Transcripts For CNBC Squawk On The Street 20171127

Opec meeting, psych cyber monday today. The benchmark yield around 2. 33. Our road map begins with the holiday return of the consumer black friday sales topped 5 billion. Cyber monday expected to set online records. Retailers are in the spotlight. Futures flat ahead of the first full trading day ahead of thanksgiving. And the Koch Brothers making a big bet on magazines, backing a meredith bid to buy time inc. Adob bee analysts expects consumers to spend 6. 6 billion this cyber monday. That would be up more than 16 from a year ago and bigger number than the 5 billion adobe says was spent online on friday. We talked about colder weather, and lean er inconvenienventorie reports that in store traffic was down maybe a percent, maybe a little more, but not dramatically. Thats a good test of exactly how low expectations had been for basically physical scores. They dont look like they will broadly give back the pop they had on friday. So many things working in the background in favor of having a pretty decent Holiday Season well see if it plays out or the market is going to get bored with the story of a couple of weeks. We talked about how they generally underperformed this time of year and the question whether consumers will wait to do further shopping before right before the holiday gets here. Did you go out this weekend no. The wife did a fair amount of shopping on this. Us too. There were very significant sales on a lot of beyond amazon on many of the major retailers we noted 50 off, 40 off at places like the gap. If youve ever given your email address to a retailer, how many did you get this weekend . Suddenly very popular. I think it was shopper track, one of them said the average discount market track 45 , last year was 48. So discounts just a shade more shallow. Only three of eight major retailers had deeper discounts than last year. As we said on friday as well, these stocks are down to the lows in july or august, they base beingally were cut in half across the board, a lot of them or more. Just slowly rebuilding that. I think again its a test of kind of a new world. If amazon will get half of every incremental dollar of online sales is there enough to go around for everybody in the other half hard to say. Good discussion just prior to the top of the show about amazon and whether or not they truly are an inquisitive company and whether food was a special case. Ive said this many times but it bears repeating, the most significant deal was the whole foods deal not because of the size but message it sent it has made everybody in this business broadly speaking retail take notice and rethink their business could amazon move in weve seen so many effects of that, whether its somebody mentioning pharmaceuticals or what it might be i think one of the Key Statistics that people should Pay Attention to, 50 of all searches now where people are looking to buy something begin on amazon. Begin on amazon. They go to platform immediately to simply search for something to buy. Which kind of detracts from the old story of everybody kind of looking at this array of prices and Comparison Shopping and amazon maybe is or isnt the bestprice, youre kind of captive to the platform a lot of people. As far as bezos goes, we knew last week his net worth hit 100 billion. Robert frank with a great stis stick, the increase in his wealth this year, 32 billion, would buy itself make him the 18th richest man in the world. Going to add to it this morning it looks like a little bit. The numbers sort of magnitude the leverage of individuals to what the market is basically doing in terms of re valvaluing these dominant Companies Never seen before. For more on cyber monday, well talk about it later today. Talk to the head of ups and other people but Courtney Reagan islive at Amazon Fulfillment Center in new jersey good morning, courtney. Reporter good morning, carl. Holiday shopping weekend rush, thats not over yet today ecommerce is the star of the show 78 million americans are expected to shop today we know amazon is top of mind for Many Americans all the time. Some 44 of all online sales go to amazon but today capty fi said amazon is the number one searched website followed by target and walmart and best buy on that order. Black friday days ago, best buy was the number one searched website. When it comes to what amazon might have done on black friday, dan ies thinks they captured half of all e commerce sales on black friday what does it take to make records today . For amazon, prime day 2017 was its biggest day yet but that was 30 hours still, it beats cyber monday and black friday 2016. Cyber monday 2016, amazon just telling us days ago 64 million items were ordered on amazons website. So thats the benchmark were looking for for cyber monday now, if you look overall, what are folks searching for across the web . Capty fi says the number one search is the iphone x followed by the xbox one and playstation and hp laptop. 38 billion has already been spent online so far in november, through november 24th according to adobe they dont think shoppers are done yet. They expect another record to be set today in the u. S. , sales are expected to hit 6. 6 billion, that would be a 16. 5 percentage increase year over year for online sales this is just one of amazons 75 u. S. Fulfillment centers, over a million square feet. There are 14 miles of conveyor belts behind me. About 5,000 fulltime employees, thousands more parttime employees and thousands of robots today well have to wait and see how many packages go out today on what could be one of amazons biggest days back to you guys at the stock exchange. Courtney, well come back to you later this morning speaking of amazon, on wednesday, on squawk alley john forte will have an exclusive with andy jassy at 11 00 a. M. Eastern time on wednesday. This just crossing the tape. Barracuda, leading provider of cloud enabled security Data Protection being taken private all cash, 1. 6 billion. All cash. They are very active in this area theyve done Similar Software related deals in the past. Havent seen that much activity from private equity. They play in this part now, not like they did ten years ago at the highest levels in terms of market cap for any number of reasons. But worth noting not a bad premium i guess, i dont know two years ago that stock was way higher. Was it . Two and a half years ago. It seems as if it was kind of hovering at this level for a while. So it was more than 40 stock. We do begin a new week of trading as the s p and nasdaq each posted a record close, surpassing 2600 for the first time and nasdaq coming off the best week since the beginning of september. The 8th positive week in the past nine, keeping an eye on a record run for bitcoin as it marches toward 10,000. I mean, its up 16 from friday. Is that possible well, it went from 9,000 to 9600 in a blink i guess. I dont know it its related or unrelated to the fact that the stock market is doing what its doing. Its hard to know exactly. If this is catching overflow capital. Obviously its this selfcontained speculative story in itself. We always say the market cap, whatever that means for bit coin, the market cap now exceeds disney, which by the way will ring the bell today and ge i dont know how to know that, if youre bitcoin fan saying youre going to displace gold or world currencies, its tiny still. Im going to leave it to you to analyze this these parabolic moves they do typically end in a different move. Usually whats funny is its a currency thats not its less currency for transactions than it is owning a piece of Virtual Real Estate in what could become the next internet or parallel internet not evaluating that claim but thats the story now that its not just about buying stuff with digital currency. As far as markets we understand a little bit better, we went through the news events were going to get this week, probably key among them is this potential vote in the senate six senators now being called on the bubble johnson, corker, murkowski and collins and flake. Well see what degree changes are made to win the vote. Its hard to note how much headline risk there is in the very immediate term for the market if the market still says something is going to trend towards a deal, i dont know if it means no deal this week means that they panic out. Nothing is really restrained this market very much from marching higher. So you would think they want to see it done but i dont know if its still a washington story about how the market operates in december. Timeline gets tougher on getting a deal done certainly for christmas or year end, same thing. One would think. Eamon javers says the president is not focusing on tax reform at the moment, given his tweet about fake news again as well as over the weekend. And holding a contest to see who the winner should be of the fake news trophy he will meet with the vp i think for lunch and members of Senate Finance to press the senate to pass that. By the way, goldman has an interesting note out that looks at the potential exodus of high income residents from cities like new york. 2 to 4 eventually over time and then a 1 to 3 effect on real estate prices. It could be catastrophic, some of the municipal leaders believe. You think about new york where the tax base is 37,000, 38,000 people represent roughly half of the income tax paid, if that 4 comes from that 37,000, which it very well might given they are the highest income earners, youre going to have a Significant Impact people are trying to impress upon the president who has still has some real