Transcripts For CNBC Squawk On The Street 20240711

And the deal is worth over 44 billion in stock it combines two of the largest providers to wall street and so far 2020s largest dollar wise deal plus, youve seen it on squawk box gm and nikola announce a smaller deal on fuel cell systems doesnt involve equity and well get to more of it why those shares are down so sharply by the way, jim, great to have you back. A lot to catch up on that we missed talking with you about over the last few days as for moderna, another monday here, jim, with 100 on severe and more discussion that come spring we may have nearly ten of these things to choose from. A remarkable moment because it is true this is warp speed and warp speed is run by the army and going to go to longterm care facilities at the same time it is going to go to Health Care Workers and i think the good news here is it will go to a lot of people that no one thought they could get to very early you shotgun the entire level of when you include modrna and dont even talk about j j i think everybody in this country will have the opportunity to be vaccinated by may. I think a lot of people who are in a highrisk category will be able to get vaccinated january, february, march. David, i got to tell you, i think that warp speed is being run in a nonpolitical way. In a way we can be proud of. And a way that will make it so that we are headed towards herd immunity, even if a lot of people decide to opt out really. Youre being very positive im happy to hear it i hope youre right. May would be a wonderful thing being that we would then have normalization over the summer for so many and people returning to work in a full way, jim, if youre right what about the transition to the Biden Administration again, there, theyre finally getting full briefings and real communication going on so you feel more confident that handoff in terms of warp speed and the distribution of the vaccine is not going to be impeded by the change administration and the lack of communication that has taken place . I think the military has never been political about this. This is militarily led . Yes absolutely what it is going to do is go to cvs and going to go to walgreens and walmart and plus a lot of Grocery Stores i think youll be able, lets talk cvs able to go to cvs website and make an appointment and we have to find out tomorrow or wednesday about what the order is we dont know what the order is behind longterm care and then Health Care Workers and they will be able to get it on site and then its going to be able to go to the drugstores, the supermarkets we are going to wait and see what the government says is going to be the reality of we are going to have people who are 65 north and are we going to have 75 north. People with preexisting but, geez, i couldnt believe how exciting this is going to be i do hope that people take it. I think youll feel like if you didnt take it, you may feel left out in the end because this is going to be very easy to get. Two shots. Youll go to your cvs and go for one and then three weeks later go for another if you dont get the second one, it doesnt work. Youll get a card, carl, that shows you got it it will go to your cell phone, too. I think youll be able to say i am inoculated and it is the way to get back to where we were jim, your timeline is a little more aggressive than say goldmans which sees about half of the population being vaccinated by the end of q2. Also interesting, jim, too, they looked at a downside scenario where they do not succeed largely on safety events which is much more bigger deal for the eu than say the u. S. Its entirely possible that they could be wrong and im right. Maybe they didnt do as much work as i have really any alternative, jim well, i dont know when you get up as early as i did and im back from vacation and you tend to call in your people david, i am telling you. Will you stop smiling and get, you can smile all you want because im giving you good news i cant do anything right by you. Thats totally not true if im smiling, why are you smiling . Okay its like with my kids am i a child of yours no, its the other way around i love my dog and hes the one person see that hes the one thing that is always happy to see me i did not mean to question your smile im thrilled for the idea. Im thrilled for the idea that they have an ability now, if it is going to go, a state funnel the states may decide exactly which ones, who are going to be get it next. But there will be a pecking order and the reason why im more bullish than goldman is because i think pfizer is underpromising and will overdeliver. I think pfizer is good i think this whole notion of how cold it has to be. Youre going to have dry ice five days and youre going to be able to get it and i think the only question about whether you get it is the jam up how many people are going to want to get it i dont think its going to be our previous guest was talking about the people who dont wear masks dont want to get it you know, i think its entirely possible that youre going to get it because the pressure under the Bide Administration is going to be pretty david, you mentioned what is going to happen. More likely youll have a president who knows that you cant get two regeneron be better it will continue to be a question to how many people resist that and, obviously, going to be an important part of the story. Youll take it, of course of course two regenerons, jim that will never get old. Bring in meg tirrell some additional questions which we dont have answers to yet yeah, carl. Thats right so, we got the final look at modernas phase three trial for its covid19 vaccine where they had more cases of the disease for the efficacy coming in at 94. 1 they looked at 30 isccases of severe disease they saw no new safety concerns. Appeared to be well tolerated moderna says it will file with the fda and europe for emergency authorization in the u. S. And that Committee Advisory meeting is expected december 17th. We talk would the ceo about what comes next heres what he said. Its highly possible between the 17th and christmas the product is approved. If you look at fda in terms of the a few days after the Advisory Committee we would be able to ship products as soon as we get approval we have worked very closely and as we said, you know, we should have up to 20 million doses by the end of the year. So, guys, with the schedule for december 17th. Were showing there a different full screen but modrnas is december 17th and pfizer december 10th. These are stacking up to be one after another. The fda reviewing these and how they green light these are up to the fda. This could happen within a day or two after the meeting but the fda is the one to decide when to hit the green light for these vaccines meg, reports over the weekend that United Airlines is already shipping some charter flights of pfizers vaccine in preparation for approval are you seeing anything to discount the idea that we could see vaccinations within 24 hours of approval . No. We dont know when the approval is going to come but the plan as we are hearing right now is for them to be able to get these vaccines out and it will be this incredibly orchestrated effort where pfizer is shipping the vaccines and as you were just talking about, has to keep them extremely cold and at the same time mckesson will be shipping the syringes and the alcohol swabs and all the things you need to go along with the vaccines all of that will be getting coordinated in every state 6 million doses shipped in that first shipment and the prioritization is going to start happening like the Health Care Workers and theyre going to figure out who is going to get vaccinated first well start to see this happen but its very complicated and an amazing thing to watch over the next few weeks most likely meg, thanks for that. Another big monday on your beat. Meg tirrell talking to moderna earlier today. What she just said about the logistics does feed your optimistic case . Absolutely. This longterm health care decision, again, this is pecking order is really fantastic. I mean these Health Care Workers. Were now, look, we read these stories about Health Care Workers who have it who are still working. We know longterm care responsible for a giantic number of deaths. So, i think the government is being very prudent i have been in touch with mckesson and i think theyre completely ready and know u. P. S. Has freezer for them no one seems nearly as worried about the pfizer temperature because theyre ready. David, theyre ready okay. Im excited to hear that theyre ready. I believe that will hopefully be the case and i hope teachers get it quickly, too thats also one, teachers before students. What i think is amazing get those schools fully opened this is a nonpolitical, this is mckessons government some state intervention but a pecking order that will be announced later this week and then the drugstores and supermarkets and thousands of places youll be able to get it and i think that is why its going to be so accessible, carl, that people are going to get it. Yeah. Lets hope so, guys. It is going to be big. When we come back, a lot to get to this morning. Obviously, s p global and ihs market and jims take and nikola shares down 21 premarket. Ngowadot ay. