tv The Exchange CNBC December 11, 2019 1:00pm-2:01pm EST
i don't know if he's going use that word. but that's going to be the theme. and that's not exactly music to bond holders' ears. >> we will hear what the fed chair says we have probably 30 seconds left you got your 10th anniversary this week. >> unbelievable >> you got another ten years in you? >> oh, yeah. i got another ten in me. i don't know about 30. i want to see how this movie ends we're in what we call the fourth turning. there is a book by neil howe called "the fourth turning." i think everybody should read it it's kind of a political philosophy sociological philosophy. and it talks about how we have to go through a new building of institutions that people can buy into because right now, no -- nobody's buying into the institutions that were set up in 1950 and we've got to get past that it's going to be very, very interesting. and i hope to share it with your viewers on cnbc. >> we look forward to that as well thanks again that does it for us. "the exchange" begins right now.
really terrific stuff, scott. thank you very much. welcome to "the exchange." everybody. i am brian sullivan. we have got a lot offahead. 60 minutes to go before the last decision of the decade what a year it's been for mr. powell and crew. so what should you expect for the fed and company for the next year we're going to dive in the barrels, they are just piling up. chevron taking a massive ride down ceo effectively saying, well, prices, they're not going anywhere higher from here. this follows a build up in inventories that took the market by surprise. we will dig into that as well. and here is a riddle for you what do area 51, disney plus, the avengers, and sri lanka have in common? there is an answer and we've got it ahead but right now, to the man who probably knows the answer because he looked at inews dominic chu with a look at the markets. >> i do know the answer to that but i'm going to save that that's a great tease but anyway, this is a very calm market, brian. you would expect this going into
the last fed decision of the year of the decade, as you put it the dow industrial's down about 41 points right now. so fairly even at this stage but remember, at the highs, we were only up about 23 points very still market so far by the way, with the s&p 500 flat as it is, can you believe it's been 42 trading days since the s&p has moved 1% in either direction? that's how still these waters. we'll see if they run deep one place we are seeing some nice highs is in the semi-conductor industry. because this particular etf, ticker smh is up 1.5% today. a confluence of events positiveness over 5g wireless. analyst upgrades for certain stocks all of a sudden, record highs. we'll put a star up there. and then the stock of the day so far. take a look at shares of apple because this continues its grind higherment up half a percent today. far outpacing the market again, a record high for apple shares and, brooi this means apple is h
$1.2 trillion. apple shares still on the move in this key holiday season. >> 42 trading days, dom, without a 1% move? >> pretty big, right that's a lot of calmness in the market right now. >> that has got me smdh. now, to that fed meeting and decision steve liesman has told you many times in the last 48 hours or so no rate change is expected but that does not mean there may not be some drama and intrigue because we got to look forward, not backward let's check in now with steve leess le liesman who is live in washington. >> with the fed meeting just days after blowout jobs report, the market would normally be waiting for and asking the question when and how much will they be hiking rates not today. in a world of global economic weakness and trade wars where that tight job market hasn't generated much inflation the question is how long will the fed be on hold and what would it take for the fed to move? let's talk about three things here one is fed chairman jay powell said a material change to the
outlook. perhaps a trade deal might help the cause. and then finally, and maybe most importantly, a change in global economies and global interest rates. the last press conference, powell said that the bar is high to cut and maybe even higher to hike >> i think we would need to see a really significant move up in inflation that's persistent before we would consider raising rates to address inflation concerns. >> so going to come in the feds' forecast in september, nine members saw higher rates in 2020 it's likely to come down could be potentially zero. and powell's definitely going to be asked about concerns surrounding the overnight lending market and the scramble for funds in the banking system that normally occurs at the end of the year. question is, whether the fed is adamant adamantly prepared for it. whether it could be a source of renewed market gyrations, uncertainty, and stability brian, i think the one question is, is there enough cash in the system >> listen, steve, honestly i think this repo thing, some people say it's not a deal some people say it may be everything we're going to find out.
