Transcripts For CNBC Squawk On The Street 20240713

Europe is steady powell makes some remarks later on tonight road map begins with megadeal monday lvmh announcing a deal to acquire tiffany. Charles schwab buying ameritrade, 26 about the all stock deal it will combine the companies the two biggest publicly discounted brokers will have more than 5 trillion in client assets ebay set to sell off stub hub for 4 billion david has details on that. Lets start with this Historic Deal in luxury goods lvmh will acquire tiffany. The deal is worth 135 a share, two Companies Expect to complete that deal by mid2020. I assume you can fill us in on what is going to happen to the brand, synergies and all of that. Listen, i mean, it is an important transaction for lvmh, which tried twice before as my understanding and not been able to get there had done it privately. From a m a Strategic Point of view, this went about as well as sort of it had been could have been hoped for from both sides. Seasoned advisers on both sides, who i think i thought they would get to a deal, even though you started at 120, ended at 135 not bad in terms of an additional premium but something certainly that you can imagine that Bernard Arnault is happy to live with, there had been an expectation initially this company wanted its all time high, which would have been about 5 bucks higher you knew that lvmh was not going to come hostile, but there was a possibility that another shareholder, jim, could come into these shares if tiffany had said no. The entire board is up and nominating window opening up soob a soon and tried to push for them to get back to the table so you had that sort of out there, lvmh wanted this for a long time. You have been sort of closer to, i think, the strategic rational for it in terms of what it gives them right when youre out at dream force, sales forces extravaganza, you periodically marc benioff, the ceo, coceo and founder, will talk about an account that is doing unbelievable things in terms of making it so that touch is individualized and using all the great crm tools. This year was lvmh it was how they have been able to get in touch with the wealthiest and keep track with them last year, by the way, was lamborghini. What the market has been talking about to me is when you want to have gigantic purchases, you need to have much better touch personalized high grade touch, based on what marc would say is truth, but what really means is that you cant buy a high priced good the way you used to you need to be sold it you need to have great interaction. Those of us who bought a lot of tiffany are amazed when we go to tiffany, they never heard of us. You go into anything that is lvmh, you walk in, they know everything about you they know everything you just bought, what you like, what your wife likes this is unbelievable with lvmh the numbers are horrendous, tiffany. 40 of the business, u. S. , has been awful mainland china, 1. 2. The only business that is any good is the public of korea. They have done a terrible job overseas terrible so this is just a remarkably good purchase to be able to blow out overseas a continued question how weak the second half would be for tiffany and whether in fact they obviously they knew that going into these and dealing with these negotiations. Took a little while for them to get to the table they talked about talking for a while. Finally 130 got them in and five bucks more got the deal done. It is smart at one point they blamed the secret service in the area on trump tower. They were almost out of excuses. One thing they havent blamed is the weather, which is something they probably could have done this quarter it has been unseasonable. You think that theyre doing their shareholders a good service by selling at 135 . It is a victory. You do . Yeah, we did the ceo was trying very hard they did that one introduction with the flowers i bought lite of those each time i bottom them, it was, like one time i went to the store, one minute left where before they closed, banging on the door, right . Here, let me throw my wallet at you. I got a thousand dollars talk to the hand i got to talk to the hand from a salesperson when im trying it get in to give them money. Only time that happened is when i went to the apple store. I got a thousand i got a thousand thousand going once, thousand going twice, sold to somebody else who got the 11. Yeah. Right yeah. That may change. The culture may change perhaps. It is a international tourism, right fantastic this Company Knows how to touch you. I dont know if people understand i went to the lamborghini factory. They said this one is for this guy, this one is for that one, that one is for this guy, all sales force. So Bernard Arnault was on display. Lvmh, when they buy a company, and they bought a number of companies. Yes, they have. They suddenly upgrade the most important thing in the world for people, to be acknowledged that theyre rich like, hey, how are you doing i know what you versus when you go to, like, have you ever been to tiffany . You can check my name. How do we do that . You look how about the receipts it boils your blood. Bernard arnault, he would be like hows lisa . Hows lisa doing have you bought her this yet thats the way they work you havent been buying three months, are we okay . Thats fall you need that if youre spending it, shelling out 10gs, you want to be known. Important to point out, obvious it is, if youre a tiffany holder, youre getting cash obviously td for its part is going to be a significant holder as well. I think we would segue into stub hub. It is a newer i give you a pass on that you are such a good guy. Steve martin. The price is 4. 05 billion they get for stub hub. They told us they were going to commence a Strategic Review of the classified business as well. Thats continuing. Youre in the going to hear anything this year about what may or may not happen there. But we got a deal for stubhub. The price 4. 05 billion in cash. Viagogo cofounded stubhub while in Business School, left the business, stoeold to ebay in 20. They sell it now in 2019 for 4. 05 billion. Want to do the math at home, compounded annual growth rate of 17 of money they put down not bad. Not bad at all. It is about 25 times ebitda im told by scott shiancoe, the interim ceo of ebay, yeah. And he tells me, i spoke to him briefly moments ago, he tells me it is about a 25 times current ebitda multiple, pretty darn good what are they going to do with the proceeds, of course . You will be taxed here it is a taxable sale nonetheless, it is going to be significant proceeds for the company. He wouldnt give me a specific other than to say Capital Allocation plan has, of course, included buybacks, dividends and investing through m a in the key business youre selling all the companies with growth, youre left with a company that i think is berift of growth. What do we do . Thats a good question. What do we do use some of the proceeds . A, theyre focused on trying to reinvigorate the platform. You know that. Have they been successful . No shopify has passed them i can argue they should merge with etsy. Etsy would never sell. But they have been left behind we have done a series of very tough pieces on realreal, authenticated, which are terrific investigative may not be authenticated that is second hand. These guys have secondhand blues. Secondhand blues . Yes secondhand blues mayor it is growing a tiny bit. Isnt it no . David. Pay pal and all the growth. Pay pal, remember, theyre changing the payment platform on their their payments mechanism on the platform which they believe will help and he said to me, they also do, theyre in the middle of that. Advertising they see as another area where they can generate thats a vertical. It is a vertical. People call things outlets. Vertical good Market Strategy good Market Strategy to me bacon and eggs and then go to market. Kids need milk. What is the go to Market Strategy youre not scaling i know. You know who that would disappoint john malone. John malone hes all about scale. Hes fascinated by scale. Great International Business fascinated i know. I dont have scale eric bakebaker, by the way they ran it on what was on a youtube station . I dont know. I relistened i listened to it. I read the transcript very powerful. Good. It was savaged half the companies there are. Eric baker, viag ogo ceo going to join us. How did you get him i had nothing to do schwab Td Ameritrade, that deal valued at 26 billion becky quick reported last week, both say the combination is projected to serve 24 million brokerage accounts, 5 trillion in client assets and a pretty granular look at what they do with real estate and branding and, of course, management teams. Wow had to happen. I dont think i was with some people in the brokerage business last week. They all keep saying the same thing. How it is almost like Butch Cassidy and the sun dance kid. Who are those guys schwab they turned out to be it turned out to be asset gathering is number one. I heard people talk about jpmorgan, bank of america, schwab thats amazing, yes numbers start to get pretty darn big. 5 trillion is real money real money. Yeah. Powerhouse. There are those who believe that they actually that fateful day where they cut commissions to zero was done in part to