Skip to main content

tv   Squawk on the Street  CNBC  February 15, 2019 9:00am-11:00am EST

9:00 am
so -- >> you give them credit if they give amazon more handouts despite -- >> no, not more. if they -- >> why would amazon come back for less >> i don't think so. i'm just saying. we need to thank becky quick have a great weekend. >> all of that is on cnbc in the archive. >> and kelly. >> i'm sorry i said bursted earlier. >> join us on tuesday, have a great long weekend, everybody. "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. what a morning of news futures up as u.s./china trade talks will continue next week in washington, d.c. we'll see the president in the rose garden in about an hour on a budget deal, pepsi, deere, nvidia and more. the market meltup. futures pointing to a rally at the open solid weekly gains >> the political risk for
9:01 am
stocks, president trump is expected to declare a national emergency in the next hour and china trade talks set to resume in washington next week >> and shares of pepsico rallying, forecasting a weaker 2019 we'll hear why from the company in just a few minutes. we'll begin this morning in washington, the president expected to sign a spending bill that will keep the government open and avoid a second shutdown before then declaring a national emergency in an effort to secure more border wall funding president is scheduled to make the remarks from the rose garden in about an hour, which, of course, will bring you live. all of this against the backdrop of some continued china trade talks set to resume next week in washington the white house, guys, says much work remains but now there is talk about commitments being put on paper in a so-called memo of understanding. >> i think one of the things that people have to recognize is that the hard-liners are saying, take your time hold off mnuchin/kudlow camp makes you feel like it is going to happen
9:02 am
more imminently. the people who want the hard-line, it is just -- as david often says, it is just harder to come up with a deal on intellectual property than it is to have them come in and start buying chips from -- machines from applied materials >> not to mention continuing to support state owned enterprises and others as well with subsidies that we argue make our companies less competitive or don't have -- don't make it a level playing field. >> yes >> you're talking there about something that has been part of the way they have done it since deng xiaoping decided to reform the economy in the first place. >> right so, look, i think that there is some other issues that really have to be worked out. and, look, i think that they very much -- they care about these joint ventures i keep thinking about the standard & poor's, let standard & poor's come in without a joint venture partner to rate chinese bonds and i don't understand why that didn't matter more. it is like that was the green
9:03 am
light. in other words, the chinese are giving in on some things i thought the s&p was a very big given that they let them come in and do it. they didn't get any credit i don't know why it was like, tome, it was the most significant thing that happened happened two and a half weeks ago. nobody talked about it that is what we have been wanting, we want visa to win, mastercard, to go in there and i think the the chinese are giving in on some thing things we're playing to the point where there is some hard-liners know the longer we take, the more likely our retailers are able to move out of china. >> so you do think 30-day, 60-day extension on this deadline is possible >> yes and i do think that when you're a hasbro, you're trying -- your toys are made in china, you need more time. what is more time than putting it off putting it off >> maintaining the 10% tariffs and the $200 billion worth of goods. >> if we get a so-called memo, is that a sell on the news event?
9:04 am
>> every single hedge fund i know says sell on the news i say buy on the news. it adds to the growth and those are people on the nvidia conference call, we'll talk about that you get growth, you get a lot of stocks -- >> you don't think markets are already pricing in some kind of resolution 10% this year. >> no. they're still too bearish. we had the powell bear market. we're still not back to what we were go back to october 2nd, october 1st, why are you looking at me >> i didn't give you any look. >> some sort of -- >> i was interpreting. >> haven't even gotten to -- >> we'll get to that >> is andrew okay? >> i'm not sure. you're misinterpreting the look. >> look, i -- we need more wide growth if we get china back online where to where it accelerates and we have good growth, all the hedge funds who say it is a sell on the news, they have to come in and start buying again. your only call last night, they can sell nvidia all they want -- actually nvidia, you have to
9:05 am
believe, you have to believe, but i do think that when you're an emerson, yesterday, emerson had a great meeting, steve tuse said the best garb i haven't heard garb since the movie. >> growth at a reasonable price. >> that stock went down because of china these sell on the news people, good luck. good luck trying to get back in. good luck. >> did get china inflation, china ppi 7-month low at .1. >> stephanie ling, who does such quality work, is saying that the stimulus that you're getting in china to get that country good, you get the stimulus in china, got to get that freight up, you will see this, and see a trade deal and then europe pick up europe, by the way, $17 trillion economy just has been doing nothing. so anyone who wants to sell on the news, i don't know what are you going to do with your money?
9:06 am
buy cds? jersey municipals? i heard from governor murphy we're number one -- we're number one in deficit we're number one in municipals that i would never touch we're number one in -- >> interesting. >> yeah, actually, i owned some illinois municipals because i thought they were safer than jersey paper we're number one >> we. >> we're number one. >> you're still a jersey guy >> i'm everything. >> i don't know where you are. >> new jersey says i'm a resident new york said i'm a resident. >> they want your tax revenue. >> i work in englewood cliffs. the two got together and i'm 53%. i have an agro business exemption, why did i grow, provided i produce 50 cases of olive oil and my wife's olive oil is very, very good she's not allowed to take it here, not allowed to -- >> waiting for our olive oil christmas gift. >> i'm not allowed to take it out of -- it is an agronomist state i'm in >> not like aoc's district
9:07 am
>> it is like queens >> we're going to talk more about queens this morning. pepsi is the other big story, earnings today, sara eisen is here with us on set to talk more about that >> good morning. pepsico had another good quarter. but the outlook left something to be desired. lower profits and a bit of an earnings reset pepsi's ceo joins us now from company headquarters welcome back, hugh >> thank you, good morning, sara. >> talk us through the fact that business seems to be doing better, north american beverages came back. but the outlook was a little disappointing. >> well, in a lot of ways the two things are connected we did see stronger performance in q4 and that's following what was a very good q3 for pepsico's portfolio overall. if you look across the world, our international businesses are performing quite well. frito lay north america is growing at a very good clip and north america beverages subsequential improvement as we
9:08 am
see that business strengthening. now part of the reason that has been happening is we did start to invest back in our businesses late in 2017 and into 2018. and we have seen such good responsiveness to those investments, we as a management team made a decision we'll accelerate our investments in 2019 back into all of our businesses because we think we can accelerate the top line growth of the company sustainably which we think is long-term the best outcome for investors. >> it is really important distinction because what coke gave us yesterday was a lowered outlook, way lower than expectations on macro economic concerns james quincy said 2019 will be slower growth in 2018 and that's why the numbers are going to look different that is not what you're saying, is it? is that what you're seeing >> no, actually. we think the macros are largely fine around the world. there is always going to be one or two areas of dislocation. but by and large we think the macros are benign. a little bit slower than what it
9:09 am
has been in last couple of years. but certainly for consumer staples company, not notably so. for us, this is really much more about the fact that we participate in two great categories convenient foods and beverages and frankly we see opportunities for outsized growth and that's why our strategy is to invest the capture of that growth. >> i guess i have a little different spin from my colleague sa sara i'm seeing possibility that you guys can go from 3%, 4%, long-term, to 4% to 6% and the outlook is for acceleration because ofthe quality of your portfolio and the fact you'll be expanding more international do you think 4% to 6% is too big a hurdle, am i too optimistic? >> no, i don't think that at all. jim, your expectation is right in line with our long-term guidance we saw subsequential improvement in revenue from 2017 to '18. and we see the prospects for continued improvement. our guidance in 2019 for revenue is 4% and that's higher than it
9:10 am
has been in a number of years. and frankly as we look forward, we want to be in that 4% to 6% range on a consistent sustained basis. and we should be able to do that in a macro environment that is slightly favorable or slightly unfavorable. we think the opportunity is there to do it, again, primarily because the product portfolio is so darn good compared to what you see in most of our food and beverage periods we think we're in the sweet spot of food and beverage. >> i actually think you guys have done some things too that is really exciting i had the privilege, the dinner the other day, need pil patrick harris, i think the personalization of beverages that -- it is going to come to the fore ramon, your new ceo, liked that acquisition and i've got it tell you, to me, when you put together what you are doing with personalization and bubbly, i think that's part of the acceleration with sodastream paying off >> yeah, that's exactly right, jim. we are a consumer centric company already and under
