Transcripts For CNBC Squawk On The Street 20240713

Road map begins with teslas truck rollout, unveiling first all electric pickup. The cybertruck and it is nothing like youve ever seen before. Wall street looking to snap a threeday losing streak. Stocks seem to be set for a positive open as chinese president xi jinping says beijing wants to work for a trade deal and a roller coaster week for retail today it is gap, nordstrom, williams and sonoma and foot locker were going to start with tesla, unveiling first ever pickup truck last night elon musk says it will have a starting price of just under 40k. Production set it begin in late 2021 musk touts the futuristic design, the armored glass. As you might know by now, a demonstration to show how bulletproof the glass was did not go according to plan try to break the glass, please yeah sure . Yeah. Well, maybe that was a little too hard man, this is getting talked about a lot this morning stocks down, bernstein says it looks weird. Like really weird. What do we think well, i mean, since they announced this, since musk announced it, the stock is up 37 points from 317. The cybertruck to me seems like still born when you look at it look, there is no accounting for taste, maybe some people like the look of it i think what is important and phil lebeau went over this, it is not going to dent the ford, gm, chrysler, dodge lock on the best part of the entire market i think it is going to be a bit of a bust. Im calling it the edsel, thats my name for it. You dont mean that in a good way. No, the edsel was a bummer. I look at this thing and i do think that it there is a delorean aspect to it, that was a niche product. I think the trick to trucks is that they all look like each other. Thats what people want. And this does not look like anything i dont know what it looks like. Bernsteins point, guys, is that it will be niche in their view theyre talking less than 50k units. Yeah. Right thats not going to move the move the needle so to speak in terms of sales. It is going to continue to be the focus on what were focused on now, right . I assume so they say on paper, jim, the specs look good. Price is decent. Six passengers, four door and claims at least that the stainless steel alloy is i dont know, did musk say bulletproof . Well, the window demonstration, im going to say that was a suboptimal launch that rocked the glass splintering. I dont know you expect a lot when they do these things you do a rollout, a tim cook rollout or like elon musk rollout, you tend not to see the it is not a reason to buy the truck, how about that . The windows splinter i dont know dont we want like pickup and, you know, dont we want semitruck . David, come on you know when you go to buy a pickup, which im sure youve done many, what you want is a tailgate that is good and you want torque and power and all those things i need a lot of torque. I focus on torque. I dont know where the torque is but, yeah, you dont want people throwing rocks at you when theyre in the back seat i want pickup trucks that i can use that are, like, you know, that are strong and powerful and have big ads during the nfl commercials. Yeah, built ford tough. It does remind us yesterday, mary barra said their First Electric pickup will go on sale in the fall of 2021. So were going to get a showdown, assuming both of these hit the floor at the same time we like trucks that use a lot of gasoline, that smell like diesel, and are powerful and i think this idea of etruck runs against the ethos of pickups, just raw torque you guys are talking very deep voices, tell you thats what i want. Yeah. Chevy truck chevy e truck. E truck . Come on. Thats not what we want. No. Electricity, thats not for us we like gasoline. Coalpowered truck. Yeah. Thank you, david. Carry the coal in the back. Thats good, david. Its friday lets go on can we go on to stocks now lets talk a little stocks as david says president xi says china wants to work out a phase one ingredient on the basis of Mutual Respect and quality, goes on to say we dont want to start the trade war but were not afraid when necessary well fight back. We have been working actively not to have a trade war. Here is the president on fox a few moments ago. You have a deal potentially very close, he wants to make it much more than i want to make it im not anxious to make it were taking in hundreds of billions of dollars in tariffs we never took in ten cents we are not paying, like they fed the line, the media fed the line about us paying. Jim said he told xi that this cannot be an even deal and said he didnt say whether he would sign this hong kong resolution that just got through Congress Said we are standing with hong kong, but wasnt to sti also wa with president xi. I dont think you can do that i think the president is uniquely doing some sort of what Gary Friedman from rh talked about, art of the deal, it is playing out. Look, the president actually follows a lot of companies that report earnings. Almost all the calls there is just particularly in retail, people are moving away from china, here is this he wants to string it out he keeps thinking that the longer this goes on, the more the companys move from china. Which increases his leverage hes got the leverage. President xi, i think the Mainstream Media really loves a solid communist dictator i think that the the idea, he doesnt want even. He doesnt respect china he also disrespects all the president s who played with china in a way that people that the chinese like but i dont know, really a deal if he hates them what is the no. So what happens once we get closer to december 15 . Are you expecting no signing, and then a delay of those tariffs . Or do they go into effect i think the market is fine. You got to keep stringing out the market, the higher the we had three days that we didnt go up because we lacked the Statement Like we got this morning on fox friends, which is obviously the venue of choice now. What do we get . There is no we got listen, there is going to be a deal, it is going to be fabulous, but there is no deal and it is not good. I dont know who else gets away with saying that can you imagine . Nordstrom was fabulous the numbers were terrific. But the problem was the numbers were awful and it was bad can i get away with that or will someone send me an email saying thats not thats not right not a lot of direction. Not a lot of direction at this point in terms of trying to understand where i know there is not a lot of respect between navarro and china. Mnuchin, tremendous respect. Remember, i keep telling you, this is the apprentice these are the this is the final episode. And one of these guys is going to go down the elevator and get in a yellow cab. And i think it is not going to be the navarro camp. I think it is the other camp theyre headed down the elevator unless we use that memetaphor, people dont understand the president. Are you specifically calling for either mnuchin or predicting mnuchin or lighthizers resignation . No, i think mnuchin likes his job too much he can be sent down the elevator and not get a china deal navarro is adamant, you got to solve the seven deadly sins which include stopping fentanyl and stopping dumping the president is deeply committed to the navarro agenda. Hes not committed to doing more trade. There is a wing in the white house i call the sportsman wing, the wing at the thornton wing, the hank paulson wing. Henry kissinger, they want trade with china no matter what. There is navarro, we want wholesale reform and i think the president s more committed to wholesale reform than they are than he is to getting a lot of spoilers. Microsoft is now selling Mass Market Software to huawei as they said yesterday. Something that even Chuck Schumer now says is wrong and should not be happening. I dont think Chuck Schumer, yeah. Thats not thats not national security. It is just software. To make your Computers Work better thats a good thing for the trade imbalance. I dont think anyone is really in the republican side against it sorry you cant take any direction whatsoever from what was said there. Jim technically had a more, id say, pretty decent record so far in terms of relying on his sources to try to figure out what is going on meanwhile, jim, you seem to think the market is okay with where we stand even the with the prospect of tariffs going on the 15th. I want to isolate macys and kohls we had a great number from nordstrom and the rack is doing well ross stores once again, value doing very well. Foot locker is fine. We are not being able to prove that kohls and macys represent america. Almost everyone else does and america is very strong those companies are great. Their Conference Calls are uniquely all positive. The nordstrom Conference Call was, like, joyous. It has been so long. I felt like shopping were going to get through williams sonoma, ross stores, gap, foot locker cramers mad dash, countdown to the opening bell upgrade for uber today this news on bridgewaters put option on the markets. Look at the premarket here squawk on the street continues from a minute. 