extract maximum pain on ameritrade and force them to say we got to figure out something in terms of consolidation. Whether or not thats true, it had the effect of bringing ameritrade you can make the argument that the synergies, thats what were learning here. Potential deal for days now. But expected to be 10 to 15 accretive. They got a lot of work to do though between now and then including dealing with antitrust, which is not necessarily going to be well, i hope robin hood is in the picture. Robin hood has 600 million. David, robin hood, softbank forgot to lose money with them robin hood is an incredible company. When you meet with millennials, they want to talk they literally want to talk about robin hood and why they like the stock. Why . Because of robin hood. Robin hood has an incredible stash to it. People say 4 million, i think much more than that. What matters is theyre backed by Venture Capital and when i go after the it is important you go out there, Venture Capitals, what do they say . The more money we lose, the more money we make. It is a novel approach typically the more money you lose, the more money you lose. No robin hood disrupted this industry in a way that no one thought could happen. You made the point, they may have disrupted it, but not necessarily with the ultimate goal of being a truly profitable company. No. Can they continue to disrupt it or are they going to run out of money they can gather assets. They have too much money, 600 million. And they havent an incredible go to Market Strategy that does scale. They have scale they have scale. They will scale are they going to continue to lose money on every new account . If you can scale it doesnt matter how much you lose. Got it. Also words that i heard where is robin hood on their advisory services, research . Isnt that going to be their edge now over at schwab . I think their edge is that theyre cool this is not being facetious. Sofi has a lot of things sofi is coming into its own they have the naming rights f S Los Angeles chargers they have been able to introduce robo, kind of excitement when youre a young person, you got to have fractional securities, have that, and thats because the the amazons of the world made it so individuals cant own. So get a fraction, buy a dollars worth people are buying a dollars worth of amazon out there. As the clients age into more money and more responsibility, theyre going to want a little more service, right . I think thats true but these are people who uniquely dont want to get rich, they want to have enough money to do what they do and thats a different attitude toward life. Im impressed by the disruption of robin hood. I think robin hood caused this i do not think that Ameritrade Schwab has been a farley irly Impressive Company you cant make that comparison any longer. Three different people, goldman has to buy etrade yeah, that too. You heard it . Goldman or Morgan Stanley i dont know dont you think our hack competitors will go after that and you have to refute it . I have no idea if thats true or not you imagine more consolidation, what do you do if youre etrade. What do you do i dont know. Thank god im not an etrade i dont have to worry. Yeah, you dont youre here. Youre scale you already scaled. Worry about the eagles. You should you got scale when we come back, a big setback for uber as london refuses to renew the operating license. Thats weighing on the stock this morning Roger Federer will join us today. More major titles than any man in tennis history. Looking to capitalize on a new investment hell tell us about that upgrades of nvidia, wendys, deckers, hasbro, lyft. Mequawk on the street back in a mont through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. More exciting than than getting a lexus. Giving one. This is unbelievable it really is. The lexus december to rembember sales event lease the 2020 rx 350 all wheel drive for 419 a month for 27 months. Experience amazing at your lexus dealer. As we said earlier, uber shares are down. Londons Transit Authority will not renew the companys license to operate in that city. Citing several breaches it placed passengers and their safety at risk uber is vowing to appeal that decision hours ago, they tweeted we understand were held to a high bar, as we should be but this decision is just wrong. Over the last two years we have fundamentally changed how we operate in london. We have come very far and we will keep going for the millions of drivers and riders who rely on us. 45,000 drivers top five market. Sun trust thinks 5 of global rides. Anybody who used them in london knows it is a very expensive versus the rest. Versus the traditional gild. Thats a gild for taxi drivers little different from here in new york or some other cities where the incumbents didnt have a lot of favor of the customers. Every time the stock seems to gain the slightest bit of momentum, there seems to be some positive sense in the Analyst Community that they sort of turned a corner a bit. With the stock down as much tass was, it just is Something Else happens. Very good point. Here we are again this is one of the most significant markets they have without a doubt. Worth noting, travis calnick sold so much stock i think he still owns another 40 million or so shares he sold basically half the stock in a very short amount of time you have a little less than 45 million shares is what he has left people say it is a kinder gentler travis hes back in favor he can call me. There had been a whole story of maybe travis will one day do a full i think hes changed from the day he met me after speaking with my wife and said, im so much richer than you are i regard as thats your favorite travis story. To me, it is kind of jarring someone comes up to you and says, hi, im much richer than you, it is a show stopper. Only met him after he sort of had become a little more humble. I got the full bore travis. What do you do with uber stock i think you buy lyft no, i think uber is coming close to a level, i want to talk with them, because uber freight has been unbelievable. Uber is here to stay it is here to stay there is some value to try to figure out what value. It has the softbank discount that matters nelson chi last week saying theyll get out of each market where theyre not positioned number one or number two. Maybe they get what does that do with uber eats, which is what matters so much door dash is playing with, you know, funny money. Gaining share. Only one gaining share. Door dash gained share by becoming a provider without you knowing it. Listen, last spot here, very im not sure you want to get into a situation like in, if youre an activist lets just remember, no controlling shareholder, nothing at all you could immediately go in there and say shut them down david knows money he never does this idly. Even during thanksgiving week. No. Youre not idle. Im saying theyre aware of it they got to be thinking about t i dont know if youre an activist if you take a shot it is pretty you bring it up, shut it down just bringing it up. Yeah, jets make the playoffs. Theyre not going to make the playoffs dont tell that to my son hes got he gets very excited. Model man doing much better thank you for the heads up there. Youre 56 were going to catch you. No need to mention my team. It is unfair i seomonym attack on me. Derve better cramer as mad dash. Count down to the opening bell a look at the remarket squawk on the street back in a moment download, edit, reformat, output, save, send, upload. Still uploading. And maybe eventually post. This isnt working. Introducing samsung business video solutions. With the galaxy note10, you can shoot, edit and post thumbstopping videos, all from one device. Samsung business solutions. You need to augment your wealth the best never occurs from those situations if youre looking to build your wealth over the longterm, to ensure prosperity for you and your family, roll up your sleeves and well do it together booyah ready, set, grow. Go to cnbc. Com investinyou holiday shortened week, markets closed on thursday for thanksgiving and early close on friday but a lot of news to start the week m a among it opening bell in about five minutes. David, this is big. It is big we got two minutes before we get to the opening bell. Were going to squeeze in a mad dash we talked about a lot of the m a announced late yesterday today we missed one that was announced yesterday. The Medicines Company acquired by novartis, 85 bucks a share in cash thats 9. 