tv Worldwide Exchange CNBC November 18, 2019 5:00am-6:00am EST
♪ it is 5:00 a.m. at cnbc global headquarters. mere is your five at 5 28,000 and beyond the dow in record territory as trade headlines help fuel the rally. crisis in hong kong. weekend protests turning violent once again a live report from that region that's coming up the gray lady investigates and fed exresponds new details this morning company that went from owing $1.5 billion in taxes to 0 taxes. a big move there. the mustang goes all e ford lifting the curtain on a new
radical new look and power train for the mustang name plate a one on one with ford ceo jim hack et coming up. saudi aramco falling short the company out with a new valuation that's less than investors were expecting as "worldwide exchange" begins right now. ♪ good morning welcome to the show i'm dominic chu in for brian sullivan. here is how your money and the global markets are setting the day up after the dow closed 28,000 for the first time ever on friday breaking above the key level just in the last few moments of trading on that day you can see there the time lapse of the moves this morning, stock futures indicating the dow will open up slightly higher. the dow is coming off its longest win streak since february the s&p seeing its longest win streak in two years at that stage. as you can see the dow jones up
by another 40 points if these gains hold into the opening bell, the s&p up by 3 points and the nasdaq up by 17. if you take a look at the overall picture, also bonds a key focus as they keep moving higher those yields you can see the ten-year benchmark yield 1.85%. the two-year, 1.62%. we continue to watch the interest rate complex move slightly higher. now as we go worldwide, in the asian trade, china cutting a short-term interest rate for the first time since 2015. the surprise move sparking talk that more chinese stimulus could be on the way. as you can see there, a lot of green across the board the shanghai composite mainland china up over .5%, hong kong up 1.5% and nikkei in japan .5% gain as well european trade, we are seeing a little bit of perhaps hesitation, pluses and minus german dax off
ftse 100 in the uk up .1 of 1% look at the other top stories we're following. new developments in the u.s./china trade talks over the weekend, chinese vice premier spoke by phone with treasury secretary steven mnuchin and robert lighthizer. they say the men discussed a phase 1 trade deal and the discussions, were quote unquote, constructive the sides report lid agreed to remain in close contact. in deal news as well, yahoo japan and chat app line say they reached a basic agreement to merge. that includes $3.1 billion buyout of line's minority shareholders some green across the screen for z holdings and line corporation in japanese trading. saudi aramco says it's aiming for a valuation of around 1.6 to $1.7 trillion. that range does fall short of
the initial $2 trillion plus targeted by saudi crown prince mohammed bin salman, but it would still be the world's biggest ever ipo by valuation. now a developing story overnight as hong kong demonstrations continue and turn violent once again they used rubber bullets and tear gas fiery explosions erupted anti-government protesters barricaded themselves inside the campus for days launching fire bombs at police. police did make arrests in that movement. back to the markets. just one session after the dow cracked 28,000 for the first time ever, a big week ahead for you and your money several retailers will be in focus. they report quarterly results this week, including home depot, kohl's, target, lowe's, gap, macy's you get the idea a lot of retail and focus. you've also got october housing starts out tomorrow. the minutes from last month's
fed meeting on wednesday an existing home sales on thursday a lot of stuff to talk about so let's go over all of these catalysts with joel shoelman, founding and managing director of entrepreneur shares we welcome you into the discussion with a market that's at market highs. are we in danger of a further meltup could this market rally continue given what we've seen? >> well, i don't ever think it's a danger to have a melt-up i do think we're going to have better returns, better prospects in small cap and non-u.s those are the two markets that have not yet recovered in the 2018 highs we're seeing u.s. large caps well beyond those highs. but we've got a bit more room maybe another 5 to 10, 15% for u.s. small caps and non-u.s. >> is there a feeling, joel, that those small caps anded my caps can really play catch up with the rest of the large cap >> yeah. >> i only say this because we heard so often from many experts
on our air that the small cap side of things have been underperforming and that we can't really get that real broad based rally unless those small caps really participate. >> well, we saw in the last month, i was here a month ago and we were talking about this and they've been up 6% since that time. a couple stocks i'm monitoring are up 20 to 22% the last month. i think those things are coming back this week may be choppy. but we still have another five, six weeks before year end. i think we'll have a christmas rally. i think january will be strong and small caps >> what a difference a year makes. i say that only because it was this time last year when we were talking about the fed chair jerome powell, the interest rate trajectory that we were looking at and then all of a sudden we got a steep, steep sell-off. it's not like this time. >> that's right. fourth quarter is rough until christmas week christmas until now we have seen markets up 30 to 40% by the way a lot of viewers may
