Transcripts For CNBC Squawk On The Street 20240713

All ahead for the session so far. Ten year note yield, crude oil, you ask, and we always like to answer as well, look at our ten year note yield, 1. 78. Lets get to our road map this morning, it starts with what you expect, the shopping surge, facing a condensed Holiday Season, retailers raking in a record 4. 4 billion online on thanksgiving day this is ahead of, of course, what is traditionally the busiest shopping day of the year, today. The final trading day of november and stocks pointing to a lower open on this holiday shortened session. Buffett thwarted, the oracle of omahas latest attempt to put his cash hoard to work, outed by by apollo global. We begin with retails busiest day. Courtney reagan is at the Woodbridge Center mall with what to expect this weekend as the Holiday Shopping season officially kicks off hey, court. Reporter good morning, happy thanksgiving to you, morgan. Here were starting to see the second wave of shoppers come out to the mall. They do those early door buster deals, all the big box stores, Department Stores, thats on thanksgiving, even had early black friday deals as early as october. Still today is expected to be the busiest day of the year for retail thats according to both npd and shopper rack 115 million americans are going to shop today in store and online we talked to a couple of them. Around like 10 00 they picked me up and we went to walmart, took a nap and came here. Woke up at 4 00 in the morning, got my girls stuff and 200 or 300 it was worth it. We love black friday. This year we decided to go all out. We had thanksgiving dinner, then we packed everything up and we got a hotel up near this mall on purpose so that we could be here at 6 00 a. M. It is a really critical weekend and day for retail last year black friday generated 6 to 7 of total quartererly sales for American Eagle and best, compared to a normal day of 1 . That makes it equivalent to an extra week of sales. So far this morning, the stop searched for deals, echo deals laptop and kindle. Lego is the top searched for toy brand right now. Cap the phi notes there is particular interest in disneys frozen toys and some online hiccups early on, catch point noticed that costco. Com was slow wednesday night and went out briefly on thanksgiving morning. However, we did see some heavier traffic there, so that makes some sense h m. Com also went down for five minutes. Thats back up and running now still a lot of shopping and weekend left here. Ill send it back down to you. Courtney reagan, thank you. Retail here, well bring in two guests, b. Rileys Susan Anderson and ubs retail analyst michael laser. Michael, ill start with you, six fewer shopping days, one less weekend, between thanksgiving and christmas this year seen a lot of sales pulled forward. Really right around halloween, after halloween. How much is that going to eat into not only this weekend but the rest of the Holiday Shopping season and how consumers are spending trk tricky Holiday Spending,i scha is happening with tariffs, inventory and challenging environment for retail overall what this means is that were going to see a lot of promotions, saw that starting very early consumers will be out, there is going to be clear winners and clear losers during this Holiday Season susan, are the promotions as steep as we have seen in years past we keep hearing about the strength of the consumer right now. Yes so i think a lot of the retailers critically within the mall are trying to plan for flat promotions, they left in some their pockets if they have to pull out other promotions. A little over 6 0 has left soe promotions a good portion of the shopping season also comes after black friday and last year we had that december lull and that is when a lot of extra promotions started to come out. Michael, tariffs, something that many of the retailers didnt have to contend with on many other products this time a year ago how is athat fathat factoring i equation is it something that companies absorb the cost of. Theyre engaging in a variety of different strategies, many are pushing back saying this is your responsibility. You handle it. Others are pushing price to consumer with varying responses from the consumer and in some cases having an impact of demand on the Home Furnishings sector way fair was open that sales slowed once they started pushing price. This is still going to be a risk that we have to be mindful of as we go through the Holiday Spending season. Winners and losers. Seems as though thats already been the case in retail overall. You talk about it all the time is anything going to change this Holiday Season or the winner goesing to continue to win and the losers continue to lose. What were going to see is that spread between the good and the not so good is going to widen. Thats because the good are going to continue to do things like get engaged in ultra fast Free Shipping, which is going to be very expensive for those who dont have the cost structure to offer those types of services. So the spread between the good and the not so good is going to lag. Susan, along the same lines, any more traditional retailers we focused so much on the instore crush and the Shopping Experience right now, anybody that is more traditionally positioned have a chance to actually prove this Holiday Season that their stocks are unfairly maligned, that basically they got too cheap and neglected . Yes, so i think a lot of the good retailers have invested in the technology to be able to compete from omni channel perspective and really the teen retailers probably given their customer obviously has shopped online earlier and sooner. So we really like American Eagle right here the ae brand is benefitting from the fashion cycle, theyre offering curvy denim, bringing new consumers into the store 30 of sales are online. They have a number of omni channel initiatives going on also they have the aerie brand growing double digits for multiple years now thats our favorite in the mall for holiday this season. Michael, we keep hearing about death of the Department Store, yet nordstroms stock rallies on the heels of earnings in the last couple of days is it overblown . Overdone i dont think the death of the Department Store is overblown. The death of bad Department Stores certainly understated and well continue to see that play out over the next few years. Where the stocks are responding is where expectations get a little too low and when that gets overdone, were seeing outside reaction. I dont think were going to see an end to volatility of Retail Stocks because it is so hard to price these types of turning points in a sector and still have an imbalance between the supply of available places to buy goods and the demand to buy goods through physical places. You mentioned Home Improvement as an area where you want to watch the season not something we often think about in terms of the gifting season just describe that a little bit. You mentioned way fair actually as one point. So we like Home Improvement it is a structurally better place to be in retail over the long run there is less price competition here than in other areas in addition, you know, these retailers are doing a good job from an execution standpoint we like lowes stock it trades at a modest multiple relative to growth rate. Theyre in the midst of a transformation and turn around we think it is in the early stages and thats going to accelerate in 2020 susan, on monday, were going to be sitting here talking about how friday and the weekend looked in terms of the numbers how important is that really going to be given the rise over the last decade of the omni channel, of online buying . Is black friday overblown these days well, it is definitely been spread out over the course of november, we started seeing deals shortly after halloween and those accelerated as we got closer to this week. Were starting to see the deals come out for cybermonday, so the consumer knows if they didnt get anything for black friday, they can wait until next week and get it during cyberweek. So i think it is important to set the tone of the environment, particularly for investors, but in the terms of shopping now, and the percent of sales, it has been declining each year so it has become less important. Susan and michael, thank you for joining us today. Thank you all right, we also want to get to tech data this morning. Agreeing to be bought by private Equity Firm Apollo for 145 a share, valuing the company at just over 5 billion the competing suitor in the bid, none other than us at the bottom of the hour with more apollo had an agreement to acquire tech data for 130 a share. Investment bankers on a kind of stop dard standard go shop for other buyers Warren Buffett, Berkshire Hathaway moved quickly to offer 140. And apollo said 145. Overtopping buffett. A few interesting wrinkles in terms of the sequence of events and the fact that buffetts willing to get involved in a quasi auction. Now, very small deal in the scheme of things, 5 of what buffett has in cash sitting around but even at that, just the idea that willing to take a fly over on a deal that was already on paper. As you point out, what has become the typical go shop, this wasnt always typical, but private equity deals we see that included, which is basically the ability to continue to solicit other bids during a period of time still hasnt ended december 9th is when it concludes. Not that theyre going to necessarily see another one. Im with you, mike it is interesting to see, even though it is a small portion, 128 billion in cash hes under pressure, one would think, maybe internally from himself, to spend some of that money. Ive talked about it oftentimes, you set berkshire up and didnt tell anybody what it was and laid out 128 billion in cash, underperformed the s p for the last decade, mike. Yeah, point to point. And has an 88yearold ceo with no succession plan, i would say, hey, you know what, thats a company own to activists absolutely. This is berkshire doesnt otherwise make sense outside of buffett. So you certainly would imagine hes anxious to put it to work. How you do that and get the returns that hes accustom ed to is hard to figure out. It is kind of a prosaic business, you know, pretty steady, but cheap and neglected. Yeah. Absolutely this is a company that last year brought in 37 billion in revenue, but doesnt get talked about very often largely flies below the radar, global distributor of Tech Products and services, supplies Small Companies with software, hardware, and it looks like a lot of the revenue, 16 of sales are tied to apple products, cisco and Hp Enterprise make up 11 each but really one of the biggest tech names that dont necessarily pay that close attention to until you have a bidding war like this. A broad middle man, which is a play on general, you know, gdp growth, which a lot of Berkshire Hathaway is now. Absolutely. Shareholders should be thanking mr. Buffett regardless given the 11. 