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tv   Squawk on the Street  CNBC  November 8, 2013 9:00am-12:01pm EST

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gains. >> it may not be inflation or all the other dire things they say about the fed but you got to get this out of the way before you can normalize trading. >> and if the taper had started, we'd be in a better place? >> yes. or at least a step there. >> we have to go. thank you for joining us. "squawk on the street" is next. and good friday morning. welcome to "squawk on the street." i'm kelly evans with jim cramer and scott wapner. carl and david are on assignment this morning. the news first. so much for the shutdown. 204,000 jobs, that was the number of jobs the u.s. economy added in october, well above expectations. you throw the revisions in there, look at the private sector figure, it's even higher. futures off on their highs on concerns the fed might scale back its bond buying program sooner rather than later. look at the 10-year note yield. a big move. it's been whipping around all
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year. 2.72. that's the latest temperature after the gdp report, after payrolls, moving toward 2.75 will be the trend today. over in europe, s&p overnight cutting france's credit rating one notch to aa. that's having a little bit of an effect on the euro, which is around seven week lows against the dollars. markets yesterday not getting much of a bid from the ecb rate cut there or here. our road map this morning begins with the jobs report. non-farm payrolls and august figures revised higher. >> and twitter taking a pause in premarket trading after soaring 73% in its debut. >> an important read, mcdonald's with sales growth. gap stores issuing better than expected guidance. >> disney fourth quarter results
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beating the street but operating income from its cable network fell 7%. that and now you'll have to wait a little bit longer for the next star wars installment. >> what are we going to do? we'll have that coming up. let's go through the numbers on the october jobs report. non-farm payrolls up 204,000. it was forecast to grow 120,000 for the month. august and september figures were revised upward. separately, the unemployment rate rose slightly to 7.3%. it was the first increase in three months and it largely reflected federal employees who are furloughed during the partial government shutdown. in other words, what happens is there are two surveys, employment and household survey. during the week people were shut down, people called on the phone and said they were unemployed. because they got back pay, they were still counted as employed on the establishment side of things. >> we all know what the drill is. immediately you're supposed to say taper, taper, taper and we
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can go there and you'll have to go there for the first four, five hours. there are considerable people who believe we're at this s&p level is because of the fed. they're not going to say china is stronger, europe is stronger. all they're going to say is this is going to end the run and yesterday was a precursor to this and that's the big decline where everyone was scrambling was really about. i'm not buy into that but when you get that tsunami selling in the first three hours, it convinces the fed is no longer on your side. >> if you look at the data, the ism numbers have been pretty good, gdp better than expected at 2.8 versus the expectation of 2.0. maybe the market can handle a little bit of a better economy versus the taper. >> but you're not most to be bullish. you're coming with some sort of rap that good news is good news. this is not espn. this is cnbc. get with the program. >> we had that moment earlier this year.
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we had a moment yields were starting to rise because it looked like the economy was going to be okay. that had its own negative consequences and we're still seeing the effect it's having on the mortgage market. is good news good news? >> when you're dealing with a company like toll brothers, good news is bad news. even though we know that employment does create in an atmosphere where people want to buy homes weeks just sell the home builders. that's been the theory all year. do i come back and say do i sell parker hanson, do i sell colgate? we did have this weird earlier this week move with colgate and clorox. they lose their bond yield equivalent status and that is one of the big props. >> i agree with that. >> do you throw momentum names out the window because the fed might taper? >> i love this. last time i'm watching priceline. it's like that's a great
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quarter. that guidance is horrible. wait a second, the bookings are good. in the meantime the stock goes down 55 points, then rallies up 20, then goes down 20 and then people actually -- you know what they do? they listen to the conference call and it's fabulous. >> that's why an analyst today upped the price target i think to $1,300. >> priceline, you talk about it swinging $15, $20. the levels are extraordinary. it's got $1,300. >> the end it's about international growth. those who say you know what, taper u.s., 355,000 hotels, the company has been a radically changed company. it doesn't get to that all-time high for no reason. >> what is the story with the consumer as we have just a couple months left before the holiday season. on the one hand the consumer credit report yesterday telling us revolving credit is at its lowest level since december 2012 but today you find out disposal
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personal income is up 2%, so there is some breathing room, the savings creeping up. is that creating winners and losers? >> maybe. gap stores horrible quarter, no, great quarter. very schizophrenic. >> i'm glad you went there. >> i thought disney theme parks was really terrific. i'm going to say something bold. i thought the disney quarter was good. you can ostracize me. i also think, by the way, go back what ups said, they ship a lot of packages and they said this is going to be a great christmas. everyone kind of overlooked it. i think it was one of those days where there was some survey that said people feel glum. >> it's going to be an amazon christmas, which means it's going to be a ups and feddens christmas as well. >> i'm calling it an omni channel christmas. you like that? >> and that's a great example of
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it with the gap. >> if you're at abercrombie, you're saying, boy, it's like grinch -- early hanukkah, november. november comp store numbers will be really early. >> what do you do momentum plays here? government shut down has been taken care of, it's all system goes to the end of the year, let's ratchet up, et cetera. has that totally changed now? >> i think that people on the fly are adjusting and saying, you know what, my mineral play, which i thought because of the china getting better, europe getting better, we kibosh those because suddenly we got the tightening and tightening you sell down the middle. there's a lot of companies doing better than we think. we're just not going to see them now. we're colored by whole foods. walter robb this morning on
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squawk, not a great call, random what's good tech, what's not. we love social mobile and the cloud. i think those momentum stocks still work, witness the fact that twitter was a very successful -- >> right behind where we're sitting, twitter goes public, the stock up 70 something percent, yet the zillows and yelps did terrible yesterday. >> well, maybe i need to sell my yelp to buy some twit pter. >> you wouldn't necessarily expect collateral damage there but maybe there was some. >> i'm watching tv yesterday morning at 4:00 because i'm completely psycho. we have an amazing surprise rate cut coming.
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i'm like isn't that a little oxymoronic? or even moronic. but people keep continually be getting caught off guard here. >> maybe it supports names with exposure to europe. they have a weak situation, extremely low inflation. >> well, they but germany -- >> i think we all know france need as s a reset. >> france is part of a bloc that doesn't control monetary policy. >> i know ireland is small, spain -- well, spain is pretty big. i thought until the punt came back, you're not going to be able to have a comeback. >> are you calling for a breakup of the eurozone, jim? >> no, i'm pro euro because i'm anti-war. >> do you think that the move yesterday was a fear that maybe draghi knows something that we don't, that because it caught so many people off guard, that maybe the situation in certain areas is worse than we think,
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although it's good for the euro. the euro is now at a seven-week low versus the dollar and had been going up every day to 138. >> is it -- it's at 133. some of these countries well below 120. for germany it's still a good situation. >> again, they're over there. americans are saying i don't know what they're talking about, i just paid $3 for gasoline. >> europe has been a really good trade. >> fantastic. >> it's been a good place to be. >> yes, it has. >> is it still? >> i think you still want the upward move. we sold the vgk, my charitable trust, it felt like enough is enough. stephanie is someone who likes to nail down a profit. >> stephanie lake approximate. >> great segment. >> people are going to want to
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see how twitter does after its strong open, up about a third of a percent so holding up there. >> it's going to be watched today, right at $45. it did close today right below the tick price. >> let me give you example. there's two previous twitters. there's tesla. you have to stop running that film of the battery blowup. when a regular car gets hit, sometimes you have those fires, too. i saw one on the highway yesterday coming home. but i think if you look at netflix, it was $7 billion, goes to $20 billion. at $7 billion, they needed someone it split it up, wireless, wire. last night i'm listening to the disney call. disney has abc. disney has a big movie division. who are they making movies for, proprietary movies for? netflix. i'm taking netflix here and
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raising my price targets. >> you are? >> yeah. i hear people raise price targets all day. i want to do that. >> somebody raised the price target for the salad because it keeps costing me more. >> i cut my price target for the washington redskins. i went washington redskins buy. buy. sell. >> i put them on underweight. >> it's perma underweight until they make a change at the top. >> coming up, we will get first reaction from the obama administration to this morning's jobs report. labor secretary thomas perez will join us live and first on cnbc. here's a quick look at futures before we head to break. dow is now at 20 as we see the 10-year making some big moves. more live from the new york stock exchange when we come back. we asked people, "if you could get paid to do something you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker.
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♪ ♪ welcome back. time to take the pulse of the consumer now. mcdonald's posting global same-store sales of .5% in europe with growth in europe being the bright spot, u.s. comp sales missed expectations while sales in the asia pacific, middle east, africa region slumped.
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meantime gap up sharply on the retailers, better than expected third quarter guidance and comp stores gain of 4%. let's take mcdonald's first. at least they didn't fall in october like they did last year. >> where was the stock last time we had bad numbers? >> i don't know. >> 94, 95. this stock is impervious to bad numbers. mcdonald's stock also presses a very big turn in the country. i'm wondering whether there isn't a belief that international is coming back faster than we thought. >> do you have a feeling that people keep looking for excuses to write don thompson off? and the stock is not letting them do it just yet. you keep hearing negative stuff but the stock, as you said, doesn't go down that far. >> because value works. i was at wendy's yesterday. i think there was a feeling that mcdonald's has to do a bit of a makeover. mcdonald's doesn't have the
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momentum it had, but there's also this big cap, i like international companies that have done well and mcdonald's is part of that wave. it is. >> speaking of product innovation, by the way, this is where wendy's seemed to steal a page from mcdonald's. some people thought maybe over the summer you had the ceo on the show last night. here's what he had to say about innovation. take a listen. >> we have a bacon port bella melt on briosch coming in in the next few days. you had it -- >> holy -- >> this product melts in your mouth. you're going to see pretzel bacon cheeseburgers coming back. >> this thing is just so
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delicious. but let's talk about the numbers. when a stock goes from 5 1/2 dollars to $9, everyone gets head on everything. they've really changed this company. it's having a pullback here. i think it is a pullback that indeed does refresh, the new stores look good, when they do the remark, the numbers go up. remember dave? remember the original wendy's? that stock was one of the greatest performers of our sometime between 1979 and 1981. do not write off wendy's in a particular down tick. >> we just showed a chart of the one-year performance of wendy's and mcdonald's and i think burger king was the other one on that list. is it now a wendy's, burger king and chipotle, maybe a panera world?
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>> one of the things is he's saying it's still a pretty point. >> i went to panera's wednesday -- >> you love panera's. >> i had the asian chicken salad and squash soup. i put out a $10. it was 13.80 cents. mcdonald's you give a 10, you get almost everything back. >> and now burger king is out with something that supposedly looks or at least looks like the big mac. wasn't jane wells doing the taste coast on the west coast. >> wendy's fries were quite good. >> wendy's chili was dynamite. >> i used to eat that all the time going up. >> you never eat anything. >> my friends would be laughing right now to hear that. the stories we could tell. let's not, though.
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let's talk about the gap, jim. >> i just want to say one more thing about the frosty. you didn't mention the frosty. >> you guys did the french fries in the frosty. that's key. >> i'm going to be fasting for another couple days. now here's what struck me about gap. how could i have been so wrong? i was thinking they weren't going to do a bad number and goldman sachs downgraded, there was a belief that these guys faltered. i got that wrong. i believed in the fact they faltered and this is a nice comeback. >> this is all going to be about differentiation, winners and losers for the holiday season. does it seem the market is still trying to figure out whether gap will be a winner or loser? >> i think it was pronounced as a loser. i think it was part of this overall out of apparel into hard goods. so the trade that the hedge funds were doing, they were short gap stores, long -- >> home depot.