not recognize of the russell 1,000 growth, it's been up 28% two companies are driving that from microsoft and apple so when you remove those two stocks, the rest of the market is just okay it is still strong, but this market has been led largely by two stocks. >> all right let's say if those two stocks are driving things, what else needs to happen then for this rally to maintain the trajectory it's on? i ask because there have been a lot of nay sayers out there who say the economic data, at least the soft survey-based data has not been supportive of an economy globally speaking that should have markets, numerous markets at record highs or multi-year highs >> what's interesting about this question and we track entrepreneurial companies, and most of the growth among the s&p 500 is about 20, 30 companies, mostof the growth russell 1,000, 30, 40 companies. so this is not a market that's
being driven broad based among 800, 900 companies most companies are just plodding along. a lot of people don't recognize we have a lot of m and a acti activi activity 5 trillion last year and the same this year a lot of markets moving up for that we're seeing a lot of dollars coming in. they're boosting the markets we're seeing securities pulled out. and we're seeing layoffs in some of these companies there's a handful of companies that are growing, driving revenues, hiring people. when you look at the market the job growth is uneven and we're seeing companies like that. >> just a few seconds left here. >> okay. >> you deal with a lot of these entrepreneurial-based companies. >> yeah. >> what does the ipo market look like >> it's been off a little bit and we had weworks and peleton so there's a lot of these companies are now suspect. we have seen uber and lyft the ceo the founder selling off
his stock. so there's pessimism among those companies. but we still have other companies coming out you mentioned aramaramco. >> joel shulman, thank you very much. coming up on the show, how fedex went from owing trillions in dollars in taxes, at least billions in dollars of taxes to near 0. >> live from the dubai air show. first on cnbc interview, his take on the on going grounding of rival boeings 737 max jet and then later. >> announcer: today's big number, 75,842, that's how many ford mustangs were sold in 2018. making it the best selling american muscle car last year. beating out the dodge challenger and the chevy camaro
>> the pony car wars continues another first on cnbc interview with ford ceo jim hackette about the company's all new electric pony car, kind of. en "rlidexan" ur still ahead whwodwe chge returns right after this ♪ evagpharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. whether your beauty routine is 3or 57,... make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy. as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years,
fred smith is firing back at "the new york times" over an article about the company's tax bill rahel solomon joins us now with more on that story it's billions of dollars worth of taxes we are talking about here. >> yes, it is. so "the new york times" pub lyricing an expose yesterday on the company's taxes. the paper reporting between 2017 and 2018 fedex managed to cut its tax bill dropped from 34% to less than 0. financial filings show that fedex paid $2 billion and the times said this all came after fedex and its ceo fred smith lobbied hard for the trump administration's tax cuts. they were designed to encourage capital investments by companies, but the times says that fedex spent less on that in 2018 than it did in 2017 passing most on to shareholders through
buybacks and dividends in a statement last night smith calls the report distorted and factually incorrect and challenges the publisher and editor to a public debate. it should be federal tax policy. especially for lower, middle class wage earners and smith claims that the times paid no income tax in 2017 and only $30 million last year while also cutting capital investment so the times has yet to respond to that challenge. >> what an interesting dynamic. >> what an interesting development. >> just -- first of all, the idea now that a corporation in america is trying to minimize its tax bill now, this has become a hot topic these days only because -- >> fedex would not be the only one. >> not be the only one doing it. now the challenge from fred smith to in essence the management and ownership of the new york times not just about the merits of a topic but also
about their own tax bill. >> right. >> it sort of begs the question people in glass houses if, in fact that is true. but it almost sounds very reminiscent not to make light of the situation i challenge you to a duel not only am i going to challenge you on this, but let's have a debate about it. >> it's crazy. thank you very much for that you have two, very, very interesting sides and numerous people, characters, at the center of this. >> i wonder if the president will weigh in. >> i wonder if the president will rahel solomon, thank you. still on deck for the show what tim cook, another character and president trump are likely to discuss when they both tour a texas apple facility that happens later on this week. plus, from beyond meat to impossible burger, plant-based foods are all the rage now another name you need to know is getting into the game. editor in chief stephanie meta here to discuss. plus, we're live from the
invitation-only east tech west i'm going to call it the east tech west conference, where our own deirdra is talking with the top names in the business. deirdra, over to you >> reporter: that's right, dom we have it all down. markets there's optimism that trade tensions may be easing, but here at east tech west in china, some of the biggest investors and companies in technology are trying to figure out what the long-term effects are. will there be a decoupling is the battle for tech supremacy just getngndti uer way when we come back, we'll have all the highlights for you it is nice.
