Transcripts For CNBC Squawk Box 20131125

And create less uranium, not enough to build a nuclear weapon. In exchange, the world will halt further economic sanctions and allow iran to get 6 to 7 billion from frozen accounts. Plus, iran agrees to daily inspections. Its not based on trust, its based on verification. Reporter the deal slows down Irans Nuclear program but doesnt stop it. Thats whats got israel concerned. This agreement has made the world a much more dangerous place. Its an historic mistake. Reporter even some of the president s closest allies dont think its enough. Its disappointing to me that iran is still going to be allowed to enrich while theyre talking. We just feel more pressure needs to be brought on iran. We have all the leverage in the negotiation and weve let them out of the trap. Reporter it took a year of secret meetings to get this far. President obama insists this framework will lead to a more comprehensive agreement in six months. Tracie potts, nbc news, washington. Our chief International Correspondent will join us with more on this story in just about 30 minutes. Then well be talking oil with an Energy Policy analyst as well. Brian, ill send it over to you. Becky, thank you very much. It is a big morning here. While we get a check on the broader markets because we have a global melt up. Futures indicating a higher open for futures stocks. Andrew told you at the top were on a lucky seven week streak. Everything in europe is higher. All the major indexes are on the rise led by germany which is up just under 1 . Japan continues to rock. Theyre leading the way in asia this morning. The nikkei 2. 25. They are now up 50 year to date. China not participating. The hang seng and the shanghai down. 10 year treasury note still hovering around 2. 75 . The yield is up. The bond is down. The dollar is little changed against the euro. About 1. 35 per euro. And gold down 1 . Guys, the story is certainly the stock market weakening. Japan continues to kick tail. Good year. Becky quick tweeting at 4 00 a. M. This morning . Im not sure. It was early. Well, a line from a Goldman Sachs report. Yeah. You can say it because you tweeted it. It was interesting. It actually came from morning money. Ben white picked it up. Goldman sachs is saying they think if they look at the s p right now they think its either fairly valued or above value at this point. They expect like a 67 chance that you will see stocks drop by about 10 in 2014. It will be interesting to see. There was an interesting report to talk about how money funds expect to lose 1 3 of their asset. If thats the case, we dont know if its going to happen, if it does, where does that money go . Stocks, bonds, real estate . Its also hard to predict where stocks are going to go next year. We dont know gdp. If gdp grows 1 were probably over. The report didnt go into detail whether thats a quick job and then bounce back. A drop of 10 , probably not a huge surprise given where stocks have run. The only good news about all of this is that theres still a little bit of worry out there. When theres not worry, thats when you should be worried. As long as everybody is a little worried, i think thats a good thing for the market. The market ran the last couple of weeks guys has been led by low stocks. Not to knock the jcpenneys of the world, but theres been some names that were heavily shorted that are the best performers in the s p last month. That makes me nervous. We have another story that may impact the real economy. One of this mornings other top stories is this. A dangerous storm could threaten travel across the country. Wonder what it will do to shopping season. The storm started in the southwest on thursday. It has claimed at least 13 lives. More than a foot of snow has been reported in many mountain regions of utah and colorado. The storm is a big concern for the 43 Million People who are expected to travel 50 miles or who are. Aaa reports 3 million are slated to fly to their destinations. That black friday Holiday Shopping starts even earlier than friday. It starts on thursday. So this isnt so great now. It could be worse later. Lets get over to julie martin who joins us from the Weather Channel to give us a little bit of the forecast on what to expect this week. Julie. Andrew, youre absolutely right. Major travel impact expected through this storm. Right now it is impacting the Dallas Fort Worth area. Icing is taking place on the roads. The airlines canceled 300 flights today preemptively. You can expect more of that as we press through the next couple of days. Well see this mess start to move east overnight into tomorrow. Had he every rain in the south and then it heads up the i95 corridor just in time for the busiest travel day of the year. For today we have the winter advisories up places like texas in through arkansas. As we move through the next couple of days this storm, again, tracks eastward and northeastward. So for now the good news is were forecasting rain for the big cities, new york, boston, d. C. On the back side of that, wintery mix. Snow in places like pittsburgh, up towards syracuse. Nonetheless, this is a look at the forecast for tomorrow in through wednesday. Again, expect major delays in and out of airports in new york and also d. C. And boston on the busiest travel day of the year. So you mentioned black friday, by the way, the forecast is much quieter for black friday. It will be cold, really cold through the midwest and the east. That will certainly impact the shoppers. Thank you, julie. Not good. By the way, in the issue of travel, we have corporate news. Boeing has now chosen 15 possible sites to build its 777 gl 777x. There are many spots all vying for that role. Now a little bit more of boeing news. The company is nowi advisin that there is a little bit of a risk of engine icing problems on the 747a and also the dreamliner which ive talked about before with engines made by General Electric. Boek is urging 15 carriers to avoid flying in high level thunderstorms. Japan airlines has already changed two of their flight paths and also changed the actual plans in terms of which planes can go certain places. This story is more concerning than the battery. This is a big story. Kind of like, oh, yeah, dont go near thunderstorms. Engines could ice over. If youre flying asia, you tend to go over the north pole. You go over siberia. Its cold. This is a bigger story than i think the headlines suggest. Do you really think they can fix this with a Software Upgrade . What . Thats what it said. Theyll be working on a Software Upgrade. I dont know what that means. Im out of my depth here. Listen, i just hope the pilots turn off the popup button, right . Then you have to restart your computer every ten minutes. Postpone your upgrade. I was concerned about that story, too. I didnt quite understand what it all meant. Maybe we need an expert to walk us through. We have a couple of Great Airline analysts. Somebody from the ge airline Engine Department on line one. Why just these two planes . I dont know. Technology is very different. All right. Speaking of software, microsoft said it sold more than 1 million of its new xbox one video game con soles. They matched sonys play station 4 launch. It launched in 13 countries while the ps 4 is currently on sale only in the u. S. And canada. One would imply that gives it a slight sales edge to sony. Chryslers ipo pricing could be announced earlier this week. They may raise 1. 5 to 2 billion. It would value chrysler at 9 to 12 billion bucks. Its aiming to complete its offering in september. Apache is reportedly in talks with the state controlled country in argentina about the sale of its assets in the country. It has stakes in 25 fields in argentina. Last year they wanted to sell 4 billion dollars in debts. Katie couric is expected to leave abc news. The deal will be announced today. Couric will do a high profile online interview show on yahoo s home page. Cnbc and yahoo have a Business Alliance to co produce reports. We look at Company Stocks every day. We look at it fundamentally and technically. Be there next to ms. Couric i imagine. Maybe shell join us breaking down the bullinger bands. I wouldnt hold my breath. No. I cant you cant. You know what they say, small lungs. Small breaths . No, tight shirt. It is a holiday shortened trading week, but there is still plenty of Economic Data to digest in the coming days. Joining us on set is darryl crump. Regional Investment Officer at Wells Fargo Bank and steven ruschiotto. Thank you for coming in. Darryl, why dont we Start Talking about what you think is going to be happening. There are some questions. Stocks have hit new highs. You have Goldman Sachs concerned about the potential for a 10 pull back. What do you think . Obviously a big move since the october 9th lows. Weve come off of a 10 gain. There have been ten caps that have added a quarter of a percent of that rally. Its been a breadthth across the names. Not always the best quality. Theres a megacap. Heavily shorted. People dont like them as much. So we dont see any big barriers to this market towards year end, becky. I think when you look at 2013, it will go down as a story of rerating the forward p. E. Ratios, right . We came in 13. 2 for forward earnings for 2013. This year were walking in at 2014 at 15. 8 for forward earnings. Things are richer than they were at this time last year. That was part of goldmans point. They were concerned that p. E. Ratios are not going to improve as we head into the new year and shouldnt. What do you think about that point . Well, i think its a fair point. We think the market is fairly valued now like most. I dont think thats an out of consensus type of move. I think as you look into 14 and maybe the last few trading days of this year, you have to start separating the sectors and companies that can do well. We think things like technologies, companies that have strong operating leverage. If you see the pickup in revenue next year, theyll translate it to the bottom line makes sense for 2014. I just looked here, four of the best ten performing stocks, steven, this month in the s p, first solar, jcpenney, youve got xerox and pitney bowes. Those are not the stocks that those are your junk stocks . Im not calling them junk stocks. Theyre not the financials. Not the Technology Names necessarily that we think of would lead whats, quote, unquote, a healthy rally. You have to love the fact that the nikkei, which by the way was my Top Performing prediction last year, im happy about that, is up 50 year to date. What do you make of the rally . Do you think its overdone . I think what youll see is additional currency regulation for the japanese yen. They have to have that. Thats the important parameter. The banks own forecast is well get to about 105, 110. Well be possibly north of that. That additional deterioration will help the repatriation and the revaluation of the earnings numbers that come in from their overseas businesses. As a result of that i think you can have another good year in 2014 for the nikkei. The real question is whether or not the fundamental economy comes online. Were still waiting to see whether the abenomics experience changes the deflationary environment thats necessary to keep the nikkei moving forward. What about here with the retail season hitting full gear at this point. You have some concerns about it if you listen to a walmart or target. Then you have Companies Like macys saying the trend was improving over the last month and things are Getting Better over the time. Whats the real story . The Interest Rate environment. How does the Federal Reserve deal with the problems it has to deal with in terms of its balance sheet, growth, and the ability to get the economy moving again by keeping low longterm Interest Rates and whether or not those expectations come through. A steeper yield curve i dont think will be a fundamentally valued situation. Its something that will scare Equity Investors and it will create an alternative. Were still in a grab free yield environment which is why the stocks youre looking at are going up. People are grabbing for yield. If you start to get into an environment where bond yields are going up, thats where youll switch backwards. That will cause a possible correction nair ri environment. I dont think we have excess environment in equities. I asked this question last week and its the thing i dont get. If i was an institutional manager, i think that i would try to lock in all my gains for the year, call it a day, take my fee and go on vacation now. Why is that not going happen . Its a function of economic surprise. Im literally talking now and the end of the year. Because 82 why wouldnt i get out of business . 82 of the time we rise. I understand that. Ride this baby as long as you can. I dont understand why people arent saying, ive got a lot of chips. Im leaving the table. Im going for dinner now. You have, andrew, what, 15, 20 trading days left in the year. Huge gains. A lot of people want to defer those taxes into yeks yenext ye well. Defer that. Pay that when youre literally 15, 20 trading days of getting into january. You can defer it a whole other 15 months. Youre talking about april 15 before you would pay the taxes. Thats a big deal, too. So i think youre talking about a time constraint. Let me talk to you about a time constraint. In the fmoc minutes it said the fed is looking for new tools to stimulate the economy if its tapering the monthly purchases its been making. One of the tools they were talking is lowering the interest on bank rester fs. The banks are now threatening according to the fte to pass that straight on to consumers. It means basically for them to have a checking account, hold your money, theyre going to charge to you do it because they cant make money by doing it at the Federal Reserve. What would the threat be to the economy if that happens . I think its a bad tool to do, number one. I think its a mistake for the fed to do it. It will cause problems in the money market funds. It will cause dislocations in the way the banks handle reserves. I think there are Better Things the fed can do. By the fed focusing people on the concept of the reality, we have a disciplinary environment. We have downward pressures on inflation coming through. That should be the key. If they get the long end of the curve to flatten on Inflation Expectations coming down, i think that will be a very, very positive development for the economy moving into 2014 and i think thats going to be Janet Yellens job to do as she takes over the reins of the Federal Reserve from ben bernanke. Steven, darryl, gentlemen, thank you both. Thank you. Coming up, Consumer Reports unveiling its holiday report card. Find out whos been naughty and nice. First before we do that, squawk sports news. If you went to sleep early last night, you missed an exciting end to the nfl game. The new England Patriots storming back from a 240 halftime deficit to beat denver 3431. Humbled broncos set up a 31 yard field goal by the patriots with 1 56 left in overtime. Squawk box coming right back after this. Ya know, with new fedex one rate you can fill that box and pay one flat rate. I didnt know the coal thing was real. Its very real. David rivera. Rivera, david. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship at the lexus december to remember sales event. Some of the best offers of the year. This is the pursuit of perfection. Welcome back, everybody. Its time for our daily executive edge segment. Consumer reports issuing its holiday report card for 2013 telling us which companies are being naughty and which are being nice this season. Yakky dea jackie deangeles has the story. Its not about the Holiday Season and what people want to buy but its where they want to buy it. In a lot of cases they have a lot of different options. Its about best practices, policies, where theyll get the best deal. Consumer reports looked at retailers, telco companies, to see whos hiding coal in the fine print and whos not. Lets start with the less favorable group. We have amazon. People like it for free super saver shipping. They raised it from 10 bucks to 35 bucks. I noticed that a while ago. Hes been complaining on air. It says theres certain types of products that you need to do addon products. Right. Thats new. You could buy a battery, theyd send it to you. It didnt matter. Exactly. Some people not sure what the policy is. Theyre going to go on the website and see this and see its different this year. Meantime, toys r us is another company a lot of folks look to. No more Price Matching the week of black friday. That starts on november 25th. On cyber monday, which is december 2nd. A lot of people are used to bringing the advertisement in and getting the same price there. If youre traveling with kids this Holiday Season, United Airlines no longer letting families with infants or kids under 4 priority board. They have to wait for their group number. Brian, i see you looking at me like youre crazy. Im looking at you like united is crazy. Why would they do this . You have a kid in a car seat or 2yearold. Its annoying for everybody else, too. Thats also the other thing. It annoys everybody. When i complained about it on twitter. Most of the people agreed with that. If you have kids you think this way. If you dont and youre a heavy business traveler, they say, i dont want you guys boarding early. I want you getting on first. Its all about the overhead space. Its also getting your kids settled. It will take you longer. It will take the plane longer to get out. It ties everybody up. Absolutely. On the flip side of it though, there are companies doing good things. Walmart is one of them, getting praise for getting rid of its administrative fees for the buy now pay later. Thats the lay away account. There is a Fee Associated with that. They are getting rid of it. Nieman marcus offering Free Shipping and returns on most of its items. They are following in the footsteps of nordstroms. Southwest, you can pay the difference in fare. No extra fees. That can add up to extra hundreds of dollars. If you have children, you may be changing things. A lot of competition out there. Companies are fighting for business. Theyre trying to manage the bottom line. Some of these policies may help. Some of them might hurt. For the fuller list, the longer list, you can go to cnbc. Com. I highlighted some of the ones i thought was interesting. This is the fourth year theyre doing this, Consumer Reports. Theyve gotten good feedback. Can i throw out another one, best buy. The idea of returns. They require your drivers license, taking down all of this information. If you return a lot of stuff, they will stop you. Youre on a target list. I used to have a friend in college who used to wear clothes, buy them as opposed to your friend who didnt wear clothes. No, no because thats the friend i like. Banana republic i think used to take all the clothes back sort of unasked, right . So the question is in this new world is it bad that people wont take your stuff back . Well, you have those people out there like youre talking about, the serial returners. Its not just clothes, electronics. They want to try everything out and bring it back. For the companies its a better way to monitor and watch the bottom line. I noticed fryes wont allow you to return any televisions with more than a 24 inch screen because there are people who will go out and get a tv for super bowl and return it right after that weekend. You do have that out there. They have to watch for that. At the same time, when you do have a company like best buy where there are a lot of options where you can buy the electronics, theyll say should i go there or somewhere else . What happens if you get a gift and you dont have the receipt . Thats a tough one. Should you be allowed to return it or not . In the old days you used to be able to. A lot harder. Southwest, i admire what theyre doing. Thats great. I spent the day out there. People hug in the hallways. Great corporation. Ill say this. They do the whole no fee thing. Some of their investors will start to push back. Theyve talked. When weve had their ceo on. Gary. When weve had him on recently, hes talked about how he wont say never to baggage fees. Theyre going to have to do something. I think 2014 may be the year that they put in baggage fees. Industry insider, im not going to say im breaking any news, but an Industry Insider did tell me recently that there is strong consideration that they have to think about it. They can raise prices a little bit to try to mitigate that. Youre getting airlines making billions in revenue. Nobody likes it. Ive flown out to denver recently on southwest. The prices were astronomical. Theyre getting it there and people are paying for all sorts of upgrades and to get into the different lines. They line you up in that awful situation. You can pay to get into a different airline. Not even a better seat. I think theyre doing fine. The fees in general, i would rather pay more for the ticket than pay for my snack, for my fees, for my boarding. Its too much to track. How about this . This will incense and anger all of your viewers. Go for it. How about we do this . Every airline requires you to check your bags. You board the plane in five minutes. I dont want to check my bag. If everybody checked their bag, the time being mitigated by boarding would be easily made up on the back end. What do you think, twitterverse . Am i satins minion . You are because on my honeymoon my bags were lost for seven days. You buy new clothes. Thats a great excuse. Which we did. Or hang out with your buddy who doesnt wear clothes. It is your honeymoon, andrew. We never book bags. Youre the guy. Im he the guy. I love the people at the end of the plane have three carry ones. Its one carry on with a purse and a computer bag and everybodys already sat down. That person spends half an hour arguing with the steward or stewardess about i paid x. Flight attendant. Waitress in the sky. I check all of my aerosol and products. Jackie, thank you. When we come back well talk about Oil Prices Falling as iran and six world powers will curb the limited sanctions. We have an Energy Policy analyst joining us. First, congratulations to taylor swift. The country superstar took home a big award of the night at the American Music awards last night. She led the show with four awards including artist of the year. Justin timberlake had three wins. Meantime, singer miley cyrus put on the purrfect report. While a lip syncing tabby cat was behind her. As we head to a break, take a look at last weeks s p winners and losers. [ male announcer ] this store knows how to handle a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. [ male announcer ] they are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho [ male announcer ] lease the 2014 e350 for 579 a month at your local mercedesbenz dealer. [ male announcer ] lease the 2014 e350 for 579 a month no two people have the same financial goals. Pnc works with you to understand yours and help plan for your retirement. Visit a branch or call now for your personal retirement review. Welcome back to squawk b box. The country gets between 6 and 7 billion in sanction relief and cnbcs chief International Correspondent joins us to break down the dollars and just how significant they may or may not be. Good morning. We keep hearing 6 to 7 billion in sanctions relief. 4. 2 billion is money theyre allowed to repay the try eight from oil sales. Iran is still selling oils. 1 Million Barrels a day. In addition to those 4. 2 billion because theyll relax restrictions when it comes to petrochemical sales. If you Sell Petroleum you sell petro chemicals. Theyll get an additional 1 billion. They think theyll a be able to sell more cars. That will bring them in half a billion in revenue. At the most thinks Senior Administration officials. Keep in mind, they have to buy auto parts, right . Theyre not going to necessarily note that much. Then theres. 4 billion, 400 million of overseas student tuition assistance. In other words, this is money that never gets to iran. Iran has money frozen overseas. What the administration will allow is that 400 million of that can go to students in Foreign Countries studying overseas. It has to go directly to the institutions where they are studying. You look okay. Well, no. That only gets us to 6 billion by the way. Where do you get the other billion . The other billion is a little bit fuzzy. Theyre going to set up starting to seem fuzzier and fuzzier. Its pretty small, actually. The administration has gone through great pains to make that point. This is like jpmorgans 13 billion settlement. Its not real. But in the reverse. Pretty small. That 1 billion, theyre going to lift restrictions on Precious Metals trade. The wording on the document is very vague. Ive asked, does that mean they can sell gold . That could bring in a lot of cash. My understanding is, no. It allows them to purchase gold. Why you would want to use Precious Foreign Exchange on purchasing gold, im not so sure. They think its pretty meaningless. The other possible area where a billion comes from, theyll set up a mechanism to make it easier to do humanitarian trade. Thats always been permitted but because there are so many sanctions in place because of the banking system, its hard. If you set up a transition mechanism in theory its easier to do food relief, etc. , etc. The administration is going through pains to say 4. 2 billion in repatriated money that they can bring back as they sell oil. Theyll sell a lot more than 4 point be point 2 billion worth. They think 15 billion additional dollars will end up being stuck in what are called restricted accounts. Right. Thats on top of 100 billion thats currently either in frozen or restricted accounts. Remember, because they used to sell 2. 5 Million Barrels a day, now theyre only selling 1 Million Barrels a day, theyve still lost in the next six months, 30 billion that they can never recoup. Can you help me with the Bigger Picture for a second . Yeah. Is this a good thing or not . That it gets done in terms of diplomacy. Is this just a band aid that will get ripped off and doesnt matter. Look, i think there are a couple of lessons here. I think economic sanctions went very, very targeted. When the whole world goes along with them work. Thats why iran has come to the table. They have been eliminated from whats called the swift system. This is the International System for marketing transactions and when you cant do that, life becomes extremely difficult. We have seen it over and over again what happens when you have a Foreign Exchange crisis in any country, whether its by their own doing or because its been imposed from the outside. Once you roll back the sanctions though, how difficult would it be to reimpose those sanctions and get Global Cooperation if you dont think youre getting the progress you thought you were going to get. So youre going to hear over and over again, limited, targeted, reversible, right . Nothing done here if they dont block. You cant stop it. You can automatically freeze an account once again. In the next couple of days well see how they decide i didnt hear your question. If you have the same group of Global Coalition partners who see it the same way six months from now. Absolutely. Thats the whole issue of where Congress Tries to impose more sanctions in light of this, that would upset our allies who say we need to give this pathway a chance first. If it looks like the United States isnt acting in good faith, then maybe they start to be less involved in imposing the sanctions. We need the europeans to go along with this in order to make it work. Ive often argued that everything in life you really need to know about you can learn from the movie annal house. Now theyre on single probation. Six months. Well give you the benefit of the doubt half a year. Sell some oil, buy some gold. Central banks must love this. You cant sell but you can buy, right . Thats going to help other central banks, by the way, who are in this deal. Theyve had their gold shirts handed to them. I think you have skepticism, right . If they get 4. 2 billion, the administration will tell you, guess what, their deficit this year is 36 billion. Their yearly needs for Foreign Exchange are 60 to 70 billion. So they are still very much under the gun and in theory if what theyre trying to do is get an improvement to their economy, they have to comply. Who knows. Theyve cheated before. They could easily cheat again. Joining us to talk more about this deal, what it might mean for oil prices is kevin from Clear View Energy partners. Kevin, welcome. How big a deal for oil is this . In terms of absolute barrels its a small deem. What were talking about is the cap at 1 Million Barrels a day which is irans much diminished oil volume theyve had under the sanctions. In october iran exported 715,000 barrels per day. You might say with seasonality, with stockpiles building in the customers countries, it might be that the countries were up forex tension of their exemptions from sanctions. So if you now say that a million is okay, youre talking about incremental 285,000. That liberalized the shipping and insurance selections which means the oil can get to market faster. Yeah. You know, thats a part of the deal that maybe has not been focused on enough is that shipping restriction sort of backing off. Kevin, if we can get more of that iranian oil to asia, what is that going to mean for us and where we buy . Obviously we dont buy from iran. How does this impact the u. S. Consumer. Does it matter at all for us . No. This isnt really an issue about the u. S. Consumer. Its actually something you would see more in the brent price at this point probably than in wti given that wti has its own localized issues. In the long run what this does do if you look ahead, this suggests a bearish trajectory. I thought you might bring this up so you brought some rose colored glasses. These are hard to find on a sunday afternoon. If you actually think that this is going to work out, theres a Million Barrels per day of iranian crude that the world forgot that could come back so that would be a dramatic shift in oil prices, and that would flow through to the american consumer. I love the rose colored glasses. Im going to take those off. For our listeners, kevin, very smart guy, has transformed himself from Energy Analyst to john lennon in approximately two seconds. I want to comment they look like purple colored glasses. Rose. Sunday afternoons are tough, guys. Yeah. Sort of the vikings third alternate jersey. I hear your point. Kevin, gas prices matter a lot to everybody in america. Weve got, what, five weeks coming up. Obviously an important Holiday Shopping time. Are we going to see meaningful decrease in gas or oil prices over the last five weeks, iran or not . That all depends really on libya, not iran. Libyas got a Million Barrels off line right now. Libya will go out of business as a country if they dont solve this problem in the next six months or so. Chances are they probably arent going to solve it before the end of the year so i would expect the gasoline prices in the u. S. To stay about