Transcripts For CNBC Squawk On The Street 20240713

Day of november on the backs of home depot and kohls, both tumbling after cutting outlooks and comps forecast. The record rally for stocks, it rolls on. Futures as you saw pointing to renewed all time highs at the open and vaping crackdown. California suing juul for marketing to teens new york set to make a socalled major announcement of their own later today. Well start with retail, though, home depot shares down on the premarket, earnings did beat but sales missed and company cuts the full year outlook saying integration is not delivering as quickly as they thought. Kohls tumbling on weaker guidance i was curious to hear you say a moment ago that lowes is getting to be the better buy because well see that print tomorrow. Yes i have to tell you, i think Marvin Ellison energized the place. One thing that happened was that lowes fell behind home depot technologically. They didnt have the systems that is no longer the case as Marvin Ellison rolls out technology at every single lowes, and hes charging management, a lot better managers the stores look better, the stores feel better home depot on the other hand, you know he whawhat, business a usual, this ev been missing the quarter, missing the quarter we bought it last time when did the trust buy it . One of these misses. It is disappointing that they do not seem to have any sort of consistency and they dont have carol tome, the unbelievable cfo. I think this one goes down and stays down today if you werent off price or online, i think youre hurting why tjx is the best place to be. Off price, the winner. Viewers may have seen, kohls looks to be the largest percentage loser were 28 minutes before the open the company did cut its annual guidance from 515 to 545 do 595. Jim, coming back to home depot, and we should add the calls for both companies, the Conference Calls, just began. 9 00 a. M so well probably get more insight, including on this, jim, which i love to get from you, sometimes you already had some of the calls before the calls. When they say that the numbers at home depot came below their expectations driven by the timing of certain benefits associated with their home depot Strategic Investments, what do they mean . Well, look, home depot is always trying to get ahead of the curve. I believe that well hear i think you make the great point, we dont know yet. But the thing that does bother me is that this is the first time we really knew they were doing something big. Why didnt they tell us they were doing something big, so we would know they didnt beat what they were supposed to be doing plain out disappointment in terms of the narrative at the same time, remember, one of the great companies, Housing Starts this morning were very good i think that people will lets say understand it. The one much harder, when is michelle gosk going to get it together, the ceo of kohls. Lets hope the expenses are related to the fact they added amazon to the back of the store. Patience is wearing thin with someone who doesnt really have anything special theyre not the lowest prices, they dont have a really good online strategy, i need to they dont have a good offline strategy i got to hear something about amazon or else people will say is kohls macys, which reports later this week because ive got to tell you this is awful. Yeah. Clearly were not seeing that plan to allow you to do pickup and dropoff through amazon getting any traction one more thing on depot, though, jim, do we believe them on the timing of these investments . Because we got retail sales on friday and Building Materials were negative for the second month in a row. Point blank i say yes because what theyre about is honesty, transparency and truth. Im out here at sales force, home depot, all time customer, and i feel like the one thing i did want to know was, outside furniture should have been better, grills should have been better lets hear what they have to say. If you bought it the last two times, it blew up, it remains the age in watch kohls, i got to tell you, i still dont get kohls i just think michelle i think shes a very, very good person in terms of what needs to be done at a retailer that had been kind of nothing, that is special, but the investing in future, the home depot is telling you right now at this moment, realize that almost entoe entirely involved with making the stores better, no particular theme, supply chain, pro and services, product innovation, it looks really hard, called the one home depot experience. Why didnt we know about it beforehand in terms of being able to gauge it home depot may be down for two days, not one. Well keep an eye on the calls. Home depot in their release acknowledges sales were below their expectations kohls, theyre saying, things are good we had a holiday period with momentum, were increasing our investments it take advantage of the unique opportunity to fuel growth and customer acquisition. We believe investing in the shortterm will support our strategies to drive profitable growth over the longterm. Quotas, were pleased to report our business returned to greth and t growth and the quarter started off positively in august not a thing here that says things arent going well. A bit of a through the Looking Glass aspect of that release. Why not just a total fess up were spending a lot of money. The results arent there so far. The results will be there. The stock is not expensive on earnings but, again, what is kohls besides kohls cash. Why do we go to kohls they have big brands you can get the big brands where . Online amazon i thought that because theyre in strip malls it would be easy to buy online and pick up. So far no real luck. We have got to hear something about the customer who walks into the back of the store, deposits the amazon return, and then buys something, which is what everybody was excited about. I want to know, is this a big hat, no cattle storstory . In the end you better show results and show results now and they havent all right tough words, jim, well watch it as david said. Despite the weakness in depot and kohls, we are on track to hit some new record highs thanks to continuing optimism about china trade. Last night on fast money, gary cohn said he hopes the president will follow through with that phase one deal but if one is not shrinking tariffs could go into effect next month take a listen. I think if there is no deal, hell go through with him on december 15th. Hes giving himself time, hes got him through the other side of the Holiday Season. And december 15th is a long time from now in terms of tariff negotiations, a lot of other things that have to happen in the United States including debt ceiling, continuing resolution i think that he thinks that that is a forcing function and if he keeps blinking, he loses credibility in the chinese eyes. Sounds like something, jim, you probably agree with. Yeah. I think that the president right now is heavily influenced by the navarro wing thats the hard wing theyre saying, listen, brought in a lot of money on tariffs, consumer has not been hurt the s p and dow are at all time highs. China seems to be in trouble, including hong kong. What do we have to lose by raising the tariffs . What do they have to gain if they dont mackke a deal. Absolutely nothing if they dont mack a de make a deal. Why dont the chinese at least they need the pork anyway why dont they give our farmers something, so i know the kudlow wing says were closed and the Financial Services might benefit. The president is not the president does not care one wit about what jpmorgan gets these things do not influence the president. They do influence a particular wing of people, the swartzman wing, kissinger wing, which says, listen, we got to go back to the days where we trade with them, there is 1. 5 billion boy, does that upset the president. He doesnt want to hear about the 1. 5 billion. He wants ideological change in china. Look at the concentration camps. When that goes you see the stories, the president says, wait a second, sending this fentanyl, imprisoning people and were supposed to be able to increase trade what is the point . If hes so interested in change, i wonder what hell do if the senate does pass this pro democracy bill especially if it passes with veto proof will that complicate talks i think the president has a rare moment if he wants to if he mentions tiananmen, then i think people will say, wait a second, there will never be talks. Thats one of those things they black out if we talk about it. So this is a perilous moment, not for us, but for the chinese. I dont think that we other than eunice yoon, the traditional media is downplaying exactly how existential this crisis is in hong kong i believe that the chinese have lost control of the situation. And the only way they get in control doing something that germany may not like germanys policies based on selli selling mercedesbenz and bmws. What would they do that germany wouldnt like . Peaceful. Peaceful reconciliation. Maybe getting hong kong a little more leeway. If you take a look, look at the auto registrations for this month. Europe, this is the strongest they have been in ages if europe can bounce back without china, i think that the president , who i know is not a globalist at all and doesnt really care about what merkel says, europe will turn against the Tiananmen Square moment. So i think the Senate Resolution is incredibly important and being overlooked because all we hear about right now from washington is what is going on in the impeachment hearings, which, by the way, as closely as i like to follow them, still kind of baffling and im not confusing it with joe bidens son. Im saying its hard, hard to follow, not as easy as watergate. A lot in there. Were going to hear from the first two of eight witnesses this week. Starting right now, jennifer williams, state department employee, aid to the Vice President and Lieutenant Colonel vindman later on today