5 increase he was able to get them really apollo was able to pay more, wondering in terms of the process itself thats why they have go shops. When we return, how best buy is raising the stakes for next day delivery another look at futures, we got an opening bell 17 minutes away here squawk on the street will continue right after a very quick break. Sundown vitamins are all nongmo, made with naturally sourced colors and flavors and are gluten dairy free. Theyre all clean. All the time. Even if sometimes were not. Sundown vitamins. All clean. All the time. Best buy trying to separate itself from its retail peers its Holiday Season through delivery. Frank holland explains from new jersey good morning, frank. Reporter good morning to you. Best buy increases spending on logistics by 90 last year and is continuing that this year as it meets customer demand, including demand for free next day shipping to 99 of its customers. Best buy is not giving us exact numbers on its investment, but we know overall the industry is just increasing spending amazon expected to see 3 billion increase in costs from offering free next day shipping this year. Walmart acquired jet. Com in 2016 for 3 billion to boost logistics and is expected to see its costs increase by 215 million this year. Best buys logistics spending includes metro ecommerce centers that allow it to offer 50 million customers in the new york, l. A. And chicago areas free next day shipping on orders over 35, placed as late as 8 00 p. M. The company boasting thats the latest deadline in the industry. The companys plan also is focused on sustainability and savings. This is a custom box cutting machine, chief supply chain officer rob bass says this is key to longterm savings you look at the package of materials and the save there you also what a lot of people dont think about, if you look at the profile of these, i could put about three of these in the same space as this one so ultimately that means were filling up less trucks, putting less trucks on the road, and then on some of our air shipments fair to say were putting less airplanes in the air. Reporter the company says it reduced cardboard waste by 40 and this also helps reduce the amount of money it spends on shipping with u. P. S. , fedex and in some cases xpo that handles delivery of larger items like appliances back to you. All right well, all the major averages coming off fresh all time highs. One more look at futures again we got an opening bell 12 minutes from now dont forget, shortened session today, 1 00 p. M. Eastern time close. Squawk on the street back after a couple of minutes. 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So, listen, i think today is going to be a nonevent only half a day, a lot of noise, political stuff. I think as you come into december, you have the market kind of churn right here and edge higher. I think the market is going to end the year closer to where we are, thats about 100 points better than where i thought we were going to end, but i do think based on what we have seen and the way the market acted, that the markets probably come through right here the only thing that could really throw a Monkey Wrench into this is if the rhetoric around december 15th gets more heated than it is potentially already going to get because the expectation is that no deal, hes going to raise those tariffs, hes not going to back off, just a matter of what is the rhetoric around raising those tariffs if and when he does i think that will be kind of the next leg of which way the market goes. And just to be clear, 100 points ahead of where we thought we would be on the s p yeah. I thought, you know, i thought the market would close somewhere between 3,000 and 3025 were at 3150, right so i think were were about 100 points, 120 points better than what i expected but, look, im down here in florida, what do i know . Larry is it just about not overthinking it . It seems like everyone can point to the seasonal strength, the fact that you have sort of the fed out of the way, bond yields really low we got through earnings season is the risk here into december continuing with that trade or fighting that trade . Funny thing happened on my way to the mall today, i saw fed chairman jay powell dressed as santa claus taking a victory lap around target at black friday. I think it speaks to the idea that everyone talks about the consumer, saving the u. S. Economy this year. The consumer twothirds of the economy, wages are good, unemployment is at 50, a record low. All those great things it was the Central Banks around the world that allowed the consumer to cash the checks that they have been writing at this Holiday Season and i think it is a very dangerous concept because it is that fed and Central Bank Policy that is driven certain sectors of the market like defensives, like reits, utilities to high and lofty levels in a third year of a president ial term. We may have seen peak liquidity. The stimulus around the world is having a diminishing benefit in the Central Banks. Theyre worried were encouraging too much savings i think it is about rotation from here on in. It is about rotation away from some of the liquidity beneficiaries into more cyclicals, more industrials, into areas like international. Ill tell you, we talk about tariffs with kenny, one of my concerns is not so much black friday, it is Small Business saturday i worry that the tariffs are beginning to have more of an impact on Small Businesses in this country that cant absorb all of those tariffs Small Business is half of the economy. We need to be more concerned about how it affects those Companies Rather than the headlines in the s p 500 right now. Kenny, if the u. S. And china dont get to a phase one trade deal until the end of the year, is the market ready for it yeah. Listen, i think the tariffs are going to kick in if we dont have a deal. Hes laid it out he cannot back down now. That would be viewed certainly from chiniaas point of him of i caving that being said, i do think that the market is recognizing the fact that we may not get this trade deal so might you get the market to back off a little bit, i think yes. I dont think by any stretch youre going to get see the market crash or correct if the tariffs come on december 15th. I think you get some pressure, and some volatility around it, like i said, but i think in the end, the market will be fine. I think kenny makes a good point. All right, guys, hang right there. Were going to have you stick with us. Were going to continue this conversation after a quick break. Take one more look at the futures right now. Edging slightly lower. Coming off the record highs that the s p, the dow and the nasdaq all hit on wednesday before thanksgiving opening bell is just a few minutes away does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. There are zero reasons to invest anywhere else. 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. Youre watching cnbcs squawk on the street. Were live from the Financial Capital of the world an opening bell in a minute and a half always a nice day here at the New York Stock Exchange. Everybody brings in their families, a lot of young kids as you can see running around around the floor, fun activities for them to do and what i like is there is free coffee and food, dont get that too often. No. Once a year. Yes once a year just look at the indexes initially, wednesday evening we get this headline about the president going to sign this hong kong bill just a reflex move futures trade lower 3140 or so on the s p and then day to think about it, we kind of were weaker today, but really doesnt seem like anything responding to too much people think there is momentum for something cosmetic on a deal and i think the sense of every day people feel less fully invested because the market keeps going up without them. So well see if thats been the november phenomenon or if we crashed in december, we still have this spiral higher just because people comparisons with last december have to come to mind. 180 degree difference, yes. Were at the highs, everything is very calm. The volatility index is below 12 and investors are pretty complacent there it is the opening bell for this friday you see the s p real time exchange, back at our headquarters here at the big board, American Express celebrating the 10th annual shop Small Business saturday heard somebody reference that. Over at the nasdaq, hf foods group, distributor to asian restaurants in the United States kenny and larry are both still with us as well. And, kenny, ill go to you, modestly lower on the major averages today, still on pace for the best month since june for the s p, the dow and the nasdaq how does that play out into the end of the year . I think we are i still think santa claus is coming. Some people feel like hes already came the market is up almost 4 , 4. 