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[00:00.000 --> 00:05.960]  NBC dot com slash invest in you next on squat box reaction to quarterly numbers from
[00:05.960 --> 00:10.860]  lift. What challenges and changes to the road map can steer investors to the right
[00:10.860 --> 00:16.720]  share company squat box today 60 a.m. Eastern. Watch a listen live on the CNBC app.
[00:19.120 --> 00:23.520]  It's 5 a.m. at CNBC Global headquarters here is your 5 at 5. Investors
[00:23.520 --> 00:28.200]  racing for fire open as Fed Chairman Jay Powell has backed a capital hill. What
[00:28.200 --> 00:32.200]  President Trump had to say about yesterday's testimony that's coming up and
[00:32.200 --> 00:37.200]  Boeing raising the red flag over a potential impact from the coronavirus outbreak.
[00:37.200 --> 00:41.680]  Lift shares sinking this morning. Why some investors say CEO needs to get his
[00:41.680 --> 00:46.760]  priorities in order. We speak with an early investor in the company and a new
[00:46.760 --> 00:51.000]  meeting for Maga. President Trump has to say about Silicon Valley's tech
[00:51.000 --> 00:55.960]  Titans and a slim win in New Hampshire as Bernie Sanders claims victory in the
[00:55.960 --> 01:00.960]  grandest state yet again. It's Wednesday, February 12, 2020. And Robotic
[01:00.960 --> 01:02.480]  Change begins right now.
[01:12.720 --> 01:15.680]  Good morning and welcome. I'm Courtney Reagan in this morning for Brian
[01:15.680 --> 01:19.480]  Sullivan. You're chart of the day. Kind of an ugly one. Sure. The bedbath
[01:19.480 --> 01:24.520]  and beyond sinking. Look at this more than 20% here. The company announcing
[01:24.520 --> 01:28.600]  preliminary guidance for its fourth quarter coming in well below expectations.
[01:28.600 --> 01:31.880]  Much more on that missed a moment. We're going to give you a look at how
[01:31.880 --> 01:36.040]  futures are looking on this Wednesday morning. Stocks do look to open in
[01:36.040 --> 01:39.400]  record territory here this morning with the Dow Jones industrial average
[01:39.400 --> 01:43.560]  indicated higher by more than 106 points. The S&P 500 higher by almost
[01:43.560 --> 01:48.600]  12 than the NASDAQ tacking on an extra 47 points in the early going.
[01:48.600 --> 01:52.680]  Let's get to check in the fixed income market. Take a look at the yield on
[01:52.680 --> 01:56.760]  bonds and look at the 10 year, which we're seeing tick higher again here today
[01:56.760 --> 02:02.520]  at 1.6 to 0 after we've seen that yield fall for several sessions in a row
[02:02.520 --> 02:06.680]  as perhaps flashing some morning signs that the equity market wasn't quite
[02:06.680 --> 02:10.520]  seeing. Let's go worldwide now and take a look at the green arrows really
[02:10.520 --> 02:15.480]  around the world in Asia, Japan, China. You name it pretty much higher across
[02:15.480 --> 02:18.280]  the board. Hang saying higher by nine tenths of a percent. The Shanghai
[02:18.280 --> 02:22.600]  Composite higher by about the same in the Japanese Nikkei adding on three
[02:22.600 --> 02:27.800]  quarters of a point. And let's take a look at Europe in the early going.
[02:27.800 --> 02:32.600]  Also some green arrows across the world around the world in Europe, the
[02:32.600 --> 02:35.800]  German zetrodax higher by six tenths of a percent. Let's do 100
[02:35.800 --> 02:38.840]  higher just marginally but two tenths of a percent. That counts as
[02:38.840 --> 02:42.840]  green and France higher by three tenths of a percent. Investors are
[02:42.840 --> 02:46.120]  waking up to a lot to chew on this morning, frankly, federal reserve
[02:46.120 --> 02:49.800]  chairman J. Powell under renewed pressure from President Trump. He
[02:49.800 --> 02:53.960]  heads back to the hill today. Among his concerns, the coronavirus,
[02:53.960 --> 02:57.640]  which he says the central bank is actively monitoring as companies
[02:57.640 --> 03:01.720]  like Boeing and caring, like new concerns over the outbreak,
[03:01.720 --> 03:04.360]  earning season remains at the forefront as well,
[03:04.360 --> 03:08.440]  names like Cisco, Walmart, and Deer. Those are still on deck.
[03:08.440 --> 03:13.000]  And a far left win in New Hampshire last night for Bernie Sanders
[03:13.000 --> 03:16.680]  shaking up the Democratic presidential field. Joining me now,
[03:16.680 --> 03:20.280]  clearonomics founder and head of research, James Liu, we got an
[03:20.280 --> 03:23.960]  awful lot to tackle here. James, let's start with Chairman Powell.
[03:23.960 --> 03:27.800]  What do you expect from him today when he heads back to Capitol Hill?
[03:27.800 --> 03:31.160]  Sort of more of what he said yesterday reiterated with the same or
[03:31.160 --> 03:33.400]  different words or a different message here today?
[03:33.400 --> 03:35.560]  Yeah, good morning, Courtney. We think it's pretty much going to be the
[03:35.560 --> 03:38.280]  same message. I mean, the message from the Fed is that the
[03:38.280 --> 03:41.320]  economy is in good shape that these big uncertainties in the world
[03:41.320 --> 03:45.080]  as always are last year it was trade. This year is the coronavirus.
[03:45.080 --> 03:48.120]  These uncertainties are very hard to measure. But, you know, you look at last week's
[03:48.120 --> 03:51.960]  job support, very solid. And the underlying trend is still good.
[03:51.960 --> 03:57.000]  So there's not much more that the Fed can do at the moment other than staying put.
[03:57.000 --> 04:00.360]  You also look at the market reaction and where Fed from futures are.
[04:00.360 --> 04:05.080]  And while the market has cheered what the Fed has done over the last year,
[04:05.080 --> 04:08.760]  you also are seeing now the expectation that there will be some sort of
[04:08.760 --> 04:12.520]  rate cut maybe by the middle of the year and certainly at least one
[04:12.520 --> 04:15.160]  rate cut by the end of the year from the market. So that's something that's
[04:15.160 --> 04:18.920]  evolving over time and that's changed as uncertainties like coronavirus
[04:18.920 --> 04:22.040]  have taken shape. Does that feel appropriate to you to be talking about
[04:22.040 --> 04:24.760]  rate cuts again? I know that maybe what the market is expecting.
[04:24.760 --> 04:27.480]  But is that what the economic data tells you might be appropriate?
[04:27.480 --> 04:30.520]  So not from our perspective. So we think that we're in a position where
[04:30.520 --> 04:33.720]  a wait and see a pro-trial will use appropriate. But of course, you know,
[04:33.720 --> 04:37.880]  the market over the last 10 years has been trained to expect the Fed put.
[04:37.880 --> 04:41.240]  And I think from an economic perspective, you know, obviously there's a human
[04:41.240 --> 04:44.840]  told and human tragedy for around coronavirus that we shouldn't overlook.
[04:44.840 --> 04:49.240]  But economically speaking, coronavirus couldn't happen at a worse time.
[04:49.240 --> 04:52.680]  And that's because we had always trade uncertainty affecting trade between
[04:52.680 --> 04:56.040]  US and China and the global economic picture last year.
[04:56.040 --> 05:01.080]  And now this year, that issue, especially the spread of coronavirus around the world,
[05:01.080 --> 05:05.240]  could in fact have a toll on economic growth as well. So from a timing perspective,
[05:05.240 --> 05:08.760]  it's not great. But these are big uncertainties. They're very hard to measure.
[05:08.760 --> 05:12.680]  And so the Fed should probably stay put. Now, the irony, of course, is that the markets
[05:12.680 --> 05:15.720]  are all time high, is and are basically trying to look through that at the moment.
[05:15.720 --> 05:19.720]  Absolutely. That is something that is so interesting and has a lot of us scratching our heads.