7 billion. They have a key cholesterol drug, jim. People will think that Medicines Company, anticholesterol drug, which rivals amgen and maybe regeneron is superior. You get rejected twice a year. I take the drug from regeneron it is twice a month. Comes to the house pick it up at the doctor, at cvs, walgreen, no, twice a year administered by the doctor, gets the cholesterol to the level, the new rules come out soon. Youll see that the Heart Association is going to say you cant lower cholesterol enough and this has got it. Genius for buying this it is interesting as well, this was already in the marketplace, Medicines Company was going to be acquired by novartis or another company. The stock moved up this was the premium on top of that you see where it is going to open today 85 bucks a share alex danver will be my guest in the 10 00 hour well talk to him about this deal this is a huge market, right now the current one, the injectable, some say 14,000 a year this comes in this will be such a bargain but nobody likes to administer the shot i got news for you the opening bell, and the s p 500, the cnbc real Time Exchange at the big board, it is pen pennymac m a, one big pot boiling today, the other is trade headlines, china is outlining new ip protections, global times says were very close what are they talking about who are they talking to . Mnuchin . The tabloid run by the look, i got a tabloid that tab llo tabloid at the New York Post here im embarrassed by this stuff. At the white house theyre saying, look, now it has to be 50 billion in soybean john deere is up, they report on wednesday. But there is a belief that chinese are going to come through. They dont want intellectual property, theyre so far apart but i believe, talking this weekend, i got the sense that there has to be more to it than a weak story about intellectual property, especially with hong kong which, by the way, suddenly now is sweeping in the discussions. Hong kong kind of was a referendum against xi. Right. President thinks he has all the cards. He also would love to deflect it from some things going on. Sure. Washington. Hong kong, of course, just to get on the record, big win on these District Council elections. They win 85 of the seats that were up for grabs. Turnout, 70 which puts to shame u. S. Participation rates. Can you imagine, 70 . We had those kind of turnout rates from the United States. Well, thats a democracy. I think if they werent gerrymandering, you would come out. We havent hit much more than 50 in a long time but, maybe mayor bloomberg will change that. Local elections we do 20. New york city we elect everybody here, like, 7,000 people out of a city of 8 million. Im exaggerating a bit not that much. Democratic primary aoc got elected with 17,000 people in the primary. What do you think about mayor bloomberg . I think hes going to pay every Single Person in america, like he not a cash payment. I think he can write a billion dollar check to the people that say determine your think i thinking facebook is the winner here. Twitter is taking no political ads. Right facebook is still taking those ads. Right. And so maybe zuckerberg was smarter than the average bear. There is bloomberg will spend a lot of money already over 30 million bucks right away. Cbs said the equivalent of the average American Family spending 39 39. 34 million, 39. With 50 billion he looks good on saturday night live. Michael bloombergs with a vewa a very effective mayor. Thats not the point. Fascinating do you think the market to the degree he siphons off any support from warren, the market can breathe a little easier . Absolutely. I think it will help the managed care stocks again. Those have been why would he siphon off wouldnt it be biden he hurts . Wouldnt it be the moderates as opposed to the far left . I think that a lot of people feel that anything that draws senator warren to the center in order to be able to stop to the center she was on that wasnt her, boy, they have her down. Kate mckinnon has it. Shes extraordinary is she running jim, you mentioned the political ads. Jack dorsey, this morning, retweeting and elon musk comment that the cybertruck orders have come in with no advertising and no paid endorsement. We know how critical twitter has been with musks success. 100 bucks down to be in line. Refundable 100, yes. Thats a real statement, if you want it. I put down 300 to get the model 3. Combative with users on twitter. Price tag of 44,000 the people i was in the tesla this weekend they pressed the start button, you can use that word on tv, the gold wings, tesla, i said, thats it. Thats it. Im a bull on tesla. I decided it is my life on twitter is easier. I dont want to defend them. Okay i dont want to defend against them first time anyone should say im defeated on twitter. Im using 52,000 price tag. David, 63,000 and youre done just saying. This guy had a better arm, i really it kills me to watch that wind up. Yeah. No, people are telling me that was feckless, everyone is focused on it. Theyre stunned. Well, musk did say friday afternoon they threw objects at the window prior and nothing happened. People like the design, they like the design, no accounting for taste. Or they like the aztec i think initially didnt Bryan Cranston drive that in breaking bad remember the aztec i dont i dont know im not the chosen market here, i dont think. Thats true were both out of the demo. So speak for yourself. Youre more out of it than i am. I have kids i have kids that can drive im buying the demo. Lets go back to m a. It is a powerful driver. Powerful driver of sentiment in this market. Havent you heard . I think youre right. Yes, i am lets see how things are performing im curious. The all stock deal, ameritrade, schwab, we saw the reaction last week, very positive. They came back a bit, sort of settled in around what we thought might be a 26 billion deal it is 1. 0837 shares of schwab for each share of ameritrade can we look at how their performing primarily derived, they say, from expense savings and there you see schwab down a bit, but ameritrade is up. Youre going to have td owning 18 of the combined company. The remainder of the of shareholders, sorry, 31 over td will own 13 which could be 43 now and the other existing shareholders own 18 of the combined company theyll be able to participate in any upside that is created. It is going to be a giant, we know that. Tiffany, lvmh, maybe 135, a bit of a not a surprise, but there had been the stock is 123 not long ago, tiffany. It is also up. Thank you, guys. Well done. Up over 5 on that 135. What are they talking about . What are they getting that deal done any trust is potentially going to be a bit of an issue on ameritrade and so well see how long it takes for them to get that deal done we mentioned the Medicines Company, the large premium there, 85, market already knew novartis was showing up with what conceivably was going to be a fairly significant deal. Nonetheless, it surprises investors and so that stock is also up sharply. And we also talked about ebay and stub hub, looking at ebay shares, see if theyre benefitting from that 4 billion deal to sell stub hub. How about the fact that so many acquiring stocks are going up that bodes very well for the remainder of the year or i think we might, you know, people seem to be working. Couple more announcements before the end of the year. Anything big in banking youre hearing no. Im here. Can we talk after give me a little bit of a sense of what youre talking about we havent gotten to the slew of upgrades. Nvidia is one of them. This is important i spoke with jensen huang last week hes doing a simulation, putting a man on the moon. With 25,000 miles a minute, got to break that mars . Mars. Going to mars. Going to mars. Hes downing a simulation where he has chips that can put it together. A lot of people talking about his voice, Artificial Intelligence chips there also is a gaming chip that is very good i think lisa sue from amd is talking about tremendous gaming chips. Intel, big booster, intel having so much trouble, making chips. But the piece is about how they fell behind in gaming, thats no longer the case. It is all in the data center, no longer the case. Theyre well ahead in Machine Learning voice was a continuous email, dream force, anybody with good voice is able to leapfrog and nvidias chips are best in voice. And understand, thats something that is so important, think about it, think about how much idiom you use in a given day versus how straight you talk know what i mean kind of. Like i said to david, it knows im being sarcastic and booking is better than mine. Theyre saying thats some booking, meaning, well right. So believe it or not, people are buzzing about his chips. They love him. They can do you know sarcasm yes his chips detect sarcasm and do shadow in gaming thats how you know and, by the way, can i tell you that jensen developed it. The idea you have foreshadow and face, like, he loves modern art, he has Great Respect for the realists this man talks art he talks architecture. You go out there, there is jensen huang and everybody else. It is he is revered he doesnt take himself too seriously. Has a wine and beer bar at his place. People want to work until 12 00, 12 00 at night have a beer. Oxy petroleum, carl icahn may try to go after the entire board. By the way, anybody who is hoping somehow that chevron would come back for oxy, now the stock is down 42 . Not what im hearing not what im hearing, no discipline discipline discipline take out a competitor. Talking about new tech. Lets talk about old tech. Hp and xerox it is getting nasty. Hp sends a letter yesterday of back to xerox after their letter. A lot of letters. Where are we headed here . Most likely to a proxy fight the window doesnt open for a little while then to the annual meeting, april until we figure this thing out. The entire board is let me focus on a couple of things that hp focused on in the return of serve to xerox after it said, sure, well get Due Diligence on you but you cant get Due Diligence on us. Federer, amazing. They got a little specific in the letter at the end of it. Were concerned about the decline in value, in excess of revenue klideclines they note that total Contract Value of enterprise signings in 18 was down 13. 