Skip to main content

tv   Squawk on the Street  CNBC  November 18, 2014 9:00am-11:01am EST

9:00 am
remainder of the 2014 season. this is something i think we also are going to hear about the internal study from the roger goodell commission. that's coming soon. join us tomorrow. "squawk on the street" is next. good tuesday morning, i'm ca carl, this is jim cramer and david faber. europe in the green on stronger than expected german confidence
9:01 am
numbers. profits miss estimates by a penny. the massive data breach hang over the stock. >> macy's downgrade with disappointing results, dick's and urban outfitters. all moved lower. >> a vote coming for obonomics in japan. >> and we'll have an exclusive interview with the ceo of halliburton to buy baker hughes. >> revenue above consensus rose better than expected 5.2%. retail noting at $28 million and expenses for that recent data breach adding it cannot estimate the total cost of the breach which for the year, about $34 million. not bad in a tough retail environment. traffic up.
9:02 am
>> i think what happened is last week macy's reported a quarter where they cut the forecast, yet the stock rallied too after being down one. that caused a lot of people to say it doesn't matter what retailers do. it's going to be a good holiday. gasoline down, employment up means you can suspend what people think. lots of stocks ran. when you run into a quarter, suddenly we take it into account the way we didn't when macy's was stalled. this stockholm depot is a victim of the running. i don't like situations where the number comes out and stock starts going down. it was a great quarter. is it as great as i expected? yes. the stock is also anticipated a lot. when you have a piece immediately out within 90 seconds of the release, home depot comes out early.
9:03 am
q-3 same-store sales in line. operating eps misses by a penny. no stock that's run up this much can handle a piece of research that says it misses a penny. >> a great quarter why? >> it's a great quarter because gross margins expanded. same-store sales at 5.5% is remarkable. these are lots of people spending on their homes. this stock was in the mid 80s not that long ago. they bought back a lot of stock. i thought the breach would be far worse. target has run a huge amount going into the quarter. >> inventories running higher than sales. >> i don't know. what happens if it snows in buffalo 18 inches? >> good point. >> you want inventories low. >> we are getting a long streak of cold weather. >> yeah. the new ceo, i think people are, there are a lot of people feel this thing has run its course. the macy's downgrade is about running its course. my problem with that is these
9:04 am
stocks historically are still inexpensive. they are doing a good job. i don't think target is doing a good job. that stock might be expensive. we saw nordstrom and macy's go up on what was muted outlook. we believed these retailers have been stalled for so long, let's run with the more positive view given gasoline and given employment. i think these stocks have run up and they come in a little. that's okay. >> right. we are talking about a move from $80 to over $100 in a very short amount of time. that's come along with a multiple going up. it hasn't been about the earnings. >> i don't like multiple expansion. i don't like paying up far more for earnings. walmart blew through the $70s to the $80s and come up with comp store sales slightly better and everybody is thrilled. europe is up a lot. yesterday europe was down.
9:05 am
we are in an opposite -- we are not trading with europe. i think we are going to trade with these retailers today. >> dick's did meet, comps up 1.7. >> urban was horrible. >> comps down 7%. that's a 2 1/2 year low for urban today. >> urban out fitters, you've got to go through the conference call. to quote the ceo, it's just -- this is richard hain. it's urban. what did we learn? clearly the consumer is growing affinity as tempered with the need to shop in stores. why did anthropology and free people do well? when i say it's lousy, i am quoting them. they were very unhappy. urban is a lost cause, the way it reads. >> that statement can be used broadly speaking to indict all of retail. it seems to be used by those who
9:06 am
are not seeing strength, but then again, we see others who aren't having that same. >> they are say direct consumer is better. it raises the bar for bricks and mortar store. you have to experience it. it's become a broadway play. >> that sounds more expensive. that costs a lot of money. i can't argue with that sentiment over time. we've been talking about it being the underlying trend in retail whether it be that people don't want to go to malls as often as they might have. and they are using their mobile phones frankly to doe all sorts of stuff they would have once done in a brick and mortar store. >> was urban out fitters the flagship very good online? it wasn't clear because the numbers are so confusing here. i do think, david, you're right.
9:07 am
the excuse of bricks and martor as being used by guys who underperform. >> why would you use it? that's the one you've got to go to. it's rooted in reality. it doesn't have to be the reality further. >> it's not that exciting to go to. restoration hardware, very expensive stock. >> i'm making a list of retail downgrades, macy's, walmart, tjx, ross, nike, lulu. if i call apple a retailer, we have a price target increase. to $130. >> i think the flaw in the sell retail is it's been very long since we had growth with retail. it's almost as if the analysts don't believe with retail. analysts think amazon is killing everybody. go over the nordstrom conference call. they have spent fortunes with their online. some people think they overspent. they've done a very good job. that is not a bad stock.
9:08 am
these stocks have been fabulous. let's just give them that they ran a lot and now we have to start thinking let's have a pullback. stocks do pull back. this is one of the great groups of this moment. when we get the numbers, it's sell the news. one of the biggest holidays, perhaps the biggest day is singles day you know you were in where you can't breathe when it happened. >> china. the headquarters of alibaba. >> they sold $33.9 billion worth of goods. 79 million packages, most have been delivered. stunning, as your point it, it ran up. >> stocks run up. >> it's still a $280 million market cap on alibaba. >> right. and apple is a great retailer. they didn't repeal the loss of the stock market. when you have a monster move, stocks come down after you get the numbers.
9:09 am
japanese prime minister abe delaying a sales price hike next year. showing the world's third biggest economy slipped into recession. over in europe, data confidence came in better than expected, rising the first time in almost a year. the estimate was only 0.5. i love one of the stories about japan. in the tax hikes they already put into place, the quote is they my have overdone it with the fiscal tightening and taxes. >> oh did they ever. tjx. a lot is forex weakness. >> we may not be fully accounting for it both on the income of what it's going to do simply to net, but also what it really does to overall sales. >> do you think the confidence number was an outlier for
9:10 am
germany? you need to see that dollar stop going higher against the euro. you go through tjx. a giant european business. first thing you think home goods. was that bad? no. how is tjx itself? it's good. how is europe? i don't know. it's good. when you translate, it's not so good. that's what a lot of people -- people don't realize that is not just a domestic retailer like home depot. >> a lot of people buzzing, s&ps moved fewer than two points for five days. 0.1% in five sessions. if we do a sixth today, our data, we've gone back to the 40s. we haven't found a streak this long. does that suggest poised to bust out up or down? >> i think we are waiting for the santa claus holiday, the santa claus rally. i don't think things are -- things have run up a lot. what you just described is classic consolidation. what we used to have, we run up a lot then give back 2/3 or half
9:11 am
of it. this is positive action when you think about the fact we had such a big run. overall earnings season turned up pretty good. i worry about ukraine. worry about soft europe and a lot of the companies i follow worry about soft europe. people are saying that oil decline? it's not so bad. we thought it was weakness. now we like a little bit of inflati inflation. i go through urban outfitters, it's bad. tj is good in america. home depot, it's good, but the stock has run. is macy's worth the downgrade? they are not as bullish as the stock reaction. wells fargo downgraded on valuation. what happens if it turns out next year is a good year and you downgraded these stocks 15 numbers? >> you'll look silly. at the same time, you can't abandon your discipline. i would rather see that.