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. Jims wrapping up his week out west what a week its been. It is our last Cross Country mad dash, for now, on this friday. Retail has been a big feature this week, jim, of course, you just mentioned sort of the outliers, kohls and macys. Tell me about williamsonoma. It is interesting because the call, i felt was actually pretty good but spent a lot of time talking about tariffs and how the tariffs hurt the beginning of next year. And i think that was the only takeaway negative, but the only one that mattered. I think thats a mistake i think the stock could turn up. Anything that indicates there is real problems with tariffs has led to selloffs this company has done a lot to be able to make these issues mitigated. But all the analysts, almost every single one, focused on what the tariffs are doing i felt they wore down the story and made people feel like you got to sell it im not buying it. I think you wait three days and you buy the stock of williamssonoma. Do we know how much of their product is sourced from china, jim . Do they give us a sense . Theyre talking about half. And then theyre saying that that will be in half next year it is really interesting that some of these companies were so heavily china. Rh the same. This is where the tariffs should have hurt them, but Williams Sonomas Gross Margins went up thats why im reluctant to join the crowd of furious selling because i think those people ought to rethink their view given the fact that elm, west elm had 14 comps on top of 7. Thats remarkable. The sellers refuse to think about anything other than tariffs. Their head is in the sand. The tariffs havent hurt them. It is not wayfair. I think they did a good job and the sellers are trying to just fearful of more tariffs by the way, jim, it is worth correcting, President Trump saying hundreds of billions in tariffs, i believe he said on that fox friends clip. I think it is about 7 billion a month, significant amount of money, but it is not hundreds of billions yet this is the facebook problem, isnt it if that appeared on facebook, would Mark Zuckerberg have to reach in and say thats affecting a small group of people, cambridge analytica. No one knows what to do. Hes prone to exaggeration thats fair to say yes yes. I think it is. Stay right there got to divide by, like, eight. Divide thats good policy, divide by eight. Whatever number. Divide by eight thats our new rule. Ill remember that. Stay right there we got a lot more squawk on the street. I mean you, jim, and you, viewer, and everybody else happy friday were back after this. 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 wean air force veteran made of doing whats right,. Not whats easy. 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Volkswagen Just Announced a gigantic deal with china i think there is a turn, larry kudlow would say green chutes in europe it is odd because china is not doing that well. But you take a company like lamborghini, wow, theyre represented here in dream force, theyre selling so many cars to china. Thats a classic play. Remember those cars cost 400,000 and ive driven one with my wife they easily go 170, 180. Theyre just doing so well in china. You got to think, wow, theyre just china must turn. I dont think they have. You add up the idea that tesla is there, people are feeling more robust about the auto market in china, thats new. And it is certainly not ford maybe not what mary barra is seeing were going to keep our eye on that, see what the figure comes in for the u. S trying to get some impact of these rate cuts. La guard, jim, gives this speech, first major speech after three weeks on the job and she really talks about a policy mix and some arguing maybe it is an admission that negative rates didnt work that well or out of gas. Negative rates just are i think to me much more of a ploy of stealing our share. And thats why i think the president is really not that articulate about, thats what this is about. Negative rates are just a way to be able to capture sales they dont work any other way. I think rates show a lack of confidence, makes us feel like the Banking System over there. The largest bank is i dont want to imitate how banco santander. And thats an odd thing given the fact that the german banks and french banks used to be very big. They need to fix their Banking System it is hard to get alone and try to get it down you cant. Keep the euro down and try to fix the Banking System and you get more robust europe, but there were good car registration numbers this week. Negative rates continue to befuddle many people you can talk to people can come up with reasons, but they still really do scratch their heads as to how they got there and how they get out of it i look, they got to have they have to break down some of the regulations. They absolutely have to make it so that they settle brexit remember brexit . I do. An election they got to solve brexit. Too many people think that brexit in europe will lead to four or five days of chaos i agree. Nobody knows what the duties are. That brings to mind this production out of bridgewater that the journal is reporting on billion dollar bet that the s p or euro stocks goes down by march. Bridge water does say any one position cannot be used to deduce the motivation behind that position. But we heard dalio talk pessimistically about social order, markets, currencies. Yeah. His last interview on our air was a little disjointed, i thought, in terms of him trying to articulate his overall views. It wasnt about the market as much as about the future of capitalism bridgewater as leslie picker who followed it pointed out didnt have the greatest year hasnt had the greatest year this year. I dont know, jim. What is interesting is at least theyre doing it with wall street banks some people wonder, they dont leave any footprint in the marketplace whatsoever people mentioned that to me. Where are they if theyre so big . In this case, the journal reporting theyre doing it with names we know like goldman sachs. It is refreshing to have a Hedge Fund Manager say negative things and put a bet out rather than just kind of trying to say that hes worried about world capitalism youre right, david. He has a very ethereal view. Hes talking about the collapse of civilization. And hes buying puts on civilization to me, it has been a suckers bet. I would rather by the calls on civilization that Warren Buffett always does. Call, not necessarily options like the najarians, not that kind of unusual option activity, so to speak. But i think that buffetts side of progress is better than dalios side of lack of civilization jim, as we sort of wrap up retail, you got two camps this week, you had walmart, lowes, target, good, and macys, depot, kohls bad, and then the final ones in today. What is the what would you say the takeaway is from all of that i think some i think there is weakness in apparel particularly in womens apparel. Thats been called out by many i think there is mall weakness, the gap was terrible last night and splitting the gap into old navy and gap, i think it is just a deck chair, titanic deck chair. But i do believe that if you got an off price strategy, like, by the way, nordstrom had, youre doing okay it is have, have not if youre using a lot of tennell lo technology, youre doing incredibly well. Split it between louis vuitton, uses a tremendous amount of technology and tiffany which uses very little technology and is mall based and you get a situation where anything that is in the mall that is either destroyed or taken over. That macys quarter was terrible anything you liked about it um, um, um okay. If you give me until, like, when i come back, i might have something. I mean, like on monday maybe ill go to macys, see something i like maybe a sale they have constant sales you have to do everything low price. You have to do online. Target, target, walmart, costco, and, by the way, can i say for the record home depot wasnt that bad everyones trashing the depot. People still had better same store sales than lowes. It was a bad Conference Call and a good quarter the Conference Call itself was very much a disappointing versus the usual Conference Call. Their Sales Outlook is the lowest it has been in several years for the full year. But youre right comps 36 is pretty good, given the overall state of retail. S p 500 at the cnbc real Time Exchange and the big board shares highlighting china. David, jim mentions lvmh that puts into focus a week of m a. Tiffany. Pay pal. Yes. Xerox, which i know hell get to and were still waiting on schwab. We are. The Schwab Ameritrade talks, i wish i had something offered i find it odd that i have not been able to sort of unearth anything that isnt out there. We had reporting from becky quick yesterday about a deal being very close the wall street journal following up yesterday, later in the day, with its own reporting of what it reported as on again off again talks. That could lead to a deal very soon stocks are backing off a bit obviously we all know Td Ameritrade was just crushed on that infamous that day when they all cut commissions, schwab leading the way and ameritrade following. They said 26 billion in the journal will see you expect they got a good market check yesterday, jim. They wanted to see how things would trade. Didnt look too bad. Schwab shares were up nicely yesterday. But you would expect they would want to get something out there if it was as close as it was thought to be. Im still waiting people know how to reach