[05:19.720 --> 05:23.880]  I think the bond market was flashing maybe some warning signs that the equity market
[05:23.880 --> 05:27.320]  wasn't quite, but to your point, it does seem as if we're looking through.
[05:27.320 --> 05:30.600]  And Chairman Powell did use the word resilient, I believe yesterday,
[05:30.600 --> 05:36.280]  when he was talking about the US economy's ability to sort of absorb some of these bigger global
[05:36.280 --> 05:41.800]  problems. Does that, do you still feel like we are resilient when it comes to the US economy
[05:41.800 --> 05:45.240]  even after all these years of growth in a commentative policy?
[05:45.240 --> 05:50.040]  We think that's the case. So the US, of course, has been the main engine of last decade
[05:50.040 --> 05:55.400]  for global growth. Now, the challenge is that if many investors expect a big
[05:55.400 --> 06:00.840]  resurgence in global growth and also market performance, not just based on last year, but also
[06:00.840 --> 06:05.000]  where valuations are, then we will have to see other economies start to pick up the slack.
[06:05.000 --> 06:09.080]  And so you think back to a year, like 2017, when it wasn't just the US doing well,
[06:09.080 --> 06:13.320]  we had people talking about global coordinated growth, global synchronized growth.
[06:13.320 --> 06:17.160]  And that was a year when not just US markets perform well, but the emerging markets and
[06:17.160 --> 06:21.240]  developed markets also. So I think that's the type of situation we would have to see.
[06:21.240 --> 06:25.880]  Of course, the coronavirus does potentially dent that a little bit, but the reality is it's
[06:25.880 --> 06:30.680]  very hard to measure that effect. You think while SARS and really those are backward-looking
[06:30.680 --> 06:36.200]  academic studies, you can't just count up the number of items that weren't produced
[06:36.200 --> 06:41.480]  because of disease. It's also the deals that weren't done, it's the economic activity that
[06:41.480 --> 06:44.760]  could have happened, that didn't happen. That's incredibly hard to measure. Ultimately,
[06:44.760 --> 06:49.240]  speaking, you need this global growth to come back in order to justify what a lot of
[06:49.240 --> 06:52.440]  investors see in the market right now. All of that makes a lot of sense, James.
[06:52.440 --> 06:56.200]  Thanks for being here with us, come back to Worldwide Exchange, and he was updated when we have
[06:56.200 --> 06:58.680]  better estimates, maybe even if it isn't two years.
[06:58.680 --> 07:02.360]  Great. Thanks for the. Well, Senator Bernie Sanders is celebrating his first
[07:02.360 --> 07:06.760]  clear all the insulin when yesterday in yesterday's New Hampshire primary,
[07:06.760 --> 07:11.160]  the victory marks the second strong showing four standards as he and the remaining 2020
[07:11.160 --> 07:16.760]  Democrats. Now shift their focus to Nevada and South Carolina and be sees Alice Bar joins us
[07:16.760 --> 07:22.520]  again this morning. Good morning, Alice. Good morning, Courtney, and turnout was high here
[07:22.520 --> 07:26.920]  in her Hampshire higher than back in 2016. That's of course good news for Democrats as they're
[07:26.920 --> 07:31.560]  trying to engage voters. We were also seeing the top tier of candidates shifting as they
[07:31.560 --> 07:40.120]  head into the next round of voting. That go. Senator Bernie Sanders, riding high this morning
[07:40.120 --> 07:46.440]  off a first place finish in the first in the nation primary. This victory here is the
[07:46.440 --> 07:54.520]  beginning of the end for Donald Trump. Former Mayor Pete Buttigieg coming in a close
[07:54.520 --> 08:00.760]  second roughly 4,000 votes behind. Thanks to you, a campaign that some said shouldn't be here
[08:00.760 --> 08:09.160]  at all has shown that we are here to stay. And Senator Amy Klobuchar, placing third
[08:09.160 --> 08:14.600]  delivering on momentum from a strong debate performance and rocketing into the top tier.
[08:14.600 --> 08:23.000]  We have beaten the odds every step of the way. Senator Elizabeth Warren looking for a path
[08:23.000 --> 08:29.000]  forward after a disappointing fourth place finish. Our campaign is built to the long haul.
[08:29.560 --> 08:34.520]  While former Vice President Joe Biden landed in fifth, having already left New Hampshire
[08:34.520 --> 08:40.120]  before results came in, he spoke last night from South Carolina where he's counting on a rebound
[08:40.120 --> 08:48.600]  from a more diverse electorate. 99.9%. That's the percentage of African-American voters who have not yet
[08:48.600 --> 08:57.320]  had a chance to vote in America. The field is narrowing. Businessman Andrew Yang and Senator
[08:57.320 --> 09:03.080]  Michael Bennett both announcing they are dropping out as winners and losers emerge from New Hampshire
[09:03.080 --> 09:09.480]  sharpening the picture of the race to November. At this point coming out of the first
[09:09.480 --> 09:14.280]  two contests, Pete Buttigieg still has a slight lead in the delegate count, which will ultimately
[09:14.280 --> 09:18.760]  decide the nominee, though of course there is still a long way to go until that decision, Courtney.
[09:18.760 --> 09:22.760]  Absolutely, we've got a long road ahead. Alice, thanks for being here with us this morning.
[09:23.400 --> 09:27.880]  Well, when we come back, forget travel, retail, and tech, yet another industry,
[09:27.880 --> 09:33.080]  sounding the alarm over the coronavirus outbreak, racing for a possible supply chain shock.
[09:33.080 --> 09:41.560]  A mixed morning has soft bank shares surging to a seven-month high check-up ad higher by 12 percent
[09:41.560 --> 09:46.760]  by that wide-next and later former Federal Reserve Board Governor Sarah Bloom Raskin is here
[09:46.760 --> 09:51.560]  or take on Powell's day-one testimony. And what we can expect from day two, a very busy hour
[09:51.560 --> 09:54.120]  still head when we're going to change returns.
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[12:30.680 --> 12:34.200]  Welcome back. Let's get to check out the latest news surrounding the coronavirus outbreak.
[12:34.200 --> 12:36.840]  We're Health Solomon is here. We're health. How's it looking today?
[12:36.840 --> 12:41.160]  Hi, Courtney. So China is now reporting the lowest number of new coronavirus cases
[12:41.160 --> 12:45.720]  and the Hubei Province since the end of January. That of course is the epicenter of the outbreak.
[12:45.720 --> 12:51.800]  So officials say that 1,068 new cases are confirmed. That's down from a peak of more than 3,000
[12:51.800 --> 12:57.160]  on February 4th. However, there have also been 94 new deaths reported in the region.
[12:57.160 --> 13:02.040]  Drug makers are also bracing for potential supply disruptions from China. The CEO of one of
[13:02.040 --> 13:07.160]  India's largest pharmaceutical companies this morning, supplies would start running out by the end of
[13:07.160 --> 13:13.560]  this month unless China research production. China makes compounds that are used in antibiotics,
[13:13.560 --> 13:17.320]  pain killers, and also diabetes drugs. And that chairman, Jay Powell,
[13:17.320 --> 13:21.800]  commenting on the impact of the coronavirus, could have an impact on the global economy.
[13:21.800 --> 13:26.040]  Testifying before Congress yesterday, Powell said that the U.S. economy
[13:26.040 --> 13:29.400]  appears to be resilient as we just heard Courtney say to global headwinds,
[13:29.400 --> 13:32.200]  but that the Fed is also closely monitoring the situation.
[13:35.880 --> 13:41.480]  We know there will be effects on China through there's some part of the first half of the year,
[13:41.480 --> 13:47.160]  and China's close neighbors and trade major trading partners in Europe as well as Asia.
[13:47.160 --> 13:50.760]  And we know that there will be some very likely some effects on the United States.
[13:50.760 --> 13:52.360]  I think it's just too early to say.
[13:53.560 --> 13:57.560]  Also, shares of Gucci's parent company carrying our higher today after reporting strong
[13:57.560 --> 14:02.760]  fourth quarter results. But the company also says that it has seen a serious drop in customer traffic
[14:02.760 --> 14:07.080]  in China. Carrying says that it's shifting some in-mintour to other countries.