9:11 am
ramon's leadership even more consumer centric we're going to go where the consumer wants to go because we know there is natural tailwinds and consumption of the types of products that we create and we brand and we distribute. we have all these great capabilities we know we're on trend with consumers. so if consumers are moving to sparkling, we're going to do that, whether in a can like bubbly or make it home like our sodastream business. we do see a ton of opportunity out there in beverages. >> hugh, it is carl. how do you characterize the effects impact and should that be a warning to people invested in global names? >> well, i mean, our expectation for 2019 is about a 2-point drag if you're asking me about the -- where the dollar is going, i mean, generally speaking, it has been strong in the past years. i wouldn't tryto predict where the dollar is going going forward. >> hugh, i want to talk about taxes. looks like your tax rate is going to go up what is the net effect of the
9:12 am
tax cut that we saw both on corporations like yours and on spenders and your customers, net-net. has it been a big positive and do you see continuing? >> yeah, i think in terms of the overall economy i think it is pretty hard to debate that the tax cut has been a positive in the united states. i think that the gdp growth is faster and that -- the unemployment rate is quite low i think those are connected facts. for us, the tax cut we got a very big benefit in 2018, our tax rate went all the way down to 18.8% some of the costs of the tax cut actually hit more in 2019, so our rate is going to go up to 21%. but net, that is still lower than where we were before. we have seen our tax rate go from 7 or 8 years ago, about 26, 27%, now down to about 21% so the tax cut generally has been quite favorable for us. >> hugh johnston, always good to catch up with you on earnings day. thank you for joining us. >> thank you. >> cfo and vice chairman of
9:13 am
pepsico. jim, i think you're right to point out higher growth because what they're saying is they're investing behind marketing and sales people, and that's leading to better growth i think the question is how much lower profits, though, are we going to expect? >> i think that one of the things that pepsico is saying offline is they have got a handle on some of the things that other guys say -- freight won't go up as much. big bulk of that is now over, which is one of the reasons why it was such a good -- really good response, a little good thing. i remember when i first -- i was covering retail, what was so interesting, there would be people who said, you know he what, the weather really hurt us and then the other people across the street are saying we didn't have a problem with the weather what are you talking about coca-cola call was disarming i really -- james is terrific. great guy. but that idea that the $4.67 coca-cola 12-pack is somehow
9:14 am
macro economic, it was lost on me >> usually staples don't sort of succumb to those economic pressures in the same way. other thing people are surprised about, how big of a hit coke is taking from foreign exchange it is exposed, but -- >> it had to be they had a hedge that went the wrong way. >> how do we know given that pepsi's ramp up in marketing costs when they have taken enough share to take the pedal off the metal on that front? >> once they get to higher growth targets they're growing. 4% organic growth is sort of 4% to 6%, jim, is the target, that's a step up from where they are. they just turned around north american beverages. >> plus 2. sodastre sodastream, let's watch this they're going after lacroix, millennials, they had lacroix at fyre fest. >> you keep bringing that up. >> it is most exciting thing -- it is the end of the
9:15 am
millennial -- their whole shtick they had >> chico is also -- >> cannot stock it they cannot -- they can't beat demand and i had to beg for it, with the distributor, they had the new bubbly, the inew grapefruit >> you like pepsi better >> i like neil patrick harris and he's the spokesman for -- >> very nice guy industrial production, rick santelli hello, rick. >> january read on industrial production, expecting the number up a bit we lost .2 last month. utilization rates running high we're expecting a number around 78.7 78.2, subsequentially below the 78.8 and last month 78.8 was the best
9:16 am
since january 15 so we definitely lost a little bit with respect to what is going on in this sector. utilization rates slipping back a bit. that really is the soft data of the morning. of course, empire was better and pipeline inflation, represented by import and export pricing, back, pushing yields up, pushing the dollar gains a bit lower. so, of course, we'll factor this in before we get to university of michigan at the top of the hour david, jim and the gang, back to you. >> all right, rick, we'll see you in 45. when we come back, why amazon decided to cancel its hq2 plans in new york. first, another look at the premarket here, optimism on u.s./china trade and we'll see the president at 10:00 a.m. eastern time on border and budget meantime, don't miss jim's interview with johns johnson & johnson's alex gorsky. more "squawk on the street" in a minute
9:17 am
when you look at the critical issues facing our world, what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.
9:18 am
9:19 am
amazon announcing it will cancel its plans to build a new york headquarters in long island city after unexpected backlash both locally and politically in a statement, new york city mayor bill de blasio said amazon
9:20 am
threw away an opportunity, they got to be tough to make it a new york city. here is the daily news normally on the left side of the ledger, goes after what they're calling amazon killers is this being tossed back and forth a lot today. >> we're in a moment where it is just -- i think it is a relative thing. but there are a lot of inner cities that have -- that still have bad unemployment relatively versus the rest of the country i know there was not -- there is not bad unemployment in queens but the same time, i think that longer term theory about trying to get us to be the silicon valley, it can -- >> larger stories that are out there in some ways, certainly as we move closer into the presidential political season. the democratic party, with those who are at least somewhat pro business and others who are even further left as evidenced by those who oppose the deal. the connection to the role of the corporation in modern society. amazon is an aggressive company, reflects that of its founder and
9:21 am
ceo. they have always been aggressive, fine they ask for a lot, they did national competitions, some say they shouldn't have done it that way. maybe, maybe they could have done a better job on the ground in queens, maybe our political leaders in new york could have done a better job socializing this issue, prior to actually saying here it is. we did it and accepted it as it is all that being said, new york was not in a great negotiating position, you have a company that says we're going to open up a new headquarters, 25,000 jobs, and enormous amount of jobs on top of that, of course, attached to it, the economic activity that comes along with it and the response from some of these local politicians who i would argue do not speak broadly for the larger community here in new york city was we're not interested because it would be you're a bad big company >> look, i think that, yes, i think that underneath that -- >> and, by the way, complete lack of understanding of how tax incentives work, which is shocking >> here is $3 billion.
9:22 am
>> i'll say something, nobody in the business said anything good about, i think, the people who stopped it and as someone who is a resident, has property in brooklyn, brooklyn nearby, amazon headquarters, everyone was going to ratchet up rents really big if you did live there and you're a renter, you know, you're a loser. and that does matter >> as somebody who lived through the '70s, you know those people who lived through the depression and never got over it, lived through the '70s in the city, you're thinking we could go back there. this doesn't make it any less likely. >> amazon is not the kind of company that kisses rings. and the city expected the ring to be kissed. >> amazon is a government. bigger than everything ay opening bell a few moments aw look at premarket. we'll be right back. people know aflac... aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh.
9:23 am
is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com.
9:24 am
9:25 am
stocks looking to end the week on an upnote as futures continue to improve. we'll talk about u.s. china trade and the budget deal. and cramer's mad dash. don't go away.
9:26 am
9:27 am
hey, how ya doing? uh, phil. are you guys good with brakes? we're ok. just ok? we got a saying here. if the brakes don't stop it, something will. that's not a real saying. it is around here. i wrote it. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g e. more for your thing. that's our thing. ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible.
9:28 am
the weeks go by, don't they? two minutes before we get the opening bell, for the last trading session of the week. but we can squeeze in a mad dash >> david, nvidia one of the great cfos, legendary jensen, called the bottom last night on their cards saying that looks like we threw the pig in the python of -- the big chip i've been worried about, the big card is being adopted by -- >> all suddenly turned around in a month? >> it does -- well if you let me finish, i could -- >> i don't want to let you finish >> i think that there are some people who are skeptical that it
9:29 am
could turn around. >> i'm saying, we were sitting here two weeks ago, three weeks ago, reading a press release where they cut their revenue forecast dramatically. >> i feel like that they were really downbeat in the preannounce and wrong the period before and they were very upbeat last night and i find that it was a little bipolar is where i'm going a little bipolar i think that behavioral -- cognitive, cognitive, maybe some diale dialectic. it was so positive, i was shocked. it is going to go up i think the big thing here is that the cryptoid is flushed out. so much inventory. where do they go when it is 20,000 -- they were on our air and jamie dimon yesterday. >> we have seen a series of companies try to call the bottom and nvidia seems to think it is the april quarter.
