >> i remember it. >> the symbol was pd you hit a pd now, you get pager duty, which is a wireless applications company doesn't that say everything? pd used to be one of the largest best copper mine you got all your opinionpennies and now a ws company. >> pager duty. speaking of healthcare, which we haven't talked about at all, just kidding, you've been focus on abbvie's acquisition of -- >> so -- it is so -- the cgrp
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bill approved in q1. >> the number of investors are watching for when the close will be there is a divestiture package, two products, what we're talking about, from allergan, to get this thing approved by the ftc and the like, from what i'm hearing is you may see something as soon as early january on that they're very, very close but moving into the holiday season, so -- >> there is some i don't want them to divest. >> i'm not certain on the names of the products. one market, one pipeline, not sure >> need botox, don't want to see -- >> it is not going to be -- >> an eye line -- >> small. >> i mentioned it, jim, there has been a bit of a spread in the deal we're looking for what i'm told by people familiar, mid to late february close. >> that's fine right in time for the blockbuster cgrp bill for the
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broadening of, david -- >> what? leeann is asking me. i have something i don't know what i have i have the names of the companies, i'm told. >> after the commercial is over, can we talk about it >> we have cheering here chinese cheering >> good! >> ahead of the planned press conference in 17 minutes from now. i'm going to get the name of the things thanks to my producer who is here yelling at me that i can't even read things that are in front of my face. >> what is go on today, the morgan stanley note on apple is trumping the credit suisse note. people don't believe hoch tan knows what he's doing when he's buyi inin ining symantec let's not just think he's just some sort of babe in the woods and then costco, you're getting your chance. there was no guide down.
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that's just more fatuous -- >> no guide down >> there was no guide down >> same thing about lululemon the other day. >> beautiful >> the way the algorithms view the releases and misunderstand -- >> he's telling you to buy levis. that's a big gutsy call. levi, chip berg. >> i haven't spoken to chip in a while. he's involved as the -- at hp. >> at 17, i went to visit them i hated the stock at 24. got to 17, i said you got to buy. i'm sticking by that >> all right, let's get back to the broader market here and check in with bob pisani, with a lot more on what's moving this morning. >> what's moving, we're not sure we're waiting for the press conference, the question is tariffs delayed, existing tariffs reduced, that's the question that's what's going novel market we don't know. see what's going on midmorning here big -- modest drop in the markets. uncertainty about whether we get tariffs, tariffs reduced
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here you had the whole discussion with dave and jim here preopen move to the downside sectors, all the trade related names are flat to down slightly. semis moved into positive, they were in negative earlier on. all of this is waiting for clarification. big debate in the last 24 hours among the bulls and bears, about 2020 earnings, that's what we're dealing with here at cnbc. and the stock market the bulls are trying to make an argument that clarity around a number of issues is going to help the 2020 earnings situation. just put up here, what has been going on here. the fed, of course, is now neutral. so we have monetary policy, accommodative rates, a positive. late, with the brexit story, the bulls are pushing, don't think brexit, think labor defeat and that's a real positive for the market i'll show you stocks rallying on labor defeat, less regulation over in the uk trade deal, a tariff truce, prospects of not having to pay additional tariffs into 2020 would be a positive overall.
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what is missing here is a clear bottom in global growth. if you can get better signs, that's why we watch all the big global industrial numbers around the world if you can get some clarity here, you know what all this argues for? multiple expansion you can deal with 17.5, 18 where we are now, forward earnings, that's very comfortable, with this kind of clarity that you got in the markets a real debate going on here. look at some of the uk stocks moving you see things like banks moving and you see things like utilities moving, banks, banks, utilities what do they have in common, heavily regulated. labor defeat helps these kinds of companies very well particularly those bank stocks let's move on here, china at the heart of all this, big china ipo today that's been all over the place. quite remarkable this is one -- they do management tools that's not the point about all of this. the point was 31.2 million shares, $10 here, prior arrange, look at this, 36 million at 12 to 14, all over the place, they practically cut it in half
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yesterday raised it a little bit here little better. indications now, i see it is right over there, 10 to 1050 now. keep an eye on that. it has been an ugly year for china ipos the average ipo in the u.s. is probably up 20% or so. the average one that has gone this year, year to date, 22, china ipos, 2018, 35, but the average return this year, down 18%. average ipo u.s. here, u.s.-based ipo up about 20%. that is a startling difference overall. and that's a big issue for the markets now. just take a look here finally about what has been hurting them, slowing growth in china, trade tensions here, overall poor performance that doesn't help things. tighter regulatory oversight nasdaq tightened things up about the regulations around the ipos. you got a company like alibaba, now a listing over in hong kong, as well, you see some pressure, david, i think next year, if
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this keeps up. a lot of those companies that are trying to come here to raise money, they will try to do it just in hong kong if they can. back to you. >> that would -- yeah, something the nyse doesn't want to think about. bob, thank you let's head to the bond pits, check in with rick santelli at the cme group in chicago >> yesterday i made a big deal that the 30-year auck was an auction was at 8 plus. we are were looking for a good auction. the price dropped precipitously before the auction if you think about the breadth of the moves yesterday and the statistical probability that such a move like that would happen on the day of the auction, it cuts down those numbers to lower possibilities, so everything lined up bought a big concession and guess what, they were right. yields are lower today look at one week of 2s, pay particularly close attention to how we're approaching 170.
