Spearheading a new way of reenergizing the brand. If you thought starbucks was high end at 4 a cup, this is higher end. I need detail. So coffee will be more expensive, right . Will it be better . Maybe youre paying for the experience of it. There is a lot to do in starbucks already. The music, used to be cds. Apple messed that up. But you got i didnt gwifi and. All day for if you have a man bun, you get a discounts, right . Dont you . Have you tried that yourself . One of these days. A fake man bun . One of these days on october 13s, ill have a man bullpen. But first its jobs friday. Forecasters expect an increase of 180,000. Bullpen. But first its jobs friday. Forecasters expect an increase of 180,000. Unemployment rate expected to remain steady. Down about 14 or so on the dow, down about 4 on the s p 500. And then the nasdaq down 24. In asia overnight, i did see japan after a big gain pulling back, but not giving back all those gains. Down half a percent. European equities were weaker. Sometimes they change by the time i get in here. But some were down over a percentage point like in france. Germany down not quite, but significant losses. Wed feel that here. A quick look at crude. It continues to trade above 50. An brent all the way up to 53. 45. President elect trump kicking off his victory tour in indiana and ohio yesterday. Trump surprised the crowd in cincinnati by announcing he will appoint james mattis as secretary of defense. Eamon javers will join us in a moment with more on that. And french president hollande will not run for reelection. First time since world ward 2 that a french president will not seek a second term. The socialist president faced Approval Ratings as low as 4 amid political turmoil and a stubbornly high Unemployment Rate. A primary in january will decide which left wing candidate will stand in april ps president ial election. What about irish coffee . The starbucks competition, how much more high end could it be. What about zambuca . We can ask him. But the way i look at it, supposedly the brand needs refreshing. Or they want to extend what is an unbelievable obviously success story. And maybe if he is stay to go spearhead that, its almost like remember when he came back when things were not i mean stock was really in trouble then. He came back and reenergized the entire company. 2008 to the present, stock up more than 500 . He came back and did it founder came back and absolutely and we have seen that in the past with steve jobs. Not the always. Not always, but we should also remember if youre going to use the analogy of steve jobs, should you also remember that apples stock hit a record high after his death and during tim cooks tenure. Thats true, too. And then entereded ea period stagnation. Which we dont know how that will end up either. But if he was retiring to go off on a yacht somewhere, it would be different than spearheading this entire new effort. I would want him to do that, too. Its almost like if you have a right hand man that you think can handle the operations of the existing starbucks, this is fine and you put the visionary out. Otherwise a cloud sort of the new guy, Kevin Johnson, could feel shackled. Yeah, its not your typical retirement. Elsewhere we will talk about that because andrew is town the down there. He has both guys. Wells fargo has changed its bylaws to split roles of ceo and chairman. It requires chair and vice chair to be independent directors. Back in october when john stumpf stepped down, Stephen Sanger took over and tim sloan became the ceo. Latest move locks in the separation of those roles for future appointments. Shares of wells fargo not to go much this morning, but closed somewhere at 54 and change yesterday. Back to the top story of Howard Schultz stepping gown as c down as ceo. Kevin johnson will take over as ceo. Starbucks shares moved lower. Joining us to sdiscuss what it could mean, jeff, lets kick it off with you. Joe and i are were talking about this. Its not just the case of an iconic ceo retiring, stepping away, hes actually not going to step around and this iconic ceo is still going to be sort of in the wings. Are you afraid for Kevin Johnson and his ability to actually be fully a ceo . Its a challenge. Youre right, we have seen some major challenges. And what a coup youve had this week in terms of having wilbur ross and Steve Mnuchin breaking that news and sorkin and cramer ready to go with the starbucks team. Hats off to cnbc. But, yeah, there is something here that i think deserves headlines, but i think there is less here than meets the eye. This man is not going anywhere. Does anybody not position that ralph lauren is still driving what is happening at polo . Michael dell has come in and out. There is a cat forethategory thr to as generals so is that good or bad . Do we want him behind the scenes or do we want him to let Kevin Johnson do his thing . It can be a good thing. Phil knight yuundermined bill perez at nike. Sadly phils son passed away, but he got a second wind and the board said a culture fit, but they never could explain why. But michael dell, steve jobs as you mentioned, many, larry page came back. Many times they have done a fantastic job. When howard came back in, they had taken it from stock was 9, 10 and up to almost 60 now. Its put a remarkable comeback. Revenues were about 10 billion now more than twice that. But it also was 2008. Nobody was doing well then. And many ever the thiof the thi howard said held do, they didntdidnt and he blamed predecessor. They didnt slow things down in the romantic view, they used technology to speed things up. So i want to get the shareholder side of it, bill. Nobody will knock starbucks. Its one of the greatest brands created on the planet. And under schultz, stock up by more than 500 . But in more recent history it has been a troubled franchise. They missed sales target for the fourth consecutive quarter. They cited election uncertainty. They have yet to meet the promise much at least 5 same store sales growth. Is this the kind of management quote unquote change because as jeff said, it may into the actually be a change that you as a shareholder want to see . Well, lets not forget that this is a legal eaddictive drug that they sell. And i havent heard anybody mention ray kroc. Ray kroc retired from mcdonalds in 197 after buying the stores in 1961. And so really what a t. All comes down to are systems and processes if place after buyin in 1961. And so really what a t. All comes down to are systems and processes if place4 after buyis in 1961. And so really what a t. All comes down to are systems and processes if place after buying in 1961. And so really what a t. All comes down to are systems and processes if place to support this bland with rand with an ad product that has become a social magnet. By the way, i think youre leaving out a couple of two for one stock splits on that price from the lows in 2009. I think the stock was fep and i think its split four for one since then. So its been quite a stock. 10fe i think its split four for one since then. So its been quite a stock. And think its split four for one since then. So its been quite a stock. Weve owned it since the fund exited, and it will be nine years old january 2. So you have a business that creates massive Free Cash Flow and massive returns on equity from this addictive legal drug. And i would agree that it would not be the First Company like this that struggles through a period where ray kroc or walt disney or howard shuttle hands the reins to other people because its kind of his baby and its hard when you bring in asitter and parents still are at home for a while. You can pull it off. Bill gates worked it out with steve ballmer. Took a few years, but now at an all time high. At intel, founders never crowded the successor. They stayed around in an ambassadorial way. There are some generals that return. Theyre not that upset about their chance to get back in. And howard has done that. This is not the first time by the way everybody should know this and reminding jim perhaps coming up and this is the second time that they have gone through this as right. So it was a planned succession. But Howard Schultz is a master architect. And he is the orchestra conductor. And he cant just walk away. And his moon shot activities i want to get to the question that share shoulders are facing. And that is a stock price authentic till the election when the stockshoulders are facing. And that is a stock price authentic till the election when the stock got a jolt to use the coffee metaphor, had been down 10 for the year until the election about th election. So is this the right team to turn things around, bill . Its the exact team that was there before with the exception of the ceo. The people there with all the way through, the people 30 years of history, are kevin ryan could be the right guy, of course hes been on the board for more than half a dozen years. And 6 of their payments their orders are now mobile. Bill being i wbill, your per investor. Valuation matters dearly. And what happened 2007 through 2009, price earnings multiple came down to the point that if you really had the guts at the height of the financial crisis, could you pay ten times earnings to buy the business. Reason we dont have as big a position in the stock is its hard to own something at a 30 times multiple. And this is an older more mature company. Its got great future in front of it. But that multiple put as risk in there and i think thats kind of what youre getting at. This is not a value buyers pick. Its a momentum stock. And therefore the risk is that you wake up in about 10 or 15 years, you have a 20 multiple instead of a 30 multiple. And whatever Earnings Growth that you get the next ten year, success of the stock will be reduced by the contraction of the pe multiple. Gentlemen, we have to leave it there. Thanks for your time. Appreciate it. And a programming note, Howard Schultz will join us with Kevin Johnson live 7 30 a. M. Eastern time right here on cnbc. Dont think there is any alcohol. In the new in the old ones they serve alcohol at some stores. But the experimental, 15,000 square feet, i mean that is like a big box store. Yeah, 5,000 square foot house is pretty big. So what is a normal starbucks, like 2,000 . In new york theyre very small. In a lot of places. And 15,000. But the coffee there its another experience. About bbut will it work. In this environment in which populism was really the message of the day, you have to wonder whether or not a coffee chain that is serving 12 cup of coffee millennials werent involved with the populist movement. Theyre still petting their puppies and everything. But this is really amazing. Also wants to be be the willy wonka of coffee. So you can imagine remember that was a cool place in both movies. So you might go. I dont know. Roast my seasoown . I dont know. Well find out. But some people are saying is this the type and place for that to even go more upscale. Are you tone deaf to what is going on in an environment where even just the average american is seeing food deflation, people are used to paying less and less and less for food. So will you get used to paying 12 a cup for coffee . All right. President elect trump revealing his pick for secretary of defense after a busy day in indiana and ohio. Eamon javers joining us from outside trump tower. Kind of interesting watching some of it last night. Im told general mattis doesnt love that name, mad dog, but president elect loves that name. And it was funny, krauthammer said if someone does Something Like iran keeps on harassing our naval ships, you can always say, you know, if you keep doing that, well bring in mad dog. And just having that name ready its a helpful name. But he supposedly doesnt like it that much. Especially if youre a marine corps general, thats the kind of nickname that a marine corps general should have. And hes also known as the warrior monk. Hes never been married. Hes viewed as a thoughtful leader. And a favorite saying is engage your brain before you engage your weapon. Very quotable guy. But we were waiting for this pick all week and finally last night donald trump let the news out of the bag. Heres what he said this ohio last night. We are going to appoint mad dog mattis as our secretary of against but were not announcing it until monday, so dont tell anybody. Had dog. He is great. So dont tell anybody except the entire national tv audience. We should also talk about companies and what donald trump said in his trip to indiana yesterday where he made the announcement that that carrier plant that was the focus of so much rhetoric on the campaign trail will actually be keeping 1100 jobs not sending them off to mexico as planned. It was a big moment for donald trump. And he said that other companies and other ceos should Pay Attention to what hes doing there. Heres what he said in indiana. Companies are not going to leave this