9:30 am
>> applied materials will not do that last night applied materials said they're not -- there is not a bottom so it is really kind of -- the one thing that nvidia has, doesn't have cell phones cell phones, no bottom, no bottom cell phones are the weak link in technology not the data center. i know you were skeptical. >> sometimes >> cell phones. >> cell phones >> more on that in a second. the opening bell here in the s&p at the real time exchange at the big board. pimco with the credit opportunities fund at the nasdaq, women and toys represented by their 2019 mentor nominee. i'm reminded of buffett's 13 f and the way he trimmed apple to the point about cell phones. >> trimmed apple and i don't know we had a push, but, look, cell phones, apple is having a hard time getting past this level. and i think that's because the
9:31 am
narrative now is the 20-second narrative, this is a bad quarter for cell phones. i have not seen anything about companies making anything with cell phones that would contradict that. it is not a good time. google and amazon, web services, and, azure, which is doing very well, i know ibm -- very good piece by adam washinsky yesterday in "fortune," which i love, did ibm overpromise on watson was watson -- having played against watson, but i do think that ibm is trying very hard to -- they have to build out everybody has to build out there was a pause mentioned several times in the nvidia call, there was a pause in growth, in tech, a lot of it having to do with macro, and not -- and china china macro came in very negatively on the invidia call. there is a line throughout the
9:32 am
calls, jay powell screwed up and jay powell made people feel like get ready for recession, if you have recession, you don't buy it other than maybe -- maybe buy doritos. doritos. >> doritos >> are you just so down about amazon that you can't focus? >> i'm focused i was taking a look at xpo logistics. >> brad jacobs, he did not deliver. >> going through the conference call. >> he did not deliver. >> yeah. they talk about last mile and it does actually involve amazon amazon not using the postal services much, part of their last mile, and had unexpected negative impact in december. >> they hinted that would happen in the previous quarter. which is why the stock is down, endlessly down doing a buyback, nobody seems to care xpo was the darling in the u.p.s./fedex because xpo delivered the last mile as you say and went from darling to hated. the quarter was obviously not
9:33 am
anything to write home about but, wow, they're taking this baby apart. >> looking for a cfo who has m&a experience said that on the call. they were rollup to a certain extent >> when you -- one of the themes of this year so far, if you lose your cfo, your stock gets hammered >> this has been a leader of logistics. >> i thought it was the -- one thing that happened there, 40% of the business is europe. europe is slow i can't emphasize enough that europe is doing really badly >> uk in particular. >> yes all these guys mention brexit and nobody dismisses it. >> i know. we just had our fastest contraction in ip in eight months atlanta fed coming at 1.5 for the quarter. >> i've been getting the -- coca-cola said there is meles. >> used cautious volatility and
9:34 am
uncertainty. those words. >> and yet we're pushing 25.7 here. >> people are drinking the dew diet mountain dew, every friday, i treat myself to a dmd, boom! >> that's what you need. you need caffeine, jim that's everybody's take. >> i try to keep up with my wife, closing that restaurant at 12:30 at night i haven't seen her this week i spend more time with my dogs, xilinx and everest how is king doing? is king back you missed king. >> i did i saw some pictures. looks great, though. >> i asked king -- >> king, i asked him about -- that was some of the worst tv i've ever been involved with was there a 52-week tv low it may have been bouncing along the bottom. >> that's all right. what is not bouncing along the bottom is caterpillar, leading the dow, after we got the rolling sells yesterday, seven months of declines in
9:35 am
three-month rolling sales? >> look, it is -- there is a lot of things counterintuitive to people. >> and deere today. >> deere was the -- this is one of those things, i want to emphasize this, deere is a company that puts out a release and if you believe the release, you should go into another business, okay you are just exercising your first amendment rights to be a moron. deere never, never puts out a release that is positive and then they tell you how things aren't as bad and people get short and then they cover, they get long and then we wonder why people don't go into index funds, do we wonder why? do we wonder about the $150 billion in fees saved ed by s&p funds. they sold the stock down 7 i said you got to buy it this is what they do they say it is bad in the call -- in the release and then they say it is all good. and it was and that's why people lose money. >> so b of a, to neutral on wednesday -- >> i said that was stupid.
9:36 am
i said that was stupid i said ill advised, ill advised. that was a really bad downgrade. we're seeing some terrible downgrades this is all part of the sell the news, negativity, meles, don't drink coca-cola, it is too expensive, things are bad. what is that >> i don't know. >> king and i had a different rap. the king and i >> that's lovely >> if all this is true, why aren't yields responding the way equities have responded. >> we're the only game in town if you're europe -- they have money in europe. people don't realize it. >> who has money in europe >> witrich people have money in europe a quiz for mr. watson, what is the amount of treasuries -- how much do you think the chinese have cut back in treasuries in the last six months?
9:37 am
what percentage? the chinese own us. >> 25% >> they have gone from 14 to 7% just in this very short period. >> decline -- >> what percentage of our treasu treasurys? they're not a factor they're naf. they're naf. they're now fitb. >> 1.3 billion hasn't changed. other buyers came in, namely our own. >> exactly we keep inflating the overall -- the -- not the denominator, the other thing. >> people left -- people have also left stocks stocks -- remember the asset class got trashed again in that unbelievable christmas day crash. >> yes. >> christmas day -- that period was so frightening to people, and so treasuries, a lot of buyers in treasuries, a lot of them. >> do you think long-term yields are the biggest threat to stocks now? if we manage to pop past 27, you don't think so >> no the biggest threat to stock is
9:38 am
the ipos. >> you keep talking about that >> i like to be right. did you hear about charlie munger say how right i am? >> no. >> he did. the woman who runs epix, she took a shot at me. i said i'm a big target. i'm a pioneer. >> i keep coming back to the idea of supply -- >> want to come back to fyre fest. >> not that large of a dollar amount. >> that's wrong. here's what's going to happen. >> tell me. >> we have so much money that moved into index funds, they can't buy ip oos they're going to sell sales force to buy -- >> to buy uber. >> yes, to buy uber. >> uber is not going to be a $20 billion raise, is it >> you don't know how much they're going to raise. >> i don't know how much they're going to keep and raise. >> the pipeline is so thick. we come in here every day, and it is going to be -- >> lyft, levi strauss. >> not today, not tomorrow, not
9:39 am
next week or next month, but one day. >> i'm trying to be prescient. i'm trying to be prescient can we show a picture of dom >> that's not nice. >> he's ready. dom is ready if you get up early -- dom has great stuff. he has great stuff he's going to agree with me. this is why i'm saying that. we're about to hear from the man who agrees with me entirely in the ipos should we go to him? 100% he agrees with me how much do you want to bet? >> okay. >> dom, i guess your endorsement awaits dom chu? >> i would say we agree on a great many things. i will definitely go that far, guys. >> you just cost me a dinner. >> i'll compensate you for it. there is always money in the banana stands. >> thank you for picking up on that thank you for hearing that little -- >> i did, yes. i caught it. >> i guess -- i want to hit cbs
9:40 am
briefly before we get to dom thought it would be down given not the best quarter, but it is not. and, guys, they did talk about something and i want to come to it, you talked about it a lot, speaking about being prescient macmanus spent a lot of time on the call guy runs cbs sports, the chairman of cbs sports, talking about the nfl rights they got questions about that. they didn't talk about it the viacom deal, didn't talk about the ceo. >> no, they didn't. >> they did talk about, well, you know, is it a 2019 event when you start to have to negotiate with the nfl what about amazon? what about others that might compete for the rights to air nfl games? and macmanus said i think it is probably further into 2020 or beyond the nfl probably wants to get their collective bargaining agreement done first before they talk about television deals. and he can't speak for the
9:41 am
strategy of the digital companies. all he can say is we brought the nfl back to cbs in '98, remember that, and we have been successful three times in a row in renewing our rights and expect to do so again. it is going to cost them, guys i think when that seems to be the key focus. also suspended their buyback for now. >> down $1.30. >> not sure. >> rumors? >> maybe maybe. no outreach that i'm aware of between viacom and cbs a lot of new directors >> strauss. >> i think he spends a good amount of time on it. >> i think the fact that the stock is up is amazing. >> surprising. was looking down free market. >> very down >> dow is up 250 less than 5% from its october 3rd high let's get back to dominic chu on the floor. >> so, carl, gang, as we talk about the way the markets are developing, you have hit on a number of the key points earlier this morning for those viewers who have been around
9:42 am
since the 5:00 a.m. hour, we saw the futures pick up steam. we were going to start off in negative territory, but around the 5:40 a.m. eastern time mark, the charts up there, we got that spike higher in futures because of the headline coming out of china saying that they were going to be a trade meeting continuation of trade meetings if you will next week in washington, d.c. that kind of put a little more of that trade optimism fuel behind the market. curious because yesterday the s&p 500 closed pretty much right on top of its longer term trend line or 200 day moving average and that's one of the things that we're going to watch for today, whether or not we see more of that follow through. all of that, of course, comes in this backdrop of possibly bad retail data coming out of the u.s., worse than expected numbers coming out of germany for gross domestic product, but if you look at the push and pull that is happening, look at the sectors so far this year to date in the s&p 500 the best performers have been
9:43 am
industrials and energy two of the types of sectors you may not expect to see rallying so far off the lows that we saw from christmas eve to the first part of this year if you expect to see a global slowdown or slowdown at the very least in the u.s. in places like china and other emerging markets defensive sectors like health care and utilities the laggards. every sector is up so far. maybe good for the stocks in terms of the overall picture if you look at the other parts we're concerned more about, it is the idea we're seeing the russell 2000 up about 15% year to date, versus the s&p 500's 10 these are both great starts, but as you have pointed out, the russell 2000 is on the verge of exiting what some traders call correction territory, 10% drawdown, so maybe not a surprise that small caps are leading in a more bullish sentiment. the issue is whether or not that momentum can stay. over the course of the past four or five months, we have seen the s&p 500 top out in the next 50
9:44 am
or 60 handles or so. this area in the market will be an area of slowing momentum to see if we can reclaim the levels to punch beyond to get back to record highs there is an economic narrative that is working against the markets right now. we'll see if that retail sales data was a blip and if asia and europe continue to weigh on the markets. right now, the markets are feeling good in this neutral zone, so to speak. back over to you guys. >> 300 point gain now. dom, thank you very much dominic chu. to the bond pits tons of data today more coming up at 10:00. rick santelli. >> absolutely. maybe the best fundamental data for the markets in terms of the equity markets we had decent data, import, export prices rather tame and empire was pretty good we didn't see industrial production impress, utilization rates dipped a bit on the day, 2s are up
9:45 am
on the week, 2s up 3, 5s up 4 basis points, 10s and 30s up 3 everything is pretty firm. if you look at intraday ten, you can see that we moved higher around 8:30 eastern. but if you open it up to one week chart, we regained the same territory that we lost yesterday on what i perceived was an adjustment challenged retail sales number so to speak been a big week for foreign exchange even though treasury yields are up, they're contained in a range, the dollar index not so much look at one week of the dollar index. it did have a bumpy tuesday and wednesday, regained its sea legs, has the firm grasp on the 97 handle. and if we look at a year to date of the competition, the dollar yen, it hasn't been a good year for the dollar yen dollar impressive run, same with the euro currency, and, remember, 57, almost 58% of the dollar index is the euro so you have to think about what that means, it is really hard to
9:46 am
get a gps there. pound versus the dollar, year to date, first after the year, the pound was very impressive since the end of january it is really lost a bit of its momentum carl, jim, david, back to you. >> all right, rick, thank you very much. rick santelli. we'll get the president's remarks from the rose garden in a few moments. scheduled for 10:00 eastern time before the break, though, take a look at this morning's top performing names on the s&p. nasdaq shooting for a sixth day of strikes since august. and the dow is up 280. thanks for coming in. ah sure. oh. oh, yeah. our data center is really slow, so to make it feel faster we slowed other stuff down.
