Transcripts For CNBC Squawk Box 20151117

S p futures up by 8 and the nasdaq up by 21. Quarterly results coming out from home depot. Heres whats happening. The company beating estimates by 4 cents with profit of 1. 36 a cha share. The Home Improvement retailer also forecasting full year profit and thats also exceeding estimates. Well talk about that in just a minute. Among the other big stories, the dollar hitting a 7 month high against the euro this morning. Among the reasons, expectations that the fed koul begin to raise rates next month. A lot of whale watching on wall street as some of the most powerful investors reveal their latest portfolio moves. Carl icahn swapping his stake in ebay for the same number of shares in paypal. The activist investor also disclosed his position in iag. Now we know the numbers. He has been calling for a break up of that insurer. Also David Einhorns Green Light Capital had a tough time of it boosting its stake in apple in the Third Quarter. Hedge fund also upping its holdings of General Motors and michael korss. Well have more later this hour. Home depots market cap right now, 155. 155 billion. Ibm is 129. So someone started home depot in his lifetime and thats a reflection of the past 25 years you could either own home depot from zero to 155 billion or own ibm from 200 billion back down to 129. Really a tale of two different trajectories when youre looking at these stocks. One of the things we didnt get to him yesterday was his thoughts about share buy backs and when it makes sense and when it doesnt and the flight of capital. Why it makes sense to be in the High Growth Companies and why you see big valuations in those companies as a result. Someone told you im going to start a chain of Hardware Stores and put mom and pop out of business 155 market cap for home depot. Unbelievable. Lets tell you about stocks to watch this morning. Urban outfitters down sharply. Quarterly Comp Store Sales fell short of estimates. The stock had been under pressure during the regular trading session though because the Company Announced its purchasing an Italian Pizza chain. Some stores already have restaurants and coffee shops attack attached to them. Are Companies Going to have to lure people in. You can see the stock is down by 10 . Aig announcing that it has adopted proxy access that will make it easier for investments to nominate directors. A shareholder that will be able to nominate two candidates of 20 of the board. Aig is a target of carl icahn. That stock is down by 15 cents. Also shares of nuisance communications getting a boost after better than expected earnings and revenue. That stock up by 9 . One of the great take over targets. We thought apple was going to buy that company. They do the voice recognition. Apple has never really admitted who they use some of the licenses from but nuance has always been the company that people expect. Lets tell you about stocks to watch this morning. Enbridge cutting 5 of the work force. Now blaming the long slump in crude prices for that. Shares of wayfair this morning under a bit of pressure. Hit after Whitney Tillson knocked it calling it his biggest short position. It will trade below 10 within a year. Also chinese internet giant daidu and citic bank are working on setting up a direct bank in a push to compete with rivals. They would need to issue a license to establish such a set up. The bank would likely focus on Wealth Management products and loans to consumers and Small Companies. The broader markets this morning. You saw yesterday and we noted that europe was well behaved yesterd yesterday. Were adding it up over 200 points higher and some of that is from being down 450 points on thursday and friday and big rebounds in Energy Issues and defense stocks also yesterday but now after u. S. Markets above 200 yesterday, theres today over in europe. Qe is, you know, full on over there but you would think there would be some i mean i guess its as slow as its going to get over there but the slow growth story is already in place in europe but obviously the developments over the weekend are not going to help economic activity. Theres asia, japan, the hang seng and shanghai. Still in a good market after trading at bear market territory after a big run up and then theres crude today. A big day yesterday and chevron some of the biggest gainers in the markets yesterday. Its weird. We now seem almost correlated with the oil markets. Some days more than others it seems like. 228 on the ten year. 107 again on the euro earlier today. 106 now. 10664 and finally gold which is i dont know, people run to the dollar and to bonds at this point. They dont go into gold anymore. Now back to the latest of the aftermath of fridays deadly attacks in paris. Michelle joins us from france. Beckdy heres what happened overnight and this morning that you need to know. Two arrests in belgium. The police there saying they charged two with complicity and terrorist activity. However they do not believe the two individuals were in paris on friday night. On that note the manhunt is on going for two individuals. The alleged mastermind of the flot a plot and one of the men that rented a car found outside of the theater where so many people died. They vowed more coordinated action around isis and overnight the french did more air strikes in syria in the selfproclaimed capital of the Islamic State and thats the group that took credit or responsibility for friday nights attacks and then outside of the country of france, russia now saying that they do believe it was a bomb that brought down the metro jet plane in egypt and i bring that up only because there is this now increasing concern that when you pair what happened here friday night with what happened in lebanon are we seeing an increased pattern, a threat that suggests there will be far more terrorists attacks in the future and what kind of response needs to come either from individual countries or from coordinated action at this point from the west. Guys back to you. Michelle, thanks. After 200 plus points yesterday up another 70 this morning. In contrast to the traditional flight to safety trade weve seen after past terrorist attacks, joining us now is the chief economists at rbs and the executive director at Morgan Stanley Wealth Management. Both of our guests, i guess, are looking beyond dan, looking beyond the developments in paris on friday and viewing the oil decline is good for consumers and that takes hold of you. Absolutely. Good to see you again. You can never down play the human impact of what happened on friday. It was horrible. Historically however when you look back at terror attacks they havent had longer lasting impacts on the market and markets have tended to rally in the weeks following these types of events. Now while there might be a near term hit to Consumer Spending on fears we think the two bigger drivers to your point are low gas prices and wage inflation, particularly at the low end. Thats a trend over the last several months that we think continues to persist and drive Consumer Spending in the u. S. We still have the slope in the yield curve so that lessons the likelihood of a slow down here and two of the head winds, emerging markets slowing down and the devaluations in china, both of those are starting to abate. So you think that we go into the next gear in the u. S. Economy . We could still see positive returns for the u. S. Market. The u. S. Economy can remain resilient in the face of all the overseas developments. You mentioned it a moment ago. Shanghai index is off of the lows. A lot of data stabilize on the retail sales and the way we look at it if we zoom out and think about em, theres no reason why they cant follow the same play book that occurred in previous developed market analogs. Look at the u. S. Going back to 2009. We had the dollar weakening. Japan also did qe and had weaker currencies that lead to growth as well. Europe is the latest back in january. So why cant em follow that same precedent . We think that will stimulate growth going forward. And michelle. Its crazy. Expects a rate hike either in december or sometime in 2016. Hes out on a limb here. He says either december or next year or the year after. Well, im still saying december although its 92 or 98 . One of the polls i had seen last week had 92 of economists. Thats a different story though. Which is why we talk about looking at the odds implied in the markets for fed funds rate hike. This is a reminder of why youll never see it fully priced in because something could happen in the days or weeks leading up to the meeting that could change the whole landscape. Now i dont think as tragic as this was that the paris events would yet fall into the category that would derail the baseline plan to take action this year but watching and then seeing how Financial Markets have reacted reinforces that point and watching to see the fall out in terms of financial conditions. A tightening in reaction to any global event to me is the biggest thing to be watching. We have a 250 sell off on thursday and then friday and then we didnt get through 24 hours before paris. So we still have four. Exactly. Its a very uncertain time globally now with this on front of us and who knows with market breaks and Everything Else we have to deal with. Walmart down 30 or 40 . Macys and nordstrom down 30 and 40 . Theres jitters going into the Holiday Season anyway although i think the fundamentals for the consumer look solid. So i think it will be a fine Holiday Shopping season to say the least. We have seen this from the fed before. They lead us to the edge and always something dissuaded them from taking action. They would be crazy to raise now. Well, i was going to say. Theres no inflation. The markets are uncertain. Dollar is off. 19 . They would be insane. The dollar is the one thing though. They would be insane to raise rates. I wouldnt be shock first degree the dollar sold off on the news. Lets see if i can talk them out of it. When they race. The dollar is not up, i mean, its up sharply against the euro and major currencies but for the u. S. Economy and inflation watching the dollars performance against our other important trading partners is more key and thats not the h the move in the recent couple of weeks that youve seen. Verses the Canadian Dollar . Well, a big part of that is china which of course has the peg but that for inflation in particular given how much consumer goods we import from china, the fact that youve got that kind of stable situation at least the devaluations lead to that and strengthening fwens the currency but now its been very interesting to the fact that while the dollar strengthened again against the euro which is so highly watched against china and mexico, but the bottom line is against countries that matter for our trade and Economic Outlook thats a different story. I wouldnt be surprised to see the dollar sell off on the event. When the fed goes into action. That was the case in the last three hiking cycles by the fed. Dollar strengthened into the event and then sold off actually there after. The currency market someone of the most sophisticated markets out there. A lot of folks anticipated this move. Friday is not going to be its the fourth. How many weeks away is that . Janet yellen is speaking december 3rd and actually december 2nd and december 3rd. Ahead of the numbers. Ahead of the numbers. If the fed is really geared to thinking at that time that theyre going shes going to send a very strong signal ahead of the payroll reports because she doesnt want to have a situation where the markets are on the fence. They cannot surprise the markets. What if last month is revised down. But she has to try to reverse the Market Reaction from that data. Does it really come down to one last employment print . She has to use that as an opportunity to layout a Bigger Picture of case of why it makes sense and leave it up to that employment report. Six year low in copper. But again for the u. S. And the u. S. Inflation outlook only a third are goods prices. Its much more about services and Service Inflation. 25 basis points thats the problem, right . Sitting at zero makes it seem like 25 basis points could derail the whole thing. Its the change itself. Its all very gradual. Its an inflection point. So too early for the employment figure countdown clock . When do they start with christmas . Black friday, right . We did k do that. So this is december 4th . We have to get the block up on the board. I wanted. 2 so we know exactly how long before the most important employment report in history. In history. Im going to expect debate type numbers. Republican debate type numbers. Yeah. I watched for an hour or an hour and a half. You want that hour back, dont you . No, im glad i did it. Thank you, guys. Well get the clock going for you. Well get the streets reaction from dow component home depot that had better news going forward. Plus an early loss for two Fantasy Sports giants but draft kings and fan dual says this fight is far from over. Well talk about that story next. First as we head to a break, heres a look back at this date in history. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. Welcome back. Draft kings and fan duel losing an attempt to new York Attorney generals effort to shutdown their sights in the states. Denying temporary restraining orders. That order would have stopped the attorney generals attempt to declare the games illegal. Gambling and injunction against the companies will be heard in a state trial court on november 25th. Also the high profile lawyer is leading a draft kings case against the ag snyder man and will join us live on squawk box tomorrow to talk all about it. News out from the Food Industry this morning, taco bell announcing its going to sbich to cage free eggs by the end of 2016. Cage free chickens . Im just surprised that eggs would even try to escape. They seem i guess they could roll. Wow. Yeah. Got to keep them out of the cages. The eggs want to be free. Theyre going to start cracking open. I actually think that like the chickens are in these things where theres like wire on their feet, you know who wants to stand around on wires all day long. Ahead of the time line of many of its rivals i guess they have egg stuff in the morning. In the breakfast. But in general you dont think of tacos and eggs. Fast food chains have been under pressu pressure. Maybe chickens too. I think its got to be chickens across the board. This is a more humane way. And use meat raised with fewer antibiotics. They use the equivalent of 130 million eggs each year. Big breakfast business there. They do. Yeah. Change at mcdonalds, a replacement for the dollar menu in january. They will launch the mc pick 2 menu. Customers will be able to pick two of the following for 2. Mcdouble, mcchicken, small fries and mozzarella sticks. After that it may change the details of the offering but it will keep i will be keeping the mcpick concept. It just sounds like a sequel or something of a movie. Kind of does, yeah. In other Corporate News german antitrust authorities are investigating amazon and apple over an agreement about selling audio books. The subsidiary is the exclusive provider to the itunes store in germany. They are reporting that they account for roughly 90 of the audio books sold in the country. Got to protect all the competition in the big audio book market. Yeah. I said that sarcastically. Home depot with better than expected earnings this morning. Joining us is the Senior Research analyst of course. Good morning. So your headline, you could just say better, better. Thats it. Its another very good report from home depot and the big headline here is going to be that it is following a lot of missteps by retailers lately. This is a sbrieth spot. Home depot does 7. 3 comp in the United States. Thats despite challenging weather in october. Beat eps. Traffic was good in the stores. A very, very solid report. But this says nothing about the rest of the industry . I think home depot is a bright spot. What we have seen for awhile now has Home Improvement performed better than other area of retail. I think that macys and clothing retailers are hit harder than home depot by weather. For macys its not cold enough so people will not getting out and buying heavy coats and sweaters that are there. Home depot wants bad weather or good weather . They want a shift in seasons. They probably sold more warm weather as the temperature stayed warmer in october they probably sold more product. Outside stuff. But generally they want the change in seasons. Lowes sales tomorrow will be fine. Well see. But lowes has a misstep on the expense side. I brought a reports to our clients on a few weeks ago. If you take apart the guidance layed out there their forecasting a pretty significant flow through in their sales. The thing that im trying to figure out is are we supposed to put home depot in the same category as the clothing retailers and walmart and amazon and start thinking about the consumer at large. Home depot has always been separate from the pack and almost everything that they do seems to not have any sort of similar botic much more closely tied to the Housing Market than anything else. If my view and having it for awhile now sits separating further. Its a much, much better run company. Home improvement is different than clothing but home depot has become a much better run company. Thank you. Thank you. Appreciate it. When we come back this morning, a major controversy in the wake of the paris attacks. A growing number of u. S. Governors declaring they will not accept refugees. We have a live report right after this. Its more than a network. Its how you stay connected. With centurylink as your trusted technology partner, you get an industry leading Broadband Network and cloud and hosting services. Centurylink. Your link to whats next. Welcome back to squawk box. We have been watching the european stocks and theyre rallying this morning. Wilfred frost joins us from london. Good morning. Good morning to you. Yes, yesterday we saw asia and europe mixed to down on certainty after the weekends events but the rally on wall street yesterday carrying through to both asia and europe today. As you can see european markets surging ahead. Around about 2 of gains. France itself up 2. 3. Germany just shied of 2 . Confidence data also very positive this morning but lets look at the stoxx 50 today. Most of it is a bounce back from soft performance last week. You can see that toward the end of the month chart. Almost as bad as in the s p 500. Europe down about 3 last week. So some level of the bounce back in equities globally is because we had declines last week as opposed to a bounce back from paris. The euro dollar highlight ace similar story. Yes theres been some safe haven buying following the paris attacks but much more than that its a longer trim which is based on hawkish fed and dovish ecb. They have suffered over the last couple of days but in general the trend today is positive bouncing back from a tough week last week for european equities. All right. Wilfred, thank you. Now to washington news. A growing number of u. S. Governors declaring they will not accept syrian refugees. As governor of the state of texas i will not roll the dice and take the risk on allowing a few refugees in simply to expose texans to that danger. Ill always be willing to at least hear what the federal government has to say, okay . I think as a public official thats my job. But hearing what they have to say does not mean saying yes. And even in france john harwood the president talking about changes to the constitution that would change dual citizenship rules and other things so following Something Like friday maybe not a total surprise to see this. I was more, i thought john you might talk about that press conference, the rather contentious press conference the president was objected to yesterday. I even saw some tweets that said the media, even the Mainstream Media was actually turning against the president yesterday on some of the analysis of how that went . That he was thin skinned and snapped at some reporters. It was not a great display. Did you see it that way . Well, they were asking him tough questions and when you have a massive attack like this and youre the president and youre saying your strategy is work, thats a pretty hard thing to communicate in that environment. He has been taking a lot of criticism. She doesnt think the strategy has been effective in containing isil so that come with the territory. The former deputy cia director making the same case. What were doing is not working. We need to do Something Different and the president was digging in and saying i have the right approach but its going to take time and that if you have people that are willing to lay down their lives theyre going to be able to kill a lot of people if they choose to do that. Thats why being president is a tough job let me just make a point on the refugees, that for now is the biggest domestic ramification of this crisis which is you have got so many governors, nearly all of them are republicans. But not all of them. The democrat from new hampshire, theyre saying stop, we dont want refugees into the country. The president tried to push back on that in the press conference and he, in particular, targeted the idea that reference should be given to christian over muslim refugees. Called that shameful. That is a significant debate that we are having right now and we had a tweet last night from the main executive Rupert Murdoch saying a proven christian should be allowed in and not others but that is an indication on the right of the spectrum but the emotions and the concern, fear that people have. Right. The journal makes a point that maybe the crisis wouldnt have gotten to this point if there would have been American Leadership earlier. The one thing that struck me, to say we dont want to shoot first and aim later when this has been two years of two, three, four years of hamletlike indecision and not facing up to the threat and just saying a series of times to kick the can down the road and not address the issue which resulted in this huge humanitarian problem. This refugee problem and you cant say now that we dont want to rush into something. You cant say im worried about shooting first and aiming later, now. People are going to laugh when they hear that. Depends on what the something is. Hes making the case that a strategy that involves were large numbers of boots on the ground is not maybe there was a time when there was a group that you could have helped out. Maybe more air strikes would have helped . A dozen things could have been done. Thats the criticism that he faces and rejected in the press conference. Hes making the argument that a large number of american boots on the ground is not the way to prosecute this and you dont have many republicans especially running for president saying we do need boots on the ground. Lindsey graham is an exception. He says i want 10,000 or more american troops. Others will vague saying you cant put a number on it. Need more special forces and that indicates the political squeeze play that the administration is under but also all american politicians given how people feel about involving the United States in another conflict. If youre not going to have large number of troops, whats your strategy . Its bombing and special operations and trying to build up indigenous forces and plainly that has not been adequate so far. The president made the argument that isis had been geograph geographically contained but its not stopped. One thing he said during his speech is look, we shouldnt have a religious check for american sympathies. And that struck me. But then i went back and watched what jeb bush said earlier about how we should be allowing christians in because theyre being specifically targeted for their religions and thats a slightly different take than what the president said yesterday. I understand its not the same coming from everyone but thats a valid point. That people are being targeted for their religions too. Yes. That is a valid point. The response from the administration is that the vast majority suffering as a result of the violence are themselves muslims. So theres a lot of innocent people whose lives have been destroyed and disrupted by this conflict. Its a horrific conflict but how we absorb and help in a context like this is a difficult problem. People can disagree though and i dont know if id say people are popping off. Republicans are popping off thnd theyre trying to get know say that im going to win. So hes in a position where he doesnt want to either lead or win or look like he is leading . Whats the alternative to winning against isis . No, no thats not what he was saying. What was he saying . Well, if you look at the entire statement he made, the statement was he doesnt want to act in a way that is on fake solutions. When he continued talking he said, American Leadership or america winning in ways that isnt winning. Thats in the eye of the beholder. Yes. Theres no question about that. That isis is contained some might consider that a slogan airing. Thats why hes in a difficult position. Thats right. When we return, coming up, the ceo of Nicole Miller on the state of the American Consumer and later well welcome Maggie Wilderotter as our guest host and shes bringing friends with her. We have a packed show just ahead. Dont miss it. Were coming right back. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Theand to help you accelerate,. Weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Shares of home pdepot rising on better than expected results. The s p 500 retail index is now down almost 7 just in the last week. Our next guest runs one of the most famous Fashion Design houses and hes cofounder and ceo of Nicole Miller. I like why Nicole Miller . Why din you name it bud the corporate name is cobra. So were trying to get a corporate name and i said what are we going to call this thing and my wife said do your name backwards. Make it cobra. Everybody thinks its a snake or Something Like that. But its my name. But for Nicole Miller is better, youre right. And Nicole Miller turned into a great brand but you know people asked me how do you get a brand name like that . Well, when mrs. Miller was giving birth she looked at this baby and said what should i name it . And said what is a good brand name . Nicole miller. Thats the logic. Your business, whats the word that all the kids use now . Meh. Whats that . Its just like, thats less than everybody that works for Nicole Miller is female first of all. 125 people at the headquaters, all female. Theyre all his age. They all use language that i dont understand. Well is it good, bad or meh. Ugly, average because even nordstrom or macys, its very scary. If thats your benchmark, you have a problem, okay . So why should that be the benchmark . Our business is kind of divided between the people that have trade, little boutiques and the big stores that have traffic. Its tough fur your audience stock market to think the little store isnt listed but what do they do . Little becky from ohio that has a little boutique comes to new york and buys merchandise for jane, alice, sarah and sue. Thats four pieces. Four pieces get shipped to ohio. She gets on the phone and calls them to come on in and i have got it. Thats called 100 sell out. With but the boutique business is live and kicking . Is it taking away from the Department Store . Ask them. They seem to not be doing well. Boutiques are paying their bills in full. Coming back for more. We hay couple of events in the last couple of weeks. Who thinks about the Cayman Islands retail anything . What happened to the Cayman Islands . Nicole went down and did a personal appearance for 100 women in hedge funds. I have done appearances for them too. Oh, you have. Yeah. Youre the second person i know. So anyhow so we go down and do this thing for this Organization Called 100 women in hedge funds. I found out about it. We didnt do lite of publicity. We did 100,000 in a couple of hours. That may not be on your chart here. That may not be a lot of business but for a little boutique, 100 grand in two hours is incredible and heres the thing, now we have a bigger fan base with 100 women in hedge funds, theyre coming back to buy this up again. It all fit them. They loved it. Thats what is known as building a business brick on brick on brick. Instead of trying to hit a home one with 20 Million People, it doesnt happen. What percentage of your business is boutiques. 30 . So thats huge . Yeah. But you didnt get i didnt get the second part of the idea. Trade boutiques, whatever. So whats the other part . The other part is traffic, okay. Whats the problem with Business Today . Everybody is concentrating on traffic. Do you know what the face of traffic is . Its anonymous. Nobody knows what traffic is. Theyre concentrating on traffic and now when you go for design for traffic instead of trade you dont have sue and alice and betty in mine, you have traffic in mind. Glad you ask that question. That gives me a chance to say what it is. I can always count on you. So traffic is this anonymous customer and they design and buy to the anonymous customer. So the stuff becomes really unexciting at the big box retailers because to buy for affic your benchmark is what was good last year. What works . What do we have history on . What do we have any kind of track record . Well here, this silhouette here sells well so lets buy that again and they have so much traffic that they work for a little bit of the traffic. If you try that in trade, the woman, sue, betty and alice say i already bought that. I bought that last year. What are you showing it to me again for. Thats the difference. So the stores that cater to traffic have become boring and boring is not exciting and so when its not exciting and its boring they see the sales fall and they blame the weather. Thank you. Thank you. Thats it . Always exciting. Never boring. Thank you very much. Thank you. Coming up when we return, i dont know if this is going to be exciting or boring but hopefully well keep it exciting. Oil prices trading low bermuda despite talk of geo political risk. Reasons why with when squawk box returns in a moment. Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Welcome back, everybody. Crude oil down 10 this month and hearing reports that gasoline prices could be 1. 50 gallon soon, despite the terrorist fears around the world. Joining us now, Clear View Energy department managing director, kevin, what we saw in the past with a terrorist attack and retribution with bombs dropping in the middle east, that used to spike prices. Why has there been more reluctance this time around . Good morning, becky. Has to do with how much oil is sloshing around in the world right now. Inventories are part of the story, theres 3 billion barrels of oil and petroleum product, thats Global Demand, two more days than the five year average. Thats a big cushion. The supply system is hot, always does, oil is a tightly strung animal, its 60 going to consumption. Thats pretty slack relative to november norms, so it takes a big supply risk to get the markets attention to the upside. I suggest actually the geopolitical risk right now is probably down. Because . If you scare people into not traveling this Holiday Season, you make a dent in jet and diesel fuel demand. Just hit that a little bit, 5 off expectations, 190,000 barrels a day surplus lying on top of full inventories. Whats the demand picture . Supply, we have a lot of it, and demand picture is a huge concern, too, looking at demand in china, europe, and how do you quantify that . Well, the problem is that demand is linked to gdp growth in most of the growth areas for demand globally. 1 million of Global Demand in the nonoced is predominantly linked to price. Theres not enough cars, roads, and people to use those cars and roads linked up with the cars and roads to make that demand happen like it is in the u. S. As a result, you really need organic gdp growth to drive demand, and thats a bigger story an energy itself. Well wait and see and hope for it. We mentioned the idea that gasoline prices could be 1. 50 a gallon. Are you in that camp that thats the case . Depends on restarts of refineries off in the u. S. A couple turned back on in the midwest and brought prices down an awful lot. Look at resumptions in refineries off in california, that could bring the average down. On a fundamental basis, novemberdecember thats when refineries are busy destocking to avoid tax obligations. As a result, oil prices soften now here in the u. S. , so its a possibility, although, probably not for an enduring basis. Kevin. Thank you for joining us. Thank you for having me. Coming up, this top stories and Quarterly Results from walmart. As we break, check out the futures. Another nice session so far, 75 points. Stay tuned, squawk box will be right back. Its more than the cloud. Its security and flexibility. Its where great ideas and vital data are stored. With centurylink you get advanced Technology Solutions from a trusted it partner. Including cloud and hosting services all backed by an industry leading Broadband Network and people committed to helping you grow your business. You get a company thats more than just the sum of its parts. Centurylink. Your link to whats next. Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Breaking overnight, russia confirming a bomb did, indeed, bring down its passenger plane in egypt killing 224 people. Now the kremlin vowing to track down those responsible. France launching new air strikes on isis targets in syria overnight as the president tells Parliament France is at war. A live update from paris straight ahead. Here at home, governors from half the states in the union speaking out saying its time to close the borders to refugees from syria. President obama says the u. S. Needs to do its part in the crisis, and governor rick scott says why the migrants are not welcome in florida. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squaux here on cnbc, first in business worldwide. Im joe with becky and andrew, and developing overnight, kremlin confirmed it was a home made bomb that ripped apart a russian passenger plane, killing all 224 people on board. Russian officials promised to hunt those responsible down, intensifying air strikes on islamist militants in syria, and theyve offered a 50 million reward for information on the bomber or bombers. Thatll get anyones attention, obviously. Meantime, france launching some new air strikes on isis targets in syria, and french president told parliament that in his words france is at war. Michelle carusocabrera is in paris with more, and good morning again, michelle. Reporter good morning, joe, so its four days after attacks, and every day that goes by, we learn more and more about whom the police did this attack. We built a graphics based on areas sieged by the terrorists to show you what we know at this point. At the stadium, two out of the three allege attackers have been identified at, at the theater, two of three identified, at the one restaurant, one attacker identified. His brother is on the run. We dont know if he was on scene, but rented a car found abandon near the attacks. All ie dentifications found near an examination of dna of body parts and passports. Heres what we know about them as a group. Most in the 20s, one is 31. Three visited syria, three connected to terrorist activity in the past, all but one are known to be french, some living in belgium. One in question is one of the stadium attackers. Ahmad, a syria passport connected to him, however, the passport is fake. Theres a big market for syria passport because if you are a migrant with a syria migrant, you get easier entry into europe. Theres a market for that. That traveled the path into europe. They just dont know if the man who died is the man on that passpo passport. Thats why theres a question, but that syria passport is why theres an outcry when it comes to whether or not there should be more immigrants allowed in western europe at this point. Two arrests in belgium. Police say the two people arrested were not here friday night, but they believe they were connected to the attacks. Lets see if those airs reveal anymore information about what happened here over the weekend. Guys, back to you. Michelle, i saw, you know, certain things about the constitution in france, and i was looking talking about a patriot act of some kind, whether theres a movement to that or talk about that in paris and gemirmany, and it has more do with defense because they cant because of e. U. Rules, and sort of the edges of increasing surveillance. Do you think that thats possible, even in a very liberal in terms of, you know, privacy, do you think thats possible in a place like france . Reporter so already what the president proposed yesterday at this historic speech in versailles is controversial. Asking beyond what you talked about that, asking for c concentrated power for his ability to declare war taking action saying the legal frame work of the country right now is geared towards an older time when you were worried about internal insurrection. Think back to the french revolution, that kind of thing, and so its going to be incredibly tough, though, the spirit of the question, joe, its going to be incredibly tough because there is this notion of privacy. Just how far do you go in curbing freedom in order to protect individuals in the name of security . We have that discussion in the United States, and they will have it here, and its going to be resippous and angry. Amazing to watch, michelle. Reporter interesting to see a leftist and socialist president move further right where the right was demanding this for a while. This is a 75 tax rate guy. On the wealthy. Right . Reporter you know, theres a lot to talk about. We could have a very long conversation about just how much the problems of france have to do with the economic structure of the economy, which many of us would believe is a failure when so much Government Spending is so much a part equation of the economy. I mean, and i understand what the president is dealing with. Just the mind boggling carnage were talking about, but watching someone in full leadership mode take really concrete decisive action, and this is a, you know, the president of france. Its kind of i dont know, for me, its gratifying. Im not going to make any comparisons, but its coming from somewhere at least. Reporter yeah. I mean, so yesterday i listened to obama, president obama in my right ear because the president s were speaking tachl ining at th and the man in the left ear was more hawkish than the man in the right. Night and day. Do you remember the red line in syria and if assad crosses it, there was we dont want to shoot first and aim later was the quote yesterday. We dont want to rush into anything. You know, we want to make sure were when was that . Four years ago . I dont think it was that long ago. Whatever. Four years the situations been happening. Maybe two years ago. Seems like four. All right. Thank you, michelle. Well be back in touch. Talk some more. Lets get to walmart. The company out with earnings. Came out with earnings of 1. 03 a share, including about 4 cents they benefitted from an adjustment for certain leases, and without that, talking 99 cents better than the street expected, looking for 98 cents a share. In line with expectations 117. 4, versus the 118 billion the street expected. They talked about same store sales, strips out fuel, it was 1. H 1. 4 . They looked for 1. 2 including gasoline. T its not apples to apples comparison. Now nay are looking for 1. 45. The streets looking for 1. 42, and thats j the stock is higher this morning, up 3 , a gain of 1. 