Transcripts For CNBC Squawk Box 20131212

Overshadow jobs. Retail sales for november. Expectations are for an increase of 0. 6 . This gueives us a very good ide of whats happening in the early shopping season. Ahead of those numbers, the futures right now are indicated lower. You can see right now those dow futures down by 16. 5 points. S p futures off just over 2 points. And on the earnings front, lululemon is expected to record at 7 00 a. M. Eastern time. The expectations have been for 41 cents a share. This after the ceo was forced to step down after making comments about the pants arent made for everyone. Shares of lululemon right now, down about 6 cents. Lets get over to andrew with more of todays stop top stories. Good morning. Thank you, becky. As joe was mentioning earlier, Hilton Worldwide will begin its first day of trading. Hey, squawk box. Thats hot. Thank you very much. Youre pricing at 20 a share. Thats the high end of the expected range. The offering raises more than 2. 3 billion and its trading under the symbol hlt. Boeings machine is proposing a contract to keep future 777x wing production in washington state. Boeing is expected to respond to that latest offer later today. And home depot is reportedly offering same day delivery. Continuing with amazon in some new odd way. The retail giant planning on spending 300 million on supply chain and Technology Improvements in california, ohio and atlanta. Were going to be getting a comment on the new strategy from home depot cofounder arthur blank who is joining us tomorrow at 8 40 a. M. Eastern time. Joe. Facebook will be getting more friend requests and likes this morning. The social networking giant is going on to be added to the s p 500 at the close of trading on december 20th. The stock is up more than 90 this year. Its adding to those gains in premarket trading. And no coke, pepsi is what theyll be saying at Buffalo Wild Wings. The New York Times is reporting that pepsi will replace cocacola at the restaurant supplier. Buffalo wild wings has 950 restaurants. Is this a big morning for her . I dont know. If you like Buffalo Wild Wings. Tell me about hilton. Its priced at 20, right . Thats what it is priced at. So did they i have a reason for wanting to know this. Do you want to know if blackstone made money . No. I already said they made over 8. 5 billion. I want to know if theres a chance that the ipo is going to be hot. Hey, squawk box, thats hot. You see, we could probably its the high end of the range, but its not off of i think 21 was the absolute top. Because we can say if there is a lot of demand, we can run that and say what about that ipo . Hey, squawk box, thats hot. You see, the ipo is hot and it is hot. How long ago did she say that, about five or six years ago . We can run that for the next decade. We have been been running it. It was at least five or six years ago. Never get rid of anything. But now, its an ipo. And you know what they call ipos where theres a lot of demand. Its hot. Its a hot ipo. Hey, squawk box, thats hot. So if the stock goes up today, we have a booking to do for tomorrow morning. Charlie sheen . She can do this live. I would like to but i dont know where she is or what her plans are. This is a 6 00 a. M. Show. We can get her on has she grown up with us . What is she doing now . I havent seen her in the papers or anything lately. Im going to describe her as a entrepreneur. Has she quieted down a little sft . Maybe she would be available. I think we might have an easier time getting her if shes staying up all night. Okay. Then, something else. Ive got a mind that cramer yesterday making the point that the market didnt believe the deal could be done. Im almost 90 this deal is done. It was down 150 yesterday, its down again today. The deal is going to get done. The market is not going up based on the deal getting done. Why did it go down yesterday . Buy on the rumor. So all that stuff we were worried about, when they finally happen, i dont think the market trades on them at this point. What did it trade on yesterday . I was trying to figure out why it was down 129. I think it didnt trade on the deal getting done and we were thinking i was up how much was it up on friday on the jobs report . It already reflected the good news in the economy and i dont but ill tell you, thinking of looking at paul ryan, who i hes grown in stature in my eyes again because he is he coming back on the show . No, yesterday i that, too. But yesterday i was thinking, you know, i dont need your trash the tea party because i think i understand what their motivation is about a lot of things and i agree mostly with small government and the private sector and i think thats really what but if youre in a position where there is no way the stuff you believe you cant just hold on to your principals as you go, you know, crashing into the ground and is just say well, i was firm in my convictions. Thats what we just did. We went through that with cruz. It didnt help anyone else but him. So ryan says, im not nifg any of the stuff i really want, but im pragmatic to know that this is the best we can do at this point. Right. Boehner has been burned by these guys. Hes given them the benefit of the doubt. Now he finally said, this is crazy. What did he is . He comes on and hes playing both sides. But he comes on and he says, this is throwing in the towel. This is the republicans getting rid of all of their theyre abandoning all of their principals. But if i were you, andrew ross sorkin, i would say the deficit has already been cut in half. We understand the entitlements and the entitlements are going to get worse with obama care. But at this point with this congress and this white house, lets get the government open for the next two years and make some who do you think is going to hold this up if it gets held up . I dont think its going to get held up. The democrats dont like theres no Unemployment Benefits. Mitch mcconnell has hes being threatened by the tea party in his own state. He knows its probably going to pass, so he gets to vote no even though it wont matter. Andrew said the other thing one of the easiest things to do is vote know when you know its going the pass. And they do that all the time there. And they will probably allow for that. But we learn you know, harry reid is still around. Delaware, they lost that senate race. And in the senate this time around is vulnerable unless they go hijacked by the far right again. If youre not in office, you cant really do much, can you . Right. The Railroad Company bnsf ceo matt rose has moved to executive chairman. The change take place on january 1st. Berkshire bought that part of the railway that it didnt own back in 2010. It now accounts for 20 of the companys profits. You could look at this and suggest maybe this is about succession planning at bnsf, too, because it will groom a new ceo. It is now time for the Global Markets report. We are going to go over to london to say hello to our good friend, ross westgate, who is standing by. Ross, good morning. Good morning to you. Not a good way to start the morning. Nice to see you. We are on the downside at the moment. Decliners outpacing advancers by a ratio of nearly 9 to 1. We hit the session low around about five minutes or so ago. The if it is fwts yesterday was down some 15 points a little more in terms of losses right now. The ftse 100 has been down around three quarters, nearly 0. 8 at the moment. The xetra dax is off 0. 6 . The cac 40 is currently down 0. 2 and the ftse mib currently down 0. 3 . Utilities, it doesnt get much more definitive than that, the only sector up. The reason autos are down, peugeot citron, amongst the blue chips, off nearly 10 at the moment. The french carmaker has cut its 2018 savings goal from its joint program with General Motors and its talking about a capital increase, as well. All things that are unnerved investors this morning. It did confirm on the plus side its in talks with chinas dongfeng, but no agreement has been reached. Thats where we stand in europe. Back to you. Thank you, ross. Appreciate it. Not so great, though. Not a great way to start the morning. Well see. You go through these things, these ups and downs. Some people yesterday were wondering if this is the beginning of a crash. A what . A crash . Is this the beginning of a crash. I can see the beginning of the first 10 move that we saw because so many things are coming to an insider put that out and people are saying, are you kidding me . You shouldnt do this. This is irresponsible. I would blog stuff lately. Hes more anticapitalist than some people think the pope is. Did he learn religion after his problems or something . I dont know. Its very strange. Its all about egalitarian outcome. Did you just the pope . I did. Because yesterday you kept you know, he consistently will take that point of view from if someone barbs capitalism, youll bring it up. Were a Business Network and i was trying to relate this time story magazine we were questioning the basic tennance of capitalism. Hes the pope. He has to worry about the poor. Thats what the pope does. Hopefully theyre not worried about rich people. Of course, they need to get its harder to get through the eye of a camel than yes, yes. But he didnt mean eye of a camel. My point was tapering looks like its coming sooner or later. So all of these things that weve been talking about, the end game is in sight. This would be you know, the market goes up, not knowing if anything of this is really going happen. Then when you see that its becoming reality, then everybody says, hey, ive always acted. Yeah. Typically, yeah. It doesnt seem like there was much else to explain it yesterday. Right. It is snack time on squawk box. After a successful trial run, graze. Com is launching its u. S. Business today. The company, which delivers healthy portioned snacks to suit your taste. It started out in 2008 and is now one of the Fastest Growing startups in the uk. Joining us now on set is anthony fletcher. Thanks for coming in today. Hey, becky. These are small healthy snacks that are portion controlled. Ive gone through the day sometimes and thought, i just need a little something. You go to the snack machine and theres nothing in there that looks all that healthy. How did this start out . The people who set up the business used to work at the netflix of europe and they were interested in reinvented snacking. So they came up with this whole model, being able to send portions of the snacks through the post directly to your home and office. So the one im looking at looks like it has dried apple in it. It has another one called nanofi pie, which is dried banana and nuts in these things. How healthy are these . How many calories are in these . Its a really good question. What were here to do is try to give people healthy snacks which they want to eat instead of a candy bar or a bag of chips. We offer different boxes depending on what youre after. So if youre on a diet, we offer a light box which is low in calorie. But you know, people are after lots of different things. What do i have to do, can i get one in a half an hour, an hour . Do you order it in advance . You order it online. We ship to 250 million addresses in the 48 lower states. You sign up and we send it to you regularly. Its a bit of a different service. What we to is pop you up with snacks each week so the box is always there when you need it. Its not getting the product out quickly. How big is the product in the uk right now . So were one of the uks Fastest Growing businesses. Weve gone from the bedroom to 17 million in five years. In our trial in america, weve shipped close to 1 million boxes. We started by emailing 100 people. One week later, we had a customer in every state. How much is a box like this . 6 plus delivery. Theres four little packs, right . This is any nut pack. I dont know which one this is. So theres four, six bucks for all of them . Yes. Do you get a discount if you order ten boxes . Not at the moment, no. And is it offices or consumers homes where youre delivering this . Well send them to both, but in america, people are really enjoying having these in the office. So they keep it in their desk drawer. Is there ever an opportunity or are those so already owned by the pepsis and cokes of the world that you cant even touch it . This is what is fantastic about technology. From our one post upgrade kitchen in new jersey, we can reach 250 million american addresses to build up that sort of distribution through vending machines would take decades. Anthony, i want to thank you very much for coming in. Thank you. Coming up, we are answering the call at 35,000 feet. This is actually one of my favorite topics. We are talking about using your cell phone to make calls on airplanes something that has taken off overseas. Were going to talk to a ceo making that happen right now. Whats ahead for tech in 2014 . Will elon musk continue to push the envelope . And what will that mean for investors . Squawk box coming back after this. The s. E. C. Opening a Public Comment period today that could eventually lead to passenger use of cell phones on airplanes. Each carrier would decide whether to allow call necessary flight. But inflight cell phone use up and running overseas. Were joined now by area mobile ceo kevin rogers. Good morning to you, kevin. Good morning. So first of all, what is the chance you think this actually happens in the United States in a meaningful way . Well, im sincerely hoping it really does happen. It might take 18 months to two years. Im hoping the s. E. C. Can make a progression tonight. What has been the experience for you in europe thus far . What airlines are doing it, what airlines arent doing it . What have been the bad tell us about the bad experiences and also some of the good. Well, to start off with the bad experiences, there really havent been in any weve been in operation now for over five years. Were operating on at least nine airlines, operating on many of the long haul fleets. Which airlines . Weve got lufthansa, fas, and a number others, as well. Air lingus is operating on many daily flights across to the states from dublin. Whats the price point on those phone calls . Some of those are so prohibitive i could tell it wouldnt become a problem because most people dont make those