market barely pays one whiff of attention to the hearings. No. The tape is good youre seeing when something is positive, biotech stock, people go nuts for it certain stocks that have the just this cadence of going higher microsoft and apple being the best examples. Facebook yesterday these are companies that in the absence of anything i think people are saying, you know what, these are the stocks to be in, there is not that much time left in the year for retail, off price, online, i dont think target will be bad tomorrow i think walmart was very good. Technology were seeing a lot of semiconductors do very well. And you have the drug stocks, i dont think people realize in the absence of Elizabeth Warren jihad, they have been going up Elizabeth Warrens decision to be able to say, listen, we wont do anything single payer until the third year was brilliant for her. Even more important, i know she doesnt care about this, the stock market went up she seems to have a particular affinity for saying funny things about companies that are important in the s p all right, indeed one weird days yesterday, where we had record highs across the board, but more stocks down than there were stocks up yeah. I mean, look, were in by the way, home depot saying a lot of good things right now. I look at the tape, theyre saying it is just taking a little bit longer than the original assumption. Thats why i think more importantly the stock was down 14, now down 8 home depot is a Great American company and the stock, by the way, rallied heavily into this quarter. Home depot, i think the biggest crime, they got to start thinking about how to forecast theyre becoming an errant an errant forecaster. That would be a change for sure, jim. Well watch the headlines on the call when we come back, west coast edition of cramers mad dash, count down to the opening bell as we take one more look at futures. Opening bell in about 16 minutes. Dont go away. Does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. Only one things more exciting than getting a lexus. Ahhhh giving one. The lexus december to rembember sales event lease the 2020 nx 300 for 329 a month for 27 months. Experience amazing at your lexus dealer. We got about 13 1 2 minutes to go before we get started with trading at the New York Stock Exchange time for one of our Cross Country mad dashes this morning. Boeing is the name you want to focus on, jim. Yes, david. Last thing you would expect for a company that is in the news only for a plane that doesnt work are giant orders for it and yet there is orders for 50 planes of the 737 max, 50 planes yesterday, big dubai air show, and what that shows me is this is why boeing stock is still up for the year this is why boeing stock will be an incredible investment for 2020 because people buy a plane that doesnt work, david, dont you wish you and i made a product and people bought it anyway . Who has that who has that kind of demand that they literally put that they have a product that nobody seems to want to fly and yet people are still buying this is the Business Model we have to get in this business. We sell lemonade that doesnt taste good and isnt made well and were crushing it. This is a business. It is it is called a duopoly and i guess thats kind of the key there, isnt it . Where else are you thats why it is such a buy. Only one other guy. Say again thats why you want to buy the tock, it is a duopoly. What is amazing is dont you think that somebody should come in, a third player, but the mode here, as Warren Buffett would say, the mode here is about as high as i have ever seen and what a credit to boeing that they literally still love the product. It will be flying very soon. Home depot, they said deplacing w deflation was responsible for a lot of the decline you think about boeing, you think about travel, the secular growth of travel, jim mcnerney used to talk about previous ceo, unabated most people in china have not been on planes but theyre going places boeing has to be higher. Higher. If there was a prospect for another major manufacturer of airplanes, it would have to be out of china, though may not be today or tomorrow but at some point we may see that, jim. Yeah. I think this is one of the reasons why china should continue to try to be in the counsel of nations, because if they can make something that competes, i think people will buy it right now, i mean, how do you buy 50 planes of something that nobody can work and the answer is you have to get in line and people get in line, because once this plane starts flying, then the orders start flying. A year from now, you wont ask whether it is a 737 max. Youll say, hey, how do i get a ticket. Okay. Jim, stay right there. Dont go anywhere. Okay. Were taking a break here on squawk on the street. Love you. Love you too. Ten minutes to go before we get an opening bell. The latest on home depot from that call as well and kohls call keeping an eye on both the Retail Companies by consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right so you can save big. Get a nofee personal loan up to 100k. Get a nofee personal loan it also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. 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The opening bell in just under five minutes got our hands full this morning. Even though there is not a lot of trade news, retail is heating up and were watching the president filling out a bit about his meeting with powell yesterday. Other big stories about vaping, california and Los Angeles County are suing juul, alleging the vaping brand targeted young people through advertising and failed to give warnings about the health risks in 30 minutes, were expecting an announcement on vaping from the ag of new york if we get details on that, we will let you know. But, jim, one more incremental piece of bad news for juul and then by extension, mo. Right but, look, the quiet nature of the fda, the reversal by the president , which is seemingly political, the location of where the leader of the senate lives, or where his district is, is all adding up to a Real Advantage for altria and juul. These states, as much as they sound like they matter, no, no this is going to be have to be federally regulated because it is from online. What are you going to do try to shut down online . It is from a lot of companies that are not easily regulated. Thats what juul will tell you were regulated. Without federal legislation, without federal appeal from the president , all these things are just lets say, much ado about nothing. These states can do whatever they want. They have federal problem, not a state problem. Yeah, though, reports yesterday indicated the president backing off a bit of his intention to ban flavors across the board. Banning off completely from what i understand, jim decided this is a reporting from other sources that it could result in a loss of jobs in states that are important to his potential reelection efforts and so he abandoned that yeah. I think that the election beckons. I think people know that it was mint that people liked ive never used juul myself, but the cohort that i think does juul and my wife is on the board of the lets say the social committee at bucknell, it is endemic. People just smoke and they love mint it is too attractive now, i dont think you get up an say, listen, i cant wait to do some mint vaping as someone who is a parent, you know that mint vaping is just too popular. You dont want your kids to mint vape remember we used to talk about marijuana as a gateway drug to heroin isnt it is a gateway drug to everything that is bad i dont know. I dont believe marijuana is a gateway drug to heroin, do you no, but i think vaping is a gateway drug to maybe lung cancer i say the things that bristolmyers is doing against lung cancer and merck. The First Amendment allows all sorts of bad things. Conversations we have before the opening bell look, im not pro lung cancer it is an odd position. I would never take it myself im n im more in the keytruda camp, the opdivo camp, but im pro mint vaping . Does anyone, i dont know i like im a little astounded the pro cancer camp does win periodically we be with better off with no vaping, no smoking, clearly, no doubt about that well yeah, thats just great, david. Are you saying people dont have a right to get lung cancer are you saying that . Are you taking that antiFirst Amendment position no, im not. Good. They can do whatever they want. Right david, it is a free country it is a free country if you want cancer, you have every right to get cancer. It does cost the system. It does it does. Your rates are higher. They are for our employer. Got to check that box if youre a tobacco user. Juul has to have earnings do not juul, it is a unicorn. Less of a unicorn every day. Get to the opening bell on the s p 500 at the bottom of your screen. At the big board today, Digital Realty trust, operator of data centers, scelebrating the 15th anniversary. Jim, we havent touched on the housing numbers we got today permits up 5, the highest print since may of 07 as were starting to see some of the benefits i guess of low rates. Right thats what makes it so hard to be able to punt on the home depot right here home depot talking about a lot of what i regard as they also talk about tariffs that are worried about tariffs this is the first time that people can really point to maybe tariffs had something to do with a miss, there is so many Different Reasons why home depot missed, and yet there they are, affirming guidance i think affirm guidance if you believe the Housing Starts end up leading you to a maybe a beat some day. This is not the home depot i know it is starting to bum me out the other name that we were watching from, the very beginning of the show, was kohls on the Conference Call that began at 9 00 a. M. , the company is talking a lot about heightened promotional environment and that does appear to be where the pressure is on earnings and why their guidance