5 across the averages. But like i said, i think there was this underinvestment as we moved into the end of the year people being more cautious than they should have been. Now there is a catchup playing as we move into it i think the santa claus rally is alive and well, which makes me think that were going to stay right about here i dont think were rallying another 3 , 4 this month in december i think that the market is going to back off and churn and end the market right about here. So im all good with it. I think kenny makes a good point, look, there is 3. 5 trillion worth of cash sitting in the sidelines in mup maoney e yields and every day they tick a little lower and the market ticks a little higher. I think it speaks to the idea that the gift of stock, which is the best gift you can give this Holiday Season, is a lot more expensive than it was last year. And it is getting harder and harder to give that gift as Warren Buffett found out today in his failed acquisition. I think people should be mindful of valuation at the same time theyre looking at momentum. Valuation is a much more difficult conversation in the s p 500 today, especially if liquidity starts to come away from the market. Larry, you said in the s p 500, just curious, one of the things people have been fixated on is the smaller cap stocks, russell 2000 breaking above a one year range we have seen these kind of head things before if thats what this is. Do you think thats relative value . I think it is a very relevant point and im glad you brought it up. We talked about the idea the market is moving toward the barbell approach, investors are so blindly following the s p 500. They dont care whats in it anymore. They dont care what the valuations are or theyre in private deal because theyre afraid of the market and the truth is, it is the middle of the vote where it is less volatile and more opportunities. And we see volatility picking up next year, but that volatility also brings opportunities. So small cap stocks have been left for dead. Plenty of good businesses there, especially if tariffs are resolved you have an opportunity for the market to broaden out here instead of looking at a market cap composition where it is just a big Company Driving the rest of the market. It is a more even keel market, we get midcap driving small caps driving, much more excited about that type of market because it is less blindly valuation agnostic. If there is this these tariffs that are coming in december 15, like we said in the last segment, is that maybe those small cap companies, those Smaller Companies are going to be the ones that are more difficult, so i think your point is correct, because i think it has underperformed, but i think you have to be very specific cant just broadly go in thats right. Thats right and another good point, i think thats a great point if you look at this time of year, typically you see tax law selling. Mutual funds doing tax law harvesting, Mutual Fund Distributions will be high very few losses to offset those gains this year. So you have a muted january effect that we typically count on and more muted tax law selling this year. And i think it actually could calm the market toward the end of last year very different than what we saw last year. Totally different paradigm thats a good thing for investors who need to sleep easy this Holiday Season. Kenny, we also have seen a number of companies go public this year. We have seen how many of those stocks have performed, not necessarily as strong as anticipated before they actually came to market as well how do you think that continues to play out into next year, you got really big names like aramco still to come to market. Listen, you do have big names, i think a lot of that ipo story, i think part of it was their own fault. A lot of them built up all this conversation about these unicorns and unicorn and how exciting and they built up all the expectation and then in the end, you know, they werent necessarily as you look under the sheets, they werent necessarily the stories that you know everyone has been talking about. And look, wework is the perfect example. Once you looked under the sheets, you realized what it was, right i think ipos will still be there next year, relevant, a lot of story, saudi aramco i dont think will be as big of a deal here in the u. S. Partly because theyre not coming to the u. S. Twill be more of a global story. That will be very interesting to watch as we have seen what happens then in the energy sector. 2019 is the year of the failed ipo look how disappointing these deals were it was uber, lyft, you had airbnb still waiting to see, but a lot of the businesses, wework showed you the Public Markets, much more transparent, the Public Markets can tell you where value is the private markets are rainbows and unicorns thats where we have been larry, dont you think there has been a shift within the Public Market and how investors are looking at these companies as well . Yes, but we worry there is too much money in the Public Market, there is way too much money in the private market. Thats the problem ill take the Public Market any ta day of the week. People start to think it is an easy game. It is not. Venture capital is a difficult game it is just the returns have been so high for so long, everybody wants a piece of that. I think thats going to be the story is people go back to the Public Markets and realize that was that was the losers game, the game that was the rigged game, not the Public Market, which is a safer place to be for investors. Look, and that that plays right out the private market is valuing these companies at much higher multiples than the Public Market and it plays out perfectly. Yeah. Wework was the extinction birth that blew all of those i unicorns and rainbows. The Public Markets remained inoculate for now. Well see how it goes next year. Happy thanksgiving, thank you very much for being with us. In the early going, obviously a little profit taking happening, twothirds of stocks down apple down a little over half a percent, 70 basis points now to me, thats always the one of the tells for are people buying to get involved with the obvious big large cap names . That stock is giving back from an all time high little bit of a rest for the indexes. Risk off today. Three secretary nrz ttors in th. And, of course, as you might expect, walmart is opening higher up about twothirds of a percent as well. Yeah. Amazon barely in the green as well yeah lets move on for a second here as well. Talk about Warren Buffett. Because he lost out in a bid to apollo or a bid to buy a Company Called tech data lost out to apollo becky quick brought us that story, broke it earlier this morning and joins us now with more it is not a huge company, becky, but it is an interesting story in that obviously and it includes buffett and his desire to start spending some of that huge war chest he has. Yeah, i think thats what really jumped out to me too. The exclusive details on this, but i think what is so important is so many people wondering what happens to buffetts cash hoard. 128 billion according to the most recent filings from the s. E. C. And people have been wondering what is going to do with this money . This deal wasnt a huge one, but it is interesting because it is a different place for buffett and berkshire to be playing. On wednesday, Tech Data Corporation announced pretty quietly that apollo had agreed to buy the company for 145 a share. That valued the company at 5. 14 billion, you take out the debt that would be included with this as well. That was a sweeter offer than the original one that apollo put forth. They agreed to pay 130 a share. There was an undisclosed bidder that came in that bidder happened to be Berkshire Hathaways Warren Buffett. The deal they had come in with was for 140 a share this was a deal that came together pretty quickly for Berkshire Hathaway they were first approached by bank of america, who put out a call to todd combs saying, hey, we have a go shop provision in this, would you be interested. Within a day he was ready to say, sure he would bid 140 a share. Greg abel swung into action, went down to florida to meet with the Management Team there and without really seeing much more than they already knew about this company at that point, they were ready to make an official bid by saturday, the following day. They really just picked up apollos contract, changed a few things and said, here is how we run with it, didnt bring a law firm in, not a huge amount of process that took place on that, but it is because they they know the companies so well and follow this industry it is interesting from the perspective that things could happen very quickly and buffett is looking around for other places to make deals back in may of this year, buffett told us that when he looked at things, of course he would rather buy stocks than buy treasuries, that was a decision he said took him a nanosecond to make he said when lookingat outrigh purchases of companies, he thought the premium there had gotten big and a lot of that is because of how much liquidity is out there and how much competition there is to buy companies outright it is interesting and different. He usually doesnt get involved in bidding wars. And just a new place for us to watch to see what he does next. As you point out, his ability to move quickly also is unique i can remember from that from the Occidental Petroleum deal. Who do you go to, who gets it done, mr. Buffett does the cost for them, 8 a year but it does point as you say to this enormous cash pile. Maybe if he had done this deal, would have been virtually nothing in terms of taking it down 128. What do you hear given how well you know this company and mr. Buffett, in terms of his ambitions to really try to figure out something to do with this money i think theyre opportunistic. Hes always been patient, always very willing to sit on the sidelines and even when everybody else is making a lot of money if he doesnt think the price is right, if he doesnt think the pitch is right over the plate, hes not going to swing. That has led to disappointments over the shortterm, made people question his judgment on things. But his point is that over the long haul, you dont overpay