9 in Constant Currency they note the churn was 18 . Both data points they say with xerox stopped providing publicly since the end of last year, they go on to say, the review of synergies based on Public Information and limited information you shared doesnt support achievable synergies of the scale you suggest and go on to say it appears there are assumptions that include significant savings that are already included theyre saying, hey, yeah, youre basically not showing us any synergies as a result of the transaction. But simply the cost says you guys have outlined added up to the cost saves we have outlined and put together jim, they come back sharply. Also speaking to people involved in the transaction on the hp side, their point is simply this price is weak, not even close. They still question the financing. Letter from city usually financing gets done. Citi is a reputable bank, but commitment letter at this point. This say real fight now. Okay, so my side out there, my work says this, which is that hp has a plan. More importantly, xerox stock might go down. And then hp could buy a better price. Hp stock advances. Get past the hiccup of intel chips, real hiccup everyone is talking about how bad. But intel could hurt hps quarter. Right and then but xerox, they think that xerox doesnt really have a lot of momentum xerox stock is it would be a good deal. Hp is interesting. But not now. May be interested at a price, as you might expect. There are synergies, they really do question a lot. And it is the first time we have gotten any granularity in terms of their overall concern but remember they did talk in august and september and hp says, yeah, we talked and we wanted more information and instead of giving it to us, you guys walked away xerox disputes that completely and says they gave them plenty of information it is just bureaucracy that hp that prevents them from actually doing anything just Getting Started here. The reason why hp is so collegial about this theyre not anymore theyre not anymore. Okay. They were okay. Fair enough. Thats why thats fair your tone has changed. I think theyre now saying openly theyre discrediting xerox as a serious not bit way it acquires, but as a company. Really talking about if you look at the longterm value of the contracts, theyre going away. Yes. And hp has this new strategy about being a subscriber to ink, which could eliminate the ink problems cutting out the employees. But hp has got to get the chips. Everyone is threatened by the big chips except intel, except for lisa su. Theyre turning up the heat okay. All right last thing we had was a downgrade netflix. Weekend in which there was a bloomberg piece citing internal data at netflix, no uptick in churn. I saw that piece. I did feel when i read this whole notion, this is a sell this is a hold to sell by wells. That the really talking about how much money thats a continuial theme, how much money losing 2 per sub for of cash on 158 million in subs. A private company miss lose that money. You know what, i think that there is room for everybody. Downgrade didnt have anything to the content is king, then cash is queen. Their Free Cash Flow projections way below the street people continue to think that apple is much more in the drivers seat when it comes to the their offering the entertainment offering. Really . Yeah. By the way, drivers seat when it comes to the i thought malone had an interesting point in our interview, not to come back to it, but just they have that optionality. They can move along. Move up as it goes, and if it is not looking like it i think they watch. It is interesting 31. 25 to seema mody. Seema . Were going to go to Rick Santelli in chicago. Hey, rick. There you are thanks, carl look two day of 10s, down a bit. The entire curve is down a basis point or so. But maybe the big issue is you look at these month to date charts is get ready to close out the second to the last month of 2019 you can see that yields really have slipped now, tenyear yields, switch the bund yields, arent at the lows of the month, but certainly close considering the first two days of the month is when we establish the lowest yields. And if we look at the dollar index, it is up a little bit today. And over the last week, you can see it climbed toward the end of last week, popped above 98 even thats a victory if you open the chart up to the september 1st, throughout september, we had that kind of saw tooth formation, very unusual. Right around 98. 5 area if we jump above that well be revisiting some of the best prices of the year on the dollar index. But we all know whether it is multinational corporations or the white house, were not all that enamored anymore with a strong dollar. Carl, jim, david, back to you. All right, now, thank you, rick now to seema mody, see what is moving on the floor. We have been repeating all time highs in recent weeks including last week with the dow crossing above 28,000 for the first time ever. This week, the concern or the topic will be those trade negotiations that continue we have the dow at 27,973. Pronounced move in global markets, europe is on track for the biggest one day gain in three weeks. Asia is higher too on reports that china may be ready to address intellectual property which has been an ongoing Sticking Point in the u. S. china trade dispute. One company that has been directly tied to these trade negotiations and agriculture is john deere, that company set to report results on wednesday after cutting its guidance last quarter. Reducing production, saying farmers were delaying purchases because of the uncertainty around the discussions the stock really hasnt done a lot over the past one month. Year to date, up 17 only up 1 in the past one month versus the industrial sector which is up over 4 as for broader markets, thanksgiving week has traditionally been positive for the market with s p averaging a gain of. 6 . But keep an eye on the Retail Sector really rough woke feek, kohls falling, macys down almost 9 and home deep crow, whipot, dow some of the Department Stores are now Midcap Companies since losing a sizable chunk of their market caps this year. Well see if they can get any help from the Holiday Shopping season, black friday just around the corner guys, back to you. Seema, thanks for that. When we come back, ebay selling stub hub to viagogo. The ceo will join us at 10 00 a. M. Eastern here on squawk on the street. Dow up 102 all sectors in the green were back in a minute johnsbut were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. 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New record high today as a lot of things working in the bulls favor. Time for jim and stop trading. You get this, these contingent rights. They could be worth big. Bristol meyers is a combination. Throwing off a lot of cash the doctor is doing a remarkable job. This is going to be a most important stock of 2020. Thats why i have the doctor on this evening also managed ricoh this is important because how well is apparel doing . Not quite clear. David, remember the dupont days . Sure do. What is carbon . Find out if you watch. A little tease. Well done well done. Kullman back. Tough scratch. Changes nothing but softballs coming there you go didnt know that. Yeah. Tell me how brilliant you are how do you do it . Ever get old . No, no. Never, never. Well see you tonight. When we come bk,ac a lot more of the big deals of the day and Roger Federer in a minute. When you pine for the sunshine of a friendly gaze. For the holidays you cant beat home sweet home. 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Welcome back to squawk on the street. Morgan brennan in for sara eisen live at the post nine of the new york stock exchange. Busy week beginning here and record highs for the nasdaq at least. Good trade headlines and plenty of m a well break it down for the morning. Plus ebay is selling for another billiondollar and over 4 billion well speak to the ceo on the acquisition. Later, ronger federer to joi us as we said, well begin with the billiondollar deal. Acquiring tiffany. Deals worth 135 a share the Companies Expect to complete the deal by mid2020 guys, as cramer said in the last hour, he hopes at least that tiffany benefits from lvmhs Robust Customer relationship management, right . Something he heard about last week. He was focused, jim was, on the ability to target customers and understand what theyre doing and how theyre doing it and something he put in contrast to tiffany at least. If youre a shareholder of tiffany, you are done. You will get the money and go. They seem tock pleased with the 135 a share price that has been agreed to by both boards and started at 120 lvmh and worked up to 135 below the alltime high of the stock which is interesting because people had indicated that they would not accept anything less than lets call it 140. That not the case. Multiples though still fairly high for a business thats, guys, struggled a bit. And there is concern about what the second half of this year must look like for tiffany and so a deal is done. Yeah. Struggles. Seen as an opportunity