calls. Well, youre absolutely right. I wouldnt say the price is prohibitive. What this is not, this is not the old Satellite Phone in the aircraft. This is an International Roaming service, so price res set by the home operator. We have roaming agreements with over 250 operators around the world. So give me an example. If im on a Virgin Atlantic flight that has your service on it and i wanted to call home and im, saying, in the middle of the atlantic and i talk to my mother for five minutes, what is that setting me back . Youll probably pay a couple of bucks a minute, Something Like nap. So like two or three bucks a minute or eight or nine bucks a minute . Oh, two or three. Although, kevin, a lot of the people who use it, you said i think its not very common for them to be making phone calls. Really theyre doing it for things like texting and emailing. Yeah, thats right. Thats right. Most of the airlines that we operate on office voice, text and data, sort of three services theyre used to on the ground. On those aircraft offering more than three services, more than 80 of the users never use voice. The amount of voice usage is actually quite small. The typical length of the call is one to two minutes. Either making a call or receiving a call. And a number of phone calls that you might experience in the cabin or on a long haul flight is about five or six. So these are based on the statistics that weve accumulated. Its worth pointing out, as well go ahead. Just going to point out, as well, that although most of our Airline Customers operate all three services, several b airlines have taken a decision not to operate voice. So they just offer text and data to their passengers. Who has done that . We look at air lingus, for example. Theyve taken a position that they offer just text and data. When i say have you offered any bad experiences, you have no anecdotal stories of somebody sitting next to somebody else who is yapping on the phone for a half an hour and it gets to fis a cuffs and people get hauled off the plane at the end or theres a screaming match . None of that . Absolutely none. Nothing that has come to my attention. Im very confident that if you go and is speak to the Airline Customers were doing bits with, theyll give you the same story. And bear in mind, these stories, these are the same company deploying this equipment on all of their aircraft and no one is retracting from offering voice. Kevin, is competition for you skype or are your Services Going to run that, anyway . Meaning people who have lamb tops and other services ta dont necessarily connect to their phone, per se. Yeah, yeah. Well, most of the airlines that were dealing with and these are the Long Haul International carriers, theyre deploying both wifi and phone. So the common theme here is that the Airlines Want to give the full gamut of Connectivity Options to their passengers, the same options we use on the ground. You go to a hotel room and you have wifi and access to your cell phone. Its the same in the skies. And youre dealing with 250 passengers here. Each one of those has a different user preference. So im going to send one text to attach to the wifi. Some want to do a long surfing session, so theyll pay the 10 or 15 bucks for a wifi session. So you have to market for both of these in the cabin. And the demand for our services is very strong, very strong indeed. Right. Okay. Kevin, thank you for joining thus morning. Appreciate it very much. Yeah, thank you. Thank you. Cant you think about, like, the train . Theres a quad car. Ive never gone to the quad car and theres people all over. I dont always like sometimes i hear some pretty good stuff, actually. I hear people talk about what theyre going to pay on the ploy employees. On a train, i can get up and walk away. There have been people that have driven me crazy kind of like the who is on and doing work the entire time. And talking loudly. So i filed found a story from where enron was going bankrupt and you ron went bankrupt . Back in the day . Not necessarily. Forgot about that. Anyway, it was ads 67 650 bill. People next to me, they hated me the whole time and i think i would hate me, too, in this instance. I want to talk more about the budget, too, because weve got people writing in that say the death of the sequester caused the markets to go down because the markets have been rallying on the sequester. What . The showing thats the thing. Its still goldman still think its 0. 4 of austerity affecting growth domestic product. If you look at it, its 33 billion spending in the next year, but over ten years, they somehow get a 23 billion cut in it. But these are all just it only lasts for a while. It doesnt do anything for our entitlements, but it doesnt really the markets didnt go up on the sequester. Coming up, the traders edge Market Strategist j. J. Kinnehan will tell us how hes reacting to the taper signals. Then, the man of the hour, hopefully we have enough time to set aside for paul ryan today. Has he talked to anyone else yet . I saw the press conference the other day, but i havent seen him otherwise. Its going to be great. 7 40 a. M. Eastern. Well get the message to his creditics. Hopefully there will be some epi fetes. I have low testosterone. There, i said it. See, i knew testosterone could affect sex drive, but not energy or even my mood. Thats when i talked with my doctor. He gave me some blood tests. Showed it was low t. Thats it. It was a number. [ male announcer ] today, men with low t have androgel 1. 62 testosterone gel. The 1 prescribed topical testosterone replacement therapy increases testosterone when used daily. Women and children should avoid contact with application sites. Discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. Men with Breast Cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breastfeeding, should not use androgel. Serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. Tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. In a clinical study, over 80 of treated men had their t levels restored to normal. Talk to your doctor about all your symptoms. Get the blood tests. Change your number. Turn it up. Androgel 1. 62 . So you want to drive mores. Safely . Of smart. Er. Turn it up. Stop eating. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum did morning and welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. In the headlines this morning, the house is planning to vote today on the budget deal that was struck earlier this week. Its expected to pass. Despite grousing from guys that are more to the far right, some of the republican conservatives. There arent enough of them to block it. And even the ones that are going to block it had good things to say about paul ryan. He doesnt other guys get you can dance a line where you know youre not going to block passage of things. You can please people back in your district. But they trash boehner. With ryan theyre i dont know why theyre i think theyre right, but youre trying to do something and they talk about the two big circles and theres a slitter right here. And well be talking to Budget Committee chair paul ryan who is going to join us at 7 40. I said he was tall and slender and kennediesque and the next thing you know hes coming on. Im not saying we made him on squawk box. He was a mere on congressman and, you know, we knew him when. Anyway, were glad to have him at 7 40. Id like to give him about 10 minutes at least. 10 or 15. If we hadnt had that airline guy. Anyway, were going to talk about the twoyear budget deal. And jpmorgan is going to pay about 2 million to prevent a criminal probe. Involving convicted ponzi scheme person anyway madoff. A billion . Doesnt that add up . How much did Bernie Madoff lose for his investors . I think it was 50 or 60 billion. Does this surround there was a time when he was supposedly doing covered calls. He couldnt possibly and they wrote the notes internally to each other. But they didnt call up their clients. Because supposedly if you looked at the actual trades they didnt know. All they knew is there were people inside jpmorgan that were suspicious. I believe there were certain funds that were taken out. If you cant prove it, and isnt it the regulars to catch those things, wouldnt you be in huge trouble and slander if he started telling people to pull their money and you couldnt prove it . Well, theres been the issue of money laundering. Madoff is selfpolicing that banks are supposed to operate. Its not that they know that the money is dirty. Should have known. But you cant go to the cboe. He was trading supposedly more in a daid day. For the size of that portfolio why is that the exchange . Because jamie said some tough about obama. Who is jj . The office exchanges wouldnt even know it. You have the trade on the option exchanges. He never called the options exchange. Jpmorgan was ever holding the accounts and could see the open interest. No, they should have known. This is a should have known, not necessarily that they did know. Should have, would have, could have. Do i need to introduce him . Were already talking to him. J. J. J. J. Kinnehan. Anyway, chief strategist at t. D. Ameritrade. I am here so you can give me grief. Good to have you here for this madoff decision. How about the overall youre not a guy thats going to explain fundamentals to it. But it was interesting that a budget deal was met with points down. Well, you know it was overbought. So with that, you know, the s p is really kind of a mid range. I think its interesting, we held the 1780 level. And it looks like were going to open just below it today, obviously, retail sales coming up here in about an hour or so that will have that affect on it. But if we can close back above 1780, i think its fine. I dont think its that huge a deal that we went down as a much as we did yesterday overall. Even though some people are panicking. With the rumors going on there, obviously, people are going to panic a little bit. Theres been talk about maybe doing it in december. I think that would be a bit of a mistake. If that happened, i think there would be more of a liquidity sell. What happened . If the fed, if their meeting came up oh, youre talking about the sequester, all right. You wampd for a long time, buy on the rumor, sell on the news. Its the beginning of the end game. Do you think the economy in recent is it possible that retail this Christmas Season gets us off track on the fact that the economy is finally red to take the baton . I think it could be a good data point. A good data point . Yeah. Not a bad data point . Oh, it could be a bad data point, too. You mine a data point that gives you an idea yeah. In general, the trend has been positive. I think the interesting number that will come out today is auto sales. Normally people tend to take auto sales out. This is a big time of year for people to buy new cars. And the thanksgiving Holiday Weekend is quite an auto shopping so youre going to get the black friday numbers, youre going to get the cyber monday numberes and youre going to get autos all kind of today to give you a little what do you think, is this the time for you . This could be a time. I have a mini cooper. No, youve got two kids. You cant do that. You have to go suv. Minivan. With the tv in the back. Multiple tvs or the one that hangs down and you know why you get the one that hangs down in the middle . Why . Because if you get the one on the back of the seat, little kids get in there and they put their hands up there and crack the screen. Good advice. But your twins are different. One looks max looks different. Do they have different tastes in movies . They both like cars. Lightning mcqueen is their best friend. The godfather. Yeah. The second one was terrible, but thats not a universal thing. Pixar, disney. The second one was terrible. J. J. , thank you very much for coming in today. Always a pleasure. When we come back, something is going on with the iphone and china mobile. Eunice yoon is on that case to tell us what she found out. Plus, will 2014 be another banner year for technology . Elaine musk and tesla marks the year when tech surges. Will his innovations keep coming back for more . Also, we have a big lineup starting at 7 00 a. M. In orderan Martin Franklin will be our guest host today. I have irwin same yop, William Lauder and michael dell. Of course, the interview of the morning, paul ryan, is coming up at 7 40 eastern. Commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. But with less energy, moodiness, and a low sex drive,y first. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron. The only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or Breast Cancer. Women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. Ask your doctor about axiron. Welcome back, everybody. Something may be going on with apple and china mobile. Good evening where you are. Good evening and good morning. Yeah, a really strange situation over here. China mobile this morning in beijing on its website started taking preorders for apple iphone 5s phones. Basically, people could get online, register for the phones, you could get special data deals. China mobile is unveiling its 3g services. So thats high speed services. Now on the website, you see a golden apple, you see apple iphone, what appear to be iphone 5ss in gold, silver and gray. And what gives it away is the website link because it says on it iphone 5s. Now, we called china mobile about this and asked them what was going on. They basically right after our conversation the link name actually switched and the iphone 5s disappeared and instead what appeared was a word which means star phone or trendy phone. In other words, a really generic term. And the company, instead, just told us, again, that they talks are in negotiation with apple, but nothing so far has been settled. How does that work out for the consumers that signed up . Oh, i did it myself. Then they send you a message saying you will get a message soon about when you can get your phone. So many people are saying how important it is for china mobile and apple to get through this deal. Weve been seeing signs of something going on. We saw a situation in shanghai where people could start taking preorders for there, as well, for an iphone. Whats interesting also is the number so far has ticked up to over 18,000 here in beijing on that website just in the past couple of hours. So there are a lot of people who are obviously preordering these phones. It sounds like something is coming and its coming soon. Eunice, thank you very much again. Coming up, 2013 was full of great tech stories. Teslas surge, twitters ipo and facebooks comeback. Whats ahead for investors in 2014 . Josh stein is a Venture Capitalist that makes business a step ahead of the tech trends. Always staying ahead. Hes on his way to the set and well get his outlook. vo you are a business pro. Maestro of project 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. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding ] at the lexus december to remember sales event. This is the pursuit of perfection. Good morning. Take a look at Rockefeller Center there. Our next guest is a silicone valley power player in the realm of Venture Capital yammism. He has backed plenty of Venture Capital companies from spacex to twitter and baidu. Josh stein is with us on set, director of vfj venture cappal. Thank you for joining us. Thank you for having me. Id be remiss if i didnt ask you at the outset how much money do you have now . Is that where that were in a little bit of a venture tech bubble right now. Where are you . I dont think so. I think valuations are Pretty Healthy. I think where you might have a little bit of a bubble would be in some of the consumer investments. Like take snapchat. Doesnt have any revenue, so saying its worth a couple of billion dollars implies some optimism. But if were wrong, theres only going to be a couple of venture funds and one hedge fund that looks silly. This isnt like 99. Elon musk said he was surprised how far tesla had run. He made that comment to investors. And they pulled money off the table. But he said, hey, im surprised were here this quickly, too. Hes right to be conservative. And i think, you know, tesla is a company that had to go through a lot of challenge to get to where it is. Hes trying to remind people there are challenges ahead. But i think what youre seeing from investors and the evaluation of tesla is how big the market is. Almost unlimited potential. I think you could argue that investors are looking a little too far forward to that potential and i think thats what he was trying to say. In the consumer space, i dont know if you can get this screen going. We talk about path, red fin, and chart beat and share this. These are some of your companies. Yep. Your sense, though, on a company like path, which is sort of facebook meets i dont know, its like a smaller version of facebook. Private, intimate. Intimate mobile facebook. The potential for that kind of company. Where do you put that . I think its immense. And i think if you look at a company like a path or snapchat and how quickly theyre able to grow. I think thats a function of the mobile platforms and how easy it is to get users now. So if you look at app usage today and take the top 500 apps, the combined audience of those apps in an hour is about 50 Million People. 50 Million People is as big as the top 200 newspaper circulations combined and as big as the top three shows on prime time tv at any given point. Just feels to me that some of these valuations are not driven by real numbers. Ill give you tumblr gets bought by yahoo. Its a top ten property. Except, it didnt have revenue that would ever justify 1 billion valuation, no . Im not sure i would agree with that. I think if you look at the internet, it has always started with get the attention, get the eyeballs, get people paying attention. And if you have enough people, youre going to be able to monetize that intention and intent. Its fair to say that tumblr was early in the development but i think they had the scale that would justify revenue. Who has monetized them . It starts out like that. Well, facebook would be an example. When we looked at facebook in 2004, they hit zero revenue proudly and today its a multibillion dollar top line company. Yeah. I hope it happened. Or twitter. Vc guys and ipo guys, if youre able to say forever eventually you monetize it and its fine now. But then you get one example, facebook. Well, how about twitter as another. Monetizing it already . Sure. Well, its i would say the valuation is still very high relative to sales. But you look at the rate in which theyre increasing revenues, its very significant. This pets. Com stock i still have i remember. Should i keep waiting . I would. I would hold on to that certificate. I think the puppets coming back for sure. If you look at twitter and facebook, one thing that has happened is companies were going public in 99 with 3 million of trailing revenue, companies now they could be like yahoo and google, the two we remember. You pick the two best, facebook and twitter. Tesla, you were in early . We were in early, yeah. We received the stock in tesla when the company went public after an appropriate period. We distribute the stock to our ultimate partners and they can decide whether they want to sell or hold the stock. Some of the other folks, do you sell in the secondary market . No, very rarely. We view investing as a longterm partnership. Before we go, real quick, any technology out there, website, anything you think is mind blowing i need to know about . Just as a techie, a geek, something thats going to change my life . I would put my money on space x. I think what hes been doing in terms of space x. Launching rockets into space its rocket science, its true. Josh, thank you for coming in this morning. Thanks for having me, guys. Im nervous on commercial flights, space x is not going to be your thing, is it . I saw gravity like you did. He didnt, branson. On purpose. Intentionally not watching it. Would you go on the first flight or the 100th . Probably the 100th, maybe the 10th. We do have a huge hour just ahead including the squawk news maker of the morning. Paul ryans going to be speaking out after the critics of the latest compromise comes out of the woodwork. And our guest host will tell us if the consumer will save the day for the economy. Jarden executive chairman Martin Franklin on the way to the set. Squawk box will be right back. 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 ] fedex one rate. If yand youre talking toevere rheuyour rheumatologistike me, about trying or adding a biologic. This is humira, adalimumab. This is humira working to help relieve my pain. This is humira helping me through the twists and turns. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for over ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. For many adults, humira is proven to help relieve pain and stop further joint damage. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira , your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your doctor if humira can work for you. This is humira at work. Time to get squawking. Martin franklin, executive chairman and Consumer Products giant jarden, irwin simon, and cosmetics titan, that all leads up to michael dell. So grab the coffee and pull up a seat, squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernan and andrew ross sorkin. The fallout and reaction to the budget deal is still front and center. And coming up at 7 40 a. M. , the squawk news maker of the morning, paul ryan will be our special guest. Hes going to be answering the critics of the bipartisan deal. Again, coming up at 7 40 eastern time. This morning, you might expect a bit of a bounceback after the drop of 129 points for the dow. The dow futures down by about 24 points. S p futures off by 3 1 2 points. In our headlines this morning, the Largest Hotel ipo in the history of the market hits today. Hilton worldwide priced the offering at 20 a share. That was a total of more than 2. 3 billion. Hilton will trade under the ticker hlt. A flood of Economic Statistics will be hitting the tape before stocks open for trading this morning. Well get november retail sales, weekly jobless claims and the latest on import and export prices. And Jpmorgan Chase will reportedly pay more than 1 billion to settle a criminal probe into its relationship with convicted ponzi scheme maker Bernie Madoff. Andrew . A deal we told you about last hour is now official. Pepsi replacing cocacola as the official beverage supplier for restaurant chain Buffalo Wild Wings. Terms of the deal which will begin in the new year werent disclosed. Pepsi and Buffalo Wild Wings planning joint marketing initiatives in sports and entertainment as parts of that agreement. More speculation this morning on the future of ford chief executive alan mulally. The board is planning to press mulally to clarify his future under speculation he may be offered the ceo job at microsoft. Told phil lebeau last week theres been no change in his plans. Right now, slated to remain as ford ceo through the end of 2014. And im ive got to give some kudos to the Stanley Fisher thing. Hes great. Hes fantastic. This this thank you. I dont like everything, but m. I. T. Guy, and born in zambia. Hes fantastic. Good guy. Good for vice chairman. And one of Ben Bernankes mentors too. Yeah. Which will give you additional continuity in similar lines of thinking. I get the sense hes a little more hawkish. I would argue he has credibility in the wall street community. He does. To the extent he has relationships on wall street and you need that righthand person to reach out. Thats the first thing i thought of. Really would make it thats a great tag team. First thing i thought of what becky said, maybe hell tap the brakes a little. Yeah. I think he has spoken what do you think . Between black friday, cyber monday and green monday, online and traditional retailers look like theyre set to score some big gains with consumers this shopping season. Our guest host for the next two hours is Martin Franklin, executive chairman of jarden, a global Consumer Products company. Welcome. Its good to see you. And we always talk about my crock pot. Ive got one you didnt manufacture in bulk with my picture on. At one point in recent weeks, weve had two crock pots going at the same time and we had to pull mine out. One for macaroni and cheese and one for a little pork. And then the candle which i also got from you. Looks like everything but none of this is that expensive. No. Not over 50. And i didnt do the turkey and dressing for thanksgiving. You can do that for christmas, right . Yeah. Why not. Do you sell these online . Yes, oh, yeah. More online than anywhere . Yeah. Like everybody else. What percentage now . I think our Online Business was up about was low double digits, 15 . Up 15 to what percent of the total . Oh, its still probably around im trying to think, about 10 . Itll double every six years, basically, and will it accelerate up 15 a year, do you think . Yeah. Is growth will accelerate as well . No, youre going to have all of our smaller base businesses that have retail base, compounding at higher growth rates. This has become more mature in terms of the growth trajectory. I think its going to continue at a similar rate. We always give you kudos for the way you manage your own business. But we still need to look for like overall trends. Do you think the retail season will confirm the idea that the economy is better than it was last year or the year before . Or will this throw a, you know, actually cause us to question whether the economys ready to no, i think this is actually going to be a pretty good christmas. I think overall. I think ive said this before, it depends on how you define pretty good. But if youre up 2 , Something Like that, i think thats a Pretty Healthy performance in line with gdp or around there. You know, what youre looking for is continued growth, continued momentum. Christmas is going to be Pretty Healthy. Why have we had so many retailers who have warned already, said theyve got to be more promotional just to get the customer in the door, they have to offer a big discount. Weve seen its an interesting thing. We see in mall traffic for yankee. Weve seen actual traffic being a little bit down but participation being a little bit up. So the two have sort of balanced each other out and net net youve had some participation meaning buying. Buying. Buying. Does that mean the traffics down. More people are buying online . Or do you think traffic is down because this is an economy of tale of two economies where you have the haves and have nots. Definitely having an impact. What about weather . Always has an impact. Weve had bad weather already and expecting more bad weather. Yeah. Doesnt that people go out after the weather, get it in before christmas, right . It doesnt go away when theres bad weather, or do you lose some . No, i think at the end of the day, people who want to shop will find who want to buy gifts are going to find a way one way or the other to find their gifts before when they want to give those gifts. You have people reacting to promotion. And what we are seeing today are the promotions weve been running have been taken up at higher rates than they are last year. Which is interesting in the sense people are out there, theyre active, they want to spend, but theyre being careful how theyre allocating their dollars. Just to step back, i think its Pretty Healthy out there. I think its, you know, there are pockets of weakness like there always are. But overall, its not bad, but there are a lot of things that drive that. Gasoline prices, financings, mortgages. You know all the statistics. Doesnt hurt that the movements of the economy and everyones 401 k s filled up to where they used to be. And the jobs picture is improving, too. Its improving. Not great, much more modest recovery in terms of employment than it has been in the past. But the reality is people who feel secure in their jobs are out there spending on normal patterns than they were pre2008. What percentage you have would someone buy as a gift . And what is not considered gift at all would you think . Well, a lot of seasonal items. For example, the ski business. Which you know you dont really gift that. But its seasonal to yourself. We have a lot of gift items. Our Consumer Solutions business, things like coffee makers, margaritaville frozen concoction makers. Those are gifts. Absolutely. Have you thought about me this year . What ill