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>> yeah. one of the things that was always confusing to me is when you see this is you're presuming they're a bunch of idiots at gap. you think they got it wrong, they're going to stay wrong. well, they adjusted. typical ceo, they adjusted. october could be a strong month in this country. it might surprise us -- >> and that's what's so extraordinary about this. it's 17 days out of the month and look at the numbers we're getting. >> gasoline. >> your stories on gap and some of those like businesses, some of their peers, versus the department stores, which the outlook is really gloomy going into the holidays. >> jcpenney had an up number. what does that say to you? >> was it the first positive month sales they had since '11? >> whole foods is -- i regard as a positive for consumer spending and it was -- again, the stock had moved up a lot.
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people got ahead of themselves. the bar got raised. if the bar is high, then there's trouble. if the bar is low, boy, is the bar low for gap. that's how you have to look at it. where is the bar going up? the bar for macy's is not high. that may be a good thing. >> the gap has quietly had a 22% year, right, on the stock. just very quietly. >> you come in now gap, one of the things that's bad about the market, you got to be there when things don't like it, which is with why i like disney. i think it's good, not bad. >> we've only got about eight minutes left before the opening bell. let's take one more look at futures here after that surprisingly strong jobs report struggling to stay positive. plenty more "squawk on the street" just after this. ♪
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♪ ♪ just about five minutes before the opening bell on this friday. time now for cramer's "mad dash" ahead of the market open. >> every time disney reports, these nit-picking analysts, i don't want to slight the analysts but were they wrong on the call. espn, if they recognize a huge amount of sub fees in quarters past. you all knew this. if you back those out, espn had an excellent quarter. theme parks were terrific. some say i wish "star wars" were in q 3. give me a break. i love the shanghai theme park opening. let the stock come in and you buy, buy, buy. >> it's been a bad motor vehicle
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to bet against iger. >> if you listen to the call, would you think this company has disappeared from the face of the earth and they're beaten by every other network. i go to these theme parks, they're pretty good. >> you still like the stock at $67? >> yesterday was at 64. that was the opportunity. this market can give you the opportunity. whole foods was done at the beginning and it continued to go down. if disney goes down, yes, i want people to buy it. the analysts are wrong. >> if not for the network, they beat on every segment. >> and fox is coming in. yeah, fox is coming in. and espn was bad. every network in the world would kill to be espn. kill. you can't tivo that, you can't dvr that. you can do the nfl tv. you could have tape recorded that 'skins game. >> i just deleted it. i just deleted it. >> you didn't need to see the first half. the first half was great. >> the second half was not.
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>> coming up, thomas perez with white house reaction to this morning's jobs reports and winners and losers after the open. more "squawk on the street" when we return. [ male announcer ] what if a small company
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welcome back. you're watching the opening bell here at post 9 at the new york stock exchange. futures are slightly higher this morning. after a big day of course yesterday for everyone down here, scott. >> here at the big board, participants from the nyse governing services, general council, the nasdaq hometown heros, a charity in new jersey, supporting local communities in times of crisis. we're open for trade today. it was the worst day for the s&p yesterday since august, worst day for the dow and nasdaq in about a month. so how do we view the market ex-twitter for a moment? >> tlt is what i tell people to put it on at home, tlt is down very badly today. it's difficult to sustain a comeback that's longlasting if
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that doesn't stabilize. i'm going to go back to what we know if the other plus 20%. which is november and december have been up. december was up on -- december was up 3 out of 4, november up all four. those are about the mechanics of the market. there are money managers right now who are well behind the market and they're going back to find something to buy today. because they've missed, they've missed, they've missed. they had a big sale that was thrown yesterday and now they're sifting through and saying i don't have any choice, i got to use these dips to buy it, i hate the market, taper taper -- >> so do you as you're looking for something to buy, do you rotate, then, out of a leader like a health care into a more recent lagger like financials that are going up? >> i was going back and forth with stephanie, contributor to your show, 8:30:25, fins, you
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got to buy the fins, which is not like the fish, the dolphins going into the weekend, who i would not be a buyer of. that's too smart. it doesn't happen for three days. it should be bought -- that should be bought today. when you get that yield curve they're supposed to get, they a are backing the idea we turn the lights on and make money. there's always an article about some element of government going to put a bank out of business. try to find a bank that's not in trouble and buy it. >> the regionals. >> right, they haven't found the regionals regionals. why don't we buy a bank in ohio? the government does not seem to mind. >> i guess on a more serious note, the breakdown recently in small and midcap stocks is
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concerning some people. they've underperformed late, late after massive runs. >> kelly was talking about the total return fund and how -- isn't it right that that fund take a little profit? >> right. but that's also a case where you're starting to see the biggest mutual fund is a total return stock fund, it surpassed the pimco bond fund this year. it's a lot. >> remember you said ex-twitter. mind if you don't go ex-twitter for a second? >> sure. >> twitter was important, they did a good job, we're not doing some postmortem saying, okay, who lost the retail investor. the retail investors likes what happened with twitter -- >> but the retail investor wasn't that engaged with twitter. >> that's the point. they see it and say maybe i ought to call my broker. hey, you know, how did they get that twitter? >> that's why today's action is important.
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we're didn't wake up and we're down 5%, 10% on the name. a guy who put his college education fund into twitter sounds a little like -- if it's a google -- >> we can sit here and bemoan the fact these haven't been monetized yet or you recognize is distinguished ceo who worked at coke, worked at pepsi, is at clorox and the facebook page at sam's club is driving a lot of what he has to do. >> twitter is up 4%. all those names we mentioned earlier, open table, zillow, yelp -- >> groupon. groupon is up, right? >> 0.2. >> were you on the conference call? that was a great conference
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call. >> what did you like? >> because they transitioned to mobile. i heard drexler say the fabulous ceo of j. crew. i love props. this is a retailer. he has a retail store. groupon is saying, listen, we got a discount retailer store right here. that matters. it's been a continual theme. >> who has been able to move to mobile faster? >> open table. they moved to mobile. yelp did, too. i think yelp comes back. priceline going there. >> secular -- >> by wathe way, gap is up 7%. >> banana republic trying to figure out where they went wrong. there is a degree of fluidity. a ceo does not necessarily say i'm beaten and defeated. >> right. >> they tend to have some -- >> you hope. >> yeah, you hope. who has been beaten and defeated. i wonder whether sherry mccoy at
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avon is beginning to feel beaten and defeated? >> does that fall into a prediction list? >> i think she's so terrific but this avon was just more of tar pits than it was door-to-door selling. >> market is up 30 points. after the jobs report, the futures turn negative and decidedly so and here we up 30 off the open. >> the hurdle on the 10-year, we're well above 2.6%, which had been a recent low, 2.7% in the immediate aftermath of that report. >> do you think people say, whoo, i thought something really bad happened yesterday and nothing really bad occurred? there was a lot of rumors that something really bad happened we didn't know about. remember missiles in iran? homeland turned out to be fiction. it looks like this iranian deal is for real. >> it's also getting priced in now so there better be some follow-through. >> it could go to 90.
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i don't know if the oil stocks are ready for that but the consumer sure is. >> the jobs report for october came in much better than expected, which came in at 209,000 non-farm jobs. let's go to the white house and labor secretary tom perez. >> pleasure to be with you today. >> you've only been in the role since the summer. this has got to be the strongest report yet. does it suggest the weakness on the unemployment side will be transitory and the private side is perhaps stronger than we previously thought? >> i have two or three takeaways from this report. number one, the economy continues to be resilient, notwithstanding the self-inflicted wounds from congress, 209,000 private sector jobs, on top of september, on top 238,000 in august, so four
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consecutive months of private sector job growth. the second takeaway was the shutdown undeniably had a negative impact on the economy. there were more people temporarily unemployed last month than in any month as soon as they've been collecting the survey data in 1967. we saw first hand, we saw it throughout this country and throughout this city that the shutdown had a negative impact. and then, thirdly, we need to pivot. we need to take our foot off the brake and put it on the accelerator. that is why the president is in new orleans talking at the port about investments in infrastructure, investments in human capital, immigration reform. when we move away from these self-inflicted wounds, i think we can continue to grow even more than we have in this resilient environment. >> mr. secretary, one of the things that i know as your job, besides just trying to get the employers to hire more people is you're worried about employees and about labor. a lot of stories today. food stamps being cut back
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dramatically. the president last night apologizes, yields to criticism of health law, not making this up, reading the "new york times" headlines. are you worried about the state of the worker in this country who feels beaten with what's happening with affordable health care and is worried about food stamps? >> i think the president worried about the worker and state of health care every day. that's why he supports a raise in the minimum wage and wants people to have access to affordable health care and that's why we're working hard toward the passage of immigration reform because immigration reform will grow the economy and create jobs and sustain the social security trust fund. when we move away from the self-inflicted wounds toward the common sense caucus, and we saw the common sense caucus in the senate as recently as yesterday when they passed the employment nondiscrimination act on a bipartisan basis on the heels of the passage of immigration reform.
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we need to get back to that spirit of bipartisanship that came back actually after the shutdown in '96 when newt gingrich and bill clinton came together and we saw immigration reform. we saw minimum wage get hiked in '96, we saw welfare reform, we saw so many other pieces of important legislation. that's what the people want. they want to us come together. that's why the president has said anyone who has an idea, i'm all ears. >> mr. secretary, i couldn't help but notice the big smile on your face as we were tossing it out to you there in washington, d.c. is it fair to say that you and probably the entire administration as well is a bit surprised by the strength in this number and the revisions that we got, politics aside? >> again, the economy continues to be resilient, notwithstanding these self-inflicted wounds. but the numbers also show unemployment went up, and it's never a day to smile when unemployment goes up.
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and when you see so many people last month who were unnecessarily laid off, again, the largest number of people temporarily laid off since they began collecting data in 1967 in this area. and so there's so much work to be done. we ten to make progress notwithstanding what's happening in congress, but we could be making so much more progress if we invested in roads in the tradition of dwight eisenhower, if we passed immigration reform in the tradition of a ronald reagan. elizabeth dole championed the minute month wa minimum wage increase. there's a lot we can do for workers and for the country. i hope we continue to do that. >> thank you. >> bob pisani, over to you. >> put up the s&p futures. non-farm payrolls threw
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everybody on a loop. we dropped ten points off worries that the fed might taper but but we sort of came right back here. a lot of sectors lagging are up to the, biotech. the 10-year yield, the big question is are the numbers strong enough for the fed to taper in december. nobody knows the answer to that yet. the bond market went up. but they say it went up before and it didn't happen at that point. the dollar spiked up rather dramatically. we saw gold collapse, too, on that number, though not far from roughly six-money lths lows. when i say it's a strange week, take a look at the major sectors. when you have the dow industrials down fractionally, the problem with this week has
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been the momentum names are basically small and midcap names. that's why nasdaq, which consists of a lot of small tech momentum games is down much more than the overall markets. these are unusual spreads for the major sectors. it not a full rout but this week has been very poor for this midcap and small cap momentum stocks, the biotech names, the reits are down, emerging markets are down again, very volatile. semiconductors are strong, airlines are down about 2%. this has been a rough week for the midcap and small momentum stocks. twitter trading at 43 and change. that's the lowest it's been. >> twitter is now down, jim,
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more than 4% after being up nearly 4%. you said this is a stock that went from a buy to a hold to a sell. >> i said anything north of 28 it should be sold. i got pilloried on jim cramer for saying that. maybe you can say this is amazon but i'm uncomfortable doing that. i'm trying to preserve capital. i don't want to hurt people. >> i think we just saw it down almost 5%. j jim, it's interesting because it's been moving around since before the open. maybe people still getting comfortable and getting an appetite for where it's going to trade. does this reflect a change in the retail guy? >> successful deals can come right back down.
