Transcripts For CNBC Squawk On The Street 20240713

Bond markets awaiting ism services in one hour road map, the trade roller coaster. Stocks look to rebound from a three day slide after that report that trade negotiators are edging closer to a deal. Plus, alphabets shakeup googles founders, larry page and sergey brin both step away from their current official roles, but still control the votes at the overall company. And another setback for boeing, united tapping rival airbus to upgrade its new transatlantic fleets stocks looking to recoup some losses from yesterdays selloffs. Some renewed optimism about u. S. China trade talks. Moments ago the at nato summit in london, the president did say discussions with beijing are going well this comes a day after he said it might be better to wait until after the election to strike a deal another piece this morning is that reuters has Jared Kushner added to the negotiating team having meetings with the chinese ambassador. That would signal more people who are globalists involved. A globalist. But when we every time we make a conversation about this, the chinese move the goal post we dont know why. The more pressure you get on hong kong, thats just a different thing entirely from trade and i think the pla, the army feels very threatened remember, the hardline, they have a hardline and we have a hardline. So i really i dont buy into the president saying things are better i think things are stasis. If they want to roll back tariffs, there will be additional tariffs if the chinese accept there will be a change and make a change to intellectual property and the tariffs are stayed, thats the news im not willing to comment every day on this. Because the president is not changed his view the chinese have to do the ag buy, they got to buy they got to do the ag buy and buy pork, which they need and pay full price. And theyre not. Theyre not playing ball at all. So i think he wants to say nice things, but so the back and forth, going well, not going well, might happen, might not happen. The president xi has to do something. Hes got to not be gentle. I think the pla is getting very nervous about the Pro Democracy Movement New York Times on the front page, a story about a Million People being in the concentration camp thats not fake news New York Times news. Uighurs, thats a big issue. Is it yeah, my friend kyle bass on earlier on squawk box talking about that for quite some time it has risen to become sort of a broader issue. Did you see the film . Ive seen some of it. Ive seen some of it im aware of the detention facility that they had for some time and the extraordinary means this he they go to monitor that population. The idea theyre using our technology to screen, whoa thats keeping track two tracks here. The political tract and the economic tract we also get to talk about Corporate News this morning. Well get to google obviously given the significant changes there. But expedia just hitting the wires now, guys, as you have seen as well mark oekerstrom and the cfo both out. It is barry diller saying, quoted as saying ultimately Senior Management and the board disagreed on strategy. Expedia embarked on an ambitious plan to bring our brands and Technology Together in a more efficient way. This reorganization while sound in concept resulted in material loss of focus on our Current Operations leading to disappointing Third Quarter results and a lackluster near term outlook the board disagreed with that outlook and the departing leaderships vision for growth strongly believing the company can accelerate growth in 2020. And so that divergence necessitated a change in management very straightforward talk here, the board has said we disagree with you, you are fired. How many quarters can you miss the answer is not many when barry diller runs it 20 million share repurchase. Stock was down 3 nrinitially. The people selling it didnt understand the people running expedia couldnt shoot straight. They had a tremendous lead on everybody. They were doing terrible. Yeah, well, we know the change in the algorithm at google in terms of search and what it meant to them and changes there and it also affected the likes of trip adviser, which we should talk a bit about. I talked to john malone about a couple of weeks ago, and expedia, where diller has all their votes. Malone sold his expedia. But in part for tax reasons. I find this incredible. We have now seen a lot of ceos fired, typically fired for ethical reasons. Here is a guy being fired because he hasnt delivered the numbers. And i think that those who remember the predecessor was doing pretty damm good there. That was interesting. Malone questioned why dara would have left in the first place. Have you ever talked to him about expedia . He had a game plan. Who is run things over there, barry diller, chairman of the board and peter kierenen will manage day to day operations while they determine the longterm leadership for the company. Picking up a bit of gains here theyre going to buy back, purchasing additional shares in the company, tangible sign of my faith in and commitment to expedias longterm barry diller near okerstrom or pickerill are being messengered as spending more time with their family theyre spending more time on the unemployment line. This is really serious. This is a we disagree with your strategy, were disappointed in your execution and youre out. Maybe they can use expedia to go rent a property and they got that division. Maybe take my place in mexico. I listed it with them. I got a housekeeper. Does sound like in addition to the stock repurchase that diller himself is buying shares. Up to an additional 20 million shares, which is in addition to the 9 million that are already available. So now it is 29 million and then as to your point exactly, kyle, diller says ill buy more shares myself. Interesting to see a company underperform and ceo get fired as oppose to blame world trade we didnt hear world trade a brutal day. That day when the stock fell over 20 on the unexpected google, which well be talking about, google is king. Why is the government looking at Google Google changes the algorithm and the Company Loses a huge percent of the value they say why didnt they figure out the google algorithm. It doesnt fit, a lot of people do it now on this, instead of on their it doesnt even fit on your screen. Youre not going to see their stuff because of all the really good point google did it to yelp. Google did to zillow the only thing that google hasnt done it to is your fantasy. And i hope you have shefter tells me im okay. Were going back and forth about whether to play the giants against the eagles. The trade works both ways when you want to be curated the right way, it grows the business i wouldnter whether go wondh founders moving away, will google be more aggressive or buy back shock and reward shareholders if you listen to the Conference Call, you havent heard the founders talk in ages. No. Speaking of changes, sundar pichai, ceo of google and alphabet in his post page and brin write with alphabet established and google and other bets operating as effective companies, it is the natural time to simplify our Management Structure we have never been ones to hold on to management roles when we think there is a better way to run the company. And google and alphabet no longer needs two ceos and a president. There is question about brins management style, the day they were thinking to bayuy youtube d jumps on a exercise bike and works up a sweat. Pichai has been running the calls and pichai runs the call for a little bit and then porat runs it for a little bit i said porat, not borat. I think the investor takeaway here may be more positive than one would think because this is the take i got from somebody who owns the stock a couple of people this morning. It is good you know why larry has been overseeing this moon shots, the other bets, waymo, the drones, loom. And maybe this means that theyre going to pull it in a little bit 15 billion so far on these things, or depends how you want to measure the numbers over what period of time but we dont know exactly how much money they have been losing on them. Will it result in a little more discipline the point you made many times, now the guys are no longer in those roles, overseeing other bets. I want a piece of will we get a youtube breakout of actual numbers on youtube because apparently there was an argument made as to why they couldnt, they reported different ways and the ceo didnt need it and why would you . I dont know im not sure i follow. But thats also people wonder if well see more transparency. Thomas kieren, once known as darth vader, now lebron james of the google cloud, this man is such a force that he is recruiting all of the good people for Cloud Services that are available. Hes making major push i want to start seeing something about that waymo, notice i dont know, last night a call about nvidia. No one is talking about they dropped out. The healthcare option, again and again i hear positive things, but who knows . They got two Healthcare Companies go on there. The place is the other bets, you know, they have not beaten the spread in ages right. So you think this might lead to a valuation that is a little more competitive. Thats what i think not that the stock has done badly, but, geez, you speak with the healthcare business, there are two competing healthcare businesses you talk about waymo, you realize they have been deemphasis of that because autonomous has been dropped off the face of the earth. But when i look at youtube and look at this google Cloud Services, they are way behind. Theyre way behind Amazon Web Services great meeting yesterday. How well theyre doing azure, obviously, no doubt about it that azure is a huge, huge winner but thomas kieren, remember