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Welcome back the year ending with a lot of m a activity large deal guys, also wanted to offer a bit more on a story reported last week we havent had jims take on it involving a company he knows so well and reports of salesforce being close to potentially buying slack i have a couple things to add here for people based on some recent reporting you know, again, the journal broke it last week we didnt get a sense on price and give you more clarity there. Perhaps even surprisingly going to be a premium above the current stock price. Now how much thats where it gets a little more difficult to say. But lets say not to a 30 billion value for slack but perhaps not that far from it so, it does appear that this is going to be, have been a very significant premium above, of course, the unaffected stock prices as we like to call it the composition of the deal, roughly im told half cash, half stock. May be weighted more towards the cash side. But i dont know specifically exactly where it falls out percentage wise. Lets just say roughly jim, well get a deal announcement after the close tomorrow this is according to a number of sources familiar with the situation. It does appear salesforce is poised to buy slack in a very high premium deal. The comp multiples at this point, jim and im told that slack did not talk to any other potential buyers they have engaged fully with and you seem upset by this i didnt want to hear that kind of price in part because i think that this is one that is not as easily integrated i know that mark believes that microsoft no longer, lets say an axis versus the allies and just use that as a term briefly. Kind of funny. Maybe not funny. Heres the problem with slack. It has been without a doubt hurt by the bundling that microsoft has done i think you agree with me. The anticabreak up one of thes n bundling i think stewart is right theyll take it to microsoft. Clearly going to war with microsoft. The company that was not that far from buying salesforce a number of years ago. I remember my reporting at the time and didnt, obviously, happen good thing for shareholders given all the value that has been created since what is taking it to microsoft and going after it with this product. Im worried about the synergistic negotiate in the same way i was worried about the notion of twitter and there isnt anybody i know, david. Ill put it to you immediately to say that slacks product is better than microsofts. I think that i used the product. I think its fantastic you dont think crm would improve the product . They could. They could easily integrate it into much of their configurations but i would have preferred something that is more, you cant buy snowflake, you cant but something that would make it more analytic. Tablo brilliant. Not afraid to pay up recognizes that sometimes you have to. But, david, this is a gigantic deal its interesting that salesforce stock was initially up because people came in this morning and didnt see a deal. Yes, look, i think its a lot of money, david when you go through what butterfield is saying, you really have to bust up something that microsoft owns. Microsoft has been incredibly effective at this to the point butterfield made a point and that is a good antitrust case superior product and because of bundling, you look like youll lose and just knock salesforce down jim, another deal to get to that has been announced this morning. Just knocked salesforce down. I see its down a little and not a lot and slack was up given the enormous move in the stock price after the reports of the potential deal slack stock moved up dramatically the idea that it would be a premium above 40, which were telling you it is is perhaps a surprise now, the stock at 44 based on this reporting by the way, one last thing on this, people were floating that google would be involved come on, board member. Tied up still trying to get fitbit done. Google is really in a difficult position by the way, google comes up sometimes in the huge data deals which takes us to this, again, how will they get a deal done of any size if theyre them but if youre s p, this is one of those names, jim. I remember when some time back at the New York Stock Exchange, you know, youd wander across it and i was like, wait a second. 70 billion market value now bigger than Goldman Sachs data and the willingness of the market to pay a huge revenue for the recurring Revenue Streams and they have the ratings business heres the deal this morning enormous roughly 40 billion. All stock. It expected to be earnings to the second full year by the way, earnings per share seem to care about it but the people that care about it even maybe a Free Cash Flow multiple. They are talking about this Company Generating over 5 billion in Free Cash Flow by 2023 and return over roughly 8 5 of that to shareholders of that 5 billion that they see in terms of Free Cash Flow. Give you a quick sort of timeline s p approached them in september, im told. And s go. Youre the spoelpotential partn thought about in the past. Lets call around 2. 1 somewhere in there and they made it up to 0. 2838 and thats where you end up theyre really trying to figure out, as well, who owns how much of the combined company. They end up there , as well. 67 6 again, jim, the multiple here that the market is willing to pay and the numbers are talking. But even revenue theyre talking revenue synergies. 680 million and thats by five years after close fully realizing those synergies. But thats huge. You throw the multiple that the company gets right now on a 680 million appreciation and youre adding 15 billion in market value. Lets keep an eye on shares of s p which is the full currency here i like the fact that it reduces s ps rating business from 47 which a lot of people feel pretty static business to 30 . Dougpederson has done a series of acquisitions. He bought a company from me. He bought a company from me. I did good he did good. One thing about doug, hes even handed and im so glad hes on my show tonight. Coming on the big mad money program. Not here, but there. Nice thats great by the way, antitrust, were just talking about it. No real overlaps here. So while these reviews do take their time, theyre talking about second half of next year and there doesnt appear to be any overlaps in their business jim, who knew data was such an incredibly lucrative business. To watch s p, i still think of it as being a small part of mcgraw hill. Like business week business week and s p. Meanwhile, one is 80 billion on its way to 120 billion. And the other is, i dont even know i dont even know. Owned by bloomberg, right . Doug has made it a point to become the biggest data company. Hes going to get oil data, which we know ihs great oil data and Good Transportation data and Financial Services data and carfax will be interesting they intend to keep all of these. Doug made it a promise to everybody that he will return a huge amount of cash. He is doing that he returned 85 of Free Cash Flow as ongoing capital return policy what i like best about this deal, david, is that the s p will be known as the data company. David, we know what happens with these Data Companies theyre loved. Theyre loved they are loved beyond all recognition because they have no risk they have that recurring revenue stream that the market loves to pay a huge multiple for. What was the multiple . 28 times ebita these multiples are crazy. The only other company that i think is in that cohort is msci. Henry fernandez. Another guy that has put together a company look, we have some downgrades and we have a downgrade of jpmorgan why . Because they have risk the people willing to overpay for companies that have no risk that are sticky. I love ihs and that is a General Atlantic company all right carl, it is as we said earlier the largest deal of the year roughly 40 billion lets call it overall in stock and more to come more to come yeah. On the call right now, ceo says we dont believe there are any regulatory issues that cant be resolved so, well listen for that tonight with jim well get to the downgrade that jim mentioned of not just goldman and jpm but bank of america, as well the upgrade of wells over there. rbarestl xe wee ck in a minute lets get to a mad dash as we count you down to the opening bell apple. David, only a matter of time before people started saying maybe there is something here. Apple stock has done nothing for a while. Loop capital goes hold to buy. This is 5g bigger than we think by the way, Morgan Stanley says iphone is doing incredibly well and loop says the iphone build up is good you have two firms that are saying good things but the idea, i believe, that they want you in ahe ahead of the 5g. One of those moments when people are not focused at all on the revenue stream and focused entirely on the handset. Not focused on the mac and just entirely focused on the 5g minies theyre going to sell to me, david, feels like one of those thing physics if you haven apple christmas, its going to do well. The revenue stream keeps growing. When aiotayou talk about the revenue stream, what do you mean a subtext meaning that were not going to wake up each morning and find that another Chinese Company has been disenfranchised like we did. Regardless of whether you like it or not, the idea that you wake up and youre watching and shes talking about some company that is important that we have just decided to cut them off, were doing it and were not getting anything from it i dont know, david. I think the strategy is to just get back, the strategy is to go back to the prenixon years i dont think that biden wants to do that i think he wants to work with our allies to cordon them off. I dont think that works if youre in the marketplace and if youre in stocks, youre just tired of the tweets and tired of the announcements that are done random in an arbitrary, capricious way which makes it very difficult to buy stocks or sell them. That is a very narrow approach what we are in is a cold war and it is a cold war we fire a lot of cold war statements and dont get anything from them i dont know i hear you. I hear you do you . What do we get more teslas. Its unclear. Not clear. And to your point, i mean, you know, frankly its the one area where the difference between the Incoming Administration and the outgoing is probably not that great. No, its not. The president , president elect doesnt tweet. No, he