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the east tech west conference is an annual invite only tech retreat held in china. now in its second year the event is bringing together a guest list of the world's most influential tech leaders in artificial intelligence, 5g wireless and much more our own deirdra bow is a joins us live with the latest there. deirdra, a lot of characters a lot of companies very much in focus there. what's the scene been like >> absolutely. you know what, dom, a lot has changed since last year but also a lot hasn't the trade war is still top of mind for many of the participants here. now, more than a year in, the landscape has shifted for chinese and u.s. companies alike. now, amid reports that the trump administration is going to grant another reprieve for huawei the company's chairman, a keynote here, was defiant today, telling us that the u.s. blacklist has a
limited impact and it will hurt u.s. companies more. he added that his company has yet to have any contact with the administration now another major topic here, dom, no surprise, is artificial intelligence now, microsoft is actually working with chinese institutions and government on facial recognition initiatives a touchy subject, especially given washington's rhetoric regarding human rights abuses. now i asked microsoft's ceo and chairman of the greater china region how they balance those initiatives here in china with the ethics that they set out in redmond, washington. >> a.i. through a set of principle and microsoft and our president decided that microsoft, we will have and we will make sure that we operate under those principles we have six of them. and very strict around
transparency and security and privacy. and so we have to stay core to that >> now, dom, i also spoke to the ceo and co-founder of pony a.i., an autonomous vehicle startup based here in china with funding from sequoia china, part of our parent company, i asked him who and where we were going to see a fully autonomous vehicle first, was it going to be in the u.s. or here in china, he actually told us that it was going to be in the u.s. because the regulations are further along. back over to you. >> deirdra, it's also -- it's not just 5g wireless or what's happening with artificial intelligence, it's also about the general tech climate there as well, as well as what maybe the headlines coming out of alibaba, their pending hong kong listing. how much is the hong kong conversation and the unrest there playing out? is it having an impact on some of the big tech companies you're speaking with out there in east tech west?
>> hong kong is only 50 miles away from here certainly there's a lot going on so that is certainly coming into the conversations here everyone here, as we talk about ipos and the next generation of disrupters in technology companies, alibaba ipo is top of mind a source familiar told me today that the company will not be holding an investor luncheon very typical of hong kong listings there's a lot of thoughts that may have to do with the protests and the unrest they say it's because alibaba is such a well-known entity there's also hopes here among the chinese companies that alibaba coming home to hong kong will encourage other companies to list and also for retail and institutional investors. >> thank you very much. coming up on the show, a new electric mustang suv is one of these things not like the other one? ford ceo will pitch us his company's latest vehicle when "worldwide exchange" comes back right after this
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welcome back good morning and happy monday, phillip. >> dom, good morning to you. four people are dead and six more injured after a shooting at a football watch party in fresno, california according to authorities, about 35 people were in the backyard watching a game when one or two suspects snuck in and opened fire into the crowd. no children were injured authorities say it is very
likely this was a targeted shooting police have not yet made any arrests. critical week ahead in the impeachment inquiry as a wave of witnesses prepare to testify in front of cameras possibly the most pivotal appearance is the ambassador caught at the center of this political fire storm, gordon sondland is scheduled to speak on wednesday the envoy to the european union is the only witness expected to appear with first-hand knowledge of president trump's push for investigations into his political rivals this week's hearings will begin tomorrow morning with four witnesses scheduled to testify. the mayor of south bend, indiana, is officially a democratic front-runner. in the first state to get their say in the 2020 election, pete buttigieg is at the top of the field. a new poll from the common register has mayor pete on top with 25% support among likely iowa caucus goers. elizabeth warren, joe biden and bernie sanders all trailed dom, back to you. >> thank you very much, phillip mena. coming up on the show, this morning's other top stories
including the market's record run. the dow closing about 28,000 for the first time ever. and futures are pointing to even more green on the screen stay tuned "worldwide exchange" is back right after this so ...how are you feeling? on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities.