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but, look, people who own twitter have to recognize that it's a cult, okay? that's okay. tesla was a cult, solar city was a cult, netflix was a colult, amazon was a cult. >> you made the point when we were asking whether the retail investors should be a buyer off the open, if you take a look at several of the internet names -- >> not several, all, 100%. >> three months after they went public, pandora down 41%, facebook down 50, groupon down 6, link down 16 and yelp down 36. you had a much better entry point in you waited. >> i'm sure the company will issue -- i bet the company will issue stock. there's just better times to buy even the best franchise when it's up this much versus what it should be. peck, people laughed at him, and it nearly hit his price target. >> i don't think he wanted it to go to 50 so soon. >> no, he didn't. >> he did a lot of work on that.
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rick santelli is doing a lot work up at the cme this morning because the dollar was moving big and the 10-year yield was really moving. >> yeah, you have kind of reality in terms of dollar index late in the treasuries and you're off in fantasy land with regard to trying to figure out what dynamic of the numbers the equity markets are going to pay attention to, how that is or isn't trumped by the fed. i'll leave that to you guys to debate that. all of a sudden here we are, 2 3/4. a week ago wednesday it hit 2.47 intra day, nailed the 38% retracement right to the tick. can you see what happens. you can make fun of technicals but there's a lot of guys running to the bank who aren't.
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it will be the highest yield close since the 20th of september, the dollar index would be the best close since the 17th of september. they're in sync and reflecting the data. let's look at some interesting charts. let's look at the 5s versus 10s. it's still steepening and it's steepening with a five-year yield over 1.39, which is its major 38% retracement. that's called the fight. let's look at the nob, the notes over bond. the let's look at another spread, our ten-year versus bund. that continues to widen. these are all very important because, as i said, what you're seeing in treasury is leading because it has to overcompensate for the lack of taper, as peter bookfar was talking about today. let's look at the dollarin decks. can you see what happened on the
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intra day chart. it was a moon chart. you can see these were the best levels since mid-september. i fully expect to hear from eamon aftjavers today because at of people on this floor saying yields moved before 8:30 eastern and eamon's our man to find out. kelly, back to you. >> yes, he is. rick santelli, thank you very much, sir. coming up, it's a different kind of story. we'll talk to the mayor of mesa, arizona. "squawk on the street" will be right back. the jobs report is out. >> october non-farm payrolls increased by 204,000 jobs. >> were you able to nail the number? if so, you will be the winner of this bill board photo signed by the entire "squawk on the street" game. find out if you're the lucky winner later on "squawk on the street." i'm beth...
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welcome back. keep an eye on gold here, down $24. it continues to decline, almost a mirror image of what's happening with the s&p 5 ho00,
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after that higher than expected jobs report. also coming up, "six in 60" with jim. don't go anywhere. which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.
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time for "six in 60." six stocks in 60 seconds give or take a few. number one. >> this is a novel anti-cancer formulation. j & j has 50% of it. still reeling from the risperdal fine. >> maybe kohl is like bishop. >> white wave. >> it's a really terrific natural food play. doesn don't give up on natural food because the whole foods. >> especially because whole foods talks about increased competition. hello, white wave. >> national continental. >> as gasolines a and jet fuels
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dow down, good. >> that was 60. breaking news on consumer sentiment now from rick santelli in chicago. >> november preliminary university of michigan sentiment survey disappoints at 72.0, the lowest level since december 20111, which was 69.9. i'm comparing this preliminary to historic finals. this number when it comes in final may be revised and keep in mind in july of this year we have an 85.1 read, the biggest since july of '07 to give you contrasting directions. we're within a whisper of a 2.75 on the 10-year note yield. that seems to be the song people are talking about the most. >> what's coming up tonight on
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"mad"? >> dropped knauss, done a fabulous job with clorox. talking vets. why is this important? veterans day coming up, i hope my dad feels better, a vet. >> coming up, we're going to have an analyst who thinks there is still 20% up side in twitter for you. and tesla, is it a buying opportunity for the manufacturer of the future? also ahead on the show, burger wars. which is your best bet now, wendy's, mcd's or jack in the box? hour two of "squawk on the street." ♪ i don't care if monday's blue ♪ tdd#: 1-800-345-2550 trading inspires your life.
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tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. welcome back to "squawk on the street" on this friday morning. our road map begins with jobs. non-farm pay rolls coming in well above forecast.
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markets still aren't that impressed, though. we'll dig deeper into the report coming up. >> plus twitter headed to the down side on its second day of trading. we have an analyst who says buy it now, there's 20% up side. >> and tesla down for the fourth day in a row as the model s fire worries investors. find out what's next for the stock. >> and we also have the battle for the burgers. this time they say it's all about the buns. >> great segue. >> we start with jobs. the u.s. adding 204,000 jobs in october. steve liesman digging deeper into the employment numbers. >> reporter: despite the rising unemployment rate, a mostly positive jobs report showing not only big 204,000 jobs added in october but good upward revisions to prior months and importantly job-based job growth. august and september combined revisions up 60,000, including putting august over 200,000.
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unemployment rate ticks up. the bad parts of the report, average hourly earnings and average weekly hours, 0.1% on earnings and 34.4 average weekly hours, the two weaknesses. the job based job growth, two areas that should have been affected by obama care, maybe the delay in implementation is having a positive effect. professional business services up, education, manufacturing, that's one of the bigger gains we've had in many months and construction coming along again with 11,000 workers added. now, fixed income traders smelling less fed stimulus in the air. they bid up interest rates this morning in the wake of the report. look at that cliff right there. a lot of talk if we get another positive jobs report in december, the fed could decide to taper that month. some saying it may wait until january or march until the situation clarifies but many now saying december is a possibility. a quick word on the unemployment
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rate. it was heavily affected, we don't know how much, by the shutdown. may be a good idea to throw it out, it should stabilize next month's. some guys are digging into it saying without this shutdown, we may have had a decline in the unemployment rate. simon? >> you know, steve, i was getting really excited and very constructive before we came on and then i got an e-mail pointing out that in one month three quarters of a million people left the workforce. he describes that as an anemic recovery that continues to fester. how would you describe it? >> that 700,000, simon, looks to be heavily affected by the shutdown. >> that's not my interpretation. if i look at the first paragraph, they've separately accounted for furloughed federal
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employees. >> no one has any explanation for the decline outside of the shutdown. that's what the labor secretary i think just told you at 9:35 or 9:40 this morning, simon. >> you still see it as glass half full? >> i see the data the way it is, simon, not really making an evaluation. i don't think that it's possible to draw too many conclusions from this data. i think the glass is a little cloudy, simon. >> i accept that. thank you. >> i think what's more interesting here, simon, is the idea there's other data that supports a strong report, the ism, the gdp and the jobless claims. this number is not as much of an outlier. >> but worth asking the question, steve. thank you very much. let's bring in john sylvia, the chief economist at wells fargo and jerry castellini. jerry, is this a strong
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employment report from your perspective? >> absolutely, simon. we started the year worried about the effects of all these larger-than-life kind of concerns in the global economy and u.s. markets. none of them have come to fruition. this economy is stronger today than any investor who has ever imagined a year ago. now we sit on a precipice of a 2014 where the best possible news is the taper because the economy is growing even faster. all of those things sit underneath the earnings power of the s&p 500 today, which most people are continuing to hold back on and underestimate. what we see after this set of earnings numbers this quarter and the previous quarter is the economy is growing, it's having the effect on the overall earnings picture and that's what's driving stocks higher. >> john, two questions for you. a, do you agree that this is a strong solid employment report? and my second question is in view of this report, are you now
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more sure that yesterday's gdp figure was also strong and that the inventory builds can be sustained and we can look at, i don't know, 3% annualized growth moving forward? >> when i look at the establishment survey, which is what i think steve liesman was emphasizing, there was broad based good gains. it was a good, solid report. plus august and september was revised up. so i would take it as a good, solid employment report. but, no, i think the gdp number still is overstated simply because of the inventory bill, which i don't think can be sustained. if you look at final sales, it was 2% in the third quarter, 2% in the second quarter. i think that 2% number in terms of final sales is sustainable. but the inventory build is probably not. >> so, john, it's not enough to move the fed in december is what you're saying. >> i don't think it's enough to move the fed in december. i think march 19th is still the date when you're going to have janet yellen coming in again be
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confirmed and i think that's the date to worry about in terms of maybe a tapering. but i think december is still too early. >> jerry, you agree with that? >> john sylvia is one of the best economists in the business. i would never question him. i agree. i don't think the taper is until later and i think it a big boom for the markets between here and then. >> we've got bernanke speaking tonight, jerry, and then janet yellen up trying to get confirmation on the hill next week. the risk is you get a more hawkish statement that you're assuming. that's got to the risk, right? >> she's got to walk the tightrope. it's a political circus for her to get through the process. she's a sound economist, the right person to take the wheel at this point in the cycle and the wind is going to be at her back. when you're in a position of it's when you taper rather than whether, that's a much better
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thing for the economy and makes her job a lot easier. >> just before you go, jerry, i just wanted to mention the breakdown we've had on the russell 2000. through this year, the russell 2000 has led the rally. yesterday it fell heavily on a lot of volume at the end of the day. are you concerned, jerry, we still have the momentum in this market? >> look, the russell has been up well over 30%. that's indicative of the -- let the gains be taken. it makes sense this time of year people would take money off the table. all that would do is fill up the gun for another shot here and probably be another big move to the up side. >> guys, it's good to talk to you. jerry castellini and john sylvia. have great weekends. >> thank you. >> now to a scary and unfortunate situation developing in the philippines, as a super
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typhoons is possibly one of the strongest ever recorded plowing into the island country and putting millions of lives at risk. greg postell is live at the weather channel with more on the story. >> reporter: we're still watching super typhoon haiyan. there's going to be another landfall over the weekend in vietnam. this storm was very well defined, likely category 5 conditions were felt and the system moves rapidly through the philippines during the last 24 hours. the good newscy think conditions are improving. manila likely experienced no more than rain showers but winds under tropical storm force. the latesteth mat, 155 mile-per-hour winds still moving west at 23 miles per hour. it going to be heading west and
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this what i was talking about earlier. later on in the weekend, close call vietnam, probably coming inland there, maybe as strong as category 2 or category 3. we're not done with super typhoon haiyan yet. >> twitter trading down about 2.5%, as much as 5% down earlier. we'll help you decide when "squawk on the street" continues. [ horn honks ]
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a $2.6 billion deal in the drug sector. santarus will guy salix. it gives it two more gastro enterology drugs. >> twitter is down after soaring 73% in its big debut as public company yesterday. twitter ceo dick costolo addressed concerns about the company's ability to be profitable. >> there is nothing structural about our business that prevents us from achieving the kinds of margins of the other kinds of companies in our peer group. i have every intention in the near term of continuing to invest in the kinds of
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strategies that have worked so well for us. >> victor anthony is a senior analyst at topeka capital markets, he just initiated coverage of twitter yesterday with a buy rating and $54 price target. welcome to "squawk on the street." the stark is overvalued, isn't it? >> i don't think so. i think what's missing from the valuation discussion and the stock price moving discussion is the company has revenues in the triple digits. compare that to ibm, cisco, oracle, hp, all of which are growing revenue in single digits. my price targets implies this could trade at 30 times. yes, that's expensive, i agree. but when you adjust it for revenue growth, i'm forecasting 80% revenue growth over the next three years. the multiple doesn't look as egregious. on a per unit of growth basis up 0.3 times, the stock is cheap
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relative to other companies i follow. >> i'll see your comparisons and raise you one and that its relative value is almost twice that of facebook's at the time of the ipo. so measured against that it seem egregiously overvalued. >> that's one way to look at it. i think the right way to look at it is to adjust its multiples to growth. even on a profit perspective, the other story that's missing and i agree with the clip from the ceo, on the profit side is over the next 20 years the way we communicate and the way we consume content, a vast majority of that is going to move over to the internet. twitter is tethered 100% to that shift and so i think it's the right thing for them to do is invest against that or else someone else will. you see companies like amazon doing it. the profits will come. it may come sooner than most analysts expect is my opinion. >> in the meantime, victor, real life is going to cut in in two
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major ways. in 180 days, 179 days, the lockups are going to expire, there's an awful lot of very rich people on twitter stock who will be wanting to sell. and perhaps more importantly than that, you have all the big analysts on wall street that were locked into the underwriting and ipo process who are silent. they know the business better than people like you who are not part of that process simply because they sat for so many hours with management and were able to ask so many extra questions. we know from an article in the journal earlier in the week that their revenue projections for say 2015 are 30% to 40% below those of the outsiders. a, there's going to be a lot of selling at the 180-day lockup expiration and, second, will there be a lot of bearish noises coming out of brokerage houses simply because the stock gained so much on day one surely. >> as far as the lockups, i view them as purely technical.