me. No thats not it either i dont know i got nothing. Im going to text you now see if i cant get you to say something. There is, david, this is astonishing that they announced this they say it is going to be news after 6 00 and then they say it will be coming im detecting a bit of amateur i amateurism. Leaks happen. Stories get out there. It can be a bit earlier than had been anticipated i would love to get a sense, again, others reporting hes been on again, off again, there is some antitrust that always can throw a board has to think about those kinds of things carefully the additional time, and effort that a deal may need in order to go through a tough regulatory process. So there are any number of areas you can imagine would be sort of key points, not to mention price, which always is one or even social issues, but it is not as though the strategic rational for a deal is lost on people, jim. Oh, no, look, i think that the reason i say that there is a lacking just not clear about this is a great deal. Why dont you announce it . Unless one of the parties balk this is fantastic for the industry taking out a big competitor, saving huge amount of money, making a colossus out of Charles Schwab and doing what is necessary in an era of robin hood and Great Technology bein against them robin hood, 500 million in three freeh mon free money, almost softbankish in terms of throwing money at something. They need to do this because of robin hood i would love to see a deal monday morning how about that okay. That sounds fine to me im hoping i can get in there and get some reporting done. Is it still about this if there is anything to update, yeah, i know im getting, just not the right texts. Okay. How about this piece, bloomberg did an opinion piece that essentially schwab broke ameritrade to buy it knowing that zero commissions would hurt them more than it hurts themselves not nearly as important part of the business as schwab. A lot of talk about robin hood, equal to etrade. Yeah. How much money is robin hood taking in, jim do you know . In terms of what they actually what their funding is no, but you no he, david, thats that same model of Revenue Growth, no earnings, that the venture capitalists love out here. They love to talk about losing money. It is, like, wow, i lost even more money i lost big money in door dash. Thats why were going to kill grubhub. David, it is this whole rush to lose money which of softbank pioneered. Yeah, well, if they didnt pioneer it, they certainly brought it to a new level, didnt they . Yes still, though, even after wework, and others thats still the discussion i know youre being somewhat sarcastic are people really talking about that or do they look for you return on investment of capital and a growth trajectory that gets you to profitability sooner now . Yeah, it is about Revenue Growth and if you get Revenue Growth, people feel profitability follows. Look, schwab developed a model of taking Revenue Growth by t e taking in assets it worked. Robin hood is kind of, listen, if i get millennial accounts, it will work. So phi, same thing millennials are not going to the traditional. The millennials are going to what is free thats the pay pal deal. We didnt talk nearly enough about it thats honey when you hear about it, millennials only use it. I talked to people millennial kids lisa ellis, i heard 13yearold liz, she talked about her 13yearold loving honey younger people are in a different world. Younger people use we think of robin hood as someone who robbed from the rich robin hood is someone who robbed from schwab, etrade and ameritrade thats robin hood. Robin hood in tights right a lot of robin hood movies, hard to keep up. You know what was great yesterday . I read through the whole malone interview, i watched it, i did it again he trashed viacom. That interview, the whole interview, made me think so differently about so many so many entertainment why is that guy not afraid . Was he saying go to ireland if Elizabeth Warren wins . No, he didnt say he didnt rule out moving to ireland. He obviously did say support bloomberg if that was a possibility and made it clear hes not a supporter of President Trump to john malone youre not alone i heard from a lot of people who watched the entire hour and eight minute interview, annual interview with john malone, of course so many things we dont show you on air that if you are really interested in the changing landscape in terms of how content is distributed here and around the world and who the winners and losers will be and how things change, i certainly recommend listening to it. And in fact, you know what, i did want to come to a couple of things i thought we would highlight again because, you know, charter has been a great stock this year. Over 100 billion market cap company. I had the opportunity to talk to malone about it. As theyre a very large shareholder at liberty and tom rutledge, the companys ceo. This idea being, and we talked about it, jim, that if you shut down the video business, you actually make more money heres what malone had to say in terms of explaining why that might be the case, and then you listen to rutledge respond it has been sort of discovered that actually margins improve as you lose video customers and you become less capital intensive. And so if you shrink the video base, and dont try and innovate the video platform, right, your margins go up, your capex goes down, your leverage Free Cash Flow goes up and your stock takes off. Yeah, well, that is the narrative. And it is true, but i actually still think that there is margin in the video business. And it is not as great as it is in the broadband business and, yes, it is a little more capital intensive, but becoming less so. So i think that having a lower margin video business attached to a higher margin broadband business makes a lot of sense, as long as there is margin in the business i thought an interesting back and forth there. We pieced them together, jim but sort of giving you a sense charter, a great performer this year far above those prices that at least verizon was considering when it was talking to them about a potential purchase sometime back or softbank, of course, as well. I thought it was fabulous the interview talked about how you want to be in distribution david, the apple the love for apple, it took me by surprise. How about you . Yeah. Me too i thought he introduced the new concept, not, well, a way to think about apple that i hadnt necessarily been thinking about it, which is they have all the connections, we know that. They can sort of get a sense in terms of how this thing is penetrating and what people think of it, that is apple, the apple product. Streaming product. And then make their decisions about how much they want to spend on content as a result of what theyre seeing. It is going to be some time. And then turn it on or off it a certain extent based on that, jim. I thought that was interesting he was positive certainly about their ability to at least gather subscribers, given theyre offering so much fro and so many devices, connected devices out there already. I thought he hit it viacom went ballistic. Viacom talked about how they really had a Great International business, that malone didnt know what he was talking about, they were very defensive and really felt he trashed them unfairly it was a bit of a backhanded, sherry didnt know what she was doing, redstone, splitting the company, being stupid. The Company Knows that it well, viacom knows it was not a great idea to split. David, the vitriol toward malone it was stark he tells you what he thinks, hes always been a good interview in that way for all the many years ask him a question, get an answer it is his opinion. He did say sort of he means at scale internationally it is an important business for viacom i think he was talking that they still dont have the scale globally that he feels you need. Comes back to that time and again as you well know, jim, as being a key, certainly Business Models and current age where it is not just about domestic subscribers if youre going to go direct to consumer or even if youre not and at t also pushing back, i should add, as well, against the comments about hbo saying this is not a replacement for hbo, service hbo max, this is about getting new subscribers with an incredibly deep library. And a price point they feel is going to be viewed positively and so, again, as you might imagine there, also significant pushback that i received during the course of the day as you might imagine, given his strong views that hbo max is not necessarily going to be a product that succeeds. One other area we did talk to malone about was what is going to happen in terms of broadband . You heard rutledge talking about broadband, the higher margin product. He introduced this idea as well that youre going to start to see the potential for bundling on the broadband side. I thought it was an important point, we didnt air it yesterday. Take a listen. I would also encourage them to continue to do it as a Value Added Service for those people who are still in the big bundle. And only make it a direct Consumer Product for those that have already made the decision to cut the cord on distributor and i would encourage them to look to their existing distributors to be partners in that those