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i am totally blind. and non-24 can make me show up too early... or too late. or make me feel like i'm not really "there." talk to your doctor, and call 844-234-2424. another milestone in the market's bull run, the dow closing above 28,000 for the first time ever. layoffs looming at wework. a new report suggests the company may slash thousands of jobs as early as this week
and ford all charged up about the debut of its electric mustang suv. we get a look at the reinvention of the iconic mustang on "worldwide exchange" and it begins now ♪ welcome back to the show and thanks for being with us on cnbc i'm dominic chu in for brian sullivan here is how your money looks as we're halfway through the 5:00 a.m. hour eastern time stock futures pointing to even more gains the dow coming off its longest win streak since february. the s&p 500 seeing its longest win streak in two years. now, if you can see there, we are going to open up by another 50 points if these future gains hold into the opening bell for trading today. turning now to the bond market we are seeing a slight tick higher in interest rates as well across the curve ten-year benchmark currently
1.85%. two-year note yields currently about 1.625% let's check on the asian markets as well. where stocks kicked a new trading week off on a mostly positive note. japan, hong kong and shanghai all moving to the upside china cutting a key short-term interest rate for the first time since 2015 now the surprise move sparking more talk that chinese stimulus could be on the way as well. the european markets, however, not reacting nearly as positive. it's more of a mixed picture there. take a look at what's happening with europe, the german dax was just slightly to the downside as was the cac in france. now the ftse 100 just marginally to the upside. other top stories we're following this morning the faa is now weighing how it approves planes for flight in the wake of two deadly crashes involving boeing 737 max jet in an interview with the "wall street journal," faa administrator steven dickson says the agency is considering
ways to fund amentally alter ho new planes are certified that could include the faa being involved in the designs from the very beginning. wework is going to plan a new round of layoffs they may announce as early as this week it is slashing 4,000 jobs the times says that number may ultimately jump to 6,000 wework declined to comment when contacted by cnbc. and speaking of wework, fast company also doing a deep dive on that company in its latest issue the magazine details what it calls the doomed relationship between soft dlgs bank's masa son and wework adam neumann. stephanie is here with us to talk about wework and all things tech thank you very much for being with us here this morning. >> thanks for having me, dom. >> this story about wework is so captivating for everybody, not
just on wall street but across the america because people know the company. what is it that bears the reporting that the times has done about whether or not we are seeing the business take a decline and how is masa son feeling act it >> what we discovered is that wework captivated investor community and main street. it's a household name. that is actually to adam neumann credit he has taken real estate and turned co-working space into a brand suggests he was doing something right at wework. the challenge really has been and what our story reveals is that the infusion of cash and the infusion of confidence that masa son brought to this company, instead of it being the kind of thing you would think should be celebrated, in fact, created chaos at the company this infusion of cash suddenly kind of made adam neumann feel like he was invincible, that he
was a superman but that he also felt this pressure to spend the money and to live up to a very lofty expectation set by masa son. when they met, masa son said the last person who made him feel that he made him feel was alibaba. >> to compare adam neumann to jack na. masa son had a lot of experience with bubble, crash, boom type environments what is it that maybe he got wrong this time about that big relationship between softbank and wework >> part was the haste with which this relationship was forged as we point out in the story and others reported, they spend about half an hour together before masa son essentially committed to invest in the company. that's not a lot of due diligence. i think he was operating very much on gut. which has served masa well in some cases in the past but as we
know from masa's somewhat checkered record as an investor has not always worked for him. so this was a case where i think he operated on gut as many people who spent time with adam know, he can be very charismatic, persuasive. masa was riding high adam was riding high and there was this symbiotic relationship that the two men felt with each other that ultimately unravelled. >> the new ceo, whoever that person ultimately really ends up becoming, what is the challenge that faces wework and its chief executive in the next year two to two >> there's a couple things one is that in spite of the strong brand that wework has built, there's a lot of competition in the market. there is probably some reputational damage to the brand as a result of this sort of sense that it's been this free spending, free wheeling company. and so part of it will just be sort of shoring up the reputation and making sure that wework can compete in this space that, you know, it helped