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here we are, kind of back where we have been doing all of our trading. down 4 on the day. one week of 10s, down 3 on the day, still up 2 on the week. but that also gets into the mid190s and failed again open the chart up to october, you can see yes, we failed there right after the last meeting after about five sessions. and finally, let's look overseas the gilt not only participated in the same moves as our markets did, because we were the leader of that move, with regard to the trade possibilities, but they also had the election. so 83 basis points you see on the one week chart, it moved up. look at one week chart of the pound versus the dollar. it is going to close at the highest level since mid-july another foreign exchange market that will close at the significant levels from july, but at the lowest levels since july and that, of course, is the dollar index, which has lost the 97 handle and it really is the biggest casualty of this week
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thus far david, jim, back to you. >> okay, thank you, rick santelli still to come, of course, we're going to get a lot more detail perhaps on what is going on with the talks between china and the u.s. regarding new trade deal. chinese officials are set to hold a news conference at the top of the hour. more "squawk on the street" when we return. ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back.
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originally scheduled to begin at 10:30 local time p.m. in china, noticew 11:00 p.m., 1 here, with that poanimrtt press conference we're back in a moment
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a quick stock trading. >> all i can tell you is there's more delays with intel chips, but she has faster chips that would -- stay long the stock i know i've been a champion for the last 40 points because lisa is amazing
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start looking at their products, they're the best she's an engineer by trade. >> what's friday fright feature on "mad money" >> biohaven, you know how much i care about these companies work on migraines, and the stock has just gone sky high since elizabeth warren has decided we won't have a single payer. >> i love you, too. >> i'll get a cup of joe. >> stick around. we may get a much better idea of what's going on when we hear from people at the state council information office we'll come back to you live. nice rock. it's time to drop gold. go digital. go grayscale.
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good friday morning. i'm david faber along with jim cramer, mike santoli -- we see them be breaking news, moments away from a press briefing where chinese trade negotiatoring will
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update us. president trump tweeting last hour a "wall street journal" story on the chinese deal is completely wrong, especially on the tariffs. jim cramer reported there was not a plan to roll back tariffs as had been reported by a "wall street journal," for example we dipped in the market once the president's tweet came out we've come back a bit, and we expect to hear some things from the chinese side that would help us understand. so it's almost like comical. let's get to that with rick santelli bring us the numbers.
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>> david, there's good news and bad news, first of all it's a fourth quarter number, better than expected, up 0.2 since july that will add to gdp here's the fly in the ointment last night that's a second down, tenth in a row it's rare to see reversals in business inventories i can't even find an example of two of them back to back so a bit weaker on the revision, but solid inventories numbers. we know inventories will alter themselves if a trade deal should be signed david, back to you. >> thank you, rick, we are monitoring the beginning of the press conference i believe we may have a translation. are we going to listen in now,
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guys we're not listening in quite yet. let's talk about the market at this point mike, give me your take just overall on the movements here. the s&p now has rebounded to the same levels it had prior to the president's tweet. >> right, this morning, exactly. i think yesterday we kind of priced in a relatively high probability, i don't think the market really got unhinged to the up side. it's not like we got to basically priced for a sure thing or a rollback that maybe now is not happening so i think it makes sense. it also tells you the way the market prefers to go, if i could say that, it's been firm even when we were uncertain about what was happening on december 15th, and then decided to get higher so that kind of also tells you that they're almost braced for
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something favorable. >> obviously from yesterday -- it's a great pleasure to work with you guys, thanks for letting me sit in. i think what's happening is there's a cake and we're eating it. >> you know what we're going to try to listen into the press conference. we do have an english translation. >> the bit environmental, and better broke in their and that is the market. chinese companies, based on the rules as well as market and the commercial pring pellets with increased.