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as the company executes, the lockup risk will evaporate. you saw the same thing happen with facebook. >> i'm sorry, if a share price is determined by supply and demand, if you massively increase the supply of a share at a given price, then the price is going to fall. that's not technical, that's quite fundamental. >> well, if you look back to the massive share lockupup for facebook a few months after they ipo'd 800 million shares, the stock actually went up. i think investors were convinced they were going to execute. longs the company executes, diamond for the shares will increase. >> now, you think that at this current level, what is twitter, at 43.40, that the retail investors should buy this stock right here because if you look back at almost every other -- if not every -- social media ipo, if you had waited three months from the rollout date, you'd have gotten it at a much better
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price? >> i think if you look at facebook in particular, i think facebook had two secular issues at the time of its ipo. one was the shift of advertising dollars to social immediate yafs unproven. second, the shift of advertising over to mobile hadn't occurred to them. so those two secular issues at the time of facebook's ipo is not exentist for twitter's ipo. >> my point is i'm not just talking about facebook, it pandora, groupon, linkedin, yelp. it's a matter of fact that the investor got a better opportunity to get into these names had they waited. >> i think there's also going to be a better opportunity. i'm not going to fault anyone to taking sop profits on twitter right now. i think the long-term growth story for this company is well in fact and significant. i think there's significant more upside for the stocks based on my fundamentals. i do take exception to your point that the guys who are part of the selling deal have better information. i think other analysts like
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myself have done extensive due diligence, anyone who is tied and the whole social media, advertising space. on it put out a note earlier this week that showed that analysts have underestimated the social media names and i expect at that they'll do the same here. >> you want to respond to that? >> no, i'll take responsibility for the statement that those that were montana ipo process have more information. it was me who said it, not scott. that's not to diss your work at all. it simply the dynamic of having spent so many hours with these guys. you're able to ask so many hypotheticals. that's the point i was making. it wasn't to diss your work at all. >> i think the analysts who were part of the deal tend to be a lot more cautious. they're giving the company some breathing rooms in terms of beating estimates. the numbers will be less aggressive than my --
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>> that's a fair point. >> victor, thanks for coming on today and defending your call on twitter. >> thank you very much. >> shares of tesla falling for the fourth straight day in a row as federal investigators say they will take a look at the latest fire involving the model s. the stock down more than 15% in just the last week, 20% in the last month. what do you do now? more on that after the break. the jobs report is out. >> october non-farm pay rollpay increased by 204,000 jobs. >> were you able to nail the number? if so, you'll be the winner of this photo signed by the "squawk on the street" gang. find out later on "squawk on the street." making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create
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the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ welcome back. i'm sharon epperson on the floor of the mercantile exchange. this is where the action is on the floor today. gold prices have plunged about $25, this after the jobs report. we're looking at prices around 12.84 an ounce. many traders are really talking about whether or not someone got some information perhaps a little early because a big part of that plunge happened about 20
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seconds, they say, before the number came out. the cme group says the functioning of the markets was proper in terms of what their execution was, but we are continuing to look into this. and we are looking at this plunge here on the jobs data to the lowest levels that we've seen in about three weeks' time. oil prices meanwhile holding steady with brent crude below $104 a barrel, we're watching what's happening in geneva. secretary of state john kerry has arrived, there iran's foreign minister, he'll be meeting with foreign ministers from britain, germany and france and there's a good likelihood we could see some form of a deal today. that's according to nbc news. >> and perhaps downward oil pressure as a result. sharon, thanks. >> speaking of oil and cars, tesla down four days in a row as the new fire in the tesla model s raises new concerns. tesla said in the statement they are in contact with the driver
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who was not injured and believes the car saved his life. the team is on its way to tennessee to learn more about the accident. how worried should investors be? an outperform rating on the stock and $230 price target. welcome. >> thanks for having me. >> we were just talking about the fires we've seen in the past and how out of the ordinary it is for tesla. how common are fires in gas-powered vehicles? >> one out of every 750 cars on the road will catch fire on an annual basis. so far tesla has about 19,000 cars on the road and three fires to date. so we're talking about an eight times ratio for tesla -- it's eight times less likely to have
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a fire. >> though that number is different today than it was before they had the first fire, second fire and third fire. >> they haven't been out a year a lot of them, in fairness. >> we'll see in a year where we're at. >> a lot of drivers feel like they don't know what they don't know. we don't know if in a year's time we'll talk about unusually common fires for the vehicle or whether this will be the end of it. >> with these three accidents, none of these three drivers have a right to be alive if driving a traditional vehicle. if you look at a gasoline fire, it typically an explosion versus a battery fire, which tends to have a slow burn and then accelerates over time. the time for the driver to exit the car is substantially longer with a tesla. >> i have a policeman friend of
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mine who says, doesnn't worry, y don't explode like they do in the movies. >> i'm not convinced. you've seen a lot of gasoline fires explode. that's far more common with a gasoline powered car than it would be with a battery powered car. >> the stock has exploded in its own right. it's been a year of momentum names. if the dynamic switches going into next year, with some of these most high flying stocks, a netflix or tesla or anything else, if that dynamic shifts, isn't that going to hurt this stock regardless of the fundamental story of the company? >> potentially on a short-term basis. we think there's a great opportunity for long-term investors to participate and grow in the stock. we talked about traders who exited apple at $100.
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>> 220 is your price target? >> 230. we basing that on the ability of tesla to drive down the battery pack costs, which we think they're very much on track for introducing a widespread car available for consumers. >> so a stock that has already quadrupled this year. what is the calendar range for that price target? do you think you'll get there in a year or shorter than that. >> our price target is based on 2020 numbers, introduction of the gen three. >> you you're not ignoring the risks either. >> no. zit a company that's spending a lot of money, it a stock that's run up tremendously, questions developing on the safety of the vehicle. >> the question on the safety, the star here is this is a far safer car than other cars on the
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road, so far. i don't think we're backing away from that. we're looking at excuse risk down the road their and ability to bring it to market. >> thank you. appreciate it. >> we do have a pretty nice gain on our hands, almost 70 points. there's the dow at 7 0rks the s&p 500 bouncing back after its worst day since august. leading the gains today, check out the financials, maybe getting a lift, kel, because of the creep-up a in straits. after the jobs number, it was a pretty big spike on the 10-year. >> oh yeah, banks are -- >> they've massively underperformed and failed miserably to break high lately. >> if you're looking for the next leader shooip group, a rotation into stocks that could take this market into that next level, these perhaps will be then, goldman sachs, stith group, bank of america, key corp
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markets with a pretty nice rebound this morning after sharp losses yesterday, this after a stronger than expected jobs report. let's get perspective from art cashin from ubs. a lot of people were surprised that the broader market was really ugly. what do you think explained yesterday's action and the rebound today? >> a couple of things. for two weeks we've been talking about a lot of negative divergences within the market, the advance/decline line wasn't keeping up with the new highs. the week before, for example, all three key averages had moved ahead and little more than one third of the stocks advance. so things were beginning to separate out. i think when they turned on the russell and the nasdaq again, that's when things accelerating to the down side. people were walking away from risk and away from momentum for a while. >> that said, this morning i'm looking at your note and as you detailed the ugly selloff yesterday, we've actually managed to break back through
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two levels of resistance. >> absolutely. >> this is a good, solid move today. as scott was pointing out, the financials are rallying strongly. does that make you happy going into the weekend? is that potentially a game changer with now the 10-year yield where it is? >> yeah, i think that what you're seeing in the equity side is the buy the dippers have come back. they've gotten an opportunity and they're moving up. i would begin to worry about the yield on the 10-year if we get up to 2.775, i think. >> we're almost there. >> well, they watch each little tick. people were beginning to move into some eventual tapering, and i think that as liesman suggested, there is going to make december's payroll very important. if they come in strong, you're going to get a real hint of tapering out there.
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>> i know we're talking sort term but given that we're up a hundred points after the toss and turn of the jobs rate reaction, is it in some respect acceptance that it's okay that rates can go higher, that we've seen this before, we didn't react well to it the first time, we're conditioned, we can deal with it. >> i think it is a kind of resignation to it, rather than a full acceptance. and i think that people were at least on the fringes beginning to think about that. when they decided to go with forward guidance again and we're going to promise everything three years down the line or until the unemployment rate goes to 5 1/2 or something like that. the secret part of that message is, and by the way, we're going to start tapering. i think the people who follow bond market carefully realize that and said that's out there. this only strengthened a concept that was already out there. >> one more point because we're seeing the dow almost at a
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triple digit rebound and yet tesla has just been swinging around. it was down 5%, then it was almost positive and now we're looking at it down in the range of 4% this morning. is this people feeling around for the right range on its trading day? >> yeah, i think tesla was stepping away from the momentum players. the fire that popped up, people are beginning to pop up -- >> i'm sorry, i meant twitter and i said tesla. what about twitter, art? >> well, it had quite a run yesterday and people are beginning to question the pricing. i mean, the way it looked to me having done this over the years, i think they placed it in very strong hands. the rumors were that 75 to 80%
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of the deal was given out to a handful of top funds. so that left the public with how do i get any of this? if the top funds were not going to sell what they got in the allocation, there was virtually little around. so they had to pay up and the public paid up dearly. >> and the rumor is they persuaded them to part with a million. how did you feel yesterday? whatever you think of twitter as an investment, it was a phenomenal physical thing to be part of, wasn't it? >> well, i felt a bit nostalgic. i've seen it when we had 5,000 people down here and in the old days i would look for things like crowd noise. it hard to do with the electronic markets of today. >> thank you so much. art cashin this morning.