country and workers will keep their jobs. And they can leave from state to state and they can negotiate good deals with the different states and all of that, but leaving the country will be very, very difficult. So you have to say this was a big political win for donald trump going into january. Sends a signal to his supporters that he is going to exactly what he said he was going to out on the campaign trail in terms of keeping jobs in the United States. Ceos will be left to sweat out the consequences of what this means for them and what this new relationship between the president of the United States and Corporate Board rooms will be like. But for now, it gives donald trump a lot of momentum going into january. Have to go, but a lot to think about here. Carrot stick approach is the best one, use the carrot, obviously not the stick. And i hope some day when you say there are consequences to leaving, i hope those consequences are that youre giving up the opportunity to work in the best place for business where capital is treated best, where youre rewarded and its the greatest country. I hope the consequences arent necessarily punitive or tariff, but just that youre missing out on a place that is so contusedu to good business. Its not clear what the consequences will be, but i think for the workers at carrier, they dont care about the philosophical debate about whether government should intervene and what the relationship should be. They care about the jobs. And thats what the people who elected donald trump care about also. So he is playing very much to the base and also some undecided voters who rpt sure who this guy was, he is sending a signal about what he will do and so different from the way barack obama handled the interaction between bush and his own presidency. Obama people very much at that latter part of 2008 said we only have one president at a time. That was the mantra. They held back. Donald trump very much seizing the limelight from barack obama, very different style, tone and way of operating. Yeah, i saw the commentary i love the word sniffed. They sort of sniffed at saying yeah, this is a good thing. But they werent that excited. Populism kind of got the republicans where they are right now to some extent. So if youre not a purist, you can have hillary and all the democrats still in power if you like it that way, or at least feel the tone of the country and go with it a little about that. Old saying in politics, you got to dance with the girl what brung you. And donald trump is dancing with the girl that brung him. From maybe we dont have to be anyway, this is all for future discussion. Cant do it here. But thanks. Coming up, well get you ready for the november jobs report. What it could mean for a december rate hike. They are the natural borns enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. May not always be clear. But at t. Rowe price, we can help guide your retirement savings. So wherever your Retirement Journey takes you, we can help you reach your goals. Call us or your advisor t. Rowe price. Invest with confidence. Girl youre going to need me. Youre going to need us. All of us. Youre going to need our help with your water. Your air, your food. Youre going to need our determination, our compassion. Youre going to need the next generation of leaders to face the challenges the future will bring. And we promise well be there when you need us. The jobs report will hit the tape at 8 30 a. M. Eastern. And here to tell us what to expect, Michelle Girard and joe zeitle. So many richard bernsteins. Is it coming out today, honest to god . It is. Werent you just here . Wasnt it monday when you were here . Exactly. Its been a month since we last talked about jobs. Last one seemed a little more important. In many ways doesnt it feel like the wormtld has sort of changed. Have you been on since the election . Yeah, we talked two weeks ago. We did sort of a symbolic high five. Which is rare around here. No one saw it. Good may maybe it didnt happen. Yeah, so maybe it didnt happen. But back then, it was influencing the election. And the fed, we were at 1. 8 i think on the ten year. So now could anything change the fed at 2. 4 on the ten year and elections . Thats what im saying. Does it really matter. The market is fully priced in not only for december, but looking ahead, theyre starting to understand that this is we will have a very different Interest Rate outlook than we had prior to the election. And the market is focusing on the potential for better growth, higher Interest Rates. What happen as in terms of todays report i dont think will change anybodys opinion about where were ultimately probably going. Have you seen rich at all since really . Yeah. Is he surrounded by golden retriever puppies . Does he have a lot of playdoh, is he coloring . Not quite a delicate snowflake. You were okay, right, youre not necessarily simpatico with all the other we might share the symbol like high five off camera. Markets anticipate things, but you would hope eventually things fall this to place. Yeah. Will they fall into place do you think . We think so. If were looking 6 to 12 months out, were looking at an environment where number one profits growth continues. Were already seeing profits growth. Were well off the trough in corporate profits. Were seeing a pretty good reflation of earnings. Number two, were seeing inflationary pressure. And number three, we cant discounts the possibility that this new administration will provide the stimulus package or increment talalley lower taxes. All those conducive to outperformance. And i think Leaders Within equitiesalley lower taxes. All those conducive to outperformance. And i think Leaders Within equitiesy lower taxes. All those conducive to outperformance. And i think Leaders Within equities will tiffin to be energy, financials, small caps. Even technology. He we think that these economically sensitive sectors will continue what is wrong with tech right now . Its really gone crush and i think its the notion of this trade war. Really . The whole reason why tech is getting crushed is because of a fear of a trade war . We struggle to understand it, too. No boost from repatriation of profits, those dont offset that fear . You would think so. You also have pretty good underlyings growth in the tech sector. So for us its a little bit of a surprise. And i think the more that you hear president elect trump talk about this wall or whatever, there is almost this direct correlation between that and tech getting hit. So for us, were not scared off by the headlines. We think the odds of a trade war are hopefully pretty low because our history tells us that theyre not good and hopefully someone would share that with trump. But these cyclical sectors will outperform the more defensive bond proxies like your telecom, utilities, your more defense iv areas. So did either of you because im hearing stuff from, you know, there are certain sectors of the gop or republicans or people that are private sector free market types that look at yesterday and really do call it Banana Republic type rhetoric, were keeping jobs here, not letting you leave. If you start completely shutting off the free flow of capital and rain, that is antithetical to free market ive even coined the term like a neo capitalist. I can make a case because shareholders, management and ceos have benefited greatly for ten years because of the fed or whatever. And i could almost say ill give up some Profit Margins to help bring up everybody else and increase the prosperity for all of our citizens. Rather than expanding the safety net and Unemployment Insurance and welfare and food stamps. Maybe the government expends some power and capital keeping is that the wrong thing to do to try to keep it here . I think obviously as you said companies have benefited. And shareholders. And workers havent. And i think thats what has gotten us to the point were at today in terms of when you look at the trump victory. It explains a lot of it. Ultimately i think you want to create is it dangerous what you hear though . You want to create a culture that Companies Want to stay here. Carrot, not a stick. Exactly. So to me thats most important. Lets say every one of our manufacturers go to a place where its 2 an hour. And we dont have make a single thing in this country, but all of the corporations are really profitable. What if we were in a time that it was the textile mills that were save something at what point do you say that this is intervention and interfering with the national and you end up distorting capital where it should normally go. Where youre restricting either capital or labor, it leads to higher prices. But if you got no one to buy the corporations are great, they have maximum profits and everybody is doing great, all the shareholder, but the workers are still stuck. But here is the slippery slope. Its the smoot holly tariffs. That was a republican senator and republican congressman who drafted the bill ultimately signed by a republican president and it led to like the biggest trade war anyone had ever seen. It was way back in the 1930s, but for a good history, watch ferris buehlers day off. Ben stein plays the professor, giving his lecture. Anyone, anyone. Exactly. You dont want to let the enemy i dont think populism got the republicans or at least some pop uhe wriulist rhet republicans in. They could be mitt romney with his 47 on the outside looking in with nancy pelosi and Elizabeth Warren and Hillary Clinton and Bernie Sanders in charge. I ultimately do think and now i sound like kudlow, growth cures a lot of ills. But if we could get the economy growing in a faster i think that a lot of the it is content a it is contents that caused us to turn more inward could be thank you. Coming up, first brexit and then trump. Will this weekends italian referendum be the third surprise of 2016 . What it means for the European Union next. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Welcome back to squawk box. Time for the executive edge. We are talking about the power of pop uhe limulispopulism. Brexit and then trumps victory. The next country to face a critical vote, italy. Julia chatterley joining us with more. Reporter well, as you pointed out, the whole point of this referendum was ultimately to try to streamline government here, centralize power, and ultimately usher in a period of more stable government. And that is desperately needed. Italys had a whopping 63 governments in just 70 years. It sounds Pretty Simple and it would have been if Prime Minister renzi hadnt effectively turned this into a confidence vote the by saying he would resign if the no vote wins. And that is now looking most likely. So this would be fine if all parties hadnt galvanized including the five Star Movement and trying to use this as a way to oust him. The big fear has been what happens in a worst case a their y a 2345scenario and we go to fre elections. People are angry becausethei scenario and we go to fresh elections. People are angry because no one fulfills what they are looking for in a politician. Because the five Star Movement, they look like amateurs while the other parties, they are very good at politics, but they use it against the italian country. Right now lets be clear, the risk of fresh election feels pretty small, but takit is a ri other leaders are watching closely. Because this is not the only vote we have in europe. The austrians head to the polls this weekend. We have the french elections of course next year, as well. And we heard last night Francois Hollande the current president now isnt going to run. He was very unpopular, but its a point to watch. We also have germany, the netherlands. And populism and the protest vote is likely to be a critical factor in all of these elections. So its about way more than just italy. Thank you, julia chatterley from rome. Coming up, it is jobs friday and were talking employment and Silicon Valley. Well talk to an investor who made big bets on yelp, yammer. And a quick check of the european markets. Julia had been talking about the uncertainty and were seeing that in the red across the board fo particularly in the ftse. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Its jobs friday and while Silicon Valley is known as the must be for innovation, could it be a prime place for creating jobs . Joining us cofounder and general manager of social capital. Great to have you with us. Somehow donald trump seen in Silicon Valley as possibly creating the environment to which jobs could be created . Well, jobs is a big topic of conversation everywhere and its a big topic in Silicon Valley. And you think about it, we are building automation, a. I. , things that will displace jobs in years to come. And ubers acquisition of the Company Called auto it is places the 3. 