it's a big deal. we'll see you in a bit thank you very much. well, the fed changing course pretty abruptly this year remember, they have cut interest rates three times since hiking them last december which i don't need to remind you, dear viewer, tanked the market sending stocks to its worst december since all the way back in 1931. so after that hat trick of cuts, is the period of monetary easing over for a long, long time or not let's bring in our fed panel neil hennessy, he is cio at hennessy funds bryce dodey is senior portfolio manager. julia core that dough, founder of macro as well on our big fed panel. julie, i would imagine you're one of those 100% that thinks we are not going to get any kind of move in rates today. so what should we be looking for from the fed >> i think steve late out a nice menu what would get them to hike rates? what are they focused on i think there's also the repo market and where they are going on that. >> is that a worry i've talked to people who say this is a big deal i've talked to people who says
don't worry about it it's happened before. >> it's always hard to predict when you hit that nonlinear in the funding markets. there are people worried about a year-end squeeze so it's something to keep an eye on are they prepared? well, they've got these facilities up and running. so presumably, they'll step in as necessary to calm the waters. and then the other thing that we're keeping an eye on is there is a whole policy review they're promising to give us a new framework by mid-year of 2020. so where are they on that? just before the quiet period, put out a very interesting proposal for yield curve caps and average inflation targeting. and i would like to hear chair powell's view on that. >> okay. but i tell you what, neil. you know what your clients like to hear? the fact that the stock market has been hitting record highs nearly all year. is there any way that we can replicate, in 2020, the kind of market gains some say pushed by the fed that we had this year? >> i don't think it was pushed by the fed i think it was pushed directly by business.
and the amount of company profits and cash flow that's been generated through this last 12 months. i don't think we're going to replicate 2019 i think we're going to reverse to the mean. somewhere in the 6 to 8% range going forward. the feds aren't going to affect business in any way, shape, or form, even if they raise interest rates a quarter or half point, it won't do anything to the economy. if anything, if they raise rates, brian, it could spur the housing market for people to get into it instead of waiting and buying a home. because you can buy -- have a mortgage right now under 4%. i mean, that's just wacko. >> listen. i think that's the technical term, neil but we'll -- appreciate it here, bryce. >> we know what happened last december okay you're more the bond side of things but the fed raised rates market tanked. bonds went haywire earlier this year, we had the inverted yield curve
recession. doom were imminent none of this occurred. if the fed were to raise rates next year, would it have the same impact it did last year probably not because we're 75 basis points lower than we were then. >> and you get to the point where the bond market is going to look for that if they resolve this repo mess, which they need to do, you're looking at, you know, a crazy amount of jobs being created and core inflation's been over 2% at some point, the bond market's going to want to see the fed, you know, do something like raise rates rather than being desperate. or -- or paranoid or terrified that they're going to keep raising rates. so we think the curve's going to steepen. we don't think the fed's going to do anything today and they're going to keep driving lower -- short rates lower. keep printing money. buying t-bills and so forth. but the 10 and 30-year yields could go up because inflation isn't going down. >> taking the other side of that one. >> hold on because there's something else i want to get to because, you see scott's interview with jeff? >> yeah. >> jeff basically said and i'm going to paraphrase, jeff.
the bond market is a spoiled brat and the fed is a weak parent and the bond market gets what it wants by screaming and the parent gives in. he basically said jerome powell is -- who told the bond market where to go and you better get in line. is the bond market or the fed in charge of interest rates >> i think the bond market is. i think that the fed -- >> jeff was right. >> well, on that piece of it i think on the corporate bond part, it's a little more complicated. he thinks, you know, half the triple b bonds should be junk. well, they shouldn't i mean, the coverage ratios are fine i understand the leverage ratios are bad. so it's precarious you're going to see some volatility going into year end either way i think the repo thing is really -- is really a mess and they've got to do something to get rid of this incentive that sucks all the liquidity out of the bond market of t it's crazy but they're paying bags to horde cash stop it. >> so, brian, let's remember paul had a problem to solve and
that was very high, disruptive inflation and chair powell doesn't have that problem. so he can spoil his child. his child is very well-behaved inflation is very well-behaved if we get a postponement of these tariffs on december 15th, we've already built that into our inflation baseline you're actually going to see inflation drift a little lower next year. the cyclical pressures are so muted. >> tariffs >> yeah. so we think it's adding about a quarter point right now. and we're just barely below their targets. >> welcome okay. well, neil, that's the bond market's problem our viewers problem is they would like to buy a bigger yacht. you brought along some stocking stuff ideas. tell us why ncr, the cash register atm machine, and somebody called itron, look attractive to you and your team. >> well, both of them have low price of sales ratio, which is a main metric that we use here at hennessy funds but at the same time, neither one of them pay a dividend they earn around $3 a share. but their technology companies but they're stojy technology
companies meaning nobody wants to own something like a coin-operated laundromat i mean, how interesting is that? itron has smart meters for water, gas, electric you look at ncr and you're looking at the kiosks in the airport. you're looking at the scanners in the stores. so you're looking at stodgy companies that are really making a lot of money cash flow. have plenty of room to pay a dividend because they don't pay any now. those are two you can look at lpl that earned $7 a share pays $1 dividend 16,000 rias work for 'em i mean, there's plenty of good companies out there without risking your money in the riskiest parts of the market which are the high-flying tech market. >> we like it. new ideas. you got the santa tie on santa hennessy thank you very much with some stocking stuffer ideas thank you very much. have a great day all right. a lot more to do just getting started here's what else is ahead on "the exchange. coming up. the oil -- grows
chevron takes a massive write down as the food supply begins to pile up even more we'll dive into the sector plus, a big blow for boeing from the faa. and a look at what disney plus, area 51, the avengers, and old town road have in common this is "the exchange" on cnbc . . no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery. ♪ ♪ ultimately, it's helping thousands of patients return home. and who doesn't love going home.