does not he does not. Carl, over to you all right guys, opening bell final day of november and what kind of reallocation forces may be in effect on positioning and how that may affect the socalled santa claus rally in the month to come. For that well turn to steve liesman. Hey, steve carl, thanks very much. In the complicated and troubling story of the Federal Reserve advising banks to stop writing libor contracts as soon as possible written after 12 31, 2021 will represent a safety and soundness risk and the Federal Reserve will supervise banks accordingly. This comes after the libor governing body today says its pursuing an end to publication by june 30th, 2023 david, i think this probable raises some memories that you have going back to 2007, 2008 when libor became a scandal breaking open in 2012 and this thing will hang around until 2023 right now the idea being that the cure for the problem may be worse theyre going to let these contracts about 200 trillion of contracts written under libor and most of these legacy contracts roll off david . The london inner bank and the scandal you referred to over 12 years ago but they were basically manipulating it at that time. And to your point, so much that trades at a spread of over libor. Libor, thats right they cant get rid of it they dont like it another offer rate that is being promoted and is going to be where they are going to transition to. But they are feeling that if they were to change all these contracts, they said, some contracts dont have language that allows change and will blow open and probably the cure in this case would be worst than the disease, so to speak so, theyre going to let this hang around for a while and theyre proposing that it end in 2 2023 carl steve, thanks well talk to you in a bit steve liesman. Jim, the final day of the month. Some discussion about reallocation and more broadly whether or not the vaccine news over the past few weeks has stolen some of that yearend rally we typically see in december im not banking on that i think that what is going to happen is were going to have a stayathome Holiday Season which benefits a few very large stocks and walmart and well hear about cyber monday great for amazon and not great for the 50 of the, half the mall. But half the mall is not important to us. So i think the bigger cap stocks and the dow stocks are going to do quite well. I think that is a reason for a continued rally, along with a lot of tech that i think is doing very well. The drug stocks are really interesting. I dont see them going up unless j j surprise announcement. I think they moves things up pfizer will surprise to the upside and that will create and maybe a follow through to believe it or not, david, the most bedraggled of dow stocks, walgreens. You think walgreens will benefit from the distribution of the vaccine . There has not been much for them to benefit by. Health insurer or broaden their business in the way cvs has. I will say both of these stocks were wallopened by the amazon announcement and youre not going to be able to get the vaccine via amazon there are ways to be able to get it if you dont go on site, but i do think that the fact that cvs is down to me shows that carl may be right about some part of the market because cvs should be up, not down but i think people are just saying, hey, you know what its a Walmart Christmas yeah, to that point, jim, goldman today. We keep bringing up goldman but they say that the delay in fiscal transfer, senate gets back to work today and theyre going to have to start thinking about stimulus, again. But goldman says the pull back in transfers will cause a decline and overall disposable income in q4 and that will weigh heavily on the bottom of households particularly hard and weigh on Consumer Spending this winter we know a lot of enhanced benefits will expire in the next couple weeks look, there was some chatter, chatter about how many people are going to get covid and, obviously, numbers will be bad the next couple days and now chatter about, wait a second the quarantine period is down. Does that afford a chance for the government to shut down things for seven, eight days to see if we get better numbers now, that is from the Health Care Committee that is people i deal with that is not, david, from president elect biden. But its pretty clear that the thing, not only is out of control, but i dont think youre going to want to go out well, listen, all about hospitalizations as we said and people point out the death rate is far lower and unfor not the denominator, the top one. You can tell not a math guy so much higher that its overwhelming hospitals in certain areas and thats the fear, jim, that continues to be the real concern that hospitals are not in a position, by the way, to take in patients who have other life threatening conditions or injuries or anything along those lines and thats what people are afraid of and thats why you would certainly encourage people to take every precaution they can. Look, i think that etsy being up and shopify being up, those are about stayathome shopping. These are companies that buy small, so to speak and i agree with you, david. I think that were all worried about the implication of the hospitals being overwhelmed, which is why its so great that the hospitals may be getting a vaccine in the next three weeks. Who needs it more than anyone else other than these Health Care Workers we pay them lip service. You just think of what their life has been like for the last nine months. The first wave, second wave and hours that theyre working and the risk theyre putting themselves through the emotional pain that its hard to imagine, carl, in so many different ways what they have to be going through the closer we are to getting them a vaccine, well, that is obviously only going to be a good thing getting a statement from the transition, the transition of the president elect saying that it is official they will nominate yellin to treasury and Cecilia Rouse and, jim, theyre not talking about National Economic Council Director quite yet but the market had been counting on yellen not just for her experience but her knowledge of the International Landscape and a roladex has been not over the years. No one is going to come in and talk about breaking up the banks and no one is going to talk about how the consumer has been ripped off by the system. But, again, i think its interesting, carl. I would have expected a little better action given what we heard about the vaccine and given the fact that bidens people seem like a jarrett bernstein. I mean, come on. They just come on and sound like real guys. Yeah, they do larry kudlow still came on a lot and hes right i think larry did a great job for the country. No, that wasnt meant as in any way criticism. I was just pointing out. He came out and by the way, numerator. Thats what goes over. Larry is an optimist. Always been an optimist. Always. Someone who was his partner he served for a long time and he gave it al his all. How about that totally jim, you have been focused, we have all been focused on nikola. We have to get to this this morning. You see down over 20 . Good news they have a gm deal. Bad news, oh, they have a gm deal because not the deal they originally had what it is a nonbinding memorandum for a Global Supply agreement and it does integrate the hydrotech fuel cell system into the truck platform but it looks more like and these are the words of jpmorgan analyst and conventional arms length and cost supply for the hydrotech system forget about the badger truck and most importantly, jim, gm not taking the equity stake which would have amounted to 11 of nikola. Your thoughts on this and we should point out the lockup is expired. We have to get the full number on the lock up. David, when this deal was announced, mary was right there alongside Trevor Milton and pretty excited about it. Today it looks like its doug parks. You know, doug parks is making announcement for gm. Yeah, dont know him. You dont david, hes global Vice President of purchasing and supply chain i mean, im talking about right i think there is liability and mary barra straight person and nikola guys. I had, i had nikola on last week and it just, i dont know if we have a clip, but but how about ambivalen ambivalence, david can we see the tape . Were interested in gms hydrotech fuel cell system very interesting to us were interested in their battery system both of those things are interesting to us. We continue to talk to them about those things i think it was interesting. Yeah, well, the market is not as interested in nikola today as it was perhaps last week or with the prospect at least of a large equity infusion, as well david, this is a spack, david, that is not doubling. What do you make of that its not. After deal still well up from the ten bucks when it was iv acquisition or whatever it was called so, yeah still chairman. David, in terms of things that have been wild that we dont talk about have you seen how we talked about it last week. That incredible movie. I was busy. I was making the stuffing. But, carl, the move there was nothing short of amazing although on friday it did reverse. It did reverse all right lets get to Rick Santelli this morning ahead of kchicago pmi in a few minutes tells you pretty much everything you need to know. We get keeping close to 90 basis points and fail to close there were basically closing the month out on change. We entered the month at 87 basis points and were just a basis point and a half below that right now. If you look at august 1st start and this was the most telling. Early august we hit the high of 96 basis points. This was after the alltime low, of course, excuse me, which was early august at 0. 