be getting you this year . You got me the wine. I have it all organized. You know, i do have a nose hair clipper. I have something that will beat all of that, i promise you. For me . For you. Are you going to want Something Back . Hanukkahs over. Ill get you next year. Im not transactional like that. Youre not . Because you already missed next year i might you are sounding like a big grinch. You have a present ready to go . For him . You know for me, i need eight. One for each night. Thats a good deal. How do you set that up . Its a good deal. My question for you is we talk about all these retailers now doing sameday delivery. Does that change your business in any way . No. As a manufacturer of this stuff . No. I think greater efficiency is a way of trying to gain share. I think the convenience of shoppings become better and better. But its still about experience of shopping, as well. What does it do to the price point . Its got to hurt the margin of the retailer unless you think it gets built into the price point. Youve got some retailers very fast growing retailers who are much less concentrated focused on profitability at the moment than they are market share. Amazon would be an example of that. Right. So im not sure how often do you go on amazon, look at one of your products for sale and go, i dont know how theyre doing that . I dont. But a lot of people that work for you do . Yes. Look, the reality is, we monitor this. And its a very broad it we dont look at one thing and say, oh, my gosh, we analyze it. We look at it and we care about it making sure that our price points are, you know, pricing. I imagine you have to care about your other retailers. Of course. If one is selling it at 50 off and youre not, thats going to hurt you. Thats part of it making sure your products are out there at the appropriate pricing. But you cant call amazon up and say, hey, up, up, up a little. You have some rules. But the reality is, for the most part, what you found weve been able to keep pricing discipline in a market because weve been disciplined on how we sell. And, you know, defining which retailers get which products when you make new product introductions is a big part of that. If you want to buy the newest, best thing, youre probably not going to find it at a discount. Thanks. Well be talking to you throughout the show. Talk to you about the minimum wage. We have to. Do you pay anyone minimum wage . In jarden, very few. Very few. Some of the other businesses. But i imagine you care about the retailers and other businesses you own. Yeah. Burger king is an example. Hes dealt with carl icahn and every day he deals with the fickle consumer. Haines celestial ceo will join us to talk about his business and the take on the new year. And paul ryan, he just did the deal, hes going to be our special guest as he responds to the critics. Squawk box returns right after this. Every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. Welcome back, everybody. Take a look at the futures this morning. There are some red arrows, even though the dow was down by 129 points yesterday. This morning, continuing concerns. Dow down by 21 points. S p just under three points and the nasdaq off by two points. The tenyear at this point is yielding 2. 848 . Thats one were watching closely. And we do get important numbers. Retail sales and jobless claims. Both those numbers coming out at 8 30 a. M. Okay. We got a lot of stuff going on here at the table because we have a call. Buying organic food often involves paying more money at the grocery store. But is it a myth it needs to cost an arm and leg . Thats the question. Joining us is irwin simon, the health and organic food company who has brought all sorts of stuff today. This is the green juice. Its a six pack of juice. Weve got snacks. Theyre not really healthy, right . Look whats in it. 150 calories. Eight servings in here. Look at the ingredients. And this one probably is organic blue corn. Okay. Okay. Nongmo which is important today. A baked snack. A lot better than a lays. Heres the question. When is the price point of this stuff going to become competitive if it hasnt become competitive already with the traditional, i dont know what you call it, unorganic, not organic food . Okay. So if i went around the table here, i think most people buy healthier food for their families as Health Care Costs are going the way they are. And if you look at Health Care Costs today, 70 of Health Care Costs are selfinflicted, okay. So listen, we want to live longer. We want to look good, feel good, were going to eat healthy. Okay. Nongmo, one of the hottest trends out there in foods. Washington state, just tried to pass a bill, 49 of consumers said we want products that dont have gmo. The price point on this. Its 10 to 15 more. If youre talking a bag if it was this she should open her ears, not close. If this or tostitos, for example, how much more is this going to cost . 10 , 15 more, max. And here you are getting organic made with blue corn, nongmo, gluten free. I was going to ask you about the bottles, too. Blueprints become a big this is a big brand. Nobodys juicing here . Steroids . Juicing. How much is this bottle . Hemorrhoids. How much does this bottle cost . That costs about 10. Its 6 pounds of organic vegetables, okay. Its a meal, its, you know, meal replacement, or you want to cleanse. Right now, the new hot indict. Monday through thursday, you eat liquids. Whats the scientific rationale. If you get a corn strain that is resistant to pesticide. Give me your rationale why thats better because its not genetically modified. People have superstitions so that makes sense . So, joe, number one, lets come back to a couple of things. U. S. And canada are the only countries that allow gmo foods in the country, okay. Number two so. Where did all of these allergens go to . Today it went around, how many kids do we know that have allergies . This is thats preposterous. Associate allergies with gmo. No Scientific Evidence whatsoever or Analytic Data whatsoever that gmos have anything to do with allergies. Its altered with what we dont know. We know exactly what happens when scientists do this. This is its better. This is like voodoo. No, its not. Its better with the unknown than the known today. If thats your sales pitch and youre sticking to it, thats fine. But do it facing the real world. Real quickly, let me tell you about lululemon. The company came out with earnings better than expected. Reported 45 cents versus the 41 cents expecting, revenue a little better, 379 million versus the 376 million. But its the outlook for the First Quarter that has people concerned at this point. 78 to 80 cents. The street looking for 84 cents iffer the quarter. Also, though, for the fullyear, the beat for the Third Quarter and the miss theyre anticipating, doesnt look like its too far off the full year. 194 to 196 in terms of earnings per share. Again, that is not off, really, by much for what the street had been anticipating, they were looking for 196, the highend of that. The Fourth Quarter does look like its under pressure and has people wondering a lot about the turmoil and the controversy, whether thats impacting sales at this point, driven away customers. I want to go into a different place with you. Okay. Which is the question i had asked earlier was actually about amazon and about sameday delivery and whats that doing to his business and his margins because i assume its going to have to get built into the cost. Amazon is getting into the food business. Big time. Big time. Is this good for you . Is this bad for you . Theres fresh direct. Pea pod. And you will deliver this, as well, i believe. We do. Baby food, our pouchs are best. Amazon, four years ago they were not a customer within the portfolio of retailers. Today theyre within our top six customers and growing very quickly. If you come back and look at it, our diapers, our pouchs, our formula, wipes for Baby Products are bought over the web. And its one of the Fastest Growing customers that we have today. And, you know, weve spent lots of time with amazon fresh and what theyre doing in california, what theyve done in seattle. And if you want to order your flat screen tv and order all our products, youll be able to get it on amazon. Are they making money on your products . We were discussing, they may not be making money off certain products. I think they are making money off our products. And, listen, one of the big things that happens, especially with baby food when you walk into a store and a mom buys six apple sauce and youre at a stop. When you go to amazon, youre going to get your supply and not be out of stock there. It is here to stay and fresh direct, same thing. Fresh direct is a Major Customer of ours within the city. And their business is growing double digits with us also. Thanks for coming in this morning. Happy holidays. Happy holidays. Is that your holiday tea . Its a great mix for a drink and its a hot tea. And cold weather, we love to see cold weather. Its amazing what happens to business when the weather gets cold. Hold on. I would think every other retailer in the world thinks cold weathers awful. What happens. You hear about a snowstorm coming this weekend. Run to the store, stock up, drink tea when its hot, you drink a lot of soup, hot cereals, stay home, watch tv, eat snacks. Do you do a super caffeinated tea . We absolutely do. That might be bad for you. Hey, the juice is super caffeinated. This has caffeine in it . No, no, no. Thank you very much. Thank you. When we come back, were going to take another look at lululemon. Those shares under quite a bit of pressure. That stocks down by about 7. The Company Reported earnings better than expected but the guidance for the current quarter, the Fourth Quarter that has people concerned. Well tell you some of the comments from the ceo right after this. Plus, dell world 2013 is underway. We have the first on cnbc interview with the man himself michael dell, well find out where the pc is headed in 2013. Squawk box will be right back. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. 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 offers end december 31st. [ santa ] ho, ho, ho [ male announcer ] lease the 2014 glk350 for 419 a month at your local mercedesbenz dealer. Welcome back, everybody. Lets recap the earnings that were just out from lululemon. Take a look at the stock. Its down by over 10 , dropping to below 61 a share right now. This comes after the Company Beat Expectations for the Third Quarter. Came in with numbers of 45 cents a share versus the 41 the street was looking for. But for the Fourth Quarter, they see 74 to 80 cents a share. All of this is happening as the ceo, Christine Day points out. Saying this so far has been a year of challenges. While our outlook for the Fourth Quarter is being impacted by macro and execution issues, i believe that the investments were making in the business combined with the team in place create a strong platform for growth in the years ahead. Obviously, though, investors have some concerns. Also, yahoo is under fire for problems with the yahoo mail service. Some users say they havent been able to access email for days. Yahoo has said its aware of the issue and working to resolve it. But the company is facing increasing complaints that it is not providing enough progress reports. And more importantly, not solving the problem quickly enough. Cnbc, of course, we should point out has a content sharing deal with Yahoo Finance. Coming up, a squawk news maker now that some of the critics of the budget deal put in their two cents, paul ryan, hes back here on squawk. Hes joining us at 7 40 a. M. Eastern time to respond to all of it. But first, the beauty of business, William Lauder will join us to talk consumer trends, fashion and whats in the Product Pipeline when squawk returns. [ male announcer ] at optionsxpress, our clients really appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18883303136 now. Optionsxpress by charles schwab. 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 ] fedex one rate. Your grass waters itself. Your dishes wash themselves. So why dont your floors. Clean themselves . The Irobot Braava floor mopping robot. Irobot. Do you . Welcome back to squawk box. House republicans lining up support of the bipartisan budget deal despite conservative opposition. House expected to vote on that measure. Paul ryan is going to join us in a couple of minutes to talk about that budget deal. Also, another victory, a legal victory for apple in its ongoing panic dispute with samsung. Now refusing to ban sales of some older iphone and ipad models in that country. Samsung had claimed those models violated three of their samsung patterns. Were also watching shares of facebook today. Take a look, the stock will be joining the s p 500 index after the close of trading on december 20th. And itll replace teradine. As the countdown to christmas continues, were wondering what retailers are thinking right now about the state of the consumer. Joining us right now is William Lauder, the executive chairman of the estee lauder companies. Thank you for coming in today. Thanks, becky. We are trying all morning long to try to get a real feel of whats happening with the consumer. Youve got a great idea of not only happening in america but also internationally. What do you think, first of all, is the state of the consumer who would be buying some of these highend Makeup Products . How is she doing right now . We think that highend consumers doing well. She seems comfortable with her purchasing power. Whether shes arriving soon enough for any retailer, thats not certain im not certain i have an answer to that. She seems comfortable, doesnt have resistance to the offer price points. Sounds like she doesnt have resistance to the price points but may not be showing up as early as retailers would like for the Holiday Season . Well, i dont want to get into the short six days, but the shortened six days. Our Retail Partners seem comfortable. Internationally were seeing, for example, travel retail is accelerating. And that indicates, first of all, the wealthier consumer, they have the money to travel and they are shopping when they are going to the different airports around the world which make a difference. Thats what you call a travel consumer. Correct. And you know whether its heathrow, shanghai, some of the gateways in the United States, these are basically malls for which planes pull up and consumers are shopping big time when theyre in transit there. Theres large, large transactions going on, individual transactions and millions of people going through. And its a really big business and its growing rapidly. How big of a part of your business is it . Its retail, its well over 1 billion. Wow. Can i be honest with you . I go through airports all the time. I look at all this stuff. And i think to myself, itd be nice to buy something. But then i think i can carry it. The north American Consumer does not have the same compunction to buy in travel retail the way nonnorth americans do. The highest sales tax we experience is 8. 