has come in for the year in terms of what their pointing to for annual earnings per diluted share. Jim, theyre talking about, again, heightened promotional environment. And Gross Margins now expected to be down 60 to 65 basis points for the year, reflecting their year it date performance, outlook for the Fourth Quarter and they also talked about what was particularly a lot of competition apparently in womens fashion. Underperformance in womens business impacted their gross margin and unfavorable mix and this competitive environment in terms of pricing this isnt the first time that they cited womens. When i went to visit them, they were very pro on the womens fashion and the initiatives they have my travel trust maintains a small position, the amazon deal would do something what i want to say, it has become quite quizzical how come this stock reports they reported bad quarter. And then the company and then the stock goes up again on belief this will be the quarter they get it right. At a certain point, david, know Michelle Gass hasnt been in there that long. Im beginning to question what the heck is she doing. Or is it the model broken, people think about macys, what people think about nordstrom, brick and mortar in the end, unless you have a fantastic online and offline, the online being how great walmart is, i think you start saying excitizen sheexste existential. It is still profitable. I dont go to kohls i dont go anywhere. So i cant say but i had kohls cash i have kohls cash they are starting to close some of the bad stores. The problem is this, how can you be so wrong about everything how can you be wrong about the promotional environment . How can you be wrong about the womens clothes that you have . How can you be so wrong about how amazon starts helping and the answer is, i dont know, lets get someone else 159 kohls stores at the end of the quarter 98 million square feet, selling footage was 82 million square feet there are too many stores, even as recently as a year and a half ago, they told me the great thing is they didnt have to close any stores, all stores were in the right place. Lets see what target has to say. I wonder whether target is taking business. Im disappointed with kohls i felt this was the quarter that you would start seeing maybe the spend was related to amazon. Promotional is a curse word. A curse word all right theyre being aggressive october into the Holiday Season in terms of offering pricing that they think will bring people in and get them to buy things is this heightened promotional environment, jim, something we can just expect will continue for good i think the fault is not in the promotional stars. I think this fault might be in themselves just a week ago, we had a number from walmart that was stunning they werent talking about promotion. They were talking about how great things are who do you want to believe, david . Do you want to believe the company that has 275,000 Million People going through the stores or want to believe a company that doesnt have a very good online strategy that has this amazon deal, but in the end, you go in and it is noike, gold toe socks, womens things you can get anywhere it is not fun. It is not experiential it is depressing if theyre investing in pricing, it might mean there is good deals you always look a good deal. Well, i like kohls cash. Im bummed im bummed because i believe that this was the quarter that could make everything make or break things a lot of suppliers to kohls seem to be doing well. Hey, ralph lauren had a good number we got to find more of a reason, you and me, to go it a kohls. Right now i feel that it is is not the housewares, not the clothes you use at a sporting event. It is not we have to find a reason to go to kohls right now, other than returning something from amazon, real pain in the butt, i dont have a reason give me a reason to quote earth, wind and fire. The wholesale model youre referring to, talked to the chief of levis about, about customization and the Customer Experience heres what he told you. Consumers want to come into the store and want an experience, not just come in if they come in and transact, they can do that online. But they want to come into a store and have an experience, something that is unique, something that is instagramable. And we have tailor shops in most of our mainline stores around the world where we do personalization and customization. What does that say . Well, i never instagramed in kohls i just no it is not an instagramable moment i was at levi strauss, they made a mad money jacket, a biker jacket, i felt like joining a club, you know, and just creating a little bit of a not mayhem, that would be the wrong word, i think levis is fun, it is interesting, it is attractive, you can make your own jeans. Kohls, we go to kohls, were not even going to tweet. Were not going to tweet let alone instagram. No not tweeting ned siegel on yesterday, no, not a twitter thing when you go to kohls it is just like, no. I dont know you know what i mean i guess i know what you mean. I feel you i feel you yeah. Instagram, what the long lines instagram the sock aisle maybe instagram some househouses housewares. No. Well do instagram of no. A lot of times there is a petco near, we can do instagram like cats and dogs. Thats always a winner speaking of winners, technology, of course, journal pointing it out today, not that we need to be told or anybody who watches this network for any length of time needs to be told, technology has been yet another year of strong gains apple is down a bit, but overall the tone in the big names that we follow closely are pretty good this morning again, carl. We have the nasdaq comp up a quarter of 1 . Indeed. There is a look at apple interestingly, b of a is out with their 2020 outlook. Says, jim, theyre lowering tech to market weight on risks of the trade war shifting to a tech war post election. They say a move toward a dual u. S. China supply chain could represent shortterm pain. That would be a shift. Yeah. It would be. And you dont have to look any further than the action in broadcom today Morgan Stanley saying hold the buy. Thats a company linked to china. And it doesnt seem to bother them remember, the narrative problem there is facebook, alphabet, they dont rely on china tim cook seems to be a q a today. Tim cook does as much business in the United States as they do in china the thing the analyst is missing is software as a service the Software Service is doing so well and they are not dependent on global trade. They just arent while i like that, i can go up with excuses of why i want to buy various semiconductor stocks, software, what does that lead me that i hate in technology hp david, hp . Hpq . Which one which hp hpq or hpe which one . Had much p p is a travesty, sham theyre nice people. Hpe is thats kind of like kohls not bad thats one of those where the comparisons are easy we have to stay close to look at that. Look where it came from in the bad part it is not going away i am worried about hpq. What did chip berg have to say during the interview did he want to talk about being the lead director at hpq or what they do in terms of xerox . I dont want to speak for him. I have a quote pulled from the from yesterday. Lets take a listen. Okay. So thats a bit of a cricket situation. I thought we set that. What he did say was just kidding, what he did was he talked about the notion that the board is much more, i felt it is a strong board i look at the players of the board, i dont necessarily know a lot of the names he made me feel that something that you said earlier. Which is that it is about the board, and, david it doesnt sound like the board is willing to do nothing. I know that the board likes the chac changes going on i thought the board the right deal and i think the board is going to say you got to make it. I dont know enrique, he just got there im listening to what you said i think youre right chip is saying the board is playing a major role youre saying that makes me feel like something is going to happen here. Well see day two here after the rejection. Day three, actually it was sunday that hps board did re jekt th reject that 22 offer from xerox. Theyre in a tough place the only way they can really increase would be to go up in the cash portion any more stock and you end up with hp shareholders owning more of the combined company than xerox shareholders and then into questions of who should really be leading this thing. A look at both thats interesting i want to hear what chip had to say to you specifically on that. Because the board is, of course, as you say, playing an Important Role here, no doubt about that. Much more than i thought. I misjudged when you said that to me. Chip berg is a forceful guy, runs levis, independently wealthy. I think people are starting to say, look, even though there is some tremendous, tremendous feeling that enrique is doing a great job, which he is, he just replaced dionne not that long ago, the combined company could be a dominant company. In an area where you have to take market share, because there is not that much growth. 