in terms of jewelry and the younger, maybe more millennial buyer depending on how the designs shape up also just note record high for the s p as were talking and of course more deals to get to as the hour unfolds. On the lvmh deal, lets bring in robert frank. Cfo on the tape right now saying the investment posttakeover largely coming from improving and embellishing the existing stores. This is a business that struggled and said basically that tiffany had a good strategy but given that the Public Market demand Quarterly Earnings tiffany just didnt have the luxury of time to implement that strategy and so what lvmh cfo is saying, you increase the value of the brand, two, you improve the store network which is probably they didnt say it but they implied to close some of those mall stores and improve some of the locations. Tiffany has 300 stores around the world, many in the u. S the third part is improving the collection and right now tiffany with three main parts to the collection a little t tiffany and key ring and return to tiffany what lvmh is so good at doing is creating iconic designs that everyone as soon as they look at it they know thats a bulgari or tiffany. They said tiffany had the right strategy and didnt have the runway given the demands of the Public Markets to carry that out. Robert, how important is cross border tourism, especially in this era where trade relations have been more tense the cross border tourism is less important and thats been the big problem for tiffany. What happened, Chinese Tourists or consumers now buy a third of all luxury and goes to half by 2025 so the future of luxury is all about china. Whats been happening is china has been repatrioting purchases so that more of them are in china now rather than from chinese coming to the u. S. Or europe to buy luxury and tiffany was late to that game. Lvmh is early in the game and what tiffany has to do and will do is build more stores in china and put less emphasis on u. S. And tourism. Having said that, they said an important thing about the new york store, that store in need of refurbishment and expect them to come in new york and put a lot of money into updating that tiffany store to make it feel fresher than it does now. Certainly a landmark in midtown. Robert, thank you for this. Thank you. The other major deal, of course, schwab buying rival Td Ameritrade and as they go through in the release, guys, talk about how theyve been really, i dont know, at war Mutual Respect but at war for a long time, decades. It is amazing they were in many ways the disrupters of recent decades and now they are coming together to counter what has been another wave of disruptions, most largely coming out of Silicon Valley shares of etrade up today and got reports last week that the deal was in the works. You just see that name sell off dramatically and the expectation at least from investors thats the name to probably be acquired first and when news of this deal surfaced you saw that stock under pressure and now bouncing general expectation. Ing the an all stock deal that means that ameritrade Shareholders Benefit there f theres benefits to be garnered here which they say there are. Expense energies, potential cost sayings of 1. 8 billion to 2 billion. 60 to 65 of ameritrades overall expense base 18 to 20 of the blended cost base of the two companies and they do expect to achieve that by the end of year three they also talk about some Revenue Opportunities and revenue synergies. They will spend as much as 1. 6 billion to support those synergies and in part why you do it 1. 80 shares of schwab for ameritrade and performed quite well last week when the first to report on the strong possibility a deal was near. Didnt quite happen as soon as we anticipated but didnt take long. With all the mergers, i suspect you have had quite a busy weekend. Busy. That was not just all of it. You have hp and xerox, of course a lorarge deal of the Medicines Company sold to novartis m a is back. And ebay which announced to sell stubhub. The price tag just a bit over 4 billion in cash and the deal expected to close by the First Quarter of next year joining us now to discuss this is eric baker. Nice to have you, mr. Baker. Have did you do this well, you know, its been something we have been thinking about for a long time. I started stubhub back in the day in Business School at stanford and viagogo to bring the vision internationally and to combine the two made too much sense and were very excited about it. Are you paying at least according to ebays interim ceo i spoke to earlier, 25 times current ebitda, a hefty multiple why is it worth it i think we think about what we can deliver, the value of it. When you look at stubhub, i would tell you that its one of the premier Consumer Brands on the internet it is a phenomenal platform. It is serving fans well now for 20 years just about and when you look at what the combined entities do and provide, we think its very exciting. What does it let you do that you with respect able to do previously well, really, we juaned to make sure our vision is that fans should be able to buy any ticket for any event anywhere in the world in their language, their currency and we should give sellers tickets and content owners access, consumers globally so that they can reach them viagogo is great distribution outside the United States. Stubhub inside the United States and put them together and fulfill a global vision. Eric, what does it mean in terms of the increasing role of technology and data are going to play and how consumers can access tickets and also i guess what that means for pricing. Yeah, so i think two things there. I think that technology has things get smoother you eliminate friction i remember before starting stubhub the difficulty of access to a ticket and people on the street corners and now it is going to get easier and easier to see what they want to see when they want to see it in terms of pricing, any time you got more competition in a marketplace where youre bringing more sellers on to one platform and competing with one another i think you will see better accessibility and better prices for fans. Stubhub does 1. 1 billion in revenues give viewers and listeners a sense of the Overall Company in terms of revenue base. Yeah, so stubhub i think basically sells out 5 billion of gross Merchandise Sales of tickets. Viagogo sells billions globally. Youre putting the two together and you have a pretty sizable business you didnt give us any specifics there, though, did you . Im sure you can do the math but if you take multiple billions with five you get a sense of it. Multiple billions could be a lot of different things. Talking about billions, 4 billion is a pretty significant number you have committed financing i guess from jpmorgan. Are you confident in terms of where and how youre paying for it yeah. We are very excited about it as i say this is the acquisition where the industrial logic makes a ton of sense for us. It brings a lot of value to fans and again this is we know the sector extremely well. Having started both companies. We understand what were getting here and what we can provide for other people so its certainly finally, i guess eric, you founded as you said stubhub and then in Business School and you thats when it was sold to ebay for 310 billion i wondered if you were there if you would have sold it in the first place. Thats a good question. I started in Business School with one partner, had differences with the partner and then wasnt able to dictate the sale of it so it was up to me i wouldnt have to buy it back because i never would have sold it but everything works out in the end. There you go. We appreciate you joining us eric baker, ceo of viagogo. Thank you. Shares of uber falling after losing a license to operate in london we have the latest wilhelm . Not the first the company faced the challenges back in 2017, they were told they would not have their license to operate as a private company renewed. They got a judge involved. By 2018 they were given a 15month probationary period there were concerns at that time about background security checks on drivers and the companys failure to report criminal offenses by its drivers. This time around its one small focus on security and passengers put at risk. The regulator here transport for london saying that uber essentially has not taken sufficient measures to stop uninsured, unlicensed drivers pretending this they are uber drivers picking up passengers, multiple times the mayor of london spoke to our colleague at sky news and talked about why transport for london cfl has taken this position. Unfortunately what they have found is a pattern of failures from uber. Ill give you an example there have been at least 14,000 journeys where unauthorized drivers have been driving people around and they arent the driver who the passenger thought they would be. Another example is drivers who have had the licenses suspended or dismissed that manipulated the uber system to drive people around and taken a risk with the safety and security of londoners and i stand by and support the decision not to grant uber a license. Reporter now, of course, the company said that this decision is extraordinary and wrong we have seen a tweet from the ceo in the last couple of hours saying we understand were held to a higher bar as we should be and this decision is just wrong. We fundamentally changed how we operate in london and weve come very far and will keep going for the millions of dlarivers and rider that is rely on us more than 45,000 delivers, largest city across europe for the firm this is a big blow they have 21 days to appeal this decision that appeal process could drag on for sometime and they will continue to operate. Any word on how many times the appeal process overturns something, wilhelm reporter we have seen it in the past with them and doesnt happen often that you have a private hire operate or the. There are a lot more smaller operators shut down in the past because they have not been able to renew the license f. That happens to uber, a massive blow for revenue in europe. Indeed. People already parsing just how much it means for the global ride base. Wilhelm, thanks. Whether we come back, Roger Federer is with us to join us first on cnbc talking about the new partnership with on and then later another billiondollar deal to get to, the novartis deal 10 billion acquisition. 