5 million Truck Drivers in the country sf. We were talking in the break how automation destroys more jobs in offshoring. And here we have donald trump saving a carrier plant which is great for those carrier workers, but is there a fear that perhaps the same phone call could be made to another company which is thinking about automation saying dont automate, save those jobs instead . Yeah, well, if you look at lets say tesla, tesla makes cars in Silicon Valley. A lot of robots, a lot of automation, but also a lot of very skilled people. So the order of 20,000 people making maybe a 20th of the cars of gm, but a tenth of the labor force. So automation hasnt completely displaced the jobs required to build cars in california. And weve seen enough examples of buggy whipped employees being put out of work and eventually comes back with a much greater you know, the creative destruction, weve seen it happen again and again, we cant stop it, but i understand the near term pain that will happen when automated trucks, do you know how many 3. 5 million drivers. And how many states have that as one of their major so i dont know how we navigate this. Are in enough engineers and code writers to take up the slack and everybody will be writing some stupid social net working code . Thats not the world that we want to create. So if you think about it, our mission at social capitalist to advance humanity by solving the worlds most difficult problems with technology. And thats just not words. Its very important to large pools of labor. So a couple things that were doing, one is we are tapping into the labor markets that have been untapped before. So people who dont have fulltime job bes, who could have some sort of job as uber drivers. One specific company were involved with is home hero which provides elderly care assistance to elderly, it matches folks willing to do the parttime job. And that is 94 Million People in the country who are unemployed but could have some sort of employment. So theyre not even in the labor pool market today. So that is would be side, tapping into these pools of labor that exist that people dont employ. The other side of it is how you bridge the skills gap, how you take people who their jobs, those tech jobs, and how do you get the light tech skills to do those jobs. So Companies Like treehouse get the three month tech degrees and get people into tech jobs which are not necessarily at tech company, but at like in any industry any part of the country, inside of tech company, but also outside the Tech Companies. If peter teal walks in to a restaurant in, i dont know are somewhere near stanford, will he be booed or what will people do . Is he ostracized . Its a little weird that the hot bed of innovation in this country was so antiwhat you would think of as free market principles, private sector principles. Is this it that they love the c capitalism that they have lived off of or why would so many eric schmidt, go done the list. Why are so many in bed with people who support Bernie Sanders, Elizabeth Warren, Hillary Clinton . It goes against the beliefs of capitalism. Were the most Capitalistic Society of them all. Then why is eric schmidt got a Hillary Clinton i think it has to do with progress. We fought so hard as a nation, as a people for progress, and Silicon Valley represents progress. And i think if you just question progress progressive ideals because a lot of progressive ideals are till th actually regressive. As a muslim american, progress is like the right to exist is questioned, that is not progress. And the right for Skilled Labor from other countries to not come so a social agenda has kept Silicon Valley for the left . Our job is to flatten the world and provide opportunity for all. And if we cant do that, if there is any sort of bigotry involved, it makes it hard for us to do this utopian view of the world. You acknowledge though based on what we know right now this, could be fantastic for your industry. Absolutely. Thats too bad that you have to pick and choose i have this on one side of the political spectrum, but they have all these negatives and this or the other side and they have all this i think we say social progress is greater than some tax cuts. I think that is like the overwhelming belief in Silicon Valley. Like that is the long arc of history will be on the side of social progress. And capitalistic success will follow. Thanks. Thank you for having me. Coming up, speaking of social, the marijuana business is one of the Fastest Growing industries in the country and the number of people it triple. Kate rogers is in denver to tell us where the jobs are. Thats next. Coming up, the final jobs report of the year. Its a make or break number for the feds rate hike plan. And it could help determine if we get a santa claus rally this year. Dont tell him what you want. Hes a liar. You disgust me. How can you live with yourself . Just cool it. You sit on the throne of lies. The number and instant analysis, coming up at 8 30 a. M. Eastern. Okay, so you launched r banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Theres one industry that is smoking hot in america. Kate rogers joins us where pot is growing jobs. Hey, kate. Reporter hey there, joe. Thats right. Marijuana business daily estimates that retail sales will hit about 5 billion this year with an Economic Impact of between 14 billion and 17 billion now over the next four years those numbers could surpass 44 billion in terms of Economic Impact. We are live here today at the dispensary medicine man in denver where the owners are quick to cash in. But finding a knowledgeable and professional Skilled Workforce is a challenge. Cannabis has been a gold mine for medicine man. William started a small Family Business and now runs nine separate marijuanarelated ventures. Hes planning to expand. We have very unique problems for this industry as its growing and coming from the black market into the light. And every problem that exists is another opportunity for an entrepreneur to make that problem go away. Reporter the industry offers a myriad of job seekers from plant cultivation to manufacturing, retail, and management. About 150,000 people work in cannabis today according to analysts and they expect the opportunities to expand in the coming years. Given eight states passed ballot measures to legalize marijuana in varying ways on election night. With the new states that legalized, were going to possibly triple retail sales in a couple years. Thats going to have a massive impact on communities and states as this kind of trickles throughout our economy. Youre going to see the creation of at least 100,000 new jobs, maybe double that. Youre going to see thousands of Companies Start up as well. Reporter now, to get a job in the industry, it is not enough to just like pot. Theyll start you at around 13 an hour. If youre in a Key Management role, you could be bringing in six figures. One thing they pointed out, postelection night of a donald Trump Presidency raises questions how this might be regulated in years to come. Over to you. Thank you. And thanks to kate rogers early out there. You know what is feeling the impact of increased pot sales . Increased twinkie sales. Sort of. Doritos. Depression on beer sales. Beer sales in these markets oregon, washington, and denver metro have underperformed the overall market year to date by 260 basis points. So people are buying less beer in the place there is legalized pot. Certainly no reason not to have a beer with pot . I cant speak from any sort of experience. Im talking about things i read. President barack obama and the first family have lit their final National Christmas tree. The 94th annual Christmas Tree lighting took place last night. They took stage to light the tree. The ceremony was full of musical performances including Kelly Clarkson and james taylor. An l. E. D. Lighting system was unveiled at niagara falls. They are much brighter than the old ones and use about half the power. Thats gorgeous. A little hey 19. You know that song . Youre way cooler than i am. Now to sports. Tiger woods made his return to the course yesterday. Playing his first tournament in nearly 16 months after recovering from back surgery. Tiger was on fire early at the hero world challenge in the bahamas. He was tied for the lead after the first eight holes but faded late putting a ball in the water. Tiger finished at 1 over par in 17th place in a field unfortunately of 18 players. Is that in atlanta . I may know that course. But hes 41, i think, isnt he . Somewhere around there. Physically if he, you know, is healthy and everything then you got to get the mental. Got to get the confidence back. I dont know what to think. I dont know what to think of whether he wins more majors or not. I hope he does. Because hes great for golf. Coming up, our guest host this morning will be ken langone cofounder of home depot. Hell weigh in on the trump transition. Then or news makers of the morning, the outgoing and incoming of starbucks. Squawk box will be right back. My business was built with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. 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If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. Keeping jobs in america, president elect trump touting his deal with carrier. I just want to let all of the other Companies Know that were going to do great things for business. Reaction from a man who knows a thing or two about job creation. Ken langone. Jobs friday is here. The buzz on the street about the data and a preview of the numbers straight ahead. And stirring things up at starbucks. Howard shultz stepping down as ceo. We speak to him and his replacement Kevin Johnson on a first on cnbc interview as the second hour of squawk box begins right now. Live from the beating heart of business, this is squawk box. Welcome back to squawk box here on cnbc. Im joe kernen along with melissa lee. Talking to ken langone. Andrew is in seattle this morning. Hes going to be speaking with Howard Shultz. I wondered where the heck you were. And Kevin Johnson of starbucks. You dont have to check in with me but would be nice to know things. Ken langone also is here. Cofounder of the home depot. Nice weekend coming up. You got the executive branch, legislative branch, scotus. Any reason not to be in a good mood . I think what he did in indianapolis yesterday was brilliant. I understand what the feelings are whoa, whoa. I understand why we dont want to have a managed economy by government. Hold on. This guy is the first time i can think of of a small number of people. All politicians talk about how they want to save the world and ive got to help you and they proceed to go on and do nothing. This guy god bless him said you know what . I know about these people. I dont know if im doing the right thing or not, but im going to go out there and help them save their jobs. Were going to have like eight minutes where we just unleash you. Meantime, let me talk about the futures for a second because its the top of the hour. Got to update people. Go long america, okay. Down 19 on the dow. Heres whats making headlines this morning. New figures out show how much investors have soured on bonds. They pulled from taxable bond mutual funds over the past week. The most since june. And saw 2. 1 billion. Pimco will pay 20 million to resolve government claims that have misled investors. Unclear about the performance of its pimco total etf on the total return fund. Pimco neither admitted or denied the findings. And not all brick and mortar retailers are hurting. Ulta is up 6 after providing an upbeat forecast. Starbucks stirring things up on the corporate level. Andrew ross sorkin joins us with more on this top story of the day. Andrew . Good morning. We are in seattle this morning. Howard shultz, the iconic leader of starbucks announcing hes going to hand over the ceo title. Thats going to happen effective april in 2017. Kevin johnson, the companys current president and coo is going to take over from howard in that role. Howard shultz is going to remain at the company as the executive chairman. Hes going to be in charge of the companys growth project known as reserve. Were actually in a roastry right now. This is part of the premium coffee brand. Were going to talk about that. Hes also going to be responsible for continuing the social impact projects that the company is pursuing. Kevin johnson of course a longtime board member of starbucks and a member of the technology community. Worked at microsoft and was a former coo of juniper. The stock went down in the aftermarket after the news was announced. Its recovered. Its down about 3 right now. Were going to talk to both of these gentlemen in an exclusive interview at 7 30 eastern time. Lots to talk to them about the decision, how it came to be, and where this company is going. And just a personal note, after this news broke yesterday, i had an opportunity to spend time at starbucks headquarters and saw both of these gentlemen talk to the companys employees. And it was one of the most emotionally fraught meetings i have ever seen talking about what business can do and what business can create. To see so many employees crying and saying thank you in ways that just were remarkable. I know you have ken langone in the studio, a founder of a company whos created tens of thousands if not hundreds of thousands of jobs. In a very similar way here. But the emotional outpouring was a remarkable thing. I hope we have an opportunity to talk about that. Were going to talk to both of these guys at 7 30 a. M. Eastern time. You have a good feel for what a 15,000 square foot, like, upscale place would be . I thought sambuca is there alcohol involved . Were go ahead. Were in the roastery right now. Maybe well show you around. It is A Willy Wonkalike factory here. All about coffee. Its a remarkable thing. It really brings to life what starbucks is all about. And you asked about alcohol. I dont think they have it in this location, right . Howards over there. Its not in this location. But theyre building one like this in new york that will. Brought up alcohol like five times. Five times from 6 00 a. M. To 7 00 a. M. I work at 6 00 in the morning. I was just wondering how you make it that much better. And more expensive. Irish coffee or something. Something with whipped cream and sambuca or something. I dont know. Im going to show you the drink. I was having an iced nitro. And how much it costs. How much did my nitro cost, guys . Whats the price . I said it was too cheap because it was that good. But 6. 