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this is in line with the trend of consumption upgrading china and the growing needs for the better life. to you -- in the economy and trade, property manage, and resolve economic and trade disputes and differences, and to promote stable growth of china/u economic and trade relations giving -- the world economy. the agreement will also help to boost global market confidence, stabilize market expectations, and create a sound environment for normal economic trade and investment activities.
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the two sides have agreed to complete as quickly as possible league review, translation, authentication and other necessary procedures, and also work out the specific arrangements for the official signing of the agreement through consultation after the signing of the agreement, it is our hope that the two sides will abide by the agreement and endeavor to deliver all the relevant provisions of the phase 1 agreement to do more things that are conducive, and the global economy and financial stability and contribute to world peace and prosperity together. thank you. we will now open the floor to questions. please identify your media affiliation before asking your questions. we have english interpretation.
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>> reporter: what positive will expanded trade cooperation between the two countries have on china and the united states will this affect relations with other trading partners >> thank you for your question recently china and the understanding have had in-depth discussions on expanding trade cooperation, both sides have come to see that expanded trade cooperation is in the interest of better allocation of resources and economic structural adjustment in both countries. we have reached today's scale because of the strong neutral complimentary between our two companies. judges from the scale of our
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economy and market, there is still great potential to be tapped in order to beat the growing consumption demands of the chinese people and to elevate high-quality economic growth, china welcomes high quality and competitive american products and services into the chinese market i think first of all, we need to see that expanded trade cooperation will help these growing needs of the people for a better life in energy, manufactured goods, every cultural products, medical service are service and financial services, there is still a gap in meeting the demand in our domestic markets the united states has a certain advantage and a quite large supplies in these areas, so to import more such products and
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services from the united states can bring more convenient and inexpensive and a greater variety of such services and products for chinese consumers secondly, it's important to see that to have more advanced technology, equipment and -- you've been listening into a press conference, of course, in china in which the big news was that both sides have agreed -- or at least they are saying that they made major progress on trade talks, and thanks to a joint effort, both sides have reached agreement on the text of a phase one deal between the u.s. and china also agreeing u.s. will keep its promise to cancel tariffs step by step. jim, i want to understand your reporting versus what they're saying, and what the president tweeted about a "wall street journal" story that indicated a rollback, and how you read this.
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>> well, let's say you're the chinese, here's what i'll offer. i'll cut the tariffs in half and won't do the december it tariff. that was not offered yet in black and white, the paper says it was. that was never offered that's what the president is say. my experience is when i say something was never offered and the president confirms it, it was never offered. you could say it was one big fake news, but it's not. whatever the chinese are saying it's agreement, it's not a cut in half of the tariffs phased rollback, we don't know what that is. >> i would like to understand the cancelling of tariffs step by step. >> we need to hear from the white house for the nitty-gritty. >> do we have eunice here. i'm relying on some of her tweets here. do we have an understanding of this phased drawdown in tariffs,
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or what that's going to mean >> well, david, i i think the ministers haven't said it as of yet, but from sources who followed trade talks closely, they told me their understanding of the tariff reduction is that there's a range of tariffs that would be reduced so this would be somewhere between 35 to 60% in terms of the reductions this would be an across the board reduction of tariffs on $360 billion worth of goods. that is something that the chinese have been hoping for they've been hoping to have a tariff rollback. what was also significant here has been the commentary around the purchases of the agricultural products from the united states. the source that i have spoken to
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within the government said there was a major pushback from the chinese side, really not wanting to stick to any hard target, to discuss that possibly from the u.s. side they could be pushed to try to buy as much as 50 billion worth of u.s. goods. in the year 2020, numerically speaking, it seemed an almost impossible achievement for the chinese. in this statement that the ministering have been making so far, it looks gib one of the things they're emphasizing, even though they want to buy a lot of u.s. products, that a lot of the decision making in terms of how much they guy is going to be determined by the market so, again, china pushing back on that point that they stick to some very hard targets and specific target on agricultural purchases. >> they do not have a viability hog business in china.