9:47 am
like the escalator. oh. you know at cdw we get that speed matters, that's why we designed you a new faster dell hyper converged infrastructure that would give you the agility and scaleability you would need to grow. and speed things up. perfect. yeah. hang tight this going to take awhile. for data center modernization you need dell and it orchestration by cdw. sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪
9:48 am
9:49 am
the idea you're going to help new york by driving rich people out, of course it hurts new york of course it hurts connecticut beautiful real estate in connecticut, down 50% in value, they have driven out all the rich people. and california is doing the same thing. i know a lot of rich people who left california. i think it is really stupid for a state to drive the rich people
9:50 am
out. they're old. they keep your hospitals busy. they don't burden your schools police department, your prisons. who wouldn't want rich people? >> that's charlie munger with becky quick this morning in in ways that only charlie can do. talked about amazon is a force of nature. talked about generationally how we're in a tougher investing environment now than we've been real since he was a young man. >> he's confident enough obviously and deserves to be to be able to speak common sense. i think a lot of people are afraid to speak common sense. >> i mean, listen, the lack of the salt deduction in new york, new jersey, california, high-tax states is the only way they raise revenue at all on the tax bill is also conceivably that's driving higher income people out which is another reason to worry when you're in new york city and have you a $92 billion annual budget, when you lose potential ref now that would have been raised through amazon and all the additional jobs and activity
9:51 am
and conceiving losing people who are moving to lower tax states because they have lost the deduction for s.a.l.t. >> in new jersey, our finances are very shaky but florida's aren't, tennessee's aren't my daughter lives on the border between oregon and california. it's booming all you have to do is take a step. >> and a lot of older -- i know a lot of hedge fund guys go to florida, in part, there's no estate tax either, no income tax. >> right. >> in new york you've got a very large estate tax, too. >> look, i think that munger is -- almost everything that munger says is the kind of thing a lot of people are saying. >> didn't know how to say it. >> rich people, you know, i think there's a camp which, no, who doesn't like rich people poor people, middle-income people they don't like them because they are -- >> well. >> what? >> there's a lot of issues here in this country in terms of rich.
9:52 am
>> right. >> there's not enough rich people in the old days that used to be different and faang keeps going down. >> a live shot of the white house. the president set to speak at the top of the hour in just about ten minutes. we'll take you there for the start momentarily. we'll get "stop trading" with jim between now and then every feeling, every , a product of mastery. lease the 2019 es 350 for $399 a month for 36 months. experience amazing at your lexus dealer.
9:53 am
9:54 am
unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today.
9:55 am
let's get to cramer and stop trading. >> pain, house of pain newall misses on three of us forecasts. i don't know what to say a storied name and just a bad quarter, bad forecast. i don't know what else to say. >> stock was $52 two years ago. >> yeah. just -- i don't know -- i'm really speechless, kind of speechless this is not what i expected, and eventually i thought that there would be some turn here. you know, we are martin frankel on and he sold a business to them. >> although he made it clear he's out. >> yeah. he certainly did make it more than clear like i thought as soon as the commercial he would say, remember, jim, o-u-t, but, yeah, this is going to be a tougher turn than we thought. >> you think >> jim, what are you going to cover tonight?
9:56 am
>> well, juan ramon alaix and he sat right there and fell off the chair when i had juan ramon because zoetis, when i mentioned animal health. there's king the king and i had quite a talk. >> did the aspca call after that >> because i said the kill shelter. >> because of the abuse he took on the desk. >> king is -- >> king is fine. >> king is fine. >> i was yul brenner yesterday actually king was yul brenner and i've got alex gorski who is doing big things, recent acquisition, the device i want you to take a look at. >> and had the large deal this week. >> two days ago. >> and the healthcare initiative with the company that makes cell phones that everybody has decided is finish, also known as macintosh, right what was the other one
9:57 am
lisa. >> some of the brands. >> newton. >> yeah. >> yeah, the best days are behind ale as they will be five years from now when they are a trillion dollar company and then the best days will really be behind them. >> verdict still out on that one, jim we're going to miss you. enjoy. >> thank you >> we'll see you soon. jim cramer, "mad money" at 6:00 p.m. tonight when we come back, the president is set to make remarks on border security and the budget. in a few moments we'll take you to washington with the start of that with the dow up 284 when you look at the critical issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.
9:58 am
9:59 am
10:00 am
welcome back to "squawk on the street." the last of a long line of data points today, our february preliminary read on the university of michigan sentiment survey, we're expecting a number in the 93s, a bonus. 95.5 95.5 that's a nice number sequentially following our final read in january at 91.2 and, granted, this read mid-month will get tossed at the end of the month for the final read nonetheless, 95 been the 5 well, it's the best since january -- since december of last year when it was 98.3 the fly in the ointment was last month. last month's number took us all the way back to the fall of 2016 we retreated
10:01 am
this is solid, and let's go through a couple of issues on inflation. 86.2, 86.2 -- i'm sorry, up 2.5% is the one-year inflation, and that follows 2.7 so like many metrix regarding price. they continue to slip a bit. that is partly one of the drivers of the higher yields today. >> rick, thank you very much rick santelli. good friday morning, everyone. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. the market up almost 300 points here as optimism surrounding u.s.-china trade continues. >> our road map for the hour starts with president trump's border emergency the president is set to speak from the rose garden in a few moments announcing new plans to fund his border wall proposal. >> after months of pushbacks from local officials amazon abandoning plans for h q2 in new york city. >> and with a march deadline looming, china-u.s. trade talks move from beijing and are set to resume in washington next week
10:02 am
>> watching these markets, dow up 277, nas daze going for a sixth consecutive day higher something it has not done, guys, since august of last year. looking for eight straight weeks in the green and the dow within 5% of that october 3rd high. >> i think what rick just reported on better consumer confidence certainly helps psychologically, especially after that very surprisingly weak retail sales report for december that we got yesterday leading everyone to wonder what's really going on that was a recessionary kind of number, and, you know, by the end of the day, it was sort of brushed aside as old data with some funky factors like a shutdown and a big stock swoon so maybe things aren't as bad as they appear. this consumer confidence number reinforces that and so do some of the earnings reports from pepsico, for instance, some of the consumer companies i cover you're not seeing any major sign of a u.s. slowdown. >> although industrial production down forthe first time in eight months obviously some weakness in manufacturing. we'll keep our eye on u.s.-china
10:03 am
after another week of trade negotiations, the treasury secretary signaling progress with the chinese counterparts, productive but certainly not over the chinese delegation is expected to arrive in washington next week. kayla tausche has more. >> reporter: we'll see if president trump will make a few statements when he speaks from the rose garden. basically the u.s. and china agreed to keep talking in a statement put out earlier this morning, the week-long discussions were characterized as detailed and intensive with the press secretary saying it led to progress between the two parties. much work remains, however both sides will continue working on all outstanding issues in advance of that march 1st deadline for an increase in tariffs on the import of chinese goods. u.s. and chinese officials have agreed any commitments will be stated in a memoranda of understanding between the two countries. they basically agree to put this on paper whatever they do agree
10:04 am
on the treasury secretary for his part tweeted a picture of the two countries' delegations citing productive meetings between the u.s. and china you see how large the two parties are in that joint photo right there which can be seen as a sign of perhaps warm relations at least for that photo-op president xi met the group earlier today, and the u.s. side continues to push for that meeting between president xi and president trump to take place at mar-a-lago, but the next meeting will be here in d.c. with the high-level chinese delegation coming here next week to continue working in advance of that march 1st deadline. we'll see what they can achieve though in just a short period of time, just two weeks left before that deadline, and in a statement from the white house, guys, made very clear that the u.s. side kept hammering home those structural issues, those long-term issues they also discussed china's pledge to buy more u.s. goods, but they still remain pretty far apart. >> just going to say is there any indication that they made progress on the chinese side of things when it
10:05 am
comes to pledges for structural reform >> there's no sense of exactly where china came out on that, sara, as of this moment in time. what i had heard from sources who had been basketweaved on these talks is that where china did appear willing to creed some ground was on enforcement, that they want to be recognized as a market economy at some point down the line, and they understand that they have to enforce some of these trade rules in order to get there. so they were warmer to the idea of having some sort of very strong enforcement mechanism, and that was very important to the u.s. side, but as -- as for, you know, stopping the subsidies to state-owned enterprises, that's such a big part of the chinese economy that up until this week there hadn't been any movement there. >> thanks. for more on what this means for the markets we're joined but cbs contributor jimmy pethokoukis and we're also joined by al dryden, jpmorgan, asset
10:06 am