50 . 6. 50. For an iced coffee. Ill show you a glass of it in just a little bit. And youve pointed out many times you dont part with things easily from your wallet, right . It was good enough where youd spend that . Id spend more. It was that good. I told Howard Shultz the prices in this election actually were too cheap. I hear the reason you love to go out west was because you heard i was going to be on the show this morning. Its ken. Is that right . Whatd you say, ken . I said i hear the reason you went west was because you heard i was coming on this morning and you couldnt take the abuse. Not true at all. Ken, separately, the sorkin family including my family need to thank you because we had that eggplant the other day that you dropped off. It was spectacular. Thank you for that. Made with these hands. Howard shultz is here. He literally like a barista just handed it to me. This is the nitro. It has nitrogen in the coffee. He doesnt have a mike on but hes going to come back in just a minute. And this is it looks like a guinness. So it has nitrogen in it . Thats cool. That is wow. And you have an iced coffee every morning on the set. So you are the source on this. Im going to have to try to get one like this though. Andrew, great job. Well be back to you. Its pretty cool that that he made Howard Shultz made him the coffee himself. And we had the two cabinet guys on a couple of days ago. And now this. This is good. Its good. And it is jobs friday. You were saying that. What . Youre hitting me again. You were saying how we had the cabinet guys. It was extraordinary. Can i just say youre slipping here . You got starbucks on, theres no coffee if the place. You got langone on, theres no two by fours, no hammers. You used to get the good stuff. Were not an advertising platform. You used to get the good stuff. Quayle used to arrange it. Is it all about payola with you . A decent cup of coffee is all i want in this world. We already talked about the jobs report and said were at 2. 4 already on the 10year. I came in early, i wrote this wonderful discussion. Do you want to hear it . I do. Thank you, melissa. Bless your heart. We are looking for a generally strong number amid what is a declining trend. Were looking for 180 is the number. 161 is what it was. Unemployment rate seen at 4. 9 unchanged. Were looking to see if people came into the workforce or not. Average hourly wages up 0. 2 . Its been something thats been going up over time. Maybe the mix of jobs, better wages from employers. The threemonth trend, though, has been coming down the last couple months having hit a high of 2. 33 . The trend was well above 2,000,000. Low claims along with a possible actual weather bounceback from october where Hurricane Matthew may have paired october gains by 30,000. Also several reports that retailers even bid up wages. Only a weak number would derail the december hike and maybe even then not. No. Markets moved. Theyre lucky. So they dont have to actually decide. Theyll do a quarter. And what im watching is its a the next one has looked to be june july right now. I want to see if that moves ahead. Thank you. My pleasure. Got an intro here. All right. Were going to intro our discussion. I dont know if we need this, but let me read what they came up with. Donald trumps appearance at a carrier factory in indiana yesterday drawing the spotlight from some recent drama over his cabinet appointments. Back to his focus on jobs. Companies when they say theyre thinking about leaving this country because theyre not leaving this country. Theyre not going to leave this country and the workers are going to keep their jobs. And they can leave from state to state. And they can negotiate good deals with the different states and all of that. But leaving the country is going to be very, very difficult. Todays guest host knows something about jobs and thinks wages will rise under a Trump Presidency. Ken langone, the cofounder of home depot is here. And to free market purists, they were disturbed yesterday. Ive used that term, dont let perfect be the enemy of the good. If the republicans hadnt had a populist tone, Hillary Clinton would probably be in the white house right now. And they wouldnt be governing. So the working man in the United States came back to republicans working men and women came back to republican. At least theyre in a position to govern now. Are we a Banana Republic because were going to start managing . No. I see beyond the event. Number one, trump has to understand and he will no doubt about it, trump needs to understand we dont have a managed economy. We dont say to companies you cant go and you wont go. All right . Thats scary. I think you push this all the way and you say he took a little situation, a thousand jobs, and he made it a symbolism of honoring his word. Okay . I hope we dont take any more out of yesterday that be that. Going back to the philippines, i shall return. The fact of the matter is i marvel at the number of politicians that want to help thousands upon thousands and millions of people. I know your pain, this has got to stop. Im your guy. The thing i see here that excites me is that hes not going to forget how he got into office. Whether its creating an environment. The most exciting thing i see here is deregulation. Regulation is strangling. Im surprised yesterday he said he was surprised that people are more worried about regulation than they are taxes. Guess what. Regulation is a regressive tax. You pay it whether you earn money or not. Income taxes you only pay if you make money. I think give this guy a chance. Look, hes an entrepreneur. We know hes an entrepreneur because how many times has he come back from the dead . And this is what im excited about this guy. He doesnt quit. He doesnt give up. You realize the energy this guy burned in nine months and how he campaigned . He was tireless. And the resonated. He knew his market. And he won. So on the other hand when romney made those remarks in march, i gave him the benefit of the doubt he was speaking his mind honestly. But in back of my mind, i had the thought maybe this guy is setting himself up to be drafted. Because back in march, trump didnt have it yet. And it was a free for all. What he did in the last two weeks hes got to be ashamed of himself. Where is the selfrespect . The horrible things you said about this man and now youre willing to go to work . Used to love this guy too. Oh, i raised a lot of money for him. Guess what. The right thing happened. But where is this sense of how can i say these things and then have this man as my boss . But it goes back before that. In 12 with great fanfare he announced trumps going to support them. He took the mans support and barely four years later hes saying what an evil guy he is. Hes a flimflam artist. Im paraphrasing. But this is whats wrong with politics in america. This is why im excited about trump. And by the way, the thing this morning lee raymond would be fabulous. I mean, right now based on the names that are out there, i pray to god they pick bob corker. I know bob corker. Hes a fabulous human being. Henry kissinger said the most important things in Foreign Affairs is trust. I think if bob corker and by the same token i know rex better than lee. I do know lee. From exxon. These are good people and these people dont need a thing. If they did it, they would do it for the good of the nation. And i hope as i said if hes got these kinds of people in their sight, plus i like what hes done so far. I am concerned about elaine kho chow. Is not going to allow a vote on term limits. Okay . Now, here were right back to where we started. Forget what the American People want. Were going to do what the hell we well please. If he does that and he defies the will of the American People that want term limits, if hes going to defy the American People, he deserves what he gets. It isnt like its going to rush right through. But if this is what the American People want, then damn it give it to them. All right. Were going to talk about that and were going to get back to, you know, how you bring back jobs. And what is fair game for the government to be involved with. It would be nice to use a carrot instead of a stick. Be nice to make it so attractive in this country that people want to keep stuff here. Right. Ive involved to the point where shareholders and ceos, everybodys done well for the past ten years. Youve done well. The workers have not. Would it be the end of the world if Profit Margins were ten basis points lower because suddenly youre seeing some movement from the ground . I sound like let me say it a little differently. If we dont address income inequality in america, were going to have social instability. Okay . Thats how important it is. If the government has to grease the skids somewhere, wouldnt it be better to keep all these guys employed rather than put them on Unemployment Insurance . What we dont know is how many jobs are going overseas simply because of the rate of taxes. Right. Maybe thats maybe its a carrot. Much more on this straight ahead. Meantime when we return, donald trump touting an agreement with carrier. Michelle carusocabrera is at a carrier plant in mexico speaking to workers there. But it is jobs friday. We are right now indicated lower but a lot can change in an hour and ten minutes time. Squawk box will be right back. , or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. Find out how American Well be with you shortly. Yeah right. Xerox Predictive Analytics help companies provide a better and faster customer experience. Hello mr. Kent. Can i rebook your flight . Im here xerox Customer Care services. Soon to be conduent. Wait im here mr. Kent . gasp shark diving xerox personalized employee portals help Companies Make benefits simple and accessible. From anywhere. Hula dancing . Cliff jumping xerox Human Resource services. Soon to be conduent. President elect trump visiting the indiana carrier plant where jobs will remain, some, instead of going to mexico. I will tell you that United Technologies and carrier stepped it up. Now theyre keeping actually the number is over 1,100 people which is so great. Which is so great. Michelle carusocabrera is at one of carriers plants in monterey, mexico to see what the reaction is. Im glad youre down there, michelle. But since you are the author of yourn im right. I wish i could talk to you about what we should think about this as well. Because ive evolved a little bit. I dont know whether youd be simpatico. But whats going on there . Reporter it bothers me a little bit. But well discuss. No surprise what happened at carrier yesterday. Front page news here in monterey, mexico. The headline says trumps antimexican endures. The reaction here is befudd befuddleme befuddlement, amusement. The governor here told mexicans they shouldnt shop in the United States which is very common to show their economic power. The local economy minister suggested the United States was suddenly acting like a Banana Republic the way mexico maybe acted 20 or 30 years ago with a politician telling corporations what they can or cannot do. Now, local Officials Say there are approximately 3,000 carrier employees in the area. And they think thats going to go up. Their understanding is this new plant is going to open. Its going to rise to 4,100 employees even though that number was supposed to be 5,000 employees in total. There are hundreds and hundreds of american manufacturers in this region. Take a look at some of the names. Bridgestone, caterpillar, pepsico, whirlpool. Why does this happen . Wages. Take a look. According to the Conference Board manufacturing wages hourly last year the the United States, 37. 