that name if i were Satya Nadella at microsoft, i would say how did kieren get that job . He came from oracle. Hes on fire and hes saying ill be your partner, ill be your enemy, frenemy, but kieren is not talked about enough. That is the name to know now that these two gentlemen are stepping aside the first time i think you mentioned him. Oh, yeah. Hes a heavyweight you spend time with him, you realize, well, you didnt do enough homework. I did three hours of homework, i got pantsed. I keep hearing the stat, 85 or more percent of is on premise still in terms of Computing Power and 15 is on the cloud 85 is on premise. The opportunity oracle. Opportunity is gigantic. Digitization that marc benioff talked about last night, it is in its infancy you cant believe it is in its infancy. This is green field everywhere because there has been so little movement, because so many people are stuck on premise, they still have this huge costs a fortune to get off of a move to get off of oracle at the street. Com it must have cost us five quarters to migrate from to the web. You got to rib out oracle. A longterm investment play, not just buying potentially microsoft or alphabet or amazon, but what companies are going to suffer as a result of that continued move. Oracle, oracle and oracle okay. Pretty straight. Yeah. Is it oracle . You know what, it is probably oracle. We are going to get to sales force and workday and some other names that made news last night. Cramers mad dash and count down to the opening bell. Keep our eye on trade obviously, headlines, and the nato summit wrapping up. Futures look good here as we try to cap off three Straight Days of losses. Dont go away. At fidelity, online u. S. Stocks and etfs are commissionfree. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk while our competition continues to talk. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. 13 minutes to go before we get to an opening bell, hump day. Workday also reported along with sales force after the bell the opposite of pichai taking over the Google Alphabet here, Neil Burberry delivers a great quarter, but gives you guidance that jeffries i think correctly calls a head scratcher. Piper says a growth of moderation, bank of america, merrill says conservative guidance i myself was confused. I read the quarter twice neil bushry, an unbelievable job and he talks he brought scout against a company that i had on last night that is a Procurement Company call eed kupa and i came away saying, wait a second, is this all there is has neil lost a step are they not winning big names he is conservative he is a brilliant operator but the Conference Call was not up to a neil bushry snuff. I felt after it that maybe there is maybe more competition in some areas hes in a lot of Companies One of the things that happened, david, take crowd strike, people are going in against them, zscaler, people are going youre now seeing a lot of companies starting to get other companies encroaching. I felt that workday, you didnt hear aboutoracle this time remember it was always in neil bushry against mark hurd. Early on they had the field to themselves, to a certain extent a lot of turf in front of them. Human Capital Management doing well the Financial Capital, i dont know i would like to speak to neil about it i think he was conservative on the Conference Call. I think things are doing better. I think he might be underpromising, overdelivering, but i did not like the call. I didnt like the call i found myself thinking, well, the headlines are better than the call i think neil was off his game. And i think hes fabulous. So i think if there could be a doover, you would give it to them. The stock has not done much need to look at a longterm chart. It has been spectacular yeah. Well talk about sales forces earnings as well jim has a lot to say there and other stories were watching for you as we get ready for that opening bell ten minutes from now a lot more squawk on the street right after this vo the flock blindly falls into formation. Flying south for the winter. They never stray from their predetermined path. But this season, a more thrilling journey is calling. Defy the laws of human nature. At the season of audi sales event. Coming off three Straight Days of losses for all the major indices and trying to avoid a decline today, which would make it the longest losing streak in about four months. Futures look good, though. Opening bell at eight minutes. 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. Nice rock. Its time to drop gold. Go digital. Go grayscale. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in five minutes on this very busy wednesday. We have covered some of the trade news and some Corporate News this morning. Datawise, interesting overnight. Some of the Market Services pmis come in. Eurozone, 51. 9 not too bad. Adp is sort of the surprise. Thats what we have to watch. The twothirds of the economy is service the reason thats so good is employment cant lose that. I found the number surprising. As long as you have good employment, were going to continue with the market that is not going to be as concerned about some of these chinese names with the exception of apple. Thats the im not going to present that as being something up 16,000 in november over 121 in october. Lowest number since may Second Lowest report since 2010 and mark zandi, who has been id say arguably net bearish on the economy says the job market is, quote, losing its shine. Well see what friday brings october adp was 121. I dont know. You got to go to marnie mussy who would say, the numbers arent that good, we cant find workers. You cant find workers, youre finding workers that are in places where, for instance, lots of people incarcerated come out, for cannabis, theyre hired. Im not buying into the things are getting weaker im buying into the idea, lets be careful we need to see a steady increase in order to be able to avoid the real slowdown in the commerce that we do well economy and thats retail and housing. Sure. Thats what im worried about. Well get that number. Not overly worried. Doesnt make sense it is too early. All right sales force, of course, down despite better than expected numbers last night driven by the cloud. Company says it expects revenue to double in five years, last night on mad money, keith block talked to jim about innovation, the company sees as key to its growth. Been talking about the customer 360 and the importance of providing that 360 that Single Source of truth, which has been the holy grail in our entire industry. We have been talking about this for 30 plus years. And now sales force is in a position to do this. Nobody else in the industry can do this. Only sales force able to do that thats why companies are coming back to sales force, they want to our advice, they want us to play that role of trusted advisers to ceos and Senior Executives you said yesterday bar was high to move the stock. The stock has run up big. The whole group is coming down people want more earnings these days you heard them say the word truth. They said it over and over again. What is that about about two things one is they got this way to be able to make it so they want all of your business the other is very they hate zuckerberg they hate zuckerberg i met with mark recently, with sacha barren coen. The there is a line being drawn they think facebook is about propagating lies to make money there is truth and lies. Pretty strong words youre using to portray their feelings. They hate him. Hate him. You dont see someone is a cancer if you like him. No. No joking around here, this isnt an alliance being built between the people who say you can trust us with your data. What is 360 . You give us your data and well tell you how to do better. You give us your data and we sell it. They did not point blank mention facebook, but at the dinner, it was an attack on zuckerberg. Beware no doubt about it, benioff wants legislation. No doubt about it. Truth 360 is the way to say we are not like them. You listen to sacha baron cohen, hes saying they would allow a he has an extreme position. I dont know if they do that are you saying there is a Coalition Building within Silicon Valley that is antifacebook . Im saying its here. Its here. And i think that Mark Zuckerberg has done a charm offensive. It is not charm. 360 truth is about who is doing selling your data, not sales force, and who is trying to at all costs make any dollar, including the idea that it would be favorite tool. You do not revoke hitler you never invoke that. Holy cow thats where mark stands the opening bell at the nyse. The s p, at the big board, Brazilian Oil and gas producer petrobas at the nasdaq, wisekey international, Cybersecurity Company celebrating its listing. I have to hand it to petrobas for the longest time, they were pabst blue ribbon. They fixed their Balance Sheet brazil doing better. Civil rights situation, not that great, versus argentina, bordering on a failed state. Who loses if venezuela goes up who loses yeah. What do you mean . China china spent a fortune. Belt and road coalition. Russia. Little bit. You know who else loses . All the poor people who are just starving to death. It is just it is a crime there are so many crimes against humanity happening now cant keep track of them but we also dont see the focus. Thats true we are getting word that the president just tweeting a moment ago, he will be heading back to washington, will not do a presser at the close of nato because we did so many over the past two days. Of course, comes after he was trudeau and johnson and macron were seen appearing to mock the president and his long press conferences. Good because we get to do our job. I spent five hours yesterday prepping for the show. Thats not necessarily why he is changing his view. But, wow, this