management, global market strategist alex dryden, excuse me alex, industrials are the best performing sector in the market this year. what does that tell you about expectations for a trade deal with china >> i think for us the markets have had a very solid 2019 we had a great january followed by a pretty decent february. we're encouraging investors to start being cautious just be aware and don't get too greedy at this stage in the economic cycle what i think that we're seeing is a bit of rotation into high quality names and a way for some -- away from the growth areas and i think industrials may be benefitting from that as well and we also like financials and we like energy and some of the material names as well. >> we were talking at the top of the hour about what kind of picture we're getting on the economy. better consumer confidence and as carl mentioned weaker production, signs of manufacturing, slowdowns, how do you tie it all together? >> maybe the economic backdrop i would summarize as mixed across the board. that's how i'm seeing this data right now. that means for us when you've
10:07 am
got the hazy backdrop, we don't want to be making too punchy of calls and getting too ahead of our skis i think the markets may be getting too ahead of themselves, especially with the rallies and especially since the economic backdrop hasn't changed that much. >> optimism around the u.s.-china trade talks and the fact that xi was there continues to drive sentiment around the recovery we've seen this year. do you think investors are too optimistic about a deal? >> listen, i think if you spend a lot of your time listening to what the president says about trade, that's where the optimism comes from because when the president talks about trade, he still tends to talk about it in terms of opening access to markets in china and how much stuff, you know, sorghum, my favorite, how much china purchases from us, and if that's what the president mostly values, not hard to see how a deal happens and then you listen to his advisers and the china hawks in the white house, and that stuff is all secondary. the bilateral trade deficit is
10:08 am
secondary. what they want are the structural changes which goes to the heart of the chinese economic model which they are not going to change. they are not going to suddenly become a bottom-up entrepreneur-driven economy. they are going to be a top-down driven economy to me it's what fundamentally does the president believe and what fundamentally does the president want from china? >> do investors, alex, care what kind of deal the president gets or do they just want to see a deal >> i think they want to see a lowering of tensions let's be clear u.s.-chinese relationships is not just based around trade. we're talking about intellectual property theft we're talking about u.s. firms having a barefooting in china. we're also talking about things like north korea this is a big relationship between an established superpower in america, learning how to deal with a superpower such as china. you won't sol that have in one conference, but for me a simmering down of tensions could be another to see equity markets
10:09 am
get a little bit of a bounce and yields start to move higher as they price out that risk premium. >> how do investors discount a world this which tariffs could go up at any time depending on how these things are tracking? >> that's very difficult to wrap your hands around as an investor it can go on a tweet on how a news conference goes for us at the moment it's trying to focus on the news feed. the information we've had so far this year has sort of been a constant trickle of nice little news that has led us to believe that a u.s.-china trade deal of some kind is on the table. just something that lowers the tensions i think will be enough for now. >> carl makes a great point. we're not going back to status quo. if that is the expectation that they are going to buy some more stuff from us and they are going to pledge to crackdown tech transfer that's not going to happen the u.s. climate in washington has changed. it's not going back and whether it's tariffs or going after individual chinese companies we're in a new era of
10:10 am
u.s.-chinese relations it's going to be more of a high-tension environment for decades. >> i mean, speaking of that, we have a live shot there on the screens of the white house we are expecting president trump is soon to come out and talk about the budget deal, talk about the border and declare an emergency to secure funding for his border wall, jimmy what do investors need to know about thepolicy risks associated with this >> listen, you know, the amount of money we're talking about here, it's not a tremendous amount of money. listen, to me the concern is this the reason, you know, the dollar is the reserve currency and, you know, the treasuries are a safe haven, part of it is because we're a big productive economy, but part of also is our economic system, our political system, rule of law, political certainty that our politics is sort of boring in all the right ways you don't have to guess about things like national emergencies or just really strange things happening. so that risk is sort of seeping back in there. listen, i don't know -- i don't
10:11 am
think you can day trade that risk i know the market is up, but longer term, if investors believe the uss a less certain political system where politicians will push the very limits of that system, i think that -- i think that is a long-term drag on how investors look at geopolitical risk in the united states. >> although other governments make it seem like we're -- >> not as crazy. >> i'm struggling with that concept. the reason being is that's a relative story, and you look at the u.s. and you look at the political situation, brexit, what's happening in italy and areas like france. china is not a secure and political stable backdrop. for me i'm not seeing those shifts yet away from damaging as the u.s. dollar being the reserve currency at any stage. >> though if we do see an epic fight over the debt ceiling in august, that's what led us to lose the aaa credit rating from zap a few years ago and that speaks to some concerns about full faith and credit in the u.s., doesn't it >> agreed. there are some concerns with the
10:12 am
u.s. debt ceiling and the u.s. debt as a whole. for me right now i think the challenge is you can fix that debt ceiling and you can fix the debt dynamics relatively quick with a change on the tax front or cost front and cutting on costs. the problem with the u.s. at the moment -- >> we're going in the wrong direction on both of those, i'm pretty sure. >> well, there is that challenge, but that's the problem with washington. i think there's still space to kick the can down the road that debt has been borrowed for very long maturities at very low yields so that does give government in washington some wiggle room to deal with this. there are plenty of countries that run with much higher debt-to-gdp ratios. >> i'll plug a great paper out as the dollar as the world's reserve currency don't have much competition right now. >> i don't think i was suggesting that the dollar won't be the reserve currency. what i am suggesting is that on the margins, if you like u.s. investments with a political certainty angle, i think that reason is slightly on the margins less compelling than it was perhaps several years ago.
10:13 am
>> noted. >> jimmy pethokoukis, thank you and alex striden from jpmorgan. >> when we come back, pot producers cannabis growth reports a growth in sales. we'll speak to bruce linton. an interesting week on the hill regarding banking for cannabis and the president expected to speak within the half hour on his border announcement. we'll take that live obviously tom performing names on the s&p, up almost 20 points. search. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪
10:14 am
10:15 am
10:16 am
surging sales of pot, boosting shares of can that business growth. the cannabis company reporting an increase in revenue and still reporting a loss from operations let's get to afeety roy in san francisco who is joined by bruce linton, canopy ceo >> thanks, david good to have you with us this morning. >> great to be on the beat >> reporter: well, your last quarter your revenues were up nearly 300% reflecting canadian legalization though your operating losses are widening what's your plan to rein in those costs? >> so we happened to have started in canada, but we're actually running in about more than a dozen countries now, and so what we're going to do is
10:17 am
over the course of this year, you're going to be able to see a company that's in about ten spots in canada that has the biggest market share, and it's going to launch a bunch of new products because we'll be allowed to as the year ends and that company on a medical an rec basis when you look at what happens in canada, you'll say that's an awesome business, and then what we'll have is a whole bunch of side spend meaning r & d for global outcomes, putting up assets in europe. rolling up our u.s. activities that are fully legal, meaning hemp and anything else possible, and so you'll see this great thing in canada and you'll say i like that. i like the fact that you're spending in other countries and you don't need to make a profit because you have about 4 billion u.s. in the bank account spend it and dominate so i think that program is something that people should expect >> bruce, interesting week on house financial services committee this woke, a subcommittee, took a look at opening up ways for the cannabis
10:18 am
industry to get access to banking. did the needle move at all as far as you can see >> yeah. you know, it's -- we have a lot of people watching and working on the u.s. file, and what's happening is hemp now is governed and i think what they are trying to do at the federal level is to find a way to bring in banking but also to just bring in all the instruments that would be normal course, and as soon as that's by state permissible, we're all in, and so that's where players like constellation as part of our funding source and activities with hemp all of a sudden blend right together there's no discussion about this disappear, and i'm not sure there's an active discussion about it being federally legal everywhere, but i suspect what states are doing will start to be governed in a way that puts us in play >> so bruce, looks like you sold 10,102 kill grams of pot during the quarter. i guess a risk of recreational and medical. first quarter since canada legalized it was that what you expected, and what other color can you tell us about how the rollout went and
10:19 am
where people's preferences lie >> the rollout started when had the fed said what you can do and how the states had to come up how to sell it so it was a pretty limited platform. what we observed though and what we planned is that if people can go into a store, know that the products are federally permitted, tested out a hundred ways and have a conversation with an informed, educated person, meaning they have been trained and certified, they will come back and buy more we're seeing that by province which means we have about 90% of the country to put up those stores and keep opening up because it was legal at every level and covered so extensively i think the demographic is from top to bottom every age category and their openness to now thinking about medical has opened up quite a lot so this is a very interesting experiment unfolding in canada which i suspect over the next 10 to 50 years we'll be repeated in every geography that wants to quit ignoring cannabis and monetize and regular hate it and that's what governments want to do.