and thats how you are able to continue to perform. The numbers have gotten bigger, 128 billion, a lot of money to put to work. He said over the years that it is going to be harder and harder to outperform the market when talking about big numbers that have been put to work. What hes been doing to this point i think is interesting buying additional shares of companies that tend to buy back a lot of stock apple comes to mind. Thats Berkshire Hathaways biggest position they hold and apple has been buying back a ton of cash. He looks at it as more of a Consumer Company but what they have been doing with services is interesting too. Not how many eye phones iphoness you sell it is a constant evolution in terms of what buffett and berkshire are willing to do and how they play in the market in terms of what investments theyre willing to make. You mentioned apple and Berkshire Hathaway invested in a number of Tech Companies at this point. Given the fact that the company owns so many different entities across so many industries, how unusual would it be to actually see them acquire a tech company specifically you know, i think if you look at it, it is probably not that different than some of the other units they have. Again, these are such broadbased, youre right, in so many different places this is like tti, another middleman had which sells lots of different skew and works with lots of Different Companies along the way too, lots of different customers. What is interesting about tech data, the middle men who are really just taking and selling to Smaller Companies some of the products that these Bigger Technology companies have to offer. I think apple makes up apple products make up 16 of sales. They have cisco and hpe which make up 11 each of their sales. Interesting to look at tech data from that perspective, being a good bellwether of who is doing well, whose fortunes are up and down in the Technology Sector as well thats interesting in itself. Becky, you mentioned buffett and berkshires evolution. You pointed this out many times, they dont like to participate in auctions or any sort of and yet they came in here knowing of course there was a deal with another company. Can we assume that thats a change or is this a one off . Look, i think that they would be very open to somebody calling them up and saying, you know, we have to shop this around, here is the go shop provision, take a look at it if they think it is an underbid, theyll bid over it. But they arent bidding twice. Buffett is somebody who is not phone for overpaying for deals and a lot of people call him cheap. If he looks at it and sees value, he thinks he can make money at this, it is interesting, i think i think i heard you point this out, apollo was able to come back and say well take it for 1 145 they had a good price going into this why you have this go shop provision. Thats part of delaware law you have to shop it around, undisclosed deal up to that point. Yes it has been a part of most private equity deals at this point and certainly in this case as you point out, profitable one for existing shareholders who can thank mr. Buffett for 15 bucks. Becky, thank you good to see you lets get to dom chu more on the floor. Morgan, what we got is a market pulling back, but still near the record high levels. As you can see here, a little red across the board fractionally not a selloff dow industrials down 1. 25 , same thing for the s p 500 and nasdaq, still well above that 3100 mark for the s p 500. So this is, again, a pullback from those record high levels. If we look at over the past month or so, what really has been driving these markets toward the record highs, you take a look at the dow, the s p 500 and the nasdaq again, 4 gains in november. S p, 4 . 5 in the nasdaq overall this has been a broadbased move higher in the stock markets. As for whats driving the action, pushing those markets toward the record highs, certain key sectors in focus lets talk about technology, the big one, up 6 you mentioned apple down just a little bit today, still a big part of this market move higher. Healthcare up 5 and financials up 5 as well. Those are all generally cyclical sectors with the exception of healthcare, you can marg moargue payments very much a risk trade happening, risk aversion off the table. Lets look at some of the stocks really moving this, look at dow movers, disney up 17 . United health group up 11 meanwhile, you got consumer products, down 5 for cisco, down 5 for hp the dow is a shifting dynamic right now. Today, being black friday and all has to be about the retailers. Many biggest volume premarket movers on a lighter volume day, albeit, have been the retailers. No surprise there. A lot of people focusing on these types of companies on this particular time of the year. So take a look at walmart, amazon, target, macys and kohls all these guys in some way getting some action today because of that Retail Holiday rush these guys will be in focus. Ill point out, guys, that target and macys, right here, this is an interesting one, because this represents the best performingier ining year to day up 90 and, guys, macys, the worst performing retailer in the s p 500, down 48 . Imagine if you put a paris trade on in some of those guys, david, morgan, mike, ill send things back over to you. Hes giving you a little run for your money with the telestrator action. Hes already. Left hand too. Which i always have to reach across my body his technique, ill take a few pointers dom, thank you. Lets get to bond pits, Rick Santelli at the cme group in chicago. Good morning, rick. Good morning, mike. You know what jumps out at most of us when we look in the rear view mirror at how Interest Rates have behaved not only for the month of november, but for the last couple of months ill show you. Lets take october 1st start date look at twoyear note yields other than the volatility in the middle of the chart, the last fed ease, october 30th, we had some movement going into that meeting, with movement going out. Very compressed. Right now, two year note yields up one on the day and one on the week ten year, a little wider spray pattern on that chart, same thing. Lots of volatility around that 10 30 fed meeting going in and out. Fla flat one up on the day, one on the week bunds similar as well. It is really starting to have very little volatility close to close. Guess what bunds are up 1 on the day, up 1 on the week dollar index, this had a rough october. Very quietly and small chunks, coming back. As it sits now, it is at seven week highs mike, david, morgan, back to you. Rick santelli, thank you. Still to come, primetime for jeff bezos a look inside amazons Holiday Shopping strategy next dont go anywhere. Squawk on the street is back after a quick break. vo the moth without hope, struggles in the spiders web. With every attempt to free itself, it only becomes more entangled. Unaware that an exhilarating escape is just within reach. Defy the laws of human nature. At the season of audi sales event. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. It is the last trading day of the month major averages backing off slightly from alltime highs you see the dow down about onethird of 1 . Nasdaq also a bit lower. S p, though, up about 3. 5 for the month of november. Squawk on the street is back in less than three minutes stay with us 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 is prime really prime . Thats what investors are asking about amazon as the Holiday Shopping season officially kicks off. Deirdre bosa has more. Reporter were looking at this question through the lens of popular items this year Courtney Reagan said air fryers may be this years instant pot we checked out the ninja at amazon and target cost 99. 99. Amazon with the delivery advantage monday versus a full week later at target amazon which is giving a run for the money for next day delivery is listing it for 15 bucks more. Mike, on your Holiday Shopping list you are looking for a pair of Nike Womens Air jordan mids for the sneaker head in your life you hit a sensitive spot nike severed the deal with amazon so you can only get this shoe at a higher price point from a Third Party Seller on amazon which had a number of negative reviews over the last 12 months and ships between december 6th and december 13th nike has been leaning into the direct to consumer on the ecommerce process so you can get Free Shipping and returns through the site, but heres the catch theyre sold out in most sizes so, mike, your best bet may be foot looker. 110 same as on the nike website. Plenty of sizes available and it ships for free in five to six business days. But this nike example, guys, represents one of amazons challenges as it struggles with knockoffs and gray market items. More brands could decide that listing on the platform just isnt worth the convenience. Morgan and david, i did not forget about your shopping lists. I will take a look at them later on back to you. All right thank you hope my daughters not watching right now i know. I made my generic. I didnt say who it was for. I guess i just did. But those are not for you the womens mids, no. You never know. All right. Weve had fun with mike today. Still to come here on squawk on the street, outlook on the busiest day of the shopping season, ethan allen ceo. Were back in a couple of minutes. Oh, ho oh, ho, ho, ho you. You got me. Uh, what do you want . Ive got uh, ai robots, ive got vr goggles. I want your sled, please. No. [ chuckles ] timmy. Itd be a shame if this went viral. For those who never compromise. The mercedesbenz winter event. Whoa. He was pretty good this year. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. One out of five kids with cancer in america will not survive. What if that child was someone close to you . Our dad, danny thomas, founded st. Jude to help give every child a seat. Thanks to you. Donate now at stjude. Org. Or shop where you see the st. Jude logo. Doesnt he look like dad . Ugh, another electronic signature. You have to print, walk, sign, scan, recycle, walk, email yourself. Really . More walking, try again, waiting, recycle, walk, email yourself, then get back to your day. Or not. This isnt working. Introducing samsung paperless workflow solutions. With the galaxy tab s6, you can sign Digital Documents onscreen, with a finger or your s pen. Samsung business solutions. Good friday morning. Welcome back to squawk on the street. We are live from post nine at the New York Stock Exchange. Carl and sara both have the morning off. Lets look at the markets a half hour into trading. Remember only three hours to go as we have a 1 00 close today. We are down across the board at this still relatively early hour our road map starts with retails busiest day a surge in Online Shopping bringing in a record 4. 4 billion on thanksgiving day. Plus it is the last trading day of november. Stocks having been the best since june but can they keep up the momentum as we get closer to 2020 the billionaire investor buffett thwarted, mising out on a Company Called tech data we start with retail today it is the biggest day of the year for those that sell stuff our Courtney Reagan is live at the woodbridge mall in new jersey reporter good to see you traffic is starting to pick up here the cadence of this Holiday Shopping weekend has definitely changed over the years last night im told a number of retailers had a pretty good night. Aeropostale was giving out free blankets but then i heard some other stores saw traffic down about 50 from last year you got to have the right deals at the right time to win the shoppers we know a lot of those deals start earlier this year, but this is still the busiest shopping day of the year for retail according to shopper track and npd. For the whole weekend, 165 million americans are expected to shop. Today around 115 million both online and in store. So its a very critical time Alex Partners analysis for cnbc says that thanksgiving weekend sales made up about 15 of retailers total holiday sales in 2017. That dropped to 13 last year. Expected to be about 12 this year largely because of both the earlier black friday deals as well as the six shorter days in the Holiday Shopping calendar. Now, of course, black friday deals go beyond the big retailers. Shopify said their sales totaled 442 million this year thats up from 250 million last year and u. S. Sales on the platform up more than 60 the average household is expected to spend about 415 bucks this Holiday Weekend i havent even gotten started so i have a lot of work to do last year the average consumer bought five and a half items in store this weekend and 3. 6 items online leslie, back over to you quick question for you. Its morgan. I, like you, have not really started my Holiday Shopping either i think part of the reason is because i know i can go online and get one or two day shipping. I wonder how much of a risk that can be if its something the retailers are talking about that you can see this lastminute surge which we know has ensnared Delivery Companies and retailers in years past. Reporter you definitely know that story, morgan it is a little dangerous to wait because of obviously the volume of packages that is going to go through the system for all of the major carriers but also that calendar that i mentioned. Youve got six fewer days this year between thanksgiving and christmas. Thats not nothing you have to consider that as you wait to shop and also remember that retailers have better inventory sort of management this year going into the Holiday Season which means supply could be a little shorter if you wait, you may be out of the size or color or exact item you want be aware, be careful this is a message to both you and to me who have yet to start our shopping and to all fellow procrastinators out there. Reporter thank you all right joining us now to discuss the state of retail. The ceo of storch advisers, jerry storch jerry, youve got this cornucopia of factors out there that people are concerned about with regard to the shopping season youve got tariffs youve got six fewer shopping days between thanksgiving and christmas, the potential for weather hazards that are going on does any of this concern you or do you feel like the state of the consumer right now is Strong Enough to supersede any of these head wind . The consumer is very strong, and for months now shopping has been very strong the weather doesnt matter short season, that might have married a hundred years ago or so you can get to stores easier that doesnt matter. Christmas is always december 25th there certainly have been sales early in the month of november but black friday is going to be massive between online and in store. And the people have jobs, High Consumer confidence. The tariffs, frankly, havent seemed to effect business at all when you look at whats been going on one or two retailers had mentioned them but they have other problems besides the tariffs. And the big ones, target, costco, best buy, dicks, theyre all doing fantastic. Do the tariffs affect the steepness of the discounts were seeing this year across the board . You know, are there any retailers that you think are, you know, maybe needing to not discount as much on black friday and black november as some people are calling it because of they cant really afford to given some of the hair cuts theyre required to take as a result of the tariffs. Look, thats just not happening. When you take a look at the largest retailers, theyve done a great job in negotiating with suppliers, getting the discounts they need. Theyre in great shape if anything, any study ive seen say discounts may be a little higher this year so thats not really a factor. I said for months i dont think its going to be a factor. When you add up the tariffs, they simply dont amount to a lot of dollars compared to the entire consumer economy. Im not saying theyre good or bad. Im saying they really arent a factor they havent been a factor its unlikely theyre going to be a factor for the foreseeable future what is happening this year that is really striking is while in years past, its clear the internet is the most of the growth in retail and thats still true some of the best players are growing both in their stores and on the internet now. When you look at what target and walmart have been doing, for example, because theyve mastered this in store pickup, ship from the store. Youre seeing growth across the board in a full employment economy. And some retailers have gotten very savvy about how to use the internet to drive their business both in stores and online. So the winners are going to win even more. The losers like Department Stores, mallbased apparel, its going to be worse and worse for them over time jerry, who owns the toy turf . It was two years ago that toys r us was declaring bankruptcy, right . All the major retailers were looking to big box retailers were looking to take over some of that market share i know toys r us opened up its first two new stores this week but in general, whos going to claim that slice of the holiday pie. Market share got divided up among the other big players that had the market share walmarts been the largest toy seller in the u. S. For a long time they gained a lot. Targets had a good market share. Target gained a lot from toys r us anyone who goes to the toys r us website now will get the sale from target. Theyve done well. And amazon has gained a lot of market share those are the big three in toys. Other try to dabble and keep trying to dabble and theyre finding that toys are not childs play you get a lot of product options. If you buy the toys in the wrong quantities so those three big players, walmart, target, and amazon are capturing the market share and theyre all way up in toys as youve seen from their reports theyre doing dpragreat. Jerry, you mentioned perhaps less steep discounts for black friday and this Holiday Shopping season among retailers in general. How about in terms of shipping we know amazon and walmart have been increasing their costs as they basically offer more oneday shipping on more products right now but are retailers able to push those costs out to consumers in a way they havent in the past absolutely not. The costs are going up for retailers. Amazon has raised the bar yet again. They are spending a fortune as you know to speed up their shipping and its coming off their bottom line meanwhile, walmart has to match it if they want to compete fortunately, you know, walmart and target are using their stores as fulfillment centers. When the customer drives to the store, for example, to pick up the product, then they dont have the shipping cost so thats fantastic. And both target and walmart have said that when they fulfill from the stores and basically drive it to the consumers house, thats a lot cheaper than shipping it across the country so theyre using their stores to help lower that cost but as the bar keeps getting raised, its going to keep costing money. Theres a negative arbitrage in the profitability of a sale on the margin in the store versus online a sales shift online, these retailers are having to overcome that profitability drain through other factors. So far, the winners are doing a really good job of that as weve seen from most recent Earnings Reports. Im expecting them to continue to learn and adapt and change. As they do that, theyre going to thrive. Theres a lot of other people doing great. You know, the off price retailers. Tj maxx. Jerry, lets end on this theme youve mentioned many times. We saw some of the Department Stores and their stock prices. Youve said this before, its just going to get to be worse and worse for them over time, the Department Stores. Is there nothing you could imagine that could reverse things for them . They have to fundamentally change their business paradigm and none of them are doing that. They have some great managements, but what theyre essentially doing is trying to merchandise better or do what theyve done for a century and that is not going to work. They need to rethink the model and its going to change