[14:07.080 --> 14:11.880]  Cheers to Foxcon, rising more than three percent today. This is on for ports. It aims to resume
[14:11.880 --> 14:14.760]  half of its production in China by the end of the month.
[14:14.760 --> 14:19.480]  Waiter says that Foxcon is also shooting to be at 80 percent of capacity by some time in
[14:19.480 --> 14:22.280]  March. You can see shares are up about three percent of pre-market.
[14:22.280 --> 14:26.600]  And Boeing is warning that the virus will hit the airline industry's profit this year.
[14:26.600 --> 14:32.600]  Speaking to reporters at the Singapore Air Show, a senior executive says that's due to travel restrictions
[14:32.600 --> 14:37.160]  and a 70 percent drop in capacity by Chinese airlines. And Courtney, you and I talked about this
[14:37.160 --> 14:41.720]  on rapid fire yesterday. Of course, if flights aren't going into China, of course, that hurts the
[14:41.720 --> 14:45.240]  airlines, but also a lot of the companies that do really well in those airports.
[14:45.240 --> 14:48.200]  Absolutely. I know the ripple effects, I think, are really hard to measure.
[14:48.200 --> 14:51.880]  And I have to actually give some of these companies credit for trying to measure it,
[14:51.880 --> 14:54.600]  even giving us some of these number 70 percent, 80 percent.
[14:54.600 --> 14:57.880]  Whether they're talking about a revenue hit, trying to manage expectations.
[14:57.880 --> 15:00.280]  Yeah. And I think it's just going to be hard to really know.
[15:00.280 --> 15:04.280]  And as James Lewis, our last guest was saying, we may not know for several years down the road,
[15:04.280 --> 15:09.480]  but the collective impact date, it's often pretty backward-looking, but we've got to try to figure it out now.
[15:09.480 --> 15:10.680]  It's basically here. Sure.
[15:11.800 --> 15:15.880]  Okay. Well, don't forget to watch CNBC's special coverage of the outbreak.
[15:15.880 --> 15:18.920]  That's breaks down the fast-moving developments and the market impact.
[15:18.920 --> 15:23.800]  That's tonight at 7 p.m. Eastern Time. We'll still on deck.
[15:23.800 --> 15:31.000]  Why investors may want to stay away from that beyond section this morning.
[15:31.800 --> 15:35.800]  Today's big number. $14 trillion.
[15:36.600 --> 15:39.720]  That's the total household debt in the US.
[15:39.720 --> 15:43.320]  It grew over $600 billion in 2019,
[15:43.320 --> 15:58.520]  making it the biggest annual increase in 12 years.
[16:13.320 --> 16:25.960]  Daydog has become the modern, modern, and endless platform in the cloud age.
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[16:51.320 --> 16:58.200]  Every morning, right and early, 17,000 Edward Jones financial advisors
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[18:15.160 --> 18:23.880]  Let's get a check on some of the stocks on the move.
[18:23.880 --> 18:30.120]  Today, SoftBanks third quarter profit was nearly wiped out by losses of its $100 billion
[18:30.120 --> 18:34.040]  vision at its $100 billion vision fund, I should say.
[18:34.040 --> 18:37.960]  The fund posting and operating loss of more than $2 billion.
[18:37.960 --> 18:44.360]  CEO Maschis on defending SoftBanks performance saying the vision fund has gained about $3 billion
[18:44.360 --> 18:46.760]  on its investments since the beginning of the year.
[18:46.760 --> 18:50.520]  Now, this report did come after the close of Japanese trading,
[18:50.520 --> 18:54.840]  softBanks of Sprint Merger with T-Mobile, a lot going on there for SoftBanks.
[18:54.840 --> 18:59.720]  Now, Western Union is reporting fourth quarter earnings in revenue that missed forecast.
[18:59.720 --> 19:04.200]  The company says the stronger dollar negatively impacted revenue.
[19:04.200 --> 19:06.600]  You can see shares down more than 6%.
[19:06.600 --> 19:10.760]  And shares a bed bath and beyond, a few plunging by more than 20%.
[19:10.760 --> 19:15.960]  Actually, down more than 25% after the retailer said fourth quarter sales were hit by increased
[19:15.960 --> 19:21.560]  promotions, falling traffic and inventory issues, same store sales in December and January.
[19:21.560 --> 19:25.320]  Those dropped more than 5% or in that was more than expected.
[19:25.320 --> 19:30.520]  The CEO says the company is experiencing, quote, short-term pain and efforts to stabilize the
[19:30.520 --> 19:35.480]  business that CEO is still sort of getting speed under him trying to figure out what that business
[19:35.480 --> 19:37.800]  is all about and frankly, how to fix it.
[19:37.800 --> 19:42.440]  Well, as we had to break President Trump giving his magus Logan new meaning yesterday.
[19:44.120 --> 19:49.160]  And we have four trillion dollar companies, one is Microsoft, one is Apple, one is Google,
[19:49.160 --> 19:53.880]  one is Abyss, so you have Amazon, Google Apple, and Microsoft.
[19:53.880 --> 19:58.360]  And so you have an M, you have an A, you have a G, and you have an A, you have a Mac guy.
[20:00.360 --> 20:03.400]  The comments coming just hours after the FTC expanded,
[20:03.400 --> 20:09.240]  its anti-trust investigation into Big Tech over past acquisitions that may have hurt competition,
[20:09.240 --> 20:13.480]  consumers, and evaded regulatory scrutiny. We're back after this.
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[21:18.120 --> 21:21.320]  Trump's Towers brought the Chinese to the table for a phase one trade deal,
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[21:24.760 --> 21:28.120]  If you read the 100 page agreement, you'll see many opportunities for businesses.
[21:28.120 --> 21:29.880]  They could help balance our trade deficit.
[21:29.880 --> 21:32.360]  Watch or listen live on the CNBC app.
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[22:56.680 --> 22:59.480]  Let's get a check on this morning's other headlines.
[22:59.480 --> 23:02.680]  NBC's Philip Anna is in New York with the latest Good Morning Philip.
[23:02.680 --> 23:06.440]  Hey, Courtney, good morning and just a moment we will tell you why that song was playing.
[23:06.440 --> 23:09.240]  A stunning turn of events in the Roger Stone case.
[23:09.240 --> 23:13.480]  Attorney General William Barr in his top aides at the Justice Department intervened,
[23:13.480 --> 23:17.720]  reversing a stiff sentencing recommendation that federal prosecutors had filed.
[23:17.720 --> 23:22.440]  The decision coming after a tweet from the president called the 7th and 9-year recommendation
[23:22.440 --> 23:25.000]  quote, a miscarriage of justice.
[23:25.000 --> 23:29.080]  All four prosecutors in the case have now dropped out in protest of the move.
[23:29.080 --> 23:31.240]  And one is leaving the justice department all together.
[23:31.240 --> 23:37.080]  Actor Jesse Smollett is facing new charges this morning. The Empire star faces a new six-count
[23:37.080 --> 23:42.280]  indictment charging he filed four separate false reports to Chicago police when he claimed last
[23:42.280 --> 23:48.280]  January that two math gunmen attacked him, insulted him with homophobic and racist slurs,
[23:48.280 --> 23:53.240]  and then looped a new surround his neck. The special prosecutor says a new investigation was launched
[23:53.240 --> 23:57.640]  after similar charges were abruptly dropped last year. Attorney's for some, of course,
[23:57.640 --> 24:03.560]  Mollett have not yet responded. And it looks like the rhinestone cowboy is trading in his horse
[24:03.560 --> 24:10.920]  for Toyota. This math from Crimea covered his car in those tiny gems 400,000 to be exact.
[24:11.560 --> 24:16.040]  Took him six months to complete a sparkly project, but he says it was a labor of love,
[24:16.040 --> 24:20.760]  and he now plans to sell that car. He says that it would be a great prop for photo shoots,
[24:20.760 --> 24:24.120]  although Courtney, I have no idea how he'd watched that.