the same. Kevin book, Clear View Energy partners. Great insight. Great classglasses. Take care. I love props. Like mad props. Any time you bring a prop to the set as a guest, you should get props for that. Okay. Wear clothes. We appreciate that. Well get your old roomy back on the show. When we come back, well talk about the flight out of china. Why wealthy chinese are moving their money and people out of chinese. Eunice yoon joins us when squawk box comes back. announcer at scottrade, our clients trade and invest exactly how they want. With scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottradeproud to be ranked best overall client experience. My boyfriend has a lot of cantmiss moments. I checked out the windows phones and saw the lumia 1020 has 41 megapixels. So i can zoom way in even after i take the picture. And i can adjust the shot before i take it so i get it exactly how i want. So, i went with a windows phone. Maybe i just see things other people dont. Honestly i wanna see you be brave welcome back, everyone. A special cnbc series on the flight out of china. Eunice yoon joins us from beijing where shes talking to Business Executives why the wealthy are moving money and family overseas. Unit. Reporter hey, becky. This is a really important trend. As Chinese People are getting wealthier, more of them want to leave the country. Theyre doing this for a whole host of reasons. Some people are doing it because they want to have more personal freedoms. Other people are concerned about the political environment here, the rule of law and what that could mean for their accumulated wealth. And still others like this man who we interviewed said that they just want a better lifestyle. Translator there are many good universities and good high schools in the u. S. Children can have a better education. Many chinese want to live in an unpolluted environment with green mountains, clean water, and fresh air. Reporter many of chinas wealthy are taking advantage of u. S. Investor visas which allow chinese to become residents after a few years if they invest half a Million Dollars in rural areas or places where theres high unemployment and if they create at least ten jobs for americans. Now the big problem though is getting the money out of the country. China has capital controls and there are limits to how much people can send out of the country. They can only send 50,000 u. S. Dollars per person per year. People here are very creative. They find ways around the rules. One of them is to get everybody in their third cousin, like literally everyone in their third cousin to send 50,000 u. S. Dollars for them. So you get maybe 20 people, then you send a Million Dollars out of the country. So thats done. However, if you need more money sent out, then you just hire people here to use their 50,000 limits to send more money out of the country. Now whats also interesting is theres an entire industry thats been created where there are agencies that have accounts in chinese uan. You can put 100,000 into that account and they have a Sister Company in the United States which then credits that money in u. S. Dollars to whatever property or other investment that you want to buy. Thats the way people do it for the most part. However, the old stand by is still being done and that is that people still literally stuff suitcases full of money and walk them across the air through the airport like jfk. Wow. Eunice, thank you. Every time youre going to see some sort of massive wall put up youre going to see the black market and an entire industry that comes up to rise and push you over that wall, too. That tells you a lot about whats happening there. Eunice, thank you. Well check in with you a little later. At 8 40 eastern well continue our story on the flight from china. Melissa cabrera. Well be joining us with a look at where the money is going. Brian. Coming up next, were going to raise the roof on housing. The ceo of Equity Residential will join us. Were going to talk Mortgage Rates, where theyre going, homeownership and where the rental market is going. We have existing home sales data out today as well. Big housing discussion. Hmm. Mmhmm. [ engine revs ] [ male announcer ] oh what fun it is to ride. 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Find out more at aflac. Com. [ male announcer ] when youre sick or hurt, aflac pays you cash. I have obligations. Cute tobligations, but obligations. G. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. vo you are a business pro. Tro management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back to squawk box. Here to give us a gauge on the overall sector is david, the president and ceo of Equity Residential, also deals with our good friend sam zell on occasion. Good morning. Good morning. Where are we . We only have a couple minutes for this conversation and i have a lot to get to. In terms of Mortgage Rates, which way, well, we know which way theyre going. How quickly are we going to get there . What does it mean to you . Well, i dont know how quickly were going to get there. I believe were certainly in a position where Interest Rates have got to go up and Mortgage Rates will go up. Theyve not gone up as much as wed expect at this time. But in the apartment business, it hasnt impacted us at all. Our residents are staying with us. They very much enjoy living in the highdensity urban housing we provide. And at least at this point in time not really opted for going out and buying Single Family homes. When does that point happen . You take that calculator out and decide it costs more to rent than to buy. In this case right now, depending on what you think the rate is in particular markets, i imagine, it actually is cheaper and the lines come together to buy rather than rent. Well, i think thats right. But in particular markets as you state. Our apartments are located in highdensity urban markets in gateway cities across the country. Boston, new york, washington, southern california, San Francisco and seattle. And in those markets, the cost of housing is a significant multiple higher than average incomes in those areas. The down payments in those markets are very significant, but putting the economics aside, its also a lifestyle choice. Ill tell you the residents in our apartments downtown in the cities in which they operate have no interest in moving out and buying a Single Family home. In terms of other markets, you talk about the high density cities you play in. Are there other markets where the math is very different . Well, certainly. The cost of housing as a multiple of incomes is significantly different in the sun belt markets in phoenix, in las vegas, in the inland empire of california, et cetera. There have been much written even lately about how housing has actually cooled in some of those markets. And i will tell you that my peers who operate apartments in those markets have not seen a significant increase of people moving out to buy Single Family homes. Are you buying any real estate in those markets . No, no the in those markets. We consider those noncore markets. Very much for the reasons were talking about today. And weve focused our capital on the higher intensity, higher cost markets on the coasts. What just real quick, what kind of rates are you getting on a per square foot basis in some of the big cities . Well, in some of the big cities, were 5, 6, 7 per square foot per month. David, thank you for joining us this morning. My pleasure, thanks for having me. You bet. When we come back, were going to talk Falling Oil Prices on the back of the iran deal. And we have these stories and much more when squawk box returns. Ya know, with new fedex one rate you can fill that box and pay one flat rate. How naughty was he . Oh boy. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Markets getting a boost thanks to a nuclear deal with iran. Well tell you what the deal means for your portfolio. Well talk equities, oil and currencies all moving ahead of the opening bell this morning. Hacking into health care websites, whats at risk . And how vulnerable is your personal information . A security expert tells us. The problem could go well beyond just healthcare. Gov. Its turkey time. And that means shopping madness for millions as they get ready for some of the years biggest deals. We hit the shopaholics story and which retailer may shine as the second hour of squawk box begins right now. Good morning, and welcome back to squawk box here on cnbc. Im Andrew Ross Sorkin along with becky quick. Joes out today, but Brian Sullivan joining us at the table this morning. Take a look at futures to see how things are setting up this monday morning. We do have green arrows, dow looks like it opens up about 55 points higher. S p 500 up close to five points, as well. Lets get you through the morning headlines. Oil prices are falling on news of a weekend nuclear deal with iran. The deal limits Irans Nuclear activity for activity in return for relief against sanctions and well have more on that big story in a moment. Also boeing warning that airlines operating the dreamliner and the newest version of the 747 jet to avoid High Altitude thunderstorms. The issue is this, there are general its General Electric engines can experience icing problems under certain conditions. And there have been six issues, apparently, involving this problem, though all the jets in question did land safely. Ge says a fix has been developed. A power retailer jones group is in advanced talks with sycamore partners. The price being discussed said to be under 16 a share. Total of about 1. 3 billion. As andrew was mentioning, iran has agreed to freeze their Nuclear Program for six months. But skeptics like Benjamin Netanyahu called this deal a historic mistake. Joining us now to talk about is a senior fellow at the center for American Progress and a former assistant defense secretary. And larry, thank you very much for being here today. Nice to be with you. So how do we measure this . Is it Historic Deal or mistake . I think its a Historic Deal because it lays the ground work for two things. One, to ensure that iran moves farther and farther away from developing a Nuclear Weapons capability. And the second is, it helps bring iran back into the International System which as you already mentioned the fact with the oil, if nothing else, is going to lower the price of oil. Lowering the price of oil is certainly a good thing for the american consumer. But there are some serious questions. Not only from israel and other major partners in the middle east, but also from people right here at home who say this regime cant be trusted. I guess secretary kerry laid out this isnt so much an issue of trust, its an issue of being able to measure whether progress is being made. I guess i question whether you can effectively measure. As part of the deal, they agree to open up to more inspections. And if you dont open up to inspections or violate it, these crippling sanctions come right back on. And its not just us for the sanctions, in order to work, it has to be the international community. And so the fact is, you have this permanent members of the Security Council plus germany all sign on to this agreement. How difficult is it to put iran back in a tight position like that . Would those partners, you think, very willingly go ahead and move iran back on if theyre not getting the type of cooperation they want . Well, i think so. And the other thing is while everybody is involved, were the ones who take the leadership in the sanctions because of our Global Economic position. And what weve done, basically, is even, you know, companies that theoretically could deal with them, we make it known to them if you do, youre not going to be able to deal with us and we really won the worlds banking system. Secretary kerry also made comments over the weekend that we have no illusions on this. This is about really getting some measurement terms out there. How realistic do you think it is that we will make progress on this front. How optimistic are you . Well, i think the fact is in order to get where you want, you have to start some place. So, in fact, you have started there. Had you not had the deal, you would not have been able to get any type of longterm agreement. And the fact of the matter is, this is a country of 80 Million People, youre going to have to come to terms with it. And they have been helpful to us. People forget, if it had not been for iran, we would not get the karzai government in power in 2001 because they persuaded their allies, the northern alliance, to support karzai. Do you think the huge sanctions were the reason we were able to get iran to the table . The conditions there have worsened. Inflation runs at Something Like 40 . How key was that in getting them to come to the table . And if conditions improve, do you think theyll go willingly along the road . Well, the sanctions were the deal breaker. Basically what happened, president obama when he came into Office Reached out to iran. And when they basically pushed them away, he was able to get the u. N. And our other partners to work with us on the on the sanctions. These provide some relief, but it really its maybe 9 or 10 of the overall impact. So it does buy us time to get the agreement and to get them to realize the price theyve been paying. All right. Lawrence, thank you very much for your time today. Thank you for having me. We appreciate it. Our guest host this morning is barry knapp, head of u. S. Portfolio strategy at barclays. What does this mean for the oil markets and beyond that for the stock market . Does iran have an impact on the stock market . Not a lasting one. I would say sentiment was decidedly positive anyway and seasonalitys favorable. The path of least resistance in equities between now and the end of the year has been higher all along. This could add to it very much on the margin. But i wouldnt view it as a big driver one way or another. You know, i do i do think that there is a theres a case to be made for Energy Companies in particular that the spread between brent and wti is exceptionally wide. Theres parts in the country where refining margins are really high. This sort of underscores that to a point, right . Because the whole reason were even some would argue disengaging from the middle east is we dont have the dependency we once had. I think it underscores the development thats taking place in the u. S. And what that means. But i would argue that in 2014, a lot of the benefits of the energy, the shale revolution in the u. S. Start to accrue actually to the demand side rather than the buy side, right . So new chemical plants start coming online. Were starting to get into the transportation system. And i think the benefits will move away from the actual Energy Companies towards consumers of that. And the individual companies, but more on the corporate side, and that, i think, will be a big feature of 2013. Lets talk about another flow besides oil flow and that is money flow. Theres an interesting story in the f. T. This morning, that 3. 