there is a trio of important oil and energy related stories today. number one, aramco begins trading. two, chevron taking nearly $11 billion charge and effectively saying, oil probably not going any higher anytime soon. and three, more proof there is still way too much oil in america and in the world let us blast through all three john, founding partner of capital and cnbc contributor start off with number one. so 1.5% of aramco was sold 1% was sort of precommitted. >> good word for it. >> so about 0.5% was actually available for purchase stock did well in trading today. are you surprised? >> no. >> or is its success relatively a foregone conclusion? >> i think it's state-sponsored success in my view. >> 465% over subscribed for the ipo. a lot more people wanted it than got it >> which was kind of -- of -- of the kingdom to allow those folks
to be off the hook i mean, this thing's trading like lumber futures to me. you know, limit up could go limit up for next several days before it starts going limit down. >> just you and i, john. just two guys talking about three oil stories. >> right and -- but look. you know, the valuation, you know, wasn't pulled out of thin air by the global investment banks, right we know the saudi reserve number we know the capacity you can kind of get an idea of the supply/demand balance going forward. so you can kind of come up with the number the number was reasonable. when you look at all the other oil companies in the sector, their peers, right even though they're the biggest one except for the one thing you put your finger on in vienna, that i heard, which is that saudi competitive advantage of having the lowest cost by far. >> thank you for watching, by the way. you know, i'd asked the saudi energy minister in that press conference and he was kind of quiet and reserved until then. when i brought up the aram aramco ipo, he went on a
three-minute sort of speech if you will we talked about their $2.80 per barrel production cost i mean, you think you got american producers who are probably not profitable or break even at 50 a barrel. 45 a barrel. they're profitable at $2.80. why wouldn't investors be interested >> this is definitely a guaranteed cash flow again, what's the forward valuation, though? and, you know, it's gotten skewed by this -- by this hyperfloat and the other issue is there's sort of a heads, i win, tails, you lose component to the offering, too. the way the state sort of dips its hand into the pot when prices go or potentially go much higher and also -- >> the tax rate goes up. if oil's above 70, their tax rate goes up i think 40% if the oil goes to 100, the tax rate on that is 80%. just be mindful. if prices go up, their tax rate goes up. let's move on to topic two, which is chevron
$10 billion write down saying they're going to divest apple, this l and g thing up in british columbia is michael worth, the ceo, effectively saying oil's not going to go meaningfully higher in the next quarters, months, years? >> i think they have a dire outlook for sure i tell you this, over the year, oil is a boom and bust type commodity for sure we've had great times. we've had terrible times when the majors do this. when they have a bad earnings quarter. they throw the kitchen sink at you in terms of writing things down or doing what chevron's doing here usually, marks the bottom. >> they're giving up they're flushing out the assets they don't believe are profitable at any price. >> it may be worth investors finally looking. i think we're all trying to see if oil can make a comeback here in any way, shape, or form this is a signal or sign of that historically. >> you know anadarco's lost 24 in market cap. 20 billion in market cap the market cap loss from
occidental is bigger than most oil and gas companies. >> it's -- it's remarkable and to go back to the aramco sur surge today, i think the gain alone was bigger. >> at some point, there's going to be value, though, because occidental is by far the highest in the industry. >> bankruptcies will fix that. >> and they're coming, by the way. >> the stuff isn't going anywhere the rigs will be there the oil will be there. the processes will be there. >> many of these stocks won't be there. they'll be a different ticker. topic three. quickly, we're supposed to get inventory draw down. instead, we got inventory build of 3 million >> there is so much oil out there. >> there is. and there's also a lot of pressure on the industry including the refining industry. there was a sizeable downtick in refinery operations in this week's report. that was surprising for the time of year. >> well, we do have this -- it's won ki th all these refineries are sort of changing their blends because