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>> right. >> the president is furious about the idea there's negotiating going on when swine flu has wiped out most of their hogs, yet their -- it's not like soy when they're putting it in a warehouse. they actually need it. so the president is doubly sensitive to -- to be had. >> i'm a little confused. >> you should be there's disinformation but on. >> eunice is reporting they're expecting a rollback in the conference they said they agreed on the context on a first-face trade deal. your reporting, the president's tweeting indicates something was wrong with the previous reporting of rollbacks, so i wonder whether everybody is on the same page again. >> here's what eunice set they have said, listen, they're going to cut the tariffs and we're going to do nothing.
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well, you think the president is going to agree to that >> i think you have to do more reporting. >> i'm doing nothing but reporting. i am telling you the idea that they can sit there and say they're going to roll back the tariffs, and we do nothing we're not buying any pork or anything, do they think we went to college to get stupid >> so is it -- is it possible the chinese are saying a what they want to believe it true >> thank you. >> and the president. >> -- not saying in exchange for what >> just says a phased rollback perhaps under certain conditions >> we're dealing with the translation. agrees on the contest of a first-phase trade deal eunice's reporting is the expectation on this rollback -- again, i'm reading into one tweet, but your reporting indicateists not agreed.
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>> there was hope there was something, it's just not the grant sweeping thing where the united states gives them everything >> there's some lack the clarity here let's see if we can get more from kayla tausche struggling a bit here, and then what the president tweeted morning. what's your take here? >> this whole negotiation has been something of a game of cat and mouse, where the united states has been willing to do certain things as long as the chinese side has been willing to do certain things in response. the president was mincing no words, and my understanding from speak to sources close to these talks is that there was a potential desire to do some of
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that tariff reduction if china was willing to make some of those commitments. the press conference we just heard did not lay out any commitments. they did not even make clear it was a specific deal that was a win for the united states. you heard the vice minister of china saying they will increase imports from all countries and structural adjustments in both countries. they have been saying through the course of this -- that there could not be an equal deal, the u.s. needed to see this as a win because of the trade imbalance over the last decade in the president's view you hear the vice minister say there would be a lot that happens after they sign the deal, working on a date and time to sign this deal and they will endeavor to deliver more things after that, so certainly leaving a lot dangling out is that
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what's going on here it doesn't feel as though there's really a deal yet. >> i think we need to see exactly what the papers say, what the white house's announcement is on this, what they are claiming is in the agreement. we're seeing broad contouring and messages from the chinese side it doesn't include any hard numbers or commitments so far. >> a very interesting morning so far, kayla thank you. we'll bring in jeremy siegel professor siegle, there's a lot of things we don't know. from what you have learned this morning, what's your read on how far we have actually come with these trade talks the first is murals reduction of tariffs, but
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sunday's delay in tariffs is a big plus for the market. whether we get that reduction or there's contingency, i don't think we'll learn right away, but just the fact there's a delay, we won't get those tariffs on december 15th i think is a plus for the market it would be a bigger plus if we got mutual reduction in tariffs. i could see the market up 10% then, but just the delay, that uncertainty out of the way of the immediate future i think is certainly good for another 5% on the market for the rest of this year >> 5% is an awful lot right now. we're only up 0.3 of a percent, is the market hedging for the possibility this still has a lot of question marks? >> yeah. >> we've had our hopes up before and they have fallen through, so there's a lot of hesitancy, but i do think what we say today is
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a delay of the december 15th tariff is trump gut to put them on in february or april? we won't get the hard tariffs, which i think is what the are market word about most but i think what the market really did fear was a ramp iing- i think this news puts that to bed in my opinion. >> professor, a lot of other things are going on. one way to look at this is we've had this ongoing trade friction, and what it got us is maybe a bit of a global slowdown, but also three fed rate cuts without a whole lot of domestic pain the market is up, and now earnings set to turn higher. how do you think that sets up