create i don't think that -- i don't think co-working is going away, but more companies have rushed in to fill that void so, there's a little bit of that the other is suring up the finances as the company reported more than $1 billion loss for its last quarter there's a lot of hard work that has to be done. let's switch gears to a more established company. the white house has now confirmed that president trump will tour an apple facility in texas on wednesday the president will visit the manufacturing plant where the company is now assembling its mac book pro apple ceo tim cook has been louded with his relationship with president trump and the on going trade war with china he's navigated it well what exactly will that meeting be like? and what exactly will perhaps be the outcome, if you will, of that particular photo op >> i think you've said it right there. it's a photo op. i don't anticipate that this will great any creator tension
in the relationship between apple and the white house. it's a very good relationship. the mac book pro is not the driver of apple's growth going forward. this is not a strategic facility for apple in a lot of ways it's strategic in the sense that it has helped smooth relationships with the trump white house. it is an opportunity i think for tim cook to further burnish his credentials with this president and members of the president's family tim cook is masterfully worked the relationship not only with president trump but also with ivanka and jared and so i think this will just further burnish his relationship with the trump white house. >> all right one more thing, stephanie, now, you're jumping on the plant-based food chain in this particular edition of fast company as well. but this time it's not just about what's happening with burgers. it's going beyond. the plant based crave has taken over things like yogurt, right >> the new fast company we're pleased to offer exclusive to
our readers chobani is announcing that it is introducing a line of oat-based milk products. they essentially introduced america to greek yogurt. oat-based milks are popular in scandinavia. there's a company that has a line of oat-based milks. baristas love it because it foams. it's different than some of the other plant-based milks that you find in coffee shops the fact that chobani, a name so ko closely associated with dairy is jumping into plant based is so significant. >> as a consumer, i consumed the entire spectrum, plant based, animal based, everything else. how much of this is a real change the way that consumers around the world will consume snood is this a fad that you're going to plant based or do you think this could fundamentally be a change, a shift in the way humans consume their nutrition >> i think this is here to stay
for a couple of reasons. unlike the move from plant based to -- from meat based to plant based in the protein space, for people who are looking for substitutes for dairy for their coffee, for their nutrition a lot of people have health problems concerning milk people lactose intolerant in addition to people making a lifestyle choice so i think there are enough people who are really adopting these not only for lifestyle purposes or because of a belief system but in the case of dairy there's a significant percentage of people who are either allergic or can't consume dairy products so these oat-based and other plant-based milks really feel like not only a substitute but a way to enjoy milk once again. >> and not just the environmental concerns that have been brought up by some of those proponents as well. >> those are legitimate and aren't going away and practical reasons why people adopt this. the fact that chobani such a big
player in this case going full bore suggests they think it's here to stay, too. >> a fascinating try um fant of stories. that is the newest issue of fast company it's out today. chobani one of those stories now to the latest in the on going trade talks between the u.s. and china, china's commerce ministry says the two sides held constructive talks over the weekend amid those talks president trump is promising pay-outs for faerms caught the middle of that trade dispute in a tweet yesterday, the president said that cash could be coming before thanksgiving. meanwhile, reuters is reporting the trump administration is expected to issue a two-week extension of a license that will allow u.s. companies to continue supplying technology parts to huawei so joining me now to break it all down is patrick, silver crest asset management chief
strategist i got to say, patrick, we've had you on so often to break down all of these things. does it feel any different this time around than it has over the course of the past year and a half at this stage >> when ever news comes out about the trade talks, i've come to tweet out it's ground hog day again. because we've seen this story over and over again. and i'm a bit baffled by the confidence with which this is all being greeted. every piece of good news is being greeted by the market. there's a lot to work out here and a month or go more this sounded like a done deal, at least a phase one. now we're heading towards the end of the year and it's not clear whether we'll even see a cease fire if there's no cease fire, that then raises the question at what point do both sides start to lose patience? one thing that's happening is that congress is looking at
passing this bill on hong kong that could furthering ing agorgh relationship it might interfere with the good news of a deal coming together so there are alot of things here that i don't think people who are just looking at the optimistic side of this are necessarily taking into account. >> so there are so many variables. there's no doubt patrick one of the things that many traders have been siting is this idea that as we incrementally make these record highs, it's not like with every headline there's a massive surge of 1,000 points in the dow. it used to be that way, kind of in the early stages of presidency, but not anymore. have the markets become more intune and just because stocks are at record highs does it imply there's a real, real optimism or the path of least resistance for markets on these trade deadlines? >> so, as a long-term investor, i actually think that stocks are the place that you want to be to the extent that you can afford