9:12 am
>> i totally agree with that. that's why i was surprised actavis was up yesterday. >> you have to come up with a reason they were going higher. >> did you find it was odd? >> yes. i would have expected actavis to be down yesterday as opposed to up begin the price they paid, the multiple they paid. the synergy number was larger than anticipated. he came out with a number here. maybe an aspirational number for earnsin earnings for this company. if you hit that number, you can argue the stock is not expensive at all. >> cheapest major pharmaceutical with the best growth. a lot of the quotes directly related to our interview. people admitted to not watching our interview. are you kidding me? there it a quote in the "times." there are dark corners as wall street markers even as companies spend on mergers and
9:13 am
acquisitions they are not spending in other areas. allergan spends a fortune and they got together and they are not cutting the r&d budget that much. >> a lot less than what would have been cut with valeant. >> i think it's very easy to be negative. the average is pretty good. speaking of synergies, halliburton chairman and ceo will visit us post nine discuss his company's $39 billion acquisition of baker hughes. ♪ there's confidence... then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind. it's no wonder last year we sold
9:14 am
over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪
9:15 am
9:16 am
blackstone reached a deal to sell a manhattan office tower for $2.25 billion. sold to a venture led by a canadian property investor ivanhoe. it would be the second largest sale of a u.s. office building in u.s. history. what i find interesting here is
9:17 am
blackstone, perhaps one of the savviest buyers and selling of real estate have been doing quite a bit in the u.s. of late. there is no doubt they've been selling more than buying in this market. you've got to remember they bought a lot during 2008 to 2012 under the leadership of jonathan gray. we talk about blackstone and think about private equity. real estate is their biggest business. they have a close end fund business you've got to start to get returns on those funds and return money to investors. so that happens. you have prices up, 4.5% cap rate. that's the yield this is being bought at. don't forget that they control hilton. though they recently sold more hilton. that waldorf sale to the chinese insurance company was a 2% cap rate. and they got 100-year management
9:18 am
contract. >> pinnacle foods today 20 million shares selling. >> and blackstone selling again. >> i just think we should note it. put it down somewhere. blackstone is a seller of a lot of assets. >> they are stilling a lot of stock, taking their companies public. it's the nature of the business. look at private equity overall and look at the activity there. this year we know it's the year of m&a when it comes to strategic buyer. private equity played a minor role in buying. they've been doing an awful lot of selling. how often have we watched an ipo where the major seller or at some point down the road would be the private equity firm? >> i asked david during the break, do you think i'm bullish? but ideal with the reality macy's should have been down last weekend. use that as being an analog for, wait a second, that wasn't so
9:19 am
good. why was everyone so excited. maybe i've got to get more excited. maybe i've got to be less skeptical. >> when you're uncomfortable being long stocks, that's how it should feel. that's how a bull market is made. >> right. i think we rotate a little bit. i want to hear what halliburton has to say because oil is so crucial. >> when you think of those who buy and sell businesses, and that being a blackstone which has a good track record and they are looking at the return parameters, they are choosing to sell more than buying. >> i was trying to buy stuff for commercial purposes. >> what have you got going on? >> i can't own stock. so guys get together and we want to own -- >> got the inn, what now? >> castles in ireland. gold mines.
9:20 am
>> ir's always too strong. >> the restaurant is doing very well. >> it is doing well. >> are you going to expand? >> a group of guys are going to get together and buy a building. i find there is not a lot of value. i do that because i'm a businessman. i'm a bit of a businessman. >> and a good one. >> thank you. >> we'll get cramer's mad dash as we count down to the opening bell. halliburton's chairman and ceo will join us post nine. we'll hear what he has to say about the $39 billion deal to buy baker hughes. for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals,
9:21 am
discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more. it's time to get to work are finally over, fixing our long-term national debt to help build a stronger economy. with a solid fiscal foundation, we can create more jobs, invest more in innovation and infrastructure, and make america more competitive, giving our kids a better future. a bipartisan solution to our long-term debt means more growth today, more opportunity tomorrow. and the time to start is now.
9:22 am
(shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud. today there's a new way to work. and it's made with ibm.
9:23 am
there it is. seven minutes before the opening bell. time for a mad dash on this tuesday. one of my favorite companies is a spin-off of pfizer. i love animal health stories? animal house is plain and simple, it's the most unregulated -- it's not like the fda. if you have something that solves a pork disease, bingo. this company has been the leader in science for animal health. it's been great. $500 million share repurchase. i wonder if they are buying back stock because they fear now that valeant doesn't have allergan this is the ackman target.
9:24 am
>> the company did put in a poison pill activated at 15%. i think that did happen when i was in china last week, but i did note it. clearly they are in defense mode. what are ackman's intentions? would i team up with valeant again? that seems a stretch. >> right. >> especially given a lot of tension in their camp and questions on the part of valeant as to whether they were well served having teamed up with mr. ackman. they might have had a better chance of success had they not. >> does it matter how well a company does? look at the performance management's begin you here. is that not enough? remember the old days actavis didn't go? >> that is a great point. we've seen it more often than not they come in where things are going okay if not good, but they make the argument it could
9:25 am
be better. that seems to get a lot of traction with investors. it gives them protection on the down side. whether it's a pepsi or a dupont, both well performing stocks, they are not strongly performing as they might have been if they made better decisions. >> there used to be some community if you were the best performing stock in the group by pepsico. it used to be people say i'm not going to go after her. she's done an amazing job. it means nothing. >> first being, well the realm of let's call it a $10 billion to $15 billion, the biggest market cap you can get to mega caps to companies that are even the better performers in their groups. doesn't matter. >> it is incredible. a great performer gopro. here is a company that announced a secondary. when you see this action ahead of a secondary, that means people are getting the word.
9:26 am
you are not going to get as much stock as you thought. they go in the open market and buy more. this is a very big short squeeze. i understand the holiday season is great. you told us to sell it at $90. it went down. i am telling you i am giving you information this secondary looks widely oversubscribed. the shorts and gopro may get hit by the fact there is a shortage of high-end gopros for holiday season. and the chinese are coming in and buying gopro. >> unbelievable. >> i bet it was a big singles day. singles like that? >> sure. you want to take a lot of pictures of yourself. halliburton chairman and ceo will join us after the opening bell.
9:27 am
9:28 am
9:29 am
you are watching cnbc "squawk on the street." opening bell in moments on this tuesday. a lot to work with today. home depot came out, largely seen as a beacon by some. the quarter is still very good. >> good to listen to conference
9:30 am
calls. the company displays a total open hand. >> lowe's on the way. there's the opening bell. the s&p at the top of your screen. at the big board, halliburton celebrating its 95th anniversary. we'll speak with the ceo after the bell. ultrate ultratech, used in semiconductor devices and l.e.d.s. >> semiconductor companies have been strong. yesterday they came in a little bit. there is a stealth rally in the old fashioned tech and stealth sell-off in the internet social media tech. it's been, what people don't understand, people want buyback
9:31 am
s. >> xilinx is close to the top performers today. $800 million buyback along with the other one out of pinnacle, along with the secondary. >> xilinx, this was the first big quarter in a long time. i've been tough on the ceo because they missed several times. it does feel like what happened here is the company's got its footing again. >> halliburton going to get some back. up 2%. talk to the ceo in a moment. >> the conference call was a total love fest. would you think these guys would be pointing the table. the break-up fee is scaring people. it's such a huge amount. >> it was a big price. >> not a big price versus july when the stock was it a $75. >> electronic arts going to be up a percent.