estate i wouldnt say holdings but interests here that perhaps that would end up in a bad place for somebody like that. Sure. To try to get them to move on coming back on the repeal of the ability to deduct state and local. Yep and 10,000 you know, limit on a deduction for property taxes doesnt mitigate very much. Its the state income tax in places like new york and new jersey and california, illinois, theres i mean a number of other states, some even some red states, a couple of them. Well find out and watch it closely today obviously. When we get back, the end of an era for a legendary magazine, time inc. , david abney will join us as the Holiday Season gets under way. We put the month of november to bed over next few sessions, were back in a moment im here to talk to you about how at t gives you more. And so am i. Like how when you buy the amazing new iphone 8 you get another one on us. See we give you more phones and more spokespeople. Are you guys doing a spokesperson thing right now . Yes. Awesome, can i be in it . Well, its kind of like a twophone deal. So two spokespeople. Got it. K. Thanks. At t its time for more. Its time for more. Buy the amazing iphone 8 at at t and get a second one to gift, on us. Live binge dvrd shows,te sport, while painting your toes. On demand laughs, during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand, your entire dvr, top networks and live sports on the go. Included with xfinity tv. Xfinity. The future of awesome. Theres a look at bob iger, chairman and ceo of disney theres mickey too a lot going on with disney i dont think mr. Iger will speak with us on camera, not going to take the seat next to you this morning meanwhile in other parts of media involving print, meredith, the publisher of better homes and garden and Family Circle agreed to acquire time inc. It is all cash, 1. 8 billion when you take out debt merediths offer was backed by the private equity arm of the Koch Brothers, charles and david. 650 million convertible preferred that pays them at 8 coup coupon thats not bad a lot has been made of whether they will have any impact at all in terms of the coverage of these magazines. Again, an 8 cash paying coupon is pretty good and financing goes to sort of the story here this is the third time meredith came calling for time. Last spring they came and offering a deal that also included about 20 equity. This time they came with a fully financed offer the koches being a part of it, and banks being part of it as well that really changed their tune and they were much focused on getting it done and getting it done quickly when you speak to people involved, eight days from beginning to end in many ways. They had a deadline to get it done and got it done, announcing it last night. And now the focus for meredith is going to be on those cost savings they are talking about, which seems to have been what attracted them many times to considering this deal in the past they are talking about 400 to 500 million in cost savings or cost synergies over the first two years of owning this that will be a lot time fortune, si, those titles are not making any money they may be losing money people is the one thing that makes a lot of money and thats going to be kept but dz not clear if Everything Else will be kept if you really focused on those cost synergy numbers, you may need to sell or wean or just get rid of some of these other names, well see what the plan is on the call this morning, guys, all they would really say is they are going to evaluate the whole portfolio and make decisions Going Forward but premature to talk about any decisions sort of broadly speaking about asset sales at this point time has been trying to become a digital company. It has not proved to be easy the stock had been almost 10 bucks a share three or four weeks ago, pretty good return. It is. If you actually believe somebody can get something done and get the deal financed, but to your point about becoming digital, they are already reducing publication schedules of a lot of these magazines and wonder if the cost incertificsy imply the print goes away. Quts Sports Illustrated is going to go circulation on better homes and gardens, 7 million those are still browsing vehicles but if you talk about people and si and time, you know, its more expense than it is reward. And print continues to decline at the rate frankly that is even more rapid than i think had been anticipated. Sure. You can understand certainly why this board would have chosen to sell when the fully financed offer finally showed up for meredith and they have but a iconic new york company sure. Going to iowa, right. Going to iowa. Well get art cashins take on the markets and later and exclusive with ken griffin of citadel. Youll never guess whos ringing the opening bell by looking at the podium this morning. Were back in a minute win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Lets bring in art cashin director of floor operations with ubs i see the Holiday Season has officially started from your tie. Yes, we go from now until christmas sometimes, all the way up to boxing day depending on how sturdy these things remain but the market is in not quite celebratory mood this morning. I think they were thinking ever more could be sol dags and a slight degree of caution congress is back so well see if they decide to somebody set up and shoot themselves in the front. Things are a little quieter in europe i said on this Program Early last week, i thought merkel had pulled off a successful bluff and that looks like it may be working out here. Little concern about resumption of weakness in china they had a pretty good selloff while we were off on thanksgiving day Global Markets a little bit mixed. Bitcoin has gone parabolic that usually does not end well i said that to mike. I think were in the fear of missing out phase now. I think initially there was some concern, im told and take this with a huge grain of salt, that the movement is even beginning to worry some people in the federal reserve, you know, can it be disruptive to currency markets. Its not quite that big yet but certainly its capitalization is moving around. I want to find out, might get a free drink there. If they start to trade futures on bitcoin, that magnetized the effective size of the market. Yeah, i think it was a promise of credibility and that allowed people to step in. The bulls have had a good run. You see consolidation may be in order at these levels. What might that mean more like a couple of days or weeks moving sideways, the dow looks most susceptible to that were above 2600 in the s p but that doesnt mean were totally free of it so well wait and see. Viewer should compare whats going on and for example the russell, to whats going on in the s p. If the russell seems to be stronger then that tells you the market is betting on a tax bill passing with a low corporate rate. On that note we did get the president just tweeting the tax cut bill is coming along very well, great support. So you know, art, wanted to keep you upto date. Thanks, art opening bell a few moments away my name is Cynthia Haynes and i am a senior Public Safety specialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. I thwell wait. What did you meetthink about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Youre watching cnbc squawk on the street. The opening bell in just over a minu minutes time. A lot of news were watching just chatting about disney who will ring the opening bell in a moment we had an interesting conversation about the history of the ipo, this month in 1957. I guess the Company Raised money in a preferred stock in 1940 because it was broke after snow white, even though it was a huge hit that gave the studio legitimacy 70 years later the ipo always starved of capital, needing to roll together the Family Businesses and kept the private business on the side right now you hear about the Corporate Governance issues but the market bought it, two years after disney land opened up. Disneyland was 55. The company went public under the name Disney Productions and changed the name years later to reflect the ancillary businesses of the movie studio. Dow industrial as of 1991, considered a big deal because it was a nonindustrial company x. Youre going to see bob iger on the podium and nyse president farley and the icon, mickey, who i believe turns 90 next year, which will be a big deal over at the nasdaq it is saint jude childrens Republican Hospital and kmart raising awareness for the thanks and giving campaign. Iger not doing much press today but it does raise the point that some argue the m and a environment has gotten eerily quiet. I think well have a busy period when it comes o to merger and acquisition activity between now and end of the year. I cant guarantee it but i certainly know my list of things im following is larger than it typically is whether its broadcom and qualcomm, mattel, and cvs and aetna. Fox and disney or fox and comcast, you have to wonder whether thats gotten a chill give whats going on over the acquisition at time warner no shortage of potential activity out there that we already know about i do think we may see some more. Well see. But we could end the year on a strong note there, carl. We did get report that the bid for buffalo wild got up to bit over at roork capital. Got the time thing under our belts today. It would be almost odd if you didnt see it pick up, just given the fact that just the fact that so Many Industries are at that seeming moment where companies have to decide, either i get big other give up and sell out. Also, people arent too sure how