83, and remember the troubles the stock ran into recently. Well watch that. They do not make comments about potential sales for the year, but, obviously, well hear about it on the conference call, but the dow component is up by 3 . Okay. The issue of Cyber Security, obviously, front and center for boards and directors, especially in the light of the recent terrorist attacks in france. Our guest host for two hours is maggie, the executive chairman of Frontier Communications, and welcome, good morning. Thank you. Great to be here again. We are trying to make sense of what happened in paris as well as implications specifically on Cyber Security because there was the debate of a post Edward Snowden world, Civil Liberties matched with surveillance, Telephone Companies with back doors to the government, and those are closing, and Companies Like apples and googles encrypting everything, and the government said no, no, dont encrypt everything. That makes our job tougherment seems like the Companies Won the game in terms of on the encryption side. Does that change as a result of what happened . I think when you think about this attack, i think about Cyber Security in two ways. One is the issue of privacy versus transparency in order to keep us safe, and them the other issue is how the terrorists are using the cyber world in order to coordinate what they do and how they do it, and how much harder it is to actually find those needles in a hay stack today with social media. I think on the point that you made, we do have to look at that balance. It is something that has to be done. There is a bill that has now just been passed in the house and the senate thats an information sharing bill. Right. And it tryinies to balance o industries to share data with each other and with the government and also protect privacy and Civil Liberties at the same time and have that balance. Its a good first step, but i think this will bring more rhetoric to the table, more discussion because i dont think that companies can just close their doors, and i dont think that we can also just open it fully. Theres Companies Like cisco, hp, a lot of Hardware Company doing business not just in the United States, but europe, asia, and elsewhere. Correct. Those countries said we cant do business with you if you have a back door to the u. S. Government. I dont call it a back door. There is a process the government has to go through in order to request information. And then we go through a process of giving precise information and not full disclosure on customers so i think there are checks and balances in place for a long time on the phone side weve been doing. Not just the phone, but texting, the internet, and the head of the ik says things swung in the opposite direction. Do you agree . I dont think they have from a daytoday practice, but i think they have in the Public Opinion area. I do think that that dialogue has to get out there and there has to be discussion. We are a global player, not just a player focused on the United States, and you do have to do business with other countries. When you think about Cyber Security, though, are you talking just about this surveillance issue . Are you worried, actually rs about cyber terrorism and what that can ultimately do to a business . Im very worried about the cyber terrorism issue because i think that we have infrastructure in our country thats not 100 protected, and im not sure we can make it 100 protected, but, you know, we have to have coordinated efforts in order to get as far as we can. You know, when you have liabilities of being able to share information within your industry because of antitrust issues, youve got to get those things out of the way because if my networks attacked like it is every single day like verizon, at t, and comcast, we want to talk to each other. You cant . Not today. Calling at t, this is what happened to us, you should know about this, and this the fix we found. Thats considered anticompetitive . We walk a fine line in having those conversations because its about our networks. Its like giving information out and back about the networks where they could have access to certain information. So you want to just have it be very clear what you can or cant do. The government helpful in this situation or not . They talk a lot of talk about how they really trying to make Industries Work together. Have they been helpful or a hindrance . Theres been a lot of positive rhetoric, and i think this first bill now in conference between the senate and the house is the first step in opening up the liability. You say rhetoric, i think that Means Nothing is getting done. Until its passed, its status quo, things move fast in the cyber world. We have work to do. Can i ask a separate ip question . Sure. One of the things going on recently when u. S. Companies go to try to do business in places like china, Companies Like ibm who decided the only way they i dont know that they decided, but told only way to do this is if they share their source code and other types of information with the government they say they do it because they trust, we trust the chinese, trust them as a partner. Should they be . Do you think they are forced into this very terrible position . Well, i think there are certain rules of engagement in china that unless you play by the rules, youre not going to have engagement. I think jenni is weighing the pros and cons of her providing that information. Whats the exposure to the company and the down side . I think every company has to make chose choices. I think other Companies Made different choices either not to participate in china or in a limited way because of the oversight of that government. Right. But as china continues to grow and be more of global play e they have to open up as well because youre going to have companies that will not participate and help them grow faster and better. Right. So i know for our company and kpo companies im on the board of, when people travel to china, its a different set of technology you bring in order to because of hacking . Absolutely, hacked and also bring that information back to our own companies. Youll be here the rest of the show. Did we mention its 59. 27 . Yeah. Actually, thats traded higher since last talked about it. It was 3 before. I dont know what that translates into. You probably helped that increase. By reporting their numbers. And reporting it against the street. They actually did well. They did. Better than expected. Worse than expectations, exactly. When we come back this morning, its been a rough year for steel prices with the decline of more than 35 year to date. U. S. Steel Ceo Mario Longhi talking challenges facing the industry, and backlash from governments over settling refugees. Governor rick scot wants to prevent them from coming to florida. Hell explain. Reaction to walmarts numbers, Quarterly Results, it is up by about 2. 7 now. Stick around, squawk box will be right back. Tough Steel Industry due to cheap import and continued weakness, and market share of imported steel is expected to rise further driven by chinese steel imports in the strong u. S. Dollar. Joining us now is mario longhi, ceo, thank you for joining us, good to see you. Good to see you again. Thank you for having me. Most recently, i see things coming from china that they continue to churn out the steel, but its totally, like, a Central Planning mistake because they should be closing down over capacity. They should be firing workers, but they cant. This seems like its not good for you. Its not good for the United States steel manufacturers, but its not good for them. Youre right, joe. If you look back in the early 2000s, china probably had 50 million tons of over capacity. They sit today on 400 million tons of over capacity when the full capacity in the United States is 100 million tons. E imports in the last couple years doubled from the low 20s to 40 while gdp grew 2 , and there is a direct correlation with gdp growth as far as consumption, so i think its really not good for china that they are not addressing it. They really look more at employment and stability and social environment. They dont have the market rules that guide their way in which business is done over here. Its not good for them or us either because, you know, a lot of jobs are being lost, capacity reduced. Its a very difficult moment right now. So what can the u. S. Do on the trade side, ma rrrio, with regard to the trade subject . The essential thing is they understand what the rule of law is. If its a base rule, everybody plays by it, we dont have a problem. The problem is that they dont lock at things the way, for example, china has 40 different types of subsidies, they are a state owned enterprise, making it almost impossible for companies that are playing by the market rules to compete with them. I think that the primary thing. I think under tpa, we spent a lot of time with the administration in congress revisiting the definition of injury. They used to look at, for example, if you have 1 profit, whats the problem . Well, the problem is you need to invest billions of dollars every single year to improve your capability and you should not make enough profit to do that. You will lose your competitiveness, and when you compete against state owned enterprises subsidizing all investments over a decade, you begin to have a serious issue. Seems to ming like, thats not a likely situation, that they are going to come around and recognize market rules. What you are asking for is blocking that from coming into the country . Zblef to do that. In the process of a valuating a trade case, you bring to the surface distortions created in the market place, and inthats the real goal of everything. We have currently three major cases that are going and are looking for duties and antidumping duties, to think the first ruling on china, on the first case, the primary finds tells us that they have a 238 margin that needs to be imposed on them. You look at the size of the problem that they are creating. And you also look at some of the slow down thats taking place over in that country, which you can put more pressure on that. Exactly. That behavior. How does steel pivot . What are the things you work on for your company over the next several years in light of this environment that you got to do business in . We have two clear moments to address. Right now, is we need to figure out a way to get through this significant head winds were facing, yet were working earnestly on it. If you look at improvements of this organization put in place in the best year and a half, its nothing short of remarkable. But its not been enough. We were beginning to higher people in october last year, revisited the plan in november, again in december, and again in january well do more. Were dealing with it. Then there is a future. The manufacturing world is going through a wonderful renaissance. There is a lot going on, and i think our company has been engaging profoundly with our customers to really understand the transformations that they are going to be seeing, so that we can be there to support them. Robotics, megadata, all of things play a significant role. We tripled the amount of research and development in the last year. Theres a lot of innovation. Lower Energy Prices helping too . It helps. We adopted operations to benefit from gas. They are all very well structured, and by probably the next five years, all of this steel that our customers are going to be used are going to be new steel that replace the old ones. There is a lot of excitement. You just need to figure out how to wade through the difficult moment. Yeah. Were also looking at maybe new polls in all of our markets that can be steel versus woods. With storms it makes a difference. Big time difference. Well, its not fair that china has this noneconomic, nonmarket based approach and drag you down with them. Reminds me of mci. How do they do it . It was fraud. Everybody else had to compete with it. Not fair. Its not fair. I think we need to pay a lot of attention because china is aspiring to be named or be elevated to a market economy come december 16th, and i dont think weve seen behavior that allows for them to be there. You have to earn the right. Just one example. Thank you. Thank you. Appreciate it. Coming up, a setback for fan dual and draft kings. Details when we return. The future belongs to the fast. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Welcome back to squawk box this morning. Setback for draft kings and fan dual. Sites wanted courts orders to shut them down within the state, and new york judge denied the request, and conjunction is heard in state trial court on november 25th. High profile lawyer, david boise is leading the case, and hell join us live on squawk box tomorrow, youre not going to want to miss that. Coming up, the Obama Administration getting backlash from state governors over accepting syria refugees, and florida governor, rick scott, is urging congress to intervene. The governor joining us when we return. Before we take a break, take a quick look at u. S. Equity futures in the green with the dow set to up 67 points higher. Back in a moment. U can create wh through capital appreciation, and this has been denied to many South Africans for generations. This is an opportunity to right that wrong. The idea was to bring capital into the Affordable Housing space in south africa, with a fund that offers families of modest income safe and good accommodation. Citi got involved very early on and showed an enormous commitment. And that gave other investors confidence. Citis really unique, because they bring deep understanding of whats happening in africa. I really believe we only live once, and so you need to take an idea that you have and go for it. You have the opportunity to say, ive been part of the creation of over 27,000 units of housing, and to replicate this across the entire african continent. Welcome back, among the stories front and center this morning, home depot posted better than expected revenue, and offering upbeat full year guidance. Shares of the company, dow component, trading up 3. 