[24:24.120 --> 24:30.360]  So Instagram worthy though. I like it. Sparkly. I mean, imagine all the photos you could take with
[24:30.360 --> 24:37.480]  that car. Totally bedazzled. Thank you, Phillip. Let's tell to come. My sums a lift needs to get
[24:37.480 --> 24:43.960]  its priorities in order. As that stock falls more than 4% this morning, plus the Carlos Gonesaga
[24:43.960 --> 24:49.720]  far from over. As Nissan takes a new swipe, but it's housed in former chairman and a programming
[24:49.720 --> 24:55.400]  note. Don't miss a CBC exclusive a CVS health CEO, Larry Marlow on closing bell today.
[24:55.400 --> 25:00.680]  As that company prepares to release results, just after 7 a.m. Eastern time. Worldwide exchanges
[25:00.680 --> 25:02.680]  back after this.
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[27:32.520 --> 27:43.880]  income at ProtectedIncome.org Stocks Look foist build on record highs as investors prep themselves around two of
[27:43.880 --> 27:49.560]  J. Powell on the health futures are higher. Bernie Sanders on top of the 2020 Democratic field
[27:49.560 --> 27:54.760]  following the win in New Hampshire, what his rise could mean for your money and speaking of winners,
[27:54.760 --> 28:00.680]  the Westminster Dog Show crowns its champion, the pup that took best in show as the second half of
[28:00.680 --> 28:02.600]  World Red Exchange starts now.
[28:12.200 --> 28:16.200]  Welcome back to World Red Exchange. I'm Courtney Reagan in this morning for Brian Sullivan.
[28:16.200 --> 28:20.840]  Here's our stock features are looking halfway through the 5am hour. We gave you a sneak peek.
[28:20.840 --> 28:25.480]  We said they were higher and the Dow Jones Industrial Average is indicating a higher open to the tune of
[28:25.480 --> 28:31.240]  106 points, the S&P 500 higher by 12, and the NASDAQ set to add about 46 points.
[28:31.240 --> 28:36.120]  Another busy day, though, of course, ahead with Fed Chairman's testimony again on the hill.
[28:36.120 --> 28:41.880]  Corona virus earnings and the New Hampshire primary results all of that on investors' radars.
[28:41.880 --> 28:47.080]  Let's take a look at the bond market, the yield on the 10 year sitting at 1.614 percent
[28:47.080 --> 28:51.240]  taking slightly higher from the yield yesterday. Let's get a check on the Asian markets.
[28:51.240 --> 28:56.360]  We saw green arrows mostly around the world, and as you can see across the board in Asia with
[28:56.360 --> 29:01.400]  Shanghai, Hanks and the Japanese Nikkei all higher, just under 1 percent, though.
[29:01.400 --> 29:06.360]  European markets also indicating or actually should say they are open, right? There are a couple
[29:06.360 --> 29:10.440]  hours ahead of us, so they're higher. We've got the Germans at your tax higher by 6 cents of
[29:10.440 --> 29:15.400]  a percent, puts you 100, higher by 3 cents of a percent, and France is higher by 3 cents of a
[29:15.400 --> 29:19.640]  percent as well. Let's get a look at some of the other top stories that we're following this morning.
[29:19.640 --> 29:23.000]  Great for health Solomon is here. Hi, Rell. Hi, Courtney. So the saga between
[29:23.000 --> 29:28.040]  Nissan and Carlos Gone continues. So Nissan has filed a civil lawsuit in Japan against its former
[29:28.040 --> 29:33.480]  Chairman Carlos Gone. Y'all to make her is seeking an initial amount of $90 million in the suit.
[29:33.480 --> 29:39.240]  The company says it's looking to recover monetary damages inflicted by Gone as a result of
[29:39.240 --> 29:45.000]  quote years of misconduct and fraudulent activity. Google kicks off a landmark legal case in Europe
[29:45.000 --> 29:49.480]  today. During the three-day hearing at Europe's second highest court, the company will seek to
[29:49.480 --> 29:56.600]  overturn three European Union anti-trust funds that total roughly $9 billion decision is not expected
[29:56.600 --> 30:02.360]  until next year. And the federal aviation administration is admitting that it has not effectively
[30:02.360 --> 30:07.960]  overseen systems for managing safety risks that Southwest Airlines. So this follows the new report
[30:07.960 --> 30:13.640]  from the U.S. Department of Transportation's Office of Inspector General that blasts at the FAA.
[30:13.640 --> 30:19.960]  The agency says that local FAA managers responsible for monitoring Southwest failed to ensure that
[30:19.960 --> 30:25.960]  the carrier complied with mandatory maintenance standards while incorporating 88 use jets into its
[30:25.960 --> 30:31.480]  fleet. Sure, the Southwest are lower this morning as we can see down about 1.2% in pre-market.
[30:31.480 --> 30:35.400]  Courtney. Thank you very much. We're going to see you back a little later.
[30:35.400 --> 30:40.040]  Well, the 20-trumpet Democrats are turning their attention to Nevada and South Carolina. After
[30:40.040 --> 30:45.000]  Senator Bernie Sanders victory and the new Hampshire primary, Sanders when puts him near the top
[30:45.000 --> 30:50.120]  of the party's fractured presidential field, which is now smaller after yesterday's contest.
[30:50.120 --> 30:54.600]  Seeing B.C.'s Kayla Towshi joins us now. Kayla, can you break down sort of where things
[30:54.600 --> 31:00.040]  stack up after the primary? It hasn't been so clear to all of us all along the way. Who's really
[31:00.040 --> 31:07.880]  the leader? Well, Sanders is victorious in New Hampshire after a clear victory last night after
[31:07.880 --> 31:17.480]  a chaotic run in Iowa just a week ago, Courtney with 25.9% of the votes. Sanders can claim victory
[31:17.480 --> 31:22.920]  here, although notably his support in the state has been significantly eroded by the entrance
[31:22.920 --> 31:28.600]  of South Bend Mayor Pete Buttigieg and Minnesota Senator Amy Klobuchar who essentially split
[31:28.600 --> 31:35.960]  the support that Sanders received here in the state in the 2016 cycles. Pete Buttigieg with 24.4%
[31:35.960 --> 31:41.560]  and Klobuchar with just shy of 20% after being largely written off just a week ago because of
[31:41.560 --> 31:46.280]  a lower tier. Trying to figure out whether she can sustain this momentum and how. Here's the
[31:46.280 --> 31:55.160]  Senator in New Hampshire last night. And tonight in New Hampshire, as everyone had counted us out,
[31:55.160 --> 32:07.960]  even a week ago, thank you, Pundits. I came back and we delivered. Because of the fractured
[32:07.960 --> 32:12.440]  field, perhaps many were surprised at the low finish of Senator Elizabeth Warren and former
[32:12.440 --> 32:18.280]  vice president Joe Biden, who with lower than 15% of support here in New Hampshire, did not
[32:18.280 --> 32:24.680]  cross the threshold to get any delegates. Biden has already left New Hampshire to start campaigning
[32:24.680 --> 32:31.720]  in South Carolina, which is the next presidential state contest on February 22nd. He acknowledged
[32:31.720 --> 32:38.360]  that he has not been performing well in the race, but is and Latinos to hopefully improve his
[32:38.360 --> 32:43.000]  numbers. And finally, because of the performance in New Hampshire, we are seeing some presidential
[32:43.000 --> 32:49.240]  campaigns suspended. Both Andrew Yang and Senator Michael Bennett saying last night that it would
[32:49.240 --> 32:54.680]  be the end of the road for their campaigns. So we are seeing the race narrow slightly courty,
[32:54.680 --> 32:59.720]  but we still have more than a handful in the running. Yeah, Kayla, and yesterday I know you were
[32:59.720 --> 33:05.240]  telling us that at least that sort of ceremonial first votes they went to Mayor Bloomberg,
[33:05.240 --> 33:09.720]  but I didn't hear you sort of mention how it all shook out for him. I guess that was all he got.