existing distributors to the degree they want to stay in the video Delivery Business will start to offer bundles of direct Consumer Products. A world in which discovery and hbo, for instance, are brought by people who already cut the cord but theyll buy it through charter. You get that. It is an interesting world that is still coming. On the broadband side, you can create small bundles of these direct to Consumer Products if theyre available, put them together at some sort of discount, potentially, split a revenue to some extent and obviously gain more subscribers. Some interesting thoughts and i encourage people to watch the entire interview if theyre interested john did go a lot of places. Tremendous subtext i felt he says he wants international, thats where the growth is wants companies to have tremendous distribution, be able to capture the names, what they can do isnt that the description of the sky comcast combination, Parent Company of this network. To some extent it is, it is sky added an Important International distribution component for comcast, no doubt about it, with content as well and obviously were going a different route at comcast in terms of direct to consume we are peacock, the ad supported, that will be ramped up much more slowly, the spend going to be more modest than what youre seeing among the bigger guys. Great interview thank you markets relatively aimless here semi having a little trouble getting out of the gate. To bob pisani. Flattish week overall really mixed results, retailers up and down. Take a look today. Somewhat inconclusive on the trading directions here. There is the semis up fractionally, retail doing a little bit better. Banks better materials, industrials here. Overall modest upsides i think the important thing on retailers, a lot of them were, well, expectations were pretty low. Nice to egap mosee gap on the u. Gap, put up the retailers here, essentially affirming the full year this is a sign of low expectations there and if you see were rust tru trust me, theyre trading on the upside f you look at the retail winners, it is a small group one company, target and then the discounters. Costco, ross, tjx and walmart. These are your winners this year when you compare them to the group of losers that are out there, it is pretty stark. The important thing is the apparelmakers and Department Stores have market caps now that are essentially midcap, im being generous, you can argue the market retail caps out there, gap is a 6 billion market cap why does that matter target, 64 million market cap for target gap, a tenth of the size haines brands 5 billion there nordstrom 5. Macys 4 you see whats going on here these are becoming very, very modest impact on the overall markets because they have been down relentlessly, 30, 40 some of the stocks throughout the year very, very difficult for them. Finally, want to comment on the wall street journal article on bridgewater, taking out what looks like very large put positions. A little less here than meets the eye, i think it is very cheap right now to buy protection here is your vix at 12 here is some of the futures contracts, december, january, february, march, and you see while they go up, they only go up modestly, 15, 16, 17. This is hardly apocalyptic going out into march what does this mean . If you buy 1 of your firms assets to buy protection this cheap, that doesnt seem luke a crazy idea that seems luke a rational thing. It is cheap to buy protection right now. Puts are about as higher and the vix is as low as it is going to get right now you dont have to go into the money to be profitable this is tied to volatility volatility goes up, the value of the puts goes up as well i dont think this is apocalyptic but mathematical calculation probably makes some sense. Back to you. Certainly bridgewaters reflects their Statement Today thanks Sacha Baron Cohen accepting the International Leadership award from the Antidefamation League last night he used his keynote speech to tear into social media giants like facebook and Mark Zuck Zuckerberg in particular. All this hate and violence is being facilitated by a handful of Internet Companies that amount to the greatest Propaganda Machine in history. The greatest Propaganda Machine in history lets think about it facebook, youtube, google, twitter and others, they reach billions of people the algorithms these platforms depend on deliberately amplify the type of content that keeps users engaged. Stories that appeal to our base instincts and trigger outrage and fear cohens point is that without universal truths, its comedy jokes dont land it is not as funny if you dont get the original reference, but it goes to impeachment this week people cannot agree on basically the facts we heard. The facts we hear, for example, yukraine was not involved in any way in terms of the 2016 election. Youre right he points to the fact that they benefit from stories that are specific to whipping up the emotions of those who are reading them, even more so, because then it will result in more and more and more and that seems to be part of the case and then we have such a different response from the various platforms in terms of what they will and wont police. Right and, jim, of course, yesterday, dow jones saying, according to sources, facebook is sort of adjusting their stance on political ads. Yeah, look, this is really important. Sacha baron cohen, much more serious guy than i thought the guy is a total heavyweight hes echoing, believe it or not, Marc Benioffs line. This is what benioff has been preaching. Im out here because of dream force. Hes talking about the idea that, well, if facebooks pernicious and i think sacha baron is taking his cue from directly from benioff and theyre great friends. They are . Thats interesting yes, great friends. Very close interesting crazy times. Were going to learn a lot more in the months to come as we get closer to the election season. By the way, check out our podcast if you can, you can listen to the opening bell hour of squawk on the street wherever you listen to podcasts. Dow up 57, s p at 3110 dont go away. One. Two. And three is how many times carson has beat cancer. Yup but carson is alive today thanks to a breakthrough treatment pioneered at st. Jude. One that we shared freely to help save kids near you. St. Jude is on a mission to cure childhood cancer. Four. Ever. High five give thanks for the healthy kids in your life, and give to those who are not. Donate now at st. Jude dot org or shop wherever you see the st. Jude logo. 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. Market pm 1i in. 52. 2 is better than the expected dow adding to the gains today. When we were looking for a roommate, he wanted someone super quiet. Yeah, and he wanted someone to help out with chores. So, we got jeanpierre. But one thing we could both agree on was getting geico to help with renters insurance. Yeah, geico did make it easy to switch and save. Oh no. Theres a wall there now. Thats too bad. Visit geico. Com and see how easy saving on renters insurance can be. Lets goat jim and stop trading. One of the most heavily shorted stocks in the earnings with splunk. Doug her rimerritt with a fantac quarter. Theyre all moving up quickly on the backs of salesforce. Youre seeing fantastic price gains and i think theyre justified. Splunk was terrific. Highlight for the week for you out there . Things are really good in the economy, and especially good in the tech world the naysayers they have their head in the sand that is bullish week, the most bullish i have seen probably in the last, i dont know, three or four dream forces. Yeah. All of those cios surveys that talked about depressed Capital Spending expectations are just surveys and what counts is the bookings. You have got the data centers on fire, the pcs doing well. You have got all the companies that are aiding businesses trying to digitize, go in the cloud. You have maybe 15 cloud penetration. What a remarkable week, some companies are doing so well. Ill come back younger, more excited than ever. Jim, whats on mad tonight . Well, it is time to talk to chlorox. Theyre based out here call center stock people dont know and then anthony noto is representing the future. Is sofi the robin hood of cash men in tights. That was the mel brooks one. Gh v ince of thieves, men in tits. Tights have you a great weekend y. woman but to businesses, were a reliable partner. We Keep Companies ready for whats next. man we weave security into their business. Virtualize their operations. woman and build ai customer experiences. We also keep them ready for the next big opportunity. Like 5g. Almost all the fortune 500 partner with us. woman when it comes to digital transformation. Verizon keeps business ready. By the way, shes the it wasnext mozart. G day. 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. But when i started seeing things, i didnt know what was happening. So i kept it in. He started believing things that werent true. I knew something was wrong. But i didnt say a word. During the course of their disease around 50 of people with parkinsons may experience hallucinations or delusions. But now, doctors are prescribing nuplazid. The only fda approved medicine. Proven to significantly reduce hallucinations and delusions related to parkinsons. Dont take nuplazid if you are allergic to its ingredients. Nuplazid can increase the risk of death in elderly people with dementiarelated psychosis and is not for treating symptoms unrelated to parkinsons disease. Nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. Tell your doctor about any changes in medicines youre taking. The most common side effects are swelling of the arms and legs and confusion. We spoke up and it made all the difference. Ask your parkinsons specialist about nuplazid. 