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the overall picture for the next year >> if we get a path now, i think it's going to be harder the next year given the valuation, 19 times earnings, and when will earnings be up next year, 5% realistically, 4%, 5 her, we're in a 2% gdp economy. one of the good news we've had, pressure on the dow, that would be good for earnings, so if the dollar is weak, that be a bootes to edges, but there isn't a lot, and elections will not be in november we haven't spoken about the brexit -- the uk vote. i think that's really a significant vote yes, that does mean brexit is coming, but europe hit a new high today the pound was up sharply the ftse was out
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the left wing agenda of the labor party has implications for whether the left wing agenda of bernie sanders or even elizabeth warren hag strong possibilities here in the united states. so i think that that is also a possible piece of news for the market professor stay right there it's funny, jim, it's been an hour and 20 minutes, we never even mentioned the uk elections and brexit >> it's very throwback, a throwback to the coal miner labor parties. i think this will make it whether you better start thinking about what the new britain will look like. >> while i still have the pleasure of your company, what do you make on where we stand with china we've got your reporting, the
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president's tweeting, the market is struggling to some extent, though we are up a quarter percent, to understand if we have really made significant progress here and there's unity of view. one of the sources i deal with is saying, if the chinese are intransigent, at tariffs will go on it's based on, look, it's up to them >> does this mean -- too early to say >> too early to say. >> i know that everyone wants certainty. everyone would love to say, let me tell you what's going to happen the fluidity of the situation is we're almost calling an election after we got new hampshire and vermont. we know that's fatuous >> let's bring in jim stewart since he was just addressed. >> i know i've said this before, but the chinese are really tough
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negotiators. they are wily. they are not giving anything away until the last moment they take a long-term view, i mean 1,000 years, not two. the other thing i will say is trump has used the tariffs as a weapon ostensibly to achieve a freer trade relationship and fairer trade relationship with china. is that a viable strategy? we haven't seen yet. we haven't seen what -- they have taken in legislative steps to make things a bit fairer, but we haven't seen what this quote/unquote victory -- what has this tariff war achieved. >> not yet >> costco is talking about how there's been a couple percentage reduction from china going elsewhere. you have done some terrific reporting on some of the retailers and how they're trying to mitigate, mitigate, but it's
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about stealing, about dumping, cyber, and there's been -- >> it'sing about them participating -- and eunice now reporting from the vice finance minister said they will without doubt purchase good quality u.s. products, but the data and detail terms will be released later. >> the president got more hard line after what happened the last two negotiations, where he basically looked like he had a deal, and then the chinese i think pretty touch made him look humiliated so it's not about agony. it's not just about pork, which they desperately need. >> professor siegle, is it possible -- i know chinese have been deal with trade, doing so very publicly, what have you, is it possible that the chinese is
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sort of negotiateling very publicly perhaps for the first time here. >> they don't like negotiations by twitter, to say the lease, trump did say we're close to a deal it may be contingent on them actually doing something i do believe that this means we're not going to have that tariff ramp-up on the 15th that will be delayed i think that uncertainty out of the way is a bit of a christmas present for the market going forward this month >> well, you know, i would like to believe that's true, but i think -- if i was sitting in the white house right now, i would hope that the chinese had prepared the american foss this particular announcement. if they didn't, i would see president trump hitting the
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ceiling on this. >> it's like it's not like there's a deal they give in and do something or we're going to wake up on sunday and,000 tariffs. no one has taken it off the table. i would like to agree with we're in better shape if you're hoping for a stay, but intransigence will be met with tariffs on sunday. >> we're up only 0.3 of a percent. >> professor, let's say unexpectedly we get tariffs on sunday you think the market goes down monday morning? >> yeah, i think the market goes down a lot i really do, because -- they're not expecting a ramping up of the war. it's not priced into the market. the rise has been the hope that there will be at least a stay, if not a phase one deal. there will be a big drop on monday if there's not imposition
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on sunday. >> it could just be one tweet. >> there's 40 companies directly i say would take numbers down and another 400 companies that i think people will be shying away from or selling, because they all do index funds that's where the opportunities will come in if you want to sell bristol matters i am ready to take the other side of the trait. they will no longer be fooled into the notion they're only allowed to he buy index funds. we decided that every company is part of a bushel. >> we do have new tweets from the president, right the penalty tariff for december 15th will not be charged given the fab -- >> changed >> we will begin negotiation on the phase 2 immediately rather than waiting until after 2020. it's an amazing deal.