[33:09.720 --> 33:19.560]  Yeah, and certainly that was more of a novelty vote, Dick'sville notch, just casting a
[33:19.560 --> 33:25.000]  handful of votes. Certainly he has been spending add money here in the state. He has been gaining
[33:25.000 --> 33:29.880]  traction in national polls. But Courtney, he hasn't really been spending any time in the state.
[33:29.880 --> 33:36.600]  He may in the future, there are some reports that he is increasing his staff here in New Hampshire
[33:36.600 --> 33:42.840]  and opening an office here, but he has not really been campaigning here at all. He will appear
[33:42.840 --> 33:48.680]  on his first debate stage of the cycle. Next week in Nevada, that is certainly something
[33:48.680 --> 33:53.720]  every campaign is preparing for. This is so interesting, Kayla. Thank you very much for bringing
[33:53.720 --> 33:58.840]  it to us this morning. This is going to continue to unfold in the weeks in the months ahead.
[33:58.840 --> 34:02.920]  We're more on Senator Sanders victory and what it means for the election and your money,
[34:02.920 --> 34:07.480]  I'm joined by Jeff Mills. He's chief investment officer at Bryn Mar Trust and Jimmy Peppa
[34:07.480 --> 34:12.840]  Cookis, economic analyst at the American Enterprise Institute, both of these gentlemen,
[34:12.840 --> 34:17.240]  our CNBC contributors. Jimmy, I guess I'm going to start with you just to give us kind of
[34:17.240 --> 34:22.120]  the lay of the land and how you think everything shook up last night's Winderstand, Mr. Sanders won.
[34:22.120 --> 34:26.920]  But by a relatively narrow margin. So what does this mean going forward? Biden's already moved
[34:26.920 --> 34:31.400]  on to South Carolina? What's happening here? Who's going to be the Democratic frontrunner?
[34:31.400 --> 34:36.360]  Well, what happened was that we had a frontrunner who as it turns out is really bad at running
[34:36.360 --> 34:40.440]  for president. I don't think Joe Biden's ever done better than about a fourth place finishing
[34:40.440 --> 34:46.120]  a primary. He looks like he barely has a pulse. We have a very weak frontrunner in a very
[34:46.840 --> 34:53.000]  fractured field. And listen, if you were going to come up with a scenario where somebody who has
[34:53.000 --> 34:59.240]  unlimited money to spend can jump in, shake the whole thing up, maybe when, maybe create a
[34:59.240 --> 35:04.200]  a, you know, a brokered convention next summer. That's exactly what you're seeing. You mentioned
[35:04.200 --> 35:09.160]  Mike Bloomberg at the end. I don't know what, I don't know what his scenarios were that he ends
[35:09.160 --> 35:13.560]  up as a Democratic nominee, but they couldn't look much better than what's happening right now.
[35:13.560 --> 35:17.800]  And so Jeff, now that we hear everything Jimmy has to say and he's talking about a fractured
[35:17.800 --> 35:22.440]  field, I guess it's a little hard for investors to sort of make some of their bets with their
[35:22.440 --> 35:28.280]  money. But if it is Bernie Sanders, I mean, you couldn't be further different from the situation
[35:28.280 --> 35:31.640]  we have right now in the White House as far as economic policy is concerned.
[35:32.680 --> 35:38.040]  Yeah, no question, but I think the market has it about right. You know, it continues to levitate
[35:38.040 --> 35:43.720]  even as Sanders has risen in the polls. But I think the bottom line is that no president has lost
[35:43.720 --> 35:49.240]  reelection when they've avoided a recession in the two years prior to that reelection bid. So,
[35:49.240 --> 35:54.200]  you know, in my estimation, you have a bottoming of global manufacturing. It looks like leading
[35:54.200 --> 35:59.960]  economic indicators are inflecting higher. If you look at earnings as an example, usually guidance
[35:59.960 --> 36:05.640]  for 2020 at this point in time would have been down by about 1.4 percent. Guidance is only
[36:05.640 --> 36:10.760]  down by about 4 percent so far. So, fundamentally, things look good, which means we likely
[36:10.760 --> 36:16.120]  avoid a recession leading into reelection. So, I think investors are looking toward another president
[36:16.120 --> 36:21.800]  Trump victory here. And usually when the incumbent wins on average, the S&P 500 is up about 10
[36:21.800 --> 36:26.760]  percent when the incumbent loses, usually up about 3 percent. So, a big gap there. But if you're
[36:26.760 --> 36:30.920]  playing the odds, it looks like a reasonably good scenario for markets. And I think that's how investors
[36:30.920 --> 36:35.800]  are acting at the current time. Yeah, you know, I mean polls show that we're suggesting that
[36:35.800 --> 36:40.920]  Bernie Sanders can be president Trump. A lot of investors look at those betting markets. Those
[36:40.920 --> 36:46.040]  betting markets have Trump the favor. And even if Trump should lose, you need to have a president
[36:46.040 --> 36:50.200]  Sanders, you know, we're not going to get a well tax, probably on constitutional. We're not
[36:50.200 --> 36:54.120]  going to suddenly, we're not going to, you know, all all private insurance companies. So, I think
[36:54.120 --> 36:59.000]  they're looking at it's an unlikely scenario. The Bernie Sanders wins. It's even more unlikely
[36:59.000 --> 37:04.520]  scenario that we go hashtag full socialism. And Jeff, as you follow along, you know, you said,
[37:04.520 --> 37:09.320]  you gave us some stats there about what happens when incumbent presidents win and then if they
[37:09.320 --> 37:16.840]  lose, the S&P 500 is up about 56 percent since Trump has been in office. I mean, you know,
[37:16.840 --> 37:21.880]  what would market say about sort of looking at this very fracture field? I guess I'm still
[37:21.880 --> 37:27.000]  just not convinced that the markets are going to behave the same way if the candidate is Bernie
[37:27.000 --> 37:33.080]  Sanders versus if the Democratic candidate is a Mike Bloomberg. Yeah, look, I mean, Jim mentioned
[37:33.080 --> 37:37.400]  it, right? If you look at the national polling, I think Sanders is a head of Trump by something
[37:37.400 --> 37:42.600]  like 4 percent. And that gap has actually widened a little bit. So, I do think that even if it's
[37:42.600 --> 37:49.000]  just for a period of time, investors may need to react in a way that, you know, supposed is that
[37:49.000 --> 37:53.960]  there could possibly be a Bernie Sanders president. So, I think it could cause volatility in the
[37:53.960 --> 37:58.600]  near term. And honestly, I've been surprised that the catalyst the markets have been given thus far,
[37:58.600 --> 38:03.640]  whether it's coronavirus or Sanders searching and the polls hasn't done more to shake the markets.
[38:03.640 --> 38:08.840]  I mean, if you look at what's going on right now, you've got the top 50 names in the S&P 500,
[38:08.840 --> 38:13.400]  some 13 percent above their long-term moving average. If you look under the surface,
[38:13.400 --> 38:18.600]  there's some breath deterioration. So, we had 80 percent of names above the 50-day moving average
[38:18.600 --> 38:22.600]  now only 60. So, I think in the near term, whether it's the coronavirus,
[38:22.600 --> 38:25.960]  whether it's something in public term prediction. I think if you look out ahead,
[38:25.960 --> 38:30.840]  it's just difficult to be too negative on a market where the liquidity backdrop is what it is,
[38:30.840 --> 38:34.520]  view what central banks are doing. They continue to stand at the ready. And like I said,
[38:34.520 --> 38:38.920]  I think fundamentals on balance are actually looking better, not worse.
[38:38.920 --> 38:43.160]  Jimmy, looking forward as these primary contests roll on. Do you think we're going to
[38:43.160 --> 38:47.000]  continue to see such a fracture field? Or these campaigns are going to start to pull together
[38:47.000 --> 38:51.320]  and voters start to sort of aggregate towards one candidate? Or is this just the way it's going
[38:51.320 --> 38:54.760]  to be until we get to, like you said, the possibility of a broker convention?