now ships on the ocean have to use a different type of diesel. >> right. >> so it's causing everybody to kind of go haywire. >> although, that market is fairly well-supplied the panic could turn out to be the y2k. it's much more of a scare than it's turning out to be fingers crossed. >> that's appropriate because the u.s. oil and gas industry may need some rebooting. >> for sure. >> thank you very much. >> thanks, brian. >> all right coming up, lululemon may be looking a bit like fruit of the loom going after the male market. what the company is reportedly doing to woo its fastest-growing customer base. plus, the faa not on the same page with boeing on when the 737 max could get recertified. we're going to have the very latest with the faa administrator faces lawmakers on capitol hill if i wi phil lebeau with maybe the important story. >> deeper data at cnbc total shipments through the port of long beach dipped 2.4% in
october. compared to the same month a year ago ad lernbfs impact international tre,ow iound shipments outweighed higher outbound shipments. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.
revenue miss disappointing comparable sales the reason the retailer also cutting its full-year guidance all right. number two, shares of american eagle outfitters they're down not nearly as much. they're down 6%, though. weaker than expected holiday quarter earnings forecast. and finally, seeing a trend here shares of home depot they're down about 2%. so not as bad. also, though, on a disappointing sales forecast for next year, hd says its one home depot strategy is simply not generating as much revenue as it had expected all right. let's now get a cnbc news update sue herera for that. >> hello, brian. here's what's happening at this hour, everyone money diverted from the defense department cannot be used to build a u.s./mexico border wall. that is the ruling from a federal judge who blocked the spending measure more than $3.5 billion of military money had been ear marked by the trump administration the justice department says it plans to appeal. search crews are combing the
ant arctic for a transport plane that vanished en route to a base on the frozen continent. the c 130 herk liaison carried 17 passengers, including three civilians. the recall involves four and five burner models of mr. steak gas patio grills the problem involves the grill's fuel gage and the fuel line. the gas regulator hose can melt and potentially start a fire and greta thunberg says she was a bit surprised to be named the time ess person of the year. she wants to dedicate the award to all young activists she says she hopes their message on climate change is finally getting through. you are up to date that's the news update this hour brian, i'll send it back to you. >> thank you very much so here's what else is coming up on "the exchange." coming up.
a real bullish call for the real real free food isn't enough for workers at google anymore. monopolies aren't always bad. at least that's what tim cook says and the faa gives boeing a reality check. chge's all ahead on "the exan." woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com.
find out your online reputation today and let the experts help you repair it. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-877-866-8555. ( ♪ ) sure, the content's easy. but then you have to connect, download, edit, reformat, output, save, send, upload... still uploading... and maybe eventually post. this isn't working. introducing samsung business video solutions. with the galaxy note10, you can shoot, edit and post thumb-stopping videos, all from one device. samsung business solutions.
welcome back keeping it real. the best places to work and maybe the worst. and lululemon wants to seldom nick c sell dominic chu pants seema mody, dominic chu, and kate rogers. ready? all right. first up da davidson is initiating coverage of the real real with a real buy rating. the real real's an online consignment shop basically, you send them your clothes, either new or old they pick out the stuff. they may want to sell to somebody else. they give back to you what they don't. and then they sell the good stuff hopefully and you make some money any large and fast-growing market of luxury resale. however, that stock is down 14% since the june ipo the analyst price target though of 22 represents 33 upside from here of course, seema mody, that's on a declining stock.