25 . Theres a lot of whale watching on wall street today as powerful investors reveal their latest moves in sec filings. George soros exiting the nearly two yearlong bet on herbalife, selling 2 million shares in the Third Quarter, stocks up 2. 5 . On todays economic calendar. Later in the morning, Industrial Production and gnarl association of moment builders latest index on builder sentiment. A number of u. S. Governors step up to say no to accepting syria refugees into the states, and we have more on that story. Good morning, a political rift opening three days after attacks in paris in which one man was possibly linked to r Refugee Status from syria. Look at the map showing 26 states where governors oppose, refu refusing, or suspending settlement of refugees in the United States, 26 governors all told, 25 republican, one a democrat. That is a big political rift because the Obama Administration has said it supports resettling syria refugees inside the United States since 2012, just over 2100 resettled in the country according to the Processing Center and the state department. Yesterday, prauchl speaking in turkey put this in the terms of americas moral duty to the world. Heres what he had to say. We also to have remember many refugees are the victims of terrorism themselves, thats what they flee, slamming the door in the faces is a betrayal of our values. Our nations can welcome refugees desperately seeking safety and ensure our own security. We can and must do both. Guys, we also saw a number of 2016 president ial candidates out on the trail yesterday opposing the marco rubio saying, look, if you admit 10,000 in the country and t 9,000 are good people, it only takes one to be a committed terrorist to cause a problem inside the United States. This is an issue politically with legs because it dove tails with the immigration issue dr e driving a lot of republican politics this year and rise of donald trump to the top of national polls. Dont look for this issue to go away soon, guys. Okay, eamon, thank you for the report. One of the latest governors to express concern is of florida, he is here to tell us why fears hands are tied in preventing relocation of 425 syria migrants to his state. Hes joining us from tallahas e tallahassee. The way i understand it, governor, because its federally funded, you cant say no because of federal funding, so youve written a letter to leaders in congress and house and senate . Absolutely. First off, hearts go out to the 129 families impacted by the murders in paris and all of the individuals that were injured. My daughters fatherinlaw and family all live in paris, and we were scared to death what happened to them. The president s got to stop. Hes got to stop and think. We dont have enough information. We do know that one of the terrorists posed as a syria refugee. Slow down. Get all the information. Then make a decision. We dont have the right to decide this on our own. The federal government makes the decision whether to allow these in our state 425 refugees into our state. I sent a letter to the majority leader mcconnell, speaker ryan, saying dont allow funds to be used to relocate syria refugees to florida. Slow down. Take our time. Lets find out what happened in paris. Find out how good our security is. Lets find out vetting before we rush into allowing 10,000 more syrians into our country. Im responsible for the safety of the 20plus Million People that live in our state. I dont want one terrorist in our state. But, you know, governor, in times like these, obviously, emotions run high, and theres been times in our history where well intentioned people, even the progressive icon fdr played with entournament camps. In times, theres a lot of things in the country, a lot of freedoms we have and things that are part of our values that can have a downside, and we accept a lot of these things because of what our values are in the United States. Youre talking about 425. Theres no way that you can look at 425 people to decide whether the likelihood of one being a terrorist is likely . Well, first off, the federal governments not they dont tell me what they are doing. They they are not they have not been a good partner for me or tell me when they are going to do something. They are not, you know, they are not telling me the vetting process, but remember, florida is a great immigration state. We have over 250 languages spoken in the state. We love immigrants, but weve watched 129 people murdered in paris 300 people injured. Lets take our time, make sure we know what happened. We know one of the terrorists poses as a syrian refugee. Lets take oiur time to make a good decision. The president is not focused on defeating isis, just ask congress to slow down, dont fund this until we have better information. Have you received a response . No, not yet. Just got the letter out to them yesterday. I look forward to hearing from them. I know senator sessions made the decision hes going to work on making sure that theres no federal funds used to relocate syria refugees to the country. Im responsible for the safety of 20plus Million People. We love immigration. We love we have so many immigrants in our state, so many languages spoken, but we dont want one terrorist in our state. Right. Slow down. Governor, i know you say slow down, but what is a satisfactory response . I mean, what would you need to hear in terms of the vetting process, in terms of how it would all work to your satisfaction to which youd say, okay, we can take in refugees . The first thing i want food is find out what happened in paris. Why did the security not work . Do we have the security mechanisms to decide, figure out, are we doing the right thing in the country. Second, how are you vetting these . All right . The federal government does not tell us these things. They have not. A good partner. Do both those things. Figure out what happened in paris. Lets make sure all americans understand the vetting process so we dont allow one terrorist to come into our country. I dont want terrorism in the state, and im sure no governor wants terrorism in the state. At the same time, we love immigration. Hey, governor, what are you hearing from your constituents . Have you heard anything from people that live in florida on this issue . Absolutely. They ive gotten a lot of phone calls from people that are saying nay are concerned about safety. They are concerned about, you know, the what happened first off, a lot are concerned about the families that have been impacted. We all traveled, so many of us traveled to paris, my daughter has krelatives there, scared to death what happened to them, hearts out to them, but next thing you think about is what about my family . Are we safe . What is our government doing . First off, the president s got to get focused on destroying isis. We have to. Its the most important thing now. His job as commander in chief, destroy isis. I mean remember, they beheaded one of our citizens from miami, and were not destroying isis right now. We need to do it. Governor, theres people, christians that are being persecuted and at risk. Is the president actually rightfully noted that are trying to escape the terrorism youre talking about. This is, you know, someone elses problem. Its not a nuclear site in your backyard, not in florida. Someone else has to do it. What do you suggest the people go in the mieantime . First off, sure, first off, think about your own family. First responsibility is your own family, right . I understand that. In my case, the 20 Million People that live in my state. This is the persons responsibility, one, destroy isis, two, show us what hes doing to vet these syrian ref e refuge refugees. We love immigration in our state. Tell us whats going on. They have not been a good partner of telling us what they are doing. This is something that is completely under their control. I have no ability to stop this on my open. Its funded by the federal government. Okay. Governor, can we ask about the economy while we have you here . What are you seeing in florida right now . Doing really well. By the way, maggie, thank you for the jobs in florida. Move more here. I know. We just put more in florida, so, governor, well continue to put more people in your state. Good, thank you. Weve added 941,000 jobs in four years and nine months, 21,000 jobs a month. Tourism at record levels. Constructions doing really well. We had so many Manufacturing Companies move here. Aerospace and Aviation Industry is doing really well. For example of my revenues, i cut taxes 50 times in five sessions, our revenues this year are up 1. 3 billion and i have more revenues than recuring expenses. 250,000 plus people moving here this year. Were bigger than new york. Move your show down here. Everybodys moving to florida. Were doing really well, but we i would like a president that would generate 12 million jobs in four years. We need a Better National economy, a federal government thats going to balance the budget. I had to do it. I walked in with a budget deficit, reduce regulation, all those things. I dont know if we move down there. Move to florida. Its two miles in where the oceans going to be in a couple years, is that land for sale yet, like, the new coast thats coming . Joe, everybodys moving here. Move here. Go for the winter, right . I hope they know how to swim. Anyway, thank you, governor. Appreciate it. Have a good day. When we return, walmart just out with Quarterly Results. Breaking down the numbers with an analyst next. Plus, why shares of Dicks Sporting Goods are crushed. Squawk box returns in a moment. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Dicks sports goods trading lower, do14 now, and light of what wall street expected, more retail turmoil weve been watching over the last month or so. Walmart out with its Third Quarter results, earnings of 99 cents a share on adjusted basis, a penny better than expected. Revenue came in nearly will line in analysts estimates. Stock jumps off the results. Joining us to break down the numbers is the managing director and retail analyst, and, robert, the numbers were not up to boost the stock this morning, trading up 59, around 59. 40. What do you think of what you heard . One of the big keys on wall market coming in, expectations for the company were low. You know, given the meeting held last month and lowering the forward, you know, updated guidance and the investments they are making in payroll, and ecommerce, expectations were really low for walmart coming in. You look at the dividend for this stock, you know, the time horizon that this Company Operates under, you know, we thought it was a pretty good setup, and we still like the stock from where we are today. Talking about the current quarter, and they said 1. 401. 55, and they are 1. 42. Where do you fall . 1. 44. I think one of the big things, you know, we talked about it last week is walmart inventories down 1. 