press conference is really going on. He did take a lot of time answering questions. He comes off much nicer in person than he does in tweeting. But we didnt get to anything yesterday. I had all this work on this deal from yesterday for the dentist therapeutics the stock was up youre not a dollar short on that one. No. Still being acquired. Yes a lot of companies, people dont recognize a lot of companies have come public 1800labrat. This is about gene therapy, about the manufacturing having manufacturing capacity for asellas. You had the one steal where that was roche is at the ftc trying to get that deal proved, similar to gene therapy, you take vectors, shoot the right gene in, you kind of mix it with a harmless virus to deliver to a tissue type and you basically defeat the genes that are bad and overwhelm with the genes that are good. Look, this is these drugs are years away, conceivably, from commercialization, but if they work, theyll be enormous. And so youve got a land grab here going on among some of the look, glaxo is reinventing itself by doing these. Novartis. Novartis does deal after deal after deal not necessarily in this area. But these companies are all being look, theyre all farm teams. What happened . All farm teams and by the way, you know most farm teams, celgene owned by dr. Kafario. That will be a fabulous deal, not unlike abbvie, incredible deal you think the bristolmyers celgene will go down as a success . Huge success. Bristolmyers to 65. They have new drugs. Very powerful. Dr. Caforio able to take celgene and turn it into a powerhouse and in the mean tim, they have a drug called eed elquist, 100 e and opdivo is not as bad as what people think it is a great drug. Keytruda. Versus keytruda their oncological franchise is second to none dr. Caforio is a speak softly crush it man very eloquent. Doctor, not a lawyer, not a banker, a doctor a doctor. A like doctors. Eim a doctor not a script writer. Thank you he did say jim, im a doctor. Chips back in favor, jim. Mo microchip guide aance better thn prior. They didnt realize there was restructuring going on there was a terrific collect, brilliant thats a mistake, just buy that. Brilliant cfo of nvidia talking about acceleration in the data center very important data center, even from when they reported not that long ago nvidia will start bringing things back. This is were a tweet away from sending all these back down again. Dont get too bullish. Nvidia needs the mellanox deal to close and apple, at any given time, people think there is going to be something negative about apple. Even though the airpod pro cant make them fast enough. I question apples manufacturing ability. They can never make the real good products enough for the Holiday Season im trying to buy those for everybody. I dont want them to be sent to me because im special no i just cant get them. I did want to ever try to get something. What do you mean . People want to give they say, listen, airpods, would you like airpods no you have to say no like the tesla 10. The x. When someone gets you a gift ill give you a tesla, i dont want a tesla. Noise canceling airpods do sound good kara swisher was on the other day, raving about them. I got the bose things. You look like David Solomon spinning at the amazon cut that out until they trade well above book. I said that to him it is not behind his back. I said it to his face. The deejay thing doesnt work when youre trading one times book. On the down low you got that, chief. He chiefed me it is not often you see a take under. I wanted to point it out not a large deal tommo bravo buying in structure. It was back on the middle of november when the company said it was looking at alternatives an activist in there as well for not that long. A little over a month or so. But take a look at the stock it is down 10 , which is i dont mean to laugh, sorry a lot of people moving into this on the expectation of a deal and they got the deal. Only problem is, it was far belowworking on it there it is. Thanks, guys hope springs eternal still trading above the actual price at this point. It is an 18 premium to the three month volume weighted average on october 27. That was the day prior to when the companys Third Quarter earnings Strategic Review for its bridge business yeah. Ill leave it at that. Nobody likes that look at expedia earnings now. What a shame same thing with the look at expedia shares. One of our lead stories this morning, 9 00, dont see it often, press release that basically lays out the reasons why the board of directors led by barry diller, the companys chairman, significantly disagreed with the strategy of the executive team led by former Ceo Mark Okerstrom and they basically said this departing leaderships vision for the board disagreed with the companys outlook as well as the departing leaderships vision for growth, strongly believe in the company can accelerate growth in 2020 and that divergence in necessitated a change in management there you see, expedia shares up very nicely now. They do increase their buyback to authorization by 20 million it is now 29 million shares available under that barry diller as well indicates he will buy additional shares in the company. Looking for new ceo, diller will be holding that role in the time being but pretty bold press release. Not unexpected from diller, but many others would not candid guy. You know what we dont talk about enough, we spent a lot of time on web, a lot of time on healthcare, you know the strongest stocks i follow now are eaten, downgraded, illinois tool works, ppg, you know what these are . Classic industrials. Theyre supposed to be hurt badly by china i had ppg on last night, michael mcgary, where is the strength . China. China. Eaten downgraded, nobody cares if these if were in such a horrible grips of a trade war, with china, why can you buy these stocks and make money . And answer is things are pretty good just the things keep resonating negatively, these are the stocks to own. It is crazy. The numbers arent going up. But people love them ppg has some good margin situation. I pull these to mind everybody gets too negative, they miss actual industrials that are doing well. I see United Rentals doing okay today, i see kalyn, top picks for next year, target is one of them. The other one is utx. Very compelling report. I wanted to buy utx when i read that the combination with raytheon will be amazing. These companies are overlooked because people say i dont want to touch industrials because of the president. No the stock that always gets hurt when the president says something is apple apple. Apple. Apple. Apple is up. Yeah. It is up. Until it is them. Dont trade apple, own it. People cantresist. I did hear you groan when i mentioned boeing and ual replacing the 75s with a321s. I had american on, they werent that positive about boeing and i had mr. Munoz on, he wasnt that positive about boeing and we had gary kelly from southwest and you start worrying about how much is boeing owned and how much does boeing owe i think boeing has a lot of planes and boeing owes a lot of money. Now, someone yesterday said to me you got to Start Talking about boeings dividend. Boeing is in a bad place right now. And the stock is still hanging in there because of the worldwide a shortage of planes i dont like all these i didnt like when united switched if i was boeing, id be, like, wow. Not the only ones ordering new families of a320s jetblue has some this is for real. Yeah. They owe these companies a lot of money and they have to pay. Because of the max. Yeah. They have good cash flow very well run company, but look, this doesnt end this has to end soon they got to end this soon. Not up to them what do you got there . Carl icahns latest letter. Hes come public on xerox hp. Owns over 10 of xerox shares, hes put out a letter this morning saying he cannot believe the recalcitrance of hps board in terms of its unwillingness to engage with xerox at this point, allow xerox due diligence. We were reporting a lot on this previously and there is a lot more to come here the window to nominate directors is still a few weeks away from opening. But as i indicated previously, it is very possible this will go into april or may whenever you get an an menual meeting at this point. Icahn says he cant believe the recalcitrance of hps board is driven by any real confidence in the stand alone restructuring plan, which the market shareholders and analysts met with extreme indifference which seems to amount to little more than rearranging the deck chairs on the titanic. Is that harsh goes on to say the road to the graveyard on wall street is littered with the bones of Companies Like Eastman Kodak which wasted a great deal of valuable time by coming up with one ill fated plan after another and also failed to act decisively when transformative opportunities presented themselves. It is xerox that has come up with the failed opportunities. You could say the same about xerox. Yes i think the there is no doubt about it, there is compelling reasons basically numbers hp seems to dispute the 2 billion or more in cost synergies that xerox seems to believe is there to some extent it will be jobs, we all know that but those are big numbers for two companies that are having a hard time finding any real growth. Youre right. Enriqco loris, new subscription policy for inc. , which makes a lot of sense are they the leaders in pc at the same time, carl is right, it is not robust market but theyre doing they are gaining share. I think they should deemphasize, they always talk about that theyre doing in 3d and still not there yet. Icahn is the secret weapon on xeroxs side well see 4. 5 , 4. 