is the real real for real? >> that is the key question. our cnbc investigations team had a big story that -- >> did a real deep dive into it. >> authentication process needs some -- there is some room for improvement there. but if you take a step back and look at the retail landscape, brian, high-end luxury retail has consistently performed well over the last two to three quarters we cover names like lvmh all those luxury names in europe are up about 35% or more this year so the idea here is that there seems to be an opportunity for real to be the secondhand marketplace for the younger consumer that wants to own luxury handbags but doesn't want to pay full price. >> but here's the catch, right she mentions lvmh. you mention names on the luxury side here. those are names that can possibly be really disrupted by what's happening with real real, poshmark, all these other ones because they sell new products to consumers that's how they make their money. >> but they don't have to be new. they could be like worn a couple
times. >> let's say you want a louis vuitton back you can go to louis vuitton. it's a big back, right it's a very expensive one. or you can go to one of these sites and maybe get a real one there's obviously some questions about that but recommerce that's this whole concept of secondhand selling that is a disruptive force right now because these folks who sell new products are now having to contend with those guys. >> seema brought up because let's say a berken bag, when i've heard about whatever they -- >> beer kin may be -- >> beer can. >> i've seen the country club right here, they had a wine issue with a woman you hear about that? she's suing the waiter everything's disaster. those go for like $20,000. let's say somebody puts it on the real real and says this is a real one and it's five grand which sounds expensive and then you get it and realize it's fake. if they don't have the trust of the consumer, i'm not sure what they've got. >> that's what i was going to bring up i mean, does the authentication process get better from here they said they have room to improve. they need to work on that. but does the consumer continue
to trust them? and is this total addressable market really as big as they say it is? >> do they have that many experts that can literally go in and expect every single thing? >> they get 30 hours of training. >> there's checkpoints they can do so there is certainly an opportunity here for real real to establish more credibility with their customer. >> platform goes down, the reputation goes with it. >> topic number two. is your place, workplace, nice or not glass door is out with its list of the best places to work in 2020 and needless to say, technology's troubles continue to grow. facebook, which by the way, claimed the title of the best place to work just three short years ago, fell 16 spots on the list it is now 23rd google dropped three spots to number 11. apple fell 13 spots to 84. number one yeah, well listen. despite the stocks going up, the employees don't seem to care there is a lot of social issues at these companies there's protests used their own organizations. >> so big tech is under fire
big tech will continue to be under fire as long as the current administration and current kind of legislative scheme in washington holds the way it is. that's one of the reasons why. pr is a bad thing here. but the companies that do top the list are always the ones that give out the big perks. remember, when facebook had it, it was a lot of the scheduling, time off things. hub spot, which is the number one on the list this year. it's a cloud computing company smaller. exactly right. but it has unlimited vacation. there's all these different perks that go along with it. it's a tight job market. and those kinds of companies stand out. remember, a time when alphabet/google let you bring your pets to work? that was a big perk at one point. pay for food. >> read mike isaac's book "superpumped about uber. he talks in the book about uber employees, it was so hot uber hats and uber uber. and then all these bad things started coming out about the company. everybody was embarrassed. i wonder if the same thing is happening with like a facebook given cambridge analytica and people say you work for
facebook >> you're spying on me. >> i don't think you can discount how much that's impacting the company. but when i was reading about it, they also said there is a lot of pressure inside the company to fix the outside issues so the work/life balance, for example, is not what it used to be and that helps it fall lower and low lower on the list because the company culture is changing. >> some of the complaints made as to why they don't love working at facebook. bureaucracy. a lot of politics amongst their leadership it kind of reminded me of the type of complaints that you would attach to a larger legacy traditional firm like an ibm, if you will but it's a good point to remind everyone that facebook was found in 2004. it is no longer a cutting-edge startup that is, you know, a silicon valley private company went public in 2012. it's been around for a while. >> perfect point listen all young people out there got to remember when companies get gigantic, bureaucracy occurs how cool you are if there's dogs and free beer, it's going to be and there's going to be infighting that's the way it is
perfect segue for dom. stretchy pants for men lululemon doubling down on its efforts to attract male consumers. retailer saying the segment is growing faster than its women's division and accounted for more than 21% of its sales last year. the stock really flexing its muscle look at that lulu, dom, nearly doubled this year while its competitors who have done okay have not performed as well as lulu. >> that have been in play for months, if not years at this stage. lulu is at the forefront of it now, lulu has a first mover advantage with regard to those types of products. but now, there are so many other companies that are coming in and kind of creeping in on their territory. and we're not talking massive brands like nike or adidas we're talking about niche brands out there. i remember this season i bought pants from a company from a startup athletic apparel maker i got them from western rise. >> for men >> these are technical pants that you can wear to work. commuter-type pants. >> what's a technical pant >> the fabric that's stretchy.