24th record ofhe t year for the s p. Roger federer and athletic Footwear Company on announcing a deal joining as an investor and contributing product designer taking a step toward life after tennis joining us is the cofounder of on and also Roger Federer. Gentlemen, good morning. Thank you for being with you. Good morning. Good morning, everybody i cant wait to hear more about this deal. I love this letter where on says we noticed roger wearing on shoes and reached out to him a small place and we started having dinner together is that how they got to you . Thats it my wife and friends had shoes and seeing the company in my country. Theyre very electronic in that market, of course. So its all around me and then i started wearing them myself in the last couple of years now i was like, how about we get together get to know each other who knows what comes out of it here we are announcing the partnership and my investment into the company and im really, really excited because theyre great people. What takes a traditional could have been a simple endorsement and now investor and product designer what took it to the next level we felt that kind of a classical athletic shape that for conventional Sports Companies and we just felt while the friendship developed that we share a lot of same passions so passion for innovation, design roger also very much shares the passion for fashion. And so, we felt its much more meaningful if roger is a coowner and part of the on team. Roger, with the partnership and investment, what does that entail how will you contribute to the company . Will we see tennis sneakers now, for example . Im sure were talking about that and stay tuned for that as i run around the whole time and i use them for running and then of course i also explore maybe the eye of a tennis shoe and see what will happen there we work on other different projects already it is a fun process as nothing was really finalized yet we are working on projects and just talking to each other because we had a good feel about possible partnership and only recently its really come to this so its been very exciting times already and stay tuned as a lot of things coming now next year. Roger, for you personally, obviously, the read is going to be, all right, he is getting the business ducks in a row for when he finally does decide to hang it up. What kind of clarity can you bring on that . Its interesting. In a way im understanding the take and on the other hand im surprised people think that way because ive not spoken about what comes after because ive also said the last few years is i want to keep it as free as possible so i basically have nothing when im retiring but ever since i signed the un irglo deal and now with on its changed a little bit i will be working also beyond the playing days and i would also do anyway with the charity and four children and my wife and im excited about it the team at on wants me to keep playing. My fans want me to keep playing. I just came back from a south american tour and i will keep on playing. This is not the end of my tennis career it is just a process im going through right now. Roger will be a very active tennis playing entrepreneur and we are looking forward to 2030 when he will end and actually we will have more time for me, as well nice. Okay well give it a base to work with i guess. Exactly. David, how quickly is on growing and what about longer termed plans for the company would you take it public we started in switzerland in 2010 and been doubling every year the u. S. Is now our biggest market growing well beyond 100 so we continue to keep it that way because on has been discovery brand and people snapped into the shoe, they loved it it is a unique feel, unique patterns and recognize to friend we want to keep it up like that. Roger, can you talk about the differences . Among athletic brands and how they differ and thinking of your partnership with nike. I was with them for a long time and when that ended two years ago, you know, it was a bit different, you know . Opened up completely different opportunities and this is where i in a way, i wasnt in any hurry. I wanted to take the time to make the next move and as david said, also, im interested also in the fashion aspect and i just think working with a brand like on thats literally around the corner from where i live, we can get together and really easy to see each other and catch up over coffee or my house an get together and also the team that really, you know, showed me what a great couple of guys they are and id like to spend time with them and talk about everything about how i can contribute to the on brand and like he said the shoes are super comfortable, great. One of the Fastest Growing Sneaker Companies out there and really cool to be part of that story. Roger, you have a laundry list of brand partnerships, as well talking about on today was rolex, monet, net jets i could go down the list how do you decide who to partner with what is your take on the Luxury Consumer and the luxury industry more broadly right now focused on the tiffany lvmh merger im fortunate to have so many wonderful partners and brands that i can be an ambassador for. I remember once back in 2004 when i came here to the u. S. Open people were saying like how do you have enough partners because the americans focus very much who who are your partners in switzerland it is the opposite tennis results and then latter the partners i think its been great to kept the white canvas until that time and i was really able to partner with the best brands in the world to be honest and its been a pleasure and for an athlete or a tennis athlete to stay with the same brand for a listening time which i have been able to do its been a privilege and love it and some will extend exceed my playing days and yeah. The luxury business is as strong as ever i believe and of course also fun to be part of the lvmh group and monet. David, shoe business is tough. So competitive im curious whether or not you think the biggest edge comes from product design, the Actual Technology or if its more about distribution right now or partnerships with athletes like roger. Its coming down to products. We didnt start with the biggest markets. We had to really believe in the fact that people really love the product and thats what made on into the Fastest Growing Fan Community in running right now and well continue to do that. I think a certain aspect as well people are really trying and next generation is trying to connect with the brand, becoming part of the story of the brand and i think thats a huge opportunity for us, more emerging brands that are now getting a lot bigger and getting so much encouragement and feedback from the fans, input from our fans so i think with on they can be part of the journey. David, listening to you speak how important is social media . Incredibly important. If you saw what happened over the last few days when we announced and all the fans of roger going crazy, of course, all the on fans going crazier, its a huge ground swell and that happened in that Fan Community. Roger, i want to get your thoughts, i mean, we have seen so many examples over the years of celebrities or professional athletes whose w. H. Athletes whos made an lost one, what is your advice to up and coming athletes financially . Me, honestly, conservative. Of course, take chances on the tennis court or in life at times but at the end of the day i like to be conservative i guess its also a swiss mentality to some extent i believe i dream big but yet we play it safe to some extent i think thats what it is. I ive never done crazy, silly investment that is big investment at on and biggest one yet in my time and im confident about it and think its a great future for both of us and be careful and surround yourself with the right people, of course. I have to ask you just talking about how people are wondering how do you do it at this age . How long you can do it when you finish a match now, how does it differ in feeling than when you were 25 is it about the Recovery Time . Is it about playing fewer matches per year what is the delta there . Whats the change . How big are