2 billion in cost synergies, is there more . Would xerox would like you to believe . Or tough to find as hp at least seems to think and a lot of synergy. You got dualing sales people in the same account. You know what that means you can fire a lot of people. Or as icon said, a lot of these aging companies generate cash longer than you think they will right . It is a slow grind, but yes, but people still have aol. Yes thats what i come back to. Somebody out there is paying 20 bucks a month for aol. We bought into the i love lucy thing for a long time les moonves, i dont like lucy look at that stock always comes back to cbs. Cant get away from it cvs is pulling away from cbs. Lets get to bob pisani good morning, bob. Good morning, guys. Nice move on the upside, record territory. The important thing is all the big cap names moving on the upside tech doing well. Semiconductors, having a good day. Banks moving up a little bit as well healthcare up here there is retail down, no surprise there given what you heard the guys talking about kohls and home depot. Home depot, listening in on the Conference Call. The sales miss, they said, due to the timing of certain Investment Initiatives the very first question on the Conference Call was is there something slowing in the macro, in the consumer o er or really t the timing of the Investment Initiatives. Here is the answer they saw strength across almost all of their departments, signal of growth in the pro and diy, do it yourself, customers out there, they also talk a lot about online traffic and the average ticket, also doing very well they were very happy with that the short answer is, it doesnt seem like there is something going on with the customer right now or the consumer and the important thing is the stock is you can see here, down 5 , this was down 220. 220 right after Earnings Report came out off the low. And do remember, this is up 40 almost this year overall this is one heck of a run for the company. Big, big move up overall important thing is, holding up this is one of the big Quality Companies out there right now. Lets talk about tech. We talked about the fact last week or overbought, thats because your biggest names are moving the most, microsoft, apple up, intel up 3 , adobe 7, accenture 7, these are the biggest stocks in the tech sector. Ill show you the top ten. The only one that is not down this month, that is not up is cisco, down 5 on the earnings disappointment, visa, mastercard, sales force, broadcom, top ten stocks you get them up in the mid signingle digits, except cisco, the whole market lifts and tech and thats why were talking about overbought, unusual with these stocks to see them up this month in a month lets talk about alibaba talking about that last week theyre doing a secondary in hong kong. People ask why would they do a secondary in hong kong does this make sense to you . It makes sense to me 750 million users in china, twice the population in the United States. You think somebody might be interested in owning the stock the company is growing like crazy. 50 of online sales in china this makes a lot of sense to me. Take a look at the market cap here, 483 billion in the United States hong kongs listing, we dont know yet, but 11 to 13 billion is the estimate. Pretty small investment here for secondary. 2 of this one does that make any sense it sure does it looks like it has been very successful strategy if the strategy was to increase the price of the stock take a look at this here here is alibaba, since they talked about secondary listing, it is up 25 rest of the market, china up a little bit, us. S. Up a little bit. This looks successful if the strategy was to get the price up well see. Well get the price in the next day or two guys, back to you. Bob, thanks so much to the bond pits as well, we got interesting Economic Data earlier today. Rick is at the cme good morning, rick. Good morning, carl. Youre right, very solid starts, exceptional permits, and yet look at the response you see that drop, that was 8 30 eastern. Theyre marching to a bit of a different drummer, equities hover in record territory. Look at twoday of 10s yesterdays low, 179 if we get below that, we should see some activity. 10s minus 2s, amazing, thats a one month chart. One week we have gone from 28 to 19 plus. And that happened based on the long end 10s on that week lost 14, closed to close, 2s only 6. Separation of eight basis points explains it. Thats important two day dollar index, mr. Trump seems to be talking down the dollar more than hes affecting jay powell looks like it is rebounding a bit. You see the dip yesterday. Finally, pound versus dollar, intraday yesterday, traded higher than the high you see open the right that was the highest level since may. But it is backing away carl, jim, david, back to you. Rick, well see you in a bit. The first house impeachment hearing of the week under way. Ylan mui is on capitol hill monitoring that for us. Good morning. We will be hearing today from alexander vindman, an official on the National Security council as well as jennifer williams, a Foreign Policy adviser to Vice President mike pence they are just wrapping up their Opening Statements and these are two key witnesses for democrats because both of them were on that july 25th phone call between President Trump and ukrainian president Vladimir Zelensky now, both of them also said there was a Crucial Detail that had been left out of the official white house record of the call colonel vindman and miss williams also took note of the explicit use of the word burisma by zelensky, left out of the record of the call now locked away on an ultra secure server now, the ranking republican on the Committee Devin Nunes spent much of his Opening Statement bashing the media and questioning the integrity and motives of the whistleblower. Now that the whistleblower has successfully kick started impeachment, hes disappeared from the story as if the democrats put the whistleblower in their own Witness Protection Program last week, President Trump created quite a stir when he started tweeting attacks of one of the witnesses in real time during her testimony we know that the president has criticized both vindman and williams in the past so, guys, we will see if hes watching and how he responds today during the many hours of testimony ahead of us. Back over to you. Thanks for that. When we come back, qualcomm holding the first Analyst Meeting since 2016 stock is up 59 for the year Steve Mollenkopf will be on this morning. Were at 4123. vo the moth without hope, struggles in the spiders web. With every attempt to free itself, it only becomes more entangled. Unaware that an exhilarating escape is just within reach. Defy the laws of human nature. At the season of audi sales event. Heres a look at kohls. Down 21 cramer had tough words for their performance as they miss and comps are disappointment, guiding welor for the year well get stop trading with jim in a minute. Just wasting time. Wasted time is wasted opportunity. Exactly. Thats why Td Ameritrade designed a firstofitskind, personalized education center. See, you just oh, this is easy. Yeah, and thats oh, just what i need. Courses on options trading, webcasts, tutorials. Yeah. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well exactly. Well except now, youre binge learning. Oh, i like that. Thank you, i just came up with that. Youre funny. Learn fast with the Td Ameritrade education center. Call 8662967451 or visit tdameritrade. Com learn. Get started today, and for a limited time, get up to 800 when you open and fund an account. Thats 8662967451, or tdameritrade. Com learn. So why isnt it all about you when it comes to your money . So. Whats on your mind . We are a 97yearold firm built for right now. Edward jones. Its time for investing to feel individual. But in my mind im still 25. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. Lets get to jim and stop trading. One of the deals that people are critical of was pell low tan. The Stock Plunged down to 20 after it came public 30 and change i love this note from jpmorgan saying you got to buy it theyre starting to move to germany. This is far more disruptive toward Fitness Industry than most people thought. Good for them. I have to tell you, john folly is doing a remarkable job. Maybe this was not so overvalued for the unicorns it may be one of the better ipos for the second half of the year. Nbc universal is an investor. We had john folly on our desk during the print and the stock didnt look good then. It didnt after that earnings. He didnt necessarily have the answers. All youve talked about is your wifes clothes hung off the pell low tan in your house. Im thinking she ought to take the clothes off, maybe get on it, turn it on. Its been such a good clothes rack maybe it has a second function, david. Jim, whats on mad tonight . We have nvidia, a family fave we have Restoration Hardware how did that happen. Warren buffet likes it its time to Start Talking square, no one has been talking about square since the days of sarah friar and the king of the cloud marc benioff business the greatest source of change. Amazing lineup, jim we cant wait. The hits keep coming mad money 6 00 p. M. Tonight. Just one point some worried about levys not making the quarter after kohls well see you tonight. The new York State Attorney general making an announcement on vaping in a few moments well get you that live with the dow down 21. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. Is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. 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. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with david faber and Contessa Brewer in for sara eisen markets looking for direction here once again, but record highs not too far away as we Pay Attention not so much to trade today as retailers our road map starts this morning with retail. The sector on pace for the worst day of november with home depot and kohls sliding on weak quarters. The vaping crackdown, well take you live to the new York State Attorney general making an announcement on vaping this hour. Eyewear brand warby parker launching its own line of contact lenses well speak with the companys cofounder and coceo on the move. The retail route, home depot and kohls under pressure after earnings sinking and cutting outlook and comps forecast for the full year. Tjx a bright spot beating on the top and bottom lines as we monitor, guys, the wires for some headlines from the Conference Call. Home depot specifically mentioning pricing in lumber, Building Materials as well as some tariff costs which they say they are looking at the broader impact on the consumer from tariffs. Its clear theyve had some momentum from housing in general. They said they are making investments and thats one of the reasons why theyre coming in lower than expected, lower than what consensus has. Im really interested in, number one with, how long do they keep blaming tariffs for this its something they know has been coming and how do you manage that, those costs, but also, you know, when youre lowering your outlook, kohls as well, what does it mean for the Holiday Season we have retailers that look like theyre under pressure. Kohls is one of the key ones under pressure theyre citing what has been a pricing environment that has been very competitive in their decision to meet that pricing environment and lower price perhaps to bring more people into the stores, give them some momentum going into october. As you can see it has resulted in lower margins which are lowering the overall guidance for the company for the full year, certainly into the Fourth Quarter. They say that given the heightened competitive environment they did respond by investing in pricing, enhancing their marketing offers, recognizing the importance of entering the Holiday Season with what they say is momentum. Certainly not getting the kind of momentum they might have liked in their stock price. When we talk retail at cnbc we talk Courtney Reagan who follows this area closely. What did you read into the reports that were coming out of home depot, coming out of kohls this morning and what it means for macys reporting later this week i think you are all hitting the nail on the head, its sending worry vibes ahead of black friday next week this is retails key time of the year home depot did miss those sales expectations, putting up softer Gross Margins. Guidance was reiterated but mike baker note that implies a lower than expected final quarter of the year comp sales remain positive for home depot but fell short on consensus. On the Conference Call the ceo said look, sales like highpriced discretionary items, for example, those havent slowed were not seeing macro changes they said its a Multiyear Strategy and the investment that goes along with that is bearing fruit, but not quite at the rate that we had initially planned for. He also said that plus youve got continued deflation of lumber prices, 175 million drag on this quarter and a shift of black friday sales, kind of distorted the quarter. This is what i mean. Last year black friday was in the third quarter. This year in the Fourth Quarter. In 2018 black friday for home depot the single highest sales day in history that can make a difference there when youre looking year over year kohls as you mentioned lowered its guidance lower than reported sales, that stock price getting crushed here comparable sales did turn positive, up 0. 4 , a good change from down 3 in the first half of the year. The Department Store did see good backtoschool momentum initially and then weak nnds september due to what the Company Calls an increasingly competitive environment and unseasonably warm weather. As david mentioned kohls lowered prices, increased their marketing and reaction to that womens apparel ended up being the only negative category in the quarter, but one of the biggest ones so thats important. Citi says the market hoped for more, particularly as amazon returns were accepted in all kohls stores this quarter there was a launch of several exclusive brands and a new loyalty program. But not enough to assuage investors today. Kohls shares down more than 18 . Tjx came in with better than expected results what are they doing right with marshalls and home goods and tj maxx. The broader tjx it has continued to be a good story which flies in the face of what we talk about a lot because they dont have a strong Online Presence we talk about how much that is changing the game in retail. But for a tjx, which also owns, of course, marshals and home goods, its all about that Treasure Hunt and that value for the consumer there is a decent cohort of consumers that seem to be growing that like that Business Model, cool with going to the stores, dont need the Online Presence, like finding Something Special they feel is at a great price. I think its a bigger Business Model story that continues to work for those off price retailers. Always amazed when i look at the market cap at tjx. I forget how large it is. Its really large and has an International Presence too we forget about that theyre not out there as much media wise as some of the other names and they have a the questioner presence in the way they tell their story. Its not to be estimated. Its far larger than target huge. Let me come back with you to home depot the Strategic Investments theyve talked about, not paying off as quickly as they talked about, but they continue to make them they say on the call. What are they talking about here that theyve done theyre expecting to get a payoff from but not as quickly as they perhaps had thought. Theres all sorts of Different Things one of the ones that craig pointed to is things like the i. T. Infrastructure. Doesnt sound that sexy but look, we had all these legacy systems and had to break them all down and build all of these new systems. Its taking a lot longer than we thought to do that and as you can imagine they have to build the systems and train the employees. Theyre like all these hiccups along the way. Theyve done a pretty good job of managing the expenses but once they have all these systems in place, theyre having a hard time seeing the payoff a big one was building the business to business website to serve the pros better. You sort of have your own unique home depot login, serves up personalized recommendations if youre a plumber youre getting recommendations for plumbing as opposed to roofing having that happen is taking a little bit longer than they had thought it would. All right courtney, thank you very much for bringing us the big wrapup there. Meantime take a look at the broader markets. The dow and s p are moving lower after hitting new highs at the open as the president says he did meet with fed chair jay powell at the white house he tweeted about the meeting late last night and said, quote, at my meeting with jay powell this morning i protested the fact that our fed rate is set too high relative to the Interest Rates of other Competitor Companies and our rates should be lower than all others we are the u. S too strong a dollar hurting manufacturers and growth runs counter to what his chief economic adviser has for years, larry kudlow talking about the benefits of a strong dollar. What we wont know is what powell responded did he say you dont want negative rates, mr. President , let me tell you why. I guess well never know powells not saying. Meanwhile which might be in his best interest at this point. The president tweeted about the performance of the nasdaq so far this year, which is due in large part to the performance of the semis which brings us to bank of America Today says, following a remarkable run we think its prudent for investors to neutralize their tech exposure semis are directly exposed to the u. S. china trade war she adds which we think could escalate into a tech war post2020 election which we brought up with jim from the last hour. Yeah. Theyve performed so well as we know as a group this year. Many of them up well 50, 60, 80 . Meantime california and Los Angeles County suing juul labs alleging the vaping brand targeted young people through advertising and failed to give warnings about the health risks. Moments away from an announcing on vaping from the a. G. Of new york in advance of that lets bring in jefferies tobacco analyst owen bennett and the president of Blue Line Futures bill barook what do we think were going to hear i would imagine something similar to california now. That would kind of set the trend in terms of a lawsuit in a long line of lawsuits now, which are really piling up if there was just one lawsuit, then potentially you could ignore it but with so many of them now you have to assume theres material ground, the allegations and therefore some if not all will be successful with compensation potentially paid. Are the states doing this pretty much ad hoc or are you sensing the a. G. S would get together and do this as a group . Obviously theres a lot of political pressure internally in congress now i would imagine theyre discussing this as a group given kind of recent reports that President Trump has potentially pulling back on flavor regulations they may feel they need to work independently to do something around this. Bill, its not like the threat of these lawsuits is new. How do you play whats happening now and what were anticipating hearing from the new York Attorney general there are a lot of moving pieces here and, you know, it was expected the stock looking at altria is taking in stride very well the losses will continue and theyve been going on for a part of the is year altria wrote down a good portion 4. 5 billion of its investment looking at the stock where we are, weve rallied 20 from the september low. So this isnt where you want to buy it not only that you dont buy the stocks because you love cigarettes, you buy them because the dividend and looking at a 7 dividend in the stock makes it attractive but you dont base it on this level. Let me interrupt you. As the a. G. Of new york is beginning to speak Million High School students and 1. 2 million middle School Students currently use ecigarettes according to the cdc between 2017 and 2018, e cigarette use increased 78 among High School Students and 48 amongst middle School Students nationwide and the new York State Department of Health System that 1 million residents use ecigarette products on a regular basis. 