>> can you plaug it in >> looks like slacks feels like sweats. >> but it's not velvet, though it's like four-way stretchy pants that look like dress pants. >> great for airplane rides. >> in the -- i came up with a better term. what do you want to do really? you want to wear it while sitting on the couch eating stuff but still look good. let's call it laze-tastic. >> oh. >> they don't own me i can sit on the couch. >> it's a great idea yeah i'm saying to work with you. >> do i look laze-tastic >> do you remember the acronym mamil? middle-aged men in licra >> that's a visual. >> i think tonight will be a big moment for lululemon as you say, it's up. whether this whole marketing strategy to attract more men is actually working. >> bringing back the sanity on
the show. >> fast money five you will see me again. i'll be there. >> and mcdonald says they don't need to discount these they're $128 some go as high as $200. which is really interesting. >> you got everything these days because it's rare. topic four apple ceo tim cook making some controversial comments at the nikkei asian review. japanese paper saying, quote, a monopoly by itself isn't bad if it's not abused. he went on to say, quote, the question for those companies is, do they abuse it that is for regulators to decide shares of apple, meantime, hitting another all-time high. kate rogers, he's clearly not talking about himself. >> no, i think you can sense tim cook's frustration with being lumped in with other tech companies, like the googles of the world. like the facebooks of the world. amazon he's like very frustrated. he's talking about them and i think the issue that people are lumping big tech all in one group. and he's saying we don't monetize your data that way. this isn't what we're doing. we're different. i think it's an interesting comment. and i'm not sure that people will necessarily agree but he also says apple's not a
monopoly. >> well, they are in certain parts, right so they're certainly not in smartphones. if you look globally, their smartphone share is not anywhere near places like samsung. >> but its app store. >> app store is the issue, right. itunes music. that sort of thing that is where it becomes an issue. but i would say this regulators will always have to be there to determine whether companies are violating those particular practices. >> i'm going to dust off the old law book, though remember this. monopolies are not de facto illegal. monopoly is only illegal when you use it to tie it to another product or block a competitor. i don't think apple does either of those things. >> we'll have to see but of course tim cook has to hold the stance that bigger is better and even if they look at the app store, they're sticking to the rules and allowing regulators to play the role that they're supposed to play but they have this comes amid rising concerns ant the anti-competitive behavior. >> although, i do wonder this. i'll ask our viewers this. if you haven't had an iphone or samsung google phone, if you've
had a brand of phone for five or ten years and you bought all this music which comes in a file format are you ever switching are you ever switching we know answer. >> you just did brooklyn law really proud just now. i just want to say that. >> finally, google out with its top trending searches of 2019. apparently, dom has been wikipedia my education let me start with the top trending searches. okay top trending what is movies also so what is disney plus who is cameron boyce and who is nipsey hussle obviously, cameron and nipsey were tragic stories. they died too son on so we'll me on from that disney plus, though? >> i was surprised to see that despite netflix being out there. there was this much interest in disney plus. of course, there are numbers to show that there is strong demand but we'll have to see with earnings if it's enough. >> i think it's all of these
parents wondering when this is available. what movies are going to be on there. because we've talked about the competition between disney plus and netflix and how much children's content disney plus has. and also, all the "star wars" stuff. i don't watch. marvel but we know that's your territory. i think there's dual interest there from millennial parents. >> remember the riddle at the top of the show? what do area 51, disney plus an like sri lanka have in common? they're all top searches what is momo i don't know what that is either what is a boomer which we know now is sort of an insult to older people and what is quid pro quo which goes, by the way, to the trump ukraine investigation. i wondered at first why that was on there then i was like. >> this is also remember when they say trending searches, this is not necessarily the most-searched item this is the biggest spike in traffic over the same time last year so it's because disney plus doesn't really exist last year right. and all of a sudden, there was
all of this interest so it's a trending search. by the way, guys, you know who the number one person that was trending on google was that past 2019 >> who >> you know but go ahead. >> it's close. it's antonio brown the most-trending person on the google search in 2019. >> all in the boston area. >> yes seema, dom, kate thank you very much. >> you're very welcome. >> have a lovely day. >> you too. >> the faa administrator testified on capitol hill today about the agency's relationship with boeing. it is a big story and an important stock and we'll get the labtetest from d.c. next.