5 , so, you know, they are really managing the business well in the environment. You got, you know, positive same store sales, lower inventory, gross mar gyps better than anticipated, but there was significant deleverage as they continue to invest in the labor and payroll piece of the equation. Maggie sits on the board of costco, talking earlier about how its a different customer whos shopping at costco versus walma walmart. How do you describe the customers . We have a buy on costkrorco, thats a fabulous company. Thank you very much, smart move. The costco customer is 100,000 income customer, and one of the things that costco continued to do is drive positive traffic, you know, over the last 12 months, roughly 4 , last month was an anomaly, and they had the membership fee stream, you know, generate a lot of earnings from that perspective, a loft growth, Square Footage growth, you know, under penetrated, a global story, great Balance Sheet. A fabulous company. With some Pretty Amazing turn of inventory bringing in fresh new products all the time, even for the Holiday Seasons they do a great job there too. Already set in costco this weekend, set for holiday, the trees out, gifts out, and as my kids pointed out, toys are already out, and, you know, costcos fabulous. You saw the chart which is, i dont know if you saw it, but its a terrible chart for walma walmart, but if you had a Million Dollars in walmart or costco, what would you do . Given the price differential . Time horizon . Two years. Oh, you know, i think theres more upside today over two year period in pal mart shares begin the depressed multiple and expectations for the business. But, you know, our target for costco is 175, and we think when we look over the next 1218 months, i think theres several catalysts for costco. I think that, you know, when you look at the credit card situation with the american express, you know, could be depressing the results a little bit right now, but as they get the new visa relationship going, i think that will be good. They could reinvest some of the, you know, better economics we expect them to get from that deal in some price, drive the comps at costco, and thinking about it, once every five years, costco typically, you know, increases the membership fees so thats coming up. Thats always very good for the stock. I think theres a positive outlook for both these guys. Costco with a solid ecommerce business, and walmart investing heavily in theirs as well. Macys ceo said they are offering steep discounts because of the inventories to get rid of. Does that put pressure on discounters . A lot is branded goods they sell, ralph lauren, tommy hilfiger, thats why people go to macys and good private brands, but discounters, electronics are going to be a big seller. The star wars toys, you know, all over the place, including costco and walmart, and, you know, i think theres a lot of solid drivers to this year, like, with all the concerns around retail in general, i think, you know, its really good to see walmarts inventories lien going in. If there was a heavy position, that could make more aggressive competition, more margin pressure. Overall, well take todays results. Robert, thank you. Do you try to do blurred. Bold. Blurred. There is i dont think theres not one. Is there . Tell our obsession. I see it, looking for a word. Theres nothing. . Can i buy a vowel . No. Look. I think we have my last name. Theres a lot of words in that. Coolest name. That guy that comes on. Okay. When we come back, well do jumbles during the break, but we have more from our guest host with a lot of things that could come from that. Executive chairman of Frontier Communications, and tomorrow, womaning back, and hes going to join us in the 7 00 hour. When youre not confident your companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Theres a lot of talk of getting diversity on boards and in particular, getting women on boards, and Frontier Communications is a company honored of a champion for the board, diversity, the executive chairman of frontier, shes our guest host today, a Market Forces, a Market Forces person overall. How do we affect this without quotas or something that isnt happening naturally . How do you make it happen quickly . I dont agree, quotas are not the right answer, but i think companies that have more women on their boards are posting great results, and at the end of the day, its creating shareholder value and having a diverse board represent your customers and shareholders, and weve done that at frontier, five women on the board in 2014, our total shareholder return was over 80 , the board im on, theres a number of women on other boards i sit on, and i make sure that when i go on the board is the first time as a woman, no other women, i get other women to get on that board as well. Is the representation for that board is that going up more quickly than ceos and senior managers . I think that weve held our own in the board room, but we need to grow more, and if i look at at least the fortune 1,000, over the next five years, if you looked at people that will turn off because of age or term limits on those boards, if every other board member that gets apointed as a woman will raise the bar to 2530 on boards. There are easier ways to do it than quotas or dictating to companies what they have to do. You want to get qualified people, but theres a ton of qualified women that are board ready today. Do you think that the goal for society will eventually be 50 50. Well, i hope the goal should be . All respects . Im going for 60 40. Thank you, andrew, you took the words from my mouth. All companies would be better results wise. Saying it, leaving it at that, right, andrew . Keep it there. Perfect. Maggie will be here the rest of the show. Nice to be here. Good to have you here. When we come back actually, its nice. A read on the economy from blackstone, the companys coo, tony james, and portfolio operations joining us next. Isis threatening to attack washington, d. C. Russia confirming a bomb took down a jet liner, and france hunting down suspects responsible for trid friday eats deadly attacks, latest on the war on terror from france and here at home straight ahead. Rally on the street, two private equity power players here to say how they are investing, and a world focused on terrorism. Black stoeps head of private equity, David Calhoun and tony james here with a unique market view. Consumer front and center, results from walmart, home depot, and Dicks Sporting Goods this morning, and breaking data on inflation, minutes away. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Former neilson guy. Got a bone to pick. Welcome back. You never measured us effectively. You admitted it. You never measured us effectively, squawk box squarks, nevnever, ever. You were not the center point of our metric. Im joe, with becky and andrew, less than the o minutes from the opening bell on wall street, and futures now, they moderated, pulled back, 75 earlier, but a great day yesterday, up another 56, 357 a day on the dow, up five on the s p, 15 on the nasdaq. Checking out markets in europe, a strong session, almost 2 gains across the board, even in greece, andrew . Lets get you up to speed on the stories investors are talking about today. Home depot posted better than expected earnings and revenue, offering guidance, shares trading higher on that news this morning. Also, walmart with a boost this morning as well. Earnings topped expectations and the retailer offering upbeat profit outlook, and one stock loser this morning, here it is, Dicks Sporting Goods, earnings missing the margs, same store sales falling short of estimates, and also guidance was weak. Becky . Stocks on the move to tell you about this morning, first up, general electric, the company says its completed its exchange offer, and ge says the offer was over subscribed by more than three times. This completes ges exit from ownership. That stock looks to be up 1 today. Angies list taking over a proposal from inc interactive. The website operator says the bid of 8. 75 a share undervalues the Company Trading down. And it might not seem like its new news, but up to this point, you didnt have the explosive residue, and now breaking overnight, russia confirmed for the first time it was a home made bomb that ripped apart that airliner in egypt last month, killing all 224 people on board, officials in russia promise to hunt down those responsible, also, to intensify air strikes on islamist militants. I can say that. They offered a 50 million reward for information on the bombers, the bomber or bombers, 50 million. Wow. Also major controversy in the wake of the paris attacks, a growing number of u. S. Governors declaring they are not accepting syria refugees, more than half the nation states leaders opposed to letting syria state refugees into their state, but the final decisions falls on the federal government. One of the suspects believed to be believed in fridays attack suspected to enter europe among a wave of refugees, an rick scott expressing his thoughts earlier here on squawk box. Im responsible for the safety of the 20plus Million People that live in our state. I want i dont want one terrorist in our state. 27 governors now come out in favor of refusing to take ref e refugees in their state. John brennan says isis has more plans for more attacks already in the pipeline. Meanwhi meanwhile, france is committed to destroying the Islamic State, and launched a new round of air strikes. Lets get back one more time to get the latest from michelle carusocabrera. Shes in paris. Michelle . Reporter we have late breaking headlines just in the last few moins, two to tell you about. First, in relation to the air strikes, dow jones reports the Prime Minister of the united king tom says theres a case to be made for the u. K. To join in the air strikes along with france, the United States, and russia as well as the Islamic State in syria, the organization thats climb responsibility for fridays attacks here in the other headline to tell you about is that two people have been there are reports coming out of germany that three people have been arrested there. Thats French Television quoting german police. Three people have been arrested. We dont know any more details than that. That is in addition to the two that were taken into custody in belgium. The Belgium Police are come police sit and participated in the terrorist activities. They dont believe the individuals were in paris on friday night. Which brings us to an update on the manhunt. They are looking for an alleged master mind Abdelhamid Abaaoud and also looking for sala salah abdeslam. His brother was one of the suicide bombers and, in fact, reporters were able to speak with another brother of his alive living in belgium late yesterday. His named is mohammed abdeslam. He was questioned but later released. I told journalists that he and his family did not know everything about his brothers activities. He was 31, the one who blew himself up at one of the cafes here. The 26yearold salah is currently the subject of this huge manhunt. Speaking in french mohammed, the brother, told reporters, quote, we didnt know, neither us nor our family. Theyre big boys. Theyre adults. We dont ask them for their timetable whenever they leave the house. He added that he hadnt heard any news from salah and also he did not believe his brothers could have been involved in the attacks. So the hunt is still on. If police are correct that theyre connected to fridays attacks, maybe we begin to get more clues or more information as to where he might be. Guys, back to you. Michelle, thank you. Despite the tough environment out there for deals, blackstone is still putting money to work in key areas like energy and real estate. David calhoun is the global head at the blackstone and also a former ceo of neilson and tony james is president and coo. Maggie willederwader is the chief executive at Frontier Communications. Thank you for coming in today. 24 years. 26 years. Thats right. I remember every one of them, too. As you guys are talking stocks off camera here. Yeah. Tony, why dont you tell me a little bit about where you see the environment right now, what you think is happening and where the markets have come, where you think theyre headed. Well, i think the markets are pretty fully valued in here and while the economies are strong, i think theres some head winds and the values are a little ahead of themselves. We see a bit of a correction coming. A bit of a correction coming because of high valuations or because of whats happening in the broader world right now . Well, youve definitely got the terrorists, you have higher Interest Rates coming, you have weaker china. Certainly economic problems in south america. The cumulative effect of that is where do you look for good news thats not already reflected in the market . Earnings of the s p are flat at best. So i think i think stock prices have had a great run and its time for a pause. Whats the firm doing as a result . Are you pulling things in anywhere . Well, weve exited a lot of investments where we can obviously and were actually poised a lot of capital so corrections probably good for us. David, that sounds like a tough environment for pe. Weve talked about how prices have run up and things you look like you can buy at reasonable prices. When the market starts getting jitters, its time to ipo and exit some of these businesses. Although in almost every case or i should say in every case we have an agenda that requires change, all the things that are going to improve the economics of a company, not the things that surround it necessarily, but of that company. I think the private governance model gives you advantage that we take full advantage of which is to put your head down, stay focused, invest good times, bad times. In some ways difficult moments for me are the best because thats the moment you can predict what your public counterpart is going to do. You get to do it different, better, harder, faster, all those words. For me this model works but im Company Specific and i think about every investment that way. Sounds like its a better competitive time if you can outperform your peers. Ive always felt that way. In nielsen life, all of the experiences ive had with our private companies, when the world gets tough and the economy gets tough, you can predict what the Public Company is going to do, what your counterpart is going to do. Theyre subjected to pressures that make the quarters even tougher. They put the straight jacket on and start lacing it up. For us we get to put our heads down and stay focused and invest through the cycle. I have an example on that. The ebida of our company is growing at 9 a year, s p zero. For this year . For this year. But think about the two of you, weve looked at a lot of pe deals over the years and you can go in and actually undercut a strategic because a stra deej beginning would take pressure from wall street if they wanted to do an acquisition and pay up. Thats shifted. What blackstone has done with you, i look at it as ying and yang. You have investor and operator looking at deals and opportunity. How do you think about Value Creation together in the environment that were in today . From an operator and inbe vestor point