9:32 am
tail winds console, upgrade cycle, a lot of the trends you hear about out of the bulls. >> if people just -- remember we said apple is a great retail? these games are selling like hot cakes. there's no -- when we watch the nfl, we used to see that's when they would introduce new movies. now it's like, wow, i want to's that movie. no, that is masters of doom and death and war. how could you not be playing that game? why aren't you playing armageddon part 7? >> some consolidation in the renewable energy space. sun edison up 5%. >> that is a hard deal to get your arms around. solar stocks did horrendous. people don't use oil in this country except in the northeast
9:33 am
to heat their homes. solar panels, we are not going to put panels on our cars. >> no the ceo of sun edison got a strong view he shared at a robin hood conference where the price of oil may go as a result of the rise of renewables. einhorn, a big shareholder there. >> i always think of green mountain coffee. he did that big presentation that made fun of me. the stock was half where it was. just made fun of me. i'm so used to it now, i enjoy it. >> we often do cite some of these hedge fund managers. they are wrong a lot more than they are right often times. einhorn has a long track record. he was a big investor in one of those mortgage finance
9:34 am
companies. the name is escaping me back in during the crisis, which i will come up with in a moment. now is saying coca-cola is stupid, green mountain is stupid, cramer is stupid. i look at the price of stock. maybe i was on to something. >> sun edison shares up 18%. >> at least that's what it was at the time. $35 billion in cash and stock. we are happy to have joining us after ringing the opening bell, halliburton's chairman and ceo dave lazar. nice to have you here.
9:35 am
many have a hard time arguing with the strategic behind the deal. they are saying you are paying a big price. >> we are putting a great company together. we are not doing this transaction for next quarter, next year but the next 10, 20 years. we created a fantastic company, great people, great technology and a great u.s. company that will make a lot of jobs. >> another question i've got that people want to ask, why now? it's not as though this idea was foreign to you or something you might not have thought about a year ago or a year from now. the approach i'm told by the people who worked on the deal was five weeks ago. you got it done quickly. why in particular choose to move at this time? >> well, basically, i believe stronger is better. i don't care what the market is throwing at you at any point in time. we'll be a bigger company. we'll have more product lines, more technology. we'll have about 140,000 employees. i don't care what the market
9:36 am
throws at us. we are going to be in good shape. >> is it about oil prices or not? >> it was not oil price driven. it was the right time to put the companies together. >> why the right time? >> if you look a the expansion of the unconventionals in the u.s., growth in the deep water and other parts of the world, national oil companies demanding more from the service companies, i thought a bigger, stronger, integrated company was what was needed to compete in this marketplace. >> last week there was a conference call that really set this group down. thank you for being on the show. john lindsay said over and over when it gets to $75, that's when people change their drilling budgets. we are at $ 75. >> people are looking at their drilling budgets.
9:37 am
a fair way is between $80 and $100. what hurts the industry is the volatility. our industry is a great adaptable industry. if prices will go somewhere and sit for a while, our customers, the service companies and everybody will be able to adapt and make money at that level. >> i like the fairway analogy. where is the bunker? >> we are not in the bunker yet. >> what number would we be in a bunker? >> if i could predict oil prices were going, i wouldn't be sitting here as a ceo of halliburton, i'd be sitting in the bahamas sipping on a nice drink. >> maybe i've drunk the kool-aid of jim brown. i thought you were so technologically superior you wouldn't want to be with them. >> from a complementary
9:38 am
standpoint, they did have technology we did not have. plus they have some fantastic people. it's a talented organization. combined with our talented people. we are putting together the industry bellwether. >> you talked about hiring more people. one of the things i've always been really proud of what halliburton is doing in this country, you've been one of the bigger hires in this country. if you put them together there would be less bidding. help wanted, you're there, baker hughes is there. why would there not be a nice break for halliburton shareholders and not as good for the workers? >> both companies are growing today. we are going to hire 21,000 people just in halliburton this year. that's a lot of jobs for americans. not only blue collar but white collar and professionals. you add that to capability, the growth out of baker, i think it expands career opportunities. not only for existing employees,
9:39 am
but those we want to hire going forward. >> your deal included the willing nfl to divest businesses worth $7.5 billion in revenue, break-up fee, all to address concerns about anti-trust impediments here in this country. i wonder about those national oil companies. in china, for example, where we've seen a great deal of anti-trust opposition to deals, are you concerned that the national oil companies and some of these other companies are going to have anti-trust concerns that are greater than we have here? >> not really. we did a big reachout yesterday after we made the announcement. the feedback has been unanimous and positive. national oil companies in particular, they see that a stronger, more well-developed organization can help them in a way that neither of us could standing on our own. >> unanimous. in other words, nobody had a concern?
9:40 am
>> i have not heard from a single customer that does not like this deal. >> in terms of the asset sales that may have to take place, have you gotten a lot of inbound inquiries on some of those assets? >> when we announced this deal yesterday, i have a big e-mail box. my e-mail box filled up with people, private equity, public companies, private companies, wanting to basically look at anything that we might have to dispose of. i say let's let the process go forward with anti-trust. we don't believe we are going to have to dispose with the $7.5 billion. whatever we do, we will. there will be very many willing buyers out there. >> what i was concerned about among the number things, let's say you do have to divest. you put baker hughes with halliburton. what happens if makes you so that you're back in the same
9:41 am
conundrum? >> we would not have done this deal if i didn't believe we would get it through the regulatory bodies and emerge with a company stronger than both of us going in. >> we are going to get a senate vote on keystone today. do you think it gets done? >> who knows. i hope so. i probably will get approved through the senate. whether it gets approved after that is anybody's guess. >> any ramifications for a veto on that front? >> not for our business. i think it would be another good solid indicator of what can happen from an energy standpoint in this country. you look at the unconventionals, oil and gas. you look at the production that the service companies and our operators and customers are doing here in the u.s. it's giving us energy independence. it's creating jobs. it's developing technology. all of that, i think, is fantastic for the u.s. in the long run. i think everyone should work
9:42 am
together to make this beyond dream continue to come true. >> come back to the stock price for a moment. it was down sharply yesterday. when investors heard about the prospects of this deal, it had moved up. the street column in the "journal" writes the following, your shareholders with 64% would be entitled to $ 7.1 billion of synergies in present value terms. they say that doesn't cover the $8.2 billion cash part of the deal. for halliburton, the deal benefits have to come from the stock being rewarded with a higher multiple down the line. do you agree? >> this is a great company we are putting together. so yes, some of it comes from synergies. we didn't do the deal for the synergies. we did this deal for the people we get, the technology we get, the footprint we get. i do believe that the multiple will increase, but all of our
9:43 am
shareholders are going to benefit from this thing. i can't be more excited about this thing. all of our shareholders i talk to yesterday, especially the long holders, they like this deal. they understand why it came together. this is not a deal for next quarter or next year. this is a company that 10, 20, 30 years from now people are going to look back on and say, man, that was a fantastic idea. what a huge amount of value it's created. >> some of the people tell me the ultimate goal is to get a multiple similar to or equal to that of schlumberger. >> that is going to be my goal. >> one of the things i've always loved about halliburton, you have this big buyback. i've been recommending your stock for years. suddenly you are issuing a lot of stock 2. people love the fact you were putting your money where your mouth is say, i don't know, you're issuing tons. >> this will be accretive from a
9:44 am
cash flow standpoint one year after we close. we are committing to take the divestiture proceeds and buy back shares with that. if you take that combination, jim, i can tell you, we are laser focused on returns to shareholders. we are laser focused on getting that money back to them. we are not backing off that. you will see money coming back and you'll continue to see buybacks. >> want to return to the helmrick issue. using the technology, a well might have cost $70, you are now getting it for $40 a barrel. shouldn't that mean as you lower the cost of drilling that the oil firms will not cut back? >> i think if the combination of technology, the combination of efficiency we are bringing to the table has in fact reduced the days to drill a well, which means the cost to drill that well is lower. therefore, i think as oil prices do decline, i think people will
9:45 am
be more reluctant to give up their rigs, give up their spot in line. as i said, we are just really positive about this new company and where the u.s. oil industry is going. >> we'll let you go in a second. finally to this point, the fall in oil though, isn't that taking capex budgets down, even though et may be less expensive to drill a well? >> it is. volatility is bad. finding the fairway is good. if oil prices settle into a range and stay there for a while, we are an adaptable industry. both our customers and service companies. we can make money just give us time to get there. >> if oil goes to $65, does this deal happen? >> it will have marginal impact on us. >> thank you for joining us. >> thanks, guys. >> chairman and ceo of halliburton. >> s&p's climbed up to another record 2046. bob pisani is on the floor. >> good morning.