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>> we have agreed to a very large face one deal. >> defines fa s phase one -- >> all happening very quickly. manufacturing goods would be a wait, could be apple, and ag, let's see the pork he -- wow, talk about in flex >> the agricultural piece is not the main issue the chinese are going to buy american agricultural products they already were. the goal was not to get the chinese to buy more production they are going to be buying massive amounts. the problem with the tariff war is they were not buying any more and shipping to sort cunning like south america i'm not so concerned about that, but if there's a victory here, i do think we seed to see some concessions a the issues, which
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is the fairness, the theft to intellectual properties, the protections for foreign investors coming in. are we going to get anything on that front >> i was hoping that we would hear concessions to american express, visa, jpmorgan, unfettered, no need to have a partner. that was supposed to be phase one. >> that would be a victory >> i want to get back to kayla tausche, because we have gotten the news, it seems, from the president. please go through it for us. >> he says there will be massive purchases of agricultural and manufactured goods my sources tell me that the price tag that the administration had been hoping for on that was $200 billion between 40 and 50 billion coming from agricultural goods. the president does not have a number in this tweets, because the two sides did not agree. the vice minister of finance in
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china was asked by a reporter specifically put ago number on the agricultural purchases, and he declined to do so, he said there needs to be still be legal review, but they're hoping for that to be flushed out he said 7.5% will be on much of the new rate you have about too billion in goods. he says the 25% tariffs will remain, but i think what he's taking about it the 15% tariff on the $112 billion. he says the majority of the tariffs will stay, but that september tranche might be the one getting cut in half here. >> i know there's more to dig
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through. right now we're going to send our thanks to professor jeremy siegel as well as jim seward from "new york times" for being here with us >> a go buy "deep state. were more breaking news from capitol hill let's go to ylan mui >> reporter: the articles of impeachment are now heading to the house floor. the house judiciary committee approved both of the articles, abuse of power and obstruction of congress. the vote on both was 23-17, along party lines. that vote took about ten minutes or so. there was no speeching, no debating, no personal attacking as we saw yesterday during the marathon 13-hour debate session
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over these articles of impeachment, so this vote happened very quickly. now we are hearing from leadership that the vote on the house floor will be happening sometime next week, but there's no official date when that will happen just yet. back over to you. ylan, thank you very much. coming up, his company imports more 90% of the products from china, and he calls the onare -- ongoing tariffs a nightmare. >> it's like looking at the spaghetti models, and every day you wonder where the storm will go that's what we're going through. without a rationalization in this trade policy, there's really no way to plan.
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good morning, everyone i'm sue herera
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here's your cnbc news update boris johnson has won the general election his conservative party won a solid majority of seats in britain's parliament that should allow johnson to fulfill his plan to take the uk out of the european union next month. six more civilians were wounded. they were in a minivan when their vehicle was targeted. police have arrested a 13 years old teenager in the robbery and mur of a new york college student. the barnard college freshman was attacked while walking through a city part not far from the camp pump. david stern is hospitalized following emergency brain surgery. he suffered a sudden brain hemorrhage thursday afternoon. there was no immediate word on his condition. he is the longest-serves nba
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commissioner, holding that post for some 3 years we wish him a speedy recovery. thank you very much, sue. chinese negotiators holding a press conference saying there's a face one agreement and the u.s. will follow up on its promise to cancel tariffs on a phased basis joining us, basic fun toy ceo jay foreman. they have currently 90% production exposure to china just tell us how all of this trade spat has impacted your business, if you can, provide us real numbers sort of bring the story home for us. >> sure, the biggest way is last night we have our annual holiday party. i stood on stage at 10:00 at night to announce the president announced the trade deal would be happening and we wouldn't have tariffs imposed
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if tariffs would imposed i could be looking down from the stage at a group of my employees and a lot music terminated after the first of the year, because these tariffs would have affected us so greatly then we woke up this morning and weren't sure if this was going to happen or not i have listening to jim cramer reporting the news and his sources, and it was like groundhog day. a wild ride, but really amendment in thappy to hear the president announce the phase one deal it would have cost jobs, profit, and cost a real, real upset of our business, and many businesses in the toy industry great news today >> that's largely because of those december 15th tariffs. those would have been the ones impacting your company the most greatly? >> for sure, yeah. >> so far have you seen an impact
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are you keeping your production in china can you move it? >> well, we're keeping it in china, because china is the most efficient place to manufacture you know, there's really no manufacturing base for the type of things we make here you can make tractor and jet aircraft here, but no toys, we do make some of them here. these are products that are given to small children, that they play with, and we over 120 years have built an incredible safe supply chain to china i really don't want to take that product to a place like india or vitt flams nothing against those countries, but they're not ready to make this kind of product china is the place >> if china is the place and that's where you need to manufacture, what have your conversations been like with the retailers you're selling your toys into?