of view . Well, for me its a deal thats not underwritten well is a bad deal so the team that goes out and hunts and finds a company that we believe in and an agenda that we believe in, theyve got to do it just right. Theyve got to protect the down side and they do a great job of that. I experience that. They bought a company at a peak in 06. I lived through 08, 09, 10, i knew what that was about. We never had a difficult moment with respect to satisfying the debt holders and others but at the same time i had all the resources necessary to plow through that and do the things that i believe were right for the company. So its if you didnt underwrite it right and got yourself in trouble, couldnt make a few debt payments, you were in trouble. Were you talking about larson . I was. You didnt have money to invest in out of home for a niche player something that would measure trading floors, gems, country clubs, restaurants, bars that would give us a true representation of cnbc. It definitely didnt hit the prioritization grid. Facebook, google, others did. As the ceo you did see the fragmented you watched it play out with entertainment in the home. Totally. You had to figure out how to measure all of these different you probably have an idea or some comments on cord cutting and all the things in the future of the business. Are we going to have jobs . All core content will have jobs. Worth more . It should be. There will be some way to measure it, some way to get paid for it . Nielsen as we speak is launching a total audience metric that includes all video streaming through all locations. Now you do it, now that we dont do nielsen. Im going back to private equity. Can i ask tony a question. I was going to ask tony so you can ask him. On size, how big a deal can you actually do in this environment . Mid 2000 before we got to 2008 there were massive transactions taking place, txu. Youve obviously done lots of big real estate transactions more recently, but there was this idea somehow that big megacap companies could be taken over by private equity, that there was actually more fat in those companies, that they were under managed businesses and there was more opportunity. That sort of thesis seems to have disappeared. I dont know if thats because you think its harder to finance those types of transactions or that those companies, that opportunity doesnt exist in the same way . First of all, you can do big deals. Look at bmc and dell. The deals can be huge. And theres a lot of equity available if you team up with another sponsor. Lps will write you billion dollar checks sometimes. You can get a lot of equity, you can do big deals. The problem is the public market. If youre going to live on taking Public Companies private and most Big Companies are Public Companies, its very hard to get value. Weve got to look else are with. Weve got to build assets. We have to take Small Companies with big management teams and build them and reinvent the business and stuff like that. You cant do a big old buyout, take it private, cut a few costs and make any money. Values are too high. What makes a great ceo, tony . Youre very big on management teams, that they make a huge difference even with a business that might not be a home run. Tell us about what you look for. Well, of course im honored to be here with two of the best ceos i know in maggie and dave. Im actually serious about that. That was a sophomore question. I think youve got to do youve got to focus on a few things and do them really, really well and do it with a sense of urgency. Youve got to have a vision about where you take the business. It cant be linear. This is one of the things that dave brought to us. Youve got to be able to set a bar that people can aspire to and stretch for and make it. Its not something that can be measured. Its not something you can draw a line to. Then the ceo has to attract a great team and it has to play together well. You do those things, youll be having a successful investment. Great. Longterm view, what do you think . Oh, yeah. Have to have a longterm view. You know, you can debate whats long term. Any time you get outside of threequarters youre ahead of the public counterparts. Three years, you can do pretty much in three years. Invest, make the turn, do the things you have to do. I refer to it as the intermediate term. Were not bell labs. We dont want to invest in something that pays off in 20 years. I dont think any business can make a good return on that sort of investment nor do we have to worry about less than a year. That intermediate term, thats one of private equitys biggest advantage. Tony, what happens if the fed raises Interest Rates. Does that change the scenario at all . Are you worried about that . Would you consider that in any way before you decide to make a deal . No. No. I think were way overdue to have higher Interest Rates. The rates will be small, theyll be short term rates. Low rates arent really helping the economy in my opinion. I actually dont think zero rates have ever helped an economy. If anything, you can argue zero rates cause misallocation of resources and cause companies to substitute labor for capital and so were overdue. I think the market wants the fed to get on with it. I have one other quick ones for you. Your competitors, kkr, i assume you think of them as one of your competitors. They shifted to paying a fixed Quarterly Dividend as opposed to one that varies. Right. What do you make of that decision . Is that the right decision . Puts them less in league with you and more in league with banks, frankly. Yeah. Well, i think theres two considerations. Whether its the right decision or wrong decision time will tell. The market definitely puts more value on something thats predictable. Ours varies all over the place depending on what we actually earn so its predictable. On the other hands, the beauty of our model is we can grow very fast, 10 to 15 a year and pay out all of our cash flow. No other business in the world that im aware of can pay out a yield of 9 or 10 and still grow at double digits because were an asset light model. Theyre not. Theyre a Balance Sheet based model. I like ours better. Would you put him back in a ceo . Would you want to go back to a more nittygritty, more i spend my life with coos and theyre not quite the scale of the ceos of the ges, the ibms have, on the other hand, i love working with all of them. Theyre all great. You dont want to do that . If the right i want to help them do what they do. What if a boeing or something what do you think of tech . Is there a bubble . Do we have a bubble going on . No. I think the opportunities in tech are still limitless as far as i can see believe it or not. The productivity that tech brings to all kinds of industries is enormous and were in the early innings. Good. Congratulations getting out of nielsen before we that was a good exit. Dave, tony, thank you both for coming in. Of course, maggie will be with us through the rest of the program. When we come back, the United States stepping up its attacks on the Islamic State and hitting their main source of money. We have details on this black market trade. They are next. Take a look at the prices now. Wti at 41. 32. More to come in just a moment. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Tens of millions of dollars are funneled to the militant group isis every month thanks to black market oil. Now the United States is ramping up airstrikes against the groups main source of money and jacquie deangeles has that story. Reporter hi, good morning, andrew. United states and French Forces looking to choke isiss main source of funding, black market oil. In a more aggressive approach airstrikes are targeting the trucks used to transport that oil. Previously it was on disabling production in the oil fields without completely destroying them, that infrastructure and avoiding civilian casualties. Treasury department estimated earlier this year that isis made 40 million in one month from the sale of oil. If you do the math, thats roughly 500 million a year. Now the group operates oil fields in Northern Iraq as you can see on the map thats going to come up in a moment. Roughly 65 of the oil revenues come from that area. Its also believed that it has refining operations in syria. Thats where it turns crude into products and then it sells that oil and gas on the black market likely at a discount. So how much oil are we talking about here . Well, not much, but enough to fund the operations. At 50 a barrel base case, 500 million in oil revenue equates to 27,000 barrels a day. For perspective consider how much iraq produces, 4 Million Barrels a day. In the wake of fridays attacks, of course, you can expect an even more aggressive approach in targeting the finances which are funding isiss operations. Since no corporation can operate without cash, guys. Jacquie, thank you very much. When we come back this morning, we have some breaking news on the inflation front, plus the ceo on the sweet taste of Business Success. Up next though, walmart giving upbeat guidance on reports thabeet expectations. When stock is up in the free market. We have the details plus a few other names this morning. Squawk box will be right back. Other stocks to watch this morning. Walmart hosting better than expected earnings and offering upbeat guidance. Shares are trading higher on the news. Now up 1. 22. I hope maggie never has to look at her stock like that for frontier. Stuff happens. Look at that. I know. I know. Thats a blue slope, right, andrew . Not a bunny slope but its not a black diamond, right . Thats moguls, bumps right at the bottom. Right at the bottom. You could actually go off sort of green. Yeah, looks like a little jump. Easy. Urban outfitter shares getting hit. The apparel retailer sales falling short of investments. The stocks fell yesterday. I thought i was reading this wrong. It was purchasing an Italian Pizza chain. Apparently they have restaurants already. Not restaurants, coffee shops. Yeah. So pizza place. All right. Little different. Yeah. Thats okay. I love pizza. Pizza and shopping. Like popcorn and the movies. I dont know which one i love more. Actually, i do. When we return, breaking news on the inflationary front. Soft drinks and pet food from ingredien. The move has paid off. Its outperformed the s p 500 the past few years. The ceo will share her recipe for Business Success just ahead. As we move ahead, take a look at u. S. Equity futures. The dow is up. The future belongs to the fast. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Welcome back to squawk box. Breaking news. October read on cpi up. 2 as expected. Strip off the all important food and energy up. 2 as expected. And if we look at the year over year numbers, well,. 2 year over year, strip out food and energy core year over year up 1. 9. Yes, 1. 9. So these numbers are very close to expectations in pretty much every way. If we look at real average Weekly Earnings up 2. 1 , theres a bit of a miss because last look was 2. 2 revised to 2. 3. So shed a few tenths there. Our yields are hovering close to 2. 29. European yields are moving closer and closer to 50 basis points. The difference between the two over 170 basis points, the widest since april. We continue to see that the equity markets responding to potential qe or more qe by mario draghi, but in the end theres definitely comparison in the marketplace, especially fixed income. As to the future outlook of the economies as well, we have a lot more data points today. Well look at Industrial Production, later in the day, Treasury International capital flows. Considering china and japan, their Economic Issues and their holdings in u. S. Treasuries, less than the fed. All important joe kernen back to you. All right. Rick santelli, thank you. Steve leaseman with more on the data and it better be good. Can you imagine there being more . Listen, i think its fair to say inflation is relatively stable and thats important. The feds been worried about inflation coming down. You have really inflation two different stories. This is ill show you from last month, this is exciting. This is exciting. This is it . This is the nut right here. This is the difference between Service Inflation and goods inflation or commodities inflation. Okay. What you see is commodities inflation are sinking right there. Yeah. Services. Look at services. How much are services a percentage of the economy . 2 3. 75 . 2 3. 75 . Either way close enough. On or thereabouts. Close enough for rock and roll as we like to say on squawk box here. The stories, its been very stable. Its possible theres another downdraft coming but it feels like oil in that 40 to 45 range, you dont have a big down draft from there. Looking at individual prices, apparel down. 8 of a percent. New and used vehicles, a function of the changeover of year. Down. 2 . Housing up 0. 2. Services over all 2. 4 . Its the stability there. The idea that there isnt another commodities down draft coming. It should work out. The one thing we want to watch relative to paris attacks, relative to fed policy and the december potential rate hike is the dollar. And what youve seen is youve seen something of a decline relative to the euro. You went through that 107. Were 106. 