nordstrom has one of the greatest managements in the borl world. Although their sales were still negative can you imagine that in this economy and their stock popular. Over the longterm, this Business Model doesnt work anymore. They have to change it they have the brand names and the loyalty that they could change it, but i dont see anyone being inventive enough to make a difference. They say make it more experiential like they havent been trying to do that all along . Of course they are it takes more capital than any of them have to make a new circus every day, a new play every day. Theyve got to change the Business Model theres a bunch of ways to do that but none are doing that right now. All right jerry, thank you my pleasure meantime, retailers are not the only ones hoping for a busy Holiday Shopping season. Our Steve Liesman joins us with the look at the Consumer Impact on the overall economy hey, steve good morning, morgan. The u. S. Economy more dependent right now on Consumer Spending than it has been in years. This black friday, it may well be shop or well drop as in growth could be flat or even negative without a strong consumer an analysis over the past two quarters you can see right there. It would have contracted without consumer growth. That is all of the components of gdp added up to less than zero third quarter, the u. S. Would have eked out a small gain without consumption. Thats not usually the case. Usually other areas can often overcome a slowdown in consumption. You have to go back to 20152016 for a time the economy was so reliant on consumer. A slowdown in Business Investment and a drawdown in ve inventories. Most economists blame that on the trade war. You can see that right there on the right side of the chart. 2015, 2016 thats on the left. Now, data wednesday gave us a mixed picture. Welcome rebound in Business Investment for october and an easing in jobless claims, Consumer Spending in october decent income, though,was flat. Spending and incomes have moderated. Theyve stepped down by a percentage point or two. But still remain at a pretty good level the consumer benefitting right now from low unemployment, sentiments high, and the stock market being up is going to be important for this Holiday Season it shapes up for a good hole today season its important to keep the economy going while we figure out this trade and business stuff. I noticed in the gdp revision y erl earlier in the week that there was an upward revision in the inventories as well. Should we talk about a possible pull forward ahead of the potential tariffs in december . Are businesses planning for it you know, it was a long dinner last night. We drank some wine if you want to tell me how this trade stuff is affecting the economy, its crazy. You have a pull forward in spending youre right there can be a pull forward in inventories. Right now we may be in the middle of a larger than expected inventory drawdown from the trade data we got the other day which showed imports are down from perhaps tariffs that could have been after the september tariffs went into place. And that could be dragging down Fourth Quarter growth. But the volatility, the difficulty in predicting whats happening in a normal economy comes from inventories layer on top of that the trade war and it makes predicting it more uncertain all right Steve Liesman, thank you for your insights on an uncertain situation. Were getting new numbers from adobe black friday on track to hit 7. 4 billion as of 9 00 a. M. Eastern this morning 600 million already spent online 19. 2 growth year on year. Keep watching those numbers as we get them. If steve was having french wine, he was already paying a 25 tariff on that too yeah. Unfortunate when we come back, stocks on their pace for their best month since june the question we always ask right here, is there more room to run . Weve got one month of trading left in this year. Plus buffetts bid thwarted. Were going to break down Warren Buffetts latest attempt to put his cash to work big show still ahead dont go anywhere. I am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Its last trading day of the month, and stocks are coming off those alltime highs still on pace for what will be the best month weve had since june joining us for more chris harvey and Barry Banister chris, let me start with you the trade war and or the resolution thereof has been the defining theme in terms of a news peg for this entire year. Is that what were going to continue to see in december . I think so. Its all about trade will tariffs be put on, will tariffs not be put on . Will we get a deal everyone is acting as if a deal is minutes away. If it doesnt come through, the equity market rolls over if it does come through, we have an initial pomp but then sideways after that. Its hard to beat expectations as you point out, weve been talking about a trade deal for a long time. What does rollover mean i think you have a 2 , 3 pullback in the equity market. Something reasonable so were all again, we ask this question a lot. Are we fully already valuing the benefit of a trade deal in the market david, i think we are so our opinion is our price target has been 30. 80 were about 2 above that. The risk reward doesnt make that much sense. What are you playing for the deal has to be above expectations for the market to pop and have a sustained rally after that i joust dont think thats possible in the shortterm the other issue is trump has pushed his bets when sentiment has been rather good that probability is out there. Thats why were worried about the risk reward. Barry, if i told you the beginning of the year we were going to be over 25 in the s p, i dont know if you would have believed me. But we are are we going to maintain those gains full year . Its remarkable october 2nd is when we really rotated up on the market weve gone up 9 on the s p 500 since october 2. I mean, in a typical year, 9 price, 2 dividend, thats a full year return so its been huge. The other thing is when you look at it, technology, health care, financials, Communication Services are doing very well when youve got growth and value working well together, thats a sign of a bull trend the third thing i would say is that money supply growth using m2 is up at a 10 annualized rate the last three months its more than two and a half times what you would expect nominal gdp to be this quarter thats excess liquidity for the stock market i just dont want to stand in the way of the Freight Train so barry, youve got utilities in real estate higher today in whats a down market. Although only modestly down. But theyre the worst performing sectors. Theyre neg fative for the mont of november. Weve been talking about this rotation were seeing in the market is it sustainable . Does it continue and do you buy into it we had been overweight significantly overweight and recommending utilities, staples, and real estate for the year up until october 13th and over that weekend, we decided to rotate into a procyclical stance. I would like to see for the sustainability of the economic cycle, a pullback in the dollar on better Global Growth abroad and i would like to see some higher 10year yield, a more steep curve than what weve seen so far those are the two things well be watching besides trade as we go into the end of the year next year chris, its hard not to forget what happened last december, however. We didnt have that 25 gain going into thanksgiving last year, but, you know, there are a variety of technical factors that really led to some significant volatility, some significant losses is there a risk of that actually repeating this year . Have those technical factors gone away . Leslie, i think thats kind of tough i think one of the reasons why were up so much is everyone was afraid of last year. So they were positioned very defensively. They werent very long they werent overrisked. And now were seeing that grind higher as people kind of miss the market and theres fomo out there. Everyone has fear of missing out at this time i find it highly unusual if we saw something similar to last year i think we continue to drive higher but we think you want to start slowly taking profits here barry, a year ago you had a fed tightening now youve got a fed thats been easing over the last couple of months as well how contingent is this market on fed policy yeah. A year ago around this time, we were very concerned with the fed. I mean, they were ignoring the fact that they were approaching the neutral rate and we were able to show that just being near neutral was too tight they had also continued with the quantitative tightening. And we saw we the repo blowup, that was a mistake to continue into 2019. We hit the feds bench point in the Fourth Quarter theyve been easing ever since i think the feds done its part, but i would say if you dont get relief on trade, some sort of a trade deal or armed truce, we would lose some of these gains weve had since october. So you agree, chris, that its trade is connected to it as well . Absolutely connected. Afraid of global stresses and trump did a very good job at pressing his bets. He did a very good job at putting uncertainty in the marketplace and the fed did react to that. So the answer is yes guys, thanks to you both. When we come back, well take a closer look at Warren Buffetts attempt to buy a Company Called tech data that stock up double digits. More than 12 today. And later, how jewelers are gearing up for the big Holiday Season well hear from the ceo of Pandora Jewelry when squawk on the street continues. Each day our planet awakens with signs of opportunity. But with opportunity comes risk. 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. Cme group 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. Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. There are zero reasons to invest anywhere else. Of millions of americans during the recession. So, my wife kat and i took action. We started a Nonprofit Community bank with a simple theory give people a fair deal and real economic power. Invest in the community, in businesses owned by women and people of color, in affordable housing. The difference between words and actions matters. Thats a lesson politicians in washington could use right now. Im tom steyer, and i approve this message. Welcome back to squawk on the street. It is time now for our etf spotlight. Looking at vanek vectors trading slightly lowers this morning. Down 0. 6 . Still the group is on pace for its best year in a decade. Up more than 50 year to date. Weve got four semicomponents. All doubling this year already. But thats not too unusual for some of these names. More than doubled back in 2017 and 2016 respectively. Broader tech sector, currently the Top Performing sector for the year on pace for its best monthly performance since june meantime, take a look at shares of tech data surging today after pe firm Apollo Management sweetened the bid for the company. Up from the initial bid of 135 per share. Valuing the deal at around 5 billion excluding debt the competing suitor in the bid, none other than Warren Buffett our own becky quick has learned he bid 140 a share and does not intend to make a higher offer at this time. So what is tech data the Company Supplies small corporations with Technology Software and hardware made by larger Tech Companies helping names like apple, cisco, and microsoft bring their products to the market. Ceo richard hume was on mad money back in september discussing the stock price were very confident in our company and where were going. So, yes, we like our future and we like what we see. So, you know, our board authorized starting last october over three different authorizations about a half a billion dollars. And weve actually acquired back 275 million at the close of the last quarter so we like our stock okay. So last october they were trading around 75 a share today based on the new news out, trading about double that price. Still a lot of people looked at the initial apollo offer to be undervalued. It was low 6. 8 times ebitda so its not too surprising you would see these advisers reaching out to other potential bidders saying, hey, apollos getting a good deal here how would you like to be in the mix . Its be interesting to see if this new offer is a fairer value for the company and does solicit additional bids. I think they have a provision for another week and a half or so december 9th. Giving them the fiduciary out that they need to say, hey, just because we signed this up doesnt mean we arent still looking. We think this may be the best outcome. But in this case as you point out, it wasnt certainly at 130 perhaps 145 will prove to be given its a higher multiple you can thank Warren Buffett for that unclear yet if we see another topping bid. I have no idea seems unlikely given they already have reached out, youd expect the advisers to see and solicit other potential offers yes absolutely and i mean, one thing that you spoke about with becky earlier today is this idea that its unusual to see buffett come in and make a competing bid he doesnt participate in auctions at least certainly not publicly. Hes been on the record saying thats not something he likes to engage the one might think that maybe, you know, that ship has sailed for this company the market seems to be at least looking at this as a 145 if not surpassing that right now. A premium now does look a bit better in terms of the unaffected stock price all right. Lets move on now. Send it over no rahal solomon. Good morning. So here is your cnbc news update at this hour in london, police say several people have been injured in a stabbing in whats being called a Major Incident it happened at the London Bridge which is now shut down we know one man is in custody and theyre treating it as a terror incident but as a precaution north korea launched two projectiles. Kim jongun was present and expressed great satisfaction at the results. It was the fourth rocket test since august in ohio, ten exotic animals died after a fire broke out at a wildlife park last night Officials Say four antelopes and three giraffes were among those killed no word on the cause of the fire and oil prices are expected to remain about the same heading into 2020. Thats according to analysts in a reuters poll they project brent crude will average 22 cents higher than the outlook last month you are now uptodate i will send it back to you morgan rahal, thank you. When we come back, retail caught in the trade cross hairs. 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Thank you sofi. Sofi thank you, we love you. Retail giant target hoping to top last years recordsetting Holiday Season coming off a strong Earnings Report just last week. Our kate rogers is live with more reporter hey, leslie you just said it target heading into this Holiday Season with an advantage having reported stronger than expected earnings especially compared to some of its competitors like kohls and jcpenney. 2018 was the retailers strongest year in more than a decade Digital Sales increased by 31 in the most recent Earnings Report but targets also focusing on the instore experience. Its made investments to spruce up its stores. Its also introduced smaller Format Stores in certain locations and launched some new inhouse brands. Target is working with disney to open disney shops in many of its locations. And it teamed up with true kids to help relaunch the commerce operation. Another huge area of focus is delivery targets teamed up with shipped for sameday shipping options. And also has sameday pickup in stores they also doubled the number of workers in fulfillment the Company Released its black friday deals a bit early for its red card members online only on things like beat headphones, roku tvs, and more the Holiday Season is here weve been talking about it. Its about six days shorter. So the retailers wanted to make sure that customers were able to access those deals nice and early. And we should mention the stock is up nearly 600 since black friday of 2018 morgan, back over to you it may be shorter but has felt longer with all of the holiday decorations up since halloween. Kate rogers, thank you retailers faced with a condensed Holiday Shopping season as well as the effects of the china trade war. Joining us now to discuss is ethan alan ceo and chairman. Also author of the new book trail blazer from the mountains of cashmere to the summit of Global Business and beyond. Great to have you here its a pleasure to be here. How big of a deal is black friday and the Holiday Shopping season to ethan alan in the furniture business i tell you outside the exchange, theres a statue of George Washington. Theres a revolutionary event going on George Washington was a revolutionary. Weve decided to create the next revolution and the next revolution is treating our clients with dignity. There is a disease, a crisis it is a race to the bottom before the Great Recession, we used to offer everyday best price. It was great for our clients because were a vertically integrated company with 75 of our products we make ourselves 1500 interior designers. We have 200 Design Centers we provide service to get caught into this whole question of black fridays and all that stuff, we decided to get out of it to offer our clients everyday best value, best service, and you know what . It has been well received by our clients. Its well received by 1500 interior designers so we are going right against all this craziness now, its not easy because its like, you know, coming down from the mountain. Because after the Great Recession, we also went 10 , 15 , then 20 . We offered a lot and no more we do offer, you know, to our clients everyday 20 savings from our everyday best price were offering them financing. Free inhouse delivery we are offering them good you know, good service but do consumers buy more at this time of the year when it comes to furniture especially given the fact weve seen green shoots in housing have you seen that play out in the Sales Numbers at ethan allen . Not for us. If youre selling a commodity, yes. In our case, our designers work with clients they develop great homes we are not selling items for us, in fact, its the other way around yes, if youre selling a commodity, youre selling an item certainly there are people in our industry that are going to most definitely benefit. But for us, weve gone right against it and we now, we just started in october. Its going to take us six months or so. You know, im a mountain climber. In fact, i got for all of you a present. A mountain climbing gift oh, thank you two of those only but if you can pass it on well share what it really is coming down from the mountain. But youve got to make sure you do it right. And so we are going right against all this craziness thats taking place. Another way youve been going against the craziness is a lot of the furniture you make you make in north america, in the u. S. Specifically. Weve been talking a lot about this u. S. china trade war situation right now. I realize that thats been a market youve been selling into the fact youve been exporting products that are made here into that market, how has that impacted tremendously. Last fiscal year our sales were somewhat down mostly because of the 15 decline in sales in china. Even then, we increased our earnings we increased our dividend by 50 . You know, we are one of those very few companies that has no debt you folks might know this. I took the Company Private in a management buyout. Not easy i took debt at 18 , 19 debt bu for the next 15 years we generated 2. 