4 of global assets have come into the equity markets and it doesnt sound like a lot. But when you talk about the worlds money supply, its actually the highest level since 2004. Are you still seeing continued buying interest at equities, barry . We are, although, i would say that theres been as much as anything theres been interest in buying other things, like european equities and a little bit of renewed interest in e. M. After the scare that, you know, the taper tantrum this summer. But to be sure, i meet very few Equity Investors or very few asset type investors negative on the equity market. Decidedly bullish. Does that concern you that theres so much bullish sentiment from everybody . Oh, the Goldman Sachs report we were talking about. There was a suggestion over the weekend that Goldman Sachs in 2014 there will be a correction of 10 of some sort. They put a 67 chance of that happening. Does that make . How do they come up with that . Thats the other question, where do you come up with 67 . Thats the tail of a distribution, one standard deviation of that. You get into charts, barry, were going to no, no, no its basic statistics. He comes up with these numbers too. Its a one standard deviation event. Meaning its very likely. And i would agree. I think that the specific catalyst for that is when the fed starts the process, right . Because if you go back to world war ii, every time the fed has gotten to this point when they figure out that the economys Getting Better and start the process no matter what it is, it triggers an 8. 5 correction. So we thought that was going to happen in the Fourth Quarter until now were getting to 2014. I would agree with that. And i love history, right . Thats why you need to read history. Generally we repeat ourselves. But in this case, barry, you wonder when you look back at any model, is there any historical precedence to where we are today . Sure. 1951. Until 1951 until march 1951, the fed was capping longterm treasury rates at 2. 5 . So it was an explicit Interest Rate cap to monetize the world war ii debt was was even higher than the current level in march of 1951. They broke the fed treasury, the treasury secretary went in the hospital, the fed announced they werent going to intervene. And you had an 8 construction right after that. There is prez dense for it. In fact, so many things that were happening at that time, including president trumans Reelection Campaign looked identical to president obamas election campaign. Things looked really similar. We got that correction and then the market moved off to the bull market of the 50s. Now, the difference with that period versus this one, the p e at the time was nine. Right now its 16. You also have eight people that owned stocks, they charge them 100, shared a cuban cigar. And now you have a free flow of capital. I could hit sell on the etf, buy stocks in europe at a moments notice. Everythings a lot more liquid. I suppose. I guess i hadnt come at it from a liquidity perspective. But stocks were cheaper, right . That does create an additional element of risk when the fed starts this process. But quite frankly as we know, they can always go backwards, right . They could start and slow the process down. So it will probably trigger a correction, something along the line of what goldman said in the first half of next year, i think thats probably right. Barry is our guest host with us for the rest of the morning. Coming up, a different look at the health care website. Some of the signup problems appear to be Getting Better. But a new risk may have emerged and it has to do with your personal data. Were going to talk about what that is coming up. Welcome back. 6 13 in chicago, good morning, and indeed, it is a good morning because weve got a Global Market meltup. U. S. Futures indicating a higher open, the dow indicated open about 51 points, already on a sevenweek winning streak. And based on this news today, the iran deal, et cetera, a lot of optimism. Stocks pretty much higher in every major developed market around the world. Two stocks independently today, big name, caterpillar. Down about 7 yeartodate but bank of america, Merrill Lynch upgrading to a buy from a neutral. In fact, not just upgrading it, theyre upping their price target to 100 from 87, guys, thats about a 21 jump from where the stock closed on friday. A lesser known name out there to watch is Orexigen Therapeutics saying their weight loss drug is performing well in a new study. In fact, so well it plans to resubmit it for fda approval within the next few weeks with an eye toward getting approval in june of 2013. We talked about a Marketing Partner with this drug. And theyre hoping it does well. Stock should be a big winner today. Weve got another story this morning that will make you anxious, or has me anxious. Startling revelations from a congressional hearing last week on the vulnerability of healthcare. Gov. Joining us now to talk about is one of the Cyber Security experts that testified in washington. David kennedy. Hes trusted sec ceo and known as a white hat hacker. How bad is it . From a security perspective, how bad is it . We started looking at the website when we noticed the performance issues happening on the site. And basically started poking and prodding a little bit looking at the security and found out it was pretty bad all around. And there were things we couldnt disclose because it was so critical in nature because of Public Information that we werent able to show. When you say bad, what can you get at . What type of information could you get at as easily as you suggested you can . Everything from hacking somebodys computer. All the way to being able to extract email addresses, user names, first name, last name, locations, all of those Different Things are available now on the website. Theres a lot of questions this raises. One is, can the site itself be fixed . And how long will that take from your perspective . Well, this is a tough one. Because, you know, when you develop a website, you develop it with security in mind and doesnt appear to have happened this time. When they created this website, they kind of threw a lot of things together. Mixed and matched a bunch of parts and put it on the site of being used by the general public. And its really hard to go back and actually fix the security around it because security wasnt built into it. Its going to take a long time to actually address. And were talking multiple months to over a year to at least address the critical to high exposures. One of the things youve raised is the idea that its actually not just this site that has a problem but actually so many of the state sites that have a problem. And i imagine those state sites interface with this site. Yep, and you got it exactly. Theres a number of sites that use healthcare. Gov for the enrollment process, but theres also a lot of exchanges that use their own website for the enrollment process itself. I believe theres, i think, 14 of them that run their own state exchanges. We started doing analysis on the state exchanges. And vermont released they had a security exposure this weekend. And we started to look at the analysis around the state exchanges. And these are also going to be a large area for a tag, not just healthcare. Gov. Its alarming because you have your Social Security number, personal information you put in there every day and then all of these systems interconnect and connect to each other. If one breaks down, you have potential of the others breaking down, as well. David, two questions for you, first, what has the government response been to this information that youve given them and alerted them to . And second of all, if im a consumer looking at this, would you advise i call up and use the telephone lines instead of using the web . Well, theres two parts o that. The response back from the congressional hearing was literally one of the one of the folks on the Congress Side basically said, well, theres other websites that get hacked all the time, why should ours be any different . And that was alarming for me because you can secure it. But a lot of others are really trying to fix this and address it. The problem is, were not getting any type of information around what type of informations being secured or the type of information thats being secured. Were at a loss at that point. And its unfortunate because, you know, when you look at the site itself, it could be really good, it could do really well. Theyre not building the security into the site itself. But what would you tell people in the meantime . Dont even go to the website . Dont access it because youre putting yourself at risk by doing that . Putting your information on there is definitely a risk. And since its on a federal level, they dont have to disclose any type of breach. If your information gets compromised. What do you mean . You dont have to notify if your information is compromised. If healthcare. Gov gets hacked, youre not the governments not liable to disclose that informations been taken or compromised. You basically have to monitor your own credit, putting that information on that website itself. And using the phones as another example. If you use the phone service. It was recently revealed the folks dont undergo background checks, you could be having a convicted felon or Something Like that taking your Social Security, as well. David, let me ask you a question. On a relative basis since the world is relative, how does this site compare to commercial sites on the internet with which we share information with every day and other governmentrelated sites like the irs website . Well, commercial websites undergo a lot of scrutiny. Because if you look at what type of information they take like personal identifiable information, theres rules and restrictions you have to do to at least, you know, inject security into that. Not saying everythings perfect. Theres a lot of websites with a lot of issues out there. But in a corporate sector, theres a lot of companies that do this great that dont get hacked all the time that could take this type of information. Its doable. And the retrospect of, is this possible fixing . Its going to take a long time. And real quick, government sites on a relative basis . The irs site familia familiarity with that. A lot of the government sites dont require security into them. And weve seen that hacking groups like anonymous and other different types of organized crime are going after government sites quite frequently. Its going to be a problem for the government as a whole not just with healthcare. Gov. David, thanks for scaring us this morning. Thanks for having me. Appreciate it. When we come back, major travel headaches are expected headed toward thanksgiving thanks to a winter storm stretching from the southwest all the way to the eastern seaboard. Well have the details right after this. And then a deal with iran over its Nuclear Program providing markets around the globe a boost this morning. Well check in with our trading block and find out what theyll be watching for when wall street opens for business. Squawk box will be right back. Ready to run your lines . Okay, who helps you focus on your recovery . Yo, yo, yo. Aflac. Wow. [ under his breath ] that was horrible. Pays you cash when youre sick or hurt . [ japanese accent ] aflac. Love it. [ under his breath ] hate it. Helps you focus on getting back to normal . [ as a Southern Belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. Uh huh. [ under his breath ] i am so fired. Youre on in 5, duck. [ male announcer ] when youre sick or hurt, aflac pays you cash. Find out more at aflac. Com. [ male announcer ] when youre sick or hurt, aflac pays you cash. Shes always been able its just her way. Day. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. Good monday morning, everybody. We do have some interesting news if youre planning on traveling this weekend. There is a winter storm that is affecting much of the southwest. Its moving east and its coming just in time for thanksgiving travel. For the latest on this storm this morning, we are joined by alex wilson of the Weather Channel. And alex, good morning. Whats this going to mean on wednesday for people trying to travel . Well, wednesday looks like its going to be an absolute mess along the 95 corridor. Rain likely for those areas, but still when youre talking rain, heavy at times and also the wind thats going to slow things down. We start, though, in dallas where theyre seeing the impacts. Now around dallas, it has been rain, but on the north side of town weve seen the freezing rain. Also in the ft. Worth area, especially in the west side of town, icing issues there. That has been a problem. Thatll soon be moving out of the dallas area. Were just about done with still icing off towards the south and west side of town. Wintery mix up into northeastern texas into parts of arkansas today. Therell be areas to watch as we go through the day today. Of course, this winter storm boreas on the move, bringing heavy rain to areas like atlanta on tuesday. And tonight, that wintery mix will be working into spots in kentucky and tennessee, western carolinas, even southwest virginia and southern west virginia. So places all across this area will be watching for the chance of some slick conditions. Of course, we still have the winter alerts in effect for portions of the south. Really the Southern Plains and including little rock where things will be slick. Now, heres a look at the day tomorrow, freezing rain, wintery mix into parts of the interior northeast with heavy rain right along the i95 corridor on tuesday night and then into wednesday. Well be watching for wind gusts around the boston area. They could get upwards of 50 miles an hour, especially near the coast, its going to be windy in new york city, as well, with heavy rain there at times during the day wednesday. Thats going to slow things down at a lot of the airports. Philadelphia and d. C. Are also included. As you head further off towards the west, that mix of rain and snow in places through central p. A. Back into new york and right down that i81 corridor into virginia, as well. Snow through portions of west virginia, western p. A. And even western new york. Around the buffalo area, theyll be seeing the snow. Heres a look at your new york city threeday forecast. Rain moves in tomorrow during the afternoon. And well keep it very soggy on wednesday, thursday, snow showers for the parade and cold. Highs in the mid30s, andrew. Okay. Thank you for that report. Going to be a long week i feel like. Coming up next, oil and currencies moving this morning after a deal is struck with iran over a nuclear stockpile. Well take a closer look. And then at the top of the hour, Jeremy Siegel has been a long time bull on this market and boy has he been right. Were at new highs, find out if hes ready to change his tune. Well come back with him and a lot more after this. [ male announcer ] they are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho [ male announcer ] lease the 2014 e350 for 579 a month at your local mercedesbenz dealer. [ male announcer ] lease the 2014 e350 for 579 a month in a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to squawk box. In our headlines on this monday morning, chrysler will likely set a price range for the Public Offering this week according to the wall street journal. The deal could raise 1. 5 billion to 2 billion and the automaker expects to complete the offer in the first half of december. Gasoline prices have risen for the first time in more than two months. The latest survey shows prices up by 3. 4 cents over the past two weeks, puts the average price at 3. 25 a gallon. And retailer jc penney is losing its spot in the s p 500. On friday, Ingersoll Rand is spinning off the commercial and Residential Security unit known as allegiant to shareholder. That will replace jc penney in the index. Jc penney will get a spot in the s p mid cap 400 replacing aeropostal. Just when jc penney was starting to show signs of life. Its a strong stock. Second best performer in the s p 500 month to date. Its up about 18. 