220,000 of those users are under the age of 18. And there is no doubt that juul, the largest ecigarette company, has caused this addiction. In fact, they hold 70 of the market, and thats why today we are taking action by announcing a comprehensive lawsuit against Juul Labs Incorporated juul basically took a page from big tobaccos playbook by marketing its products in a manner that was appealing to underage youth it misled consumers about the nicotine content of juuls products it misrepresented the safety and the therapeutic value of its products by saying they were safer than cigarettes and suggesting that consumers make the switch when in reality juuls products contained significant amounts of nicotine and are not cessation devices. They allowed minors to purchase its products in violation of new york state law, and juul violate new york state law by repeatedly targeting teenagers through its vast Advertising Campaigns and selling productness a variety of appealing flavors to underage new yorkers through its website and in Retail Stores and when juul launched in 2015, new yorkers, the consumers, were introduced to the company through targeted launch parties in new york city and the hamptons its ad campaigns were accompanied by the catchy phrase vaporized with a corresponding social media hashtags including vaporize or juul or lights comma, vapor juulvapor. The ads failed to warn consumers that juuls products contained nicotine, which is highly addictive and particularly dangerous for teenagers. 2016 survey revealed that roughly one third of teens surveyed reported that they thought juul and other ecigarette products were harmless subsequent years, juuls social Media Presence that is letitia james, the attorney general of the state of new york, talking about their lawsuit against juul labs. You can hear sort of their arguments are pretty plain going back to marketing praktz that the Company Admits were misguided and have tried to apologize for since. New york is going back to their earlier days, right . Yeah. I mean its this ultimately when you consider it in the context of big tobacco i think is actually supportive of longterm growth in terms of investing in big tobacco what these things highlight we need increased regulation and with increased regulation enforces barriers to entry and enforces the ollie gop poly. I would flag in markets such as europe where weve had strike regulation around vaping since 2016 theres no issues wet teenage usage. You have a strong flourishing vaping market becoming consolidated amongst the moojers. Implications for altria now or some of these new Tobacco Products altria its sold off a lot. If you look at its relative valuation its not at historic lows with difficult times remaining head for juul and potentially limited traction on costs. We have our reservationsp we remain cautious on altria. Lawsuits aside how problematic is it banning flavors from the juul pods from my understanding theyve banned everything but two flavors right now. Some of the most popular look at it why are they banning it its coming from the kids that are doing it and theyre trying to its the regulation is going to start from the state level and have to be implemented from the federal level i mean there wases some theres serious violations here and theres proof, theyre sending the stuff through the mail, thats a federal offense, thats where its going to have a start. You know, the old saying goes, you sell the lawsuit, you buy the settlement right now, theres going to be some weakness and its not coming in the stock right now. Looking out, where are we going to find the stock six months down the road. Earnings have been good. Weve seen a good rally off the lows the dividends are there. If they can figure this out and figure out the launch, there could be some value in this stock moving forward again, theres as lot of uncertainty here we dont we have to see what type of products theyre going to have still available, if at all. Where would you buy i would have to see at least a half retracement back into 44. That dividend of 7 at this level is makes the stock attractive long term but, you know, i just dont see im not biting up here and i dont see a reason to be anxious to be a buyer at 44. I want to see again, this playoff from the state level into the federal level, see what products they still have available after that and see how the iqos launch goes youre not buying it because of the cigarettes, youre buying it because of the dividends and there could be longer term value from that level. You have trumps nominee to the fda who will testify before a Senate Committee tomorrow, likely to be pressed about this. Does that influence at all your take on these stocks well, i mean the reports around potentially, what you need to consider the culprit in all of this is juul. Actually theyve removed all their flavors voluntarily. I mean the actions that are going to be taken have been put into place by juul themselves. So where there is such a negative impact of pulling back on that remains to be seen. Well wait and see if juuls has a response to this after a day after california and new york this time bill and owen, thank you, guys. Thank you. Still to come eyewear brand warby parker is launching its own line of contact lenses the Company Cofounder and coceo will join us first on cnbc later today chairman Lloyd Blankfein will be on the halftime report, 12 00 eastern. Ua othstetwh en we return. It was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Nice rock. Its time to drop gold. Go digital. Go grayscale. Eyewear brand warby parker announced its adding a new prescription business called scout, growing the frames line to include daily use contact lenses joining us to discuss the companys growth, competition and more, warby parker cofounder and coceo neal blumenthal thanks for being here. Is this the kind you had a real opportunity with eyeglasses because exotica had a near monopoly on glasses. Did you have the same scenario coming into contact lenses where you could be the upstart competitor the price umbrella is not as big as with glasses, right, because our glasses are 95, instead of 400 or a 500 our contacts now are 110 as opposed to 150. Theres staill great value. We find three of the top four manufacturers are pharmaceutical companies, we dont feel that theyre able to provide a wholistic Customer Experience like were able to. This was about the contacts themselves, as opposed to price . I looked and you can go to costco and get a three months supply of contact lenses for 64. Yeah. So those, that 64 is actually for a 90 pack, whereas ours a 90 pack for one eye is 55. Were still able to provide it at a lower price the big difference is that were also able to provide it, the convenience of you go into a warby parker store, you go to our website, an one of the things were excited about the lenss theres 80 less waste so the packaging is radically different from any contact lens on the market currently. Whats that do for shipping costs . It brings it down, less Carbon Emissions also the really neat thing, you can actually put it in your wallet if you need be and it doesnt take up room when you open it its always the right side up. Your fingers are only touching the outside of the lens, never the part of the lens that touches your eye its more hygienic as well. Whats it going to do to sales of glass whats the mix going to be over 40 of our customers buy contact lenses so we think that we can build a really big business, even just offering this to existing customers. And were fine we recognize just as people live physically and digitally and we have physical and digital presence, the same with glasses and contacts, right. Its usually not an either or. How long did it take you to actually research the market, get the product where you need it to be, make sure your manufacturing is up to speed, how long did it take this is something weve always wanted to do when we look at the markets, eye exams and contact lenses are over 11 billion market in the u. S. Its a great opportunity for us. But we started in earnest about a year and a half ago. Really researching, understanding the market, the product landscape, and then finding an amazing partner, manufacturer in japan to produce the contact lenses what about the technical advances that youre seeing from microsoft and facebook and apple on glasses does that hold any appeal for you . It does its super exciting. Unfortunately, were not yet at the point like the movie minority report where you have functional wearables, but we think thats something that could be down the road probably ten years away from something thats really functional the challenge that weve seen with most wearables its great for gaming, theres not real great use cases for everyday wear one of the big obstacles for the company is how bulky the glasses are if theyre going to be worn. Have any of these companies approached to ask about a partnership in doing the actual design we do talk to everybody and everybody. Yeah. So, you know, we think that were not going to be able to invest the same amount of capital as a lot of the Big Tech Companies in the space, but we can be a great partner to them where are we in the past weve had you on to talk about the mix of physical versus online and we continue to see blowup after blowup of retailers who mismanaged that mix and are Closing Stores as we speak are you you seem to have tested it and committed to it, right. These are no longer popups. No. We now have 112 Stores Across the country and in canada. Weve been deliberate with our rollouts our first store in soho was a couple blocks away from our office where we had a showroom and we were doing several Million Dollars of sales out of our office so that was a safe bet. We then deliberately expanded into Outdoor Lifestyle Centers, really honed how is that going to work, the financials slightly different in an Outdoor Lifestyle Center than on a street location. Looked at indoor malls looked at tested College Towns like boulder and madison and ann arbor and gone into suburban main streets like westfield, new jersey, and what we found is our model works in all of these locations. Its only after we test that we then begin to scale. One riskier are malls just treacherous right now or not certainly not the