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simon? >> mcdonald's out with october sales number this morning showing same-store sales growth remains sluggish off u.s. and europe, upsetting sales in europe. jeffrey has a buy rating. good morning. >> good morning. >> jeffrey, is that your rating or would you have a more beat spin on it? >> it's hard to get too upbeat. the comps were relatively flattish. that's where they were two weeks ago, it came in a little bit above that. the challenges are prevalent across the u.s. and europe, most of the world. >> why are you sticking to $108 as a price target? >> the benefit that mcdonald's has at this point, being the largest player, this can get a little more aggressive in terms of promotion and value. they were on a very strong eight, nine-year run. they do now have favorable comparisons to go up against and we still view it as kind of a
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defensive play and more challenging bamack macro. >> is it a more chipotle issue? >> whether it be wendy's in quick service who seems to be doing better or chipotle and others in fast casual, as easy more mcdonald's to take share as they had done years ago. across the board, it's get morg -- getting more competitive. >> if this was any other industry, jeffrey, you might say, look, this is a golden age of innovation, this should be capable of driving overall demand for that industry, particularly with gas prices low, and therefore everybody could gain. it not necessarily a cut throat
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and some gaining at others' expense or is that simply not applicable in this area of the industry? >> the category of a whole isn't much of a growth category anymore. it is somewhat of a zero sum game. with that said mcdonald's had been taking meaningful share for years. they've gotten perhaps a little more complacent and competitors more aggressive with their new news and taking back lost share. >> when you see jack and wendy's up and dunking 45%, are those the ones moving forward or is mcd's the top pick? >> i do think if the economy gets better, you're going to see the consumer shift more up trend and move more toward more discretionary type names. so we'd lean more that way. but within the world of quick service, we've identified wendy's as our favorite name and mcdonald's for those looking for
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large cap. >> have a great weekend, jeffrey. thank you. >> the days of not being able to talk or text on your cell phone on a flight are soon coming to an end. phil lebeau will give us a live report from a plane testing out this service. there he is. stay with us. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can. you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you?
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welcome back to "squawk on the street." check out river bed technology, an activist investment firm. elliott management disclosed a 5.8% stake in this network equipment maker saying it's significantly undervalued and said river bed should implement strategic review initiatives. an activist getting involved. back to you. >> dominic, thanks so much. pretty good day shaping up for the dow. dow is up 76 points. look at the financials, specifically one of them. it's goldman sachs. it's having a pretty big impact on the trade today. about one quarter of the dow's gain can be seen there in
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goldman sachs, 162.92, a gain of 90 cents. >> and to the point you made, it also the insurers, the real big gainers are met life up 5.6%, lincoln up 6.5, the point you made earlier. >> they like that kind of thing. we should also mention the strength is pretty broad based and we're seeing a trampoline. >> there was a breakdown simon was talking about earlier with the russell and midcaps. now you're getting money moving in. >> you've watched that on your show. >> yeah. >> apple is bringing thousands of jobs to the united states. yes, you heard that correctly. find out where those jobs are and what it means for the local economy. we're back after a quick break, friday morning on cnbc.
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welcome back. some big moves in rates on the dollar this morning after the jobs report. let's get straight to the cme group, rick santelli and the santelli exchange. good morning, rick. >> gee, i wonder what we're going to talk about. there's only two things we can talk about. the first one, a week and two days and that 237 magic retracement is now worth 27 basis points to a trade and that's all in the pocket. it went against anybody who put it on there, zero. zero, jezero. you don't get to say that often. the other aspect to that is the 1.39 yield in 5s. once you get above that, you should extent this move a bit at 141. let's look at the jobs report, which is the second issue. on the surface 212,000 jobs, that's boiling temperature,
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isn't it? not bad. historically -- even historically it isn't bad. it isn't enough and maybe there's issues and maybe there are government shutdown issues. i just know that if you look at table b-1 on the web site, you know, government care hiring, nonseasonally adjusted, actually was up. here's the key to the report, in my opinion. you had 60,000 for the last two months that were added in. that's a positive. but thanks to zero hedge for putting this together. 932,000 disappeared. they just disappeared from the labor force. that's now 91.5 million that have disappeared. according to zero hedge, and this is really scary, if you take the current pace, and you can see the chart up there, and continue it for four years, there will be more people outside of the labor force than inside of the labor force, okay? and 62.8's labor force participation rate versus 63.2, and that, of course, is a new
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fresh low going back to '78. here's the big e-mail i'm getting -- hundreds of them. "hey, santelli, how can you reconcile that when people leave the labor force the unemployment rate is supposed to go down, but it went up half a nick, from, like, 7.25% to 7.3%. here's the reason why. on temporary layoff, that category added .3 to unemployment. look it up. so it's called "on temp layoff." that would have moved it up .3. well, to be basically unchanged, yes, the dynamics of those leaving the labor force would have pushed it lower. a little oversimplification, but it explains everything. where do we go from here? i can't tell you. what i can tell you is, if you want to trade outside of all of the blah, blah, blahs about what
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the fed may do, may not do, the fact they have no knowledge really of what they'll do in the future, so how can they communicate clearly, pay attention to the fixed income markets. judge, it's all yours, buddy. >> ricky, a lot of people certainly are, and will be for the rest of this day, that's for certain. meantime, a new way to get the college football fix, and it involves a legendary coach and his man cave. more on that when "squawk on the street" comes back. hurt you. you don't kn what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ stick with innovation. stick with power.
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there are lots of ways to watch your alma mater on the football field, but one legendary former coach is taking it to the next level. broadcasting live from his man cave. jane wells is live in l.a. with that story. hey, jane. >> hey, scott. what if you could make money covering college football without having to pay for the rights? or if you watched baylor destroy oklahoma last night, this is what you heard. >> the pass -- that is picked off. >> now, that's fox sports 1. but some people have been watching sooners games on tv while listening on a second screen online this season to a guy who knows oklahoma football better than anyone. legendary coach barry switzer. >> well, they're going to run the pistol on him. release it out of the backfield, all five out, a crossing route.
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>> good play. >> barry sims is in theous. >> switzer has been webcasting from his man cave in norman, a venture he calls "coach's cabana." after a trial run last-year-old, it's been expanded to more schools, more coach, more advertisers. they never actually show the game, so what does the ncaa say about this? >> i didn't even call them when i worked for them, you know what i mean? i know what the answer will be, "no, no," i'd rather ask for forgiveness, jane. >> i think i'll take a drink of diet coke. >> i'm on east coast, west coast. i'm one of the top programs in the country. i'd like to have 30 countries. you got time, you got it time. get it out. and you can tweet me and interact with me at the same time. and you can watch -- you don't have to watch someone on network television do the color who's never cover add kickoff or brought one back, you understand, girl? >> oh, i understand. now, the webcasts are not slick. but hard-core fans appear to love them. it's very low-risk. switzer isn't really paying the other coaches very much, at least not yet. and they all seem to be having a
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good time. scott? >> glad you understood. jane. >> yeah. >> barry switzer is awfully colorful. >> oh, he is, and he can be a little more colorful, because he's online and not on tv. >> yeah, yeah. that's for certain. jane, thank you so much. kelly? >> jane wells this morning. the faa says we can move our mobile devices during flights, maybe to listen to barry switzer. that could be the beginning, gogo is allowing some passengers to use the phones so they can talk and text while the plane is in the air. phil lebeau is, in fact, on the gogo test flight right now. thousands of feet up in the air to see how all of it works. you making calls, phil? >> i am. i'm calming you guys, kelly. we're about 25,000 feet above connecticut right now. from newark. and this essentially the new gogo text and talk service. it's brought to the airlines in the u.s. in the first quarter of next year. now, they believe that most
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airlines in the u.s. will say, you know what, we don't want people talking on phones. so that's likely not going to happen. but you will be able to text, and that's a feature that gogo thinks will be very attractive to people who want to use their own phones to stay connected with family, friends, or to the office. and this text-and-talk feature, which they are rolling out in the u.s. is already being used on corporate jets throughout the world, and gogo has had a big response from the corporate market, because people are saying, i want to stay connected when i'm in the air, and this is proof you can do that. >> i wonder, phil, if you can give it a try, if you can try to text us here on set, actually, from 20,000 feet in the air, where you are right now. >> well, i will do that, as soon as i get off of the phone. you can talk and text on the same phone at the same time. you can separately. after i'm done with this report, i will send a text message to my favorite anchor, and you can say, "i got it." >> perfect. he says that to all of them. phil, thank you so much.
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fascinating stuff this morning. and i wonder, guys, if it's not going to cause headaches for passengers now that you have to deal with people who potentially, as you said, more of the texting, but you'll hear the ding, maybe. >> the more burning question is why phil lebeau has your personal cell phone number. >> i couldn't begin to comment on that. if he does get it, i think there will be a lot of people worried about the communications and saying, how do i know this isn't really going to affect the systems of the flight while i'm in the air? >> i can't imagine as long as they've taken to allow them, they wouldn't have really checked this out. >> really? come on, you're old enough to know bad things happen in life. >> the bad thing that could happen is i don't think sitting next to somebody in a tube at 30,000 feet talking on the phone is all that great. >> right. >> now, being able to use it for texting, that's another story. a phone call? that's something totally different. >> completely agree. it's bad enough when you're stuck on a train, for example, you can maybe move around. in a plane, you can't. you know, for the most part. anyway, phil's not texting.
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[ laughter ] it's all right. >> don't get too upset. >> we'll talk about it later. scott, thank you so much for joining us this morning. >> thanks for having me. good to be here. on the "halftime," we'll figure out what the jobs report, what it means now to the fed, the taper, and this rally, right? the dow is up 90 points. >> oh. i spoke too soon. >> we'll do it with that man right there, keith banks, the president of u.s. trust, really smart mind on the markets. >> you got fill's text? >> i don't know if he can read it, it's your favorite aviation reporter texting, in flight. i think the world just got your phone number, as well, phil. it could be an interesting flight -- >> it's on you, kelly. >> yeah, sorry about that. and let's get to it here, here's what you might have missed if you're tuning in this morning. welcome to "squawk on the street." here's what's happened so far. >> we're not playing the market. i think it's very difficult to determine when the market's high, when it's low. what we're trying to do is just
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find businesses, and then once we find them, and we're right, and they have these opportunities and they're developing as we expect, to hang on. october, nonfarm payrolls, increase by 204,000 jobs. the unemployment rate is 7.3%. the -- much higher than the consensus. this stock is impervious to bad numbers. there's just another theory going on behind this company. the theory is they're getting it together. you don't knowsly -- necessarily see it with the big turn in the company. >> i'm wondering if there isn't a belief that international is coming back faster than we thought. [ bell ringing ] >> we need to pivot, and we need to take our foot off the brake and put it on the accelerator. and whether we move away from the self-inflicted wounds, i think we can even continue to grow even more than we have in this resilient environment. >> the stock's overvalued, isn't it? >> i don't think so.