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. Good friday morning. Welcome back to squawk on the street. Markets having a decent day on some relatively constructive trade head loons and more to come. Our road map today starts with teslas smashing unveil, a newest cyber truck will the car be a hit success . Well dig through the numbers. A wealth tax warning, why its not just billionaires who could take a hit. Moan time, elon musk with teslas new cyber truck last night but in typical elon musk fashion things didnt quite as planned. Phil lebeau joins us with more. Well show that in a bit. This is the tesla cyber truck. Call it a rolling metallic trapezoid. It is not your typical pickup truck. Theyre offering three versions of it going on sale or delivery starting late 2021 or 2022 range 250 to 500 miles what do the analysts think mixed. Those with serious doubts said the cybertruck looks weird, like really weird its unclear who the core buyer will be and theres positive comments one said the unique and futuristic design will resonate with consumers leading to solid demand over time we expect impressive features will win over a larger audience maybe over time we wont remember what happened with the demonstration on how durable the windows are. Did you see that they threw a heavy ball at the windows to show that they were shatter proof. Well, they spider webbed not just once but it happened a second time. As they were trying to demonstrate how durable and tough and different the subertruck is but that certainly was not the case last night and thats getting attention today looking at shares of tesla showing you the stock over a period of time here. Where its really run up its had a nice move and today thats not the case. Down more than 6 . I would not attribute the drop to the event last night with one exception. This is a sell the news evens we heard people suggest yesterday because the stock moved so far so fast over the last couple of months and will not do much for the bottom line any time soon. So you could almost say that that stock is equivalent to the shatter proof glass there. Phil, obviously the analysts commenting on whether theres enough of a demographic to actually purchase these trucks what do you make of the design how important is design in trucking and consumer demand for teslas products reporter design is huge for tael tesla and its incredibly important for tesla. The issue for some people is they thought it would be a true concerted effort to cut into the business of the big tree coming to pickup trucks thats not what the cybertruck is all about it will appeal to urban buyers, people to make a statement who arent really using the truck for most trucks are used for and in terms of making a style statement, sure, tesla made one last night but in terms of taking away market share from the big three who dominate the pickup business thats not going to happen with this truck. All right well have to wait to see what gm comes with on the electronic front, too phil, thanks well talk to you in a little bit. We are getting university of Michigan Sentiment well go to Steve Liesman today. Good morning. Yourpt of michigan final coming in at 96. 8, better than the preliminary number and better than last month. This is the Consumer Sentiment that consumers will go to the malls with before black friday one, decent number expectations and readings on the Current Conditions both pretty good i dont know if you remember but we had fed governor talking about the economy, the risks but that she kind of lights up talking about the consumer basically holding up the u. S. Economy and very quigley, guys, with the end of the week here, show you where gdp stands. 1. 5 thats up against the actual 1. 9 held up well throughout the quarter and very quickly a wide range here with the atlanta fed at the bottom at 0. 4 . So a bit of a slowdown from the Fourth Quarter is in the cards right now, carl. But well see with the black friday day coming and the rest of the Christmas Holiday season if the consumer can maybe get the number up higher. Yeah. Perfect segue. Thank you for that steve mentions retail. Its a busy week of earnings black friday is a week from today. Courtney reagan has a look at the names that have reported in the past few hours. A week from today i know i know okay so its been like choose your own adventure in retail and things change in the middle. Foot locker were up 5. 7 and sent shares higher premarket but then the retailer issued disappointing Quarter Sales and now shares are lower nordstrom bucking the trend after hours. At least with that stock reaction shares up about 8 after beating earnings by a wide margin and increased the fullyear guidance but just by a bit despite the Current Quarter wide margin beat the Department Store sales were actually down more than 4 the off price, so the Nordstrom Rack business, sales growth of 1. 2 fewer markdowns in the quarter on the call executives said theres a strong response to the new york city flagship were a month in a stronger sales lift for the mens store across the street and he said opening the flagship is perhaps most important milestone in the companys lon history which was first imagined 20 years ago and then gap shares, lower now but those, too, were higher in initial reaction the adjusted earnings slightly better from two weeks ago. Comps in unchanged and down 4 and that lowered fullyear Earnings Guidance reaffirmed and the permanent ceo search is on going and the old navy spinout is moving forward and the board believes in serving the two focused consumer section i was in a gap yesterday which what did you think . I dont do ever. Ever. Right. Holiday shopping . Lost . Jeans for 30 bucks. 30. I dont know how much discounting theres going to be going into the hall say seasoli. And at gap stores, discounting for sometime 40 is fairly normal which is a bit of a problem for them and hard to wean customers off that when you trained them to basically wait for 40 more than half the time it seems at least. Nordstrom was down sharply on the calls numbers earlier this week seems to be making up what it lost today. Yeah. Exactly. I think the nordstrom shares are an interesting story overall for the year for the year down 25 and last 3 months come up and had a nice little run an then they got pulled down from what we heard from the Department Stores this week and then reported, whew, okay, not so bad and then made up some ground. You are not done making tv today. What is coming up . Coming back later in the show at the end of the hour organized retail crime has become a bigger problem for retail so much so that its starting to show up in the retailers profit margins. Several earnings calls we have a look behind the scenes with home depot and take you inside and show you what happened we had a search warrant issued and they should care about. Working on this for a long time since about may. I cant wait to see it. Cant wait to show you. Courtney, thank you. Thanks so much. Wework with an all hands on deck meeting and presenting a fiveyear Strategic Plan to employees. The news of the presentation reportedly in a memo sent to employees a couple weeks ago coming after announcing to lay off 2,400 employees. I mean, these allhands on deck meetings seem to be every couple weeks now as this Company Restructures and tries to keep up some kind of morale for the employee who is are still left at this company. Yeah. I was talking to somebody last night about this, close to it. Elevator coming up and down. People saying are you out, are you in as you might imagine but there seems to be some confidence at least on the softbank side that theyll get things together in terms of at least presenting a plan that makes sense for streamlining and continuing growth. I think whats difficult for the Employee Base here is this idea that, you know, you have a plan and then kind of backtrack a little bit even looking at whats going on with the softbank investment and reports that 3 billion bailout package to be restructured and executives not happy with it after all and people not happy with adam newmans pay package other people are laid off. That could be restructured it is hard i think people for people on the inside to keep moving forward when plans are out there and theres so much leaking in the immediate why and then things get tossed and and changes all the time it is really difficult to move on from this it seems like an extra big hurdle compared to other companies. Its easy to lose sight they almost went public for a darling of the street and now talking about massive infusions of support, thousands of people losing their jobs. In the course of a few weeks. All the acquisitions that now seem to be looking like they could be unwound and lead to additional job losses. They were a pretty decent sized acquirer, especially amongst startups and they dont know if theyre losing their jobs due to unwinding the recent acquisitions. Well see and look for details today. When we come back, retail caught in the cross hairs and ceo of ace hardware going boo the Holiday Season and a wealth tax warning, why its not just billionaires who could take a hit depending on the policies eventually take place. Well lloufi y in. Dows up 84. 