[38:54.760 --> 39:00.600]  Yeah, listen, I think if there was, and I'm like Bloomberg sort of looming out there,
[39:00.600 --> 39:05.720]  you'd say at some point, listen, Sanders has, you know, he's won the votes in the caucus
[39:05.720 --> 39:10.280]  and the primary. The next couple of states look much better than him. I mean,
[39:10.280 --> 39:15.240]  he kind in a normal situation. He kind of should be the Democratic nominee. People don't believe
[39:15.240 --> 39:20.920]  it because of his age, because of the socialism tag. And because we have this age bump of money
[39:20.920 --> 39:25.960]  about to explode in this primary over the next few weeks. That's why I think this is still
[39:25.960 --> 39:31.160]  going to be a very topsy-turvy field for quite a long time. Jeff Mills, Jimmy Pethicookis,
[39:31.160 --> 39:34.200]  thank you both for joining us this morning. You know, we're going to keep talking to you
[39:34.200 --> 39:39.800]  for the months to come because we have a lot to figure out. It seems. Well, shares of lift,
[39:39.800 --> 39:44.040]  tumbling, despite the company posting results that beat analysts estimates, fourth quarter
[39:44.040 --> 39:49.720]  revenue topping $1 billion for the first time ever. Investors, though, thank close or attention
[39:49.720 --> 39:54.840]  to the stock following Uber's fourth quarter beat and updated profitability target shares of
[39:54.840 --> 40:01.720]  lift down 4%, CEO Logan Green didn't update Lyft's profitability timeline. But he did make it clear
[40:01.720 --> 40:07.880]  that it was among the key themes the company is focused on this year. We've expected to deliver
[40:07.880 --> 40:13.400]  continued strong topline growth in 2020 while also making progress on our path to profitability.
[40:14.440 --> 40:18.040]  As we've discussed on prior calls, there are three key themes that were focused on.
[40:18.040 --> 40:24.280]  First is product innovation, second is profitable growth, and third is operating leverage.
[40:25.560 --> 40:30.360]  Joining me now, San Toshra, how he is head of Research at Manhattan Venture Partners, his firm
[40:30.360 --> 40:36.280]  wasn't early investor in Lyft. So you just heard Logan Green profitability number two on his list.
[40:36.280 --> 40:40.280]  Should it be number one? Good morning. Good morning. Good morning.
[40:42.280 --> 40:45.720]  I think it's no. They're on the right track. They're not in a rush. They don't want to pull
[40:45.720 --> 40:49.960]  in the timeline. And that's one of the reasons why we invested right from the beginning.
[40:51.240 --> 40:56.040]  It's a pure play with a focus strategy, very disciplined strategy. So I think that's what they're doing.
[40:56.040 --> 41:00.840]  They're executing to that strategy. They're not in a rush. Like he said, profitable growth
[41:00.840 --> 41:06.840]  until the second last quarter of 2021, they will be profitable. So I trust the numbers. I trust
[41:06.840 --> 41:11.880]  the CEO. So I think he's on the right track. And this quarter was a classic beat, beaten race,
[41:11.880 --> 41:16.760]  fourth quarter right off the gate, doing great with big numbers. So I think this company is on the
[41:16.760 --> 41:21.000]  right track. And our thesis is proving out that this is the way to go. Is it really
[41:21.000 --> 41:24.920]  investor? Are you currently an investor in Lyft? No. We are not. I mean, we distribute the shares
[41:24.920 --> 41:31.080]  after the expiration. But we were early investors, like I said it. Okay. Okay. And so you mentioned
[41:31.080 --> 41:36.440]  that Lyft is a pure play. And you mean, because they don't have a lift eats like an Uber eats.
[41:36.440 --> 41:41.080]  But some people point to that is actually a really good thing for Uber. You don't think Lyft needs
[41:41.080 --> 41:45.720]  that. No, they don't need that. I mean, Uber eats. It eats businesses good, but it's competitive.
[41:45.720 --> 41:49.560]  That's the thing about Uber. Uber, it's a different game. It's a platform. It has number of other
[41:49.560 --> 41:56.440]  businesses, not all profitable. We don't know when they'll be profitable. But it's a broad platform.
[41:56.440 --> 42:00.920]  But I think the way to go is the right-sharing business in North America, which has the best
[42:00.920 --> 42:06.760]  unit economics. So this is right to focus very well with the optionality later on of going into
[42:06.760 --> 42:11.000]  other businesses. I would rather go that way than go this way. Because there is a lot more to do
[42:11.000 --> 42:16.600]  here. The market is big. There's a huge opportunity out there. It's still locked more to go.
[42:16.600 --> 42:21.560]  Still early stages. So I think they need those resources and the attention to execute here.
[42:21.560 --> 42:26.360]  And then later on, see, try to go into other businesses if needed. But they don't need to.
[42:26.360 --> 42:30.680]  So really important part of North America is California, because it's a huge state. And we've got
[42:30.680 --> 42:35.560]  this gig worker law on the books that these right-sharing companies and the number of others are just
[42:35.560 --> 42:40.360]  not thrilled with, frankly. I mean, how big of a threat is this? And will this continue to be
[42:40.360 --> 42:46.760]  an overhang for investors? Yeah, I think it's still playing out. Lift is banking on a ballot initiative.
[42:46.760 --> 42:50.920]  They're confident that they can win. But let's see where that plays out. California is not the
[42:50.920 --> 42:55.560]  biggest part of the market. I mean, it's big, but it's not all all the business. And there's a lot
[42:55.560 --> 43:01.080]  of other businesses around. So there'll be some hit, a small percentage of the total earnings
[43:01.080 --> 43:08.120]  seconds. But overall, I think we'll see, I think the genies are at the back. No one, you cannot take
[43:08.120 --> 43:12.840]  this back. Right-sharing is the way to go the future. Everyone wants that. There's a ground
[43:12.840 --> 43:17.000]  swell of support from bottom up. So you'll see, at somewhere in between, you will settle.
[43:17.000 --> 43:21.720]  They will be a compromise somewhere. But in the end, you need to get your economy. You need
[43:21.720 --> 43:26.840]  right-sharing. That's the way to go. Transportation of the transportation as a service is a big
[43:26.840 --> 43:31.080]  part of the future. That's where we invested. That's how that's why we thought this was the right
[43:31.080 --> 43:35.160]  place to go. So a lot of moving parts, Santor. Thanks for being here with us. Thank you. Thanks for having
[43:35.160 --> 43:41.400]  me. Absolutely. Well, coming up, Netflix, making a rare move with the release of one highly
[43:41.400 --> 43:45.560]  anticipated sequel details on that. And the other stories you're going to be talking about,
[43:45.560 --> 43:51.000]  that's ahead. And coming up in a C&B exclusive Goldman Sachs CEO David Solomon joins closing
[43:51.000 --> 43:56.920]  Bell as the banks annual internet and technology conference kicks off at the 4 p.m. Eastern time.
[43:56.920 --> 43:58.760]  Robotics change, though. That could just a moment.
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[44:10.680 --> 44:18.840]  India, where I found yoga. Slow down, free. I have breathed in India's magic. I have felt
[44:18.840 --> 44:27.720]  it's warm. Yoga has taught me the truth about life and motorcycles. That the more still you are,
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[46:07.640 --> 46:12.200]  Let's find out what else you're going to be talking about today. It is time for this morning's
[46:12.200 --> 46:18.120]  top stories. What do we got today? Twitter is in an up war about this next one. The Westminster
[46:18.120 --> 46:22.440]  Dog Zero wrapped up two days of competition last night and handed out its coveted
[46:22.440 --> 46:27.880]  Best-in-Shawa award. The winner was this standard poodle named Ceba. Cute, right?
[46:27.880 --> 46:33.640]  Ceba is the first standard poodle to win top dog of the show since 1991. Also the fifth to win in
[46:33.640 --> 46:39.720]  Westminster history. Ceba, however, upset, crowd-favorite, Daniel. Let's wait for this. This is a golden
[46:39.720 --> 46:44.760]  retriever who took home first. This is Ceba, of course. Who took home first in the competitions?