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my price target implies that it will trade at 30 times. yes, that's expensive, i agree. but when you adjust it for growth, revenue growth, that,forecasting 80% revenue growth over the next three years. the multiple doesn't look as egregious. good morning, we're live here at post 9 at the new york stock exchange on a friday. let's start this hour with a check on markets. a nice rebound shaping up after yesterday's sharp losses. the dow is up 80 points. a lot of that gold bhman sachs. the nasdaq up better than 1%. small caps doing well this morning after being hit hard over the last couple of sessions. shares of groupon are rallying after third quarter revenue beat estimates. investors are encouraged by strong north american growth and 10% jump in gross billings. looking at priceline, and it's always a pricetag to watch. well over 1,000, still beating third quarter estimates.
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they announced they split the chairman and ceo roles with ceo jeffrey boyd remaining in the chairman role. here we go. this is our agenda for the next 60 minutes. shut down? what shutdown. the u.s. adding 204,000 jobs in the month of october despite the lengthy federal government shutdown. so does this mean that tapering from the fed is back on the table for this year? we've got the answer. plus, twitter is now open, of course, for trading, but one big question remains, how will the social network boost its profits? the answer must involve advertising but not in the way that you'd probably expect. we'll explain later in this hour. and from the silver screen to your tv screen, disney is partnering with netflix on four brand-new tv shows involving marvel superheroes. so will those superheroes add more profits to the house of the mouse or netflix? we'll take a closer look. but first, back to the upbeat jobs number this morning.
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the market is pushing higher on the heels of hearing the u.s. added 204,000 jobs in october with upward revisions to the months before. let's bring in david kelley, chief global strategist with jpmorgan funds, and jeff cleveland with hayden and rival. guys, good morning. >> good morning, kelly. >> david, first, to you. is this a game changer? >> yeah, i think it is. i think the most important number today was actually some of the information in the report, and that's what the unemployment rate would have done had they not been on layoff. we estimate it would have been 7.0% exactly without the distortion. and that means the labor a market is tightening faster than the federal reserve thought, and because of that, i think we now -- it's likely we'll get a taper either in december or in january. you know, i think that's a close call. which of those, i think it's likely the taper will start at one of the meetings. >> well, jeff, for precisely this reason, now there's more talk about the fed perhaps widening its perception of how the job market is doing, or lowering that unemployment threshold to begin the taper.
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so just to take crt capital surveying the street this morning, on average, people now think they're going to lower when the unemployment rate hits 5.8%. so does 7% matter as much as it might have a couple of months ago? >> kelly, first and foremost, you have to ignore the details of the household survey. i just set that aside for this month, and let's reconvene a month from now and talk about the household survey. the establishment survey, i'm also a little skeptical on. i don't think you can shift your view of the market or the economy on one month's data. i don't think the fed will either. so it's a good number, but let's just stand back and wait until november's data, i think that's what the fed is going to do. so i don't think this actually changes anything with regard to the taper or the not-taper question. >> okay, david, going back to this point, though, is it still 7% in your view? in other words, if that was a print we got this month, do you think the fed is going to stick by what it earlier said, will be the 7% threshold, or are they going to low ter now, because they understand it's a narrower
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read of job conditions in this country? >> well, i think they've thrown out the 7% threshold. remember, that's where bernanke said the unemployment would be when they finished tapering, not when they started. the unemployment rate is coming down much faster than the fed expects, and i do think that -- i agree there's distortion in the household survey, but we know how it's distorted, and it's possible to adjust it back. and what it's showing is a continuing trend of declining labor force, for demographic reasons, the baby boom generation is retiring en masse, and that means the federal reserve doesn't have as much room to maneuver as they thought they did. >> so what does that mean? >> well, it's very interesting -- [ overlapping speakers ] -- what it means, still 7% unemployment is still too high. remember, the federal reserve is so far away from a neutral monetary policy, if they want to do it gradually, they'd better do it now. they don't have as much time as they thought they did, because
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they need to get back to a neutral monetary policy, at the pace they're going they won't get there. we'll end up with inflation and end up with asset bubbles. so i think this should be a bit of a wake-up call to the fed they need to consider to get tighter here. >> jeff, it's not just -- when we think about the fed and the effect it will have on the markets, the answer to that very important question of when they start to taper and how aggressive the taper is going to be. but, also, implicit a question about the degree to which this rally this year is based on liquidity, and if the liquidity is withdrawn, what would happen to the rally. jeff, what is your fundamental view of the gains we've had on the stock market this year? is it sound? is it fundamental? or is it in part liquidity-driven? in other words, how bad could the sell-off be? >> we think we've come really far really quickly, and maybe some of that is due to liquidity. but, simon, people have been saying this the whole time, since march of 2009, that we wouldn't recover and that it was
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all central bank driven. i think that story is false. i think we are seeing 2.3 million people more employed now than a year ago, so there are real gains. there's real growth happening in the economy. the question is, is it happens fast enough for the fed to taper this year? and i think you just keep in mind it's in the context, it's not just jobs. jobs is one of the things that the fed wants to see. but there's also the inflation question, which hasn't been talked about much this morning. >> sure. >> but 1. 2% on pce is well below target, and the fed is looking at that, as well, in terms of thinking about tapering and the next step. >> jeff cleveland, thank you very much. david kelley, as well. have a great weekend. >> thank you. >> you, too. in the meantime, a terrible situation in the philippines. the most powerful typhoon in the world this year, arguably the most powerful to ever make land, the massive supertyphoon slamming into the philippines this morning, putting millions of people there at risk.
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greg postel from the weather channel has more on that for us. >> supertyphoon haiyan continues to roll across the philippines now, bringing destructive winds, heavy rains, and storm surge with it. let's look at the last 24 hours. i can show you what it's looked like as it moved just south of the island -- just south of tacloban. they went through the eyewall with category 5 conditions, likely in that region, about 12 to 18 hours ago. now, this system continues to rapidly move off toward the w t west. the good news is it's moving away from the philippines. but the bad news is, there will be another landfall likely in vietnam later on in the weekend. as of 10:00 a.m. eastern, the maximum sustained winds were estimated at 155 miles per hour. that's down considerably from where they were yesterday, but still in the category 5 range. movement toward the west at 23 miles per hour. this system will continue to move on toward the west, and here's the cone. it's likely going to impact vietnam, perhaps make landfall as a category 3 later on in the weekend, maybe as early as
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sunday morning. back to you. >> all right, that was dr. greg postel at the weather channel. we're keeping an eye on how it trades in the first full session, down almost 5% at the levels and and moving around. and it seems to be settling here. the question is whether the excitement is over now that the ipo has happened. we'll get into that issue next. first, though, rick santelli, sir, what else are you watching this morning? >> i watch everything, kelly. but i'm going to be watching it with jim beankco at the bottom of the hour. david kelley said, hey, if it wasn't for what happened with the government shutdown, unemployment rate would be at 7%. that is true. a really nasty way to get there, and we'll tell you why. and i bet you some of the great students from k. state know why. hey, anybody here understand that people disappear, the unemployment rate goes down, right? is that a good thing? >> no. >> all right. well, the "no" wasn't loud
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[announcer] ...every wish for a bed that could feel perfect under every part of your body... [man]ask me about our tempur-pedic. [announcer] they're sleeping on the newest tempur-pedic bed... the new tempur choice... [man]two remotes. [announcer] firmness settings for the head,legs,and back... these real owners get that famous tempur-pedic comfort how they like it. [woman]ask me about the lumbar button. [man]lumbar button [woman]lumbar [announcer] tempur-pedic.the most highly recommended bed in america. now the fun begins! like this with huge moves in the 10 year, we have to keep an eye on the utilities sector. not surprisingly, one of the biggest losers on the s&p 500, dominic chu back at headquarters with more. good morning, dom. >> good morning, kelly. yeah, a tough morning for those utilities as the spector of the higher-interest rate environment coming off
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stronger-than-expected expected jobs scaring investors. check out exelon, con ed, edison, duke energy, reporting weaker-than-expected earlier reports. the hefty dividend yields suffer when there's boater yields in the treasury markets. simon, utilities is one of the worst performers. >> yeah, yen and yang. shares of twitter are trending lower the day after its ipo. so what's the consensus on twitter's pricing and its current valuation? pop tip is a company that analyzing public opinion on topics like the twitter ipo by examining common phrases in social media, and joining us at post 9 is the founder and coo of pop tick is kelsey palleter. >> hi, simon, how are you? >> i'm interested in how you will handle the question as to whether twitter is overvalued on the analytics. what are you going to say? >> i think there was a really
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low probability of the stock trading down, and i think that that's really what they were going for. the other piece of it is, their cfo, mike gupta, came from zynga, had a lot of background in that world. you know, they learned from facebook. at the end of the day, the top phrase, the top discussion about the twitter ipo is that it's priced higher than facebook. so, i mean, it's doing well. >> tell us about pop tip. how does it work and how can people use it if they're trying to understand the relevance of twitter here? >> right. so what we do is we've identified -- we've created a proprietary algorithm that understands and analyzes crowd conversation instantly. we look for common phrases and try to find consensus in the data so that we can say, hey, this is what people think in aggregate about a given topic. >> and how do you display that? >> right now, it's displayed in a point-based ranking system. >> okay. >> it will tell you in realtime what the top phrases are about a topic. for instance, about twitter ads. the key top phrase topic there
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is, well, are there going to be more ads now that twitter has ipo'd? >> right. >> and a lot of more discussion around that, consumers are bringing it up. >> on a day like yesterday, twitter has the thing on the side, it will say top trends, and trending things. it sounds like what you do is similar, but you can put in a search term and see what comes up around it. when you did that yesterday during the ipo, what did it reveal? >> you know, a lot of what the discussion was around the ipo was how this is a big moment in social -- in social media history that this is something where, you know, the key element around the ipo really was about how compared to facebook actually, and then, the secondary element was around this being a big moment in social history. and that's something that people recognize. >> so if you listen to our interview with the coo yesterday, which i'm sure you did, one of the things that he was very clear at again and again repeating was how this would be the platform for now. >> yes. >> this is for living in the instance. and he has to try to attract advertisers into that -- >> right. >> -- live conversation. i'm imagining that what you do
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request help the advertisers with tweaking. >> oh, for sure. and that's, i think, where how successful twitter is will pan out in how they increase the user base, but also really hone that realtime targeting aspect of things. you know, i think that they've done a great job of looking at immediate, kind of, like, high-level key words and targeting against those. but people are complaining, the main point of complaint is how the influx of twitter ads, especially in the last week, hasn't necessarily been targeted in the best possible way. and that's where i think taking a look at long-tail phrases, around actual colloquial conversation is going to be really big for them. >> although, again, for people who are wondering how twitter is a company going forward, the fact you exist, you know, you're here to analyze trends on twitter, tells us something about the information in this big-data age that twitter can potentially supply. >> right. and the data we saw yesterday, more people say good morning twitter. you know, it is a daily utility,
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than they do even talking about the ipo. >> but nobody's -- nobody's saying they don't have eyeballs. the difference is, can they have revenue and profitability? that doesn't advance it down that road, does it? >> you know, and that's where some of the investments, the recent investments need to pan out in order to get them to where they need to be. >> kelsey, nice to meet you. >> thank you. >> kelsey falter from pop tip. and now, home depot this morning apologizing for an offensive tweet. this tweet was sent from an outside p.r. agency. take a look there. it was quickly pulled. the retailer issued a set of apologies that read which drummer is not like the others, from @homedepot, and now saying we are deeply sorry for the dumb tweet and said we have zero tolerance for anything so stupid and offensive. deeply sorry. we terminated agency, and individual, who posted it. speaking of twitter. move over cupertino, apple is expanding manufacturing to a whole new part of the country. when we come back, we'll tell you where that is. stay with us here. it's "squawk on the street."