71 per hour. Compare that to mexico, 5. 90. And that cost is going down because of the peso. The peso getting hammered every day. But its been going down for two years. In dollar terms, wages here declined last year by 12 . It is infrastructure, improving from here. And finally, joe, this country is embracing the private sector in a way it didnt for many years under socialism. So the Regulatory Environment is Getting Better as well. Mexico is competitive. Thats the underlying issue. And donald trump cant fix it by going from Going Company to company pressuring them. Theres other issues here. Yeah. I hear you. We know what we have to do. We have to make capital and we have to make the United States more attractive and do everything we can to make it more attractive to keep them there. Thanks, michelle. But that was depressing just listening to that. Programming note, greg hayes is going to join someone at some point. Lets get to andrew in seattle with whats coming they rolled there. You can see where hes going to be on jims show. Whats up, andrew . Whats coming up . Joe, we are in seattle. Coming up the big interview of the morning. Howard shultz the outgoing iconic ceo of starbucks along with the new incoming ceo of the company, Kevin Johnson. Well speak to them after the break. As we go to that break, take a quick look at the futures. Were back in seattle in a moment. Welcome back to squawk box. We are live this morning in seattle with the big news of the morning and the big interview of the morning. Howard shultz, the iconic leader of starbucks, announcing that he is going to hand over the reins of the company as ceo to Kevin Johnson. Thats going to be effective april 3rd, 2017. We have both of these gentlemen with us this morning to talk about this momentous decision. Good morning to both of you. Congratulations, kevin, on the new title and the new role. And youre not going anywhere. Youll remain the executive chairman. Were going to talk about that. So many questions this morning about this decision, your decision to hand over this title. How did this happen . Why and why now . Thank you for being here, andrew, and thank you for being in the roastery. As we discussed yesterday, kevin and i have been together now for almost ten years. Seven years kevin served on the board. Two years as our ceo and president. And for the past year and a half we have coauthored the strategy of the fiveyear plan of starbucks. And what was clear was that kevins ability, skill base in my view he is much better prepared to really manage the Global Operations of the company than i am at this stage. You said that yesterday. What do you mean by that . You dont think youre equipped to do it . I think kevins skill base and his experience, he is much better prepared than i am while i can take advantage of what i think is an Enormous Growth opportunity for the company in leveraging the equity of the new brand, the Starbucks Reserve brand, the roastery, on a global scale. You mentioned were under construction in shanghai and new york. Just announced tokyo. Theres two more coming. Were building a new growth platform in starbucks while kevin will manage and integrate technology in ways that i think will really advance the opportunity for starbucks. In ways that i am not as well versed. I think kevin has been at my side for two years. Theres no better person, no better leader. And what you saw yesterday at the company meeting, you saw the response i got. But the response he got, the respect and admiration that people have for kevin. Speak to the timing. Some people suggested you had set this up. Those on wall street who were focused on it understood that a Succession Plan was in place. I dont know if they understood necessarily the timing was going to happen now. Why now . And let me go back to how this evolved coming out of our skre Strategic Plan. There are three strategic objectives. One a around elevating the brand, the second is elevating the customer experience, and doing those two things allows us to amplify starbucks as a destination. We delivered that Strategic Plan and discussed it with our board in may. And coming out of that may board meeting, howard and i sat down and said how could we best focus our individual capabilities and contributions to help make that plan come to life . And that led to the set of organizational alignment, announcements we made back in july and the way we set my responsibilities and howards responsibilities. Sop it evolved from that Strategic Plan. Youve tried to accept back before. This is not the first time youve tried to. What is going to be different now . Why are you bringing that up . No. And by the way, we saw what happened and then you had to come back. To the extent there were Lessons Learned from that experience. I think there were two things. On a macro level, i left right at the beginning of the cataclysmic financial crisis and starbucks had a very difficult time navigating through that. We did not have the quality of the team and the resources we have now. We didnt have the leader. I think on a personal level, i dont think i was as emotionally prepared to lead the company. This time around ive got a fulltime opportunity in terms of brild building the reserve brand. The wind is at our back. How were doing in china. So the opportunities in front of us i think are so strong, there will be no issue whatsoever that would be close to what happened in 2008. How hard was it for you to decide to do this . Even in the past 24 hours. You know, Something Like this, it doesnt hit you until you actually say the words. You prepare for it. You put yourself in a position to say the words. But when youre in front of everybody and you make the announcement and its real, you realize youve crossed over the rubicon. And i really am at peace with it. The company has never been better. Ive got a great partner who i trust with kevin. Im in a good place. Theres a special person back east known as jim cramer who has been following the company for a long time who i know has a question or three if not more for you. Jim, lets bring you into the conversation. Howard, even kevin in the Conference Call last night said you were one of the worlds most iconic leaders and entrepreneur. Why would i want to own this stock of starbucks if the man i most identify with starbucks is only the executive chairman and is working on a division that may or may not pan out even as i know that kevin is a strong leader . Well, you know, starbucks has been in business now for 45plus years. You know, im not putting myself in the class of tom brady or any other athlete that has been at the corner stone of success on a team sport. But, jim, this is a team sport. It has always been a team sport. Ive gotten more credit than i deserve. The company has a large base of fantastic leaders. And im not going away. Im going to add value in the areas that i think are skewed towards my entrepreneurial creativity and dna. Im going to support kevin when he needs it. And the companys going to continue to perform at a high level. I have no doubt whatsoever that starbucks the foundational elements of the equity of the brand, a customer experience, the pipeline of innovation in both product and beverage and in terms of technology and what the roastery and reserve brand is going to be. This is a great time to own starbucks. If i look at the stock price, you know, ill probably regret saying this on air but i think the stock is undervalued. Fair enough. Howard, im just trying to figure out whether your role will be i know you want to come in all the time. I know you are being involved with a particular division that youre excited about. But do you think youll be more of an ambassador . Do you think youll be able to speak out more . Do you think if you dont like something that president elect trump does, youre freer as an executive chairman to speak out than you would be as a ceo . Well, jim, i have not had a problem over the last couple of years in trying to demonstrate what i believe we all have a responsibility to do. And that is demonstrate moral courage with regard to how many people in america are unfortunately being left behind. And the issues that were facing as a country. I dont think my role and responsibility executive chairman and voice are going to change. I think starbucks continues to need to use its scale for good. Its platform. And i think as i said two years ago, i strongly believe that businesses recognize that rules of engagement has changed. And support the communities we serve. Kevin, just a quick one. Ill back out, andrew, after this question for kevin. Okay . No, no, please. Kevin, ive known you for many years. I knew you at juniper. Lets say i was interviewing you now to be the new ceo. Not that youd been there a long time. I would say what is your experience in consumer Package Goods or is the issue with starbucks the lines, the through put, the technology . Because the coffees darn good, but we cant get it fast enough and throughput is the most important thing i see for a problem in the Domestic Stores and maybe international. Thats a great question, jim. I point to the fact that ive been on this journey with starbucks for nearly eight years now on the board. Been eight years in march of 2017. Ive been intimately involved with the Management Team and coauthoring the strategy for the company here over the last two years. And operating every part of the business. Well, if we look at the fiveyear Strategic Plan we outlined. It is the most ambitious Strategic Plan in the history of the company. In order to execute against that, weve got to do many things in parallel and weve got to do them very well. And so my ability to be a great partner to howard and take all of this great vision and the strategy we have and figure out how to land it in a way that allows it to propagate globally and elevate the brand, elevate the customer experience, and ultimately amplify starbucks as a destination. Thats what i intend to do. I have great confidence in my partnership and relationship with howard. I have great confidence in our leadership team. And i believe in this strategy. Were going to make it happen. Kevin, when you were speaking to some of the employees yesterday, you acknowledged something that was very authentic. That when he asked you to take the job, you went home and you said to yourself, can i do this. Meaning actually can i do this. When you ask yourself that question and you think about the challenges ahead, what is it that you worry about . What is it to the extent if theres anything that makes you anxious, i imagine something must in terms of something that you want to accomplish in this role . Well, i think, you know, anyone that is being asked to step into this role would recognize this comes with great responsibility. And it is following someone who is an iconic entrepreneur and leader. And i think this would be something that anyone stepping in this role would have to consider. How do you step into that and knowing that i have to be authentic and lead in my way. I cant try to be howard. Im not howard. Howard and i share many things in common, the values, the way we think about the business. The preeshs for the mission and what this Company Stands for. But we come at it with different through a different lens because we have different life experiences. So acknowledging that and knowing that i need to lead in an authentic way. I need to trust in my partnership with howard and i need to leverage this World Class Leadership Team weve assembled. First new thing you plan to do and one of the Big Questions is same store sales. What do you need to do to increase that number in a meaningful way . Whats on tap . Same store sales, a big part of whats powering it is the work weve done to extend the instore experience to the digital experience and how mobile order and pay is helping amplify that. You look at mobile and pay. That is only deployed in Company Operated stores fundamentally in north america. We are now building that capability to extend to our license partners. To extend to other geographies. Thats a big unlock. If you look at this growth agenda, were going to have to grow more in the area of food. Weve had great from how we deployed for breakfast sandwiches. But the next frontier is going to be can we crack the code weve tried food before without real success. What have been the missing ingredients . Been a huge success for the company. If you look at where we were and where we are right now, our food sales and the attachment of food in the morning has been a significant driver. The question now is can we take advantage of multiple day parts and multiple needs . I think well be