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. Risks to Global Supply chains are rising as the uncertainty of a phase one trade deal grows we have the ceo of ace hardware. John, when you were on squawk on the street back in may you said about 15 of your business was being impacted by the trade war. How has that breakdown changed and how are you thinking about things now that it looks like the deal is kind of on again, off again . What does that mean for planning your business . You know, these tariffs i cant speak to them. Im probably unqualified to speak to the macro view but from our lens theyre pesky, frustrating and manageable i think the numbers are similar to last time we talked the primary aim is the same which is to insulate our customers from these tariffs the new lists we have told our suppliers we are not accepting price changes and you have to work further up the supply chain to deal with the outcome of those. The suppliers are taking the hit than from the impact of the trade war. Have you seen any kind of trickle down affect or do you believe that ace hardware is big enough to maintain the Pricing Power . If you look at the third quarter, for example, our revenue is up 7. 2 and about 100 to 125 basis points is inflation relatted an ena chunk is tariff but its manageable. John, assuming december 15 goes into effect, does that share of margin compression change again, our primary aim remains to insulate our customers from these and if they come down thats the number one strategy the second is absorbing some of those internally corporately and the truth at the end sliding through they end up to the consumer with a higher price but that is the last of the options. Have the tariffs impacted your Inventory Management strategy at all . Have you had to kind of pull forward some of your reserves to account for whats going on with the trade war . No. Our Inventory Management practices havent changed at all as a result of this. Of 4,600 u. S. Stores, theyre locally owned and operated so that does not change at all these guys are going to be in stock particularly entering the Holiday Season thats their first choice. We talk about tariffs for obvious reasons but it was a good quarter u. S. Same store sales up 3. 4 . What in particular seems to be driving things is there anything that you can cite in terms of that number yeah. We had a nice quarter and id say its primarily driven by three things first is Digital Business continues to okay set rate second we opened 48 new stores, 39 of those were in the u. S. And helps fuel the growth and lastly the comps up 3. 4 and the credit for that squarely falls on the shoulders of the local owners that impress me with the ability to adapt and capitalize on the landscape in which we operate and i give them a lot of credit and plow forward despite the news is of the day. What does that mean, capitalize on this new retail landscape . What are they doing . Well, you hear a lot in the media about a Retail Revolution or the retail apocalypse and i think theres two things going on theres a logistics and a labor revolution going on and we see thats forcing a real bifurcated retail market. One end is low service, low price discount prices and you see many of them reporting an doing very well and then the high touch, high service ultra convenient speblcialty and focus on high service, high touch, you know, convenience because theyre right in the market. Three quarters of the u. S. Within 15 minutes of an ace store and then of course differentiated high quality product. I want to ask you about pricing in a couple different categories lumber is mentioned in the earnings calls of the publicly traded companies and then great runs in names like Sherwin Williams i wonder whether or not paint you think has that momentum behind it fundamentally. It does we are not quite as impacted by lumber we have stores that have it but generally not impacting us theres 268 categories in a Hardware Store and we want to be famous for 4 one is paint we struck a deal with Benjamin Moore paint. We have what we believe is the premium brand of paint in the u. S. And then power equipment, barbecue which is really big this time of year and home preservation those four remain our Growth Strategy and fueling quite frankly most of the comp growth. John, our jim cramer talked about the ecommerce strategies among your peers, home depot, lowes and looking at the differentials over the last week you guys up 81 . What do you think is the buying behavior for Hardware Stores in a online capacity that made the sales so much more successful in the quarter . I think speaks again to how i talk about the local stores adapting and capitalizing on where the retail landscape is changing 92 of the dotcom business was either instore pickup, bopus as the industry calls it. We are trying to differentyate the delivery using our assets, our stores, our trucks and our people to do that last Mile Delivery to the local customers and because our stores are so ubiquitous it does help us leverage where the consumers moving to the ultrahigh convenient experience. We tend to say were going to be faster than amazon on stuff we stock because we are already in the neighborhood. Already in the neighborhood john, thank you so much for joining us. You bet, thank you. When we come back, a new media triple play. When the executive tom rogers join us. His company has got a media merger going on and tells us about it when squawk onhe re tus. T not much, how about you . Are you answering my text in person . I am. Yeah. Lol. Come on in. This is tech that helps you be there. The nissan altima. Now offering the most techadvanced engine in its class. Now offering the most techadvanced wat t. Rowe price, hundreds of our experts go beyond the numbers to examine Investment Opportunities firsthand. Like a biotech firm that engineers a patients own cells to fight cancer. This is strategic investing. Because your investments deserve the full story. T. Rowe price. Invest with confidence. Welcome back small but interesting deal this morning. Announcing a threeway combination for the first platform dedicated to live new, sports and esports executive chairman, contributor, joins us here. What do you have torque sports, frankly and winview and calling it engine and saying it will have the elements of live event media to require new sources of revenue and distribution as a subscribe fees fall off and cord cutting and that you are going to be dedicated to axel rating new live immersive experiences for consumers. What does that mean . Great question. I havent put three companies together under one roof as a Public Company before and that kind of underscores just how unique combination this is engine, each contribute something meaningful here. What we have here is some real depth in each of those areas when it comes to esports, torque is the leading content provider of auto racing, mobile games you interviewed greg yesterday, liberty. They own formula 1. Yes. Torque developed the formula 1 mobile racing game which is the biggest free mobile racing game out there torque goes all the way up to the highest end of esports with simulators that ferrari uses for the kind of live esports competition that is a rage now they also have a Measurement Company that actually measures the analytics of the esports sports contests out there that you see on twitch with millions of people participating. You need data like you do for tv whens engaged, how, give it to the brands they have a competition platform that will be part of engine media. Which actually has esports tournaments and those esports tournaments have prizes. What a great synergy opportunity for winview. It allows people to play along while they watch sports on tv predicting what will happen next and win prizes we have always thought, hey, why not apply winview to esports you have the gamers watching all kinds of gaming competitions and esports and gamers, give them a game to play, engage them and torque wanted to bring that element to what they were doing. They were on their road map to eventually get there we bring that right away of course, frankly, which im also chairman of, is a news content monetization company, allows content to be managed and provide ad sales for leading franchises 1,200 broadcast stations and those stations can provide a very interesting promotional platform in terms of their looking for additional ways to monetize their inventory and bringing that into the fold gives a way to promote this in a way thats an important ingredient so a lot under one roof. A lot going on there. How are you so the way youre reaching the consumer specifically in the new company is what . Well, were going to have direct Consumer Experiences. Winview directly reaches the consumer by allowing people to watch live sports on television. Play through an app that allows you to, say, play a quarter of basketball