the aches to back in the day it is a good question. It is very different i think recover faster as a teenager and in the beginning of your 20s you play tough match and you without thinking about it you just feel back to 100 after two days i feel sometimes the same but doesnt always come automatically. You know at 38. I have to make sure i do the warmups right it is windy at the top i have to work hard and definitely more quality over quantity because i can play long matches and be selective with my schedule and just make sure that with all of my life everything thats going on is so busy and so exciting that i just know how much is too much an how much is not enough and i need to play enough matches because i dont want to only spend time on the practice courts because my passion is to play in front of the people like in south america, ecuador and mexico city on saturday and broke aaltime record of in front of people, double the size of the Arthur Ashe Stadium and had a wonderful life and i hope i can keep that going and having more aches nowadays than when i was younger. Meanwhile, the rest of us watch in disbelief you are amazing. Thank you. Congratulations to both of you. Please come back. All right we will. Thank you. Thank you thanks for having us. What a way to start the week. Going to break, take a look at shares of ge after tapping their ceo to replace jamie miller as the cfo, sto uckp around 60 in 2019 up 2 right now. We have more squawk on the street after this break welcome back, everyone im sue herrera. A disagreement between Navy Secretary spencer and the white house has cost him his job spencer was fired yesterday after opposing president trumps request of gallagher to remain with the force a wave of pro democracy candidates elected in hong kong. The Elections Come after protests in the chinese controlled region. The election saw 74 turnout. People are hospitalized after taking a 16day cruise from california to florida paramedics met the ship. Norwegian said the ship was thoroughly cleaned before new passengers boarded a few hours later. And things in germany made off with hundreds of millions of jewels after successfully robbing one of the worlds holdest museums. So far, though, no suspects have been named youre up to date. Morgan, back to you. Wow i hope they find those people but also sounds like a plot for a new movie. Exactly, exactly. Sue, thank you. When we return, another billiondollar deal to hit lta with the investor on novartis when squawk on the street returns. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Ptech students around the world. Johnsbut were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. 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. Novartis agreeing to buy the Medicines Company for 9. 7 billion. 45 premium to what was the unaffected stock price for that company. The deal does position novartis to go head to head with Drug Companies of amigen with competing products chairman of the Medicines Company, the founder and chief Investment Officer of an activist investor. You work with carl icahn for a long time. Thank you for being with us. Thank you for having me. This is an excellent outcome for any recent shareholder or longterm shareholder. Absolutely. You know, you have had very good returns taking these positions, reconstituting boards, and sort of taking your time but getting a very positive outcome. What is it particularly about bio tech that lends itself at least to your approach okay. So thank you you know, in bio tech, theres a couple factors we think sort of make it particularly good for the type of investing we do. One of the factors is that its very high margins and barriers to entry in this business so in when a company has a successful product it has a government issued monopoly of the product which is appropriate. Its a lot of work to get there but they have this sort of high margin business with barriers to entry unlike most other businesses in the economy. I use restaurants as an example. If we were to get into the restaurant business, we start it down the street from here, somebody could copy the idea and unless we had the best Service Every single day we lose share but when a company has a drug on patent to the extent docs and patients recognize the value it provides to society they continue to use it even if the company misallocates cash flows going forward. So it sort of is easier for companies in the bio tech space to get away with mismanagement in the near term. Get away with mismanagement Capital Allocation. They had a high class problem sort to speak of a bare yrier t entry. Exactly. What do you look for . Companys that are sort of not doing all they could do because they do have this kind of recurring cash flow from a potential drug so we look for companies where basically what we do is we decf a company as if its run optimally for the shay holders and compare it to the market cap. Look at the company and the drugs and which markets address and figure out the margins, how many sales people to optimize that value and do a simple dcf and then compare it to the market cap and we dont take account of the fact that the company has some skyscraper headquarters in new york city and corporate jets all we do is say whens the best way to optimize the value. When froms a huge difference we look at it is there ways to put leverage on the company and often hearing from big institutional shareholders, large mutual funds contact us all the time so thats a good window into us knowing the shareholders are generally kind of unhappy with the play. Give me a sense specific to the Medicines Company, you sell 10 billion almost, reconstitute the board. The stock single digits, wasnt it yes i guess a year ago it was 17, yeah. What happened there what did you do effectively as an activist investor that helped to bring this out . Medicines company is a good company, good people where they had a large collection of assets put together over time most assets not actually creating economic value. They were in fact in the short term destroying it they had businesses where the costs of being in the business were higher than the revenues so we were able to sort of separate out those businesses, sell them off, and focus in on what the value that we felt was the highest value piece there which is this drug candidate which is really a very, very exciting program. And bringing in a team that was just laser focused on executing on that. And we put an options policy for employees so that everybody was incentive to get goals, move the drug forward as quickly as possible which is good for society, good for shareholders, good for everybody and then work out well. How many years do you expect that youre involved with a company whether on its board or active in the stock when you get involved so its very hard to predict but we assume that well be dealing with a multiyear investment sometimes after six months we can have a situation where a large pharma comes in and say we want to buy it if we agree on a good price thats fantastic but we sort of play on this going to be a few years and usually takes a few years to sort of implement change, get if boards turnover is necessary implement that. Let me come back to a name you know very well youre on the board and had been for a long time, in fact, going back to the days of icahn, biogen. Yes. We got news from the company when it went back and take a look at treatment for alzheimers and the studies that it had done and said theyre statistically relevant what are your expectations there . The stock had a big pop on that day and havent heard much should the market had been as excited about the prospects for this drug . Look. That drug is now in will be submitted to the fda theyre the experts to determine, you know, kind of the whether the drug should be approved and what the kind of what the market would be and risk benefit of that theyre the experts. But from there was a from the data thats been presented publicly theres a real reason to believe that this is a very important therapy, potentially a very important therapy for alzheimers patients unfortunately as you know its a horrible disease basically untreatable. There are a few drugs on the market that, you know, kind of have small effects. One would imagine an effective treatment that sometimes with the retarded growth or progression of the disease is a largest selling drug in the country very quickly. That is possible, yeah. We have that kind of so this is certainly we have that view that thats possible you know i dont want to get in front of the fda and they have to review these data and carefully analyze them but, you know, if you sort of looked at the market potential and you look at the affects that we have seen so far, but the affects seen so far could be huge. Finally for your pharma, a little over billion dollars again and highlighting you have had a good track record. Thank you. Based on the longterm positions. Do you go after larger prey or go with the market caps that make sense with your relative size right now we look at all companies. The first order its more important like when we have leverage over the companies. Hearing from three or four large institutional shareholders in a company thats maybe theres three 10 holders in a 50 billion or 60 