10:20 am
>> let's bring it back here to the u.s. you recently announced an investment of up to $150 million into a hemp production facility in new york. new york city recently started cracking down on the use of cbd in restaurants does that worry you? >> so the reason we're going to new york is new york is the most progressive jurisdiction in the u.s. on the governance of hemp to cbd and they are standing up their rules to say that it has to be produced, controlled, contained, have the supply chain. can't make fake claims like you put two shots in your coffee you'll be smarter for the day. you really do have to get more value for your seven bucks than is being promoted, so the regulators are saying we're cleaning up the platforms so that we can actually roll out products that have a real market, and i were say when you look at things like regulate the state-level marijuana in places like you are, like california, a big challenge for the people trying to follow the state rules is that the ones that are not following the rules aren't being shut down and so i think you'll see good governance in new york and great products and a real good launch platform >> bruce linton, co-ceo of
10:21 am
canopy growth. thanks so much for joining us. >> thank you, guys >> back to you guys. >> meantime, in an effort to avoid another shutdown the president is expected to sign a bipartisan bill regarding the budget but then he'll announce a national emergency this morning over funding of his long-promised border wall any moment our eamon javers is at the rose garden with more good morning. >> reporter: good morning. we're expecting the president in the rose garden any minute now, and we expect this national emergency declaration will give the president the funding he says he needs to build a wall on the southern border. white house fifshlsor officials are open to all sorts of contortions in terms of what that wall would likely look like will it be steel, concrete will it be fencing nonetheless, they say, ultimately the president will get about $8 billion in funding from the action he's taking today. take a look at how all of that breaks down. first of all, there's the appropriations bill that the president is getting from congress that was passed yesterday. that's about $1.375 billion in funding for border security.
10:22 am
also, the president is going to tap about $600 million from treasury's drug forfeit you're and 2.5 billion from the drug interdiction program and the national emergency declaration will give the president access to about $3.6 billion from the department of defense's military construction budget. all tolled the white house says that should give them the amount of money they need given that a lot that have money comes with restrictions on where and how it can be used. ultimately they say they are going to be able to build hundreds of miles of new border wall, fencing, whatever you want to call it sumantically to protect the southern border. they say it's entirely right and appropriate to be doing this today, and ultimately this is military construction so appropriate to take it from the military construction budget democrats though likely to oppose this action we'll see if they weigh in later today, as early as this afternoon perhaps in terms of lawsuits to stop this executive action by the president today. the white house officials saying ultimately though they are not
10:23 am
concerned about the precedent here even though nancy pelosi suggested yesterday that a future democratic president could use similar national emergency action to go after action on gun control or climate change or any of the other democratic priorities that conservatives might not appreciate on capitol hill here at the white house though, they say ultimately democrats have always had that opportunity. past democratic presidents have always had that opportunity and this president is not doing anything outside of his legal and constitutional authority carl. >> indeed, eamon, as you're speak we see new a.g. william barr in the rose garden in the front row. speaking of the line from the likes of the speaker, u.s. chamber of commerce moments ago, eamon, says that this declaration will create a dangerous precedent that erodes the very system of government that has served us so well for over 200 years that's the u.s. chamber of commerce is that line typical of so-called republican voices? >> you know, it is typical of republican voices who are typically very strict in terms
10:24 am
of interpretation of the constitution, but this president very focused here on getting a resolution to this political crisis that he's got on his hands ever since the government shutdown and very focused on getting this money for his signature campaign promise this is something that the president promised his base and is determined to deliver on, so they are not as concerned here about the precedent. i asked sarah huckabee sanders about this in the west wing yesterday, and, you know, what's the problem here if there's a precedent that you're setting in the -- in the rose garden tomorrow and she said ultimately, look, we just hope that there is no national crisis or humanitarian crisis that a future president has to deal with they are sort of shrugging off that concern about a precedent here, carl >> even "the wall street journal" op-ed board, carl, i would argue, which was often been very friendly and supportive of the president's policies says it does create an unprecedented policy, eamon, and they give an specific example f.climate change will end life as we know it why not impose part of the green new deal, trying to contemplate how democrats could take this a step further. >> nancy pelosi specifically
10:25 am
referenced the idea of that sort of action being taken by a democratic president saying that republicans will rue the day that they agree to do this republicans on capitol hill will have a choice to make. do they line up behind the president make, support one of the most popular campaign initiatives in their party, even though this isperhaps an unorthodox way of going about it, or do they break with the president on this? it seems politically unlikely that you're going to see a lot of senators break too hard with the president on this. you might have some grumblings, some expressions of dissatisfaction, but at the end of the day you would have to expect that senate republicans anyway will do everything they can to give the president the win here we saw mitch mcconnell, the senate republican leader, say yesterday that he would support this executive action today by the president because it guarantees that the president is going to sign that appropriations bill. republicans on capitol hill really, really do not want another government shutdown. they feel like they lost politically on that. they don't want to go through that pain again, and so this
10:26 am
might be an escape hatch ultimately to get out of that political difficulty that they find themselves in >> yeah. >> it's been said this morning that the shutdown, the budget bill, the wall construction, largely irrelevant for stocks. today's actions would certainly back that up the dow session high is up 330 i wonder, eamon, do we have any clarity on when construction actually might begin in the face of what we expect to be court challenges >> we don't know, carl, exactly when the construction will begin and we don't know exactly when this money will be transferred because of that threat of potential lawsuits, right? mean, the other question that remains open here is exactly what money is going to be reprogrammed you know, military construction budget is typically earmarked towards a whole range of construction projects that the pentagon has in mind in any given year officials here not answering the question on exactly which projects they are going to shut down in order to build that border wall. that's probably smart politics because ultimately all of those
10:27 am
construction projects that are -- that are contemplated have an array of backers and supporters who is would rally to defend them if the white house were to signal which ones are going to be cancelled in order to pay for this border wall construction by leaving it vague, they keep the opposition sort of in the dark as to what's going to be -- which pots of money are going to be reprogrammed here, so ultimately the white house is savvy here in choosing military construction and then not announcing which programs ultimately they will reprogram the money from in order to pay for this border wall. >> do you expect the president to take questions here, and i'm asking because, you know, part of this rally on wall street is being fueled by continued optimism that we're going to get a trade deal with china and president xi was there hand things are looking good. of course, everybody wants to know what the president says and how much he's willing to tolerate in terms of china committing to or not committing to those structural reforms, eamon. >> reporter: sure, i can't guarantee you that the president will take questions here but i can guarantee you that the reporters here will try to ask some questions you can see the setup here this morning.
10:28 am
some vips in the front row and second row there's a whole host of reporters here all ready to go and all of them have prepped questions all morning, so you can expect that they will be asking some questions of the president, and it will be up to him to decide whether he wants to answer. a lot of times in this format in the rose garden we have seen the president willing to engage with the president, and today especially you might think that he would want to the do that because he's got a policy decision here that he's taken that he's going to want to explain just beyond the formal remarks on teleprompter or paper. he's going to want to explain why he's going to do this, talk both directly to his base and then also to republicans on capitol hill and explaining to them why this is the right decision, and in that we might have the opportunity to ask some questions on some other topics as well once the president gets rolling. he likes to take a few more questions. >> i was going to say, eamon the key would be if he was willing to put any color on the readouts we're getting regarding china talks in beijing i mean, a memorandum of understanding, how much of a step forward is that
10:29 am
what does the white house mean when they say much work remains because the market has been buffeted by headlines that characterize it in two very different ways >> i'll try to ask him for you, carl, when we see the president here in a couple of minutes. larry kudlow in the white house briefing room yesterday was keeping it vague on that point he said there are good vibes from the negotiations, but he wouldn't say exactly where he was getting those good vibes from or what that even meant, but just a general sense of optimism about the china negotiations, and we saw the president earlier in the week signal pubically what we had reported people were saying here privately last week which is that march 1st deadline on china tariffs could be kicked down the road a little bit by this president. that's a self-imposed deadline there's no real reason they have to have it other than the president said that it exists. the president can simply kick that down the road if he feels, he said, that talks are going well and they have got progress and they think they might be able to get to a deal. the market looks at that as probably an optimistic sign that this is a white house that's in deal-making mode, not necessarily preparing to slap those tariffs on at the first
10:30 am
opportunity. >> speaking of optimism, the shenzhen index in season is actually up 6% so far this week. there definitely is some optimism building, and they have also been still hating their economy which i guess helps, eamon. where is congress on all of this how does what we're about to see from president trump on the border deal, national emergency, does it relate at all to the deal on trade and the support he's going to get from congress on things like the canadian and mexican new agreement and what he's doing with china? >> fascinating, first of all, fascinating that you mentioned the chinese stock market because here at the white house they have talked about the chinese stock market really suffering over the past several months, and they view that as leverage over the chinese they feel like that the chinese market's weakness is one of the reasons that president xi jinping is going to come to the table ultimately and agree to a deal that they hope more on their terms than on beijing's terms and that chinese stock market is something they are watching very closely here in terms of your question on congress, i mean, i think these
10:31 am
are decoupled issues i think that these are on different political tracks really members of congress will be able to support one action and oppose the other depending on how it plays out in their particular state or district, so ultimately i don't think that this action today is going to play out, you know, dramatically in the china debate. >> eamon, we continue to tap tans here as we await the president. >> that's a long ten minutes. >> we spent time about amazon hq and bill de blasio and others commenting out saying he's not ruling out a run for the presidency himself is that conversation of note in d.c. today in. >> absolutely. look, the white house loves the leftward lurch of some democrats on capitol hill. they view that as socialism and they have taken the opportunity at every turn over the past two weeks or so to hammer home this idea that this is a president who stands against socialism, who stands against government
10:32 am
control of the economy that's very comfortable political debating territory for this white house, and they feel going into 2020 ultimately having this president as a bull mark against that sort of leftist extremism in the view of this white house will be good politics for them so the activities of aoc and the amazon deal, they view that as liberal democrats shutting down business, cancelling jobs, and they think that's a political winner for them here, and it's going to be fascinating to see how that plays among democrats up on can hilpitol hill who wano embrace jobs in their district and are wary of giving large subsidies to corporations that are run in this case by the wealthiest guy in the world. where is that balance on the democratic party going in 2020 is going to be fascinating especially now that we have so many democrats, particularly in the senate, who are running for president. there's going to be a wide range of menu choices here for these democrats policy-wise, and they are going to have to figure out
10:33 am
what's their best option in order to take on this president in 2020. >> it is interesting how it's split the democratic party, eamon. as far as congress and what the next big fight, is you know, once this border wall gets -- gets signed and -- and we can move forward, then what? >> reporter: well, that's a fascinating questions right. the issue is what's on the president's policy agenda here moving forward domestic, right. we know what his foreign policy agenda is in terms of china, trade, syria and some of the actions he wants to take there, but what does the president want to accomplish with the last two years in his term running up to 2020 ultimately other than infrastructure, which is still kicked around as a possibility here, white house aides saying that there's bipartisan demand for an infrastructure bill, what is the big legislative push that we'll see from this white house? not clear where they are going to go after the bothered wall that has really consaupold aumed all attention of this white house.