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are they asking you to take on thought higher costs on your own? are they willing to split that at all >> well, we are starting to have those conversations. actually the retailers have been sort of reluctant to enter into those conversations until they knee whether the tariffs were going to hit or not. the result would have been some type of early share in the pain, in a sense between a retailer and manufacturer, but eventually those costs would have been absolutely passed along. toys are really high-value products on you're see tremendous value would hit the consumer and certainly would have increased next year. >> jay, while we have you here,
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i wonder if you have any sense of how the shopping season is going? do you have much of a window on how this gift-giving season is going? >> yes well, you know, we can track sales daily eventy micro levels of stores, but because of the compressed holiday season, it was a little tight around black friday also the consumers but programmed cybermonday was huge, so we saw a little softness, but now things are picking up they need to get to the store. things are going to sell out the best sales and deals are just starting to happen now also, and, you know, like we used to say, the sun is going to
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sign eventually, and the american consumer will show up to buy toys at christmas they just have to get going. i think the christmas season will be pretty solid >> mr. foreman, i know you've been watching us to try to understand what's going on you said bay in the 30th, you talked about the lack of uncertainly. you got abig one this morning, knowing that the tariffs won't go into effect on sunday why caution you as well, given what we have heard from the chinese and what we have heard from the president in his tweet, it's not clear there's a full agreement. do you feel like, based on what you know, that you can you make the plans you need to? >> i think for our trade, the toy trade, i think we can feel certain. i would make a comment, what i would say in particular, in regard to agriculture and pork,
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we have to play the long game with china we have to understand the psychology you know there's something called saving face the chinese will buy more pork than we can exports. they'll buy more soybeans than we can grow. we don't have to ask them for quotas they're going to buy they eat pork like we eat steak. they're going to buy our hogs. we don't have to tie them down we can give them face and let them be open on that so i'm hoping that cooler heads will prevail and mr. light highser is pretty smart and right-minded person, will be able to work the nuances of really what needs to happen with china trade, but i feel stronger about this i hope the president will make a deal, a comprehensive trade deal in the middle of next year, not wait until after the election. i think the deals are a really
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good sign for him he has to show folks he can make deals. there's still a few things we don't have deals on. this is one he can do. >> mr. foreman state right there. i want to get to kayla tausche on, we do have an announcement from the office of the u.s. trade rep. they are confirming a phase one deal in a statement attributed to ambassador litehise reform as we have as steve mnuchin, saying they're making critical progress the only details of which are structural reforms and other changes, also that china will make substantial additional purchases. it also says in response the u.s. has agreed to modify its
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maintaining that tariff on the vast majority of chinese goods, that's about $250 billion worth of goods, but the september 1st tranche of tariffs that hits about $120 billion of goods, that rate will be cut from 15% to 7.5%. we're still awaiting details on exactly what additional modifications ustr has outlined and what the substantial purchases gov entail, but certainly the administration hailing it as a win, as a landmark, unprecedented deal. >> we can say there's a phase one trade agreement with the chinese? >> correct both sides have great to this in principle. the china very have announced this as a deal, and committing publicly to signing it that's several steps furse than the chinese have been willing to
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go in the past it did not include leo hud, and lower-level officials at the vice minister level. even so, it's a significant milestone. >> we these those details have been worked out, but they're just not sharing >> we don't know we've asked the white house, all of our sources about this. i've told what you i know, which is that the administration was trying to secure a $200 billion figure for those purchases of which about $40 billion would have been agriculture. president trump wanted 50 billion in agriculture, and for whatever reason, we vent are vicinity gotten a ticktock of what happened behind the scenes. those numbers have not appeared in the deal, so you have to assume they were not agreed. >> kayla, thank you. very significant morning on
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face one of the trade deal agreement. >> i will note in this statement, it does not lay out, at least explicitly, that we are not putting those tariffs in on december 15th, unless i'm missing it. >> that was in the president's tweet, though. >> it was in the tweet. >> penalty tariffs will not by charge charged. so mr. foreman, can you rest easy i think we're clear on that. it sounds like >> i have a sharpie. >> i know. how many employees -- as a percentage how many employees would you have had to potentially think about letting go if the tariffs had gone into place on sunday? >> i think we would have had to tighten up in about 15% of our u.s. workforce, lay off other folks in other areas of the world. you just have to manage your business if you take 15% off the top of