to and what i mean by that is that safe harbors right now are very expensive. they're a little less expensive than they were a few months arg but they're still very expensive. so for a lot of investors especially if you have a long-term perspective, it may be worthwhile to ride out some of these bumps along the way that could be coming up, but i am a bit skeptical of some of the optimism that seemed to lift markets in the short-term, in the sense that where is it coming from? well, optimism about trade talks? that may or may not be justified. if you look at earnings, earnings are flat for the s&p 500, quarter on quarter. they're down a little bit in the third quarter. you look at the economy, sure, it's a mixed bag there are some good numbers that are holding up like jobs and consumer spending, but there are also some things that are slowing down and continue to slow down. the atlanta fed now is projecting the fourth quarter u.s. gdp growth will grow
at .3% that number could get better we're still in early days in terms of data. that's still not encouraging in the sense that you would want to build higher valuations based on that so in the short run -- in the long run it makes sense to be exposed to the market. in the short run, you have to have realistic expectations about what some of the bumps along the road might be ahead. >> patrick, we also got news overnight that china has lowered one of its benchmark interest rates the first time it's done so in multiple years is there a sense right now that any kind of chinese stimulus will be beneficial on that end to kind of prop up their economy and markets and by virtue of that will the rest of asia benefit from that particular liquidity injection from the people's bank of china >> china is slowing. and it's slowing in large part because of an overreliance on credit and so markets always welcome this news of chinese stimulus, of more credit being poured in,
but actually doesn't ever solve anything it actually adds to the problems but markets continue to welcome that so the slrm response may way well be positive the long-term effect may not be a game changer in terms of getting china back on a positive track. >> we always appreciate your thoughts thank you very much for the early wake up call this morning. coming up, ford puts a new spin on a classic. phil lebeau gives us the look at the all new electric mustang he sits down with the ford ceo about this move. stay tedun you're watching "worldwide exchange" here on cnbc ♪ and are gluten & dairy free. they're all clean. all the time. even if sometimes we're not. sundown vitamins. all clean. all the time.
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ford has officially unveiled its latest entry into the electric auto sector with the mustang mock e they transformed the muscle car into a performance-sport utility vehicle. phil lebeau sat down with jim hackett at the l.a. auto show to discuss that new vehicle >> here with ford ceo jim hackett on a big night as you unveil the mustang mock e. what was your reaction the first time that you saw this version and they said we want to call it a mustang. >> it actually was preceded by the first ev iteration that i didn't think was good enough, but it was all instinctive because, phil, you know, i came from outside the industry. so i involved jim farley who had a rich history, product development, hey, guys, this isn't good enough. and farley came back with the idea of having the mustang inspire the next iteration when i saw that, i said, this is
the right direction. but in ford, i got this secret weapon in bill ford. i mean, he's not hands on, but i can go to him and say, will you go with me and look at this? and his eyes got big when he started to see the evolving design i knew we had something. >> how important is it that you get it right because you're playing with an iconic name here and it's your first electric, all-electric suv. you've got some big hurdles out there to make sure that people say they did it and they did it right. >> yeah. i'm on record as saying the heart of the company is on trial here because we have to get this right because our mustang share performance just keeps getting better and better. we're now the number one sports car in the world with mustang. and this was important not to disrupt the state of that. and so the extensibility of it was that possible? and the team has figured out a way to do that. >> are you worried that ford has
been very slow when it comes to developing electric vehicles some said, look, you guys are so far behind, it's going to take a long time to catch up in evs. >> i don't think any of those people made any money. on vehicle number one, we actually produced a contribution margin with this vehicle of course we have the development costs which we have to amoretize, but i'm talking about sales minus costs equal profit that's a breakthrough. we're talking about with the incentive price point the mid $30,000. >> for the base model with the federal incentive. >> yes, that's right 36,000 roughly. >> so you're looking at a 36,000 electric suv when do you expect that people will truly start seeing? i know you want the first ones by the end of next year. are they going come in a flurry? >> the way we talk about it this is a seven-year program. it starts -- yeah, next year,
late in the fall and the gt follows after that not too far. then of course we have lots of ideas about how we're going to extend the performance of these things because we can do over the air updates now that all the vehicles are connected, i talked to you about this at the auto show a year ago. we can change based on customer feedback the performance of the vehicle. for more phil's interview with ford ceo jim hackett, head over to cnbc.com bringing out big hollywood fire power. on deck for the show, the new timeline one major bank is giving for a rebound in global growth. plus, hp says thanks but no thanks to xerox's takeover bid why they're rejecting the offer to reunite with its rival and why it maybe time to turn the tables on this dl.ea stay tuned you're watching "worldwide exchange" right here on cnbc