10:34 am
we'll see if there's something other waiting in the wings, but it gets tougher and tougher getting into a presidential election year and cycle it gets tougher and tougher to do anything on capitol hill with democrats in control and speaker of the house nancy pelosi running the house of representatives, the type of legislation that could thread that political needle would be so very narrow and specific it seems unlikely that there's any big broad-based agenda i'm here from this white house that's going to get done between now and 2020 >> eamon, stand by, thanks for filling the time as the dow is close to the session highs, within 35% of a record from october 3'd, up 335 and the russell is above the december high got to go back to mid-november to find the russell at a higher level. kayla tausche, of course, has been covering the u.s.-china trade element in all of this, and as we were saying with eamon a moment ago, kayla, maybe that gets addressed in the coming hour, maybe not. >> reporter: yeah, maybe if the president takes questions or if he decides to go off
10:35 am
script, perhaps that is something that he could address here in terms of where this national emergency declaration and the china talks sort of fit together here is the president is essentially taking a something for everyone approach going into the 2020 election season as eamon was just referencing you know, there's this idea that the president if he's going to be back away from this extremely hard line that he's pushed on china for the last year in order to appease the stock market, to appease fortune 500 executives who have been talking to him about this, then he needs to provide something for his base so that is the border wall and this declaration of national emergency. in the meantime while he's seeming to potentially move towards a deal with china that would seem to be backing away from this harder line, so taking a two-part approach where, you know, you offer the base something that you campaigned on while you offer the markets and executives something that's perhaps a little bit less than you campaigned on in order to provide a little bit more
10:36 am
underpinning to the stock market going into the election. that is something that i've heard referenced multiple times as people talk about the way that the -- the way that the president is approaching all of these issues as he thinks about the electoral going into 2020 and the idea that he can't win on his base alone. that won't win him michigan, pennsylvania and wisconsin, the states that helped deliver him the 2016 win. >> where does that leave then the white house on the prospect of auto tariffs, the eu trade deal, the fact that congress still has to pass the u.s. mca a lot of trade issues still outstanding. >> the u.s. mca, the white house has taken a fairly bullish approach with the expectation that this spring when the -- there are hearings, when there is an opinion about the economic impact of this, when the china situation has subsided, that that will be an easier sell to democrats and that will be had a more popular push on capitol hill than i think a lot of the committee leaders are thinking it will be behind the scenes
10:37 am
you know, the white house is -- is certainly telling the president that this will be an easier sell. meanwhile, their conversations with members of congress are all about trying to whip some of these votes in favor of a deal that people have a lot of questions about still, so that's something that's certainly still outstanding, and we'll see when that comes to the forein the next few months. there are two republican operatives who are planning this big spending push to try to drum up support for the u.s. mca over the next several months because there's this idea that there are some of these districts that recently turned towards freshman house democrats in the most recent mid terms where they could potentially win some votes that would be needed to secure that, so there is that effort going on behind the scenes while the white house certainly seems to be bullish about the end prospect of passing that >> that's interesting. i was thinking about, you know, the president for a time there, kayla, was talking about the wall being paid for indirectly because of benefits from the u.s. mca is there any sense that
10:38 am
ratification is truly at risk, or is this all posturing. >> reporter: of course, we need to ratify it here not only in the u.s. but also-ins canada and also in mexico, and there are republican members of congress who say canada and mexico won't pass this until the u.s. takes the steel and aluminum tariffs off which are still in place from being enacted last year so that's certainly something that's on the table that republican members of congress are pushing for. it depends on whether that actually happens for canada and mexico to take this up politically prime minister trudeau is heading into his own election year, so if that doesn't happen we could see canada potentially take a tougher stance here. we'll just to wait and see on auto tariffs, reuters is reporting that report will be delivered to the president this weekend. unclear exactly what the recommendations are, and whether that is something that there's even support for i was told by a senior administration official that there's really not broad support for auto tariffs within the
10:39 am
trump administration and there's only one person's opinion that matters and that's the president's. >> we ticked through some of the matters before i wonder if the bitterness of this budget fight and border fight made infrastructure less possible i'm not sure if it was possible to begin with. >> reporter: yeah. >> but it was thought to be something that both parties could agree on. >> reporter: look, it's been a bitter couple of years here in washington, d.c., so i'm not sure that this particular fight adds to the bitterness pile more than what we've seen been going on over the last two years as these two parties are very far apart on a range of issues i think the calendar makes infrastructure a lot more difficult and we're just getting the announcement of the president so we'll stand down here. >> eamon javers, thanks very much the president approaching the lectu lecturn here let's listen in to the president of the united states. >> before we begin i would like
10:40 am
to just say that we have a large team of very talented people in china. we've had a negotiation going on for about two days it's going extremely well. who knows what that means because it only matters if we get it done, but we're very much working very closely with china and president xi who i respect a lot, very good relationship that we have, and we're a lot closer than we ever were in this country with having a real trade deal we're covering everything, all of the points that people have been talking about for years that said couldn't be done, whether it was theft or anything, anything the unfairness we've been losing on average $375 billion a year with china a lot of people think it's $506 billion. some people think it's much more than that.