5. The high was 96 basis points in november the reason thats important is because that now is the bogey. That is the number we need to break through if were ever going to test 1 on a tenyear note if we switch to Foreign Exchange euro versus the chinese and look how the euro is starting to gain traction and other economies compete better and finally on the dollar side 31 and, carl, jim, david, back to you. All right, rick well see you in a couple minutes for chicago pmi. Well take a quick back. Lets get you caught up with Rick Santelli. Rick our november read on chicagos pmi expected to be a number near 59 and comes in a bit light, 58. 2. 58. 58. 2 this is the lightest chicago pmi since august when it was 51. 2. In since then both numbers over 630 and last month at 61. 1 of course, continues to stand unrevised and on this, i will point out, of course, that most of the other pmis have been weaker not only with regard to market in the u. S. But also across the International Scene carl, jim, david, back to you. All right, rick, thank you very much. Our next guest is firmly in the trenches when it comes to distributing in mass a new vaccine. Life Sciences Company ivontor involved in all parts of the supply chain and michael joins us this morning. Michael, welcome good to have you thank you for having us good morning to you all. Well talk a lot about this in the next several weeks and when i look at the profile of your Company Mission critical profile and services used by Life Sciences i mean, talk about what else is involved other than developing the actual vaccine yeah, we play a pretty prominent role here in bringing these vaccines to market were going to be exposed to most, if not all of the candidates that are being developed and sponsored particularly by operation warp speed. Were going to be engaged with our customers really from the early phase process, development and then were able to support them all the way through scale up, Clinical Trials and ultimately in the production of any approved vaccines that might come out of this its amazing when you think about, we can all remember back in the spring when a vaccine was still aspirational but the thinking was lets Start Building the Building Blocks now so if one one day gets approved it can get out of the gate without delay. How much of that advance planning do you think has actually paid off . I would imagine just a game changer in retrospect. It is nothing of this scale has been done both from a time standpoint, as well as, you know, from just a sheer volume of vaccines that are going to be produced here. And, you know, we also got a jump start on this back into the Second Quarter when we started supplying customized materials to our customers to help them in their development of the vaccines and weve been scaling with them as they work through the early phases of Clinical Trials and were obviously encouraged with where theyre at and hopefully on the doorstep of an approved one, if not more michael, jim cramer great to see you sir one thing i have been surprised about is how prepared the army has been how prepared mckesson has been that they have either seemed to have done dry runs or preparing all november for what i regard as being this influx of both pfizer and moderna you have been around and these guys are political get and getting it done. An awful lot of work that has gone into this and although it has come together pretty quickly. I would say the entire ecosystem of providers all the way through to the distribution providers have been working collaboratively over the last couple quarters. I couldnt be more complimentary of operation warp speed. Were very closely engaged with them and with this scale of what military can bring to this, i would say the supply chain is up for the task here. Trying to accomplish something, obviously, something that has never done before and the readiness is extremely high at this point michael, a lot of people who are very, lets say, skeptical about the idea that pfizer could get its vaccine out given how cold it has to be. It seems like that has turned out to be much less of a problem in the distribution. You know, it is true that it does need to be kept at rather low temperatures but i guess necessity is the mother of innovation as they say a lot of creatativive tethat has gone into some of the complexity of distributing a vaccine that needs to be kept in the physical infrastructure, as well as in the process and the handling of that i would say whether it negativ. I would say whether it be solutions around dry ice or even processes that will play out at the Distribution Sites themselves, i think the industries that done just a phenomenal job you know working around that particular constraint. Michael, judging from the comments i have heard thus far, i can tell that you are erring on the side of being cassiutioui would seem but i would love for you to give our viewers some sense of when these vaccines are going to be available. We could get emergency approvals any day now s. Jana wise time line to assume some will be available. I dont have any more information than what has been provided by the fda and the regulatory bodies but i can say we have been working with the leading candidates a number of months and there are a lot of doses that have already been produced and it is my understanding that within 24 hours of an emergency authorization the vaccines will be rolling into states around the country for distribution what gives you the mostco concern . If you have any one on the list of i would assume that are many that you have already dealt with or the authorities have already dealt with what gives you the most concern in terms of getting it into as wide distribution as possible. The supply chain is vast. The numbers of patients we are trying to reach is unprecedented and the number of players that have to come together to make it happen we are relying on our Raw Materials suppliers to keep us supplied with the necessary products our industries are working hard to supply the products and we are working closely with our customers to get it delivered. The speed at which this is all coming together is unprecedented. We are doing it in the midst of a pandemic trying to keep our oeshts and employees safe so we can keep our factories running is going to be top of mind. Thats going to be critical throughout this as we get the display chain operational and hopefully are nearing an approval. Thats one of the things that gets talked about not enough the fact we are still working under these conditions final lesion on modalities we are all arm chair ep de dealologideal yo ep peoplologists, but we are hearing more and more about the antibody antibodies therapeutics coming available. There is approximately four leading modalities being developed here that i think we will all hear a lot about. The raw material requirements, the technologies are all very different. What has been encouraging is how effective they have been i think we are obviously excited about the application here to bringing an end to this pandemic but it really opens up the doors for many new areas of therapeutics and indications that we havent been able to get after before i think we are also excited about what these new technologies will bring even beyond this current pandemic i think the efficacy of these novel technologies likes mrna have been surprising we have seen numbers in the mid 90s in terms of efficacy and you would compare that to other vaccines we are all familiar with, things like the blue vaccine which at best is 50 to 60 effective it is amazing what we see coming from the new technologies. We played an Important Role in that these novel technologies require Different Levels of purity, new materials alltogether in order the bring them about i couldnt be more proud of our scientists and our team that helped enable some of this. Maybe we make another run at flu because of that innovation michael, thanks. Micah stubblefield of avantor. Looking forward to talking to you in the weeks to come we will take a break here. We are back to 3,625 dont go away. [ whispering ] whats this . Oh, are we kicking karly out . We live with at t. It was a lapse in judgment. At t, we called this house meeting because you advertise gigspeed internet, but we cant sign up for that here. Yeah, but im just like warming up to those speeds. Youve lived here two years. The personal attacks arent helping, karly. Dont you have like a hot pilates class to get to or something . [ muffled scream ] stop living with at t. Xfinity can deliver gig to the most homes. All right, jim s p tonight . Yeah. Also we have carvana and we have michael dell oh, i am a competitive guy as i get older, i get more competitive. What can i say. Thats the opposite of what i get. It is time to we have got to go. Do you think i really want to go there is never enough time, jim. One of these days you are going stick around for the 10 00 as a habit. Adon, 0see you tonight. M mey 60 p. M. Eastern time only a sioux few stocks in the green, including apple back in a minute of the market. Customiw its smarter Trading Technology for smarter trading decisions. Fidelity. It was absolutely terrifying. I felt like i was just fighting an uphill battle in my career. As a little kid i knew that i wanted to work with computers. So when i heard about the applied Digital Skills courses, that definitely appealed to me. Youre learning how to create spreadsheets, documents, forms and surveys. Im thinking i can become more marketable. I got to about the third course and im like, you know, i probably could do this for a living. You dont need to be a computer expert to be great at this. These are skills lots and lots of people can learn. I feel hopeful about the future now. Its empowering to have that knowledge that nobody can take away from you. That noband sweetie canay coloryou just be. Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Welcome back to squawk on the street im diana olick with breaking news on the Housing Market pending home sales fell unexpectedly in october, down 1. 