one of the products i helped develop at 3m was a more secure diaper closure. there were babies involved... and they weren't saying much. that's what we do at 3m, we listen to people, even those who don't have a voice. we are people helping people. dickson testifying on capitol hill today all regarding the agency's relationship with boeing and its oversight with the 737 max. phil lebeau is in d.c. and has more phil >> brian, during a three-hour testimony, the head of the faa was pressed about the faa being
lax when it comes to safety issues involving the 737 max as well as boeing's plant for the max out in washington. listen to this exchange between one representative accusing the faa of ignoring the complaints of a boeing whistle-blower >> i know you knew that he wrote to you, that mr. pierson wrote to you, once in september. but -- but, in fact, he wrote to you three times, sir he wrote to you in september he wrote to you in october and he wrote to you in november. and i know you just got on the job. but he didn't just write you letters. he sent you extensive information, didn't he, sir? >> yes. >> on -- on production problems that he identified at the rentin facility. >> yes. >> so my question to you is have you interviewed mr. pierson? >> we have reached out to mr. pierson to schedule -- >> that's not my question. have you interviewed him >> i know that we have contacted him. yes. >> so -- >> i don't know if -- >> excuse me he's sitting right over there. will you commit, as we sit here
today, that you will interview mr. pierson? >> absolutely. >> will you -- will yo investigate the production problems at the rentin facility? >> yes. >> can't say that word mistake, huh? that one's just sticking on your lips there. >> i don't want to blame other -- i don't -- again -- >> it's not about blame, sir it's about accountability. we're not trying -- >> again, i'm accountable. i hold myself accountable. >> can you say that the faa made a mistake in not taking seriously mr. pierson's concerns in a timely way? >> we are taking the -- we are taking all concerns, any concerns, that are raised, we are going to take seriously. and run them to ground in a systematic way so that we can make the right decision. >> just a taste from three hours of testimony for faa administrator steve dickson today. as you take a look at shares of boeing, they are off of the low of the day but, brian, we should point out that this is a stock that went down earlier today because the faa came out and said it ain't gonna be certified the 737 max is not going to be certified before the end of the
year that runs counter to what boeing has been saying all along. that it still expects certification by the end of the year brian, back to you. >> well, phil, just quickly. why is boeing saying anything? it's not their call. it's like me saying something about what someone else may or may not do it seems a little bit -- i don't know -- irresponsible in some levels >> that has been the question that has been asked ever since they put out this timeline on november 11th. remember, that's when they said we expect certification by the end of the year. and potentially, some airlines to return to commercial service by the end of january. remember, after that came out, brian, there was a couple of statements and then a video e-mail that steve dickson sent out to the representatives at the faa saying we call the time. they don't determine it. we call the time they don't release those video e-mails, brian, voluntarily every week when he addresses employees. that was a clear signal from the faa that they are tired of
boeing trying to pressure them in terms of getting this plane recertified. >> all right phil lebeau in d.c phil, real pleasure on an important story there. thank you very much. well, don't lose sight of this the fed rate decision is now just a few moments away. j. powell and company are in a very different situation than they were one year ago we'll take a look at what is ahead and what has changed 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, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer.
we are just ten minutes away from the federal reserve's interest rate. is there a risk for a repeat of last year's december selloff the worst december since 1931, how quickly we forget >> it was awful. >> remember last year we did this, it was a little later. december 19th last year, here's the s&p for december as brian said this was depressing the whole month. here it is they raise rates on the year, and the market dropped 1 1/2%? not only dropped that day, but for the following couple days, it continued to drop, the mark did not start out well, of course
remember president trump described himself as tariff man. we kept slowly sliding into it, until we eventually bottomed as brian referenced, the worst christmas eve ever >> we had the fed, concerns about trade. and a looming government shutdown too that was a little bit of a factor in this horrible december very different >> you look at the s&p, we're not done here. a verydifferent s&p for the beginning of december so far essentially we're flattish for the month. remember, last time in december, we were looking in this direction. we were down to about 5% this time in december of last year, now, we're essentially flat, so it's a lot better situation. we have the tariff deadline looming on december 15th, we can't say what's going to happen so far, very different situation. >> if those tariffs hit monday, it could be interesting.