10:41 am
we're going to be leveling the playing field. the tariffs are hurting china very badly they don't want them and frankly if we can make the deal it would be my honor to remove them, but otherwise we're having many billions of dollars pouring into our treasury we've never had that before with china. it's been very much of a one-way street, so that's happening, and the relationship with china is very good, but i think they finally respect our country. they haven't respected us for a long time, not for a long time the uk and the u.s., as you probably have been seeing and hearing, we're agreeing to go forward and preserve our trade agreement. you know all of the situation with respect to brexit and the complexity and the problems, but we have a very good trading relationship with the uk, and that's just been strengthened further. so with the uk we're continuing our trade, and we are going to
10:42 am
actually be increasing it very substantially as time goes by. we expect that the uk will be very, very substantially increased as it relates to trade with the united states the relationship there also is very good. we have a lot of great announcements having to do with syria and our success with the eradication of the caliphate, and that will be announced over the next 24 hours and many other things a lot of positive things are going on we're working on a -- a summit and you know all about the summit it will be in vietnam, hanoi, and we will -- we'll be meeting in hanoi i think a lot of you will be going, i suspect, and i hope we have the same good luck as we had in the first summit. a lot was done in the first summit not more rockets going up. no more missiles going up. no more testing of nuclear, get
10:43 am
back our remains of heroes from the korean war and we got back our hostages, but we hope we're going to be very much equally as successful i'm no-no rush for speed we just don't want testing the sanctions, as you know, remain everything is remaining. china has been helping us, and russia's been helping us, and south korea i think you can say has been -- we've been working very closely with south korea, with japan, but china, russia on the border have really been at least partially living up to what they are supposed to be doing and that's okay as per the united nations so we will have a meeting on the 27th and 28th of february. and i think that will be a very successful, and i look forward to seeing chairman kim we have also established a very
10:44 am
good relationship which has never happened between him or his family and the united states they have really taken advantage of the united states billions of dollars has been paid to them, and we -- we won't let that happen, but we think that north korea and chairman kim have a tremendous potential as an economic force, economic power. their location between south korea and then russia and china, right smack in the middle is phenomenal, and we think they have a great chance for tremendous economic prosperity in the future, so i look forward to seeing chairman kim in vietnam. today i'm announcing several critical actions that my administration has taken to confront a problem that we have right here at home we fight wars that are 6,000 miles away, wars that we should
10:45 am
never have been in in many cases, but we don't control our own border, so we're going to confront the national security crisis on our southern border, and we're going to do it one way or the other we have to do it not because it was a campaign promise which it is. we're rebuilding the military. our economy is thriving like never before you look at other economies. they are doing terribly, and we're doing phenomenally the market is up tremendously today, not that the that's anything, because they will go back in and say the market just went down, but the market is getting closer to the new highs that we created. we have all the records. we have every record, but we're getting close to that point again where we'll create new records, so our country is doing very well economically, and we've done a lot, but one of the things i said i want to do and have to do is border security. we have tremendous amounts of
10:46 am
drugs flowing into our country much of it coming from the southern border. when you look and when you listen to politicians, particularly certain democrats, they say it all comes through the port of entry. that's wrong that's wrong it's just a lie. it's all a lie they say walls don't work. walls work 100%. whether it's el paso, i really was smiling because the other night i was in el paso we had a tremendous crowd, and tremendous crowd, and i asked the people, many of whom were from el paso, but they came from all over texas and i asked them, i said, let me ask you as a crowd, when the wall went up, was it better? you were there, some of you. it was not only better, it was like 100% better you know what they did but that's only one example. there are so many examples in el paso they have close to
10:47 am
2,000 murders right on the other side of the wall, and they had 23 murders that's a lot of murders, but it's not close toss 2,000 murders, right on the other side of the wall in mexico. so everyone knows that walls work, and there are better examples than el paso, frankly you just take a look almost everywhere take a look at israel. they are building another wall their wall is 99.9% effective they told me 99.9%. that's what it would be with us, too. the only weakness is they go to a wall and then go around the wall they go around the wall and in, okay that's what it is, it's very simple and a big majority of the big drugs, the big drug loads don't go through ports of entry. they can't go through ports of entry. you can't take big loads because you have people. we have some very capable people, the border patrol, law enforcement looking. you can't take human traffic,
10:48 am
women and girls, you can't take them through ports of entry. you can't have them tied up in the back seat of a car or a truck or a van they open the door they look. they can't see three women with tape on their mouth or three women whose hands are tied, they go through areas where you have no wall. everybody knows that nancy knows it chuck knows it they all know it it's all a big lie it's a big con game. you don't have to be very smart to know you put up a barrier, the people come in and that's it they can't do anything unless they walk left or right and they find an area where there's no barrier and they come into the united states. welcome. we've detained more people, our border agents are doing such incredible work. our military has been incredible we put up barbed wire on top of
10:49 am
certain old walls that were there. we fixed the wall and we loaded it up with barbed wire it's very successful, but our military has been fantastic, and i want to thank them, and it's very necessary we've broken up two care advance that are on their way. they just are breaking they are in the process of breaking up. we have another one that we haven't been able to break up yet. we've been actually working with mexico, much better than ever before i want to thank the president. i want to thank mexico they their own problems. they have the largest number of murders they have ever had in their history, 40,000. 40,000 and they have to straighten that ought and i think they will. i just want to thank the president because he's been helping us with these monstrous care advance that have been coming up. we had one that was up to over 15,000 people. it's largely broken up others have gotten through and in tijuana, you have a lot of people staying there.
10:50 am
if we didn't have the wall up and if we didn't have the wall secured and strength gend, they would have walked right through. it would have brun welcome to the united states. one of the things we save just a tremendous sending the military. we had a wall, we don't need the military, we'd have a wall so i'm going to be signing a national emergency and it's been signed many times before it's been signed by other presidents from 1977 or so gave the presidents the power there's rarely a problem they sign it nobody cares i guess they weren't very exciting nobody cares they sign it, for far less important things in some cases, in many cases. we're talking about an invasion of our country with drugs, with human traffickers, with all
10:51 am
types of criminals and gangs we have some of the greatest people i know. they have been with me from the beginning of my campaign, almost from the first week, angel moms. unfortunately we have new angel moms one incredible woman showed me her daughter who talking about killed in the year of '18. i said i haven't seen you before she said i'm new i said that's too bad, that's too bad. it is so sad stand up just for a second show how beautiful your girl was. thank you. i have such respect for these people angel moms, angel dads, angel families i have great respect for these people these are great people these are great people they're fighting for their children that have been killed by people that were illegally in this country and the press doesn't cover
10:52 am
them they don't want to incredibly. and they're fighting for other people they don't want what happened to their children or husband or anybody. we have one young lady whose husband, please, stand up. your husband was just killed in maryland beautiful children, won't be seeing their father again. these are brave people these are people that don't have to be here, they don't have to do it, they're doing it for other people so i just want to thank all of you for being here i want to thank you, incredible people last year 70,000 americans were killed at least i think the number is low, by cocaine,
10:53 am
fentanyl one of the things i did with president xi in china when i met him in argentina at a summit before i even started talking about trade, it was a trade meeting. went very well before i talked about trade i talked about something more important. i said listen, we have tremendous amounts of fentanyl coming in, far more than anybody registers. and i'd love you to declare it a lethal drug. and put it on their criminal list and their list is tougher than ours their list, they get the death penalty. our list, a drug criminal gets a thing called how about a fine. when i asked president xi, i
10:54 am
said do you have a drug problem? no, no, no i said you have 1.4 billion people what do you mean you have no drug problem no, we don't have a drug problem. i said why death penalty. we give death penalty to people that sell drugs. end of problem what do we do? we set up blue ribbon committees, lovely men and women, sit around a table, have lunch, eat, dine, and waste a lot of time. we want to get smart you can end the drug problem end it faster than you think president xi agreed to put fentanyl on his list of deadly, deadly drugs, and it is a criminal penalty, and the penalty is death that's one of the things i am
10:55 am
most excited about you want to know the truth, what's going to make billions of dollars with the trade deal is great for our country and great for china i hope their market is down close to 40%. our market is way up we picked up since my election trillions of dollars of worth. trillions. many trillions china's lost trillions of dollars. i want it to be good for china and good for the united states we'll see what happens china is coming here next week they're coming home, the traders, then china is coming here next week then i will be meeting with president xi at some point after that to maybe for some remaining deals, we'll make them directly one on one ourselves so we're going to be signing and
10:56 am
registering national emergency it is a great thing to do. we have an invasion of drugs, invasion of gangs, invasion of people, and it is unacceptable and by signing the national emergency something signed many times by other presidents, many, many times, president obama, in fact, we may be using one of the national emergencies that he signed having to do with cartels, criminal cartels. it's a very good emergency that he signed. we're going to use parts of it in our dealings on cartels, so that would be a second national emergency, but in that case it is already in place. and what we really want to do is simple it is not like it is complicated, it is simple. we want to stop drugs from coming into our country. we want to stop criminals and gangs from coming into our country. nobody has done the job that we've ever done. i mean, nobody has done the job
10:57 am
we've done on the border and in a way, what i did by creating a good economy, and if the opposing party got in, people say well, maybe the previous administration, let me tell you, the previous administration, it was heading south, and it was going fast we would have been down the tubes. the regulations were strangling our country. unnecessary regulations. by creating such a strong economy, you look at your television to see what's going on today, it is through the roof what happens is more people want to come. so we have far more people trying to get into our country today than probably we ever had before and we have done an incredible job stopping them, but it is a massive number of people if we had the wall, it would be very easy. we would make up the cost of the wall just on the cost of the
10:58 am
fact that i would be able to have fewer people. we wouldn't need all of this incredible talent, some of whom are sitting in the first row, you wouldn't need all of this incredible talent. we would get thousands of law enforcement, have them in different areas, doing different things, law enforcement, border patrol i want to thank law enforcement and i want to thank border patrol and thank i.c.e i.c.e. is abused by the press and by the democrats by the way, we're going to be taking care of i.c.e we talk about the new bill, we're going to be taking care of ice. they wanted to get rid of ice. and the bill is just the
10:59 am
opposite i ran on a simple slogan, make america great again. if you're going to have drugs pouring across the border, if you're going to have human traffickers pouring across the border in areas where we have no protection, in areas where we don't have a barrier, then then very hard to make america great again. but we haven't been given the equipment, we haven't been given the walls. in the bill, by the way, they didn't fight us on most of the stuff. ports of entry, we have so much money we don't know what to do with it. i don't know what to do with all the money they're giving us. the only place they don't want to give us, sounds like a lot, not so much, although we are putting it to better use than it
11:00 am
used to be, a lot of the past administrations it was easy to get, they didn't build or do what they could have done, would have been great to have done it earlier. i was a little new to the job, a little new to the profession, and we have a little disappointment with the first year and a half, people that should have stepped up did not step up. they didn't step up and should have some people didn't step up we're stepping up now. we have a chance to get close to $8 billion, whether it is 8 billion or 2 billion or 1.5 billion, it is going to build a lot of wall. we're getting it done. we're now in construction with wall in some of the most important areas. and we have renovated tremendous wall, making it as good as new that's where a lot of money has been spent on renovation in

62 Views

info Stream Only

Uploaded by TV Archive on