long the financing environment is going to be quite this generous after we had a little ripple in the high yield market a couple of weeks ago. When there was no talk of tax reform towards the end of the summer and it felt as though that was not even something that was going to get momentum, a lot of companies seemed to have made the decision to move ahead with their Strategic Initiatives having waited to see what would transpire. Then suddenly tax reform came back in the fall and i have wondered whether that would give some companies pause yet again as they try to understand what the landscape may look like if we do get a tax bill that gets through and gets signed. But judging from what im hearing, a lot of conversations going on i had anticipated another freeze and some people were saying that but its unclear whether that has really taken place so as i say so often, we shall see i guess. Retail is going to lead the charge this morning. We talked about it at the top of the hour but combine the stellar growth in online sales and maybe lower than expected declines in in store traffic the discounting environment, the inventory environment. Youre going to see kohls gap, foot locker, lowes near the top. Gap is interesting here, up almost 3 , new 52week high. Most of the retailers arent one of the interesting themes thats been running through the Holiday Season that people actually buying clothes again. Clothes have been struggling for years. And gap as a company has been operating playing defense for years. Theyre hayday was the late 90s, theyve been shepherding Free Cash Flow for a very long time, been dealing with negative comps for years. It seems as if they are almost built for this type of environment. Maybe investors think they have something figured out. Do wonder about the omny channel, meaning their efforts digitally. We did a lot of shopping over the weekend for my kids and things like that now old enough to do it on their own and tell you you bought them their gifts. Give you the trade report after. Yeah, after adidas having sales tremendous. Interesting brings up the apple today, where ubs lowers their unit Sales Forecast for the iphone, taking it from up 12 to up 10 because of what they are calling more muted demand than expected. Its going job offset by higher asps the argument for most of the season people would direct more dollars to technology. Its been a real kind of argument about how this upgrade cycle will go for apple. The stock hasnt suffered tremendously for it. Its still hovering just below the highs, but i dont think people know how to game this out with the sort of multistage new phone rollout and kind of carrying you past christmas and plus the high price point. It is kind of interesting, you see on both sides people saying this is a Spring Loaded situation where youre going to get a rush and others not really so sure. Amazon, guys, above 1200. Closed friday at 1186. Gain of almost 2 . 583 billion market value and now the best performer amongst that group i shouldnt say that alibaba shares are up 116 but facebook, alphabet, all below that, apple even not quite as strong a performer with the stock up 61. 5 this year. Which is why mr. Bezos net worth has gone up so much. Doesnt share much on his plans on the Charitable Giving front, does he . It seems as if hes still in build mode i dont think hes in that mindset of kind of harvesting and deciding what comes after him unless its traveling to other planets. I think hes got a good 20 or 30 years before we get to that. Maybe he considers the Washington Post a charitable donation a service at least. 250 million, that cost him that was half a day maybes pay or not pay but an hour or two. A year ago shares were at 770 or so. I wonder if i cant think back offhand but some of the aggressive targets we got back then, i mean 1200 might have seemed a little excessive. I think there was a 1300 target that did seem like a tremendous stretch, maybe a year ago, eight months or Something Like that. Its been amazing. The other thing is when you compare it to facebook and alphabet and things like that, its times like this when we see courtney next to the conveyor belt, how its not really that virtual a business so the economics are not facebook the money just pours in and they dont have to do anything for it. They are moving a lot of stuff around the world and still gets capitalized and really the exception that proves the rule within fang. Guys, in my little world of media telecom, the name altice has generated attention because of that. We talked about bitcoin, parabolic, whats the opposite i guess just crashing. I dont know. Its a down opposed to an up one. You can see whats happened, the stock down again thats the european of course, when youre levered it work both way. Patrick drahi, the Business Model to take costs out and hire younger people and merge a lot of services but a 3 miss, that can translate into a much alarger miss on Free Cash Flow that spooked investors, its been down more or less ever since. However, the performance of their u. S. Assets sun link and cable vision here in the United States has not been that bad you can see altice usa had been suffering the same as its parent but its up you get the downward spiral, some questions about mr. Drahis continued significant 51 ownership. And were going to keep watching it there had always been questions about the overall Business Model and ability to take cost out, so much more than their competitors. Lets get to bob pisani back on the floor. Hello saying to hello to bob iger, all smiles on his face want to talk about the markets, we have even on the advance decline line, mixed open importantly, retail tends to sell off after black friday. Thats not happening today weve got gap at a new high and michael kors in a new high and home depot, industrials, small move on the upside, Consumer Staples also on the upside energy down, oil can not get over 60, that would have been a big, big psychological move but it didnt happen fell back a little you see ill down a little bit two important things have happened in the last week. The market sent. Changed a little bit and tone has changed and the most important thing the advanced decline line is again essentially at the historic high here the concerns about the market narrowing, there was a major issue five or six or seven days ago. No longer valid. The russell 2000 has essentially hit an historic high, we worried about the underperformance, thats completely turned around now. While its not moving as fast it has now essentially moved in the same direction as the s p 500. The third most important thing is the market leading throughout the year, technology and particularly Semiconductor Stocks are both sectors also at historic highs, theres other things going on internally if you look at the broader parts of the market high yield, which had a very tough time two weeks ago turned around it is not back but its almost on a uturn oil 16month high, even though it failed getting to 60 the dollar has trending weaker recently but not the case throughout the whole year and biotech the other major Market Leader has been stabilizing as well it is not rocketing back up but much more stable in the last seven or eight trading sessions. All of this is really market friendly overall you mentioned the fang stocks, guys putting up some of the big fang names this morning. I want to point out, nobody is using them as a source of cash anymore to go out and buy the market facebook and amazon are essentially lets not quibble about fractions of points here, apple is at a fraction and netflix from a historic high nobody is selling off the fang names overall. Elsewhere, europe has been holding up but its been lagging. Remember the big story, European Growth generally europe has been up but in the last month it seems to be less enthusiasm. Theres the stock 600, s p 500 of europe, notably under performing for the last month. Europe has been doing well but the most speculative part of europe which is the mainland stocks, shin zen, more speculative, look at that, been trading down for last month, down 5 . Theres a real push now, guys to regulate some of these wealth imagi management products in china they are held off balance, Retail Investors say the bank is guaranteeing me 4 prosecuti , i that thats causing a little bit of a risk off atmosphere. Long term a very, very good idea for them to regulate the market in this particular instance a little bit more. Right now the dow has turned positive, its up 11 points, back to you. Lets get to the bond pits as well and check in with rick sante santelli. Good morning, carl. Europe has been a place of lots of investment love for 2017 but i would take a step back and realize for the entire month, entire month of november, the highest yield for the shots, the european 2year was minus 69. 5 our twoyear chart, hovering at 1. 75 well show the chart since september, its been a big run since september and were close to the highest level since october 08, the actual level is 1. 77 last week look at year to date of 10s, i love with things work out like that high and low yields for the year, 2. 0 4 and 2. 63 the average is 2. 