game or a quarter of a football game, compete to win prizes torque as i said as a competition platform where people get to participate directly torque is actually building a live esports arena in miami to also serve as a Production Facility interestingly, they also own a franchise thats a form of a Television Show that is on cnbc worlds fastest gamer which is all about auto racing so very deep in that particular esports vertical but developing others it goes to a key issue you discussed with john malone yesterday. That was an excellent, excellent interview. Thanks. It was all about whats going to happen as the bundle breaks down and entertainment programming goes to streaming. And we all know that entertainment programming is going on demand. And as the cable and satellite bundle break down, whats left of Live Television is news and sports but as the bundle breaks down the subscriber fees that have supported news and sports arent there either, something john made a special point of coming to cbs viacom and so you have to think of developing for the industry, not just these direct Consumer Experiences we have but a platform for the industry to develop new sources of revenue be it news or sports or increasingly esports as live media. So that there is a way to support what the rest of the entertainment world and the bundle going elsewhere to netflix and the streaming services we have created the first vehicle under one roof for the industry to be able to have those kind of services to support it so its a b2b play. I havent heard you mentioning games of firing guns at somebody. Is that intentional . Winview is about live ports on television. Most of what torque does in the content space is auto racing but its competition Platform Company called umg in the process of finalizing the acquisition. Does have tournaments that include fortnight and call of duty epa same time nba 2000. I wonder if you saw liability long term on those kinds of games depending on the resolution of gun discussion in this country. Thats an issue to continue to get a lot of discussion and the tournaments and what we can bring to it we think brings a healthy way for people to engage in that kind of esport. Are we in the earliest days of esports think we are in the early stages i think there are different ways that people looked to participate, team ownership, League Ownership we think we have a really interesting way of allowing people to compete for prizes but broadening the platform so the millions of viewers of the competitions can equally participate and that combination of content distribution and measuring the analytics being the nielsen of esports which is a key role of this combined company we think gives us a data play that frankly also has by way of between the two companies over 100 million touch points a mob which is really very substantial reach already to build on. Always amazes me. Stadiums or arenas filled up with people watching people play video games. We have to leave it there for you. Really appreciate you having me getting a news alet this morning on airbnb. Hi, deirdre. Good morning, carl. Airbnb losing a key executive ahead of the expected 200 listing. Belinda johnson stepping down as chief operating officer in an email to staff viewed by cnbc she says the decision is family one and will join the board of directors as the ninth member and third woman. The timing for airbnb is rough she is at the Company Since 2011 shes become the number two of brian chesky and called the Cheryl Sandberg of airbnb. She was chief business aofficer and steered the company in large part due to her airbnb has taken a different approach with regulators than other gig economy startups like uber. Airbnb is a friendlier disrupter and worked with regulators on policy, still though, the company approaching a 2020 listing is facing a slew of regulatory disputes over taxes and renter rules with a number of city governments including new york and new jersey where residents voted overwhelmingly to impose greater regulation on shortterm rentals in a statement, cofounder and Ceo Brian Chesky says, quote, belinda was the First Executive i ever hired when i hired her, airbnb was making noise with governments around the world and a lot of people that didnt like us she taught me better she told me that we should meet the people that dont like us. Guys, this is a big loss for airbnb back over to you. Thinking, deirdre, how active they have been in terms of news making, policing content, more aggressively you mentioned the municipal laws this olympics sponsorship deal theyve been active. I wonder if its a path of coming to market. Right i think that this is more scrutiny as they head to publicly that listing so the scrutiny is on them. They need someone like belinda johnson, certainly so its a big loss for the company. Now, you know, the reason is to spend more time with family. What i have heard is theres not any other reason to think thats true and the timing is very tough. She is a very trusted executive to brian chesky and as i mentioned shes been there since 2011, the First Executive he hired and seen as very, very strong on the regulatory front but remember, she does stay involved as a board member so they have that benefit. She hadnt actually been there that long in that specific role i remember there was some kind of internal battle between her and lawrence tossi, the cfo and led to his departure from the company and interesting to see whether her departure slows things down for the ultimate listing if thats the route they choose to go down. She is staying until march 1st. Im told by the company theyll be looking for someone externally and not replace that coo role instead, they get a Vice President of operations so perhaps that tells you something about how the executive team is going to operate remember that its three founders are all still there with brian chesky as ceo. All right great reporting, deirdre thank you so much for bringing that us. Now lets send it over to sue herrera. Sue . Good morning, everyone. Heres whats happening at this hour President Trump says he does not expect to belie impeached and claiming the democrats had nothing inkricriminating on him he also said that he will stick with Vice President pence as his running matd he made those comments on fox this morning three iraqi protesters were killed, 25 wounded with clashes of Security Forces near a strategic bridge in baghdad. The clashes come hours after some of the most intense street altercations in recent days. Firefighters battling a massive blaze that all but destroyed a Beachfront Hotel in the english town of east born. No one was injured and the guests and employees have been accounted for but it is unclear what started that blaze. A large crowd welcomed pope transis at bangkoks cathedral arriving for a mass dedicated to young people those outside the church followed the ceremony through a large scene tv and the pope will be leaving for japan on saturday for the second and final leg of his trip to asia. Youre up to date. Carl, ill send it back downtown to you. All right sue, thanks so much. As we go to break, take a look at the best performing names on the dow so far for the week for the time being, a uwerep 65 back in a moment whether your beauty routine is 3 steps. Or 57, make natures bounty hair skin and nails step one. Its the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. Natures bounty, because youre better off healthy. Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. 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. Elizabeth warren and Bernie Sanders taking aim at the super rich but how could they proposed taxes affect the not ultra rich . Robert frank with economics correspondent neil irwin the article how democrats would tax highincome professionals appeared recently in the times. Good morning. Good morning. Neil, talk about who potentially could be at risk for paying more. Right so put the wealth tax aside, put some of the taxes on capital aside that senator warren and other democrats are talking about. Out there in plain sight is this idea of changing how Seattle Seahawks is taxed, how payroll taxes. Right now seattle seahawocial ss are capped you dont owe a dime in Social Security payroll taxes senator warren wants a tax theres a democratic proposal on the hill, 400,000 either way that results in high income professionals, people in the midsix figure range with a higher marginal tax rates than now. Those numbers make sense to you . Yeah. It is not just two cents and not just billionaires. If you make more than 250,000 your federal tax rate under all the plans about 55 . Now, if you live in california and new york, your federal tax rate is and state, is going to be about 70 . So its upper middle class, 70 and thats the part that voters arent hearing about. Cant deduct the taxes. Like the one were in. So were at 14 in new york. Add that and new york city. I mean, oh my. I think the polling showing broad support of the tax plan of liz warren is about the wealth tax applying to 50 million or more and i think different result and, neil, correct me if im wrong, told people what would you would you support it 250,000 or more 55 tax rate and see a different polling result. Yeah. What i do agree is the proposals exist in isolation and you have to look at them holistically to understand how senator warren to overhaul the entire tax system and not just the wealth tax and Capital Gains taxes, not just Social Security. It could add up to big numbers for a lot of people. We hear a couple of things, one is that you have to go through several hoops to get into law the others given the debate this week the party has a natural pull toward the center and that listening to obamas comments over the past couple of days that there is not something that the market at least should worry about. Do you a gree . The odds of both a senator warren, senator sanders wins the nomination, they win the presidency, democrats win the senate, thats a lot of ducks in a row that are lining up and if you look at the probabilities together it is not enormous. That said, i think we see overall the thrust in which the Democratic Party is going. Whenever the democrats come to power again, it is a different approach to what obama took. You look at taxes for obama during the Obama Administration for top earners. 