9:46 am
mixed market. energy a modest leader. want to talk about reits. this is the final rush to get it out before thanksgiving. we have the first chinese ipo since alibaba. this is the number two rental car service in china. price talk was $14, priced at $12 but opened $12.50. this deal was postponed last week. went public a few moments ago. show the crowd here. this is a reit formed by oak tree $18.50. that's in the middle of the price talk. this is the first reit since april 2014. think of restaurants and health care centers or applebees. need yield 5.5%. should open shortly here. tomorrow the biggest reit ipo, paramount is going to price $2.3 billion. they own class a office space in
9:47 am
new york. nothing is pricing above the range in the last few weeks. that's because ipo buyers are calling the shots right now. nobody wants to overpay. that's good for reit returns. we are in a good reit market. retail earnings. decent numbers. tjx was miss on revenues. europe was down 3%. lowers the numbers trying to keep expectations down. hoe depot did all right. same store sales up 5.2%. dick's sporting goods, lower interest in golf, lower interest in hunting hurting them. urban outfitters having trouble with traffic declines. here's the retail scoreboard for earnings. 8.5%. that is a good number. margin 9.8%, near a record.
9:48 am
no deterioration. happy birthday to the gld, the gold etf. i unveiled that ten years ago. here i am november 18, 2004 holding up a gold bar. the world gold counts didn't want to show up that day. they were concerned about acting like they were promoting the product too much and the s.e.c. might have a problem with them. you see how successful this has been. the vehicle has been sturdy etfs for owning gold. what happened is the prices hurt them. gold in september 2011 was $1900, today is about $1,200. they had about $50 billion in assets. today about $27 will. it's demand and supply hurt the gld. that etf has proven to be sturdy. >> you have not aged a day. bob pisani on the board for us this morning. let's get to the bond pits and rick santelli.
9:49 am
>> good morning. even though the ppi number is hotter than expected on about every possible metric, it didn't have a huge impact on treasure rates. look at a two-day chart of 10s. launching off this 220 back in the 16th session in a row. looks to be closing between 230 and 238. keep that same day for boons. we close in the range of 230 to 238. boon yields are about 1/3 of treasury yields. their range 78 to 90 basis points. wider. their impact, their force keeping our rates force on the efficient relative value trade. let's switch gears to foreign exchange. euro at 27-month low. look at a two-day chart. yes, the euro is up today smartly. when you put it in the context of yesterday, how much does it mean? there is the chart going back 27 months. let's look at two-day of the
9:50 am
pound versus the dollar. you can see it's flat today. if you open the chart up, we are hovering at 15-month lows versus the greenback. the last one is the dollar/yen. maybe the most aggressive. two-day chart shows you something important. 117 two days in a row. that's your momentum trade. especially on a closing basis. we have to show you a seven-year chart showing the last time we were flirting with the 117 level. back to you. >> thank you very much. when we come back, former blackberry ceo, find out what company he's been hired to run now. s&p up six points.
9:51 am
in a world that's changing faster than ever, we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. when diet and exercise aren't enough, adding crestor lowers bad cholesterol up to 55%. yeah! crestor is not for people with liver disease or women who are nursing, pregnant, or may become pregnant. tell your doctor all medicines you take.
9:52 am
call your doctor if you have muscle pain or weakness, feel unusually tired, have loss of appetite, upper belly pain, dark urine, or yellowing of skin or eyes. these could be signs of serious side effects. are you down with crestor? ask your doctor about crestor. [annit's working forny. new york state. already 41 companies are investing almost $80 million dollars, and creating 1750 jobs. from long island to all across upstate new york, more businesses are coming to new york. they are paying no property taxes, no corporate taxes, and no sales taxes. and with over 300 locations, and 3.7 million square feet available, there's a place that is is right for your business. see if startup-ny can work for you. go to startup.ny.gov.
9:53 am
there is an endless search trying to find stocks that haven't moved and recommend them. tex and mtw.
9:54 am
this is nonresidential construction coming back. these have been horrible stocks. it's reacting. goldman recommends stocks with great runs. the refiners, i highlight phillips 66 and marathon peaked. why that is so important, when oil comes down and gasoline comes down, people use more gasoline. it's actually not that bad a call. frankly, i like marathon very much. it's a very good company. they've done a lot of right things and a lot of acquisitions. >> thoughts what we heard from dave? >> i don't want to rain on the parade, but was most significant, budgets go down in '75. what that means is the group itself, if you like this deal, you want to buy puts in the oih and go long this deal. what he said it won't affect them but at the same time, there are a lot of companies that are
9:55 am
very dependent on the next quarter made. obviously like hp, i urge people to read the helmwork and pane company. >> halliburton was down. actavis is up another 6% today. talk about a stock going up. really, i think many of us anticipated it would be flat to down. you've got pressure from shorting it. they did a convertible offering. no stop on it. >> ten times 2016 earnings. >> right. >> 10 times aspirational numbers. used to like going to guess was aspirational number. >> until it's no longer going to happen. then what happens to the stock? >> less than aspirational. >> what's on "mad" tonight? >> chuck bunch has done a remarkable job on ppg.
9:56 am
richard pops, don't talk to him enough. alkermes, they have breakthrough drugs about the central nervous system. anybody concerned about some of these horrible mental illness conditions that don't get talked about like cancer does, listen to him. he is a very thoughtful and learned man. >> was it an inversion? >> moved to ireland. >> actavis is also an inversion. >> i know. i think it's important to point out the journal. i was talking earlier, the "journal" said this wouldn't have gotten done if it was an american company with tax rates. >> tax rates is key. adds a great deal to savings. >> it's important for congress to recognize that and wake up out of their slumber. >> treasury rules did a lot. >> under the bell. they got in early. >> when indiana jones grabs that hat from the door coming down. >> exactly.
9:57 am
>> we could use one for our market. this market is too high right now. >> 2048. see you tonight. >> thank you. "mad money" 6:00 p.m. eastern time. home builder sentiment at the top of the hour. they challenge us. they take us to worlds full of heroes and titans. for respawn, building the best interactive entertainment begins with the cloud. this is "titanfall," the first multi-player game built and run on microsoft azure. empowering gamers around the world to interact in ways they never thought possible. this cloud turns data into excitement. this is the microsoft cloud.