5 well off its highs, single digit stock. Every time jc penney seems to be crawling up somebody kicks it. Somebody whacks the mole head. Thats a good sign jc penney dropping it. They end to add things gone up a ton, adding a ton of internet stocks in the late 90s and drops stuff. I like your contrarian thinking, barry. All right. Your top stock is oil. It is down after the nuclear stockpile, it could have an impact across a few different industries. Lets turn to our trading block from new york on the dollar is bk Asset Management director. Weve got barry knapp here. First off, are we seeing any, boris, impact on the u. S. Dollar . I cant tell because its early and people are lazy. The biggest impact today, wasnt dollar yen, which was fresh multiweek highs. Which is kind of interesting, basically the market took the positive news of the iran deal much more than the tension going on in china over the dispute of the islands. For now, the dollars acting very well against the yen. I think whats really interesting is howdy v divergene story is. Now, every story has a completely different scenario. The euros going its own way, the Australian Dollar is going its own way. Everything right now is sort of playing off its own scenario. And that, i think, is very interesting, probably going to keep its way through the end of the year. What everybody is really focused on is u. S. Economic performance. If we do have positive numbers, then, of course, the issue of taper becomes much more real and then the dollar may have much stronger against everybody. I dont know how much of our audience actually trades currencies for a living, right . Enough. Enough currencies. You know, but when i look at, say, the yen, im not going to sit there and go into shinzo abes plan, which makes it look like a pimple. What theyre trying to do there is massive. Yes. I care about the nikkei 225, you can buy it through an etf, do you see the yen weakening at all meaningfully . Im surprised at how well the yen has actually held on. Its a tail wagging a dog story with the yen and the nikkei. The yen responds very positively or goes down as the nikkei goes up. And one is fueling the other one very much so. The yen is not trading much on risk flows more than any other currency which is why we had the big bump today. The nikkei went up, dollar yen, as well. So, again, if we see equity markets go to fresh highs before the end of the year, its very likely dollar yen will make fresh highs, as well. Whats your greatest prediction as we head toward the year end. Is it dollar yen . Give us one trade that we can sort of bank on or have a little fun with in the remaining five years. Assuming the u. S. Economy does not falter, dollar yen has the strongest path towards fresh yearly highs amongst the other currencies. The other interesting stories, the euro is eventually going to buckle. This tension between the euro zone is going to force the europeans to become more stimulative and the euro will start giving up some of the gains weve seen so far. Boris, a pleasure, good morning, have a happy thanksgiving. Well see you soon. You too, guys. Any comment on that . The european stock market, you mentioned earlier, some of your clients were now more interested in europe. Thats been stronger than the u. S. On a relative basis lately. The nikkei is now 51 yeartodate. So let me give you a broader perspective on the g3 currency realignment that took place a year ago and what thats meant for the global economy. Keep it clean because we talk g3 currency deals, you never know where it could go. About a year ago, right, the bank of japan entered into this qqe program and abenomics. And with that came a 40 move in euro yen at the point when europe was in recession. Germany sells 60 of the exports to the rest of europe, the other 40 , roughly, is selling capital goods to the rest of the world. One of their biggest competitors, japan, just got a 40 price cut. At the point when their other customers all in recession, thats a global deflationary shock that occurred. The dollar yen moved 35 , 25 of the worlds currencies are linked to the dollar including china who also competes with japan in a number of things and theyre going through an investment bust. So a year ago, japan basically exported deflation to the rest of the world. And that created this downward pressure on inflation. And now central bankers are looking at this going, gee, theres no inflation anywhere. Its a lagged response to what happened in part a year ago but things are still moving but theyve stabilized on a rate of change basis. So that inflation downward pressure is going to dissipate as you get through 2014 and all this, you know, talk that central bankers can just keep easing because inflations really benign, that should start to go away in 2014 and put additional pressure on, you know, upward pressure on inflation. If you look at inflation in the u. S. , Service Sector inflation is 2. 4 , goods actually deflated last year. If goods just stabilize, all of a sudden were not at 1 2, were at two, which is where we think the end of next year. Its good in a way but puts a lot of pressure on the fed in central banks. So theres my perspective on the whole japan and exporting and we forget how important japan is. Weve ignored it for 20 years, the third biggest economy in the world, third biggest than germany. And we pretend the country has existed, i guess, until this year. And japan always ran current account surpluses. They have to, import 100 of their energy. Produce no energy. And all of a sudden, that put even additional pressure on their current account and trade deficits and thats when the currency started to move. Thank you very much. Great stuff and you kept it clean. We appreciate it. Up next, sales, steals and deals. What you can expect when you hit the mall this week if you can get to the mall with the weather. How retailers are looking to profit. And then wilbur ross talking energy, china, the budget and pretty much whatever he wants to talk about. 7 36 here in the east. Hope youre having a great start to your week. Futures are. Were back with more squawk box after this. Clients are always learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back, everybody. The kickoff to the big Holiday Shopping season is days away. What tricks do the big box retailers like walmart and target have up their sleeve to make this a block buster Holiday Season . Joining us from new york is joe feldman, senior managing director. And joe, we have heard some concerns from the big boxes like walmart and target. What do you think actually happens this Holiday Season . Well, were looking for the overall season to be up 3. 5 for an aggregate. Its going to be a challenging, very promotional Holiday Season. Walmart sets the tone saying were not going to get beat on price and were going to be aggressive. And i think were going to see that from other retailers cause a lot of other retailers talk about their profitability, maybe a little less for the Fourth Quarter than originally anticipated. Best buy is one of the ones that came out and said that, as well. Does walmart win in this scenario . If they can push out great prices even if it hurts their margins, can they make up for that on volume . Yeah, i think they can. Theres a couple of things. One is theyre setting the tone for the promotions which means they anticipated to do this. They could price the product and purchase the product with this type of margin in mind. So they know what profitability they need to hit. A lot of the others that have to kind of match price and come up, thats where you see a little profit pressure. Walmarts guidance, actually, for gross margin was to only be down 20 or so basis points, s o slightly down for the quarter. I think theyre anticipating this way ahead of time. A lot of retailers do the same thing, but therell be a little bit of incremental pressure. If walmart turns out to be a winner, who will be a loser . Well, you know, ill tell you, target has been having a tough go of it lately. And it seems like walmart, you know, has been a little bit step ahead all season so far. Theyre going to open a little bit earlier. Theyve got the time promotions, the layaway, a lot of Good Strategies in place to win that customer. Now, i dont think that targets going to, you know, completely give roll over. Target will be competitive. But everybodys kind of fighting back against walmart right now. And having to deal with that. Lets talk about some of the softer retailers. Some of the Companies Like a kohls, like some of the department stores, macys. Weigh in on all of those because kohls numbers were lousy, macys looks like a top performer. Do you think those trends continue for the rest of the Holiday Season . We do. We think macys is going to be a winner. They like to kick it off with the thanksgiving day parade. Theyre going to be open all day here in new york on thanksgiving. And i think macys will continue to drive people into the store with good promotions, good product. But that mid Tier Department store chains like kohls and like a target or jc penney, sears, thats where theres a lot of pressure in the market anyway. And i think its going to be a heightened promotional season for all of those guys, going to be tough to fight it out and find a winner there. So what do you do under those scenarios . Would you tell people to buy any of the Retail Stocks . Well, see, theres names like best buy will have a good Holiday Season. Game stop with all the new video game platforms. Should have a good season. William sonoma tends to do pretty well around the Holiday Season. Costco, you know, caters to a more affluent consumer. Theyve put out fliers in their store. A lot of promotions starting this week already. I think therell be winners out there. So this is barry knapp. You have a 3 to 3. 5 comp forecasted. How did you come up with that . And my reason for asking is what im generally getting feedback here is were back to school selling season was pretty soft and that correlates strongly with holiday sales as one issue and the short selling season. Generally people have fairly tepid comps. Actually, our comp is a little bit lower. Thats total sales were talking about, 3 , 3. 5 . The comps were actually looking more like 2 to 2. 5 , a little bit lower for sure. I think its going to be a challenging season. Whats interesting to me is i think we might get the expectations are so low right now, we might get to the end of the season and realize, hey, things werent quite as bad as we thought and that could be the surprise. And i agree. I think theres a lot of upside here. And the reason is typically you do look at back to school and look at holiday sales and the correlation. But theres something thats different this year. And whats different is we had a huge tax hike at the beginning of the year. That slowed retail sales, you can look at nominal core retail sales, slowed from 4. 5 selling rate last year to 2. 25 in the first two quarters and picked back up in the third quarter. And the october was pretty good. Theres a psychological effect of a tax hike, lasts for a couple of quarters, consumer cushioned it for a little while and took the hit. But that looks like its fading. If that fades and people are moving on past the tax hikes, you could have a lot of upside surprise. Let me throw this out to both of you. Is there a situation where people are worried about what theyre going to be doing in terms of new Affordable Care. With the Affordable Care act, does that change the scenario of people less willing to spend . That is a that is certainly a risk to 14 for sure. Typically what happens is these things hit people and it doesnt impact their spending right away. Takes about a quarter or so and then they readjust their spending. You think this talk is bogus until they realize half way through the year . Comes halfway through the fact. Gas prices are right now. Right. And gas prices are a gigantic stimulant. 50 to 100 savings per average family per month. Not insignificant. A broader perspective. There was 180 billion tax hike. To me, based on trend and the consumption portion of gdp, looks like consumption took a 50 billion hit off trend. Thats a very small multiplier. Thats like. 3. Europe was more like one or greater last year. And i think the reason is because cash flow measures to brians point in particular from Interest Payments, Interest Payments is a percent of disposable income from 19 down below 16 . They refied. Right. Thats how the consumer absorbed it. The cash flow story is okay, theres the psychological story, i think its fading. Could aca provide that sort of a hit next year . Possibly, you know. Barry is our guest host, hell be with us for the rest of the program and, joe, thank you for joining us. Thank you very much. Squawk market master wilbur ross on Global Markets and where hes looking to do his next deal. And at the top of next hour, Jeremy Siegel is our special guest. Well talk about dow, 16, 18 and maybe 20,000. Squawk box after this quick break. Sing thrusters. I need more power. Give me more power [ mainframe ] located. Ge deepsea fuel technology. A 50,000pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. Our Current Situation seems rather extreme. Why cant we maximize our. Ready. Brilliant. Lets get out of here. Warp speed. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. Okay, who helps you focus on your recovery . Yo, yo, yo. Aflac. Wow. [ under his breath ] that was horrible. Pays you cash when youre sick or hurt . [ japanese accent ] aflac. Love it. [ under his breath ] hate it. Helps you focus on getting back to normal . [ as a Southern Belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. Uh huh. [ under his breath ] i am so fired. Youre on in 5, duck. [ male announcer ] when youre sick or hurt, aflac pays you cash. Find out more at aflac. Com. Welcome back to squawk b box. It is time for a squawk co call. Navigator holdings rose 10 after the New York Stock Exchange debut last week. The Company Controlled by wilbur ross and one of his many plays on the emerging markets. Joining us now wilbur ross, chairman and ceo is joining us with more. Good morning to you. Youre in florida this morning, which is a lot warmer than it is here. Very smart, wilbur. If you know nothing about anything, this is youre in the right place. Thank you. First lets talk about iran. Im curious as an investor, do you think this will have impact over the way you operate over the next six months . Im very worried about the transaction in that, remember, we began the negotiations with iran right after the president canceled his former red line in the sand. Thereby, i think, losing face with everybody in the mideast and maybe everybody in the world. So the notion that iran would suddenly become compliant right in the face of that always struck me as silly. And i think this temporary shortterm deal also doesnt sound very appealing. I gather all theyre going to let the investigators do is view tapes at the end of each day. Anybody that knows anything about photo shop knows the tape can be manipulated in a lot of ways. So im not so sure that this is anything other than a Political Announcement trying to show some success by the administration. You know, we teased this segment by talking about navigator holdings. Thats a play in many regards on emerging markets. Is that how youre thinking . Yes, it very definitely is. And its also a play on the shale gas phenomenon in the United States. At lpg is liquefied petroleum gas. And it forms the feed stock for all kinds of plastics, chemicals and fertilizers. All of which are very much in demand in the emerging markets. And whats happening is that a lot of the production of these materials had been in europe and had been based on now lpg is about half the cost of naptha. So that production is shifting to lpg and then will be reexported as finished product. So its very much a play on the rising standards of living in the emerging countries coupled with a play on the shale gas phenomenon in the u. S. So give me a little prediction on what you think the fed is going to do when it comes to tapering and whether you think that will impact the emerging markets given what you thought would happen when there was even talk of it. Right. Well, the emerging markets are much thinner markets than we have in the developed world. They therefore tend to be much more volatile. They also of the other variable of currency flows. Hot money in and out. So thats why changes in Interest Rate are particularly destabilizing to those markets. But i think janet yellen is relatively unlikely to do any kind of a precipitous move in easing quantitative easing. It wasnt too many months ago when she voiced an opinion that perhaps we needed more quantitative easing rather than less. So i believe if she does anything near term, itll be very, very gradual. Maybe as little as 5 billion a month of tapering which would eliminate the qe over a very gradual 17month period. I think preannouncing such a gradual glide chorus would offset the concern of the reduction in qe. Wilbur, you talked about the bifurcated economy before. And one of the things i wanted to raise was whats going on in the art market. Which ive heard you describe as the new gold. What are you saying . Well, i do think things are getting a little bit extreme. And its a combination of people running away from paper money. When you think about it, if someone is really wealthy and has a lot of cash, what are the alternatives . Everybodys scared to death of shortterm fixed income because it yields nothing. People know that longterm bonds have extreme downside when quantitative easing ends. So where do you go . I think a lot of people are putting it into art. And thats being compounded by the fact that certain countries, are spending literally billions of dollars developing what will be true world class museums. And so theyre driving up the prices enormously. Yeah, in fact, wilbur, hey, its brian. I dont know if you saw this but a case of 1978 ive never had a bottom of it sold in china for 474,000 in china over the weekend. Thats not just wine, is it . In some cases it seems to me that theres a stupid rush into some of these quote, unquote assets. I dont think i have clothes good enough to wear while im drinking 400,000 wine. Just save it. It might be for trading rather than for drinking. Are you buying art . Just to clarify . Well, yeah. I guess ive been sucked in by the fad. We collect chinese contemporary and western surrealist paintings and weve been doing that for quite a while. Not because not because you believe that with the dollar is going to zero . No, no, no, just that we very much love surrealism. And i think if youre investing in distressed companies, what could be more appropriate form of art than surrealism . Got it. Wilbur, thank you for joining us. Appreciate it very, very much. Thank you, good to be on. Enjoy the sun down there. Do you have something going on . Qualcomm saying theyre investigated by the nrdc of china, the antimonopoly practice of the chinese government. No details provided as to why. May not be serious, but qualcomm putting out a release moments ago saying we are being investigated by this one agency in china. They dont have any they say we dont know why, right . Its confidential but watch qcom. Well keep an eye on that and try to work it over the break here. Coming up with stocks at record highs, is now the time to take chips off the table. Jeremy siegel will join us. Check out the futures right now. We have green arrows setting up the week. Squawk box coming up after this. Hi honey, did you get the toaster cozy . Yep. Got all the cozies. 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Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. Taking a victory lap, his prediction of dow 16,000 by the end of the year was confirmed at fridays close. Well ask him how long he expects this rally to continue. Squawk disrupter uber announcing a new partnership to boost the number of drivers in the network. Where are you headed . Aspen. California, beautiful. The ceo will join us first on cnbc. And calling all young people. How old are you . 22. You certainly are. New Health Exchanges need you to sign up to help keep the cost of health care low for everybody. Well ask two Health Experts if americas youth will buy into the plan. The third hour of squawk box on a monday begins right now. Welcome back to squawk box here on cnbc. First in business worldwide. Im becky quick along with Andrew Ross Sorkin and brian who is in for joe today. Our guest host is barry knapp, the head of strategy at barclays. In the meantime, lets get your morning headlines. We do have news for you this morning. Boeing has chosen 15 possible u. S. Sites to build the new 777 x long haul passenger jet. The locations include the following, washington state, long beach, california, salt lake city, huntsville, alabama, san antonio and north charleston, south carolina. And also in a little bit of other boeing news, companies advising about a new icing problem on the 747. Boeing is urging 15 carriers to avoid flying them near highlevel thunderstorms and Japan Airlines has already changed a couple of the routes with different plane, replacing these planes with other planes. Everyone knows im a nervous flier. And we have people on planes watching us now. Im going to cut this conversation short. I dont know if theyre watching from a 787. And if i could accept my payment right now for getting up so early. Which is a cheap tease of my show signs at 2 00. This stock no matter what pro problem you have. The battery problems, this. Nothing has held the growth of the middle class in china and india. Because thats where youre seeing all of the orders coming in. Which i find odd considering china is going to soon produce and sell its own jet which looks shockingly similar to the boeing 737. So were going to talk about boeing. Were going to sort of hammer into this name. Its been a name im confounded by to be honest. Thank you, that was my payment for the morning. The cup of coffee we gave you. And a muffin. It was cold. Other news for you. Microsoft saying it sold more than 1 million of its new Xbox One Game consoles within the first 24 hours that were on sale. The results matched sonys play station 4 launch. Analysts are noting that the xbox launched in 13 countries excuse me while the ps4 is only on sale in the u. S. And canada. You can see who the real winner is there. Were also continuing to track a dangerous winter storm that could threaten thanksgiving travel across much of the country. Could impact a little bit of the retail business. The storm started in the southwest on thursday. More than a foot of snow reported in many regions of utah and colorado. The storms a big concern for 40 Million People who are expected to travel 50 miles or more for thanksgiving. Aaa reporting 3 million of those are slated to fly to their destinations. Were going to get an update from the Weather Channel later this hour. Lets get a check on the markets this morning. You are seeing a pop with some of these equity futures here as well as the trading taking place around the globe. This is coming because of the deal with iran. Right now the futures are up by about 56 points. Overseas in asia, youll see that overnight the gains for the nikkei up by 1. 5 . Slight declines for shanghai and the hang seng. And the early trading, youll see that germanys up by about 1 . The cac is up by. 5 and the ftse up by about. 33 . Iran striking a shortterm deal this weekend over the Nuclear Program which will give them some relief from the crippling sanctions taking place there. Is this proof that economic sanctions work . Our chief International Correspondent Michelle Carusocabrera joins us with more on this. Widespread agreement regardless of what side of the aisle youre on. Economic sanctions worked. And for a long time they were not believed because cuba, for example, north korea, they hadnt been successful. And there was debate about what caused change. Even the hard right that wants to whats their answer when they look at the situation . Even more situations. Theyre like, wait, theyre working, we should go double down at this point. Heres the most crippling sanctions weve seen. You look at what appears to have worked. Prohibited from the swift system, i know you all know the society for worldwide interbank financial telecommunications. Thats how money moves all over the world. Also, 50 billion in restricted accounts. 50 billion that arent really dollars. Heres what they said, they said, okay, china, you can buy iranian oil. All that oil, all that money goes into an account, and it may be denominated in dollars, but can only use that indian account for indian purchases. And the chinese account for chinese purposes. So in other words, what youve got is an account denominated in dollars but really is really a rupe account. And there isnt necessarily that much stuff that the iranians want to buy from india. They want to buy internationally. They also have frozen assets of 50 billion around the world that have been in various accounts around the world. Theyve got 100 billion that they cant touch. The Foreign Exchange needs over sixmonth period 60 billion to 70 billion. What have been the results of all of this . High unemployment, the president of iran says its 12 . Believed to be much higher than that. Estimated to be 40 plus. You want to make a population crazy . You want instability, do it with inflation. Leads to looting, riots, et cetera. Budget deficit right now, estimated to be 30 billion. When you look at the iranian budget, its been going up in real terms. When it comes to actual dollar spending, its down almost 30 . I mean, compare that to like greece, its much more crippling. The u. S. Administration has been careful to say these are opening moves, theres not significant thawing here. What do the moves translate into in terms of the iranian economy . 4. 2 billion in access to cash over the next six months when their deficit is 36 billion and their Foreign Exchange needs are estimated at 60 to 70. Its small potatoes. I think its going to help in terms of they subsidize things like fuel and also food. So that will help a little bit. We saw the iranian currency move 3 overnight. Its down 50 . So if the iranian population is expecting massive relief from this, theyre not necessarily going to get it. Okay. In the cold hard cash, 4. 2 billion. People could maybe get back to work, auto sales are down 50 . But perhaps and we did see, by the way, moves over in france this morning because they were the biggest sellers. What was it . 13 billion a month in sales . Exactly. Theres also talk theyre going to change their c o, thats driving up the price of the stock, as well. The tel aviv stock market rose on this. Israeli stocks went up. Why . West tensions is the perception. Despite everything netanyahu says. A lot of foreign money pouring into tel aviv. I met with some investors last week and they said its not local investors buying that market, its money pouring in. So that, the reason its up is probably people externally looking at it going, hey, this is good, ill buy it. But im sure theyre much more skeptical within israel. Michelle, thank you. We should point out that michelle will be back to cover our day long series in china coming up at 8 30 this morning. Why the rich are leaving china and where they are taking their money. And by the way, folks, stocks continuing their hot streak last week. The dow and the s p striking new record highs. Weve got now seven straight up weeks. Futures indicating were going to joining us now chief Market Strategist at rbc capital markets. Also with us, Jeremy Siegel, he correctly predicted the dow would hit 16,000 before the end of the year. So what does he think now . Lets find out, professor siegel, youve been strong, wrong, and youve been right. Are you calling for more gains . I think so. My data shows that the actually fair market value based on current earnings for the dow is probably around 18,000. Now, it doesnt mean were going to get there right pay way or were going to get there in a straight line. Boy, weve had a long time without even a 10 correction. But i dont think this bull market is over yet. I still think theres good gains to come. We dont care so much about current earnings, do we, professor . We care about future earnings. Right. Well, what i meant is the current projections of future earnings. And, you know, we had an earnings gain this year over last year of about 10 to 12 which is pretty good in a very slow Economic Growth situation. If we have a little speed up in Economic Growth, current projections are another 8 on next year. So it could go higher. We have had disappointments through the last few years from earlier projections. 2013, i think, could be one year where we come closer to what analysts are expecting. Jonathan, are you that optimistic about 2014 . I dont know if im as optimistic to say were going to have a repeat of this 26 run, but stocks at this level still look relatively cheap. If you look at where the bond market is implying multiples, its telling you multiples could be between 16 and 18 times given the current level and were 15 times. I do think theres definitely up side here. I think its not only going to be multiples but earnings are likely to be better in 2014 in this year. And youre seeing a number of indicators that the economy is picking up from a low base but picking up. Whats the risk, jonathan . Is there a rational exuberance . Everyones going to be opening up their 401 k statements. Oh, lets throw some more money at the market. That makes me nervous. You know, we put out a note, actually, to answer this very question this morning called excellent not exceptional. And, in fact, what you find is that there are a number of things which cause corrections but tend to be things like recessions or oil shocks and not simply that the market got ahead of itself. As a matter of fact, if you look at this year and, you know, those outlying stocks in technology and biotech and the chipotles, this year actually looks very normal in terms of a concentration of leadership. So theres nothing which looks like a bubble in this year. Could we get there . Maybe but its not a 2014 event. Itll be much further out. Sure. I suppose i may as well chime in on all of this, as well. The one thing that, you know, is a big consideration is, first of all, the stocks being cheap to bond argument only holds when youre talking about the parts of the stock market that look most like the bond market. But from a broader perspective, what we did when we started thinking about what happens next year, we looked at when the fed finally start normalizing policy, where the p e at that point has a big determinant on what happens through the rest of the cycle. I agree with dr. Siegel its no means done. Those bull markets dont end with recessions. The normalization of policy beginning of tapering or beginning of raising rates . Its tapering. It doesnt matter what they do. History is the reaction and the stock market is roughly is very homogeneous. When weve gotten to this point in the past when the p e on the low side of 15, which is the longterm median from when we get to this point, it always continues to rise through the cycle. When it continues to rise, the only cycle where it kept going up was in the late 90s when we had a bubble. Our argument here is we actually have a 9 Earnings Growth forecast for next year. But think that you will get some multiple contraction in 2014. So its not going to be nearly the same kind of year we had and we will have to pay the price for the huge multiple expansion that we received this year. And professor, we always talked to you about the u. S. Stock market. When i look at europe, right, priced to earnings multiple, slightly higher on a forward basis, are there any markets outside of the United States that you think are better deals than the United States right now . Well, i think emerging markets got way too whacked when, you know, the hints of tapering last may, both on the currency side and the valuation side. I think the p e ratio of msci emerging markets is Something Like 11 or 12, about 10 below its fiveyear average. I think those markets have more potential going forward. Especially if worldwide Economic Growth accelerates like most of the guests seem to be thinking as i do also for 2014. I also think that europe is still a little cheaper than the u. S. I still think the problem for u. S. Investors could be the euro. I think draghi may have to bring down the euro to keep that recovery going. But emerging markets and the u. S. Look good to me next year. Jeremy siegel, gentlemen both, thank you so much. Have a happy thanksgiving. Well chat with you soon, im sure, on cnbc. Thank you. We never talk to jeremy about the rest of the world, right . He basically said the emerging markets look perhaps less expensive. Europe may look a little less expensive. Although, 22 times trailing earnings. Well talk more about it. Songs sort of a cue, shut up and drive. Car service uber announcing new partnerships to expand in the network. Ceo Travis Kalanick will join us next first on cnbc. And later demographic problems for obama care where young people sign up on the new exchanges before the Enrollment Period ends. Were going to ask two Health Care Experts when we return back in a moment. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . We have some breaking news this morning from phil lebeau on chrysler and the ipo expectations. Phil . Hey, becky, announced that the chrysler board of directors have consulted with their Legal Council and do not think its practical for an ipo to happen this month. They do think it could happen in the First Quarter of next year but do not say they do not think it could happen this month. The importance of this is that all of the players involved have said, listen, we could see an ipo perhaps in the first half of december. There have been a number of reports out and weve done some reporting ourselves that the players involved most notably the veeva trust would like the ipo to happen sooner rather than later. But now you have the chrysler board saying, you know what, were going to hold off here. We dont think it should happen this month. It could happen in the First Quarter of next year. And remember, guys, at the end of the year, sergio and the chrysler executive board, they do not want this ipo to happen. They would rather that fiat buy all of crislhri chrysler by buy outside of the public buying. Were headed that way because veeva can push the issue of an ipo. Why do they say its not practical at this point . What are the considerations for that . Well, theyre not saying, it could be anything. At the end of the day, it is in their best interest if you buy the philosophy of sergio that they want this ipo not to happen. They would like to work out a deal with veeva, so the longer they can string this out, becky, the better it works out for them. They dont have to give us a definitive reason. They can go back and say were players in this, as well, and we think there should be a little more time. Keep in mind, there hasnt been a road show or a road show announ announced. I think a lot of people when i talked with analysts and those on wall street, everybody says the same thing. Yeah, we think this might happen, but our gut says it probably wont happen. Keep all that in mind. Does veeva have any recourse . Or is it up to chrysler . Not entirely up to chrysler. I dont know if you want to i dont know exactly what their recourse could be other than try to force this. You know, chrysler to come back and say were playing along here, waiting another month is not as if were stopping this. Waiting another month or potentially two or three months to kind of get things underway. You know how the game is played here. At the end of the day, theres an ipo that is moving down the track that sergio and the chrysler board do not want to happen. And, you know, you dont want to bring an ipo in if everybodys not on board. And thats the key consideration here. I dont get this. I dont get this because theres a window. Its a beautiful window right now, right . Just for the market you look at the market right now, wouldnt you want to go to public tomorrow if you could . Although, there is some of the deals are starting to struggle a little bit. Theres no doubt theres been a huge window in the Fourth Quarter. And i would agree from a markets perspective you would think this is about as good as it gets. You dont know whats going to happen in two or three months. But, guys, keep in mind, you dont want this ipo. He would rather buy it directly from veeva. So the weaker the market, it works better in their favor. All right thank you. We will continue to watch this today. But that is breaking news from phil lebeau. We have news this morning also from Uber Technologies announcing a partnership this morning with Financial Institutions and auto manufacturers toyota and General Motors to improve driver economics. Joining us now from San Francisco, first here on cnbc is Travis Kalanick. Good morning. Good morning. Tell us about what exactly youre doing and how youre teaming up on the financing and automobile manufacturer side. Well, to really cut to the chase, we like to say its a vehicle for vehicles. And its essentially a set of partnerships with oem manufacturers, essentially manufacturers on the car side along with Vehicle Financing companies and banking institutions. Essentially, the partners, the drivers that work with uber, you know, basically got a robust consistent cash flow. The average partner is pulling in 100,000 per year, thats gross. So with that cash flow, were able to basically and that affiliation with uber, were basically able to reduce the risk of financing these guys to get more cars on the road. And the reason we need more cars on the road is that ubers demand is really shooting through the roof. Even the last two months, we had greater than 20 month over month growth in those last two months. We have to get cars on the road and help our partners get those vehicles out there. So this is a partnership. Its not that from an economic perspective, is uber putting up any money . Youre bringing different partners to the table. This is a financing platform where were connecting the drivers and partners we work with with the Vehicle Financing companies and essentially means to get that financing. What Financial Institutions are involved . So were not naming names on that side of it on the Car Manufacturers side, toyota and gm are involved. You know, theres a theres several large Vehicle Finance companies and banking institutions. On the other side of this. Now, one of the things you mentioned was theres not enough cars on the roads. How many more cars does uber need or expect over the next 12 months need to get on the road to fulfill customer demand . Yeah. Were in the hundreds of thousands in the next 12 months. And, you know, as you start to look forward into 24 and 36, the numbers get bigger from there. Are they typically new markets or typically markets that just theres so much demand that a new york, for example. You know, we have our oldest markets are our biggest ones. So youd expect San Francisco, new york, philadelphia, boston, dallas, chicago. Our examples, this is a pilot those are the six cities were starting in. As every city gets older, right, they become big cities too. They need to get that same capability to get more vehicles in the hands of drivers and our partners. And to be clear, cars on the road, people go, my god, hundreds of thousands of cars on the road. Remember, every fully utilized uber out there on the streets is taking 20 cars off of the road. Travis, Brian Sullivan here, when i look at you and one of your competitors, i look at your screen shots, you guys look very, very similar. Some of the pricing now is kind of become the same how do you view lift . Can you both coexist . Or is this going to be mets yankees . Never going to get along . We got a pretty big head start. Uber is quite a bit bigger than lift. That said, you know, youve got to stay on your game and youve got to continue to innovate. I think this is a big part of that innovation. You know, look, any successful business is going to have clones and thats part of the situation. And youve got to they keep you honest. They keep you competitive. And i think this is part of that for travis, very quickly, weve got 20 seconds left, i use it religiously but hate the surge pricing. My question is, some people call it gouge pricing. If, in fact, you get more cars on the road, will you get rid of surge pricing completely . Look, its when demand outstrips supply. And when the price goes up, more cars come on the road. The more cars we have affiliated with the network, the less surge we have to do. So ive talked to drivers, by the way, about this, you dont send out notes, though, to everybody saying search pricing is on, come get on the road. Yes, we do. You do . Yes, we do. And thats the whole goal. Basically more supply on the road means more trips happen, fewer people get stranded out there. This is part of getting more vehicles affiliated with us as demand grows and really making sure the price stays stable as much as possible. Its a great product, thank you, sir. Appreciate it. Congratulations on the new partnership. Thank you. Coming up, a winter snowstorm threatens to derail already difficult Holiday Travel across much of the country. We are going to get a muchneeded travel update from the Weather Channel. Why the wealthy are fleeing china and where theyre going to cnbcs special series and we have it coming up. Hi honey, did you get the toaster cozy . Yep. Got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. So i knit until it was full. Youd be crazy not to. Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. [ female announcer ] announcer at scottrade, our tcexactly how they want. Tg. With scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottradeproud to be ranked best overall client experience. A winter storm is threatening Holiday Travel across much of the country. We are joined right now by the Weather Channels alex wilson. And this is a problem right now for some parts of the country. Its going to be for other parts come wednesday when you get into the travel season for the holiday. Exactly. And the big cities for that big travel day. Now, this morning dallas has been dealing with it. Dallasft. Worth did see some reports for ice. At this point, more likely than not youre seeing rain around the area. But some of the elevated surfaces. Its the little rock area where we begin to see the wintery mix move in, even some snow showing up in blue. Well, this system is going to get working towards the east. So little rock, memphis today getting in on the wintery mix. Tonight, areas like louisville, memphis, over towards charlotte, north carolina. Rain works into spots like atlanta. Heavy rain in the cards for atlanta tomorrow, 3 to 5 inches possible over the next 48 hours. But this isnt it for winter storm boreas going up the east coast as we head into tuesday and wednesday. Freezing rain and a wintery mix in the midatlantic and northeast same for tomorrow night and on wednesday. That huge travel day, were looking at rain and wind in places like boston, new york, philly and d. C. Heavy rain at times. That rain snow from syracuse to harrisburg, p. A. Snow even further toward the west. Buffalo, pittsburgh, charleston, west virginia, getting in on the snow showers. New york city area, the rain moves in tomorrow during the afternoon and evening. Well keep it heavy at times throughout wednesday. Temperatures will be mild, but still, doesnt do any good for the cars or trying to get in on the flights. 34 is the high and the big apple will be seeing snow showers. Thank you very much. When we come back, well talk about some breaking news from walmart. Well also talk about the success of obama care. Its dependent on young, Healthy People signing up for insurance to offset the cost of health care for older, sicker people. Up next, were going to talk to two Health Care Experts about the demographics of the new health care law. Stick around, squawk will be right back. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. Hmm. Mmhmm. [ engine revs ] [ male announcer ] oh what fun it is to ride. Get the mercedesbenz on your wish list at the winter event going on now but hurry, the offer ends soon. [ santa ] ho, ho, ho [ male announcer ] lease the 2014 glk350 for 419 a month at your local mercedesbenz dealer. Welcome back. We are just getting news of some Significant Management changes at walmart. Doug mcmillian named to succeed mike duke effective february 1st. So a change in the leadership at walmart. Mike duke is going to be staying on as an adviser to mcmillian for a year. Hes going the be named the chairman of the executive portion of the board. But this is something weve been watching very closely and were going to keep an eye on the shares of the stock for this. Right now, looks like the stock is indicated up by a few cents on the news. But this is a big significant change for the retailer. I wouldnt be surprised, becky, to see walmart get a bid on this news here. Of course, the whole market looks like its going to lift up today. Mcmillon has been with walmart since the late 1990s. Sams club was the big performer for a long time. And if you look back at a fiveyear chart of walmart, it has gone up, but gone up by half the amount of the Dow Jones Industrial average. The dow and the s p have doubled the performance of walmart. Not to mention the fact, you have this stuff going on in mexico with alleged bribery, poor worker relations and then you have this ohio walmart recently which announced a food drive for its own workers. I dont know if you saw that. How is it possible can i redo this . Wait a second, the workers pushed back on that. They said it was something they had put out. They were upset with some of the coverage that came from that. Im sure they were, but you cant deny, becky, walmart deserved or not, the subject of a lot of bad press and bad topics. That stock has suffered. The chairman of the board with a straight face though we cant see his face, says this leadership comes at a time of great strength and growth of walmart. Anyone see the last numbers . Not so hot. He then says the company has the strategy to serve the customer around the world. Their last numbers actually beat expectations. It was what they said about whats going to happen they also said that they are going to be very actively slashing prices. Now which cant be a good thing. We talked to an analysis who said they might win in that game. They went into this knowing they were going to