billion company, theres more leverage there in terms of potential shares outstanding than a Smaller Company where we dont know the shareholders we are looking at all market cap ranges and the answer is probably bigger ones. All right appreciate you taking the time with us today. Thank you. Thank you thank you for having me on. Very welcome. Carl, back over to you. Thanks. As we go do break, take a look at the market this morning. Nice little meltup. S p 3130 f torhe 24th record high of the year back in a minute itary service ms at home and abroad for all their hard work and sacrifice. We all sleep easier knowing youre out there keeping us safe. And on a personal note. Sfx jet engines. I just needed to get that off my chest. Thank you. Geico proudly supporting the military for over 75 years. Have you ever worked with dr. Francis . Oh yeah, hes ok. Just ok . Guess who just got reinstated well, not officially. Nervous . Yeah. Yeah me too. Dont worry about it, well figure it out. Ill see ya in there just ok is not ok. At t has americas best network, now with our best plans, at our best prices, starting at 35 a line for 4 lines. New from at t. I have respect for jeff bezos but he bought the Washington Post to have political influence and i got to tell you we have a different country than we used to have. We have a different he owns amazon he wants political influence so that amazon will benefit from it thats not right and believe me if i become president , oh do they have problems they will have such problems amazon challenging the pentagon decision to award gentlemenjedi contract saying the president exerted the political influence on the outcome of the bid and this as amazon files with the u. S. Court of federal courts under seal and amazon said that the president quote unmistakable bias impacted the Decision Making process one to watch this amid more controversy at the pentagon over the weekend after the firing of Navy Secretary spencer after the fate of a navy s. E. A. L. Accused of war crimes in iraq i sat down with spencer a few weeks ago. So what does this mean for investors . A statement of not expecting an outcome but notes that, quote, it is an unpress departmented turn of events that could lead to additional resignations it all speaks to whats arguably greater civil, military angst as the president continues to take on many steps to weigh in on the pentagons affairs, processes that have been in many cases crafted to really avoid politics of controversy id also just note a quick programming note for tomorrow. Do not miss my interview with Army Secretary Ryan Mccarthy happening right here on squawk alley actually 11 00 a. M. Eastern tomorrow. All right. The etf spotlight this morning focusing on the tech with nasdaq at a record high apple, amazon, nvidia on the 100 with the impact. Xlk up 40 this year outperforming the s p which as we said a moment ago hit its own record high today. All right. Time now to send it over to jon fortt for a look at the next hour that would be squawk alley. Jon . Thats right. Investigation into worker conditions at amazon finds that perhaps warehouses are not made safer by robots. Well talk to a reporter behind that coming up on squawk alley. It is nice. His haircut is nice. This is the mostawarded minivan three years in a row. The van just talked. Sales guy, give em the employee price, then gimme your foot. Handsfree sliding doors, stow n go seats. Can your car do this . Man, yall getting a hook up and yall dont even work here. Dont act like im not doing yall a favor. Yall should be singing my praises. Pacificaaaaa with employee pricing, get 4,107 below msrp plus 1,000 bonus cash plus 0 financing for 60 months on the 2020 Pacifica Limited welcome back to squawk on the street. Im dominic chu. A yer end rally is picking um some steam with the nasdaq and s p 500 hitting high highs health care is on pace to close at 52week highs the best performing group as you can see is the Technology Sector reversing last weeks down trend. Its particularly Semiconductor Stocks that are leading the way higher today thanks to part to strong gains by inn individual i cant, Morgan Stanley upgraded that stock to a buy rating claiming that they will return to solid growth next year, thats helping to lift applied materials, Land Research and amd, all up between 2 and 4 in early trading. A lot of green for semiconductors. Back downtown to you guys, carl, at the new york stock exchange. As dom mentioned the markets hitting record highs on this holiday shortened trading week Mike Santelli is on set. Good frayed news, m a and pause that refreshed. It looks like it at least we had a pause last week, a lot of things came off the boil, semis leading today, they were down a few percent off their highs. I think a lot of people still felt underinvested if we werent going to get a real dif there is an impatience towards saying we have to increase our exposure. Thats a longerterm money that feels as if the path of least resistance to the end of the year might be higher you are not seeing i dont think a huge grab for the cyclical stocks that everyone thought should be reviving a lot of stuff is working but its been health care and technology that have now kind of assumed the lead and that to me is just kind of, you know, get involved because the market doesnt seem like it wanted to come in that much more, at least not right now. As we get into the final weeks of the year here when does tax positioning start to become part of the conversation i think thats been an ongoing kind of thing below the surface for a while now, morgan. Its almost impossible to isolate that and say this is exactly the quantitative effect of all that, but if you look at the number of stocks that were hitting new lows, the weaker groups stay weak, and then i dont know that were really seeing the other piece of that is no real rush to sell your winners you dont want to sell your winners before the end of the year so that kind of creates that bifurcated market you do have a huge spread between the valuations of the winning stocks and the losing stocks right now wall street is telling you, hey, that means its ripe for stock picking but it also could be ripe for a narrow market that continues to reward whats been working. Bond market ratifying all of this i think the bond market is staying out of the way, you have essentially had yields stay low but they are not making new lows i think its enough. Its kind of showing you, look, financial conditions have eased a lot, bond yields being low, the volatility index being low, the market at a new high people want to talk about the fed balance sheet. I think its a placebo, the plas bows work. And thats being whats been happening. If you have very, very accommodative financial conditions and at least some evidence that the fundamentals are turning for the better, you have a market at new highs. Probably you give a good grade to fed communications for saying were now, you know were backing off for now and market not really throwing a tantrum. I think thats because the fed was at a moment where it was in tune with what the market saw out there, which is we see signs of some bottoming, theres no economic emergency we have to respond to right now market was willing to hear that, we had our freak out in august and september and right after that the fed said, you are on your own for a while while. Quickly, now that its official Td Ameritrade and charles schwab. Obviously its a very logical horizontal merger, its going to force things further in the direction of individual investors being able to get things kind of cheaper and easier and faster, but beyond that i do think that we kind of priced it in obviously last week a ton of conferences coming out of thanksgiving so we will learn more about how q4 is trending in the coming days. When we come back this morning obviously we will watch the markets here, dow is up 136. Tesla getting a boost for strong reservations for its truck we will talk about that with kara swisher when squawk alley starts in a moment about medicare and 65, ysupplemental insurance. Medicare is great, but it doesnt cover everything only about 80 of your part b medicare costs, which means you may have to pay for the rest. Thats where Medicare Supplement insurance comes in to help pay for some of what medicare doesnt. Learn how an aarp Medicare Supplement insurance plan, insured by United Healthcare Insurance Company might be the right choice for you. A free decision guide is a great place to start. Call today to request yours. So what makes an aarp Medicare Supplement plan unique . Well, these are the only Medicare Supplement plans endorsed by aarp and thats because they meet aarps high standards of quality and service. Youre also getting the great features that any Medicare Supplement plan provides. 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Call today for a free guide. Good morning it is kl a. M. At uber headquarters in san francisco, 11 00 a. M. On wall street and squawk alley is live. A. M. At s in san francisco, 11 00 a. M. On wall street and squawk alley is live. 8a. M. At uber headquarts in san francisco, 11 00 a. M. On wall street and squawk alley is live. A. M. At uber headquarters in san francisco, 11 00 a. M. On wall street and squawk alley is live