33 where weve been hovering. Look at the chart of the crb index. Sometimes we sweep the commodities and energy the rug, we have a weak dollar. Getting very close to making a fresh high going back to around mid february of this year. Lets look at the dollar indlex. Twoday, one week, dollar index just in a slide. Its not acting well, its down close to 10 for the year. Look at a september 1st, 2017 of the dollar index because the last time it closed here was 22nd of september. While the euro getting ever closer to 120. Carl, back to you. Rick santelli in hicago when we come back, the ceo of ups david abney is with us well get his take on the y opngean. Sso dow is up 16 lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Another day of work. Why do you do it . Its not just a pay check, you actually like what you do. Even love it. And today, you can do things you never could before. Youre developing ai applications on the cloud. Finding insights hidden in decades of medical documents. And securing millions of iot sensors. So get back to it. And do the best work of your life. With cyber monday in full swing, lets talk to the man whose company will deliver 750 million packages between now and christmas. Ups chairman and ceo david abney joins us live from atlanta and Morgan Brennan at post nine. Welcome. Good to see you both david, a lot of data has piled up over the past few days to suggest the season is starting out stronger than expected can you confirm . You know, i dont know that i can confirm that we are expecting a 5 increase between thanksgiving and christmas this year over last year were way too early to estimate whether it will be heavier or lighter than that. I will say weve gotten off to a good start we felt comfortable with where we are. David, great to see you if i were as a consumer to make a perfect online rightpackage s through normal Ground Service its going to cost more. The peak holiday surcharges, one of the biggest things for investors to watch this Holiday Season, how should we think about those . Is this a way for ups to make more money or is this really about changing Consumer Behavior and shipping behavior so you can have a smoother peak season and tamp down the higher than expected costs weve seen in previous years you know, morgan, you really nailed it in both directions first, we do want to make sure that were paid for the value that we provide our business really ramps up during peak and brings extra cause we want to make sure we compensated for that cost. Another advantage to this peak season surcharge is we are able to have very productive discussions with other large customers of how we can smooth out volume and if its not urgent, to avoid those key surge weeks and to utilize weekends and weeks before and after christmas. So dual benefit and we feel comfortable its going to come through for us. It seems almost kind of gutsy to me in the sense that this is unprecedented and its the first time youve done this peak season surcharges but also youre the only company that really has them this prevalent throughout the peak Holiday Season arent you concerned about losing market share to fedexor postal as much as or other smaller carriers with the higher costs . I think that were not concerned about that because its the value that we provide whats most important to our customers this time of year is making sure that they get a delivery that they can depend on on time and we do have other competitors that have matched different portions of those surcharge, so they are out there too. But capacity is so tight this part of the year we want to make sure we can give our customers the service they want this peak surcharge is making sure were compensated for that. David, obviously the demand side, things look pretty tight i wonder how closely you need to watch fuel cost. You do add surcharges for air and ground and rest of it. But at this level, does it start to pinch activity along the chain at all we do monitor closely and we have a fuel surcharge that kicks in when fuel changes drastically one direction or the other our focus this week is to utilize our technology, be very productive and then provide that service that our customers want. And taking a look at amazon, it seems every time theres a headline about that particular etailer, increasing its logistics and own transportation network, shares of ups seem to sell seem to sell off how big a portion of u. P. S. s revenue is amazon, and given that number, are investors fears overblown . Morgan, we dont address particular sizes of individual customers. I can tell you that no customer at u. P. S. Is greater than 10 of our revenue. So sometimes these stories can kind of take the weight of their own, and carry more than what we really think they should the important thing is we have a mutually beneficial relationship with amazon. If you order a lot of packages from amazon, youre going to see your u. P. S. Pretty often, i can guarantee you that speaking to that, certainly the breadth of your network is much bigger than just Ecommerce Health care, for example, has been a bright spot and an area of growth for your company with these headlines that came out at cnbc last week about a new manufacturing pharmacy license, what can you tell us about that and how does that expand your service in the Health Care Sector thanks for bringing that up that was not a new service or a new strategy we do for several pharmaceutical companies, we would take large shipments and we would break them down into smaller shipments. In order to dothat, you have to have the necessary license we have been doing that business were going to continue to do it but its not a change of direction or a change in strategy david, as we Pay Attention to new categories in online and consumers buying just a wider array of products on their computers and on their phones, has there been an interesting evolution in the average size or weight of the packages you ship . There has been. When you thing about ecommerce, you can originally think very small packages, a couple of pounds now, though, its just a wide range of products. People will order mattresses they order furniture we have seen ecommerce bring a much larger package than what we would see normally in our b2b business and david, after this interview is done, im going to get on a plane and come down to see world court, which is u. P. S. s major aircraft hub. What am i going to see down there and how are you preparing for the haul dpa season . Morgan, youre going to be quite impressed. Its a huge facility its a fully automated facility. We handle over 400,000 packages per hour in that facility. We have yet to have customers visit that building and not be quite impressed. We think you will be, too. We look forward to having you there. David, thank you. David abney, the ceo and chairman of u. P. S. Thanks to you our Morgan Brennan still to come, one of the biggest players in the Hedge Fund World stay tuned for an exclusive with ken griffin. Dow is up 44 points. Ckft aho bak coming up on cyber monday, well speak to walmarts Senior Vice President of Digital Consumer brands, also the ceo. Walmarts share up 40 so far this year. Back in a minute [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Monday morning welcome back to squawk on the street. Im Carl Quintanilla with david faber and melissa lee at post nine sara eisen is off today. Markets up 49 points on the dow. Busy week. Of course, the final week of november congress back to work, and it is cyber monday retail names leading amazon above 1200. Retail front and center, cyber monday gets under way. Following a record weekend of online sales, what to expect today. And call him the 100 billion dollar man, jeff bezoss net worth skyrocketing and a deal this morning or yesterday evening. Meredith is buying time inc. Details straight ahead getting new home sales numbers. Lets get to Rick Santelli rick i love breaking big numbers 685,000 seasonally adjusted annualized units is the october read for new home sales. Last month, it was 667,000 that was a tenyear high it was downgraded to 645,000, but it doesnt matter. 685,000 is bigger. You have to go, as i said, all the way back to halloween of 0 avenue where it was 727,000. So tenyear best exciting number. Just for the trivia out there, july 2005, that was a high water mark, a whisker shy of 1. 4 million. So even though its as a great number, we have an extra ways to go to catch up to history. Melissa, david, carl, back to you. Thank you very much another big day for retail after the weekend shopping frenzy but bigger till for amazon shares the online retailer handily beating the s p retail surge over the past three months, as we track cyber monday sales, who can keep up with amazon . Joining us, john kerner, patrick is a retail analyst at mkm partners good morning good morning. Lets talk about the weekend and how its all shaped up we all know its early, but do you foresee changing your models or estimates or targets on any of these names based on what weve heard . I dont think well be changing our estimates or models just yet, but certainly the sectors on better footing than in the past. November month to date retail traffic is at its best, brick and mortar traffic at its best rate all year. Only down around 3 total for brick and Mortar Retail traffic. Thats a big improvement from where we were at the beginning of the year. Thats why youre starting to see the sector outperform in the last couple months and its tup today on what was robust digital spending trends. Online was up over 18 over the weekend. Consumer is healthy and brick and Mortar Retail traffic is better inventory levels are in much better shape, and retailers in general on plan, and with that, you have a lot of cheap valuations given the underperformance of this group so were slightly more favorable on this group. Why is target such an underperformer was an underperformer on friday, in todays session is that a real reflection of how you think black friday, thanksgiving weekend, cyber monday will