able to do that. Youre going to spend time on the premium business, the reserve business. Were here in this roastery i call it A Willy Wonka emporium of sorts. How can this move the needle for the larger business . I tried to explain that on the Conference Call. Let me slowly kind of walk you through that. I hope we have the time to do that. So in many other industries, the fashion industry, the automobile industry, there has been segmentation at the upper end in which businesses and brands have been able to go up in their core business. What we have created here in the last two years is a significant immersive experience that not only takes coffee to a new level, but theres no Retail Experience like this. It has far exceeded our expectations. It has four times the average ticket of a typical starbucks store and has become a primary destination for every tourist in seattle. We now believe that we can take elements of the roastery and bring it down to a different type of store about 4,000 square feet, twice the size of a starbucks store and build reserve stores in the same theme of roasteries. We also believe therell be 20 to 30 roasteries around the globe that will shine a halo on the entire company. Well have reserve stores in this brand and then were going to integrate into existing Starbucks Stores, reserve bars. All of that will add incrementalty, drive comp store sales, create separation in the marketpla marketplace. Now, while im doing that, kevin and his team besides managing the Global Business and growing the business will take the same level of initiative on the Technology Side and integrate a pipeline of new innovation in terms of Customer Facing Technology within the mobile ecosystem. And so a year from now, a year and a half from now, the company will be completely transformed both at the high end and in terms of consumer facing technology. The last thing id say the is and we havent discussed it is whats going on in china for starbucks. Theres no western Consumer Brand that has accomplished what we have on any level let alone our scale. 2500 stores in china. Were opening more than a store a day. Were going to do that for the next five years. I think chinas going to be larger than the u. S. 600 million middle class chinese coming into the marketplace. And we are positioned so well to take advantage of that. So this is a wonderful time for the company. And i think im going to get an opportunity myself to take advantage of what i do best while kevin is managing the business. Melissa in new york has a question. By the way b i was in hong kong a couple weeks ago. I love the red bean scones. I always have them when im in china. I want to ask you because youve been a vocal supporter of Hillary Clinton in the past. Since the election theres been a real optimism in the stock market for prospects of the u. S. Economy. Gauging your stock price, investors feel the same way. Since the election, up 7 . Do investors have it right . Should they be more optimistic for the pros pektpects of the u economy and therefore of starbucks . Well, i need to separate the prospect of starbucks from the Trump Administration and the momentum in the stock market. You know, if you look at the success weve had in building market value, its been primarily based on our ability to execute, build shareholder value with social impact. Im not spending a lot of time on the cause and the effect of the Trump Administration. Obviously we all want the president elect to do well, but starbucks is going to have to do what we do based on the things we can control. Do you feel that the starbucks brand is at odds with the administration and donald trump . The reason i ask is there have been boycotts of trumpstarbucks or boycott starbucks as it relates to trump people asked baristas to write trump on the cups and scream out the name. And just what the starbucks brand represents at large. I dont think on any level that the brand or what we represent is at odds with the president elect or his supporters. 90 million customers a week are going through Starbucks Stores and i assume many of them voted for donald trump. We feel very strongly as a company that our role and responsibility in addition to making money and building shareholder value as you know is to demonstrate a level of social impact in the communities that we serve. We as a company, the board, me personally, kevin have been deeply concerned about a number of issues. Social issues. That for the most part have not been addressed by the republican administrations in the past. And hopefully will be addressed by the president elect. I think that as we go forward, we will have an active voice in demonstrating what ive said before. The moral courage to address things that we think are important to the promise of america and the American Dream. Ken langone back in new york has a question for you. Ken . How are you . Im very well. Nice to talk to you and nice to see you. You and i are supposed to get together pret si soon with jim meade so i look forward to that. I do too. Let me first of all congratulate you for the company you founded and the way its running, the way its operated. Let me try lets both of us try and push aside our political and philosophical differences. Lets talk about one thing that we can say is created by a bipartisan effort. And thats Public Education in america. If we want to close the income gap, if we want to really be address the issue of income inequality, we need to understand that weve got to prepare these kids better than theyre being prepared globally and around the world. But also in america. And i think that theres no doubt in my mind if you look at hard numbers since the Education Department has been founded in 1978 or 79, Public Education has only gotten worse. When we talk about qualifying people for opportunities, we need to have them have the basic tools to succeed. And i think heres an opportunity for me a conservative, you a liberal, and People Like Us to sit down and say okay lets push all this aside. Lets come up with an approach thats going to be good for us. Because very frankly, the only thing of any enormous value are the 360,000 wonderful people who work there. Theyre the heart and guts of this. Anybody can build a big box. Anybody can buy inventory. All of those things can be done. The genius of home depot and i guess im being proud to say im part of it, all of the people that are there is our people. Thats what separates a Great Company from a company thats not so great. And i think, howard, you go into your stores and its manifest there as well. But we have got to together as a nation do better in what were doing to educate these kids because its getting worse and worse and worse. And one of the things im excited about hopefully youll have some more time now that youve turned over the ceo role that people like you and me can sit in a room saying forget about what we believe and dont believe, just the numbers and how to fix them. I hope youre going to do that. And i congratulate you for handing off the baton. By the way, i love your stock. I think its a Great Company and i think its got a bright future. Can i respond to that . Please. First off, coming from you and what youve accomplished over your career and what home depot still represents in america, im humbled by that and i really appreciate it. I think what youve just described unfortunately we did not see a lot of over the last year in terms of the lack of civ civility and lack of respect in the campaign. What youve just describe sd a level of civility and common language to address a very serious problem. If you look at the problem we have today, the education issue is deeper than just education. We have almost 6 million young people in america who are between the ages of 18 and 24 labeled as opportunity youth. The majority of them are africanamerican and hispanic. We have one out of six in America Today that is goes hungry every single night. Which unfortunately your station in life is beginning to define whether or not you have access to the promise of the country. What the country needs more than ever before is a level of m unity, of inclusion, of civility and people coming together over a common goal. And i think the subject that i would talk about mostly is a level of compassion and empathy that we need to try to recognize that the only way our society and the promise of america and the American Dream can continue to exist is to ensure the fact that those people who were at the lower end have the same opportunity that people have with the right zip code in america. And i think thats the question that unfortunately is being answered today in a negative. And i think i would look forward to sitting down with you and others in a bipartisan way to address this issue so that we as Business Leaders can recognize that we can make a difference and address this issue and not wait for washington. Obviously the dysfunction and the polarization weve seen for years hopefully is not going to continue. But whats been coming out so far is not as encouraging as one would hope. Amen to that. I want to jim cramer i know has one last question then i have a final question for both of you gentlemen. Howard, its got to be difficult for kevin. Youre an executive chairman. Youre not a chairman. That means youll be intimately involved. Youre staying on in an important mission. How will you really let kevin have the reins . Because an executive chairman is in there doing exactly what a ceo could do if hes not careful. No. Jim, i cant let you get away with that one. Kevin johnson starting in april is going to be comprehensively all in the chief executive officer of Starbucks Coffee company. Howard shultz is the executive chairman to support whenever kevin needs it. He is managing the business. Hes managing the team. Hes setting the strategy. Im here to help and support. There should be no misunderstanding whatsoever. And Kevin Johnson is well equipped to take the company to the next level. And thats going to be a wonderful opportunity for our shareholders. And let me just add to that, i think its a gift having howard as an executive chairman. He and i have developed a relationship over a decade. Weve worked together nearly eight years at starbucks. The last two years what do you go to him for . You guys have a door between your offices. In this new role, when will you open the door and walk . We talk to each other multiple times a day on a wide range of topics. Every time that door to my office opens and howard pops his head in, theres going to be a new exciting adventure ahead. Final question and you know i have to ask it given that were talking about education and policy and public policy. Everyone wants to know whether you are laying the ground work not necessarily now but perhaps four years from now running for the big office. Im all in starbucks at this time. I imagine youll be asked that question again in the future. Gentlemen, thank you both. Congratulations on the new job and we really appreciate you spending time with us this morning. Thanks for being in seattle. Thank you. And i want to thank jim cramer for his brilliant questions as well. Guys, i am going to send it back to you in new york. All right. Thank you very much. Great interview. Coming up, street reaction to our exclusive interview with Howard Shultz and Kevin Johnson. Plus more from ken langone. We are less than an hour away from the november jobs report. Squawk box will be right back. Y when growth presents itself . To win, every millisecond matters. Y when growth presents itself . Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. 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. Jobs in america. Breaking news this hour. We are just minutes away from the last employment report of the year. And the final jobs number before the feds rate decision. Well bring you the data, the market reaction, and instant analysis from our panel of experts. A special hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc. Langone is grilling Austan Goolsbee. You miss a lot. We need a i think maybe a web feed where everything goes. Theres no commercial breaks. Im joe kernen along with melissa lee. Andrew ross sorkin is in seattle spending the morning with outgoing starbucks ceo Howard Shultz and incoming ceo Kevin Johnson. Our guest host this morning is ken langone. Chairman of invamed associates. Were counting down to the jobs report. Forecasters expecting increase 1068z 0,000 nonfarm jobs. Thats up from 161,000 in october. The Unemployment Rate now expected to remain steady at 4. 9 . Ahead of the report, the futures are marginally lower. Down under two points on the dow. Down just under one on the s p. The nasdaq down about 12. Treasury yields, at this point we got the 10year now 2. 