9:58 am
for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. which means it's time for the volkswagen gn-then-drive event. for practically just your signature, you could drive home for the holidays in a german-engineered volkswagen. like the sporty, advanced new jetta... and the 2015 motor trend car of the year all-new golf. if you're wishing for a new volkswagen this season... just about all you need is a finely tuned... pen. hurry in and get zero due at signing, zero down, zero deposit, and zero first month's payment on select new volkswagen models.
9:59 am
i'm just looking over the company bills.up? is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow
10:00 am
of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. welcome back. home builder confidence jumps four points in november to 58 on the national association of home builders monthly index. that is a surprise to the up side. the street was looking for a one-point gain. builders say consumer confidence is behind all their optimism. increase buyer traffic after that drop in mortgage rates led to more signed contracts. builders have been lowering prices a bit and offering incentives. of the three index components, current sales rose to 62. future sales expectations rose two points to 66 and buyer traffic jumped four points to 45, better, but the only
10:01 am
component in the negative. regionally confidence was up everywhere except in the midwest. northeast is weakest. south is the strongest. new home sales in september were flat after a big downward revision for august. housing starts didn't move for the month. both higher than they were a year ago. we get october housing starts tomorrow morning at 8:30. we'll see if this translates into real new construction. for more go online. thanks, diana. operating profits $1 a share, a penny below estimates but revenue above consensus. same-store sales rose 5.32%. the retailer had a $28 million expense for that data breach adding it can't estimate the total cost of the breach. checking out shares, they are still under pressure this morning. down about a percent. let's bring in michael loser. has a buy on this stock, $108
10:02 am
price target. what did you think of the quarter? investors aren't impressed, but the numbers look solid. >> the numbers were very good. stock's down because it has had a big run into the numbers. we think that the results show that this is a business that is very well positioned for the long term. there aren't many retailers putting up a combination of growth in in-store traffic. growth in online and gross margin expansion along with leverage. these factors were featured in home depot's report. we think that continues. >> many retailers would be jealous 5% same-store sales growth. what about the charge related to the hack attack? we were expecting expenses to pile up here. were you surprised they didn't see any dip in traffic like we saw at target last year. >> i think it reflects two things, one the strong positioning of home depot and the way they handled the breach.
10:03 am
two, consumers are becoming less sensitized to these breaches and view it more as the cost of engaging in commerce in today's economy. it's an unfortunate but true reality of it. >> so mr. miniere took over as ceo. how is that given the fact frank blank has one of the best reputations in terms of executors. >> the transition has been seamless. craig has been in home depot for a long time. he indicated this morning on the conference call that he is not going to make any major changes. so we expect the performance to remain strong under his leadership. >> those who wanted to quibble looked at inventories at 5.8, faster than sales. is that a worry? >> it's not a worry. we are seeing there's been disruptions across the supply chain and retail due in part to
10:04 am
a strike on the west coast. it's always prudent to manage inventories well right now. i don't think that's an issue for home depot. >> the stock has run up nicely. shares up about 20% already so far this year. does that match where we are in this sort of bumpy housing recovery? >> what we see from home depot, their strengths are coupled from the results like housing turnover which suggest they can continue to generate strong performance independent of what's happening in housing. as consumers reinvest in this asset. i think there are a couple of ways to win here. either the factors remain decoupled or housing starts to get better, in which case home depot starts to benefit. >> can you extrapolate anything from this for lowe's? >> it suggests the market is good if you's reply 150 to 200
10:05 am
basis point spread. looking for 4% comp tomorrow from lowe's. the results from home depot would suggest that is a reasonable expectation. >> we'll look for those tomorrow. >> thank you very much. >> michael loser, ubs retail analyst on home depot. >> the s&p 500 chalked up its 42nd record close last night. ceos are taking advantage of higher stock prices triggering $3 trillion of m&a this year, a deal volume not seen since 2007. we did this deal for the people we get, for the technology we get, for the footprint we get i do believe the multiple will increase. all our shareholders are going to benefit. i can't be more excited about this thing.
10:06 am
all our shareholders like this deal. they understand why it came together. 10, 20 years from now people are going to say that was a fantastic idea. >> good morning. what do you think of this level of deactivity. >> there is a high correlation how much the stock market is doing so there is a danger saying which one is driving the other. if you think where korngss are going to try to go the next year, try to keep earnings growth going, m&a gives them an opportunity to find synergies. >> we have the higher level of activity than we have in 2007. should that give people pause?
10:07 am
we saw blackstone selling property. some analysts saying you should stop booking profits and start on gains you made. should people be aware we may be coming to the end at some point in the future? >> if you had other signals to indicate market was at a peak, yes. right now we see solid fundamentals growth. this activity is positive. >> one of the reasons we hit a record and we hit one in almost every five trading sessions is ceos continue to buy back their old stock. goldman estimates $450 billion of stock. if they are willing to do bold moves because stock price is so high, will they be as willing to buy their stocks moving forward, particularly if they have to signal that the growth is slowing in many cases?
10:08 am
>> companies have cash on the ballot sheet. we'll see this is a way to return cash to investors it is a healthy movement you want to see in terms of liquidity and investment cash going to companies and investors and back. >> it was domestic driven. we thought the m&a boon would be cross border. given the global economy and picture, u.s. stocks, bonds and the dollar are all in favor. do you see this continuing through until the deal environment? >> i think so. we may start seeing a bigger pick-up with the strength in the dollar suggest people look for bargains in europe. that composition may change.
10:09 am
>> we think the u.s. market is fairly valued. emerging markets and japan. we had disappointing gdp number out of japan. it signals kind of an opportunity that the government is going to get more proactive, more aggressive about reforms, go for new election and that valuation should grow. >> what about the fact those assets you may buy abroad will be denominated in other currencies that could fall in value. it could wipe out gains for the dollar. >> euro zone and japan you need to be investing on a hedge basis. >> good to see you. >> thank you. s&p almost at 2050. we are up 200 points on the year. right about these levels. let's get to mary thompson. >> the s&p may be higher, but not so tjx companies. this is the parent of t.j. maxx, mar shauls and home goods. the stock falling after missing sales expectations and lowering full year outlook. it blamed warm weather in
10:10 am
europe. stock down 2.1%. almost the whole country seeing freezing temperatures today, as much as five feet of snow expected in some areas. states of emergency and others, it's not even december yet. we'll get a live report on the arctic blast. >> the fate of the keystone pipeline lies with the senate later today. what are the chances of it passing? what would the pipeline mean for the future of energy prices? opinions. there's no shortage in this world.
10:11 am
who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.