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time for your executive recap, the headlines you need in 60 seconds hp's board unanimously rejected a xerox takeover bid xerox offer of $22 per share is not in the best interest of the shareholders and would undervalue hp. but the story is not done. hp is now saying it would be open to exploring a bid of its own for xerox, making it the acquirer the drama continues. pg&e is warning of more power outages in the northern california region due to the increasing wild fire conditions. it may start kutsing electricity for roughly 180,000 customers starting again on wednesday. then morgan stanley is forecasting global growth will
recover starting in the first quarter of 2020. the bank says easing trade tensions and monetary policy will help to reverse the recent downward trend, but it warns u.s. tariffs on china set to take place next month could delay the recovery into the third quarter. airbus's chief commercial officer is forcefully rejecting the idea his company is benefitting from the grounding of boeing 737 max model jets speaking first to cnbc during the dubai air show nobody wins with this move ♪ this does not benefit anyone in this industry, the at least of which would be airbus it's a tragedy it's an issue for boeing to resolve, but it is not good for the competitors to see problems on any one particular airplane. big comments from air bus. back to the markets the major averages closing at record highs on friday the dow topping 28,000
for the first time ever. for more now i'm joined by equity strategist and portfolio manager at fed rated investors steve -- >> good morning, dom. >> good morning. how are you? >> are you bullish do you feel good is this going to keep going? >> we do feel good 3,100 was our target which seemed crazy in january or at least to a lot of other folks. the markets have played out the way we expected. we thought that the global slow down in the first part of the year would lead to stimulus and reacceleration we think we're seeing that i think you always have to have humility at the highs. so could we see a pullback sure, absolutely if there's no recession the bull market is not over i don't see a recession. i'm not conceding the end of the bull market. >> let's put your portfolio manager had on here. that's your job to make asset allocation decisions with markets at record highs. are you starting to trim at these levels >> we trimmed already back the mid summer first hit the 2,900
level we were at 8% overweight as a firm took to 3. seemed prudent but was wrong we could have stayed with the 8% overweight as we look now, we're looking to add, if anything we think there's some areas both internationally and value part, the value cyclical part on the small cap side look attractive. >> take us through the game plan where would you be adding on weakness here? >> you have to look at small cap value actually if you look at small caps in general, they still remain undervalued relative to large caps they lagged at least in the first part of the year we think on the value side you have seen that yield curve steepen since labor day. you have a lot of banks in that small cap value. that's an area we have our eye on. >> banks i heard as a value theme for the better part of three years or more at this point. >> seems like 30. >> never seems like it really pans out bhach makes it different this time around because the yield curve is historically relatively depressed levels. >> it is it's a heck of a lot depressed
than it looked in august we look at the federal funds rate versus ten-year yield we think that could have legs. doesn't mean we're going out and selling our growth we think that's well positioned. as you have cash to bring to the market, that's an area that we're looking at. >> the safety trade has been a huge focus the past nine months, better part of a year now. we are seeing gold prices start to fall a bit. we're seeing treasury yields spike. treasuries are selling off some of these dividend-paying type names are starting to come off a little bit now does that rotation stl happen? do we think there's still a trade getting out of safety assets >> i think dividends stocks are in for a much better two to three years going forward than they have the last few years look at the money market rate. no one sells a dividend stock to
buy a treasury bond in a rising rate environment we had three rate cuts money market rates have gone from 250 to 175. we think that rate difference is what pushes dividend stocks higher. >> thank you very much. >> thank you, sir. that does it for the show on "worldwide exchange. "squawk box" picks up all the coverage this morning. crisis in hong kong. police confronted a group of act vaiss armed with makeshift weapons. protesters threw molotov cocktails and fired arrows at police we'll take you there live. new this morning, reports say president trump is backing off of a crackdown on e-cigarettes offering potential new life for an industry that's scrambling for its very exist. the dow climbing above 28,000 the big move that could move stocks out of beijing. it's monday, november 18th, 2019
"street signs" begins right now. ♪ good morning everybody, welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick. we'll start with the markets this morning after the dow closed above 28,000 for the first time ever. breaking that key level just in the last few minutes of trading on friday. you'll see right now that the futures are indicated higher for the dow once again right now looks like it would be up by 36 points. s&p up by 2.5 and nasdaq up by just over 12 look at what's happening in the treasury markets, looks like right now the ten year is yielding 1.84%. violence i
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