42 . And joining us for our conversation this morning, American Enterprise institutes kevin hassett. And Austan Goolsbee who, you know, you always think i give you a hard time. And you sat down i never said that. Okay. So you sat down and immediately what was your question, ken . He wants to know whether what do you mean . Has austan learned anything . Forget about this election. It happened. Its over. Its done. We won. I agree. Okay. He told me he couldnt win, trump, a hundred times. Even more than tom hanks or george clooney. You told me absolutely not. I did. I did. I was wrong. I have a whole amount. How do we Work Together on what i consider to be americas biggest problem . Which is the lack of quality education of Public Schools in america . Help me out, austan. Your man came in eight years ago. Look at the numbers then and look at the number nos u. Ill take the blame for george bush for what he did. We need to invest more in education. No. We need to get better results. And better results. 30 developed countries on earth. Were ranked second how much we spend on student and were 28th on results. Were spending the money. Lets forget about labels. Lets just talk about the problem. Okay. George bush didnt help it and certainly your guy hasnt helped it. Under both of them you have seen improvement in different parts. Then why arent the numbers better . Youre a scientist. Youre an economist. If you look and say share of 25yearolds with a college degree. We used to be number one in that measure. Now were 18th or 20th or something. Its that we started growing slower and slower and wait a minute. Im in the trenches. This is the difference in me and you guys in front you dont need to getted a homin hominin. To say continues to get worse. Lets not put a party label on it. Lets not blame any sector. Okay. So what do you want to do . Or kevin, the American Enterprises. You guys are supposed to know how to do this. I want to do with Stan Druckenmiller and jeff canada and williams are doing up in harlem. Were holding our teachers accountable for results. I know i got a great education. Not because of the building i went to but because of the passion and the enthusiasm of the teachers. Okay . So my friend and trustee will be any boss of i dont know. If you look at what shes accomplished in education policy over the years, its just wonderful. And her view is not to create a world where the teachers but to create options for students. I think that federal policy has moved in that direction and it will do more now in the next four years than its done in the past because theres someone who believes in School Choices leading the department of education. Explain to me the naacp coming out opposed to charter schools. Help me with that one. Ive talked to prominent democrats who say we cant understand it. Clearly they have a lot of members that are also in teachers unions and then they have people who they represent different schools and they made the call. Lets start with that. Okay . So lets not worry about who gets the blame. Can i insert myself . Im sorry to interrupt you, ken. This is a topic that deserves the attention and we could talk about it ad nauseam. But we are expecting the jobs report in 25 minutes. Choose your own adventure, what will we get and what will the fed do in response to that, kevin . Well, i think everybody thinks the feds going to give us a hike. And in terms of trajectory of future hikes. You know, ive got this model and im right at 190, a little above consensus. I think that the economy is looking pretty solid. I think that President Trump is inheriting a position thats really pretty solid. If they have a lot of the policy changes they propose next year like the tax cut, the economy will heat up from there. My view is this is the first of many fed moves. In part because theyre going to have to offset the policies. Since he controls congress, theyve got a heck of a lot of legislative potential. Theyre coming up with plans for that legislative potential. Its looking to me next year could be one of the best years weve seen since weve been talking about this on squawk box here. Youre that optimistic austin . Until that last sentence, i was like this is the worst month for me in a long time. Then i just found i agreed with almost everything kevin said. But at least he said that last sentence i could disagree with. I think is the 0 i was going to say 194. I kind of agree with that. Hes doing the price is right thing. We have now been doing at a clip of 2. 5 million jobs a year which is a strong clip. I find it if you think that donald trump is going to generate more jobs than 2. 5 million a year as obama did in his second term, i think thats a mistake. I think theyre going to try to juice the economy through tax cuts to high income people and say, oh, its going to trickle down. Its going to generate high growth. I dont think that worked when george bush did it in the early 2000s. I dont think thats going to work now. I think what were going to see is a big explosion in the deficit. With far less bang for the buck. Wont the tax cuts really juice earnings and therefore boost Everything Else . Choose the corporate sectors profits. I think the fed is look. Youve already seen inflation expectations. Inflation, the world of inflation is coming back. The fed is going to start raising rates. There are some pluses. There are some minuses. I think the white house will find out relatively soon that arguing that rates should be higher within a year you are going to see them saying why is the fed choking off the recovery . You can think of it as a horse race. The feds going to be the first horse out. The fed is going to lift rates and the horse is going to start running and all of the deregulation is going to come out. Theyre going to be pushing in different directions. I think that the fiscal policy moves are so big and so smart that i see coming that fiscal policy is going to dominate and that you should start seeing north of three instead of being stuck in the twos. Because the fiscal policy is so good. Talked about the Corporate Tax plan the house has which is similar to the stuff that candidate trump talked about on the campaign trail. And also its good the business side of it is a good plan. If you did it revenue neutral so you broaden the base and loadered the race, i could totally get on board with it. I dont think theyre going to. I think once you start to broaden the base, people begin objecting. Then it will be an Old Fashioned cut everybodys taxes. You dont think were in regulatory hell right now. That loosening up for for every the last eight years weve the number of regulations has absolutely exploded. And some of them are absolutely useless. Do you not recall the same people including you saying going to go back to financial crisis or something . Go back even further. They were. They said bill clinton had put in all these regulations choking off the economy. They said if we deregulate the financial sector, there will be a huge boom. Let me there was not enough capital. It wasnt regulation. It was not enough capital. You think the cost of capital is not low right now . That would have saved it. Let me say the economic staff puts out a forecast for every country in the oecd. And it doubled for next year. Ratcheted up a percentage point. And then when they said why, they said because of the election. They said because of the election, austan. They think trumps better than clinton for growth. You average 1. 75 for eight years. Thats so far below this countrys potential. If trump is better than that, ill be thrilled. Thatll be great for the country. Itll be great if he can create more jobs than obama did. Ill be extremely happy. You dont think that were going through a period of insane regulation in this country . Let me give you a for instance. The industry thats been hardest hit by the internet is the its high value, low weight. Its accommodated by cost. Our Justice Department ruled that its anticompetitive for office depot and staples to get together. Theyre both struggling. And as it is now, they will both go broke. And yet the wise people in the Justice Department said you cannot even if it means that together they have a shot at survival. Im not sure theyll survive anyway. But where the hell is common sense with a decision like theres something inherently wrong in a system where you apply cost that can only be described as a regressive tax . Because with regulation, you pay whether you make money or not. Youre kind of all over the map. Youre damn right. You know what it is . Its regulation. So joe and i have had this conversation multiple times which is lets say when they pass obamacare and you said that the 50person employees, if youre under 50, the mandate does not apply. So if youre arguing that the mandate is a killer regulation destroying jobs, then you got toex plain why do we not see different behavior from over 50 and under 50. Why do we see the same pathologies of companies sitting on their money compared to the United States. Why is the u. S. Growth rate the highest of the advanced world, not the lowest . You guys are just youre not i have. And think of small businesses. And there are many regulations we could get rid of, streamline, or get better. But adding that our growth rate has been low because of excess regulations is just thats a religious fact that youre basing that on. Not so. Let me give you an example. I dont view myself as that kind of religious. So the epa carbon regs, theyre response to Climate Change and the court order to treat it as if the Greenhouse Gas is pollution under the clean air act. They put out all these regs that make it prohibitively costly to use coal anymore. Nobodys been investing in improving coal burning furnace and nobodys been putting in new and that could be a policy objective they definitely had. But the coal industry, like joe, didnt they drop 80 in value, coal stocks last year . Theyre up now after the election. But the point is that its misleading. No. Thats a perfect example of regulation causing a big effect. That is hold on. Thats all im saying. 80 drop. As you know, the overwhelming majority of what happened to coal producers is that the cost of natural gas got extremely cheap with fracking and the discovery of shale. And that is what killed the market of coal companies. And it happened before clean power rules. So how can you blame that . How about metallical . You know my problem, theres been too many damn academics in the kitchen in the last eight or ten years. On that note, weve got to take a break, guys. A changing of the guard at starbucks. Youll see what Howard Shultz said about the coffee giant here on cnbc. Stay tuned. Squawk box will return here on cnbc. But today, maybe it can. I am helping 1800flowers find the perfect gift out of trillions of combinations. And working with the new York Genome Center to find treatments as personal as dna. And i am helping sesame street make education unique to every child. Hello, my name is watson. Working together, we can outthink anything. Hello, my name is watson. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential todays top corporate stories, Howard Shultz announcing he will step down. He joins us in the last hour with Kevin Johnson. Andrew ross sorkin is live in seattle with the highlights from that great interview. Andrew . Thank you, melissa. We are in seattle. Howard shultz announcing his plans to step down as ceo. That happens april 3rd. We asked howard why kevin. I think kevins skill base and his experience, he is much better prepared than i am while i can take advantage of what i think is an Enormous Growth opportunity for the company in leveraging the equity of the new brand, the roastery, the new reserve stores on a global scale. And Howard Shultz of course has tried to step back before. He did so once before coming back to the company in 2008 as the coo. We asked why this time was different. On a macro level, i left right at the beginning of the cataclysmic financial crisis. Starbucks had a difficult time navigating through that. We did not have the quality of a team, the resources and capabilities that we have now. We didnt have the leader. And i think on a personal level, i dont think i was as emotionally prepared to leave the company and not meddle at that time in my life. Now to help us break down this news and make some sense of it, r. J. Help us through this. What did you think of the announcement yesterday after the market closed . I was surprised by the timing. I think the company set this transition in motion this summer when they reorganized the executive positions but the timing caught me off guard. I thought this might have been something we see a year or two down the road. That being said, i think listening to the interview, i walked away a lot more impressed with Kevin Johnson. Thats the question everybody has in their mind. Its obviously possible to replace somebody with the retail acumen of Howard Shultz. I thought he did a good job on the retail side. I think its jim cramer who asked and he accurately answered