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♪ apple's bringing about 2,000 jobs to mesa, arizona, announcing plans to open a manufacturing plant amid a push to bring some manufacturing jobs back to the u.s. with us this morning is mesa mayor scott smith. mr. mayor, we're so pleased to have you with us, good morning. >> good morning, thanks for having me. >> so mesa, if people aren't familiar with it, part of the phoenix-mesa metropolitan area, one of the biggest cities in the country. how much of an impact really are these manufacturing jobs going to have an your region? >> well, anytime you build manufacturing capacity and bring new jobs, it's a big deal. you know, 2,000 jobs is a lot,
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but the phoenix-mesa area is a huge economy, but the fact that it's apple and that what it signifies in apple bringing manufacturing and creating manufacturing in the u.s., i think it may have a bigger impact than the actual jobs themselves. >> sure. and was there a bidding process, mr. mayor? in other words, did you make presentations to apple? did they solicit you and other cities in making this decision? >> well, we don't know what other cities were involved. obviously, there's a long negotiation process. apple and mesa have sort of rubbed shoulders before. they've looked at mesa. we were not an unknown entity. and so, we just talked about how we could best help them be successful. we had an existing facility. we had existing infrastructure. we had done some things that really set the stage, so apple could come in to mesa, and we think be more successful here than they could other places. there was never an us versus them mentality. >> what incentives did you deploy, aside from the infrastructure, and perhaps the
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geographical location, you're somewhat closer to california, obviously, than other low-cost parts of the country. are you offering them tax breaks? >> the city of mesa is not. the state of arizona is offering some incentives, which i'm not totally privy to right now. they haven't released that data. but the city of mesa basically provided a location that had infrastructure that was especially tailored for this facility and helped make it successful. and our proximity to the phoenix-mesa gateway airport, and basically our history in providing the kind of support that we have to major manufacturers i think was more important than any check we could cut to apple. >> we should celebrate the fact that actually manufacturing in the employment report that we got today is up 19,000, and that is a very rare occurrence. so all jobs are welcomed. but, mr. mayor, a lot of people worry about the future. and if, in order to attract jobs for communities, the tax burden has got to shift. in other words, we as workers are going to pay the bulk of the taxes in this country increasingly so.
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in order to attract the capital, to attract the businesses into our neck of the woods, and they will get off with lower and lower taxes in order that we can all work. is that where you see things moving in the future? >> you know, i don't. once again, the economy works together. i don't think that there will be a giant shift. however, we've got to be competitive. if you don't have entities that can create jobs, then the jobs aren't there. we've got to find that fine balance between what companies can bring, what individuals can bring. i think we will find that equilibrium. there's no doubt that in america we have been used to a taxing system that hasn't worked, especially in keeping manufacturing jobs. that's part of a major cost that these companies have to deal with. >> sure. mr. mayor, finally, can you talk about the kind of workers in mesa -- when apple looks to staff a plant like this, are these specialized manufacturing workers? why is it that you seem to have a preponderance of the workers, and is there something that other communities can learn as a result?
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>> well, people forget that the phoenix-mesa area was once referred to as the silicon desert. motorola was the largest employer in the state of arizona. and so, we have -- we have great research universities and arizona state, and others. and so, we have a deep cache of highly skilled workers, and i think that was very important to apple and the others -- intel who has a major facility here, and others who are looking to this area, understand we have a young workforce, an educated workforce, and a workforce that's really ready and willing to work in this environment. >> all right. mayor scott smith, welcoming 2,000 jobs from apple to his community, and joining us this morning. we thank you very much. have a great weekend, sir. >> thank you. let's stay in tech and send it over to the nasdaq, where sheila has a new sell rating on twitter, sheila. >> hey there, simon. we have another sell rating from dan ernst at hudson, and it possibly has the best title of a
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research report i have seen in a long time. ernst says about twitter, flip the bird, initiate at sell. he says, look, there's no upside that's not already been more than fully valued in the stock. he said there's not enough emphasis on profits, people are focusing on soft metrics like sales, and it's about flipping the bird when it comes to twitter. back to you. >> if only the retail investor had it to flip in the first place, sheila. thank you very much. now that twitter is public, what can the social network do to continue to drive that revenue and profitability moving forward? one of our guests has an interesting idea, and it's all about online video. he'll explain that in a few minutes. plus, the bells are about to sound across europe. we will just check in with the european markets, a big week for europe with the surprise rate cut.
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♪ the european markets are closing now. two big pieces of information coming through in europe. first, a cut on the ratings of france by s&p, a crushing need for reform. and the other thing, we got a huge currency surplus count from germans. the bigger story is that what
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with negative markets pulled positive as a result of what's happened here on wall street? let's have a look as where we traded, as they sign out for the week. the united states, relative to europe, and you will see that bounce on european stocks from the surprise cuts in interest rates from the ecb. but then that's basically dissolved away as we trade out for the week. that's partly because the news conference yesterday was not particularly dovish, nor was the statements. so that rate cut might be all that you get for now. in the middle of a lot of concern about the european economy and tapering here. check out the asset managers. a lot of them quoted in london that for some reason are down quite heavily today. i don't know if that is about future expectations of where markets will go. two corporates i want to mention to you. the first is telecom italia. check out the 20-year chart of what was once a mighty, mighty business. now desperately selling assets to raise cash and reduce its debt that is now twice the size of its market cap. and i do want to mention, as
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well, the parent company for british airways, i.a.g., which has now doubled in value so far this year, as it squeezes the airline iberia into shape. another 3,000 jobs are going there as it tries to raise profitability on the latin american routes and the spanish routes, and, also, trans-atlantic really doing the business now for british airways. on that note, i'm going back the to u.k. this week. back to you. >> i was going to say, i'm going to miss you next week. >> oh, you won't. >> i will. let's bring in bob pisani with a look at what's moving down at the big board. >> the big story, of course, is interest rates moving up this week. that's put pressure on the markets. look at the 10-year yield. they're watching that down here. that's what the stock traders are watching. we're marching towards 2.8%, slowly but surely. there's the week. you see the big move up was essentially today. this is putting a lot of pressure -- all week putting pressure -- on some of the interest rate sensitive groups, so the homebuilders have had a tough time in the last couple of days -- lennar, ryland, mth,
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spf -- all to the downside. this is for the week. reits have had a particularly tough time in the last couple of days. so retail groups like general growth properties, hospitality properties, avalon, sl green, one of the big office reits, they've been down rather noticeably. but there are a lot of bulls that are still out there. they don't believe in the general idea of the correlation trade -- as rates go up, then you sell stocks off in general. a lot of people are arguing the taper's because -- if you taper because of the strong growth numbers, that the rate also still essentially stay at zero. a lot of them are pointing to the reversal today. they're not dramatically selling off the entire stock market. we've had a day and a half correction. there's the reversal there for the last two days for the s&p 500. people are noticing that. you'll notice financials are doing better. some people, i think incorrectly assumed the yield curve will steepen a little bit, so you can see some of the big regional banks moving to the upside today.
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ipos, it's been a huge week. this was the biggest week for ipos in several years. we're going to have two interesting ones next week. you both know them, extended stay america, this is the biggest owner/operator of north american branded hotels, and mifflin, big publisher, as well. and there is a crowd around the twitter post. a lot of volume and activity there. $43 for twitter right now. remember, it opened yesterday at $45.10. guys, back to you. >> history in the making. thank you very much. let's send it down to rick santelli in chicago for more reaction on this big move on interest rates and the employment report. rick? >> and you've done a good job talking about it, simon. my hat's off to you. my hat is always off to jim bianco. welcome. thank you for coming down. david kelly, jpmorgan, good guy. >> yes. >> smart guy. on our show, we didn't have the time to pull the clip, about 15 minutes ago, "and if it wasn't for the .3 that the temporary
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layoff category due to the government shutdown, if it wasn't for that, and we had a clean number, it would be 7%." he's right. because i did the same "santelli exchange" telling people why, because there are people that aren't working. this isn't good! it isn't good! it's not a good thing! it never has been! and ben bernanke vacillates, whether he talks about it or not. but it doesn't change the dynamic. people, wake up! if we're going to structure crazy policy to a drop in the unemployment rate, let's make sure it's not because people are dropping out! your thoughts. >> i think you're right. you can't have a .4 drop in the participation rate in one week, which is the third week of october when they did the survey, or i guess it was late because of the government shutdown, and call it demographics. there's something more going on many people are leaving the workforce. that's why the unemployment rate is falling. if you look at private payroll growth at 200,000, believe it or not, that's really in the range -- middle of the range we've had for the last three years. there's no real upward movement in that number. it vacillates around that for three years.
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so this number is not disastrous, but it shouldn't really be thinking -- we should be changing fed policy. >> let's look at it from another tangent. according to zero hedge, if you extrapolate the trends in population, labor force participation rate, all of the ratios, if it stays on the current clip, in four years, you're going to have more people out of the labor force than in the labor force, which will be rightly probably at the time when we hit the threshold for the fed to stop the program. is this like -- are we in disney world here? >> it's just showing you the numbers are unsustainable at rate they're going right now. you're right that the unemployment situation is really very muddled because of the drop in the participation rate. and the fed has errored by tying themselves to the unemployment rate, which has all of the problems right now. >> knowing the ratios -- now, what would you tie it to, to actually reflect the working workers versus the ignored unemployed workers? a lot of numbers to tie it to, right? >> right, to private payrolls. they could tie it to, you know,
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to -- >> those in the labor force! >> those in the labor force. >> gee, that would make way too much sense. >> that would tie it to part-time work versus full-time work. there's a lot of numbers they could look at. they hitched their mast to unemployment. >> the producer, how much time do we have? quick, quick, quick. real quickly, you were telling me, we're at 2.75, and you had things to say about fed interest rates. >> yeah, 2.72 back in september, interest rates too high, the fed said, 2.47, he this said they were fine, and now back to 2.75. the fed should be very worried about the levels if they are consistent with what they said in september. >> jim, you are the man. have a good weekend. >> thank you. >> happy veterans day for all you veterans out there like my dad and jim cramer's dad and back to you! >> enjoy the break, rick. we'll struggle on without you. let's send to to dominic chu for a quick "market flash." >> simon, let's continue the discussion. with the strong jobs report showing the economy might be
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better off than you believe, you would think homebuilders would be on the ride, and they're down heavily today. the reason, the sector has become an interest rate play. investors are concerned the fed will start tapering sooner rather than later, forcing rates higher. check out pulte, lennar, k.b., toll brother, all down between 2% and 4%. remember, rising interest rates, kelly, means home affordability becomes a little tougher. back to you. >> it does. dom, thank you very much. now that twitter is officially public, the social network will be looking at new ways to increase revenue. it will be so much more important. our next guest is a competitor to twitter's vine service. he says if twitter wants to make money fast, it should focus onion line video. we'll tell you how when "squawk on the street" returns. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal
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♪ now that twitter has gone public, who's next? tout is a social video sharing platform that allows users, including sports and entertainment brands, to create and share 15-second videos, called touts. it's been called the twitter of video. we should know that nbc universal, our parent company, is on the tout platform. michael downing is the co-founder and ceo of tout, and he joins us this morning from san francisco. good morning to you, michael.