bob pisani we'll see you at the fed decision >> the fed call just a few minutes away i'll see you on power lunch as well contessa brewer, we have a great pal. a t reo aer this. ♪ ♪ ♪ ♪ have you ever worked with dr. francis? oh yeah, he's ok. just ok? guess who just got reinstated! well, not officially. nervous? yeah. yeah me too. don't worry about it, we'll figure it out.
servicenow put our this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.
welcome to power lunch, we are minutes away from the federal reserve's decision on interest rates the markets right now are mixed. the dow slightly lower, while the nasdaq and s&p are in the green, but just barely portfolio manager with morgan stanley investment management. david kelly's chief global mortgage strategist, it's good to have you all here first of all, jim, can we talk about what you're expecting out of this decision >> i don't think there's anything that's going to be earth shattering, the economy is in a good place. i don't think that really changes, it may be an update to the unemployment rate, they probably bring that down from 3.7 to 3.5 i think the fed is going to keep their upward bias in the policy
rates. i don't want to make this sound like a boring meeting, i don't think it will be, it's going to be much more important in the press conference in how we decide the communications strategy of 2020. >> three special words we've heard over and over again. what's your expectation from any drama coming out of the -- not just the meeting, but the press conference >> we're calling this a drama free day i do think -- >> time to go. >> no, thank you, though i think they will talk about how they're going to stay on the bull market. i also think we'll talk about the risks, not only trade, but global growth. it's that dichotomy between manufacturing and consumer economy is still there >> i think the draw, monique, you are correct. from a rate perspective.
>> from a rate perspective you look at what else the fed is dealing with with this trade fight, the possibilities of a bunch more tariffs in a couple days maybe tariffs on a couple billion dollars on european goods. an election, brexit. there's a lot of stuff they're going to be dissecting that we won't hear about today >> the message is, we're on vacation we're going to be on vacation all of 2020. don't expect anything from us. maybe in retrospect we shouldn't have cut rates the market is up 30% this year i think that's where you're going to see the message >> right now, we just got this cnbc fed survey back that said 57% of those who responded think they will actually cut rates again by june. that was the average forecast next year. 50%, we're seeing continued dog growth, we're seeing very modest rising consumer prices
tell me what the market sees that the fed's not seeing or are they -- >> the market may be the futures market and not realizing that's somewhat distorted here. when you look at the wages, 3.7% year over year if wage growth is rising, there is no reason for the fed to be cutting. >> we have two minutes let's play a game. this is the last fed meeting of the decade will the first rate move of the next decade? will it be a hike? >> it will be a cut, because the economy is eventually going to run out of steam and threaten recession again. >> and when? >> i don't think -- maybe in a year's time. it may well be -- >> you're going hike for the next move. >> just to spite david
>> i don't see a recession imminent on the horizon. i agree if we start going down that trajectory, all bets are off. >> i think it's a rate cut, it's sometime in 2021 >> you have almost two years before another fed boom? >> financial conditions are easing we may run the risk of zloeg down after the elections, that could be the case where the fed does start to have to cut again. and look i think the markets are misunderstanding one thing interest rates are low why are the interest rates low the down side risk is so much bigger than the upside risk in the economy. for example, we have trade, we have a political election coming up in 2020 if bad things happen, that's going to be worse than if good things happen. therefore the market skews rates a little lower i'm in the camp that i think we need to be cautious. i think 2020 is going to be a decent year. but the next rate cut is 2021.
>> we're going to find out in a few seconds. a good discussion there. we have two cuts and a hike about. >> there could be a lot discussed. we're going to find out what they say about the economy the strength of the job market and inflation. so there may be more drama than we expect. let's find out now let's go to steve liesman in d.c. >> no change on the federal funds rate we have a range of 1 1/2 to 1 3/4% the committee judges the current stance of the policy to be appropriate. it was a unanimous decision. no defense either way that means. the median forecast no longer sees a rate hike in 2020 that had been built into the september forecast we have a new forecast this year and there's no longer a rate hike built in. some division over 2021 where several have multiple rate hikes built