2 , not an insignificant position he owns in hp. I thought we were going to talk about occi. He nominated all the directors. I know. Did you see the slate did you look at that the newell slate. Not an Impressive Group of executives. Beauty is in the eye of the beholder. Yeah, they have icahn to deal with on that. All right all right. Oil and semis helping out today. Dow is up almost 180 vix below 15 lets get to bob pisani. Happy wednesday, everybody. 3 to 1 advancing to declining stocks, great open and were still right near the highs for the day. Usual trade movers this time on the upside, the exact opposite yesterday, of course semis, energy, which have had a pretty down draft, notable down draft, up today. Retail which had a terrible day yesterday up banks, tough day yesterday on the upside, consumer staples, essentially flat at the open even consumer staples, defensive sector, moving a little bit. The point is this is a very broad advance, even the defensive stocks are somewhat on the upside remember what is moving the markets, four things that have moved the markets this year, lets handicap that quickly. Still very positive, fed still neutral, consumer still strong these are positive data points and main reason why were off of our highs. Trade outlook, i said uneasy truce yesterday, lets say for the moment it is uncertain, but it is not necessarily negative right now. Global economy still very mixed. Were trying to figure out whether there is a bottom in the Global Economy and we keep getting conflicting numbers. Recently, in terms of the economic new here, china servicservic s numbers, services now, beat overnight, thats good news. Theyre manufacturing beat earlier, european services, numbers were better than expectations manufacturing numbers, earlier, better than expectations we have that usadp number, a big miss and the disappointing run on u. S. Manufacturing earlier in the week this conflicting data, were trying to get the bottom and were not sure where it is some people noted maybe an l bottom were dealing with, not a u bottom everybody is confused. Let me show you what the s p looks like in the last month heres november 15th notice how the market goes up on november 15th. Administrative Officials Say a trade deal with china was nearing. Now here, november 20th, were moving down. The stock market moves down, reuters reports phase one china deal may not be completed by the end of the year. The opposite of what we heard a few days ago notice here, a nice upswing here thats whats going on trade optimism, maybe a deal, here we have brazil, tariffs and today, yesterday,of course the president saying maybe we will have something until the election today, maybe we will have a trade deal does this make you crazy dont yell at the stock market a lot of people have been yelling at me about the stock market we dont want the whole trade headlines to dominate trading every day. It makes perfect sense it is a marginal mover the outcome of the trade talks are uncertain. The principles, the two principles do not know what the outcome of the trade talks are going to be. How can we know what they are . A whole sub set of traders that come in every day. This is a big headline, not surprising the people are trying to make money around all that. And, of course, thats the key for intraday trading carl, i know a lot of people want to yell at the stock market, i think everyone should calm down and recognize what going on until we solve this puzzle it will be a little bit volatile back to you. Thank you very much. To the bond pits, Rick Santelli at the cme with data in a few minutes. Big data in a few minutes everybody is up in a tizzy about all the trade issues, bob outlined it quite well at the end of the day, this thi really a question on trade if it was, we wouldnt be hovering, hanging out in the zip code of all time highs the volatility, thank god for computers and day traders because they like volatility as bob pointed out. But the data that we have been getting definitely has been spotty not all bad, really does fit it seems as though the trade issues push a little farther into market that is willing to move look at 24 hour of 10s 8 15, reflected the notion that adp was a disappointment also notice long before that, it popped up a bit above yesterdays lows and it is still hovering above them. Look at week to date chart of 10s. We popped a bit, you can see were clearly depressed. And week to date of bunds, similar formation, small bounce there as well. Now, when it comes to looking at jgbs, hard to make minus 03 seem like a high yield, but none the less, you look at the chart on april fools day, it is a sevenmonth high it is minus 02 yesterday want to pay attention. See if you can get back up to zero and finally the dollar index, fourth session down, none of them have been super big. But cumulatively we have given a lot back you can see hovering at onemonth lows carl, david, jim, back to you. All right, thank you very much, rick. Still to come, a rough 12 months for canada goose. Shares down more than 40 . Will the business of winter boost its fortunes stay tuned for an interview with the ceo as the dow has some nice gains for the first time in four sessions up 188 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. Take a look at the dow 30. Few components in red. Were up 189 and were gngoi to get stop trading with jim after a short break. 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. I wouldnt be here if i thought reverse mortgages, took advantage of any american senior, or worse, that it was some way to take your home. Learn how homeowners are strategically using a reverse Mortgage Loan to cover expenses, pay for healthcare, preserve your portfolio and so much more. A reverse Mortgage Loan isnt some kind of trick to take your home. Its a loan, like any other. Big difference is how you pay it back. Find out how reverse mortgages really work with aags free, noobligation reverse mortgage guide. With a reverse mortgage, you can pay whatever you can, when it works for you, or, you can wait, and pay it off in one lump sum when you leave your home. Discover the option thats best for you. Call today and find out more. Im proud to be a part of aag, i trust em, i think you can too. People, carl, are saying this j j, they did the tests on the talc, found no asbestos, found none before and some say thats ridiculous. They did secondrate testing theyre back doing the testing it does seem to be theres no asbestos but remember the journalists plaintiffs bar will have another shot and basically said the fda did shoddy work i dont think theyll say that you can get excited today but i think the fda will have to say, guys, no no i say i believe in j a j but thats completely worthless, nobody claims. Been a tough thesis with the litigation. I still use it. Whats on mad tonight i use it. Do you . I have mattel on tonight. What a turn going on there this guy, ynon is just doing a terrific job terrible job mr. Mike perry, sprayon skin. Fantastic. And then the most important guest this year, the people who precipitated the ameritrade trade. Oh . The robinhood people. Theyre not men in tights theyre men with 900 million. Also new figures out this morning of number of users. Supposed to be broken on my show. You can cover it. We have to go. 6 00 p. M. Eastern time. When we come back, an executive shakeup at expedia with the dow up 201 period is here. The time to choose your medicare coverage. Begins october 15th and ends december 7th. So call unitedhealthcare and take advantage of a wide range of plans with a variety of benefits. Including an aarp Medicare Advantage plan from unitedhealthcare. It can combine medicare parts a and b, which is your hospital and doctor coverage. With part d Prescription Drug coverage, and more, all in one simple plan. For a low monthly premium or in some areas, no plan premium at all. Take advantage of primary care doctor visits. Preventive dental care and an eye exam. All for a 0 copay. Plus, earn rewards for completing other Preventive Care activities, like flu shots and annual physicals. You could also get over 150 in free health and wellness products. So nows the time to look at unitedhealthcares variety of plans, and let us help find the one that works best for you. 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Rick santelli here with an important data point november read on ism nonmanufacturing, service sector, biggest swath of the u. S. Economy, 53. 9 is what we arrived at and that is definitely a bit of a disappointment following 54. 7 so how does this stack up . 53. 9 is weakest level since septembers 52. 