10:12 am
10:13 am
all the continental united states looking at freezing temperatures today. some areas even expecting as much as five feet of snow. weather channel's mike bettes is live in new york where it's currently 18 degrees outside and snowing. how bad is it? >> hey, i'll let the pictures do the talking for us. hardly anybody out. every now and then you'll see a four-wheel drive come by or a plow. this is the traffic this morning. we had about 20 inches of snow in roughly 12 hours. it has been a really interesting event to cover, no question about that. schools are shut down. most of the interstates here are shut down between dunkirk and buffalo. you can't get along them on
10:14 am
i-90. buffalo international, about 50 plus flights have been canceled. what's funny about all this, we had 20 inches in 12 hours, likely to see another 20 inches over the next 12 hours. at some point we are going to get you out here with us. i no longer have the ability to blink. look at this. >> don't think i haven't done that live shot. >> look at his eyebrows. >> that is some good tv, mike. we'll talk to you later this morning, i'm sure. from the weather channel this morning. the democrat-controlled senate expecting the vote improving the keystone xl oil. >> paula: pipeline. john harvick joins us with the latest. landrieu has the 60th. is it true? >> we'll find out when they lay
10:15 am
the votes down 6:15 this evening. she says she may have more than 60. nobody identified that 60th vote. they don't appear to be close yet there. let's look at what they need to make it through the senate. you need 60 votes to clear the procedural hurdle and get past the chamber and get the bill on the president's desk. it's going to take 67 votes to override the veto president obama's aides say he will cast if this gets to him. that may not be the end of the story. there may be bargaining after that. the other thing going on is the side show is the run-off, keystone battle between two politicians in washington. republican bill cassidy, house member who pushed this measure through the house of representatives, democratic incumbent mary landrieu, the last democratic incumbent still
10:16 am
alive in this wave. this is an attempt by mary landrieu to say i can get things done. it will be an embarrassment if she can't get that 60th vote. if she does, it is not likely to make a big difference in that race. she trails by more than 10 points from bill cassidy, very conservative state. not quite sure this is going to make much difference. she is giving it a shot. >> any long-term ramifications for a veto by the president? basically just not, by executive action not upholding the laws the way congress is writing them? >> no. vetoes are part of the game. many times where you have two parties making a deal on something in the past, you'll have a veto then you'll have a deal. when president clinton signed welfare reform in 1996 and a deal with congressional republicans, he vetoed the deal twice before finally signing the
10:17 am
third time. now the kind of deal that the president might seek from republicans is not 100% clear. it could be something on his epa regulations on carbon emissions. it could be unrelated, funding the government or some other priority. maybe even immigration becomes part of that discussion. we've yet to see whether or not there is going to be an appetite for negotiations. one thing we know is the president himself is not strongly opposed to the keystone pipeline. he doesn't think it's particularly important. he doesn't think either the economic benefits or environmental damage by themselves would be all that important. that's where horse trading comes through. >> we'll see what happens this evening. thank you so much, john harwood in washington. let's bring it home to wall street. several companies are affected by this. jacqui deangelis what do we need to be watching? trans canada is the big one. >> trans canada is a big name. a lot of people in the pits
10:18 am
aren't talking about the names. they are talking about what keystone approval will do to oil prices which are very depressed on the concern we have global supply glut here. let me explain the two schools of thought for you. we've got the bearish view which is this. more oil could be coming in from canada. that is going to pressure gulf coast prices. it will also pressure saudi arabia and other producers. they are the ones that are going to have to decide if they want to stay in this market and maintain share. so far they said that's very important. will they change their tune? we have to find out if they do change their tune, we do see the prices will continue to decline. it is going to hurt them. you've got a bullish argument that is interesting too. this is the idea bringing canadian crude into the country allows us to export it. the export ban is only on domestic product, not on the
10:19 am
canadian product. if we start shipping canadian crude out of the country and bring north american product up to those pricing levels, that's why prices would rise and be more equal. consider this. i want to talk about some numbers here, as well. according to citi estimates, we are exporting up to 30,000 barrels a day. that figure could go to 200,000 next year without the keystone exel crude. we are producing over 9 million barrels a day and taking much less in from saudi arabia. bottom line is that keystone could be a game-changer for the oil market. back to you. >> thank you so much. let's get back to mary thompson. >> it keeps going up and up. check out shares of apple. it is trading above the pre-slit $800 a share level. the company did a 7-1 stock split back in june. stock is at $114.66.
10:20 am
back to you. >> thank you. next on the program, black friday is just a little more than a week away. who will be the big winners? we'll find out if the department stores or high-end names are better set up. for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve.
10:21 am
visit pnc.com/wealthsolutions to find out more. e financial noise financial noise financial noise financial noise to build something smarter. ♪ some come here to build something stronger. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best.
10:22 am
♪ starts at 6:30 a.m. - on the (vo) rush hounose.und here. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity.
10:23 am
because at scottrade, our passion is to power yours. take a look at urban outfitters. as we close in on black friday, can we expect other retailers to fare better? joining us on the phone richard jaffe joins us.
10:24 am
how strong does anthropology have to be to offset urban? >> i think it's going to be a challenge in the fourth quarter. it's a retailing 101 issue but not a fourth quarter turnaround, i'm afraid. >> it sounds like you think the namesake change there are existential questions they are dealing with. >> a lot is their own self-inflicted sorts of problems. retailing issues that i think can be addressed. the appeal of the brand remains, success on the direct channel make that clear. they like the brand. >> $28 is a big discount from where it was. i think it lost 1/4 of its value, at least for the year. i see a lot of targets in the $39 range. how constructive can you be right now? >> it has a longer time frame. we've seen urban suffer before or underperform. it's a four to six quarter time
10:25 am
frame till they get it right. buying the stock today is knowing you are going to have to own it six to 12 months to generate an attractive return. i think that is a reasonable time frame, but it is about 12 months. we are looking at a better than $2 estimates for 2015. as the growth is restored with the turnaround of urban coincident, we see the stock trading into the high $30s. >> can you give us an update how prom potional urban and other names are being as we head into the all-important black friday holiday shopping season? what we hear is consumers are being trained to accept these big discounts. >> absolutely. it's been years now and the consumers understand there is value to be had, discounts that will be out there. discounts that will grow as black friday approaches and then obviously again as we get into the holiday season.
10:26 am
i don't think anyone will not have aggressive promotions beginning with black friday and into the holiday weeks. who is going to be the deepest promoted? those that don't have the products appealing. urban outfitters, more than anthropology or free people. macy's does a great job shouting the loudest and preserving margins at the same time. >> a lot of your colleagues on the sell side even for names that have done well are starting to downgrade on valuation. in other areas, walmart, lulu, ross stores, tjx. are you going onto the fourth quarter constructive or taking money off the table? >> christmas gets priced into these stocks before christmas happened. for a short-term investor, there
10:27 am
is no question there's opportunities to trim based on rich valuations, but if you have the luxury of a longer time horizon, some of the preemment brands like tjx, lb, limited brands, macy's, they have a deep moat around their businesses, continue to gain market share, long-term compelling stories to trade out of them and look to buy them back in january doesn't seem productive. i'm going to own these long term. >> thanks for coming to the phone, good stuff. richard jaffe. >> got what may be the final pieces of news on the fight between allergan, big ackerman actavis. mr. ackman telling scott he will withdraw from that special meeting that has been called for for december 18th.
10:28 am
in other words, there will no longer be a need for a special meeting on the 18th which there was an opportunity for allergan shareholders to vote on a slate of directors to replace the existing board. he told scott he is a supporter of the actavis deal and ceo brent saunders who joined us here yesterday on "squawk on the street" and will be meeting on friday with actavis management for purposes of due diligence and will become a long-term shareholder. he is getting $129 a share in cash but getting a significant slug of stock in what will be this combined company for his part as we pointed out many times, mr. ackman walks away with a significant profit, $350 million of which, 15% of which goes to his so-called partner valeant. this does appear to be the end of a lot of hostilities. yesterday we did speak to the ceo pyatte an allergan who said
10:29 am
he will continue the trading charges on mr. ackman. >> the long-running soap opera. japan looked like the model for economic revital until yesterday. what does japan's recession mean for the rest of the globe including europe which was looking at that country as a road map for success? get to the terminal across town. are all the green lights you? no. it's called grid iq. the 4:51 is leaving at 4:51. ♪ they cut the power. it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable.