25 . The v. A. T. Equivalent in europe averages almost 20 . Theyre getting bargains. Theres a huge difference in the pricing just on those areas alone. Then you have some other basic pricing differences in other markets which make it a much more compelling Value Proposition for that consumer. Youve been watching squawk box or you were already on the consumer as she youve been doing that for years, havent you . She is lets be honest about everything. Thats what. Thats not sexist to say she. Especially for estee lauder. In my business, its over 95 . Why say he . Why be stuck in the past where you used to always say he. Yankee candle, 97 of the consumers 97 . Weve got to say she. I believe it. We said the other day, we were with langone. We said its she for consumers. He said, i take issue with that. What have you bought recently . Well, i would buy the jet but my wife would buy everything beneath the jet. So the jet probably is more than everything else, but the wife s is making most of the purchasing decisions. Yes. Absolutely. And how about you . You buy some stuff, right . I dont buy any. You look good. Thank you. Youre welcome. Youre going to like the way you look. Dont say that around youre not a mens wearhouse guy. No. And you did it naturally. Thats who we aim towards. Lets talk about the international. The International Consumer and particularly those who are in some of the developing markets. When you looked at china and other overseas markets. That emerging middle Class Consumer and so many markets in the world, whether its china, which shes emerged if not having emerging is way more to go. Look at brazil, for example, rapidly growing middle class. Look at middle east rapidly growing middle class. Eastern europe, behind the iron curtain in europe. Where those consumers are emerging. As they have enough disposal income to spend on themselves, what we find in beauty is because its approachable luxury, easy price points, they begin to spend those moneys on themselves because she says im worth it. What lines do you sell there . We usually start with brands like estee lauder and clinique, the brands that are approachable. And as it becomes more room at the top of the market, well bring the more luxury oriented brands come in. And we also have brands like mac bobbi brown. And depending on the propensity of the market, well emphasize the fragranceoriented brands like donna karen, michael kors. Weve seen numbers out of china suggest a 7 or 7. 5 growth number and think thats a concern, its not growing as quickly as we anticipated or maybe hoped. Do you ever see that as a slowdown potentially . Or has it been straight up . Most of the rest of the world would be dancing and the politicians would be reelected for life if they were delivering 7 to 8 consistently. As a company, you have to think, okay, were anticipating gdp of a certain level. Lets look at china, for example. East coast of china, more developed markets along the east coast. Theyre more fully developed and they are not, perhaps, growing as much as interior china. If you look at the runway for development in that part of the world, theres an extraordinary amount of development. Theres over 25 cities with populations over 10 million. Theres Something Like 50 cities with populations over 5 million. In north america, we consider a city with a population of over 5 million to be one of the largest metropolitan areas. Theres lots of them and just emerging with enough disposable income. From our perspective, theres a lot of room to go and grow within this marketplace as that middle class as more and more middle Class Consumers emerge with disposable income to spend on themselves. Look at the conversion and china, for example, from a predominantly industrial economy as they move toward a more consumer oriented economy as it becomes more fully developed. Theres a lot of room to grow. Is africa a continent you have a lot of growth in . Were seeing a lot of opportunity in africa. Subsaharan africa. Were continuing to see more of an emerging middle class and disposable income. Very powerful. And were now beginning to see markets like nigeria angola. Kenya. Angola a little less so because its smaller. But were seeing the nigerians, wealthy nigerians, showing up in london and paris with tremendous disposable income. Were able to follow them as they return home and start putting our Retail Operations into those operations. Its exciting. Theres an opportunity there. We have closed the gap, andrew and i on the purchase of cosmetics, for example, by men and makeup. 94 . What color do you wear . Depends on the season. Depends on my nature skin color. Mac . Mac is one of our best brands. N45 . Do you both do your own makeup in the morning . Not necessarily. Sometimes we do each others makeup. Oh. Weekends or weekdays . All right. William, thank you very much for coming in. Thank you. Up next, Budget Committee chairman and former Vice President ial candidate paul ryan, urging Party Members to support it, of course. Hes the one that put it together. At the top of the next hour, michael dell will join us to talk about the pc market. Tablets, the cloud and much more. Squawk box will be back after a quick break. Tro of project ma. Baron of the buildout. You need a permit. To be this awesome. And you. 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The deal negotiated by the Budget Committee prevents another Government Shutdown but fails to address some of americas biggest deficit problems as we know. Joining us now one of the architects of the plan, paul ryan, chairman of the house Budget Committee. Man, oh, man, we knew you when. Were glad to have you on, congressman. Its been too long. We p want you in here. I dont see the bigger you get, the more famous and higher profile, you still can come in here and sit on the set for an hour. I was there a few months ago. A few months ago. Now, this is you look at all the whats transpired the last couple of days. Let me start with one thing that the journal said today. And that was the deal, the deal was a craftsman like monument. E to the power of pragmatism. Youve gotten criticism. But this is the wall street journal, not the editorial page, but a craftsman like monument to the power of magmatism. You know where i stand and ive got to congratulate you on it. Im a conservative who has read my russell kirk and my berke. You cant shoot for the moon every time. You take steps in the right direction. Thats the kind of offense were playing here. We knew if we required that the other person violates their core principles, well get nowhere. Thats why all the grand bargain talks go nowhere. We decided to focus on where is that Common Ground. And i wanted to take a step in the right direction even though i couldnt get my budget passed. The budget in the house, reforms the tax code, doesnt raise taxes, thats what we want. Thats our ultimate goal. This is a small but modest step in the right direction. But in this day in age broken governments, by think its pretty good. Adds certainties, gets the government functioning at the basic levels. We dont raise taxes, we go over to the auto pilot side of government spending. Permanent spending cuts to pay for temporary sequester relief. 92 of the sequester is left intact here. What were saying is to prevent this impasse, a lot of our members dont like a lot of these military cuts, we prevent that from happening any further. And we say weve got to reduce the deficit. We think its a good template, good precedent. This isnt the bargain of a century. This in this divided government in this functional government we think is a modest but productive step in the right direction. You said youre a conservative and ive made the point that im not a kneejerk tea party trasher. Because as a conservative, the basic tenants of the tea party are id agree with them. But what i dont understand, we saw with the Government Shutdown, we saw with ted cruz, his stature elevated, as well. And others the more i look at it, since you need to be elected and need to actually get things done to further your goals. If you know beforehand that youre not going to be able to do any of those things, you probably eventually arent going to get elected or youre going to reelect harry reid. Or if youre cutting off your nose despite your face or your partys face, what is the what motivates a ted cruz or someone that almost its a scorched earth policy for the party itself. Is it personal motivation . I dont know. Im not going to get into that. Im not going to speculate. I wish you would. Its your party. Its your party. And im sure you want to succeed. And there are like i said, im with them on most of that stuff. But if you know its a dead end, whats the point other than your own personal career. So, look, i think shutting the government down is a dead end. If we could do that, twice in january and again in october, that takes our focus off of obama care. That takes our focus off speaking truth to power, doing oversight, watching the regulations, oh, and by the way, were going to reduce the deficit versus doing nothing under this agreement. And we get the appropriations process working again. That sounds like an inside baseball. But what it means is for three years, we give the continuing resolutions to the president so he sets spending priorities. Under this agreement, we are reclaiming the power of the purse, bringing it back to congress. Thats the constitution, so we can do oversight. So we can set spending priorities. So to me, this is a constitutional step in the right direction, reclaiming the power of the purse. Its preventing shutdowns which we think are bad distractions. And oh, by the way, would they inject uncertainty into the economy . And we basically make this divided government work. I just say basic minimal level. But to me, that is a step in the right direction. If i cant get a mile, ill take a step. This is a step. This isnt substitute for a budget. Our budget is what we want. Our budget is our vision. Its our goal, this is a step toward that goal. And, look, if in divided government, this is how its going to go, you dont get everything you want when the white house and the senate are controlled by the other party. Congressman, we have been watching the market. And yesterday, the market actually sold off. It surprised some people who figured it would be just good news to see any deal that came out of congress. Some people were speculating that was because it was a smaller deal. Others were saying, look, we knew this deal was come. This was a buy the rumor, sell the news. Jim cramer pointed out it hasnt gotten passed yet. Are you 100 sure you have the votes in the house to pass this bill . We have a majority of our majority. Were in good shape here in the house. Look, ive spent the day yesterday in my House Republican caucus. They understand that Government Shutdowns arent a good idea. That if we can get net deficit reduction without raising taxes, which is what this does that advances our principles. They also understand our budget is our ultimate goal. But with this president and this senate, were not going to get our budget in the law. We want to make good in an incremental way. So my colleagues here and the majority in the house understand that. A good majority of our colleagues i do believe will be supporting this. I feel good about where we are in the House Republican caucus. Steny hoyer was here the other day and was talking about it was before you made the actual announcement. But he was very unhappy with the idea of Unemployment Benefits would not be included in part of this. How many votes do you need from the democrats . Steny is upset because were asking federal employees to pay more for their pensions. Steny represents the washington, d. C. Metro area which has a lot of federal employees. There are some entitlement reforms in here that i know some people may not like. Hard working taxpayers who pay taxes for government workers are paying for benefits. Were asking that people pay a little bit more for their pensions if theyre a federal worker because they have a pretty good deal relative to the private sector and we want to equalize that. Hes a little upset about that. I understand that because he represents federal workers. We think its a modest step in the right direction. And 92 of the sequester is left intact. Its not like were blowing the budget caps or turning off the sequester. Right. How many votes do you need from the democrats . I dont know the answer. Youve got to get Kevin Mccarthy on here. We feel pretty good about this. Is it just the saying patty murray got the best of you . What about that you gave away the i saw some David Stockman comments yesterday. Talk is cheap, i guess, yeah . She wanted a big tax increase, we said, no. She wanted to completely bust the sequester cap, we kept 70 of the sequester in this year intact. She wanted none of the sequester. But i had to give patty some things, too. Look, its mutual. We both had give and take. We found Common Ground. I dont think either of us got the best of each other. Shes a hard, tough negotiator, an honest person, shes a liberal and im a conservative so we dont see eye to eye on a lot of things. Thats why this is a Common Ground agreement, its modest, not trying to oversell it. But we think in this divided government day in age, a step in the right direction. To the extent this could be a model for future compromise, what do you think was the distinction, the difference. Some