6 and that was the weakest going back all the way to august of 2016. Do keep in mind we havent been below 50 since september of 09. Disappointment, still an expansion territory and not the lowest number of the year. Carl, back to you. Okay, rick, thank you good wednesday morning, everybody. Welcome back to squawk on the street. Market not really fazed by the Services Number and watching that closely as a most anticipated piece of data to the jobs number on friday. This morning, starts with the market volatility. Stocks rallying after the selloff with trade optimism fueling todays move higher. Plus a shakeup at alphabet, what the cofounders stepping down means for the company. An exclusive with the founder of papa johns markets reversing this threeday slide hovering near session highs this hour. Investors digesting the trade head lons and new reports of china talks are edging closer to a deal after the president said yesterday that a deal could wait until after the 2020 election. Joining us this morning, greg battle and Brian Leavitt good morning good to see you. Good morning. How are you balancing the daytoday reversals in the trade news its no surprise that youll get volatility around uncertainty with policy. For investors you need to answer the bigger questions are we still in a secular bull market i believe we are i believe secular bull markets end with euphoria and policy tightening we are not there on either front. The question for investors now is do we get a better policy to lead to improvements, steepens the yield curve a bit or be in this slog . That will have real implications for the portfolio. I suspect rates will go up a bit. The yield curve will steepen a bit and gate cyclical rally here well go back to 2 improvement. Same thesis from you . We could get to 2 trend growth by the end of next year and could have turbulence before we get there we have the data service side of the economy starting to slow a little bit. Manufacturing ism on monday disappointing, as well we see scope for the malaise of the manufacturing side of the economy to broaden out slightly as we hit the First Quarter of next year and could have a turbulent start before trend growth. Are you spooked by adp this morning . I think so. We have trade related volatile which is going to set the tone directionally to the back end of the year but i think data is a tail wind than a head wind. Goods producing did not show up in adp. Theyre trying to say if its an outlier month. We have been dealing with a while now for policy uncertainty thats disruptive for Business Investment and at some point that starts to feed into the job market but in my opinion thats been the story of 2019. Got the fed to start ease policy the story of 2020 i suspect will be incremental progress on trade. I dont think were going to get a fully big trade deal and incremental progress, a better tone and that should lead to some improvements in sentiment, help to stabilize the Business Investment and the jobs market. We have seen markets rise and fall on what President Trump has to say about trade and it is widely contradictory daytoday. When you look at the momentum heading into the political elections next year, do you anticipate the markets responding in a similar fashion to what happens on capital hill and what happens in the campaigns . Yeah. Absolutely think well get election induced volatility. Moving into q1, democratic primaries are a source of volatility around november the election itself will be when we have looked at previous election cycles we have an agree gait Election Year you get the pockets around the primaries and the election days. We have seen markets rise meaningfully this year in a year where investors were very concerned about the policy direction. And so in essence what is happened is we have seen a better tone, fed easing, administration backing off a little bit the last few days created some uncertainty, flattened the yield curve a bit. We can expect it in the coming year and this is a very good year for markets. Is there a reason for the markets to have risenthat high though i had a guest on, on monday, who argues that this policy of easy and free money means that companies have gone in, offered up bonds and theyre using that money to buy back stocks boosting the equities. Is there a good, solid reason to see the rally that we have seen this year . Yeah, sure. If you look on a price earnings bases, stocks are a little bit expensive. In a world where growth is going to be modest, inflation is generally nonexistent and Central Banks cant really raise rates, in fact, most Central Banks around the world are easing that should favor risk assets i was particularly worried in 2016 and 2018 when the fed was raising rates, strengthening the dollar, flattening the yield curve. Thats when investors need to be cautious but no. I mean, the fundamentals look reasonably sound for businesses. We are not overly excessive on valuations and stocks are generally cheap to bonds globally. Some desks argue that u. S. Will lag in 2020 are you fans of other parts of the world exu. S. . Our view is low single digit returns next year and we think that the u. S. Could underperform in that context and seen a resynchronization and sets the scene for europe to outperform on a relative base taos the u. S. Would you take a flier on europe yeah. The thing that investors need to think about is how will policy affect capital flows the big struggle for International Investing has been the strength of the dollar and so in an environment where the fed is on hold or easing and you get progress on trade, that should take some pressure off of the dollar and start to capital attracted 0 overseas so emerging markets, and europe but you need a good policy mix for us to get there. I suspect thats where theyre heading and would require. That is on the president s mind guys, thanks good to see you both. Thank you. All right. Lets take a look at shares of expedia. 9 00 a. M. We got a press release and the board of directors of the company led by the chairman barry diller fired the ceo and cfo effective immediately. In fact, mr. Diller has now stepped in at least to manage daytoday operations with vice chairman peter kern, a director, as well. While the board determines the longterm leadership of the company. Why . Well, you dont see this too often. Straightforward language from mr. Diller known for being straightforward coming the way he talks about things. Ultimately, he said in the press release, Senior Management and the board disagreed on strategy. The board disgreeed with the nearterm outlook an the departing leaderships vision for growth and believing the company to accelerate growth in 2020 it was that divergence they said necessitated a change in management, an immediate change in management. The market responding positively because maybe in part they added 20 million shares to the authorization for its buyback. That is a 29 million as well, mr. Diller quoted saying i will be purchasing additional shares in the company as a tangible sign of faith and commitment of the longterm future thats mr. Diller speaking there. You may recall that on the 6th of november after the bell when the Company Reported earnings it significantly lowered the outlook for adjusted ebitda to 5 to 8 growth. That was well below what was anticipated and saw weakness in Search Engine optimization it means that changes to googles algorithm forced expedia and other travel agencies, tripadviser down that day some 20 and lost the ability to get to come up on search and therefore have to rely on more expensive paid advertising to reach consumers and that has changed across multiple product categories, multiple regions costs them more, margins go down adjusted ebitda guidance came down, as well. Apparently mr. Diller not standing for that. Week or so ago i spoke to john malone who was a significant holder here. This was a Liberty Company at one point, as well you may recall malone continued to have faith at the time in mr. Diller. I have enormous faith in barry and his ability to figure things out right. It may be that these travel companies faced with googles change start to focus their valuation metric on leverage Free Cash Flow instead of growth the growth days they be coming an end but theyre enormously profitable, very low cap x, right . And so if the metric changes, and they drive toward that metric, they could well see valuations come back up. Interesting to note that mr. Diller seems to believe theres growth and so he and his good friend malone sort of perhap disagreeing a bit on that. Malone admitted he sold most of his expedia in part to offset a loss that he had in lionsgate shares a significant upturn in expedia. Not often you see blunt language in terms of why they chose to dismiss the current management team. I think its interesting, too, the expectations for growth are happening alongside where were hearing from Hotel Companies that their outlook for 2020 is slowing somewhat somewhat depressed and so, you got to wonder what is what does barry diller see for Leisure Travel what ch are the people using expedia versus what the ceo had to say about that still believe theres a real opportunity for the company to grow revenue and margins in a dynamic industry youre right we want more specifics in terms of his views. A couple potential culprits on this one. Not often you see the ceo and cfo leave at the same time absolutely true. Speaking of shakeups at the top, what the departures mean for the future of alphabet do not miss an exclusive of the ceo of canada goose hoping to turn around whats relatively a tough year no, its not in my records. Youve got a lot on your plate. Deliveries. Billy, come in. Shift times. I just need to know if its there. Compliance. Can i get your 20 . For 100 drivers. Doug. Doug . And where is doug . He should be sleeping. So should you. Just because youre married to my sister, you could lose this job, billy this isnt working. Introducing samsung connected fleet solutions. With the galaxy tab active2, you can track driver shifts and timesheets and meet eld compliance, all from one device. Samsung business solutions. Google cofounders stepping down from their roles as ceo and president of Parent Company alphabet after more than 20 years at the helm or various positions. The current ceo of alphabet and the current role all of this coming amid mounting scrutiny of regulators and the overall power of that platform our jon fortt joins us here on set to talk more about it. What can we expect in terms of changes that this will sort of bring . I dont know but as somebody whens covered Public Companies for quite a while now, couple decades, this makes me uncomfortable. I want to know what you think because you covered Media Companies for a listening time, too. This is still a controlled company. They have absolute control over what happens at the company and decided they dont have the time to run it. I dont know that we have seen this before in kind of modern tech history bill gates was still chairman of microsoft until just over five years ago. Even though he stepped back from operational