[46:44.760 --> 46:49.960]  Sporting group. Let me tell you, Daniel. There's Daniel. Very cute. So here's the issue. Apparently
[46:49.960 --> 46:56.440]  a golden retriever has never won. And so it was the underdog. No pun intended. And so folks really
[46:56.440 --> 47:01.480]  wanted Daniel to win. They also thought Daniel was a cuter, more doggy dog. Right, right, right.
[47:01.480 --> 47:05.880]  But apparently, so that's not what the judges are looking for. They're judging to see which dog
[47:05.880 --> 47:13.640]  is closest to the ideal breed. Like it's breed. They're not measuring Daniel against Ceba.
[47:13.640 --> 47:19.640]  Exactly. They're measuring Ceba against standard poodles and Daniel against golden retrievers.
[47:19.640 --> 47:25.160]  And apparently the judges felt like Ceba was closer to the ideal standard. They're both cute.
[47:25.160 --> 47:30.040]  They can both win. And speaking as an owner of a golden doodle, I love both breeds. Yeah, right?
[47:30.040 --> 47:35.960]  Yes. Also Netflix giving non-subscribers now a freebie amid one highly anticipated release.
[47:35.960 --> 47:40.520]  The company is 2018 original to all the boys that I've loved before. We'll be available to
[47:40.520 --> 47:45.640]  stream regardless of whether or not you are a paid user through March 9th. To the move comes as
[47:45.640 --> 47:50.360]  the sequel to the hit rom-com officially hits the platform today. And this is the first time that
[47:50.360 --> 47:55.320]  Netflix has offered free streaming for one of its originals in the U.S. We'll be very interesting
[47:55.320 --> 48:00.920]  to see if this leads to more subscribers because think about it. If you watch now the first one,
[48:00.920 --> 48:05.000]  right, and you're into it, you want to be more willing to pay, you know, to see the second one.
[48:05.000 --> 48:09.560]  They say it's a hit and I love rom-com's but I've not ordered this nor have I seen it. So I've
[48:09.560 --> 48:14.440]  totally missed that boat. We may have aged out though, you and I. Oh, I mean, I'm with you though.
[48:14.440 --> 48:20.040]  I'm with you. Okay. So pizza. Surfing up another interesting innovation in the chain announced
[48:20.040 --> 48:26.120]  that it's newest product. The mozzarella poppers pizza comes with 16 mozzarella filled squares
[48:26.120 --> 48:29.720]  baked right into the pizza crust like right on top of this. You see there. The restaurant list
[48:29.720 --> 48:34.600]  causing it calling it the cheesy it's pizza yet. Both claim considering that the chain was
[48:34.600 --> 48:39.880]  also behind the stuffed crust pizza. This also comes a week after Papa John's launched. It's innovation
[48:39.880 --> 48:45.080]  the pop at D.A. I do remember all of those innovations and it does sort of get you interested.
[48:45.080 --> 48:49.800]  I feel like everybody's I should say a lot of people try it once. I don't know if you keep going
[48:49.800 --> 48:54.600]  back to it. Like does it does the mozzarella stuff crust become your go to pizza probably now?
[48:54.600 --> 48:58.200]  Or maybe it's just a novelty. Right. Like you're just trying it once as you said. Exactly.
[48:58.200 --> 49:02.680]  Like I can tell a lot of mozzarella. But maybe that's all they need. Interesting. I love cheese.
[49:02.680 --> 49:07.640]  I would definitely be willing to try it here. Well, on deck Boeing issues the new warning
[49:07.640 --> 49:11.880]  over the coronavirus and the major economic impact the outbreak will likely have.
[49:11.880 --> 49:15.800]  Plus, what investors should take away from Jay Powell's latest comments before he
[49:15.800 --> 49:20.840]  testifies to Congress again this morning will talk to former Fed governor Sarah Bloom Raskin.
[49:20.840 --> 49:25.800]  That's coming up next. At a reminder, you can always watch or listen to us live on the go on the
[49:25.800 --> 49:50.200]  CMBC app. Worldwide exchange is back in just a moment.
[49:55.800 --> 50:05.880]  When it comes to your business internet, which is more important.
[50:09.480 --> 50:13.160]  Okay, wish I didn't have to chew. Like the more I think about it, the more I want to jump
[50:13.160 --> 50:15.000]  to you through. What if I said you can have it all?
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[50:57.560 --> 51:01.880]  mmm, birthday cake. And try pure protein delicious protein shakes.
[51:03.080 --> 51:08.840]  Next on Squatbox, reaction to quarterly numbers from lift. What challenges and changes to the
[51:08.840 --> 51:14.600]  road map can steer investors to the right-chair company? Squatbox today, 6 a.m. Eastern,
[51:14.600 --> 51:16.840]  watch or listen live on the CMBC app.
[51:16.840 --> 51:23.320]  It's time to change the way you think about money. Personal stories, money tips, strategies
[51:23.320 --> 51:30.040]  for saving and investing. Invest in you, ready set, grow, CNBC and acorns go to
[51:30.040 --> 51:35.640]  CNBC dot com slash invest in you. Big news, big price tags and big problems.
[51:35.640 --> 51:38.600]  It's been on the market for three years with no offer.
[51:38.600 --> 51:42.520]  Listening impossible tonight, 10 a.m., CNBC, get yours.
[51:44.680 --> 51:48.520]  It's now time for the executive recap. The headlines you need in 60 seconds.
[51:48.520 --> 51:52.680]  Foxconn is aiming to restart half its production operations in China.
[51:52.680 --> 51:57.080]  By the end of the month of mid-the-Coronavirus outbreak, according to Reuters, the company
[51:57.080 --> 52:02.440]  is working to boost that number to 80% in March. Foxconn received approval from Chinese authorities
[52:02.440 --> 52:07.880]  this week to reopen its largest plants. Meanwhile, Boeing is issuing a warning about the
[52:07.880 --> 52:12.520]  impact of the coronavirus, speaking to reporters at the Singapore Air Show. A senior executive
[52:12.520 --> 52:18.120]  says the global air cargo industry is unlikely to grow this year because of challenges in China
[52:18.120 --> 52:23.160]  stemming from that outbreak. Boeing is also warning that the virus will hit airline revenues
[52:23.160 --> 52:28.920]  and profits shares a Boeing down only fractionally. And a federal judge has dismissed some of
[52:28.920 --> 52:34.360]  the charges against their no-spounder Elizabeth Holmes. The judge ruled patients were not deprived
[52:34.360 --> 52:39.640]  of any money or property by using the company's blood testing services and there was no evidence
[52:39.640 --> 52:44.920]  showing Holmes directed doctors to make misrepresentations to their patients. The judge did
[52:44.920 --> 52:50.360]  uphold wire fraud charges, however, against Holmes. Well, as stock features point to new
[52:50.360 --> 52:55.080]  records for Wall Street at the open, investors also looking ahead to a second day of testimony
[52:55.080 --> 52:59.560]  from Federal Reserve Chairman, Jay Powell, expected to testify before the Senate Bank.
[52:59.560 --> 53:04.280]  You may get 90 Emmys turn time today, just one day after he said the central bank is closely
[53:04.280 --> 53:11.800]  monitoring the coronavirus outbreak. The question for us really is what will be the effects
[53:11.800 --> 53:17.000]  on the U.S. economy? Will it be persistent? Will it be material? That's really the question.
[53:17.000 --> 53:22.360]  I think we know there will be effects on China through through some part of the first half
[53:22.360 --> 53:28.600]  of the year and China's close neighbors and trade major trading partners in Europe as well as Asia.
[53:28.600 --> 53:33.320]  And we know that there will be some effects on the United States. I think it's just too early
[53:33.320 --> 53:39.640]  to say we have to resist the temptation to speculate on this. And so we'll be watching that carefully
[53:39.640 --> 53:43.960]  again. And the question we'll be asking is will these be persistent effects that could lead to
[53:43.960 --> 53:50.600]  a material reassessment of the outlet? Joining me now with Morris Federal Reserve Board
[53:50.600 --> 53:55.400]  Governor and former Deputy Treasury Secretary Sarah Bloomraskin. She's also a CNBC contributor
[53:55.400 --> 53:59.800]  and Duke University Rubenstein Fellow. Sarah Good Morning. Thank you for being here with us today.