5, Something Like that, just a little bit lower. Its another place to come down. If the doves wanted to seize on something and stop the december rate hike if you had another big down draft in the dollar and it created another down draft in imported prices. In the past have sovereigns really gone into the open market to support or to do the occurrence . It used to be more common in the new world its become less and less. They would never do that . Not never. Not never. They dont take it off the table. Its something they have done very reluctantly. To the extent that currencies are manipulated theyre more likely to be manipulated through central bank policy. Right. If they want to let the fed go up and get the plunge Protection Team involved. Out of the s ps into the currency. They can do it. When was the last time you heard the treasury secretary Say Something positive or negative about saying that . Thank you. A strong dollar is in the u. S. Interest and i want them to take them by the lapel and Say Something real even when they leave office. That would be a bad idea. They would swarm at that point. Do you think the numbers that came out today reinforce the fed rate increase . Yes, most definitely. You see the stability, you dont see the drag and you dont see that down draft i showed you in commodities really affecting the broader economy, which is services. It would be remiss not to talk about airline fares which are up 1. 5 . Thank you, sir. My pleasure. Well do our review of the movie after. Right. We both saw spotlight so were going over it. If youve ever wondered what makes crackers crunch, yogurt creamy and body lotions silky, our next guest heads a company that makes those ingredients. Joining us is eileen gordon, chairman and president and ceo of ingredion and our guest host is maggie. We were talking during the commercial break, the ingredion name, do you love that name . Do you hate that name . I actually love the name. You do . Okay. Our company and were glad you do. Thank you. Were glad you do. Our companys name was Corn Products. Its a 100yearold name. We bought a company five years ago called National Starch. Put the two companies together to take advantage of the Consumer Trends towards Healthy Eating and neither was a wonderful name to describe what we do. So ingredion became a name that was available and we rebranded five years ago. Corn starch too m. Actually, Consumers Want to know what theyre eating on the label. The centers and starches and actually providing healthy ingredients so what it means is we work with the Food Companies and the beverage and brewers. The recipe. J its called clean label. And then enstid of enzymes. Consumers love that. Things are very smooth. Yogurt is creamy. Theyre creating shareholder value. You came into this company. It was old line. You transformed it. How did you go about doing that . I joined a company about 6 1 2 years ago. We made this major acquisition of National Starch after about a year and so that was five years ago. By putting the two companies together we brought on a global business. National starch had a European Business that Corn Products did not have. In fact, we had a wonderful r d center established in bridgewater, new jersey. Today we have 140 scientists. Then we have idea labs around the world, 24 of them. So we formulate the ingredients in new jersey and then we disseminate and localize the particular recipes in the areas. Percentage of your business now in the food space versus we talked about body lotion, for example . Well, a significant part, 50 is in the food business so thats processed foods, thats sweeteners for candies, yogurts, thats part of the food side and then beverage and brewery would be another large piece of the business. As we get more away. I dont know if you think its a trend or not away from packaged food, what does that do for your business . Well, actually, we help the Food Companies formulate recipes in the center of the store and then around. In fact, we bought a food company, kerr concentrates, this summer that really takes fruits like berries and processes it for smoothies. So weve reinvented ourselves to work with the Food Companies and be more important to them with a broadening of our ingredient portfolio. I remember Corn Products and then you bought the starch company. So it would have been corn eileen, i like your name. Thank you. Could you tell from the tone. Did you hear the way he asked the question though, the tone of it . Do you ask it again like that . Ask it again like that. We were just discussing the name. But you said, do you really like that name . I mean, do you like if im being honest you were saying i dont like it. I dont like mondolese. Some say to me, where did you get that name . It was available. I cant believe it was available. Its a great name, eileen. Youre going to go visit your lab today down in she keeps it on. Absolutely. Today is our worldwide webcast. Quarterly i go talk to 10,000 employees around the world. Today im going to do it from new jersey because its a wonderful center of innovation. From ingredion, a name that we love. Great name. Maggie is sticking around. Go indwreed on. Go, ingredion. When we come back on the chart. Thats something im proud of. When we come back, secretary of state john kerry meeting with french officials on how to respond to last weeks deadly terrorist attacks. Well speak with dan seymour. Hell be talking to us next right here on squawk box. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. These terrorists have declared war against all civilization. They rape and torture and pi pillage and call it the wilf god. They are in fact psycho path thick monsters and there is nothing, nothing civilized about them. Secretary of state john kerry meeting with french officials to discuss the response to fridays deadly attack in paris. We are joined by dan senore, cofounder of the policy initiative. I dont want to spring it on you. Did you see it yesterday . Yes, it was excellent. It was excellent. And you get rid of isis, you dont necessarily get rid of islamic extremism. You need to deal with it and the way the model that we have right now is israel. The way israel deals with it. Thats sort of what youre here to tell us. Well, no, israel has dealt with a population within its borders. Not islamic extremism. Bar baron ibarians in your m theyve dealt with that to shut i mean, the kind of terrorist attack that happened in paris is almost impossible in israel. Why . For instance, theres basic security in any facility that is hosting large numbers of people. You cant walk into a cafe today in tel aviv,er r er ruinjuries without them checking your bag. The idea that someone could walk into a hall or sports stadium with suicide bomb vests is unheard of in israel. They actually stopped them at the stadium. At the stadium. One of them remained outside. Right. And the concerts and the bars. So theres preventive arrests, intense surveillance. Thats important. The reality is these are all symptoms. All of these things that ayan was talking about in her op ed were symptoms. Unless we deal with the sanctuary in syria and iraq, we wont deal with this question. Speaking of the israeli society, we dont think of them having a closed society. I put israel in that camp. Am i wrong . It is a very free and democratic society. Theres a Democratic Free speech debate. Most critical of the Israeli Government are the israeli arab newspapers. In that respect, yes. There is a high tolerance for doing things in terms of surveillance, in terms of infiltrating attacks before they happen by going after people that you are just suspecting. And profiling. Profiling. Profiling. Right. Human profiling. If you go in and out of an israeli airport, the interrogation you go through effectively to get on and off of a plane takes a couple of minutes but theyre trained not to rely on equipment but human profiling. Theyre willing to give up. The difference is the threat. The mosques. The machinery indoctrination. Its good in europe. So for europeans doing whats necessary. We have a layer of protection. You have these refugees coming into europe. Its it add a lay of protection. The Intelligence Agency and the nsa. Theres a collection for a few things that is the developing the authority. They shouldnt sit back and sin 2004 in mumbai in 2008, cities, these things are very vulnerable. Its interesting. In france. Theyre trying to align themselves. Its being seen. It speaks to them. Its a hard right. The foreign policy. Putin today is in syria. Were barely in syria. Putin is in syria. Its a cut throat. We had him on yesterday. He said the only way to do this, theres no other way to stabilize the situation. Yeah, so i have done that. There are several military leaders who believe as carl does and sort of recreate syrian society. The commitment. Kournl jacobs is recommending. I dont know if thats the priority. It is very hard to do all of this. Homeland security unless you deal with the sanctuary, there are tens of thousands of people being trained in these Training Camp for 50 yeerz. That doesnt require a quarter of a million troops. When theyre returning. These isis strong holds, so stronger air capabilities, some ground capabilities. I do not believe theyll disrupt the sanctuary because of the vacuum of leadership that were that we have here. Now when you saw putin, i was like, putin, thats a guy maybe thats the guy we need to go after right. Theres a guy whos tough, ruthless and gets it done. I said wait a minute, what am i thinking . A lot of people were saying now something will happen. Its the enemy of the enemy. Isis is worse than we think of even in the ukraine and all this stuff. All this bad acting. Its like, wow, finally we got a guy in there. When you watch president obamas press conference yesterday i wasnt going to bring that up. Its too easy. Perplexing. He was basically saying what im doing is working. He sets up this strong man, if youre not with me, youre for world war iii. Just too easy. Unbelievable. Its unlike you to just to avoid the easy i know. I was flabbergasted. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. Get down to the new york stock exchange. Jim cramer joins us now. Is this the beginning of a turnaround of walmart, do you think . Or dead rock bounce . Maybe what dougs doing is on target, if he didnt have to cut numbers again. They cut numbers repeatedly. The fact they can make the numbers is a sign perhaps that there is a nation turn. I think you have to wait more than just a short period. But it is good to see that doug took the numbers down to a level where he can exceed them. I think some of the categories were good health and wellness looks good. It is good to see them try to climb out of the hole. The hole included some very low bar that makes it so that they can top. Versus tjx and home depot where there were high bars and they jumped over them. Do you think were out of the woods in terms of the overall market . Not if the fed decides to raise. I think a lot of what happened yesterday was a belief that, wait a second, with this terrorist attack and some recent data, theres no way he can we can raise. That will go away if we think walmarts good, home depot is good, Steve Liesman comes on, that will get rid of the rally. You have the eagles. Im not unhappy i didnt have the bengals. That was a baseball game. Knew it was coming. Thanks, jim. Okay. Well get some final thoughts from our guest host when we come back a programming note, tune in tomorrow at 7 00 a. M. , we have macys Ceo Terry Lundgren on. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Welcome back. Lets turn to our guest host. Maggie, congratulations. Ernst young naming you their entrepreneur of the year. Congratulations. Thank you. It was privilege. Ive been an entrepreneur for 35 years, multiple companies. It was a great opportunity. They do such a great job. When you are ceo of a major Company People probably dont think of you as an entrepreneur anymore. You are running something and staying big. How do you stay an entrepreneur even when youre in charge of thousands of people . Its a great question. When i was first nominated, i said, really, i run an 86yearold company, fortune 500. I always looked at frontier as small and then big. Lots of small markets in rural and suburban america. Pnls down at that level, general managers running those businesses. I always tried to say stay mean and lean at the corporate level, pay for performance. Its an entrepreneurial approach. Plus we do a lot of noninvestigation with internet, technology, video. Its exciting. Maggie, thank you very much for spending the morning with us. Its been a pleasure. Thank you for bringing bests. Thank you for coming in. Its been great. Great to see you. Thank you. That does it for us today. Keep track of the futures. You have home depot and walmart with better than expected earnings. Thats helping out the dow. Up another 74 points today. That does it for us today. Well see you tomorrow. Right now time for squawk on the street. Good tuesday morning. Welcome to squawk on the street, im Carl Quintanilla with jim cramer, david faber at the new york stock exchange. Stocks point to follow through after mondays rally. Consumer inflation in october relatively stable. Some decent news out of walmart and home depot as we keep a close eye on developments out of paris and belgium. Europe is seeing gains of about 2 this morning on dovish ecb commentary. Bonds are going to have