roles. Right. If you look at oracle, Larry Ellison doesnt have that kind of control he has a big share in the company. Jeff bezos i think also doesnt have that kind of control negative control to a certain extent and now with the divorce settlement, too, yeah. So these founders ceos, the titans we thought of, steve jobs, similar, he sold out a lot of his initial apple stake when he left the company in the 80s, bought pixar did all that he had a lot of influence and didnt have an absolute control. We have the two guys with absolute control, but no direct accountability they have put sindhar pichar in there. Its moon shot bets to manage, as well. When somebody is subpoenaed, somebody has to answer for what happens at the company, cultural or setting him up, jon well, i mean, im not saying it doesnt happen. Look at when bill gates stepped down as ceo of microsoft it was like the absolute peak of the market in january 2000 so that i think investors should be concerned about, too, but i dont understand if you dont want to run this company, you dont want to be chairman, why should you have control . But wait. If that much of a stake in the company dont they have the confidence in sindhar . Couldnt you read it that way that they trust him with the baby then why doesnt he have control . Maybe he is too busy. Theres an article of talking about dr. Manhattan, too big for this world anymore and moved on to, you know, big thinking projects. That could well be but he still has control of this Public Company is my point and if youre an investor i think that raises questions of governance, the culture of the Company Called into question if you look at google just in se me too issues at the number of people, executives, at google who have had issues with dating employees or contractors, look at eric schmidt, sergei brin, andy reuben, page is not accused of that. Stand up, ethical guy and let it happen on his watch so now he is still in control cultural changes that need to happen but but he is not the guy zuckerberg one day may choose to step down as ceo, for example, but his control of facebook will go on in perpetuity. Theres questions of what happens in those situations. Not all cofounders have to sell to not run daytoday operations, right . Thats what youre suggesting. Right now because control companies are under scrutiny, look at what happened with pinterest, their provisions are such that, hey, if youre not in an operating role after a certain period of time you lose that stock and that ability to control the company. Maybe it will be fine. This is a company that did tremendously well over larry pages tenure. Investors are encouraged by it in part meaning more modest a aspirations for the money losing moon shot so to take and therefore he wont be spending as much on drones or loon or whatever it may be and that you sort of will have things running more smoothly in some ways and should be noted the walmart family, not all they still control walmart and have for a long time, have given up gave up, you know, management control quite sometime ago and not completely unknown. Right but in tech, certainly in this era, Media Companies that were controlled for a long time and the founders didnt necessarily have direct operating role and often they did tech is fast moving and under such regulatory pressure, i think raises questions for investors about accountabilitywise what happens from here. So you really seem to think these guys are trying to disappear themselves so they dont have to show up in front of congress or deal with the heat if and when it comes. Larry page sort of already disappeared. He has vocal cord issues that caused him not to be one of the front and center speaking people and brin isnt out there much since google glass blew up and not as if they had to do to retreat an so young. Theyre 46 years old they could easily, you know, lord willing, live another 40 years not in an operating role necessarily unless they decide to step back in and they can at any time if they take the boat and yet investors are need to really trust them to make the right calls about a company that apparently they dont want to pay that close attention to. Interesting theyre on the board. Stay on the board. Yeah. There is that. I mean, as far as i know theyre still on the threeperson executive committee which includes them and sindhar. Jon, thank you. Lets get to dom chu for a sector sort looking at whats moving this morning. Hi, dom. So much green on the screen stocks trading near the best levels of the morning so far comments from President Trump saying that trade talks are going well, helping limit the damage following that weaker than expected adp report on private payrolls you have cyclicals higher and those markets near the best levels of the day but lets drill down on another outperforming group so far, the Energy Sector reversing yesterdays sharp losses and the sector down about 15 from the recent highs back in april among the names leading that Energy Sector higher today, noble,al burton, devon energy and marathon oil up around 3 to 5 on rising oil prices. Back downtown to you. All right thank you. When we return, well have an exclusive with the ceo of canada goose opening a new Experiential Retail space in toronto. Plus, dont miss the ceo of papa johns a week after the companys founder and ousted chairman spoke out on the companys direction. More squawk on the street when we return. Ive had over 40 pizzas in over 30 days it doesnt taste as good. The way theyre making it, putting it together, it is just not ndfuamentally sound to what makes a papa johns pizza a papa johns pizza their medicare options. Ere people go to learn about before theyre on medicare. Come on in. Youre turning 65 soon . Yep. And youre retiring at 67 . Thats the plan well, youve come to the right place. Its also a great time to learn about an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Heres why. Medicare part b doesnt pay for everything. Only about 80 of your medical costs. This part is up to you. Yeah, everyones a little surprised to learn that one. A Medicare Supplement plan helps pay for some of what medicare doesnt. That could help cut down on those outofyourpocket medical costs. Call Unitedhealthcare Insurance Company today. To request this free, and very helpful, decision guide. 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Canada goose opening a new retail space in toronto hoping to turn around a rough 2019 by enhancing the Consumer Experience Courtney Reagan is there live with the ceo of canada goose hi, courtney. Hi, contessa. Thank you very much. Im here in toronto with the ceo of canada goose danny reece. Thank you for having us here today. This is the journey. We call it a store but there is no inventory theres a simulation where you walk through a glacier, a cold room with actual snow. But if youre so impressed with that, the goal is for a shopper the leave empty handed how risky is this bet . For sure. Thank you for coming up from new york and taking the time to be here with us launching this incredible experience. We feel that whats really important is to be innovative, whats important is the experience and try new things, especially in this day and age where as we all know retail is changing and evolving and ecommerce is disrupting things. Our brand is strong and brand heat is strong and the ecommerce business and Retail Stores are strong and this is a great time to experiment with something which is different to learn more and i think that, you know, what i think is that consumers will come into the store, people will come into the store, they go through a crevice experience out of the mall environment and brought into this environment where were sitting right now and i think that, you know, i think that its a powerful Brand Experience and important today and will learn a lot and at the end of the day a consumer can buy a product should they choose to before 2 00 p. M. Delivered to them the same day. To their home or hotel and if they buy after 2 00 p. M. Within 24 hours so priority is Still Available here and the service will be successful so you brought up the fact that your brand is strong, ecommerce is strong, Retail Stores are strong. Part of that direct to consumer business up i believe 47 in the most recent quarter, a smaller part of the business and rely on wholesale. Do you think that that is the model that will persist Going Forward or is it better to own the experience even if its a store with no inventory . Yeah. I think that well, i think well learn a lot from this store. Overall for us, our wholesale partners are important to us in being present at wholesale is important and the right places with the right partners and these days we have the brand heat that we have does drive sales to the wholesale partners. Nordstrom said its a top selling product and driving traffic into the stores and i think also important to have our own stores to interact directly and give them great experiences and have a different kind of relationship so i think the harmony of all the things together is really important and especially at this sort of a moment for us and our brand where things are going so well to experiment knowing that retail is changing and to help we want to be it is important to us to be a leader the mandate in krcreating the store is to do something never done before. You are bringing up important points of the power of the brand and we see it on the streets of many big cities and even thoughre very expensive items and the stock under pressure down 12 year to date, 45 off the highs hit last year. What is the street not understanding about your story is there a communication issue yeah, no. We are focused on the long term. You know we see that our business is performing very well and we dont look at the stock