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anybody's sales, it just hits the bottom line. when you're in an industry working between 10% and 15% margins, that's just a killer. it would have really hurt. so this is really great news obviously, again, there's even uncertainty. it's hard to read the tea leaves, but it sounds like things are good. what i would like to remind your viewers -- i'm good to get on a plane for my 152nd trip to china. when he go through china through a shopping mall, i so starbucks, the gap, ralph loren s. costco, american brands, american products are in klein. they are growing, buying, and we're doing great business when i walk in a mall in the united states i don't seize a chinese retail brand name. i don't sigh a chinese coffee shop or outside a chain restaurant which is owned by
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americans. we are doing a tremendous amount of business in the united states and china. you don't necessarily see it in the traditional trade. what i would suggest as it results to the agriculture is, if we loosen this up and normal i'd the trade with china, they will grow and we will grow, and they will eat a lot of pork and buy a lot of soybeans. you don't have to worry will 40, 50 billion, this will be of 0, 70 billion it's been working. >> thank you very much for sticking with us here. ceo of basic fun toys. we ask you to keep us up to date thank you. >> i sure will thank you. it has been a roller costers ride so far this morning dow currently, as you see there, really just about to flatline, but it had rushed to some decent gains when we got the initial reports that there was a broader
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let's get out to the cme group in chicago with rick santelli hello, rick. >> good morning. i would like to welcome my everything is about trade day guest, melon chief economist vincent, i want to talk about markets, how phase one even though we don't have details may shape up, how markets will view it but in the beginning i heard a couple of comments, the chinese are the best negotiators they take a long view. they're steadfast, really good at it. i think to myself being a communist, you don't have to worry about elections, print anything in the newspapers you
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want that's a conventional wisdom faux pas this president moved the ball pretty far what do you think about how the deal will end up >> two parts about that. one thing on the u.s. side of the table there's been radical transparency, maybe too much talk as the contestants in the white house put out their view so we flip just about every day. on the chinese side, they release what they want to release when they want to release it that gives them a competitive advantage. another fact i like to put into the mix, rick, is when china was granted to the wto, it was the fifth largest economy, nestled between germany and italy, not looking too threatening, now the second largest economy it has a big footprint on the
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global stage and therefore it has some heft in negotiations. >> having said all that, it looks as though something is about to break, but of course we're all most worried not about purchases of grain, chinese need to eat, the population is growing, but it and protections. in the final minute, it seems as though the trump administration is working various protections in do you think that can be modeled, interpreted, enforce snd. >> enforcement >> >> go back to representative lighthizer's speeches and testimony over the year, that's the issue, focused on market and intellectual property. that's why they call it a phase one deal they want to come back to phase two, see how well promises were kept with regard to protecting property rights and granting
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market access. >> vincent, we're going to run out of time, a press conference coming do you think the market priced in the full efforts of this deal, phase one being signed, given implications for positive input into global growth your final thought >> you don't price anything in until after it is signed because anything can happen. i think the important part about the deal is reversing some things that were bad, increasing tariffs, and taking off the table something that was going to be even worse, another increase in tariffs. so it is absence of a bad thing that's good for the outlook. >> that's a nice way to put it i like that. thank you, vincent have a great holiday, great weekend. david faber, back to you >> thank you, rick. let's send it over to jon fortt with a look at what's coming up on "squawk alley." >> david, we're going to continue of course to talk about trade in apple touching all-time highs on news that investors should not expect a lump of
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tariff coal in the stocking. what should investors in apple and other tech stocks look at as hto end of the year we look at that coming up on "squawk alley.
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it is midnight in beijing,
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china, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ good friday morning. welcome to "squawk alley." i am jon fortt with me at post nine, courtney reagan, david faber. carl and morgan have the morning off. we begin with the latest on trade talks with china let's get straight down to kayla tausche with the latest. >> the u.s. and chinaannounced a phase one trade deal that washington hails a


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