1 still up over 20 year over year but the street was expected a slight monthly gain. The realtors have been blaming exceptionally low, record low supply for the slowdown in sales in september now they are pointing directly at prices, affordability hitting a wall we know the median home price was up to the highest level on record at 313,000 in october foreclosed sales that was up year over year realtors saying that is hurting buyers goo is final months of the year says were down 5. 9 in the northeast. Down. 7 in the midwest and flat in the west. Sales were up everywhere regionally year over year. The realtors say if prices dont cool a little bit we will see the sales pull back. We did see sales of newly built homes jump over 40 year over year in october. Also those representing signed contracts. Again, those higher prices really starting to hurt buyers out there. Carl. All right the market is definitely going to watch that, diana thank you very much diana olick. Good morning, everybody. Welcome to squawk on the street. Im carol carol with david faber. Alsoly picker is with us for the hour chicago pmi was a bit of a disappointment dow is down 250 as we close out november senate gets back to work today and moderna once again the star of the show. Announcing it will request emergency clearance are the fda for its coronavirus vaccine. It will be the second drug maker seeking that emergency use authorization. Meg tirrell has the latest for us. Moderna planning to file with the fda today after getting the final efficacy look at its phase three trial. That efficacy is looking to be 94. 1 at protecting against covid19 and when you look at severe quaed, they saw 30 cases of severe disease in the trial all of those among people not on the vaccine. Showing potential 100 efficacy against severe covid19. In terms of safety, well tolerated. No serious concerns to date. The advisory meeting for the vaccine is likely to be december 17th we are also talking about supply moderna says it should have 20 million doses available in the u. S. This year 500 million to 100 billion globally during 2021 we spoke with the ceo and asked him whether there was any possible way to make more and make more faster. We were working on a daily basis with operation warp speed. They have been extremely helpful to work with suppliers to get priority for all the materials we need. When we make we formulate it ourselves we do not do filling this is done by an outside party. We want to make sure that every milligram of mrna we make is not wasted this is where operation warp speed has been extremely helpful. They are heading to the fab with that meeting schedules december 17th. It is a week after pfizers meet scheduling december 10th the fda will dissect all of the data around the vaccine an independent panel will review all of the data around the vaccine and then the fda will review it and make its decision. I can expects it is going to be a busy few weeks for you. Thank you for covering all of this. The u. S. Reported 200,000 daily new cases for the first time this past friday. Joining us dr. Scott he willner from montana and dr. Fauci called the numbers in montana stunning and formidable one in every 16 montana respects has been diagnosed with the coronavirus right now. Thats about 6 of the population or so about 461 people remain hospitalized whats the capacity will be like right now in your Health Care System thank you for having me the statistics are sobering. Just to put things in perspe perspective we have seen a significant rise through october with new cases and then an exponential or skyrocketing rise through november to where 81 increase from 33,000 cases in montana to now over 60,000 the numbers with hospitalizations have doubled within november. And this month we have reached 671 deaths so we are at or beyond capacity. We are making every possible infrastructure change, including more air flow rooms. We have added over 90 rooms that have negative air flow we have expanded offices to create icu capacity. And we have created double occupancy so thatwe can allow patients to be together in one room to meet the needs the most sobering thing that we saw actually this past weekend unfortunately was that we lost one of our physicians to covid so this is really hitting our work force, our billings clinic family, pretty hard . Im so sorry to hear that. Condolences for your loss. When you say that you are at or have outstretched capacity at this point, what does that mean from the quality of care standpoint are you able to treat patients in the way that you would like well, we are able to absolutely treat patients in a safe manner. Our nurses at the bedside and in our clinics are working very hard to provide the absolute best quality under the circumstances. Its just a lot more work, with wearing more personal protective equipment, and these patients are so severely ill that it requires a lot more effort and time to care for these acute patients so we are able to provide absolutely great quality its just a matter of adding more to the work force to meet the burden of these extremely ill patients. Mr. Wells, let me go to you with a similar question of course that leslie just asked as well what are you seeing on the ground are you concerned at this point . Is arkansas perhaps being spared some of the worst that we are seeing in other states well, im very concerned. You can almost tell the same story for arkansas that dr. Ellner told for montana. Beginning of october, cases increased significantly. November of course was a dramatic increase in hospitalizations and positive covid19 patients in our state so the good news is we had a lot of time to plan. The springtime and summer months were easy on us. We had a lot of time to plan for surge scenarios and we understood there was a possibility of a rough winter ahead, and of flu season colliding with covid19. And so we have had a lot of time to prepare nons our existing capacity is stressed right now, particularly our icu beds and our Critical Care staffing. Is always the biggest shortage we have bed capacity but the staffing scenario in arkansas is pretty dire. Doctor, over the weekend dr. Fauci sort of raised this notion of a surge upon a surge in the wake of thanksgiving travel. I guess the question would be for you, do you believe that in billings that is going to come to pass . And what plan might you have to handle a super surge over the next three to four weeks, lets say . Yeah, in montana, our community, our people believe in their personal preemds and we expect to see a surge from the thanksgiving weekend believe in their personal freedoms and we expect to see a surge from the thanksgiving weekend. We have reach out to assisted living facilities to place people outside of our hospital so we have a significant surge plan also in place specifically for the thanksgiving weekend mr. Wells, back to your last comment there, to follow up. You mentioned you still have some capacity. But you are worried about staffing in fact, you said dire i dont know, if you get a significant increase what are you going to do in terms of your staffing well, so, one of the approaches that arkansas is taking now, understanding that we were going to be challenged this fall, is under the leadership of asa hutchinson, our governor, hes assembled a Winter Task Force that really is intended to address some of these questions. We are looking at how do we coordinate bed availability around the state also, how do we understand better what our true resource situation is related to staffing and other Health Care Resources that may be needed around the state. We are trying to improve compliance with Public Safety guidelines like wearing a mask and other social distancing guidelines and taking steps in order to reduce the spread of covid19. Ultimately we have a limited amount of resources and limited amount of staff so doing things like improving through put of patients through our hospitals is important we cant make more Critical Care nurses that quickly. We have to move the patients through the system fast. Our governor reached out to secretary azar to assist us with Medicare Advantage plans who did not remove some of the administrative burdens early on during the pandemic that allows you to move patients quickly through the Health Care System we are hopeful that those commercial payers and Medicare Advantage plans will help us out since a third of the residents in the country are on these plans. When you talk about moving from acute care into a regular bed sometimes that takes days and weeks to have that occur we want to speed up the resources that we have because it is not so easy just to create more. Doctor, meg trerl was on earlier saying the news from moderna today means there could be two viable vaccines within weeks in the wake of an fda approval what are the plans for vaccines in montana do you plan to make them mandatory for doctors, nurses and staff at your hospitals . We are cautiously optimistic about the news of the vaccine trials the Pfizer Vaccine and the moderna vaccine. And we are certainly preparing we have been since late september, preparing to receive the vaccine. Certainly, we would like to receive an allocation to where we can provide the vaccine for our work force and for those most vulnerable. At this time, though, we are still requesting that people wear mask, social distance, and do all the things to prevent getting the virus. As far as mandating our work force to take the vaccine, right now we dont know how effective the vaccine. We dont know what adverse events may be caused by the vaccine. So we are not going to mandate like we do the flu vaccine at billings clinic. Waiting if more data. Doctor, troy, thank you both for being here, for joining