price daytoday we focus on the long term shareholder value and excited about the brand heat we know exists around the world that we see across the markets and im really excited about the future and great things to come. It is important to talk about if we can quickly asia and Hong Kong China very important market for you. Doubled in the last quarter. Theres unrest whae whats the Long Term Plan in hong kong if this continues . Notwithstanding the unrest in hong kong and we are monitoring it and hoping for an ammicible resolution for everybody i think the fact that as you point out our business in asia did double in the last quarter and so much opportunity in asia in general thats what im excited about and i think that the growth in asia and the future of asia is so much space for us and what we are focused on as relates to hong kong we continue to monitor that same way as a whole world will. Very quickly before we go, what do you feel about the u. S. Consumer youre obviously selling a discretionary, high priced product. Where is the u. S. Consumer right now as this trade war continues going into this very important Holiday Season the brand is doing well in the states we have a lot of our Brand Awareness has grown a lot. We are expanding into new markets in the u. S. Consumers are real he gravitating well toward our brand and i feel really well strongly and really good about the opportunities in the united states. Dani reiss, thank you for having us here in toronto. Its pleasure thank you. Back over to you. All right thank you very much. Really fascinating conversation there about whats happening, what his views are on hong kong and the future of the consumer, as well. All right. Carl sue herrera for a news update at this hour. Good morning, everybody President Trump lashing out at canadian Prime Minister trudeau after trudeau was overheard appearing to gossip about trump. The president telling reporters he believes trudeau was upset he brought up the fact that canada talls short of the nato target of 2 of its gdp on defense. Well, hes two faced. Do you think that germanys too obviously, with trudeau, a nice guy i find him to be a nice guy but the truth is that i called him out on the fact he is not paying 2 and i guess he is not very happy about it. First Lady Melania Trump visiting the Salvation Army and joining local School Children making Christmas Decorations in a church hall in london and then the children put on a holiday show singing and dancing for the first lady. In new york city thanks to the new years eve wishing wall, people can write down the wishes on little pieces of confetti that will then be released above times square when the ball dropped at mid nigh. Anybody can participate and it is popular already that is the news update this hour back downtown to you, contessa. How would you like to be the person responsible for removing the push pins . I would not like to be that person im sure there are several people. Lets hope so sue, thank you. When we come back, well have an exclusive with papa johns ceo rob lynch with the companys stock up almost 40 . Since hes been named ceo in august ghbaawk on the street will be rit ck yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. So it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. 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. Two years, two lawsuits and two ceos later, papa johns is working to turn around the struggling brand and reported positive same store sales for the first time in two years. Kate rogers is with papa johns ceo rob lynch three months into his tenure kate david, thank you so much. Rob lynch, thank you for joining us today from new york. Great to be here, kate. So david mentioned positive same store sales growth in past quarter, first time in two years. The stock up about 50 year to date whats the next step to ensure this Growth Continues . We need to stay focused on the things we are all excited about. You know we are a food company. We have a lot of innovation in our pipeline that we havent really taken advantage of in the past and were focused on making sure that we are delivering our better ingredients, better quality message and bringing new types of products and new types of food for the customers and then we are also really focused on making sure we have the right Technology Infrastructure to support the business moving forward. We are making investments there and starting to see some positive movement there, as well. You mentioned innovation. The companys moving quickly with changing things up on the menu and something that papa johns has not done in the past and also slimmed down the management team. Whats the next step in the play book it is really executing all that with excellence right . We have the plan in place. We built the strategic plan. The franchisees are aligned and spent time working with the franchisees to meet their needs and working with them to bring all that innovation to the marketplace. Got to ask you about john schnatter. We have seen the most recently interview criticizing Company Leadership and the way the pizza tastes how big of a thorn in your side is he . We dont focus on that. Hes entitled to his opinion we focus on making sure that we are taking care of our employees, focused on making sure that we are working with the franchisees so, you know, i cant really comment on how he feels or what he thinks. Rob, Contessa Brewer has a question for you back in new york contes contessa has the formula for the pizzas changed has the ingredients changed . Has the way you make them changed . No, actually nothing has changed. And, you know, i would ask our franchisees how they feel about hour products. Im never been part of a system that takes more pride of what goes into the food we make an how we make it we feel great about the food we are putting out there. We havent made any changes to the way we make it or to what goes into our products. Rob, you mentioned franchisees a few times. You are working closely with them and Financial Assistance to them through 2020 to kind of help them through the things that have happened over the last two years. Right now whats their biggest challenge in moving forward . You know, their biggest examine is just, you know, adopting the changes that we are putting in place but everyone is excited and were all aligned that this is the right direction so were working with them very closely to make sure that were building operational protocols and processes that help them be as productive as possible despite the fact of bringing new ideas to market. Any time you invoke change and bring new ideas theres going to be some transformation period and were working with them to make sure thats as seamless as possible. Wed love to get your thoughts on the delivery landscape. You do delivery in house theres more scrutiny, potentially more regulation coming down the line for that industry how important is that piece of the pie to papa johns and what do you see foresee moving forward . You know, we love the idea that delivery is becoming a bigger part of the Restaurant Business in total. The aggregators have really tapped into an unmet need and so we believe that we can partner with them. We believe that they can help us reach new customers. We also believe that they can help us through some of our high capacity periods of the day. Dinner time is a really busy time for the pizza business and especially in the bad weather and no one wants to go out we have built relationships and partnerships to compliment the business and we are not concerned it substituting the business. What is your outlook on Consumer Sentiment right now we have seen moves in the stock market, concern of trade how does the consumer look right now . Its a wonderful thing of being in the Restaurant Business everyone has to eat. Andas long as youre doing all the right things, putting the pride and quality into your product, taking care of your employees, taking care of the customers, you can, you know, weather through both ups and downs in the marketplace. How big of an issue right now is finding the right talent to work in your restaurants the economys doing really well and the labor market is tight. Turnover is historically high in the Restaurant Industry. Thats a biggest challenge and thats why its more important than ever that we take care of employees and make sure we create a Work Environment that is challenging and stimulating and provides opportunities for our employees to achieve their dreams, whether it be at papa johns or somewhere else we teach them to be part of a team and take pride in the work they do and qualitys that are going to help them in this very competitive workplace. You led a similar turnaround as arbys and that was obviously successful Big Marketing campaigns. We have the meat everybody, thats synonymous with the brand whats the biggest lesson youre taking from that turn around at arbys to apply here i get credit for the arbys turn around but it was a team effort an enthats the most important thing. The team that you have in place. You know you got to make sure that everyone believes in the vision and where youre going and how you get there and if you build that and build that both with the internal employees as well as the franchisees great things happen. Rob, final question here. What do you foresee as the biggist challenge and Growth Opportunity for papa johns moving forward i think the biggest challenge is overall the Restaurant Industry is challenged from a you know, a excuse me, the Restaurant Industry is challenged from a transactional standpoint people dont eat more. We dont want to make people eat more its competitive we have to make sure People Choose us over the competition the biggest opportunity is that we have a differentiated position in the marketplace. Frankly, we