people who said the president wasnt involved. Some people have said, you know, it was kept so small. In terms of the group. What is the lesson here . I think those are both probably valuable points. I think, andrew, we the when we started this thing, you know, i wanted more robust entitlement reforms like means testing or raising age limit. They would have none of that. They would have revenue increases. What we learned was they were just big things neither of us agreed to. We narrowed the scope to find where the Common Ground was so that neither person had to compromise a core principle. Thats how we got this thing done. So to take this model. Look, youve got to start crawling before you can walk before you can run. Basically were getting government to at least crawl here. Deep down, you know that its another two years where some of these really important things are not going to be done. How much of a disaster is that . That here we are with all the stuff plaguing our future, killing our future for kids and grand kids, not one thing is done. That has to get in your draw a little bit. I will not take a backseat to nib. Ive been proposing all these budget reforms, all these medicare and Social Security reforms. The budget we passed in the house three years in a row now, joe, balances the budget, pays off the debt. Gets us completely off the fiscal watch list. I dont think this president is willing and able to fix this thing. In the meantime, what can we do to make government work . You know, the republicans will want to win in 2016, these guys arent going away by then. How far right are you guys going to get pushed by the tea party so that even you or Chris Christie or general bush or whoever it is has to change who they are to get the nomination and then they could be ruined again for the general election like maybe some other people have been. If were going to save america and get this budget under control and keep limited government and economic freedom, well have to win a couple of elections. I dont think were going to have this grand fiscal bargain. I dont see that. Were going to have to win some elections to do that. And i think shutting the government down twice next year is not going to help us win elections. If we want to talk politics. Talk economics if we want to talk certainty talking making government work. I think its in the nations interest to prevent the shutdowns. And moving the ball forward as slowly as were doing it and win elections and fix the problem. Youve got to whisper to some of your colleagues. If you stick to your principles and crash and burn, then your principles are crashing and burning with you. You can feel good about yourself and go back to your people and say, hey, i stuck to my principles, but if it crashes and burns and helps the other side, its stupid. Its tough love. Anyway. Well see what kind of guy can run in 2016 when youve got lets get this done first. Congressman, we appreciate the efforts youve made. Its been something we all here on the set have really watched. Did you know i called you tall and kennedyesque, is that why you came on . I love you guys. Things must be going well for him, he hasnt been on recently. I guess things are really going well for him. They are. Yeah, theyre going well for you. But then youre on. No, its when youre in a three months of budget negotiations, you dont go talk on tv. Youll ask me those questions and i wont answer them. I dont want to be evasive on tv. Were glad you didnt talk and got this deal done. And youre talking to the right people when you do come on here. Come back soon. Thank you. Thank you, paul. Up next, yesterday hps Ceo Meg Whitman said the pc market isnt dead. That was an interview exclusively with cnbc. Now well find out if michael dell feels the same way. 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. From the pc market to the cloud, we talk tech with michael dell. Plus, breaking economic news. Jobless claims and retail sales just ahead. And then, welcome to the world of products and inventions from people around the world. We talk gadgets, cool gift ideas and more with the companys ceo. Squawk box on cnbc. Its estimated that 30 of the traffic in a city is caused by people looking for parking. Thats remarkable that so much energy is, is wasted. Streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then theres a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. The collaboration with citi was important for providing us the necessary financing; allow this small startup to go provide a service to municipalities. Citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. So the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge. 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. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Weve got dell. The chairman and ceo of computer maker dell joins us for a look at the pc market. Financial services in focus. Cnbcs global cfo council is in session with ubs. Well get thoughts on the volcker rule, our nations budget fix and his yearend review for the bank. Breaking economic news. Jobless claims, retail sales and import prices all hitting the wires at 8 30 eastern time. Market reaction and what it means for your portfolio as the final hour of squawk box starts right now. Welcome back to squawk box here on cnbc, first in business worldwide, im joe kernan along with becky quick and andrew ross sorkin. Sharing thoughts on the economy, consumer and markets is the executive chairman of jarden corporation. What was it . Altrista . Yep. And he became some troublemaker, right . And bought 9. 9 . And now youre an operator and its a much Better Company than it ever was. But most activists are not like you. Well, its one of those stories where the board of directors did the right thing and shareholders have been rewarded in ways i think they probably never couldve imagined. A huge difference if the board of directors does do the right thing. Look. Activism comes in all shapes and sizes and some activism can have enormous returns. Some at the end of the day only benefits the activist. You going to talk to him about this later . Were going to try to talk aubt this later. It is no the the grand bargain many were hoping to see, but he told us a few minutes that the budget agreement struck was based on finding at least some Common Ground. Thats a step in the right direction. If i cant get a mile, ill take a step. This is a step. This isnt substitute for our budget. Our budget is what we want. Our budget is our vision. Its our goal. This is a step toward that goal. And, look, if in divided government this is how its going to go. You dont get everything you want when the white house and the senate are controlled by the other party. Ryan says that the majority of republicans in the house do support this pact. Lululemon shares taking a big hit this morning. They were down 10 . This is coming after the Athletic Apparel maker Beat Estimates with the earnings. Falls well below what the street was expecting. The Company Blames both macro and execution issues. And right now, you can see the stocks down by 9 . Hilton worldwide begins trading on the new york stock exchange. The ipo priced at 20 a share. And, by the way, this is the largest ever hotel ipo. Okay. The del world conference is in full swing with investors hungry to learn whats new for dell in 2014. Now a private company. Joining us from austin, texas, michael dell, the companys chairman and ceo. Good morning, michael. Good morning, andrew, how are you . Great, thank you. Help us here. Give us a road map on the consumer side and on the b2b side in terms of what looks like. Not just what dell looks like, but what kinds of changes happen over the last six months while you were in the process of going private to put out this next sort of lineup . Well, we had a big year creating a tremendous number of new products and solutions. And were here to show those off to our customers and to listen to their feedback and their needs. We talk about helping them transform their enterprise that could be moving to the cloud, connecting with their mobile devices. Informing, getting all this value from all the data they have and protecting security, securitys now become a Large Business within dell. So were growing since the privatization. Weve been growing at double digit rates. And we had fantastic demand in our consumer business. Black friday sell through week was up 30 yearoveryear. So tablets and notebooks are strong, the Enterprise Business is healthy. And as a private company, were investing like never before in a bold way, really with a focus on the longterm and 100 focused on our customers. Well, in terms of that investment, what is the investment in . Whats the difference . Investments in, you know, the areas where we see growth. Its emerging markets, data center. We still see opportunity to consolidate the computing space with tablets and pcs. Building out our whole solutions and services capability. Continuing organic investment. Right. Were also today announcing a new venture fund. 300 million to accelerate organic you know, invention outside of dell. And well work with these companies to incubate them and give them resources and help them grow to be part of the eco system that were all a part of. Right. Michael, you guys Just Announced a new laptop thats going to run off of googles chrome for the first time. This is not going to run off of microsoft windows. The uz that does that, is this a prelude to more devices like that . You know, i think were seeing a real variety of devices now. Of course, our tablet business doubled from the First Quarter to the second quarter, doubled again from second to third. And this quarter it appears to be tripling. Were having Enormous Growth in tablets. Theres also this new category of convertibles and two in ones, venue, 11 product. Now google has the chrome book operating system. Weve introduced our first product focused on the education market. Were also partnering with google in the cloud. Googles becoming part of our Cloud Partner Program as is microsoft and a number of other leading companies in the industry. So were expanding our partnerships and alliances to bring our customers more choices. So when they decide, for example, to go to the cloud, they go with dell. You know, michael, we have been trying to figure out what to make of the laptop and the desk top pc for consumers, that whole market has seemed like its been going away like its been dying. But we were having conversation around the table, i think it was yesterday because meg whitman is doubling down with hp and saying, yes, they are staying in this. Joe and i both realized we need to buy new laptops coming up. What do you start thinking about . Looking at laptops and desk tops, how long will these things be around . What should we look at the future when were thinking about them . You know, this is a market in industry space with 500 Million Units sold per year. While theres been some elongation of the replacement cycle, these devices are still very essential to how you do business. I think youre using them every single day in your lives and there are all kinds of new interesting things occurring. Of course, you have these two in ones and convertibles, were introducing a new 4k 2k display. Think about this, you take a picture on your smartphone and it has 8 million pixels or perhaps more. Well, the display you have on your desk probably can only show you 1 million or perhaps 2 million pixels. Youre only seeing maybe a quarter of what the image from your smartphone is. Were seeing the resolution is the new gigahertz. Tremendous demand for highresolution displays. In not only desk top environments, mobile environments. We have the highest resolution, workstation, you know, mobile workstation out there. And interestingly enough, our demand for pcs is up double digits. I think theres some industry consolidation going on. Clearly dell is gaining share. We gained share for the first three quarters and im quite convinced well be getting share. Back to beckys question. So five years from now, im trying to figure out what im going to be buying. And i cant see its like i hate those ipad key boards. The spaces never work, theres always a v where the space is supposed to be. Why . Im going to need a keyboard still and im going to need a screen still. I dont know how that advances. Its not going to give me a back rub or anything, right . Or something it seems like were stuck with that. Thats what its going to be unless im buying a drone or something to take the cleaners. Its still going to be a keyboard and a screen, isnt it . Yeah, were working on the whole telepathy thing where you imagine things and it happens. But until we get there, displays are important, visualize information very quickly with a display. And, of course, people are very used to keyboards. Theres lots of new foreign factors. I dont think youll see one device that kind of wins everything. Youre actually seeing a proliferation of many different kinds of devices. And we see user preferences sort of run the gamut. And were giving our customers choice from, you know, mobile devices, tablets of all shapes and sizes. And there is still a professional workstation market. You know, if youre doing complex engineering and design and, you know, youre doing Digital Content creation, you want a vivid display. These are amazing when you see them. If you sit down in front of this for about five minutes and compare it to what youre using today, guarantee you, youll never want to go back to what you had before. And were going to make these affordable. Were going to do what dell does best and drive these into the mainstream just like were doing in the data center and software services. Michael, youve talked about a lot of positive things going on in the business. But tell me as a private business, whats the biggest thing youve done differently as a private company as opposed to a public company. We lost audio. Oh, we lost audio . Michael dell. That was a good question. We didnt get the answer, but we will hope to have michael back to answer that question very soon. Good pro moe. Good tease for the next time. Coming up, the council in session. Tom naratil will join us for an outlook for 2014. And then at 8 30, breaking economic news, a little jobless claims data and also retail sales and import prices will be out. Before we go to break, an update on a story weve been following. The futugitive master mind of a ponzi scheme has been arrested in peru. Eric bartoli was featured on cnbcs american greed which originally aired in june of 2012. He stole allegedly more than 65 million through Cypress Funds telling investors he would invest in latin america and United States. In 1999, he fled from his home in ohio. He was indicted in october of 03 on ten counts of fraud. Its suspected hell be extradited. This shows turning into americas most wanted. American greed got this guy. And its not the first time. Well be back. [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. 