us we wish you all the best in the upcoming weeks. Thank you very much. Thank you. It has been a busy day for merger and acquisitions. Of course the largest deal of the year announced s p buying ihs another deal looks like it is going to be announced today. After the close last week the wheat journal broke the nows that sales force is going to acquire slack. The deal could be announced as soon as in fact, expected to be announced after the close tomorrow salesforce tieing the knot with slack. The composition of the offer is said to be roughly half cash and half stock maybe weighted a bit more towards cash though i did not get a specific percentage prosecutions in terms of that makeup but lets call it roughly in that range perhaps surprisingly to some in the marketplace would be the premium on where slack started the day. It was a 40 stock prior to that lets call it 2 move higher source indicating it would be a premium to that number perhaps although not quite as much as 30 billion in stock and cash for salesforce a multiple that is quite high even on the companys revenues even compared to many of its socalled competitors, and what you consider to be its competitive set but one that salesforce seems willing to do in fully take on microsoft in this important work force area and compete with its teams product for example, and a multiple that at least in the past salesforce and its ceo mark ben offhave not been afraid of paying for other businesses that they have actually proved to have made good acquisitions of, whether it is tableau or meal soft you can go through a number of them, carl but again, we are looking for what could be a very large deal tomorrow in addition to of course the news we got today as the year wraps up, m a pretty active. Along with earnings it is going to be busy tomorrow night. We look forward to that. In the meantime, nikola is a huge story again as they announce that gm is no longer taking an equity stake this new deal rework no longer includes the badger pickup offering up to 53 million shares of new common. Sharesow23 dn to about a twoweek low we will take a break be back in a moment. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Any idea how much it will cost . [doctor] i recommend goodrx. You get free coupons to save on your prescriptions. Goodrx, smart. [announcer] stop paying too much for your prescriptions. Thanks. Download the free app today. President elect biden confirming this morning he will nominate janet yellen to treasury ylan moi has more on that this morning. Good morning, carl. This was a very well telegraphed move and yellen has received praise from all sides as the nominee as treasury secretary biden also naming the relevant of his Economic Team as well including the council of economic advisers and the director of office of management and budget the common theme since the pandemic is that the country needs more fiscal relief, it needs to be big and it needs to happen now Cecilia Rouse has been tapped to lead the council of economic advisers also on theim team, heather boushey. Together they helped organize economists from both sides of the aisle to Push Congress the pass another Coronavirus Relief package. Eventually about 150 economists signed on to a letter 245 read congressional policy responses to the recession unnecessarily prolong suffering and stunted economic growth. Congress should not make this mistake again. Roush and boushey also recently wrote an op ed announcing stabilizers that would kick in so congress doesnt get stuck waiting for someone to act bidens pick to lead the White House Office of management and budget, neera tanden would be more controversial she was a close ally of Hillary Clinton and has tangled with progressives in the party in the past progressives are saying they really want to make sure this position has someone in it who does not feel constrained pie the record level of the federal debt and deficits and is ready to go to bat for bidens 5 trillion economic and fiscal agenda that could mean, carl, if she does do that she could lose republican support of course all of these nominees do need to be confirmed by the senate back over to you. Zero chance, as john cornyn spokesman said over the weekend. We will see. Ylan moi, thank you. Lets bring in jim stewart to talk more about it. Jim, what we heard from the president elects team in the past few days, the Economic Team, the press team, foreign policy, the diplomatic team, i wonder how you think markets are absorbing all of this. I think by and large its great news for markets and investors. I mean especially with yellen, a very proven ommodity, someone who is very steady, very cautious already trusted by the Investment Community but who has been traditionally very dovish on Interest Rates, very supportive of high employment, and not overly concerned with inflation. So i think thats you know, thats music at least in the shortterm that is music to investors ears. Similarly you have people coming into the administration pushing stimulus, pushing spending, pushing Infrastructure Investment fiscal stimulus again is at least in the shortterm very positive for markets and you know, these people are not that concerned about running up the deficit again, thats something that may have to be dealt with longer term but is very positive news you know, i think there is no thats one of the reasons the market has been so strong in recent days. Yeah. Jim, i wonder, though, at what point does the market flip and start to think about the accumulation of debt, the disbursement of stimulus as negative difficult, sovereign debt ratings, things like that. At some point obviously these issues are going to have to be confronted certainly, though, a lesson of the last decade is that, you know, where is the inflation why arent these big deficits having a bigger impact on Interest Rates i think over the next few Years Movement in Interest Rates is going to be incredibly important for investors and at the first sign of strength in Interest Rates, Interest Rates going up, that you are beginning to see the Investment Community, the fixed Income Community beginning to respond to these growing deficits then you are going to have to begin to pay closer attention to this. Certainly, inflation has not gone away. And the markets you know, as things heat up, as we get a vaccine, as everybody goes back to work, we are going the see more pressure on Interest Rates. I think that will be a signal that, you know, you cant just keep running up deficits forever. Yeah, all othough we keep waiting for that day and it doesnt come there are those who think currency is going to be the place to look for it. David, can i mention. Please. The neera tanden pick really set off bells in my mind she was the prince pel pal architect of the Hillary Clinton tax plan in 2016 i wrote about it quite a bit i have to say, i mean put aside liberal or conservative, almost everybody i interviewed thought this tax plan was crazy. It had these incredibly complicated Capital Gains remember the tiers yes. If you held it for one year, it was one rate. There were seven different categories based on how long you held an asset. I dont think clinton was ever that interested in tax policy and handed this over to tanden at least thats what people told me then. This made me nervous i dont know as head of management and budget she would have much to do with tax policy but i dont have any confidence that she should be in control of that. Thats interesting. Of course when it comes to tax policy overall jim we may start to hear from the republicans in what still seems to be a Republicanled Senate that we are worried about budget deficits again. Come on. Custom may mean the biden may not be able to get through anything in the way of its plan on tax reform. It is hard for me to believe that are the republicans really going to pivot and suddenly start worrying about deficits again we havent heard a peep out of them for the last four years on that front you know, people like paul ryan are long gone. Again, i think intelligent spending is what we have to look forward to and i hope republicans will support that as well trump himself campaigned on Infrastructure Investments and we didnt get much of that biden has also pledged that. Intelligent investments in infrastructure should be viewed as an investment in the future not spending it is not like giving the money away and it goes you get a return on investment i at least personally hope that republicans can get behind intelligent spending proposals. Jim what do you expect on the labor front . Biden is appointing several former labor economists to the roster which the times writes could suggest a strong focus on worker economic as a tool for economic growth. What types of policies would that imply i think it is investor friendly because taken as a group this group of appointees i think is very understands or supports the idea that healthy employment, full employment, leads to wage improvements from the bottom i think this was something that trump campaigned on. And actually, you know, if you look at the headway he made with many minority voters, which you know, surprised a lot of people, i think come some of it did come from the point he was making that a very strong economy, full employment helps disadvantaged communities and minorities who are able to get jobs and i think this you are going to see a continued emphasis on this by the Democratic Party and this administration recognizing that it does have real political payoff when you see healthy employment and people disadvantaged groups getting jobs and earning money i think you are going to see an alignment there between some of the trump policies and the Incoming Administration. Hmm thats a lot of policy we just talked about hopefully next time jim we will talk more about some of the market mechanics and what you see going into year en always good see you. Thank you. Now it is time for your etf spotlight looking at xlk up more than 30 for the year. Currently trading fractionally lower today. Apple, the groups biggette holding getting an upgrade at loop capital to a buy from a hold it says tail winds for product and services growth. We will take a quick break dont go anywhere. Hey yeah . I switched to geico and got more more savings on Car Insurance . They helped with homeowners, too ok plus motorcycle, boat and rv insurance geicos got you covered like a blanket houston . You seeing this . Geico. Expect great savings and a whole lot more. Oh yeah, you going to place it . Not until im sure. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. We did it c crowd cheering [narrator] wherever you start, snhu is where you can finish. crowd clapping crowd cheering here we go. [narrator] and its it. [group] yay [narrator] you did it, high five Southern New Hampshire university. [man] that gets a hug. laughing look at that masters degree, i did it i did this for my children. I am very proud of myself. [narrator] finish your degree at snhu. Edu. Welcome back, everybody. Im sue herera heres your cnbc news update at this hour. Trips for thanksgiving helping drive another record day for air travel in the u. S. The tsa says nearly 1. 2 Million People went through its check points on sunday, the most since march. This as Health Officials predict a rise in covid cases tied to holiday gatherings in europe, the latest rise in coronavirus case is flattening and even going down in some areas. But not in this spanish village. Spot testing suggests 70 of residents have been infected mass testing has been ordered, and food and medicine packages are being distributed to people who cannot leave their homes. In iran, senior government officials attend the funeral of the Top Nuclear Scientist who was killed the head of irans Security Council accuses israel of using Electronic Devices to remotely kill him israel has still not commented on that attack you are up to date thats the news update this hour leslie i will send it back to you. Door dash is kicking off its ipo road show with a filing that drop earlier this morning. They are seeking to raise 2. 8 billion through the listing. At the high end range today pricing door dash at 32 billion on a fully diluted basis thats double the 16 billion valuation that door dash received in the funding round just a few months ago in june. The range in the latest filing prices the shares between 75 and 85 each a final price will be determined right before the debut, expected in about a week and a half time. The pandemic, though, has been a boone for door dashs business as stayathome orders forced more consumers to order food to be delivered the Company Reported a profitable Second Quarter although dipped back into losses during the three months in september. Revenue during those two quarters jumped upwards of three times he year over year. The company is listing on the New York Stock Exchange under the symbol dash. Interestingly, door dash is using a unique method to price the shares of its ipo, something similar to what unity did, somewhere between an auction and a traditional ipo method where they take in orders through more of an auction based system, use that price discovery process to then assess what the final price should be and it allocates stock as you would would in a traditional ipo. Reminds me of when google came to market didnt work that i mean it ended up being obviously a great buying opportunity in retrospect back to door dash. Their growth has been so tremendous leslie as a result of the pandemic and the increase in business they have gotten. I wonder what they think their year offer year comparisons are going to be like or i guess the investors are going to be willing to pay the multiple trend. They cant physically go on the road and meet with investors as per all of the road shows of 2020 but i think that is going to be at the top of investors minds as they try to assess the valuation for this company what ds a forward multiple look like do i have to go to back to 2019 numbers to assess what this Company Looks like or is there stickiness involved by the pandemic. Are there habits being created by people that enjoy ordering door dash . They have a bunk of partnerships with certain restaurants do those obviously continue . Do they continue to see growth from that . I think that is the key question carl that investors will want to know [ no audio ] oh, we lost carls audio there. But, david, kind of going back to door dash and the plethora of ipos that we have seen and we can expect more road shows this week, namely airbnb, pretty much every company that has filed an a1 thats planning to go public before the end of the year benefitted by the pandemic in some way, shape or form. Airbnb doing a huge aboutface after a march and april slump when people were staying home and ulf a sudden needed to break free and rented holmes, getting away to places that were within driving distance row blocks, online game that caters towards a Younger Generation saw big benefits from people staying home and playing games, especially children who werent able to socialize with their friends. That continues to be the key question, the bumpups as a result of the pandemic, are they sustainable . It is going to be interesting to watch door dash. I continue to wonder about consolidation giving how many they charge restaurants and yet they are still not consistently profitable we will be keeping a track of a lot of them as they come to the market. Coming up we will have qvcs Holiday Shopping policy. We will have curates ceo mike george i got it all from you im always pushing through i know well make it to the finish line i know youre waiting on the other side im like you ondemand glucose monitoring. Because theyre always on. Another lifechanging technology from abbott. So you dont wait for life. You live it. Janet yellen, who will be nominated as treasury secretary tweets for the first time a few moments ago saying we face great challenges as a country right now. To recovery must restore the American Dream a society where each person can rise to their potential and dream even bigger for their children as treasury secretary i will work every day towards rebuilding that dream for all. David, not sure you dont want to prescribe or ascribe correlation or causation but the market hit a session low on that tweet. Interesting we are down now almost 1 on the s p. As you say, yellen, that has at least confirmed she will be the nominee for treasury still have to get approval probably the best prepared Single Person ever for that job. Lets move on to black friday. On line sales, not instore but on line sales saw a 22 surge with consumers spending a record 9 billion thats according to adobe analytic shoppers avoided going to the store given the surge nationwide in cases of covid. Joining us now, mike george, the ceo of curate retail that owns qvc and hsn. He has an outlook of what we can expect mike, oftentimes you join us during the media liberty day festivities. We are happy to have you today i know business has been good. I am going to ask you the question i was asking regarding the door dash ipo. A the question, is this bumpup that you have seen based on a number of trends sustainable. Good to be with you david on this cyber monday. We think the bump up sustainable. The pandemic has largely accelerated this long term shift towards all Things Digital from streaming movies to on line shopping to social media and it really intersects with this Multiyear Strategy we have had to take what is the Worlds Largest video shopping platform and make it accessible and relevant on every device the consumer engages with. So over the top Services Like roku or flex or service like pluto, the new streaming service we launched on today social media we think as long as we are present where the consumer is, where the viewer s where she is spending her time and we are offering relevant products, relevant connections, relevant information, we have got a very strong path to long term growth. But it wasnt that long ago, mike, that you were struggling to grow of the a all again, as you said you have benefitted from a lot of these trends including also by the way people staying home and wanting stuff for their home you have a lot of important brands there but to the point i am asking about i mean a year ago you werent even growing now you are growing a lot. You seem to think you are growing a lot . Yeah, i would suggest that the current level of growth is not sustainable forever. Clearly there is an accelerated level of activity as folks are buying all things for their home but we see a business that to your point we struggled with slightly down sales a couple percent down as we were making a fairly important evolution from being primarily on pay tv to being available across a range of services. For us it is all about that balance. It is about getting all of these other services, other ways that consumers engage with media up to a certain level of performance. We got a boost, we got an acceleration on that stream through this pandemic but we do think these fundamental initiatives we are putting in place a couple of great new compelling content we are providing. New interactive features we are launching so that for the first time consumers will be able to buy on live stream programming without ever leaving the stream. We are focused on innovation to evolve the Digital Ecosystem in a way that can sustain long term growth and the fact we are getting record levels of new customers that are proving to be ever bit as sticky as our historic customers have been is a good sign of long term growth. When you say they are proving to be as sticky what are you referring to specifically as far as the metrics you use to define that we look at a number of metrics to try to predict lifetime value that have proven accurate over time the pandemic class of new customers which is up roughly 50 over the prior year, just an enormous surge in terms of their repeat purchase rate, their spend rate, they look very strong. Our highest bar is what percentage of new customers we define as best customers meaning making 20 or more purchases in one year we have got a lot of new customers that have already hit that 20 purchase threshold until just their first two months of joining us so this is a quality class we are bringing in. We think they will be with us for the long term. Mike, leslie picker here. Can you explain your discussion behind using your free cash plow for special dividend and commencing a stock buyback program. How come thats the best use of cash at this time when you are operating under strength relative to history. We have been generating a high level of cash flow. The first solution is lets reinvest it in this business we have been reinvesting substantially in all the thing i have talked about. Distribution platforms, fundamental up ovation this our streaming services making sure we are providing best value in the marketplace to our consumers. But we are in the fortunate position where we still had a lot of excess cash we generated 1. 