10:30 am
10:31 am
10:32 am
with japan falling into recession, calling a snap election, the direction of abenomics is looking less certain. nikkei jumping 2% overnight. we did get better news out of germany. sentiment has markets rallying this morning. let's bring in rbc's chief international economist. eric, the question with japan, if you look back since abenomics started, nikkei is up and japanese yen down almost 40%. are those trades intact? >> i think they are but getting more mixed. when i step back for japan, it
10:33 am
seems abenomics delivered part of the aspiration. these two quarters moved more quickly. profits have soared, which speaks to the stock market. there have been some victories. those victories seem to be fizzling a bit lately. i've got q-2 gdp which is weak and a fairly uncertain future begin reforms that aren't happening now. it's important to recognize q-3 gdp number was odd. my suspicion is we'll look back and recognize just as the u.s. q-1 figure was ultimately not reflective of the broader environment as the european q-2 number wasn't reflective, i'm suspicious about that third quarter number. we see retails sales rising, trade numbers getting better. it looks like jp should be growing. >> that is an interesting take. japan is the third biggest economy. we have plenty of business ties to them. do you expect the prime minister to survive this confidence vote? would you expect the bank of
10:34 am
japan to ramp up qe, more monetary stimulus? >> i think we've seen the bank of japan's plans for now. it's increased buying by 25%. it would be a stretch to see more near term. on the political side, i don't think many people saw the election call coming not more than a week or two out. doesn't seem obvious abe is b popular. the object is to get backing for deferred sales hike. he is fairly popular in the polls. i don't think this is a threat to him. question is can they get the sales tax pushed back? that will improve economic prospects. will they sign that trans pacific partnership deal and get structures going? we've seen japan in theory should look good. consumers should be spending money. burns a hole in their pocket, wages are rising, wealth has gone up, they are just not
10:35 am
spending that much. it's similar on the business side. profits have soared. we've seen competitive increase because of the yen. i think they will, but it's taking longer than we thought. >> people wish the japanese well, they don't care what happens in the japanese economy. they are interested what happens here. one of the primary effects of what they are doing is liquidity coming in in search of yields pushing treasury yields down. as the fed looks to tighten, is it going to be concerned it lost control on interest rates and therefore -- when they raise rates, they want a reaction in the market. if they don't, rates remain in this country at a record low, are we effectively going to overinflate this economy? is the fed going to be unable to do its job because japanese and europeans are in the way? >> in the margin, yes. yields will go up less than they otherwise would have. money flooding from europe and
10:36 am
japan to the u.s. i don't think it's a deal breaker. it means central bank tightens more than it would have. it would have secret targets for the ten-year yield. whether they are 3% or more can get there. >> had it not been for qe from other people around the world or the talk of slamming interest rates lower, how much higher do you think the yield on the ten-year would be here? >> i think you could argue on the order of 75 to 100 basis points higher. qe did happen. that is where we are right now. doesn't look to be unwinding that quickly. right call is central bank tightens. yields go up. we should be celebrating that given the effects of the housing market and elsewhere. this is an economy highly sensitive to higher rates. maybe this is a good thing. >> we ask this all the time. given the diminished outlook
10:37 am
from japan, europe is flirting with deflation and potentially recession, do you expect the u.s. to continue to show that it can withstand some of these global pressures? and our economy can continue to outperform as the dollar strengthens? >> my answer is broadly yes. i think there is enough of a positive impulse underneath the u.s. economy to do that. it is fair the stronger dollar is a drag. our math suggests lower oil prices, lower yields are an approximate offset. frankly, when you step back we will see somewhat better growth from japan. europe and pessimism has been overblown there. i don't think the international story is as negative as it looks. >> thank you. the government putting out its wholesale price for october.
10:38 am
steve liesman has the details. >> all the stuff you were talking about. we got the first installment of two important inflation indicators that will determine when the fed hikes interest rates. if lower energy prices and weaker overseas growth with an appreciating dollar begin to show up in core inflation numbers, some economists think it could hold off federate hikes next year. the fed is shifting. it's looking more to inflation numbers than employment numbers to determine when rates should rise. ppi up more than expected. ex-food and energy up 0.1%. food up 1%. energy down 3%. trade services, an artifact of a technicality how they get that number does not show the trend.
10:39 am
the jump does not reflect a turn in a trend. core good prices are soft. dollar strength and commodities point to downside risks into next year. here's the global trend in inflation. it's been coming down. it was double digits in the '70s. slowly coming down. that's the global trend. take a look at the u.s. and europe. this will point the way towards what happens with the federal reserve. u.s. inflation above the european level. the european level coming steadily down. if the u.s. numbers start looking like the european numbers, the fed could hold off maybe for next year. stay tuned for the important consumer price inflation numbers thursday. headline expect it to fall. the core still rising up 0.1%.
10:40 am
back to you. >> thanks very much, steve liesman. yesterday a very large day for big deals, including halliburton's announced deal to acquire baker hughes. halliburton stock price was down sharply. earlier we had dave lesar and we asked him why the deal and why now? >> what baker brings us to is complementary product lines in areas we did not have a large presence. production chemicals, artificial lift is another. from a complementary standpoint, they did have technology we did not have. plus they have fantastic people. it's a talented organization, combined with our talented people, i think we are putting together the industry bellwether. >> it is their hope they will
10:41 am
command a multiple equal to that of competitor schlumberger. another part is the anti-trust risk which in yesterday's announcement they tried to mitigate saying they are willing to sell businesses that have revenues as much as $7.5 billion. that is a significant potential give-up for halburgtliburtohall. are you getting interest from potential buyers? >> when we announced this deal yesterday, i have a big e-mail box. my e-mail box filled up with people, private equity, public companies, private companies, wanting to basically look at anything that we might have to dispose of. let's let the process go forward with anti-trust. we don't believe we are going to have to dispose with the $7.5 billion. whatever we do we will. there will be very many willing
10:42 am
buyers out there. >> he seemed to indicate even with oil falling to perhaps as low as $65 a barrel, it would not have that large an impact. there is concern what if we do see a significant lurch down yet again in the price, what would it mean for the deal itself, which is going to take as much as a year to complete. >> down another $1 a barrel today. when we come back, the former ceo of blackberry will join "squawk alley" live to talk about his ceo as power mat. going? about 55. where you headed at such an appropriate speed? across the country to enhance the nation's most reliable 4g lte network. how's it working for ya? better than ever. how'd you do it? added cell sites. increased capacity. and your point is... so you can download music, games, and directions for the road when you need them. who's this guy? oh that's charlie. you ever put pepper spray on your burrito? i like it spicy but not like uggggh spicy. he always like this? you have no idea. at&t. the nation's most reliable 4g lte network.
10:43 am
dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. it's more than the car.er. for lotus f1 team, the competitive edge is the cloud. powered by microsoft dynamics, azure, and office 365, the team can gain real time insights and instantly share information around the globe. when every millisecond counts, staying competitive begins with the cloud. this is the microsoft cloud.