class a malls that were in. Were seeing that traffic is very strong in these centers when we speak to the heads of these reits they tell us hey, traffic is generally good but people arent visiting as many stores during their trip to the mall. Fewer stops. Thats because people are really doing discovery and starting the shopping process online. Right. Over 70 of the customers that purchase in our stores have spent significant time on our website or on our app before visiting the store. You mentioned your new packaging really flat, less waste. Youre recycling some materials here youre also doing a buy a pair, give a pair eyeglasses talk a little bit about the esg and where you feenind Business Value in that. Its not something that we lead with, with our customer communications, because we recognized that people care first and foremost how do the glasses look on our face, the contacts feel on my eye, what is the price, the quality and service. But it is the number one reason why people come and work at warby parker if we want to be Customer First we have to be employee first having a Strong Social mission and now providing over 5 million pairs of glasses to people in need around the world and even in the states and cities like new york, philadelphia and baltimore, that enables us to recruit and retain the best talent. Neal, its a pleasure talking to you thanks for coming in. Thanks for having me. A programming note as we go to break, all day on cnbc do not miss some very big interviews from our evolve conference out in l. A. Including the ceos of chipotle, walmart, Activision Blizzard squawk on the street is back in a moment. Dow is dow58n new york state is taking business to the next level. Supporting Innovative Companies that will shape tomorrow and Building Workforce development and tuitionfree College Programs to generate the talent companies need. With a 150 billion investment in state of the art, modern infrastructure, and a nationleading commitment to lowcost clean energy, new york is doing more than any other state to build for the future of your business. New york state, the state of the future. Learn more at esd. Ny. Gov. Time now for our etf spotlight. Lets take a look at the spidr ticker xlk climbs a day after the record close for the broader sector tech stocks on pace for their best in a decade the tech sector up 41 in 2019 handily outperforming the s p 500. Carl lets get a news update back at hq. Hi, carl, good morning, everyone heres whats happening at this hour two federal jail workers who were on duty the night Jeffrey Epstein killed himself in a new york city jail were arrested on federal charges this morning thats according to the new york times. This relates to their failure to check on epstein during the night. Sweden has dropped the rape investigation involving wikileaks founder Julian Assange who was currently in prison in britain. I it follows a ruling in june that assange should not be detained a former u. S. Marine in a moscow jail at least until the end of the year as he faces espionage charges. Paul wheelen was arrested at the hotel in the russian capital last december and has denied the charges. And british Prime Minister Boris Johnson there, ahead of a televised debate ahead of jeremy korb nz and he practiced boxing moves before slipping on a pair of gloves with the words get brexit done written on them. Not something you see every day. That is our news update for this hour david, ill send it back to you. Thank you when we come back right here, is it time to buy this dip in home depot. Sharts down over 5 . Well debate the dow component with the company finishing up its Conference Call in the last half hour. A lot more squawk on the street for you. Stay where you are driverless cars, or trips to mars. No commission. Delivery drones, or the latest phones. No commission. No matter what you trade, at fidelity youll pay no commission for online u. S. Equity trades. At fidelity youll pay no commission [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu the amount of Student Loan Debt i have, im embarrassed to even say. We just decided we didnt want debt any longer. I didnt realize how easy investing could be. Im Picking Companies that i believe in. I think sofi money is amazing. Thank you sofi. Sofi thank you, we love you. Home depot shares under pressure this morning, this on weaker than expected quarterly sales. It was hurt by lower lumber prices and the company cut its fullyear outlook. Joining us wedbushs seth bashen i know youre both coming off the Conference Call. Seth, give me your impressions from the call . I know they spoke about lumber prices and the payoff on the Strategic Investments theyve made not coming quite as quickly as they thought. Whats your take thanks for having me. As it relates to the quarter, it was a decent quarter not as strong as expected the primary shortfall on delayed benefits from Strategic Investments as you mentioned and those should come through over the next few quarters. Were talking about a Company Growing sales nicely and gaining share in the marketplace i think home depot is pretty well positioned. John, your take yeah, i think Comparable Store sales were a little bit lighter but were still believers that home depot is a core, longtermholding here. You know, we see initiatives to grow eps growth ahead like the pros and tool rental and everything theyre doing in delivery and margins game came in in line with expectations we believe the backdrop is still favorable for these guys. What would give you pause i mean what you know, they did obviously sell a bit less than had anticipated during the course of the quarter, jonathan. Is there anything that would give you pause you heard nothing on the call to do so . You know, what would give me pause is if we were seeing a dropoff in terms of big ticket spending and saw an acceleration there. Big ticket was up 4. 8 , up 5. 5 , excluding the impact from hurricanes, so, you know, we feel good about that big ticket spend is obviously important for the pro customer, so, you know, were pleased there. I think whats going to be key to monitor Going Forward is, is getting some of these pros enrolled in the b2 b website seems like home depot needs to unwind some of its legacy i. T. Systems there. But, you know, i think those benefits should spill over into the next quarter and early 2020. Seth, looking within the quarter at the comps, they went from 4. 1 in august to 3. 7 in september to 3. 1 in october. Is that intraquarter deceleration common . Its not uncommon, but in this case, theres a calendar shift that impacted their october comps by 100 basis points they shifted a week from this year versus last year. So on an adjusted basis we didnt really see much of a deceleration in fact, we think about the quarter, really around 5 , which is pretty much what theyre guiding to for the Fourth Quarter. Were not too concerned about that lowes reports tomorrow morning. Im just curious, whats home depots competitive advantage in terms of driving foot traffic . Jonathan yeah. You know, i would say obviously they do have a better grip of the pro here they have around 45 of their sales coming from pro customers. Lowes is closer to 20 to 25 , although they have been making, you know, headway there. I would say home depots advantage is really with the pro and everything theyve been doing in the omni commerce framework, right i mean on the call we just heard about traffic up in the dijjal channel as well as conversion better, so obviously lowes has some issues there historically they are making investmentses there. You know, we feel comfortable with our comp estimate for lowes tomorrow at around 3 i think that captures some of the deflationary lumber pressures, offset by maybe some headway theyre making with the pro. Seth, our retail correspondent Courtney Reagan was telling us last year black friday was a record breaker for home depot why is that such a big holiday for a home store yeah. Probably each of the last three years weve seen recordbreaking black friday sales for home depot. They continue to get better and better at merchandising and marketing the black friday period what are they doing . Theyre offering things like power tools at very cutrate prices they are driving traffic to the stores with events centered around specific items. Theyre starting the black friday sales earlier and earlier. Weve seen them kick those off and that will benefit them Home Improvement has become a bigger category for black friday than ten years ago. Mom of twin boys, i will tell you they offer the kid seminars the beginning of every month, to me it looks like early branding. How important is it for them to be building these younger and younger audiences, jonathan . Consumers . I would say millennials account for around 20 of home depots Customer Base and theyve been leaning in heavily there. You know, i think theyve done a lot of focus groups and theyre learning from that generation have really guided some of their store refreshes, some of their website redesigns, their mobile app, et cetera i think as they appeal to that millennial customer, thats going to be important, especially as household formation ticks up were seeing from our work around Residential Construction more Building Permits outside of city centers i think thats going to help with the affordability equation and make homes more affordable for millennials. I think theyre doing great things there were going to leave it there for now. Appreciate your time thank you. Thanks. Were mun touring the public hearing in the house impeachment inquiry down in washington, d. C. Elon is keeping an eye on that for us what have you learned . Contessa, republicans have just begun the 45 minutes of questioning from the ranking republican on the committee, devin nunes and his chief counsel. The witnesses testifying today are jennifer williams, an aide to Vice President mike pence and alexander vindman, an official at the National Security