4. 6 Percentage Points on the top rate another. 9 on the obama care tax. We are talking two to three times just on the Social Security piece and a different impulse from the Democratic Party than even five years ago. Neil, what point do you think democrats have the propensity to switch parties with higher taxes or the likelihood of higher taxes . You know, given that obviously as you mentioned other issues have come to focus ever since the obama president in that party. Do you think that, you know, in knowing this that people will actually switch parties to the republican side . So i dont know about that but i do think we see evidence that high income democrats, affluent democrats and rich suburbs, westchester county, the bay area, they have issues, taking issue with higher taxes, we see that with the salt deduction debate right now the things on climate taxes, carbon taxes nobody wants to pay more money in taxes how much are these kind of progressive goals that affluent liberaling believe in, how much are they willing to pay for that i dont know well know until its a subject of a real debate and not just swirling in the atmosphere type of debate. We here in new york at 52 something percent. Right . Thats not dissimilar from what europeans say. Right. They get Free Health Care and usually free education. Right. What do we get . We get a big tax bill if you add it together, it is an important point is you cant just look at the wealth tax but all these things combined. We would be the highest taxed country in the world exceeding denmark and by the way we dont have all the services that denmark has in the u. S. So thats a really good point and i think voters just have to know truly what the choice is when theyre talking about warrens tax plan and what the plans add up to for the tax bill and the bottom line opposed to 2 on billionaires. I wonder how much currency youre putting into things floated on the republican side namely that kudlows at least looking at ways to cut middle class taxes even further. I mean, its hard to say given that the republicans had full control for two years and didnt really put forward any plan, anything specific. You know, its hard to its like water, trying to get your arms around whats on the table. We have large deficits and with the middle class is further and i have a wait until you see it type of attitude on that. Robert, real quick, 2 on billionaires but 2 anything over 50 million . Thats correct. 6 on billionaires. 6 on billionaires. And what the most voters and at her Campaign Appearances hear is 2 on billionaires and it has doubled since she even started from 3 to 6 . To pay for health care, yep. Keep it on honest on the twocrept thing. Thank you. Thank you, guys. Still to come, grab and go cnbc investigates retail crime losses hitting an alltime high. Well take a closer look when squk t see rurawonhetrtetns d. 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. With a nationleading 150 billion commitment to infrastructure, were creating state of the art, 21st century transportation hubs, constructing new bridges, bringing highspeed internet to every corner of the state, and committing to lowcost clean energy. 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Investing lets me use everything ive learned as a doctor to help make a positive impact. So thats why i go beyond the numbers. Imagine loading up a car with merchandise and leaving the store with it. Retail alsos are at an alltime high shrink they said hurts profits they gave cnbc access to how they fight a never ending battle against stealing Courtney Reagan has the investigation. Reporter youre watching brazen retail theft. The suspects so sure they wont get caught, some get aggressive when stopped as this Surveillance Video from home depot shows. Most likely they arent shoplifters, people that steal items for their own use. Instead it is a bigger problem known as organized retail crime, with criminals working together to steal for profit. Home depots jamie born investigates it starts with boosters. A booster is somebody thats a professional shoplifter, doing it for profit, not just for personal use. Are they guessing what items are in demand, know it from history . I know i can sell a lot of drills there are many locations out there that are giving a list to the boosters. If theyre giving lists, theyre part of the crime too, are they not absolutely. One of the location was a pawn shop. The manager was charged with selling stolen property. The case is ongoing. The next stop, this raid bourne and his team helped Law Enforcement serve a search warrant on this home. When we do search warrants with Law Enforcement, we can provide the value of the merchandise. Reporter the suspect allegedly stole power tools on facebook they seized a pallet of items from the home, brought to this warehouse. It may look like home depot, but this is an Evidence Room inside is over 1 million of stolen product, seized from a raid of seven pawn shops. You see on the inside of a pawn shop, they say lowes and home depot price, 129. 99 our price, 79. 99 chris is a special agent with Utah Attorney general office. How is it secondhand merchants sell it for less than a big box retailer than home depot or lowes can buy it for they found the answer in these sting operations sell them, pawn them . Sell them. This is undercover video of Law Enforcement selling items that seem stolen to those pawn shops. The case led to a new utah law that makes it harder for pawn shops to buy unopened product. Since we passed a new law, seems like it is getting better. What we have seen is a shift to ecommerce. Like the power tools we saw confiscated during the raid. Here they were for sale on facebook organized retail crime is growing, cost the industry nearly 800,000 for every billion in sales home depot said its profit took a hit the last three quarters because of higher shrink or loss of goods, which includes organized retail crime while we dont comment on particular numbers, were seeing shrinkage rates rise across the country. Reporter scott blend is in charge of Asset Protection for home depot. Organized retail crime drives other crimes, it drives drugs, it drives guns, it drives human trafficking. I think the openioid is a piecef it. Reporter why should consumers care isnt home depot able to absorb this. We have been good if we cannot continue to do business this way, we will have to pass it along it is not just home depot dealing with the problem lowes reported earnings wednesday. When we asked the ceo about this issue, he said yes, this issue also hurt margins in the recent quarter. Incredible. For history, typical shrink rates are what, 1 yeah. And theyve gotten higher and higher it sounds like a billion dollars in sales, 800,000, it is not that much. But it is coming up on earnings calls. Home depot called it out in each of the last three earnings calls. It is a problem. It is hurting profits. As scott glen said, if it gets bad enough, it is possible prices have to be raised at some level to make up for it. Anything they can do on the technological side, amazon grab and go, seems like it would prevent this shrinkage at stores is there anything some of the more traditional retailers are doing . Home depot, some items that are higher theft, they have video cameras right there, at eye level to be theft deterrent. Here it is we are videotaping you now as you grab this off the shelf, even if you do so as a regular customer you dont want to make it uncomfortable for honest shoppers to grab that power drill off the shelf. They have spider wraps around things, has to be removed before an honest shopper can take it home, can be annoying. In pawn shops, theyll selling them with spider wrap still on it thats a crlue an honest shoppe didnt walk out with that. No longer just apparel. You can tell from the production you did a lot of work on this. Thanks, court. Software firm intuit moving lower, despite eniarngs beat an exclusive with the ceo when it starts in a few minutes and to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. 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. Good morning it is 8 00 a. M. At tesla headquarters in palo alto, 11 00 a. M. On wall street. Squawk alley is live oh, my god. Well, maybe that was a little too hard