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 ] fedex one rate. 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. Is that because people are writing in. Imagine Voice Recognition in five years there wont be any keyboard. But im thinking about, youll say button to the computer, it wont know i like to say i really would like to say buddon with a d, but then when i overcorrect. The computer will be like, did he say butt on . Manhattan. Youve got to start speaking. Youve got to work on right. And i say, you know, i swallow a lot of my words. I read corduroy to the kids, you know, corduroy. Yeah. And hes missing a button. Is that how the kids are learning it . Dont get the kids talking like that. Please, theyre going to go to school and get bullied. Who says it . Three big stories affecting the but im worried. People talk differently, right. They do. And poor siris got to be that does not compute. Anyway. Three stories affecting the Financial Services industry this week. Federal approval of the volcker rule, a compromised budget deal and rumors of a possible taper in december. What will 2014 look like for the sector . Joining us is ubs Financial Officer tom naratil. And just in general, tom, do you what affects yo uh most . Things happening to your parent or things happening here . Volcker . Youve got to worry about all of them. We have to worry about all of them. Its a combination of Regulatory Environment in 2014. You know, it was going to continue to be part of the theme of the challenges well have to address. Right. But one of the things that actually is positive. I cant Say Something thats positive that happens with the volcker rule. Regulatory clarity is far better than regulatory uncertainty. Even if its more punitive and more restrictive. As long as you know what it is, its still better. It allows us to actually start to plan the way wed like to alter the business, understand the preparations. For ubs, what do you like best about what does it do for you that makes you a better competitor against other people that are affected more. Whats the worst thing in it for ubs . If i look at the volcker rule, we actually adapt it to some of the changes a few years early. Two years ago when we change our strategy for our investment bank, we actually drop proprietary trading at that point in time. Didnt wait for the implementation of the rule or wait for the phasein period. And i think, you know, we never thought that would be an adjustment that would end up being negotiated out of what the ultimate the ultimate rule would be. I think if you look at the rule and one of the bigger challenges next year for the industry as a whole, is it going to be preparing all the documentation that youre going to need to support decisions you make around macro hedging, the way you treat your liquidity reserves as a whole. Certainly increase burden, but at the same time, knowing what it is puts us in a position where we can prepare for that. Overall, we had someone earlier on, it was a mediumsized bank. City national. Saying dodd frank was tough for them to deal with. Not you so much . Look, i think the overall mediumsized banks. I think in some ways its a little bit tougher for them. I think the large, the globals have had to adjust more quickly. Investors, quite frankly, have been the ones putting pressure on early adjustments to things like building up common equity capital. The guys that caused it. Its less, you know, for the guys that caused it for the innocent medium and smallsized banks. I wouldnt say its less challenging, weve had the ability to deal with it more quickly under the rules. Is it okay. Heres my volcker question for you. You guys say you got ahead of this. How many firms do you think havent gotten ahead of this . You know, i i feel like most cfos if they sat here at goldman, morgan, citi, youd say oh, weve been ahead of this for two years, too. No . I think the industrys been anticipating a lot of this. I think some of the concerns were, some of the proposals in the last couple of weeks about how extreme the rule could have been. I dont think any of us were prepared for that level of an extreme move. I think where weve ended up, i think the industrys in good shape. You want a steep yield curve or a stock market at 20,000 at ubs . You know, for us and for our client base since the businesses core business is wealth management, obviously higher invested asset bases is beneficial for us. Yield curve, actually the thing thats more damaging to our p l is a steeper yield curve. Wed be more comfortable seeing parallel rise in rates is one of the best things for future p l. Right where they are, then . Wed actually like to see the fed begin to 100 billion a month. No. Begin to normalize. Really . Why . If the markets going up . You get distortions in asset prices as im sure you know. And at the same time, the pressure the eye of the beholder. Well, the pressure youre also putting on deposit profitability for banks. One of the bigger pressures for the industry. You said you didnt care about a steeper yield curve. Again, shorter term, rise in shorter term rates benefits us more than longer term rise in rates. Look at this. Thanks to ubs cfo and now i know my abcs, next time wont you sing with me we do this every day at home. And and hes at the cfo council too. On cnbc and now youve got to go over to cfocouncil. Cnbc. Com. Get a leg up on the trading day with the morning squawk newsletter. Go to our show page, squawk. Cnbc. Com and sign up. Morning snapshot is a look at the days top stories, guests and water cooler stories that well be squawking about all morning long. Sign up and get morning squawk in your inbox every weekday. Squawk box on cnbc. Profit from it. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Pepsi is replacing cocacola as the official beverage supplier for Buffalo Wild Wings. The new deal beginning with the new year. Pepsi and Buffalo Wild Wings planning a Market Initiative as part of the agreement. Bleu cheese and the carrots. I need something with a little more kick than pepsi and coke for a sporting event. They can mix it. Mix what . No, i need beer or something. For a sporting event, right . Who cares if its it could be a jack and pepsi. Are you a hard liquor guy . Not really. Zima. Yeah. Zima. As weve said. Little spritzer. Whats that one . Also yahoo naming the fast food yahoo is naming the Fast Food Company of the year and it is wendys. Thats the winner, Yahoo Finance blog, the exchange saying the companys image revamp and its bet on bread paid off for shareholders. Im surprised that bread is paying off for shareholders given the carbs conscious thing. Another factor was the restructuring of the costs, now on track for the best annual profits in years. The blog pointing out that the success of the pretzel Bacon Cheeseburger and trials of flat breads that well, does that come with an angioplasty . No, no, no. The stock is up more than 75 over the past year. Clearly wendys isnt the only place in town that rolls out trials and new breads and mcdonalds went with wraps, wings and egg whites. Burger king had a turkey burger, lower calorie fries. However, yahoo points out that the pretzel bun in particular was a big step for fast food. For the fast food giant. And cnbc has a content sharing partnership with yahoo. You dont even wait for me to say bartels and james. At this point you say i drink wine coolers. Have a mikes hard lemonade. Havent tried that either. I like the satisfries. You are burger king. I am on the board, i will confess. But i think theyve had a great response. It shows up in the numbers. I havent tried them yet. Theyre really good. 40 less fat. Its a good product. Does point out that burger king has trailed for years. Ive always said, get with it. You dont need the plastic king that looks like hes going to hurt someone. Its a different company. You know that. Who picks the fries . Jobless claims coming up. Plus retail sales. 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. 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. Your grass waters itself. Your dishes wash themselves. So why dont your floors. Clean themselves . The Irobot Roomba vacuum cleaning robot. Irobot. Do you . Welcome back to squawk box. A litany of data. Lets start at the top. Retail sales for november up a stronger than expected up. 7 with a positive. 2 revision to last month. Lets do the xs, double expectations. X autos and gas up. 6 , double expectations, and all of those also had positive revisions from last month. Lets look at initial claims. Holy cow buckle up up 68,000 to 368,000. And if we look at import prices also for november, down. 6 , close to expectations, thats month over month. Lets look yearoveryear, down 1. 5, also close to expectations and there are revisions but i dont see them as making the huge, meaningful issues, export prices were up. 1 , thats pretty much it. Is that enough for you . I think if we have to summarize, Interest Rates hovering around the same place 285 or so, preopening equities still under a little pressure. International equities under a little bit of pressure. But at the end of the day, i like the retail sales number. Id like to see a one handle in front of it. But it did best expectations a bit and theres a story to initial jobless claims. Ill wait for the experts, up 68,000, something doesnt really seem to jive on that. But, it is what it is at this point. Theres a lot of different seasonalties that could be at work here. Back to the desk. Thank you, rick. And steve, you didnt flinch. Steve liesman is here with more on the numbers and market reaction. No. Thats a huge number. You mean the claims thing . Yeah. I flinched a little bit in the sense that i expected some revision upward because of the thanksgiving rick was absolutely right. You saw nothing. It was the left cortex sending a pulsation to the right cerebellum. Hes a smart guy. You have a new shirt on, too. I do have a new shirt. You dont like these. It crosses at the top. Joe is my fashion consultant, my economics consultant. Youre in trouble. I want to give you one piece of data which we call core retail sales. A number that feeds into gdp. And we follow this because it tells us about growth. Other numbers in the retail sales report, the government gets from other sources. But this number here is up 0. 5 . I saw estimates of 0. 3 , and they revised up october, 0. 7 . Bottom line is, joe will do the math, but my guess is we are running at a 3 clip for Consumer Spending in the Fourth Quarter here. Did somebody Say Something earlier about this . So two. You were two, werent you . Conservative. No, wait, thats just the consumer. The idea was we were going to have the huge inventory drawdown. Which by the way the wholesale trade data. Rumors of a massive slowdown in the quarter could be pending on what our guest says greatly exaggerated. You want to weigh in . Sure. You know, clearly the consumers holding up. I wasnt as worried about Consumer Spending as so many people seem to have been. Because what weve seen over the last three, four, five years, we have a big push on black friday weekend and cyber monday. And then the consumer goes asleep for awe couple of weeks. Here we have a situation where a very shortterm Holiday Shopping season is probably going to get spending picking back up really quickly. You know, the economy has a lot of momentum in it. I dont think theres any question about it. You know, we could have a 1. 5 , 2 growth rate, maybe even less than that in the Fourth Quarter. But thats all inventory swings. Fundamentally, i think were growing to an after 3 and thats going to accelerate as we get into the first half of next year. What do you make of the claims number . Yeah, go. Yeah, you know, i was thinking it would get up to about 330, 335 maybe because nobody knows how to seasonally adjust on a weekly basis, especially when thanksgiving has the latest it could possibly be. This is kind of an odd number. Lets wait a week or two. Also, if you look at the 296 we had the previous week and adjust it for the labor force. It was the lowest that weve ever seen. Claims per size of the labor force. That made no sense given job growth. I think were getting to something in the normal range around 320, 330 on claims, thats about a 200,000 or a little bit more on job growth. Its all coming together. Joe, where do you stand on the fed . The fed puts all this into the hopper, stews it around, comes up with what next week . Next week they say they like the trends that are going on. They want to see theyre sustained. I think theyll give some hints that if this is sustained in the early part of next year, theyll be willing to taper. I dont think theyll start even in january. I still have march because, you know, when you go this far with this much purchases, lets make sure you make the right decision. It doesnt hurt to wait another month or two. I think thats what theyll indicate that early next year theyll start tapering. Its a new day. Are you back to not tapering . Or are you still tapering . I have to say im feeling increasingly out on a limb, but my call is good, its a good call. If it was a close call in september, the data has moved substantially in their way. Joe didnt give a rats patootie. No, he does not. I want to pencil this in because you are getting a bit of notoriety on this. So you think of the statement. It isnt just going to be pencilling in some information regarding the taper at a future date. You believe in this statement theres going to be concrete facts about a taper when and the size or do you believe its going to actually happen . I think its going to happen. More likely than not to happen. Thats my belief. Still, everybody around here, you think its going to say Something Like were going to begin tapering like next week . Well, i guess what they do, technically, rick, if you want that answer, they instruct the new york federal the desk at the new york fed to reduce the amount. And i maybe it begins in the next month, i think. Im not sure about how those instructions actually work, but i think its not something they you dont think its going to be were considering it. I dont think so. Look, bullard said we should do it. And i want to get it straight. Youre right. Youre right, rick. And i have to say the more people think im wrong, the less likely it is to happen. No, no. Its not about right or wrong, steve. Everybody wants to try to get ahead to the end of manipulation. Its very important. All right. Okay. Joe, im not changing my mind. There it is. Thank you, guys. Weighing on me now. Whats weighing on you . Im worried now you should be worried. They could do anything. I want you to be right. I want to be right too. I gave you a hard time about it. I want you to be right, not me. Im going to get yelled at. Weve got a break and were going to come back because weve got a special gift, gadget, thing of magic. Can keep your cord straight and your wine in line. Very cool products. Squawk box coming back after this. Get a leg up on the trading day with a morning squawk news letter. Go to our show page squawk. Cnbc. Com and sign up now. A snapshot of the days top stories, guests and water cooler stories that well be squawking about all morning long. Sign up and get morning squawk delivered in your inbox every weekday. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. If every u. S. Home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes . 1 million . 2 million . 3 million . The answer is. 3 million homes. By 2030, investments in Energy Efficiency could help americans save 300 billion each year. Take the energy quiz. Energy lives here. 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. Welcome back, everybody. Retailers are heading into the final days of the Holiday Shopping season. And one company that banks on this time of the year is the disrupter quirky. Accounting for about half the startup sales. How are the holidays treating them so far . Joining us once again is 27yearold ceo and founder ben kauffman. Its an amazing way of developing things, people come up with ideas and you create the products. You can explain it all on your own, its great. People make three brand new products every week. The world discusses which ones are the best and we make sure they wind up on retail shelves. First of all, since youve been with us the last time, youve got a 30 billion investment from ge, major partners from people like home depot. This is big news, youre making a lot of progress in this area. Yeah, weve enjoyed partnering with ge this year. Weve been able to leverage their scale and all their technology and bring some cool like smart products to life. What do they help you with . I dont understand. They help us with all sorts of things. A Global Research center. And they create all sorts of crazy technologies and were able to pair those technologies with ideas coming in from the community and bring them to life really quickly right here. Now, you do things for the holidays. This time of year, youre knocking out what kind of products . Were knocking out things incredibly giftable. The gifts you can find on quirky. Com are amazing, no ones seen before because they were just invented. Show us some of these. This one is fun and a Great Holiday product. It looks like a scissors, but the blade falls back into the handle. So as youre cutting open those gift boxes. You dont have to worry about cutting your hand. I do this. Just simple inventioned. This ones fun, people wound up with a lot of things in the trunk of their car. Oh, for the snow, right . Yeah. This opens up and its a shovel so you can dig your car out. If you take the brush all the way out, its a brush. And then you can stick this in the snow and its a reflector. This is called th o, r. Is there a scraper on there . Yeah. You put this in and use the tip for the scraper. Its pretty cool. This ones actually from jim robinson, one of our board members. And, actually, its a reinvention of the swiss army knife. This is a build your own multitool box. For fixit guys, dads, grandfathers, you can actually pick what tools you want to put in your multitool. And this is how jim did his Due Diligence on his company before we made our investment. He tried the process himself. And heres the product. And hes made tens of thousands of dollars off this. His partners arent too happy about that. Tell me about this one. This one is bandits. Thats a rubber band. It is a rubber band with a hook. And this is my favorite example of why quirky needs to exist. Because . I did not like this product. Theres live video of me saying this will never sell. Its terrible. Why does anyone ever need this . Did your head of sales Say Something, too . He said if we made that product, he would go stand naked in time square because its so silly and we didnt see a need for it the two of us. But we were overruled by our team, the community, the power of all of us coming together. We ended up making these, weve sold tens of millions of pieces. Our inventors made hundreds of thousands of dollars. I still dont know what people do with it which is why they started a blog called howibandit. Com. All things they tie up. Its a very utilitarian product. I dont use it myself, but the world needs it and the world loves it. Has your head of sales stood naked in time square . No, he has reneged on his bet and we remind him of that every week. What is this board over here . This board here is from Michael Pearson who is a an avid skier and board sport guy. And invented this thing to train in the offseason. You can ride this as a surf board or as a i dont know whats going on with it right now. Its not really moving. Theres actually a disclaimer on the product that says dont use on live tv. Because it was on a you can actually ride it and drift back and forth. Feels like im doing this incredibly well right now. You can actually train for surfing, snowboarding and actually turn this way and do skiing. So, yeah, theres all sorts of stuff and this last gift is nimbus, which is a digital dash board for all of your internet things. Its incredible. Its internet connected alarm clock is the way to think about it. What does it do . Gives you stock reports for your cnbc friends. It gives you traffic, weather, how many emails you have. Basically is a physical representation of everything going on in your online world. Thats cool. Thank you again for coming in here. Come back when you have more stuff to show us. Of course. Thanks so much. Andrew, over to you. Lululemon reported earnings earlier this morning and joining us now on the squawk newsline, pam quintilliano. Joe is applauding my pronuns g pronunciation. You can see the stock market down, 9 00, what do you want to hear from them . Well, i want to clarify, earnings were very hot, 4q guidance, not so hot. They beat 3q significantly. The problem is that the implied guidance had previously been 84 to 85 and now its 78 to 80. And the company was saying its a combination of macro and execution issues thats causing them to downwardly guide. More freaked out by the macro issue or by their own problems . The macro issues are impacting everybody. This earnings season, the majority of the retailers in our universe have guided down for 4q. Very few that have stayed in line and no ones raised. Macros a big concern the execution issue is what we need to hear more about. They do have new people in place on the product side. And also handling more of the controls on manufacturing facilities. But it takes some time to clear out obviously on issues what everybody wants to know whats going on there. Real quick, do you think their stores are too big . No, because part of the hook for them is that you can go in and actually have a yoga class. Theyre a yoga studio, as well. And you have to keep in mind if you go into a street location in new york, perhaps, it may appear large to you, but when you go into the mallbased locations, those are smaller. Okay. Pam, thank you for joining us this morning. Thank you very much. Good luck with the call at 9 00. When we come back this morning, jim cramer on the news of the morning. The Economic Data and much more. Plus, a preview of whats coming up on squawk on the street. Squawk box will be right back. Tomorrow on squawk box, its a retail bonanza you wont want to miss. Think of it as black friday for investors. Former chairman and ceo of saks is our guest host. The ceo of hsn talks holiday deals and outlet outlook from steve tanger. The fun begins at 6 00 a. M. Eastern time here on cnbc. U 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. So you want to drive more safely . Of smart. E rate. Stop eating. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum 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. With us, a visit from jim cramer. I refer to you because youre loaded and youve made it in the markets, among other places. I wonder if youve changed your notions on the market and other things. Do you still think it might not get done and thats why the market doesnt like it . I think it will get done. I did a lot of calls and checked with the people who are oppositional and they dont have the horses to be able to stop it. I know it says this is over, as soon as they have the budget deal, they can start tapering. I dont think washingtons off the front burner. I do think there will be unemployment issues that will come up. But if we can get rid of the budget, the debt ceiling issue, which is what some people are telling me were going to have, we can have smooth sailing. The action is based on very little news flow, watering balances, switching of the s p. I remain washington is going to be an issue but maybe less of an issue and therefore we can focus on the earnings, which i think is quite good. The guys that think it moves on entitlement reform or austerity, theyre saying the far right got its rear handed to them on this deal and this reversed some of the gains made and thats why the markets down because they gave up too much and didnt get anything they wanted. I dont think so. Look, when youre really in a jam, chuck todd knows these things. He said you have to realize this is a real bipartisan move. I said maybe some people will say gridlock is good but were reading too much into it and being way too washington sensitive here. The companies are doing well. Weve had an unbelievable run in the market, i think its a consolidation. I dont think its more than that. His judgment is clouded by miami but about other stuff i think hes better. Miami Florida State, youre kidding, right . Youre going to beat Florida State . Harwood thought duke was going to. The wifes a Florida State person so hes influenced on that. The more on i work on this one, the more i feel better about the noles. Auburn cant go from terrible to winning the National Title in a year, can they . No, they cant, just like the chiefs cant. And the bengals. We got to worry. The world is coming to an end. I forgot to mention that. Coming up, well look back at what we covered this morning. Plus more of the state of the consumer. Squawk box will be back right after this. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. [ male announcer ] 1. 21 gigawatts. 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. Welcome back. Weve got a big show today with some big guests. Weve learned a lot today and heres a rewind of what weve seen. Do we think its a good template, a good press didncede . This isnt the bargain of the century but in this divided government, it a modest step in the right direction. Were growing since privatization, been growing at double digit rates. Weve had fantastic demand in our consumer business. Black friday sellthrough week was up 30 year over year. Tablets and notebooks are strong. Regulatory clarity is far better than regulatory uncertainty. Even if its more punitive and stricter . As long as you know what it is, we can understand the preparations and adjust. Lets get back to our guest host Martin Franklin. Youre on the board of burger king. I am. I want to know this debate about minimum wage and whether it should be increased. What would it do on your business . Im on the board, i dont set the policy. But the reality is i think for minimum wage, if you have a dramatic move, ceos and all companies are going to look at working, you know, more efficiently with fewer people which is not going to be good for people who youre trying to help. Automation . Yeah. At the end of the day you need modest moves, like any other curve, youll get the benefits that you want if you want to make some small changes and modest changes, i think thats fine. If you do something dramatic i want to get to activism. Do you worry, though, that there are more people middle aged and others that are working at a burger king than it being a starter job that you did out of high school and until you got another role . Qsr is a huge employer in the service sector. Its just reality. Activism. Youve been an activist. I dont know if youve been on the other side of an activist. Have you . No, never been on the receiving end. Are all activists created equal . No. Theres an enormous disparity. I think the tough thing is for board of directors to ascertain the difference between the two. If you look at whats going on between mens wearhouse and jos. A. Bank, i think they should kick shareholders out of the room and look at the factors, thats their duty. You have to be discerning on what you do. Martin, thanks for joining us today. Join us tomorrow. Right now its time for squawk on the street. Girl, you want to come to my hotel, ill leave you my room key good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Two big ipos at the big board this morning, hilton and aeromark. A couple of Profit Margins to keep your eye on. Seeing a little creep after the weak 10eyear, more talks about stan fisher potentially going to the