have worked really hard to build the quality position and leverage that to be successful in the pizza industry. All right thank you so much for joining us today. Thank you. We appreciate it. Back downtown to you. All right kate, great stuff. Thank you so much for that kate rogers. Going to break, take a look at the markets here dow up 177 watch oil, too up more than 2 now as we just got a bigger than expected draw out of inventories we are back in a minute. For a r, he wanted someone super quiet. Yeah, and he wanted someone to help out with chores. So, we got jeanpierre. But one thing we could both agree on was getting geico to help with renters insurance. Yeah, geico did make it easy to switch and save. Oh no. Theres a wall there now. Thats too bad. Visit geico. Com and see how easy saving on renters insurance can be. Hr tariffs knocking at the door and a top expert said that shouldnt be an investors main worry. More squawk on the street is coming up. Stocks reversing a threeday slide rebounding this morning on reports that china trade talks edging closer to a deal. The dow up off what we have seen for the intraday high so far joining us former trade representative for china jeff moon and Wells Fargo Securities senior economist mark vitner jeff, given your experience in the past as the deputy trade representative, how do you interpret what President Trump is saying about trade, one minute saying hes willing to delay until after the election next year and then saying the talks are going well the problem we have here is that the trade talks are not transparent. We have two data points. One is economic realities underlying the trade disputd and trumps comments so the economic realities have not changed over the past few days. Both sides wants to reach an agreement focused on agriculture and tariffs and we will get that kind of an agreement meantime, however, i interpret trumps comments publicly as basically just haggling with china. He is always unscripted, he frequently does not stick to the truth and he sticks to several familiar themes. Yesterday, for example, the theme of his comments was that china wants the deal more than we do. And he rifted into the comments about maybe no deal until after the election today he only had time for one sentence comment which was more mainstream so i dont think that we should read too much into these comments we will get a deal i think for phase one. Either by december 15th or within the next few days, months as for a phase two deal, i think thats much less likely because the chinese made it clear theyre not that eager to talk about the core issues in this trade dispute all of which are in the phase two package. Regardless of whether the markets should read too much into it they clearly do put stock in what the president has to say because we see his comments moving the markets here mark, whats your prediction about what happens and how much the president moves the markets until a trade deal is or is not done well, my sense is the markets are actually moving a little bit less i know that we had the biggest move we have seen in a few days after we had some more negative comments from the president. Bounce back today. We had seen much bigger moves when we had similar comments a few weeks ago so i think the markets getting a little more used to the fact that this is the way the game is played this is art of the deal and i think that the trade negotiations will be contentious right up until the moment that a deal is reached and were probably not really going to see it coming. Jeff, you seem to indicate your inability to see our way towards a comprehensive deal i would like you to give me more sense of why that would be so difficult. I think that the fundamentals for phase one deal are all in place. But china i think is really just playing trump out for time they do not want to talk really about force technology transfer. They dont want to talk about subsidies or other things that would require them to do business in a different way. They do not want to address the problem of abuses of official discretion that fundamentally discriminate american firms. Those are the really tough terms in the trade negotiation and there is no sign that theyre willing to address them so i think theyre frustrated with trumps style of negotiating theyre not sure that they can get a deal or get it to stick and willing to perhaps push it beyond the election and i think that would be a mistake because the democrats will be tougher, will go back to the Transpacific Partnership and maybe raise other Human Rights Concerns and put that in the mix and in the chinese best interest to cut something sooner rather than later. Do you think we get the december 15th tariffs put in place . I think we do not because it is not in trumps interest to start taxing pure consumer goods for domestic reasons i think trump will not do that trumps focus is always domestic and short term and i think hell find a way to kick that can down the road. Mark, i know you disagree with that, though. You think that tariffs tariffs t effect, dont you . I think theres a pretty good chance theyll go into effect but be reversed fairly quickly this is the way that we could roll back some of the tariffs in order to get to an agreement so that we raise them and then lower them i dont think that theyll stay in effect. I dont think that theyll have any Lasting Impact but i do think time is just too short to get a deal before december 15th. I dont think i mean its possible they push a delay, but that weakens trumps hand if he does that. I think theyll probably go through, theyll take effect and then theyll roll them back and then they can say, hey, we agreed to reduce tariffs in order to get a deal. And the u. S. Companies were hearing have really played up the importance of the intellectual Property Protection and yet you think a lot of them have already factored in ways around that . If you look at whats been happening in manufacturing in the u. S. , weve been adding manufacturing jobs even amidst this manufacturing slowdown, were adding manufacturing jobs. Theres 470,000 manufacturing job openings today, which is a near record. China has been losing manufacturing jobs a lot of companies have been saying if weve got production in china with intellectual property at risk, well pull that back, either put it in the u. S. Because the labor cost differential is not what it used to be. Folks are trying to avoid Political Risk and have more control over the supply chains, and china is beginning to feel this i think china needs a deal more than theyre letting on. I think they really do need to address these issues and i think that theyre a little put off by the way that trump has gone about it, but that doesnt take away from the fact that they need a deal more than people realize. Yeah, all right thank you very much, mark, jeff, appreciate that. Asian markets were lower overnight and that was before the positive headlines came out about the trade negotiations so well have to see what happens when asian markets open once again. Lets send it over to jon fortt so we can get a look at whats coming up on squawk alley. Well have more exclusive comments from the ceos of amson web services and verizon coming up on squawk alley. A surprisingly tough forecast for housing in 2020 released today diana olick has more. Diana, what have you learned you would really think this would be a much better forecast given the growing demand for housing, the Strong Economy and still historically low Mortgage Rates. But realtor. Com, one of the nations largest home listing siting, says the Housing Market will slow down next year and we could see a very troubling new record set the headline of its report is home sellers will stay on the sidelines. That will cause the housing shortage to get even worse and supplies could hit that record low. Low inventory will cause sales to drop just under 2 annually and home prices will flatten nationally as millenials, who will account for half the home buying market, will struggle to afford overheated prices in some markets. However, realtor. Com is predicting prices will go negative in some markets, the first time thats happened since the housing crash. Those cities include chicago, dallas, las vegas, detroit, chicago and san francisco. They will have little incentives to put their homes on the market Single Family home is increasing and the forecast is for a 6 annual gain but so far it has largely been on the upper end of the market not at the entry level where demand is strongest. Builders are starting to pivot toward cheaper homes but up against tough cost constraints the only bright spot is that realtor. Com does expect Mortgage Rates to remain low and they just dropped again yesterday on that china trade news. Interesting housing news, diana, thank you for that. When we come back this morning, kara swisher on what larry page and sergei brynn means for the future of alphabet [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 for every family going home for the holidays, there are countless people working to help them get there. Thank you to everyone we rely on to get us home to the ones we love. Um houston, weve had a problem its human nature to hate problems. But why is that . Problems inspire us to rewrite the rule books. The history books and future books. Thats why so many people work with ibm on everything from city traffic to ocean plastic. From flight delays to food safety. Problems even got us to the moon and back on one tank of gas. And who knows where theyll take us next. Good morning it is 8 00 a. M. At susans garage in menlo park its 11 00 a. M. On wall street and squawk alley is live but i still havent found wha im looking for but i still havent found wha im looking for good wednesday morning, welcome to squawk