be for this retailer sph. I think, melissa, some of it is that the focus on ecommerce and investors in Retail Stocks are focused on ecommerce today with cyber monday. Walmart is doing a lot better than target is online. Walmarts ecommerce sales grew about 50 in the third quarter, and targets were about half that still good at 24 . And outpacing ecommerce overall, but i think investors are looking for traditional retailers that can really do omni channel well. Right now, anyway, walmart is growing faster than target so patrick, does that lead you to favor certain names in your space right now i actually like target as a little bit of a contrarian opportunity here i think that they have a really good holiday lineup. Theyve got a lot of new brands in the stores. About eight out of 12 that theyre planning to introduce by some time next year. So theres some merchandise freshness and exclusivity. Their online sales have accelerated. Theyre being more aggressive there. Today, theyre offering an extra 15 off online in addition to some of the regular cyber monday deals. So and target, the multiple is down in the 12, 13 times area. Walmart is trading about 20 times forward earnings a lot of the good news is priced into the stock for walmart there is a shocking stat, john, out by gbh insights saying that on black friday, as much as 50 of all ecommerce sales were on amazon. Do you expect that to continue on cyber monday . And i know you dont cover amazon, but who does that impact if that were to continue yeah, sure. I think cyber monday is forecasted up over 18 to 19 in terms of year over year growth there will be 6 billion done today online and there was 8 billion done online over the thanksgiving weekend. So all the robust trends in consumer and digital, the brands that are extending their content into the Digital Space like nike, adidas are winning youre seeing brands like under armour hitting the promotional panic button 40 off at retail. The stock burning a lot of cash, that makes us coshish on them. Our favorite stocks in the digital theme are adidas, skechers adidas, stock trading 22 forward earnings you could probably grow earnings in the next three to fooev years. Skechers, potentially a billion dollars in cash in their Balance Sheet by the end of this year. Very cheap stock, trading less than 16 times earnings the brands that can expand in the Digital Space are oning. Brick and mortar and the promotional brands like under armour are falling victim to amazon at this point your prowess in digital, you think, overwhelmed any tailwijd you might get in apparel, for instance is that the lesson of under armour right now they extended their brand into too many channels, and the product quality probably went down and they have to restructure their footwear and apparel business to a smaller size a smaller footprint. When you see a brand 40 off at retail, thats a warning sign. Just too much inventory in the channel. So power category in general is healthier, but under armour is burning a lot of cash. That puts investors in a tough position right now so patrick, at this point in the season, we got black friday, and well get cyber monday sort of under our belts incremental touchstones will you be looking for over the next two or three weeks to help you sort of characterize the season is it about weekly traffic or average temps or Something Else . Other than corporate guidance. Yeah, i think traffic for sure i mean, that is key still. Its very important still for retail to generate store traffic, either digitally or at the store level. And it tends to we have a big burst of activity over black friday, thanksgiving, black friday, and also cyber monday. Then it tends to go. It has over the past several years gone into a reallull its quieted down quite a bit, then the comes roaring back about the week before christmas. Ill be out at the stores a lot and paying close attention to store traffic, and yeah, the weather certainly comes into play this time of year but so far so good its been pretty favorable relatively warm and dry. So things yeah, i agree things are looking better than they have, than they did last year and better than in a while for retail overall because i think the economys as strong as it is but ill be focused on traffic, store traffic. Yeah. Well, clearly, one of the biggest stories we cover all year long. John and patrick, we hope youll come back and help us digest it all. Good to see you both thank you thank lets get to some deal moves this morning publisher meredith buying time inc. For 1. 8 billion. Third time did prove the charm for meredith its going to pay 18. 50 a share for time that was a spinoff from time warner back in 2014. Meredith had tried back then to see if they could engineer a deal subsequent or when the spin was occurring. Then it came calling last spring, trying yet again to see if it could put a deal together. But did not have a full financing package in place the deal it offered in the spring or was talking about in the spring included a good deal of equity. About 20 equity meredith has been focused on maintaining its Investment Grade credit rating. It was able to do that this time by raising a good amount of money from banks and 650 million through the Koch Brothers through their private equity arm thats an 8 coupon on a 650 million convertible preferred. Remember, i said, keeping an Investment Grade rating was key here that will be treated as equity, not debt that helps they got the deal done very quickly. Now, the question for meredith will be, and by the way, you see the very positive reaction its shareholders are having to the deal this morning. The key will be, can they get the cost savings theyre talking about. 400 million to 500 million in cost savings are targeted by the company in lets call it two years after the deal they think they can close the deal quickly were not talking about an enormous review that takes place over continents, and then the question also will be what do they do with some of the key titles at new yorkbased time inc. For example, the namesake time, Sports Illustrated, fortune, none of which are money makers will they be jettisoned . Unclear at this point. People is the main money maker. Thats where most of the money is generated a company that that been trying, of course, as so many others in the industry have, to increase significantly its digital footprint while dealing with those significant declines in its print editions its been a difficult process to say the least. Which is one reason why times board was happy to take the 18. 50 and run with it it was a number that was similar to what was at least discussed back in the spring as a possible price there. At that time, you may recall edgar braufman had interest in putting together a potential bid for the company. Well see what happens in terms of merediths ability to ring the cost savings out of the company and bring people into the fold they also have a significant presence in the video business, owning a number of television stations at meredith always been some question as to whether they would bulk up enough on the print side to split the company, but a positive reaction, not just in time, but perhaps more importantly in meredith. Just to put it in some perspective, a deal amounted by unilever to adopt sun dial brands shea moisture is the name of their key brand. I only mention it because deals like this, im told, have been done around eight times sales. Shea moisture doing around 240 million in sales ogx, they bought a while bac if you do that, you get a sale price that is very similar for a company nobodys ever heard of wow to what time sold for kind of puts it all in perspective, that 1. 6 billion, 1. 7 billion, 1. 8 billion is what meredith is paying. Theyre assuming debt as well. Guys, as you know, a few moments ago, we got the blowout number on new homes sales. We want to turn to diana in washington for some reaction and to say blowout, it goes beyond that. This is well beyond what the street expected. We were looking for giveback because septembers number was so high, and we thought that was all hurricane related. If you look at the numbers, the biggest part of the jump up to 685,000 annualized units is in the northeast and midwest. Clearly, the builders are benefitting from the record low supply of existing homes for sale, but on top of that, you saw the median price jump to 312,800, up from 302,000 a year ago thats a huge jump in prices and youre seeing the supply of newly built homes drop to a 4. 9month supply it had been over 5. 