10:44 am
which means it's time for the volkswagen gn-then-drive event. for practically just your signature, you could drive home for the holidays in a german-engineered volkswagen. like the sporty, advanced new jetta... and the 2015 motor trend car of the year all-new golf. if you're wishing for a new volkswagen this season... just about all you need is a finely tuned... pen. hurry in and get zero due at signing, zero down, zero deposit, and zero first month's payment on select new volkswagen models. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get the real answers you need. start building your confident retirement today.
10:45 am
with the s&p trading at a new record high, let's check out the health care sector today. one of the biggest gainers, as you can see. mary thompson has more. >> not only the biggest gainer for the day, but for the year. the sector is up 23% year-to-date. higher as well thanks to actavis leading the way higher on its $66 billion acquisition of allergan followed by medtronic
10:46 am
which said its full-year revenue is coming at the upper end of its forecast. covidien and tenet healthcare moving higher. a good day for what seems to be a very good year for this sector. >> thanks. >> let's check in with rick santelli. >> i would like to read -- i want viewers to understand who this man is. the late c. everett coop with regard to his work monitoring the obamacare process, i have no known no one with a better grasp of what's going on in honest than bob. >> nice to be here. >> i'll be very frank here. the second enrollment is under way. i spend my fair time not being
10:47 am
at work monitoring things on the media in general on tv. everything is going peachy. is it that the medias lazy or is it too complicated or they don't care or all of the above? what do you say thus far on the second enrollment in terms of handicapping its progress and what it means? >> it's off to a good start. i didn't crash. compared to last year the headline is they are doing great. these don't mean a lot. first of all, be careful to watch the numbers. the back end is so screwed up, you can't recognize the number. about 100,000 people enrolled. they can't tell us if it was all new people or people changing plans. they don't know the difference. >> let me interrupt you there.
10:48 am
when i'm trying to monitor enrollment, to me is the bar that low? the enrollment in the media and how it's going is the fact the website hasn't crashed? shouldn't it be all about the numbers? >> the real number we need to get to we believe you've got to get 3/4 of an eligible group to sign up for it to be sustainable. that's enough healthy people signing up to pay for the claims for the sick people. they've got to get about 15 million people. they have about 7 million people now the obama administration goal is to get to 9 million. if they get to 9 million and trumpet that and tres think that is a terrific accomplishment, they are failing. they've got to get to the absolute number of 15 million.
10:49 am
before the insurance company premium support program, insurance companies are getting money if their claims are higher than expected. that program goes away by the end of 2016. this thing's got to ramp up to 15 million by the end of 2016. they've got 100,000 this week. >> stop there. we have a quick ten seconds left. with regard to jonathan gruber's comments if you don't have a state exchange you are not getting subsidies. will that have an impact on the ruling? >> king versus burwell is huge. supporters call it the greatest existential threat to obamacare. everybody who supports obamacare is worried about the supreme court ruling coming down. >> thank you so much, bob, for taking the time. sara, it's all yours. >> thank you, rick. the l.a. auto show kicks off tomorrow. we've got an inside look today. phil lebeau is there live for us. what do you have for us? >> it's l.a. which means luxury.
10:50 am
it means convertibles and a big splash for bentley which last night unveiled two new vehicles, the grand convertible. for l.a. and for bentley, this is convertible and the and the ceo is pretty happy with the pace of sales in the luxury market here in the u.s. >> in the world few it's challenging. we have a markets that are failing critically. and we have also some very stable markets and one of them is the united states. it is our biggest single market. we do very good over here. we also do quite good in continental europe and back home in great britain. >> you want to talk about a gorgeous vehicle they are showing here. the mulsanne speed. look at the price tag on this high end vehicle from bentley.
10:51 am
$333,000. 0-60 in 4.8 seconds and top speed 194 miles per hour. and when we talked with him today, i was told by my customers they want a little more horsepower. so they give them 20 more horsepower. and people say aren't they show vehicles? and he says no. there are people who want to drive these so they want a little more oomph behind the we'll. back to you. >> just before we let you go. the audis look very interesting this time around. the new audis. >> yeah. and audi has really targeted the l.a. market to be the place where they want to make the biggest splash. last year with the a3, they had a lot of success. and we're going to see that more and more with audi. this is the auto show where they want to make the biggest splash. >> more on that tomorrow. for the moment phil in l.a., thank you very much. up next, the country with the
10:52 am
most rapid growth in entrepreneurs. it will surprise you. next. sheila! you see this ball control? you see this right? it's 80% confidence and 64% knee brace. that's more... shh... i know that's more than 100%. but that's what winners give. now bicycle kick your old 401(k) into an ira. i know, i know. listen, just get td ameritrade's rollover consultants on the horn. they'll guide you through the whole process.
10:53 am
it's simple. even she could do it. whatever, janet. for all the confidence you need. td ameritrade. you got this. i research. i dig. and dig some (trader more. search. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours.
10:54 am
10:55 am
while this country may lead in entrepreneurship, the fastest growth is taking place in other parts of the world. >> good morning simon. entrepreneurship is booming around the globe and in unlikely places. at the top of the list, know surprises with the u.s., canada and australia leading the way. but here is where it gets interesting. despite political turmoil and economic instability, countries in the middle east and north africa are growing most rapidly year over year. and the fastest eses esest is start-ups. women and young people in particular. the youth unemployment is about 24%. the study is by the entrepreneurship network. -- including entrepreneurial
10:56 am
abilities, attitudes and the growth potential of start-ups. around the world although there is start-up activity in 130e countries measured we're ate 52% of capacity. now we have a much more comprehensive look at the index at well on cnbc.com. >> surprising results there. thank you kate. now over to jon fortt with a look at what's next. >> a great show for you. former blackberry ceo thors ten heins here is here. uber drama. and analyst ups apple on selfies. now selfies a reason to upgrade. more coming up. ing me? everybody's on woo-woo! [elevator bell rings]
10:57 am
woo-woo? lock and load, people! we're going all in on woo-woo! ok? mark! comp us up a profile page! copy! susie! write us some posts! ready! grace! upload some videos! uploading! i want sponsored woos. i want targeted woos. we want to be all up in your woo-woo feeds! gordon! register our woo-woo handle! janice?! we need an ethnically ambiguous woo-woo mascot. we're cashing in the q4 budget, people, and we're buyin' some followers! hahaha! yeah! [applause] woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! oh yeah! [laughing] dude. are you still on woo-woo? naaaahh, man, my mom's on woo-woo. ♪ ♪ (holiday mhey! is playing)
10:58 am
i guess we're going to need a new santa ♪(the music builds to a climax.) more people are coming to audi than ever before. see why now is the best time. audi will cover your first month's payment on select models at the season of audi sales event. visit audioffers.com today. for tapping into a wealth of experience...
10:59 am
for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more. good morning. 8:00 a.m. at uber in san francisco, 11:00 a.m. here on wall street. kwauk al -- "squawk alley" is live. ♪
11:00 am
welcome to "squawk alley" for a tuesday. jon fortt onset, along with kayla tausche. we'll be joined by kevin o'leary in a couple minute. lot going on in the world of tech. 2049 s&p is exactly 200 points for year. we began the year about 200 points below these levels. we've been looking at flattish action for the last five days. s&p moved .1 for five straight sessions. lots argue that means we're going to bust one way or the other. the question is whether up or down. >> up nine sessions out of the last ten. so even

118 Views

info Stream Only

Uploaded by TV Archive on