have lower margins and expecting only a decline of 20 basis points in the margins. Well see what happens. This is big news to drop in the middle of the Holiday Shopping season. And also, you know, listen, walmarts going to say hes retiring and it was his decision. Maybe thats true. But 63 is not that old. And were looking at alan mullaly at 68. Younger than the seahawks head coach. And you also look at the fact, andrew, when we talk about executives of a company this size, the biggest private employer in the United States, second only to foxcon in the world. To leave only two months for a transition. Hes going to step down at the end of january. That to me seems like a very david stern gave two years. Had to make an announcement in the middle of Holiday Shopping season. That cyber thing monday. Can i take the other side of this . Please. This is different than announcing somehow our executive is leaving in two months and we dont have a replacement. No, they have a plan. If you have announce you have a transition plan and hes going to remain that doesnt get me that bothered. Im not bothered by it. And i said i thought walmart might catch a bid because mcmillon international succeed. This to me sets a case of, weve got a better guy. Not like you want to step down. Might be, but youve got a better guy, you know. Lets bring in courtney reagan. She joins us on the phone, just spoke to walmart. What do you hear . Thats right. Really interesting news as you guys have been running through this morning. Mr. Mcmillon has a lot of experience as a merchant. A little different than mr. Duke who actually was much more involved in the logistics side of the business. Also very important to walmart but different. Im told this was a personal decision for duke to step down and retire. That hes been at walmart for 18 years. The board voted on it on friday. Mr. Duke will remain chairman of the board for a year and be an adviser to mr. Mcmillon. And walmart also says this has nothing to do with the ongoing allegations. They know more than likely be brought up today. They say this was a personal decision. The timing remaining interesting during a holiday. Those are some of the points i wanted to relay after just speaking with walmart. Thank you very much for that. And courtney knows walmart a lot better than i do. But we all know the optics on this are odd. Everythings a personal decision when you step down as a ceo, in large part because of the way that your exit contract is going to be worded, right . You did also bring up interesting point in times about what had happened in mexico last year. Michelle is here. I raised the question thank you for the mike. You covered the microphone is helpful in television. Yeah. I think you want to raise the question. Is this a precursor to the results of that foreign corrupt practices act coming out. We dont know that it is. And walmart itself says this has nothing to do with the jaup going allegations but something that shareholders will be looking to to find out. Yeah. Absolutely. And there were emails that could have raised a question at certain times about how much mr. Duke knew. Unveiled by the new york times. We are still waiting now more than a year after that article for results of the internal investigation as to how prolific or pervasive bribery was in walmart. Or is it a precursor to perhaps what walmart sees for their quarter in terms of sales. Im trying to go back through my file cabinet. Retailers dont have visibility beyond how many people came in the door yesterday, right . So they might have a view about what the quarter would be. Its like our earlier discussion. And i wouldnt see that as being a catalyst. Im wondering because i dont understand why the biggest retailer in the world would announce their ceo stepping down a couple of days before thanksgiving, a hanukkah start and then a month before christmas begins, it just seems exceptionally odd timing for a retailer. Right. Ive got no real perspective on that. But when you did mention walmarts underperformance relative to the s p. Well, remember consumptions run at a little over 2 through this entire recovery. This has been a tough recovery or expansion to be in this business. And it may just be that theyve decided, look we talk all the time about the two retail environments out there, one for the highend consumer and one for the lower end. No doubt. All the deleveraging thats taken place has happened in the upper 50 of income. The board saying you should have done better, i would have no way of knowing that. But they have been in a tough part of the demographics and tough cycle for dealing with the consumer. Well have to wait and see. Walmart up about. 4 but the whole market up basically because the iran deal. Its impossible to know if the stock was up because of the news or the stock was up prior, we didnt take a look at. Also, by the way. Nobody you shouldnt be. Thats my point, unless you believe this other guy is so much better, lets bring him in now. Can we bring up bbry, guys . Blackberry. The chief marketing officer, chief operating officer are out and theyre replacing their cfo. The cmo, c. O. O. Are out. And the cfo is being replaced. A company on the slide, you got three of the top four executives now out or changing jobs. You had to expect that to happen. Whos running the ship . The new guy. Cmo and c. O. O. Are out. No, we have a new ceo. Were talking about blackber blackberry. Cleaning house with his own guys. You were going to keep everybody at this company . No. Im just suggesting if this didnt happen, it would be criminal not to happen. They have christmas in canada, andrew, right . Kpanexactly. Wait until the new year. I wouldnt pay them bonuses either. For any retailer, Consumer Electronics company, wait for january, wait until things slow down, clean out inventory, dump out your bad news, discount everything to the point its free, effectively. Theyve already done that. This isnt somebody has to clean out everything. Not this one. Celebrates the little known u. S. Okay. Here we go. A lot of news in about we are hard to handle now on this set. On deck, the challenges of health care. Well speak with two experts about the future of obama care. Plus a lot more about the big changes at walmart, the ceo stepping down. Andrew says something smells funny in the kingdom of bentonville. Ready to run your lines . Okay, who helps you focus on your recovery . Yo, yo, yo. Aflac. Wow. [ under his breath ] that was horrible. Pays you cash when youre sick or hurt . [ japanese accent ] aflac. Love it. [ under his breath ] hate it. Helps you focus on getting back to normal . [ as a Southern Belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. Uh huh. [ under his breath ] i am so fired. Youre on in 5, duck. [ male announcer ] when youre sick or hurt, aflac pays you cash. Find out more at aflac. Com. The Affordable Care act continues to make headlines as the government hands out fixes to the controversial program. Joining us now to talk about the future of the Nations Health care system is dr. Scott gotley, also igor volsky, thank you for joining us. Scott, why dont we talk about the problems you see specifically when it comes to demographics because we know about the problems with the website, with know about a lot of other issues, i think the nuts and bolts of this will be once the system is up and running, how does it work at that point . And whats your concern . Yeah, they used to vary premiums based on 71 ratio based on the older individuals and the younger individuals. Now theyve changed it with the Affordable Care act with 3 to 1 age rating, that means the prices have gone up for younger folks. So when young people go on to the websites and look at these plans, theyre getting sticker shock. For example, in new york state, a 30yearold looking at a very average silver based plan will pay about 330 a month just in premiums and deductibles will be another 3,000 to 4,000. Thats a lot of money. And the experience in the states is the young people arent signing up. Even in california, weve seen data coming out where people arent enrolling in these plans. Igor, your take on any of that, is this a problem that you think gets fixed . Do those young people come in . Well, youve got to absolu absolutely attract the young people. The good news is we know they tend to come in late. Close to the deadline. And young people while they could now be paying more because theyre going to be purchasing more comprehensive coverage, they are the group thats most likely to benefit from the tax credit. Theyre going to see a reduction from that Sticker Price that scotts talking about so its good news for them. But you absolutely have to have an entire campaign to bring them in so that the risk pool is balanced and costs dont go up exponentially. Go ahead, scott. Just to pick up on that point, you look to california, about 50 who went on the website and looked at enrolling were eligible for subsidies. By only 60 of people who bought a plan were eligible for subsidies. Does that suggest that the people buying these plans are folks who are willing to pay the high prices for the plans because they need the Health Care Coverage . So the healthy young people arent signing up right now. I dont know that the deadlines really going to instill sort of a spirit of they have to sign up by a certain date certain. Because that date keeps moving. Igor, let me ask you this, how do you measure success . And when will you know . Would you then say theres a problem with this . Well, i think success is making sure you have that healthy risk making sure you have a good balance between the young and healthy and the sicker people so that insurers their rates werent actually participate. Werent often. And next year you have stability in the market. As long as in these early years, you have stability in the exchanges, i think thats success. And you ramp up the coverage over the entire tenyear window of the law. You ramp up the coverage over ten years. Tenyear window of the law. You are not going to have ten years to say insurers are worried. Do you think you have a year or two to straighten this out or do you think there are ten years . You have to solve the access problem by the end of this month. Thats critical. In terms of enrolling the 30 Million People the law projects, thats going to take some time. Scott, you are expecting to hear some backlash from the younger people that are coming in and paying higher premiums. It is not just young people or anyone that previously had higher coverage. They are going to find these policies are very restrictive, much more than what they enjoyed in the private market. I think people are going to be very unhappy. When people go to use the coverage and find there are exclusive provider organizations that only include the doctors in their community. People are coming from an individual market where their plans were canceled and they had all kinds of caps on coverage, now, they are going into an Insurance Plan thats going to provide coverage when they need it most. Thats a stark contrast. When the access problem is fixed, you are going to have a lot of customers tear. In the individual market, people traded benefit, design, copays and deduct i believes, and flexible. We rejected the hmos in favor of ppos in the 90s. Thats the problem. I wish we could continue this conversation. We have breaking news from walmart. Thank you for being with us. Coming up, were going to talk to jim cramer about the big management changes. The ceo is out and we are going to talk about his successor, Doug Mcmillan next. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. announcer scottrade knows our and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Its lots of things. All waking up. Connecting to the global phenomenon we call the internet of everything. Its going to be amazing. And exciting. And maybe, most remarkably, not that far away. Were going to wake the world up. And watch, with eyes wide, as it gets to work. Cisco. Tomorrow starts here. Welcome back to squawk bochblths lets get to the New York Stock Exchange. Mike duke, goodbye. 2009, he comes in. 132 million retirement package according to a Huffington Post article. David glass comes in 1988. Lee scott stays from 2000 to 2009. I know mr. Duke is a little bit older. Im surprised how quickly this occurred. Are you happy about it . Look, i think walmart is a challenged company. It has kind of lost its great growth. It is trying to do a lot of international growth. Domestically, it has been tapped out. Brian talked about the idea it is underperformed. The large discounters have underperformed. They dont seem to have whats wanted or needed right now. They are all flailing of which walmart is flailing as much as the other guys. Are you skeptical about the timing . Does the timing mean anything to you . I wouldnt have done it. Lets say i was in charge of the board, i wouldnt do anything ahead of the Holiday Season. I wouldnt want any disruption whatsoever. It is time to bear down. It is the kind of thing where you should be 100 focused on sales, not for a minute focused on the ceo. I find it quizzical. Is there a larger signal something is amiss . Everyone may say nothing is amiss. This is not the way i would handle it if i were involved with retail, because you want stability between now and the end of the Holiday Season. Part of your year is going to be made between now and christmas day. Why have turmoil . Is walmart too big to succeed . I feel like thats the case a lot of time. The best stocks to own where retailers are going regional to national. It is very difficult for home depot. It is really hard to get any sort of growth once you have tapped out in the United States. You dont need as many walmarts now. I think one of the things that frank blake has taught us, a great manager at home depot. We dont need a lot of home depots. We are kind of fullup home depots. I think walmart is kind of fullup, walmart. Jim cramer, see you in a couple of minutes. Well be back with barry knapps 2004 outlook. Stick around. Rivera, david. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male aavo thesales event fedex one ratsis back. Drive which means its never been easier to get a new 2014 jetta. It gets an impressive 34 highway mpg and comes with no charge scheduled maintenance. And right now you can drive one home for practically just your signature. Sign. Then drive. Get zero due at signing, zero down, zero deposit, and zero first months payment on any new 2014 volkswagen. Hurry, this offer ends december 2nd. For details, visit vwdealer. Com today in a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. No two people have the same financial goals. Pnc works with you to understand yours and help plan for your retirement. Visit a branch or call now for your personal retirement review. You can fill that box and pay one flat rate. I didnt know the coal thing was real. Its very real. David rivera. Rivera, david. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Our guest is barry knapp. You have about ten seconds. What do you think. Next year will be a good year for the economy but not as good for the markets. Thanks for being here. It has been a pleasure. Make sure you join us tomorrow. Squawk on the street begins right now. Good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer live at the New York Stock Exchange. David faber is off. Given this news out of walmart, we are going to get him on the phone. Company veteran, dug mcmillon will succeed steve duke. You were just talking with andrew about why you would do this days before theid