council. Vindman has given some pretty personal testimony so far this morning. He was born in ukraine hes a decorated army veteran. Got a purple heart in iraq and spoke emotionally about his service to the country dad, im sitting here today in the u. S. Capitol talking to our elected professionals, is proof that you made the right decision 40 years ago to leave the soviet union and come here to the United States of america in search of a better life for our family do not worry i will be fine for telling the truth. He also talked about the implicit power dynamic in that july 25th phone call between President Trump and president zelensky he said it was clear that in order to get a white house meeting, zelensky needed to deliver on the investigations. I come from the military culture, when a senior asks you to do something, even if its polite and pleasant, its not its not to be taken as a request. Its to be taken as an order now vindman also flagged the fact that burisma was also brought up during that july 25th phone call he said that the word was not included in the official white house record of the call, but during the hearing this morning, he said that he didnt believe that was nefarious and that it was, quote, not a big deal back over to you elon, thanks for keeping us honest on the developments on the hill this morning. As we go to break take a look at shares of apple moving a bit lower this morning after hitting another alltime high in earlier trade. The Company Announcing a surprise event next month here in new york city that will honor the companys favorite apps and games of the year. Apple is not expected to release any new products at that event but well watch it closely dow down 74. 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Lets get over to tcme grou in chicago and Rick Santelli with the santelli exchange. Thank you i would like to welcome peter chur, Academy Securities thank you for joining me, lets get right into it. You have arrived at the intersection that many have that phase one in essence is a truce. I dont disagree why dont you explain why you believe that is the case and how will that truce affect further negotiations on more difficult issues that sounds great i think reality is were not going to get a true phase one deal its delayed too long. Theres too many contentious issues i dont think the president wants a big deal until end of q1 or early q2. We will get a trade truce, things that china needs. I think it will be bla, not as good as the markets would hike but that should be enough for now. Move from checkers to chess, shall we okay lets make some assumptions and say we get a trade truce, theres no additional tariffs placed and this president wins reelection one year from now. Then wouldnt that truce be a strategic error by the chinese i cant imagine how this president will negotiate without the issue of a reelect in front of him i think it would get sloppy at that point. I think were already seeing Companies Make sure they have backup plans for china i think were going to have less business going on with china Going Forward regardless of whats going on and it keeps the pressure on china to be good about hong kong. Right. China has actually had some shown some restraint lately in hong kong. We dont want that to escalate having some pressure put on china is not a bad thing for the globe either now, as we move across the globe and think about issues like this and how they affect the big elephant in the room and that is capital spending, i look towards Christine Lagarde beginning her term at the ecb and everybody, including us, believe that her big thing is going to be to extract some fiscal stimulus, especially from germany. How long do you think Something Like that is going to take i think the markets are a bit impatient. You know i dont see Something Like that happening for six months, maybe out to a year but i think shell show some progress within the first few months well get a sign whether germany is willing to back down, france is willing to support that i think theyve done, you know, quite frankly more than enough in Monetary Policy i hate the idea of negative Interest Rates, the qe is problematic. They have to ween themselves off of Monetary Policy, focus on fiscal stimulus. I think she has more support than people realize and the market doesnt need a deal, they just need to see signs that europe will come to the table and germany in particular will relent and let fiscal stimulus proceed. You know, peter, i had johnny fine from goldman on last week and we were discussing triple bs and how large they are and if theres any credit deterioration. We could see some big moves as triple bs move to junk my question to you is, that certainly doesnt seem to happen even though junk spreads based on bark clays arent doing as good investment grade, they both seem really well behaved your time thoughts theres a lot of money into credit, double b credits are fine, all the triple b that were weak that we have been watching have been doing the debt diet improving their balance sheet. At t announced a watch i think this will be a conversation going on for years because i think were going to see more and more Companies Move to triple b and i dont think they dont need to be single a, you will see triple b and lots of opportunity to talk about triple bs. To talk about that they have good credits, levers to pull, good balance sheet. The weakest companies have had a turnaround thats important Going Forward cant get overly concerned about triple bs and let it wreck our investment pieces. Always interesting to hear your thoughts. Thank you for joining me david faber, back to you thank you, rick. Lets send it to jon fortt with whats coming up on squawk alley. Jon . Hey, david. Qualcomms Top Executive leaders are here in town in new york for the first analyst day in four years, leading the pitch that the legal and regulatory hurdles are behind, and time to focus on the technology and growth. Should investors believe it . We have the qualcomm ceo Steve Mollenkopf talking about it coming up on squawk alley. This is an incredible milestone for 10x on our journey to mastering biology to advance human health. We can imagine a path to curing cancer, addressing infectious diseases, and figuring out alzheimers. And i believe our team at 10x will be instrumental in making this the century of biology. Were just getting started. Together, were going to do some amazing things. Welcome back to squawk on the street. I am rahel solomon it is another day of record highs for the dow, s p 500 and nasdaq composite all three set new inter day highs at the open, but sliding since then health care, tech and financials the leaders. Discretionaries taking a hit for retailers and disappointing results from home depot and kohls this morning. Another sector under pressure is Energy Crude Oil down strongly for a second day, taking Energy Stocks along for the ride wti crude is down 2. 2 both refiners and producers are getting hit. Among the biggest laggards, holly frontier and others. Back downtown to you guys. Dow down 107 billionaire activist carl icahn urging the sec to rethink the role change for proxy advisers he said while i have the utmost respect for the laudable work the sec has done over many decades, i believe the current proposal is a dangerous misstep that will have disasterous repuree cushions for the economy. They put new rules in place to give companies a chance to review proxy materials before theyre sent to shareholders you can see why carl wouldnt like that. Yeah. I have spoken although not recently about undue influence in some ways proxy advisers have, given the large amount of passive money voted on in important decisions about the composition of various boards as you might imagine. Mr. Icon often involved in those kinds of fights. These Advisory Services are paid to a certain extent by the hedge funds that participate often times in contested situations. And they have a great deal of influence. Less than they might have in the past, the government in operations of some of the large funds or passive investors like blackrock have been significantly bolstered over recent years, they take more interest you can imagine how many governance issues you have to go over when you own thousands of companies and stocks thereof this, carl, would have the effect of making them liable for any misstatements, and there are plenty of them particularly because theyre not written often times by the most sophisticated professionals out there. Again, it goes to their judgment, but you have to wonder whether they should be at risk for misstatements to the extent that may be the case under the sec rule in his argument, he seems to be indicating the companies would then have influence over the final report that the proxy companies are putting forth. In your opinion, would that be the case are they likely to say im sorry, you dont like that, well change it . I dont know. The companies themselves often complain, contessa, about misstatements in the final report, but thats unclear to me they do need to be regulated in some fashion beyond where it is now, but im not sure this is the answer. Well see what kind of response he gives to that piece. Meantime, sell off in place, down 125 on the dow. Coming up in the next hour, an exclusive with Steve Mollenkopf, live from analyst day in new york, the first in several years when squawk alley begi ia mentnsn through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. I cowe can do theyour screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. vo the flock blindly flying south for the winter. They never stray from their predetermined path. But this season, a more thrilling journey is calling. Defy the laws of human nature. At the season of audi sales event. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. It is 11 00 a. M. At qualcomms analyst day in midtown manhattan and 11 00 a. M. On wall street squawk alley is live