5 billion of free cash then comes the Great Recession but still i think that we are doing well so china has tough we have got to make it up here in north america here in north america, theres more question on this. Whether its ethan allen, room and board, youre seeing it with a line of made in america. Is there a trend is this becoming a thing in furniture and retail more broadly . To be manufacturing here in the u. S. Is this something Consumers Want its not that easy. See, 20 years back most furniture manufacturing went from the United States to china. In the last seven, eight years, it started shifting to vietnam vietnam is cheaper than china, but theyre having logistic kal probl logistical problems. Some is coming back. We are one of the few ones to maintain in north america. Not easy we have consolidated from 30 manufacturing to 9 but those nine are producing so we can ship not only to china. We got Design Centers in korea, philippines, cambodia, middle east and so in the United States all these folks are talking, not that easy because not many left. We are some of the few ones left making in the United States. Farook, you came on to promote your book trail blazer. Then marc benioff comes out with a book called trail blazer. Who is the real trail blazer you or him i think we both are hes done a good job in his business and i think in our case, you know, forme its my personal journey from the mountains of cashmere, growing up at 8,000 feet and at age 20 from those beautiful mountains ending up in beautiful brooklyn and then ending up being part of the founder of ethan allen in 87 years ethan allen has had only two ceos. Just think of this and im just Getting Started i was wondering were glad to hear it. Were glad to see you. Thank you. Always a pleasure to be here. As we head to break, take a look at the three Top Performing stocks in the dow for november there it is. Disney leading the way united health, Walgreens Boots Alliance right behind. E re rasqwkn t more ua o thstetstight ahead edgetoedge intelligence the , gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Nice rock. Its time to drop gold. Go digital. Go grayscale. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu im not really a, i thought wall street guy. Ns. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade on a scale of one to five . One to five . Its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry clive actually, really angry. Thank you. But what if your business could understand what your customers are feeling. And then do something about it. Turn problems into opportunities. Thanks drone. Customers into fanatics change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. [ dramatic music ]ing ] ahhhh ahhhh elliott. You came back now lets get to the cme group in chicago Rick Santelli with the Santelli Exchange hey, rick. Good morning and thank you. Id like to welcome my last guest of the week. Jim bianco so much going on this week one thing ive always said if you really want to know whats going on in the market, keep half an eye on the fundamentals, keep the other on charts but the other on capital wheres the money going and to that end, what do you think . The money is not going where everybody says it is you always hear there is no alternative of fear of mising out. You assume that means that money has to be flowing in the stock funds. Thats not the case. And thats not been the case for several years now. Well, when i look up at the board, its very odd because the stock market not only is losing vol like everything, if you look at historic volatility close to close and to the fixed income space, it is really getting low. And stocks are starting to join that crowd but at lofty levels. So lets go to the white board you have a surprise for us what are we looking at here . Were looking at the total flows of etfs and mutual funds together for stocks and for bonds. Since november of 2015, a trillion dollars has gone into bonds. Since november 15, 100 billion has come out of stocks money is coming out of stocks going into bonds at an unprecedented rate at the time everybody says it should be doing the opposite i know. And there is no alternative. Its almost being used as a crutch because many dont believe the economy has the underpinnings to warrant such a hot stock market so if this is the case following the money, whats the driving force, a, keeping stocks up . And b, keeping Interest Rates from going down farther . I think theres two driving forces here. One is definitely higher rates the fed is hiked but that hasnt kicked up yet. So people are chasing higher yields understand now in the world, a high yield you jump over the desk and grab is 2 . And youre seeing a lot of shortterm bond funds in aging demographics in the developing world, every day we had 8,000 more people at the age of 65. Theyre also looking at reducing their risk by buying in fixed income on stock front, what i think is supporting the stock market is buybacks Corporate Bonds which companies have issued to buy back their stocks as well, too. So where the public has been putting their money is exactly the opposite of what you hear. Theyve been plowing headlong into bond funds. And no higher stock market is going to change this weve been saying this for ten years. If the stock market goes up, theyll capitulate its gone up 400 and this trend is accelerating. Oh, its a contrarian trend. Thats what you hear right the stock market is up 400 and look what its done the last four years you could go up another 400 you need yields to go back to zero to get people to pull out of bond funds at this point. Thats only going to happen if you have a recession jim bianco, thank you its interesting to kick the tires in a way nobody else does. Hope you have a great weekend. Back to you. Thank you when we come back, Pandora Jewelry dropping a new fan favorite selection just ahead this Holiday Season. The ceo will join us next when squawk on the street returns as a principal i can tell you this. When one student gets left behind, we all get left behind. 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. By the way, shes the it wasnext mozart. G day. Ptech students around the world. 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. It is the most wonderful time of the year for retailers and shoppers that is according to adobe Holiday Shoppers are expected to spend 7. 5 billion today and 9. 4 billion on monday representing a 20 increase from last year. Still global Retail Stocks sliding alongside the rest of the market today the Worlds Largest jeweler is hoping new designs like the harry potter collection will revamp the brands relevance and sales. Joining us now is ceo of pandora. Alexander, thank you so much for joining us and you are in the middle of a turnaround you joined a few months ago at pandora. How are you looking at this Holiday Season in the midst of the recent changes the Holiday Season is very important for anybody that is in the gifting businesslike we are. We probably produce somewhere around 30 of the turnover lets say from middle of november through to christmas sales so this is incredibly important for us we have lined up a number of Different Things to excite our consumer base. Weve had some advertising on black friday like weve never had before i think we have strong offers both in store and offline. And weve launched a collection that is not on sale but that is also going into december so we have sharpened our knives this time around this is an important period for us and in terms of the collection that is not on sale, how orimportant are sales for t jewelry business do consumers expect to see deep it was counts this time of year or do they usually just pay up for jewelry . If you company back a few year, pandora had no sales and then we had a few years of problems and so we got on this promotional trail. And these kinds of events become increasingly important if you want to compete for the customer money. So, yes, we play the game. But if i could choose maybe i would do Something Different how are you going after the millennials and up and coming gen zers when are they looking for and how are you targeting them so if you look at the pandora brand, it has been trans generational brand we see a quite normal distribution across the age curve going from 15 to 65. So that is not something that weve been focusing much on. What weve tried to do recently with the brand relaunch is to rejuvenate the core proposition of pandora and part of that is also a most recent launch that weve done to kind of try to go after gen z with the pandora me bracelet that we Just Launched recently so we do some selective activities to go after segments in the market, but generally speaking, we have a very broad proposition. We compete, you know, in the middle of the market so we have to have a broad appeal so how would you gauge the health of the luxury market globally right now especially when there is consolidation coming to the industry if you look at the industry as such, it has been a quite healthy space the last five years. It has probably grown anywhere between 5 and 6 , which would put to on the gdp growth so that is an interesting space. We can also see that branded jewelry is still quite low it was probably a quarter of the total market is branded jewelry. And that is actually the only part in the market that is growing. Which then would suggest that things like the merger we are seeing from lbmh and tiffany makes some sense from a consolidation standpoint because that is the part of a healthy category that is growing. You mentioned that you were going after a certain targeted demographics as part of your turnaround strategy. Does the Chinese Consumer count as one of them china as for many other companies is a very important market it is our number two market in the world. So i wouldnt characterize that as a specific demographic. That is more a geo graphigee ge target but very important for us of course thank you, alexander. And when we come back right here, primetime for amazon, well break down the companys holiday strategy when we return. [spokesman] if youve tried college but never finished, group cheering snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu 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 morning it is 8 00 a. M. At Amazon Headquarters in seemgattle, 11 0 a. M. On wall street and squaws alley is live thats right, it is black friday morning welcome to squawk alley. Were live from post nine here at the New York Stock Exchange and carl and jon