[53:59.800 --> 54:04.760]  You of course heard Mr Powell. I'm sure you heard him say all of those things yesterday as we're
[54:04.760 --> 54:09.880]  trying to square up really the impact of the coronavirus saying we have to wait and see if it's
[54:09.880 --> 54:14.600]  material. It seems to me that there's no question it will be material. We just don't know
[54:14.600 --> 54:23.560]  perhaps to what degree. That's right. This virus actually does have quite the potential to really
[54:23.560 --> 54:29.880]  have some big knock on effects. If you think about certainly the impact, the economic impact on
[54:29.880 --> 54:36.920]  China itself, there is now speculation that that will knock off a couple of points of GDP growth
[54:36.920 --> 54:43.640]  there in terms of how they measure it. But the effects on the U.S. and on the trading partners
[54:43.640 --> 54:49.000]  for China are also really what we have to keep an eye on. You heard Chairman Powell talk about
[54:49.000 --> 54:55.080]  these effects being looking to see whether they are persistent and material. That is, in fact,
[54:55.640 --> 55:03.080]  what the Fed will look at. This is, you know, as I see it really, kind of a double
[55:03.080 --> 55:09.640]  lamby because of course we're coming out of a situation where trade has been affected by the
[55:09.640 --> 55:19.320]  terror wars. Now we have this virus to contend with from an economic growth perspective. I think
[55:19.320 --> 55:24.760]  this is actually a serious headwind. I think so too. I think it's going to be some time before we
[55:24.760 --> 55:29.560]  know we're so much more interconnected. It seems now that even we were during the SARS outbreak,
[55:29.560 --> 55:33.640]  both the United States and China, but really China with the rest of the world and their economy
[55:33.640 --> 55:38.280]  is certainly swell to be much larger than it was then. But the president of course Sarah also
[55:38.280 --> 55:43.080]  kept up his attacks against J. Powell. He was tweeting during yesterday's testimony quote
[55:43.080 --> 55:49.000]  when Jerome Powell started his testimony today that that was up 125 and heading higher as he spoke
[55:49.000 --> 55:54.200]  it drifted steadily downward as usual on his now negative 15. Germany and other countries get paid
[55:54.200 --> 56:01.560]  to borrow money. We are more prime but Fed rate is too high. Dollar tough on exports. Oh, Sarah. I
[56:01.560 --> 56:06.200]  don't think he's ever going to escape these tweets. He's always going to be criticized and Trump
[56:06.200 --> 56:11.000]  keeps pushing for this idea of negative rates. What do you make of it all put together? I guess
[56:11.000 --> 56:17.240]  both the president's criticism of Powell and the idea of negative interest rates. Right and
[56:17.240 --> 56:23.880]  well the question of negative interest rates actually got questioned in the context of the hearing.
[56:23.880 --> 56:30.040]  Yesterday and I thought I thought Chairman Powell was particularly articulate in taking negative
[56:30.040 --> 56:35.480]  interest rates off the table. I mean he has made it clear that that is not going to be a tool in
[56:35.480 --> 56:41.960]  the toolbox that the Fed is like our ammunition. He talked about the use of forward guidance,
[56:41.960 --> 56:47.320]  the use of large-scale asset purchases, not that these are being contemplated at the moment.
[56:47.320 --> 56:55.720]  But you see the Fed here starting to talk about its usual playbook. It shouldn't need it in terms of
[56:56.520 --> 57:03.720]  more accommodation. So I think the negative interest rate point was handled you know pretty clearly
[57:03.720 --> 57:10.440]  by Chairman Powell. That is not going to be a tool that he is contemplating right now.
[57:10.440 --> 57:16.280]  And I think you know the president can tweet on and on as much as he wants about it. It is a tool
[57:16.280 --> 57:22.360]  that has mixed results in terms of it's use in other countries. And I think it's use in the
[57:22.360 --> 57:28.120]  U.S. is something that is not considered imminent. Before we go here, Paul did also highlight
[57:28.120 --> 57:32.120]  what he sees as the biggest risk to U.S. growth cybercrime. If you can just take a minute we're
[57:32.120 --> 57:40.200]  going to play this for you. The thing that we worry about a lot is cyber attacks. I think we have
[57:40.200 --> 57:45.960]  a great game plan for traditional you know issues like bad loans and things like that. It's more
[57:45.960 --> 57:52.520]  cyber attacks is really the frontier where you worry. So what do you think about that? How big of an
[57:52.520 --> 57:57.400]  issue is that? It seems like so many businesses that we talk to at CMBC say yeah we're getting
[57:57.400 --> 58:01.960]  attacked basically every day. We've just gotten better. It's sort of the wording many of them.
[58:01.960 --> 58:05.480]  But you know that's not at some point they're going to break through I should say.
[58:05.480 --> 58:11.640]  That's right. And the volume and the complexity, the sophistication of these cyber attacks
[58:11.640 --> 58:17.320]  continues to increase. We saw this. I mean I saw this back at my time at Treasury. I mean this
[58:17.320 --> 58:24.600]  was something that is a mounting concern. I think that Chairman Powell is correct in noting
[58:24.600 --> 58:31.000]  that the defensive posture of a lot of financial institutions is actually increasing and that's
[58:31.000 --> 58:38.600]  a good thing. So from a defensive posture a lot of the institutions do have good mechanisms in
[58:38.600 --> 58:43.800]  place to thwart the attacks. But in terms of they're coming they're coming fast and furious and they
[58:43.800 --> 58:50.360]  continue. This is a series headwind. I would you know I would have probably answered that question
[58:50.360 --> 58:55.800]  right a little differently. I think that there are other big risks on the horizon and maybe they
[58:55.800 --> 59:01.320]  will get explored today from the Senate side. But in particular you saw Chairman Powell dodging
[59:01.320 --> 59:07.240]  around a little bit on some on on questions of climate change and financial stability and other
[59:07.240 --> 59:12.840]  you know and other kind of risk factors. So many things to consider Sarah Bloom-Raskin. Thank you
[59:12.840 --> 59:16.840]  so much for being here with us this morning. We'll speak to you again very soon. That's it for
[59:16.840 --> 59:24.120]  Worldwide Exchange this morning. Squawk Vox begins right now. Good morning. The NASDAQ and SNP
[59:24.120 --> 59:29.160]  pushing the new eyes that companies are now warning a supply disruptions related to the core
[59:29.160 --> 59:35.800]  virus outbreak. Feelin the burn in New Hampshire, Senator Sanders, edging out Pete Buttigieg.
[59:35.800 --> 59:40.600]  We're going to take you live to the Granite State for the results and implications for investors.
[59:40.600 --> 59:46.680]  And shares a bed bath and beyond are plummeting. The CEO is describing it as short-term pain.
[59:46.680 --> 59:52.120]  We've got details on all of this great ahead. It's Wednesday, February 12th, 2020. The
[59:52.120 --> 01:00:10.440]  Squawk Vox begins right now. Good morning everybody. Welcome to Squawk Vox here on CNBC. We're live
[01:00:10.440 --> 01:00:14.600]  from the NASDAQ market site in Times Square. I'm Becky Quack, along with Joker and an Andrew
[01:00:14.600 --> 01:00:19.000]  Ross Sorkin. Let's take a look at the US equity futures at this hour. You'll see right now that the
[01:00:19.000 --> 01:00:24.680]  futures are indicated higher. In fact, the Dow indicated up by triple digits again of about 125.
[01:00:24.680 --> 01:00:30.200]  NASDAQ up by 51 in the S&P up by 13. And this comes after the S&P 500. And the NASDAQ
[01:00:30.200 --> 01:00:34.200]  both set new records once again yesterday. During the trading session, all three of the major
[01:00:34.200 --> 01:00:51.800]  averages were higher and the Dow gave back most of those gains into the day flat. But again, you're