5 months just last month one interesting note, there now 247,000 new homes sold that have not been started to be built yet. Thats an amazing number its the highest in over ten years. That means the builders are going to have to up the Housing Starts, and the big question, of course, is where are they going to get the labor to do it. Really incredible numbers for the builders Going Forward we have to expect to see Housing Starts rise along with that. Back to you. Thank you for thereat diana olick in washington, d. C when we come back, online sales for black friday skyrocketing up nearly 17 well talk to the svp of Consumer Brands for walmart, andy dunn. Take a look at stocks. A record high on the nasdaq and now the dow joins them with its pedy meord high, l bho de depot. Back in a moment so how old do you want to be when you retire . Uhh, i was thinking around 70. Alright, and before that . You mean after that . No, im talking before that. Do you have things you want to do before you retire . Oh yeah sure. Ok, like what . But i thought we were supposed to be talking about investing for retirement . Were absolutely doing that. But theres no law you cant make the most of today. What do you want to do . Id really like to run with the bulls. Wow. Yea. Hope youre fast. I am. Get a portfolio that works for you now and as your needs change. Investment Management Services from td ameritrade. Board this morning with the dow, s p, and that dachitting record highs as Retail Stocks lead the way on this cyber monday the nasdaq also coming off its best week since september. Lets bring in steven wood and david stubs, chief client investment strategist at jp morgan private bank. Good to have you with us ill start off with you, steven, because you say this is an asymmetric momentum driven market underweight preference for u. S. Equities how long have you been in that position how painful has it been to defend this position as we continue to hit record highs we have been in thas position for a number of quarters and the relative performance of that has been borne out because were keeping our Global Equity stable but were composing it differently. Trimming it into high valuations and reallocated that into predominantly europe and japan emerging markets the relative performance has held up quite well what are red flags when it comes to the european and emerging markets are you concerned about whats going on in germany with Angela Merkel if you look at whats happening with the europe context, we think the European Central bank will be lower longer they reduced qe. But also, we think relative to the u. S. , theyre going to be more easy, more quantitative, as will japan we think the political situation, the Monetary Policy situation in europe is looking pretty good. Also, earlier in their Economic Cycle. Valuations still look attractive into 2018 and 2019, we think of global alkaz could benefit some usd. This is a good eight years, time to rebalance globally. David, you are constructive on equities globally im wondering how constructive you are in this part of the cycle and in terms of the potential risk, some of the risk you see potentially impacting how equities do, theyre out there. Theyre happening right now. Yeah, some of those risks are manifesting, if you look at chinas policy changes we have seen since the congress, we always expected they would take some tough choices, and that might start to impact some of the markets you see that more in the bond markets than their equity markets right now. But some of the risks, of course, to the outside, if you look at u. S. Equities, we would agree with steven that over a medium term, theres probably more upside to europe, to japan, to emerging markets. In the near term, if we get tax reform, indeed, thats probably an upside risk to u. S. Equities as well. I think also that the discussion about Monetary Policy being removed of that support is a red herring at the moment. Going to take an awfully long time before Global Central Bank Balance Sheets start to shrink and Central Banks around the world are going to be able to remove accommodation very gradually, part of their disinflationary source are in tech, and theres a link to the flattening in the yield curb and the performance globally the same picture, broad based growth around the world. Steven, what did you make of chinas stumble last week, and what do you tell people who think it sort of connotes problems with the leveraging long term . I think the big story coming out of china is this contribution to growth rate right now. If you take the longer term, were looking at portfolios that are longer term in nature that are multiasset and global, and what we see coming out of china and korea the week before last, is that the Global Growth rate has improved dramatically. Europe, as i mentioned earlier, japan has gone to not bad, and the chinese growth rate is probably in the 6. 5ish arrange. Previous to the current uptick, probably in the 3ish percent. The growth rate, but i think right now what were seeing coming out of china from the Financial Markets perspective might be more opaque than we want, but the Global Growth contribution, the inflationary contribution, the yield curve in the u. S. , thats something people want to keep their minds dwar towards. Given these valuations that it might be in their interests. One of your concerns is the unwind of voltillitary positions. We live in a low volatility world. Are you concerned about risk parity strategies . What are you talking about if you look around the nature and structure of markets, every cycle we see innovations in how people invest innovations in the instruments they use if you look at the this cycle, you look at how much money is bet in different ways on the existence of low volatility and that continues into the future, i think there is Something Interesting happening in market structure, but thats just a risk factor that were watching. There are definitely ways you can play that, obviously certain hedge Front Strategies and strategies that will allowia to hedge the risk. Its something we keep in mind further mormore, i dont think were going to see the kind of turn in the Economic Cycle globally as steven was saying, that is going to lead to people to really reevaluate the part and parcel of corporate earnings any time soon. Although were looking around the world for issues and for risks to hedge because it seems to be such a positive story, overall, were absolutely staying on the front foot with our strategies across our investor base. And to play the strength of the stock steven was talking about indeed, if we look at container volumes, export volumes, trade is participating in a way that we havent seen in the postcrisis era in the last few quarters thats very healthy as well. I think also theres greater conviction and participation in this equity rally from a range of different investors who have sat on the sidelines for a while. Thats one of the reasons we see more money coming into the market thats why you see drawdowns so limited. At the moment, this is a great pitch for investors. Thanks. Good to see you. Thank you thank you well, call him the 100 billion man. Amazons jeff bezos watching his net worth soar along with his companys price. Hey, robert. Were watching it too because never before has anyone gained so much wealth so quickly as jeff bezos on friday after the amazon shares surged on strong black friday expectations, bezos worth topped 112. 3 billion. Its the First Time Since bill gates back in 1999 this year, his wealth has increased by 33 billion, just this year. And hes up over 50 billion over the past two years. Now, lets put that a little into perspective bezos could spend over 6 million a day or 250,000 per hour for the rest of his life and still have billions left over so what is he going to do with it all so far, hes not announced any concrete plans he has pledged or given away a total of 68 million, about less than one tenth of 1 of his wealth, and unlike virtually all of the billionaire tech founders, he doesnt have a charity. He did tweet out a request for ideas, saying he wanted to focus, quote, on the here and now of need. And bezos may be about to redefine philanthropy. He has sold over a billion of amazon stock every year to fund blue origin, his Space Company that plans to colonize mars, and he purchased the Washington Post, which he sees as very important for democracy. And he has said that, quote, for profit models can improve the world more than philanthropy models what would it take for bezos to be the first trillion dollar man . Well, amazon stock would have to hit 12,500 guys, back to you. Hey, robert robert, its david to be fair on gates, remind me here, is that 89 billion he still has not in the foundation or do you include the foundation when you include gates net worth . Thats a terrific question, david, because if we included all of the money that gates has given away, gates would be at over 150 billion today. So hes given away over 60 billion to the foundation. And the 80 some odd that gates has today does not include all the money hes given away. Wow also viewers remind us about the tweet that bezos send out in june asking for ideas, which you mentioned, robert. And the only followup to that was bezos expressed his thanks for those he said he would take it into consideration. So far, we havent seen any of those ideas come to fruitiono here hasnt said what hes going to enact the 6 million a day rate, he could have paid for the post in 41 days, right we were talking about that this morning. Exactly now, of course, robert, youre assuming i dont know when you have him expiring over 100. Going to figure out a way to be 300 years old probably, youre right. I have put it at 105 because hes he seems to get younger and healthier every day. But youre right knowing him, hes figure out at least 300. I should amend that. Okay, good. Robert, thank you. Thank you fascinating as always speaking of amazon, wednesday on squawk alley, jon fortt will have an exclusive with Amazon Web Services Ceo Andy Jassy when we come back, drama unfolding in washington as a showdown is under way at the cfpb well take you there live. Tomorrow on capitol hill, Jerome Powell testifying before the Senate Banking committee for his confirmation hearing well bring you analysis and take you there live starting ri ua othstet tomorrow well be right back. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. It is a showdown over the Consumer Financial protection bureau, as two people now claim the acting director job. Our Kayla Tausche has been covering this all morning from cfpb headquarters in washington. Hi, kayla. Hi, carl. It was mick mulvaney, the budget director and the white houses appointment to be acting director role here at the cfpb who got the keys to the directors office, got the transition binders and was greeted by staff this morning, despite being sued late last night by the Deputy Director who was promoted into the job that would have assumed the acting director if the white house hadnt appointed someone leand raw english fired that lawsuit and a temporary restraining order against mulvaney using a provision of dodd frank that the white house disputes in addition to that, the cfpbs general counsel disputes that. This could be a legal battle that plays out depending on how angry democrats get about this you can see behind me, consumer advocates are calling this a hostile takeover of a government agency, cited the billions of dollars in fines they collected from big banks as well as mulvaneys own criticism of the bureau and his attempt in previous years to get rid of it altogether that was a sentiment he echoed as recently as january during his confirmation hearing because they are off appropriations, because we dont budget for them, because theyre run by essentially a oneperson dictator who believes he cant be fired by the president but by cause, we have created, perhaps inadverte inadvertently, the worse kind of government entity. A senior white house official that i spoke with disputes any contentiousline lness everybodye role despite the fact that mulvaney sent an email that was confirmed that said to disregard any instructions that employees get from leandra english, the Deputy Director. They say mulvaney will take a measured approach to the role, though he will have authority to revisit rules that are currently under consideration as well as pending enforcement actions. The white house does hope to name a permanent director soon, but well see how much this boils up or blows over and what happens after day one. For now, back to you all right, kayla, thank you Kayla Tausche in front of the cfpb lets get to sue herera for a news update. Good morning, everyone. Heres whats happening at this hour ending months of speculation, briltens royal palace says prince harry and american actress Meghan Markle are engaged. Theyll marry in the spring of 2018 the announcement says that the couple were engaged earlier this month. 33yearold harry is fifth in line to the british throne cleanup is under way in florida after a train carrying multan sulfur erailed in lakeland officials asking nearby residents to stay in homes hazmat crews working to investigate the crash. Syrian Government Air strikes hitting serve areas of damascus today, killing at least six people, according to Syrian Opposition activists meantime, opposition fighters shelled a separate suburb of the city and pope francis arriving in myanmar where he was greeted by local catholic officials francis will meet separately with myanmars civilian leader before meeting with bangladeshs political and religious leaders. Hell also greet a delegation of Rohingya Muslims youre up to date back to you. Thank you very much, sue. When we come back, Online Shopping Takes Center Stage this Holiday Season well speak to the svp of Digital Consumer brands for walmart, andy dunn squawk on the street will be right back ngoway. S, global bonds and highdividend strategies. Sure, these are investments. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. They might just get what they wanted out of life, and maybe even more. Black friday sales reportedly topping 5 billion, and online records expected on this cyber monday. Retailers aggressively trying to counter the amazon effect, and walmart now in an allout online price war with the ecommerce giant. Joining us at post nine, bunobob bunobose founder andy dunn, also ceo of Digital Brands at walmart. First, how would you characterize the weekend and how do you think the season is going to go . Its a grazie time for ecommerce were seeing increasing share shift. Its exciting for us because were on both sides of the aisle. Were going from the ecommerce standpoint, also focused on the stores were trying to make sure that both sides are really singing to make sure this holiday is awesome. What surprises you most about this early stage, the growth online, which we know pretty well, or the instore traffic, which is better than some expected we think its kind of a great moment to be a contrarian. Theres a lot of challenges in the landscape with stores, and we have been opening, and what we have seen is it becomes a great complement if its differentiated you come on and try on clothes, you get fitted, then were shipping it to you from our Fulfillment Center what were doing is leveraging the economics of really being a showroom, but with the inperson tactile experience of trying on the clothes, and having this, which is a one to one Human Experience increasingly, that becomes important as we move to online, having great oneonone experiences. Do you take a look at retailers who have stores, who have inventory in stores who feel the sorts of pressures and think thats going to go the way of the dinosaur eventually the model we have where you come in, you touch, you feel, you try on, and then it gets shipped to you is the way the future is going to be . Theres a great quote which is the future is here, its just not evenly distributed we think were a corner of the world where that is the future for us, what it enables us to do is offer a great fit so in our chinos and our suits and pants, were offering a lot more inventory so we have a more granular fit, more silhouettes and color and print. That wouldnt be possible if we were levereraging one base of inventory. Taking nothing away from bonobos, i want to know what youre doing for walmart overall as the senior vp of Digital Consumer what is your day like now, and how is it different than when you were running bonobos we have conviction that what were going to do is extend across the consumer eco system we have modcloth, which is reporting up in my purview, and the idea is similar, digitally native brand but focused on womens vintage apparel. We think this digital native model is going to become more pervasive as this change in the landscape continues. Are you working directly for mark lurie i am. You said in the past that hes the most innovative and ambitious ecommerce entrepreneur in the planet i think so. Why when you look at the ambition with jet. Com and what he did there, his success with diapers and soap. Com, very few people are going out there and creating models with this much equity value. The chance to work with him is just phenomenal because he wants to take on the world a lot of people wonder why you didnt go public as bonobos. We had a gentleman a couple years ago, a fast growing retailer others have gone public at the exchange do you look back and think what if i talked about it for years we were talking about the ipo, and then the chance to work for mark, the chance to belong to such a scalable home where the asset would really be safe, you see the Public Markets every day. Being a standalone vertical retailer challenging, and then a chance to play offense on a much bigger stage was too good to pass up. Culturally, has it been what you expected working for walmart . Its been great you know, we were worried about it i think rightfully so, but our team is really engaged they see the light that this is actually a Great Company you look at the overall ethos, the company of walmart, we have been thrilled to be a part of it and humbled to be a part of it walmart, the market has responded to the fact theres a belief that Doug Mcmillon is very much focused, theyre really committed to omnichannel online is that what you see at the risk of being a brown noser, i love Doug Mcmillon. I had dinner with marc and doug. It was more about are you is that actually happening are they willing to spend a lot of money are they doing the things that would say online first, or sort of equal to instore you can see it. Coming off last quarter, its really, really exciting the way the company is so committed to digital, and also leveraging the power of the stores. When you talk about your model, though, it sounds like its a Real Advantage that you got walmart the juggernaut, that has this infrastructure already with Fulfillment Centers and distribution its almost like an amazon model. I guess the question is if youre somebody like you and you want to team up with a big guy, if somebody did the same with amazon, would they have just as much of an advantage as you in terms of that sort of infrastructure that you need to have that retail model of the future we think its both. Right . You think about sam walton and what he started with stores. Now the world has changed so much we really believe its about omni if you look at bonobos, were the pioneer in omni commerce for building a brand versus selling other brand so you thought it was a great match. Can you give an example early on where you came in all these books are opened for you to see, and you realize the possibility of their power of distribution, things you could never do before . The speed of the fulfillment in particular. What we want to do is get faster ow service is great, our clothing is great. Can we get the product to the consumer fast. We look forward to partners with walmart on the fulfillment piece of the equation. How about private label is that a possibility as well . Or creating your own brands as you did at bonobos within the walmart ecosystem . Private label isnt the sexiest term, but you could think about what were doing as Digital Private label. Thats what bonobos is now for walmart. Thats what modcloth is. We wont necessarily sell on walmart, but when you think about jet. Com, the power of reaching an urban Millennial Consumer and owning your own brands is the way walmart came at it. To your point about the future not being evenly distributed, when . When does it become the norm, do you think . How many years away . We have been humble we pioneered this model a decade ago. Now in every category, every single piecemeal, in pockets in pockets. I think it takes time. This isnt downloadable clothing this isnt going to happen as fast as music happened when row see it, particularly this year and last year, you can feel it happening in the market so at what point does it start to accelerate. Ecommerce was 7 in mens wear when we started bonobos, now its between 17 and 20 when does it get to 50 . You know better than me. You think it can get there . I think it willie get there andy, please come back. By the way, a quick programmatic note as we go to break. Tomorrow on capitol hill, fed chair nominee Jerome Powell testifying before Senate Banking. Thats his confirmation hearing. One of several big news events we have this weeknition to the opec meeting and yellens testimony. Well bring you full coverage and take you there live beginning 100at0 a. M. Eastern time dow up 70 points almost as squawk on the street continues in a moment. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Analyst dick bovey say about the bank stocks now . Find out on tradingnation. Cnbc. Com more squawk on the street coming up. Bit bp coin surging past 9,000 to a new high over the weekend. Seema mody joins us with more on this move. Shoppers did not just buy clothes this black friday. The Largest Bitcoin Exchange saw 100,000 accounts activated between wednesday and friday, yet another sign of how more Retail Investors are getting exposure to the crypto currency in the later stage of this rally. Its seen as one of the factors behind bitcoins most recent climb. The move from 8,000 to 9,000 took only seven days at this pace, it will be well over 12,000 by the end of the year and the Younger Generation has taken notice the most extensive Bitcoin Survey to date compiled by block Chain Capital Shows Millennials prefer bitcoin to stocks 32 say theyll own bitcoin over the next five years. But bigger institutions are airport anticipated to play a larger role as the cme group is set to launch Bitcoin Futures contract in december that will be a big test for the crypto currency space. The ceo said second week of december, so put that on your calendar all right, seema, thank you. Now lets get to the cme group in chicago with Rick Santelli and the Santelli Exchange rick well, thank you, melissa. Dr. Lacy hunt, my first guest of the hunt thanks for taking the time my pleasure you know, in the newsletter you coauthor, one of the first sentences was, worst recovery in postwar period. That was a big mantra last election havent heard much about it lately has this year changed that in any way in your mind, doctor no. And it doesnt because of the vast disparity this year between whats happening in the Consumer Sector and Overall Economic growth the consumers are living substantially beyond their means. Had very disappointing growth in Household Income after taxes and inflation. Consumers have been spending, but the rate of growth has slowed very dramatically since late 2014. And what growth weve had has been responsible, has been attributable to a sharp decline in the saving rate and a big step unin consumer debt. This is really not sustainable the personal saving rate is at a tenyear low, and its one of the lowest personal saving rates since 1900 the Consumer Sector is way over its means at the present time. All right dr. Lacy, im going to give you a hypothetical and then i want you to answer a question first of all, considering if we stood exactly at the current growth rates that we have now, do you see any way were ever going to grow our way out of some of our issues yes or no . No, because the debt is racing ahead so rapidly. Federal debt now is approximately 106 of gdp, and by 2030, it will be around 125 to 135 of gdp having said that, dr. Lacy, if you were to look at the tax reform bill, and granted its going to morph a little bit before the senate votes on it, then it will have to meld together with the house, but just generically, will it make a difference in your answer . Should we pass tax reform . You said the road isnt going to take us to the promise land. Could tax reform make a difference towards that end in your opinion it will not make a difference if the tax reductions are financed by new debt i believe that there is substantial evidence that indicates that as Government Debt goes up, Economic Activity contracts a little bit there may be some transitory benefits, but overall, the tax reductions are merely creating some sets of winners and some sets of losers theres no net gain for the economy. Let me interrupt again because were just about outf time i like what youre saying but in the end, heres the quandary youre not a fan of debt you think its one of the reasons we had such a rotten recovery but in order to get a big kicker on tax reform, it cant be anywhere near revenue neutral. The kicker in the beginning is going to look like a debt enhancing issue down the road. How can we get around that or can we, final thoughts if you if you could finance e debt, the tax cuts by reducing government expenditures, that would work to the economys advantage, because the tax multipliers are more favorable than the expenditure multipliers, but it has to be achieved by expenditure reduction. It all sounds so good we cant even close the Consumer Financial protection bureau, because they have a life of their own, so tackling what you say seems more difficult, thank you for your thoughts this week, sir. My pleasure back to david faber thank you. Okay, i will take it, thank you, Rick Santelli time to send it over to john fortt and get a look at whats coming up on squawk alley. John Legendary Hedge Fund manager ken griffin, founder and ceo of citadel is going to join us. Boy, what the markets have been doing this year, the strong start to the Holiday Season, it will be interesting to figure out what investors should do next thats coming up on squawk alley the kardashian backed app has partnerships with nordstrom and h m. Users upload photos or take a screen shot, the program identifies the clothing and suggests similar options from different brands at different price points joining us now, the coowner, molly herwitz. We were playing around with the app. What did your app turn up . Yeah, we take inspiration from social media and we bridge a gap between that inspiration and for the user to be able to purchase that item in the moment so you took the photo and then what came up is dresses of you, tons of different options, different price points, things on sale, showing you everything in one platform you can just tap on it and buy it and the partners include . We have over 450 Brand Partnerships sachs fifth avenue, all the top i retailers right now. How does that work in terms of a partnership, how do they pay you, how do you get paid we receive commission so if they use the app and they dont buy anything, you dont get paid correct got it. Whats the Technology Behind this that enables it to be true to what youre saying . So were a Patent Pending right now. Indirect recognition is not a new concept, but our use case is really special where we bridge the gap for millennials who like to browse on social media, thats one behavior they have the second is screen shotting. We bridge that gap between screen shotting and browsing for inspiration, take the screen shots, bring it to our app and show them so many different options to purchase in a minute. You know, its interesting this app is for clothing i assume you can apply it to all sorts of different goods furniture would be easier, for instance, and thats been sort of the last mile you have an app like a pinterest or houzz and its difficult to purchase what you see on the screen that last mile is missing. Absolutely, youre taking my road map out in front of the public, but yes we have exciting things coming up right now its men and Womens Clothing coming up soon is going to be kids, a little sneak peek over here, but after that theres going to be a lot more exciting things were looking forward to bringing out how many downloads so far and how many do you expect obviously, were partnered with kim kardashian. We expect to be getting millions of downloads that for us was exciting, but for us the true number that resinated was our retention and engagement this early. We Just Launched a few weeks ago and already were seeing users come back day in and day out they love our app. They are so addicted all right, molly, thanks so much for coming by thank you molly hurwitz, screen shop cofounder. Coming up, ken griffin is with us. Dow is up 67 and sqwkll ar ia nute aey i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Welcome back to squawk on the street. Markets are higher to start the week with nine of the 11 sectors in the s p trading in the green. One standout is energy, as Oil Prices Sink more than 2 that does itfor this hour of squawk on the street. Lets send it back downtown to the New York Stock Exchange for the start of squawk alley. Guys, back over to you dom, thank you very much. Good morning, it is 10 00 a. M. At meredith headquarters in des moines, iowa, its 11 00 a. M. On wall street, and squawk alley is live. Good morning, welcome to