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thanks for getting up early. >> thanks for having me. >> it says here in the notes, just to cut to the chase on twitter, you think that they've made a major misfire on their business model. why? >> well, i think looking at how twitter's generating revenue now and the basic kind of physics of what we're looking at post-ipo, where they're going to have double or triple the revenue very, very quickly. if you look at the sector now, look at the publicly traded companies -- the googles, the yahoo!s, aols -- right now the video is driving disproportionate amount of the revenue growth. the missed opportunity for twitter right now is that video has to be a bigger part of the formula for how they begin to scale this revenue quickly. >> is that an application for them to buy you? >> well, we're a fast-growing company, a young company right now who's focused on becoming profitable and continuing to scale our business. but i think, you know, twitter's
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got a lot of smart guys in management over there. >> sure. >> they're growing fast. i think they're going to do the right thing. >> so can you just -- for those of us that struggle with this cutting-edge of where you guys are, can you explain why video, and in particular -- i think the 15-second video in your case, is the kind of the holy grail of monetization? how do you make money from that? because you can carry ads for coke in addition to -- >> absolutely. >> -- the content? >> so here's the kind of simple explanation as to why video is so important in the overall online advertising market right now. you have display ads in basic kind of graph cical ads that ar declining across the board. video is valuable, because i as an advertiser, if i go and create a 15-second video ad or 0-second video ad, for the first time, i can quantify engagement. i know when somebody actually watches the advertisement. on a display ad, which is a banner on a page somewhere, i don't actually have the ability to quantify engagement there.
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and that's why the prices of the ads are going down so quickly. >> sure. although, michael, we know, for example, to your point, youtube is just a juggernaut for google, and it would -- >> huge. >> -- imply the other companies need the similar service. as a user, i wait that three, two, one, and then clicking the "x" as soon as i can. how legitimate is it really to quantify all of this? >> i think the one thing you have to look at is the macro trend, which is right now the visual web, or this simple kind of notion that people are spending more and more of their time online around video and visual content is starting to dominate every platform. and revenue and advertisers are following that trend. so twitter right now still has largely an experience that's based on 140 characters of text. they do have vine, which is more of a toy than a tool, and it doesn't have any kind of advertising mechanisms attached to it. but the big missed opportunity, i think, for twitter is you have a very significant audience.
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you could begin to deal with media companies in a slightly different way, where they look at twitter as a primary kind of delivery point for that video content, and begin to monetize that content at a very, very high level. >> michael, twitter is trading at $43.30. would you buy the stock? >> i absolutely would. i mean, to answer that a slightly different way, i have a steady stream of phone calls yesterday from relatives and friends of my parents in texas, calling me here in san francisco, asking me about, should we buy twitter, is it important? i mean, one thing definitively, i think everybody should understand, is twitter is one of the rare and unbelievably important companies who's really changed the landscape forever. and even at 43 or 46, or whatever it may be, this is a company that's going to play a very, very significant role over the next five to seven years of how the internet evolves. >> and what about tout? what about your own business? you co-founded six different technology companies, successfully sold three, took
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one public during that time. what are you going to do with tout? at what point is it ready for you to move on, and how will you move on, and in what way? >> for tout, understand we're a much earlier-stage company than twitter, only three years old. we're on this hypergrowth path right now, grown 600% year-to-date. we're generating substantial revenues. we're not quite profitable yet. we're due to be profitable mid-2014. for us, the most important priority is to reach the point where we achieve profitability and imbed ourselves across the entire kind of media landscape, and we've made very significant progress so far. >> it was a pleasure meeting you, mr. downing. thank you very much for your time. michael downing, the co-founder and ceo of tout in san francisco. >> thank you. and now, superheroes are coming to the rescue. of disney's bottom line, anyways. the company is working on four -- yes, four -- new marvel superhero tv shows. you can take a look right there what we're talking about.
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they'll be coming out on netflix over the next couple of years. here's a look at some of the new character right now on your screen. should you buy or sell disney on superheroes? we'll get the answer for you next. farmers presents: fifteen seconds of smart. so you want to drive more safely? stop eating. take deep breaths. avoid bad weather. [ whispers ] get eight hours. ♪ [ shouts over music ] turn it down! and, of course, talk to farmers. hi. hi. ♪ we are farmers bum - pa - dum, bum - bubum - bum ♪
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welcome back. a new netflix deal, new "star wars" date, and a new movie hitting theaters today. you could say the characters over at disney have been busy. the media giant reporting quarterly earnings results yesterday after the bell, topping estimates, and take a listen to what bob iger told cnbc on the deal to create four more new superheroes for marvel. >> we view netflix as a viable platform, a great platform for us to put our product on -- both movie product and television product. they're also paying us nicely for the great product that we offer them and their customers. so i think it's actually ends up being a win-win deal for both of us. >> so what does it all mean, though, for investors? is now the time to get in on the disney dollar? let's ask brian steinberg, variety tv editor joining us now. good morning. >> hi, how are you? >> great, thanks. taking a look at the shares --
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(unintelligible) is with us, as well, from s&p. netflix is up less than 2%. do you think investors are right to perceive this as a better deal for disney? >> i think so. i think disney gets paid by this by netflix. it's a great way to get money for the "avengers" and marvel franchise, so another vendor to tap for the global project of theirs. >> sure. what about you? what's the implication for the shares? >> so we did reaffirm our buy, a strong buy opinion on the shares today. i think you see that investors have received all of the news pretty well. the earnings were pretty strong across the board if you exclude the impact of accounting at espn, and as far as the marvel deal, i think it's just another way to, you know, leverage what we believe to be a potentially sizable wrong-way for that franchise, and across television, motion pictures. i think they just barely getting scratched here. >> brian, mr. iger was quite
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clear, as far as abc is concerned, that they weren't going to sell off any abc stations for as long as there was a network. but he was actually a little evasive as to whether the whole abc division could be sold. what are you hearing? is abc up for sale? >> you know, he has been very kind of coil on abc for many years now, he never gives a direct answer. they haven't sold it yet. it's a pretty big asset. it's not easy to buy. and it is, i think, central to a lot of their promotional efforts in getting the disney characters and disney properties out to the public. it's not an easy sale. >> do you agree with that, tuna? >> that was my question to bob iger on the earnings call. and he was pretty, very clear, you know, that the stations are not for sale. i was a little surprised, frankly, that it was speculated given that the stations are firing on all cylinders and leader in their markets. so i think he pretty much, you know, dismissed that possibility. >> interesting. okay, tuna, what about the -- what about this whole question of when the new "star wars" film
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is going to be released? obviously, they spent $4 billion buying lucas film, and now saying they're delaying it, i think i'm right in saying, until december 2015. do they have problems with the production process? why the delay, in your view? >> i think it's pretty consistent with what they said when they bought lucas film. they were always looking at 2015 for the release. i think what happened -- >> yeah, but tuna, it was the summer of 2015. now that blockbuster is going to be delayed six months. and obviously, the sequel and the money from that is then further delayed into another calendar year. >> well, i think you're right, it did get pushed back a few months, but i wouldn't really read much into that. it was just a question of finding the right spot where that film can really excel. and i think they did a pretty good job in that. >> tuna, where do the shares go from here, in your view? >> well, so, we -- you know, you see the shares up today. and i think it's really going to be pretty much trending towards even more all-time high
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territory. there's not a whole lot not to like about the story at this point. they just wrapped up a very strong fiscal year. you know, we expect double-digit earnings growth going forward. it's just the cost of monetizing a whole lot of investments they've made. you see capital expenditures declining and we think return investment will continue to quote up. >> interesting. brian, briefly, on the netflix point, as well, how significant is it? we know netflix is almost an established player. is there any concern about content costs? how do you interpret the significance just of disney going to netflix with the next characters for that company? >> i think it speaks volumes about netflix's place in the media ecosystem. this is not a place for, you know, original content, but now it is fattened with the "house of cards" things that came out earlier, "orange is the new black." it's a viable option for a lot of consumers. >> absolutely. thank you very much for joining us. brian steinberg and tuna amobi, have good one.
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>> thanks. the score is on the door. the economy added 204,000 jobs in the month of october. we'll tell you this month's winner of the "nail the number" competition when "squawk on the street" returns. chronic plaque psoriasis to another new stylist. it was a total embarrassment. and not the kind of attention i wanted. so i had a serious talk with my dermatologist about my treatment options. this time, she prescribed humira-adalimumab. humira helps to clear the surface of my skin by actually working inside my body. in clinical trials, most adults with moderate to severe plaque psoriasis saw 75% skin clearance. and the majority of people were clear or almost clear in just 4 months. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb.
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and we have a winner for our monthly competition with a guess of 202,900, on "nail the number" winner, getting pretty close. we were unable to track down andrew brainard of portland, oregon, but he came closest. congrats, andrew. sends your details and we'll send you this prize, the "squawk on the street" billboard, as was hung on the west side highway new york for some time. >> carl and david are with us in spirit anyhow this morning. >> yes, reassuring. >> very much so. earlier, we brought you phil lebeau live from a test flight. he was using gogo's new system which allows passengers to use their phones during flight. so we did a trial. and phil was able to send me a text message that i showed on air. unfortunately. >> with phil's number on air
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around the world. >> i have since added him to my contacts. at the time, it did show the number to the world. so apparently, he has gotten quite a few texts. we'll put that in place on "squawk on the street" this morning. here are a couple of examples. kelly broke the man code. mr. lebeau, what do you think about tesla? buy or short? have a safe flight. no surprise there. in-flight texting has unintended consequences, your number was shown live on cnbc. good luck. how's the flight, dog, cnbc, be my thing, i love "squawk on the street." for the record, the text wasn't sent from phil's personal phone. but to the viewers who took the time to text him anyway, thanks very much for watching. >> let's have a quick check on where we are with the markets. obviously, from some on the headline figure, a blowout employment report today. raising the possibility of ta r tapering. to others, there are deeper problems with the employment. but some sectors -- financials, housing -- moving quite dramatically on that figure there. >> sure, the rally, simon, yesterday, after one of the
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sharpest sell-off, we're now seeing a decent rebound. again, the breadth going beyond the financials and insurance companies, as well the russell 2000 doing okay. taking it on the chin this morning, gold. >> and twitter. >> that's right. >> so many more questions. answers next with the "halftime" report. from us, have a great weekend. >> and have a great vacation. all right, guys, thanks so much. here's what we're following today. #sell. that's what investors have been doing with twitter today following its rip-roaring ipo. now analyst michael bakter explains why he's giving the stock a cool reception. burger wars. we have a battle royal with cheese, wendy's versus ronald and a debate over the happy meal. and we're following the better-than-expected jobs report, and the move of what it means for your money. live at post 9 at the new york stock exchange, it's ha"halftim" the ma


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