5 billion in Free Cash Flow in the last 12 months up substantially over prior periods. We thought the best use of that was to return it to shareholders in the form of a dividend that builds on a successful dividend and Cash Dividend we provides a few months back. As long as we are in a position where we can effectively redeploy that cash to grow we think we should give it back to shareholders and see what suits their needs. Although if you waited longer it would have been bigger. I think you sell under some of your brands the outdoor heaters and things of that nature that will keep people warm outside. Do you have any left where are we in terms of supply for those kinds of thing we absolutely have some left. Go to frontgate. Com. It is a constant battle to stay in stock on those kinds of items. But you are in stock right now . We are in stock right now. Good to know. Will you keep a couple for me . Absolutely. See, the benefits of doing this on tv mike george, appreciate it as always thank you. Thank you, david. S p below 3,600 for the First Time Since november 24th about a oneweek low dow now down almost 1. 5 we will watch that as squawk on the street rolls on back in a moment before money, people traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Auto could stocks be in for another leg higher before the year is out . One top strategists take on trading nation. Cnbc. Com. More squawk on the street coming up. Welcome back to squawk on the street on im seema mody. Markets taking a breather after hitting record highs on friday down about 1 pbz for the s p, dow, and nasdaq. Currently eight out of the ten s p sectors are trading lower. Energy the worst performing sector, lower by 3 . Retail so much in focus today as black friday sales show instore shopping dropped by as much as 52 compared to the same time last year. Retail and apainful peril stocks are trading down gap, tapestry down 3 to 5 right now. We are also keeping an eye on travel stocks as airbnb is expected to kick off its investor road show this week with an ipo sometime in december cruiselines, hotels along with casinos like wynn and mgm in negative territory. Interesting, seema, maybe profit taking as people make room for the upcoming ipo. We are keeping an eye on the electric vehicle space after the gm nikola news this morning. Tells la and neogetting crushed. All three are poised for huge november gains, tesla up 45 this month more squawk on the street right after this dont go away. So get the 5g americas been waiting for. Verizon 5g is next level. Unlimited plans fit everyone in your family, starting at just 35. With 5g included at no extra cost. Plus, youll get the entertainment and gaming the whole family will love. 100 obsessed with the mandalorian. man i watch a lot of sports. woman it has all my favorite shows. Switch now and save 700 on galaxy s20 plus. Its like a gift on top of another gift. Gifts keep coming at you. Everywhere. This is 5g from americas most reliable network. I was just fighting an uphill battle in my career. So when i heard about the applied Digital Skills courses, im thinking i can become more marketable. You dont need to be a computer expert to be great at this. These are skills lots of people can learn. I feel hopeful about the future now. Shaped by technology chand human ingenuity,s. We can make it work for you and your business. The teams been working around the clock. Wire, weve had to rethink our whole approach. Were going to give togetherness. Logistically, its been a nightmare. Im not sure its going to work. Itll work. I didnt know you were listening. Slight bounce off that session low. Lets get to Rick Santelli and get the santelli exchange. Hey, rick. Good morning, carl. Yes, id like to welcome jerome schneider. He is head of short term Portfolio Management jerome, thank you for joining me today. Great to be here, rick. You know, the feds mantra these days and for a long time now if you think back to the credit crisis, lower rates for longer the problem is when you squeeze a water balloon, pops out somewhere else and lower for longer has several snags. One snag in particular, you written about, prime Money Market Funds you know, they had a huge regulatory overhaul, jerome, four years ago and now both confidence and capital seem to be leaving the building whats going on in the money market sector . Quite simply put, one of the places to park cash over the past 40 years is prime Money Market Funds the Money Market Funds take a little credit risk in doing so however, the weaknesses have been revealed over the past few years and they were trying to address back in the Money Market Fund report of 2016 more recently in march we saw the weakness where the fed had come once again rescue them through the money Market Liquidity Fund they provided. The key point is that with all the cash on the sidelines and with investors still being relatively defensive, we need to find other options for investors to find that cash and to have a little bit of income prime Money Market Funds used to be that panacea. But at the same time, right now with low yields, one or two basis points, they simply dont offer that much attraction plus, they have some of the liquidity risks highlighted again last march so the regulators, fsb, other people are really taking a second look at should investors in terms of how theyre thinking about that prime Money Market Fund allocation. The best way to address it, tiering your cash. Move some to the government Money Market Funds which are in high quality t bills and segment the cash to take advantage of the relative opportunities just outside that money market space which can produce returns of 2 or 3 over the course of the next few years even though the fed is likely on hold for the foreseeable future jerome, we want to make sure we point out that investors should also check the insurability of their investments. Fdic does ensure certain money market areas within the banking field. Another area is whats going on in general with the notion of vaccine . We should be celebrating a vaccine, jerome. I think in large part many are but there are going to be snags with regard to the feds lower for longer and all the negative rates across the globe that have risen during the pandemic. Many are going to be coming back hard whether it is Services Like flying how is this going to be reeled back in by the Central Banks of the world . Ultimately, you have to think about where were headed there is a certain amount of Economic Uncertainty at pichl at pimpco, were optimistic. Were waivering between fiscal policy at this point in time which would contribute to additional issuance down the road that has implications for the shape of the yield curve at the same time, we see good amount of corporate issuers term out the liability structure over the next two years the short term funding market is relatively anemic right now. There is very little issuance. Weve seen over the past six months, the fed programs, a tremendous amount of Investment Grade corporates to come into the sector it means that were going to have to be looking at the amount of issuance coming and then looking at traditional understanding of where opportunity sets might lie again, bifurcating Corporate Credit risk is going to have i had yoe sin democrat idiosync and there can still be considerable value active investors can utilize this to their benefit even though theyre safeguarding capital and playing a more defensive posture over the foreseeable future they can produce income. We have to leave it there next time i have you back, jerome, i want to talk not only short term funding like money markets, i want to talk about the delay in libor off the financial road map thank you for joining me today, jerome carl, back to you. Any time. Rick, thank you very much when we come back, a lot more on doordash and airbnb as they gear up for the ipos as squawk alley starts after the break. For over 30 years, lexus has been celebrating driveway moments. Heres to one more, the lexus december to remember sales event. Lease the 2021 rx 350 for 419 a month for 36 months and well make your first months payment. Experience amazing at your lexus dealer. And well make your first months payment. Were committed to making college more accessibley, by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Good morning, its 11 00 a. M. At ibm headquarters in new york its 11 00 am anl. M. On wall st and xasquawk alley is live. Good morning. Were going to begin this hour with a pai