about the digital wheel. I think the company is well ahead of the curve on that end. I also think howards point about the deeper bench is true. If you look at this bench right now, everyone positions they have whether it be matt ryan john culver, you know, theyve got a really deep bench. All these guys are at the top of their fields. I like that this company is a deep bench and well positioned for the future. Starbucks has its investor day in new york next thursday. What do you think you need to hear or want to hear . Yeah, i think we just need to my point, i think we need to see Kevin Johnson really assert himself as a retail leader. Not just somebody back on technology. I think thats got to come and be apparent. Show the market how hes going to drive same store sales. I think that is the key question on investors minds. But theyve also got to talk about some of the longterm growth initiatives. Obviously howard will talk about the roastery and the reserve stores, but also things Like International consumer package growth, china. Some of the secondary brands. I think those all have to tie together. So what theyre going to do to drive same store sales, thats got to be first on their mind. How do you map out the reserve piece of this business . Their efforts and what howards going to focus on in terms of the Super Premium component here as we talked about. Were at the reserve roastery. When you try to map out what that is for the company. I think it gives the impression this could be successful. That the Retail Experience, a lot have not invested enough in making a compelling Retail Experience. Can really drive traffic. I think these takeaways from these stores and also opening a new roastery. And also the reserve premium bars with existing stores. I think that can add a level of excitement that other retail brands cant match right now. I think thats a worthwhile endeavor. The question is how quickly you can ramp that up. I think the numbers there are between 20 and 30 roastery occasions. I think that seems about right. If they can hit the numbers we talked about last night on the call, talked about twice averaging net volume out of reserve stores. I think they can drive a lot of growth out of that. Certainly positive for the story longer term. Thank you. Always great to get your perspective. Appreciate it very much. Back to you, my friend. Thank you, andrew. Coming up, the final countdown. Were going to get you set for the november jobs report with predictions from our all star panel. And then the number of the month. Market reaction and instant analysis straight ahead. I dont know the final Election Results might have been the number of the month, but this is important. Squawk box will be right back. Which allergy . Eees. Bees . Eese. Trees . Eese. Xerox helps hospitals use Electronic Health records so doctors provide more personalized care. Cheese . Cheese xerox healthcare services. Soon to be conduent. Thats it. How was your commute . Good. Yours . Good. Xerox real time analytics make transit systems run more smoothly. And morning chitchat. Less interesting. Xerox transportation services. Soon to be conduent. Take a check on the futures markets. We are seeing positive signs out of the s p and dow. Nasdaq is of concern. It is on track for the worst week in ten months. We are looking at a fivepoint loz here on the nasdaq. The last jobs report of the year minutes away. What it might mean for the fed meeting. Stay tuned. Were going to go to break because i dont want to hear joe sing. The final countdown this is cnbc. Sing it. Come on. Commit to it. You cant unhear that. Welcome back. Were moments away from the november jobs report. Lets get final predictions from our panel. Austin, we start with you. What are you expecting . Im expecting 194 and the Unemployment Rate drops by a tenth. Were so close. Sorry, joe. Im at 190 and about the same drop. Rick santelli in chicago, what are you looking for . 233,000. Whoa. Whoa. Steve leisman . Im at 179. Holy christ. You guys talk to each other. What you mean . 179,000. 179,000 to 233,000. I run a model on the private sector and random number for the government. Hey, my margin of error, five in the month of september and three in the month of october for the record. But im due for a bad one. Statisticicly. The picture has improved throughout the morning. By just a few points. But the nasdaq has of course been under pressure for the past month here. Well be watching this picture closely as well as the bond market faces its worst november. Right . 1. 7 trillion lost in the global bond market in the month of november. So we could see pressure there as well as we get these numbers. If we only could get the nate silver 538 forecast. Theres an 85 chance the the number is he was he was the most in terms of pro trump. And yet everybodys outside the labor department, hampton is going to bring us the numbers in like two seconds if i breathe. Hampton . 178,000 november nonfarm payrolls includesed by 178,000 jobs. The Unemployment Rate is 4. 6 . Average Hourly Earnings decreased a tenth of a percent. That 4. 6 rate is the lowest since august of 2007. Private sector job growth last month, plus 156,000. We had revisions. October previously reported as 161,000 revised down toward to 142,000. September 191,000 upward to 208,000. A net decrease of 2,000 jobs for the two months. How did we get to that 4. 6 Unemployment Rate . Basically the number of employed increased by 160,000. The unemployed decreased by 387,000. Also a big thing from that unemployment decrease, the Unemployment Rate for adult men actually fell to 4. 3 . As far as job gains in the month of november, professional and Business Services up 63,000. Health care, 28,000. Construction plus 19,000. On the downside, retail losing about 8,000 jobs. Manufacturing down by 4,000. The Labor Force Participation rate downward slightly to 62. 7. The real Unemployment Rate 9. 3 . Thats the lowest since april of 2008. Longterm unemployed, 1. 9 million just under 25 of the total unemployment. Back to you. All right, hampton. Thank you. Wow. 4. 6 . That portends really good thing for the party in power in this upcoming oh, wait a minute. The elections over. Oh, god darn it. The second term is going to go down as one of the great job creation terms of the last half eventual for obama. Can you concede, joe . I want to be nice to you. 178,000. Yeah. My average error the last couple months is in the single digits. Price is right rules, you missed it. What are you going to do . Theres a thing called sore winner. How many in a row are you now . Im three good ones in a row. I had two bad misses. Standard deviation was i was plus minus 50 in my model. Can i just say this whole model developed as a joke. It was a joke. Remember when the government shut down, it was a joke. The government shut down no, its better than that. It was a joke. All right. The government shut down and the vice of cnbc came to me and said hes a big guy here. Steve could you make a model and tell us what the government would report. I did it that month and it was within 20,000. Then i kept doing it and its been anyway, thats not the important thing. The important thing is the numbers. Manufacturing down 4 but construction up 19. Thats good. It tells you the Residential Housing sector is doing okay. Service providing has been the nut of this. 156. I would tell you that well, thats what i got right here. I come up with a random number every month for government hiring because there is no way to forecast it. I came up with 20,000 because it was the threemonth average of the prior. Leisure hospitality doing well. Temp services doing well. The retail number is interesting to me. And this is down 8,000. Theres an expectation of huge hiring and probably huge hiring going on. But because of the seasonal adjustments theyre not quite meeting. I want to talk about austan was interested in how they got to 4. 6 . We lost 226 in the labor force. Second month in a row youve had a dropout. Yet you were down 195. In a generally kind of very slight rising trend when it comes to the workforce. Youve had people coming back into the workforce. Youve had the Participation Rate going up. But employed in the household survey, 160. The number of unemployed leading to this very nice i shouldnt say that. Relative to where its been, its nice. It is still elevated 9. 3 from what its been. Those unb employed what are we . I fudged that joe because i didnt have it in front of me. Ill look it up. There is a theory that matches whats been doing on lately. Which is what you get youre smiling. When you get close to full employment, then you dont get big surprises on the upside. Because its starting to be hard to find the workers. But youre close to full employment so the economys doing fine so you are trying to hire people every month. So if you get a reduction in the variance of the jobs numbers from month to month, then it can be a signal youre close to full employment. And we should start to dont tell that to President Trump. Theyll have to bring people into the labor force. At 4. 6 , youve got to worry about inflation. Thats why the market is worried about inflation. What would you do right now . More than expected . I bet they wont go more than people are expecting, but i guess theyll go more frequently than people are expecting. I want to just layer in joes idea on this which is does the market care anymore . When you look at the 2year already been 1. 12 right now, their scope now for the fed to move without being major action. I mean i think that if they come out in the december meeting and they indicate that the trajectory is going to be faster, thats going to freak the markets out. Right now were just pricing in december rate hike. Were pricing in a couple next year. I think its sort of the jury is out, a lot has changed for the equity markets at this point. This was me story yesterday melissa. How does the fed factor in the change in the market which is a reality for them because its financial conditions. Its a higher Interest Rates, stronger dollar, stronger stock market yet the policy that the market is trading on doesnt exist, wont exist for months. And maybe something less than theyve already factors in. If melissas dynamic is true and we start on a series of rate increases potentially even faster than what people think, the dollars going to go way up. Manufacturings going to start taking some punches. Let me ask you a question thats not scientifically based. I was surprised the first two weeks after the election of the number of people i know that were supporting the Democratic Party that have said to me i dont know why i feel good but i feel good. Ken, i heard that as well. I dont think you know many democrats. No, no. I heard exactly what ken was talking about. I picked up on that too. Ceos got bullish. Almost overnight. Yes. And look, folks. I think every these well educated economists at the table with all their ph. D. S agree theres a capital factor and its animal spirits. The supply side has been constrained because of regulation and taxes or from the democratic side they would argue its been constrained from the demand side. That the demand has not been there. That if you wanted to borrow money in this country to build something, you could have built it. And there was never any constraint on that. This is where we are right now. After you built it, if you dont have a reason to have it thats why. You dont build it. Argument of utilization. I wrote about it just before it happened and i think that what i was speculating about ended up being the truth. And so i think we understand what happened. Justin wilford put out a paper that the trump effect was going to be big and negative for the market. Then trump was elected and it went the other way. The piece that i wrote just reminded that it was actually data from justins own paper that republicans have always been good for the market. Like if a republican wins, the market goes up. And so in the paper i wrote, i speculated if trump is elected and then he acts like a normal republican, then the market will really celebrate. Right . And so the market is nervous that hes going to start a trade war on the first day. But he didnt do that. Hes had a great transition. Hes picked good people. Hes spoken like a sensible republican and the markets are celebrating. Its against both the democrats and republicans. Were fed up with the nonsense of these people down there being elitists that we know better for you what you need than you do yourself. I think theres been a revolution psychologically in this country. And i think trump cashed in on it. Austin, i want to throw you this idea. I was astonished in the campaign Hillary Clinton never shifted to the right at all. She couldnt. She continued to run a campaign that she was in a primary versus Bernie Sanders. So the fear of the market were not her plans. The fear was that there was never any into it. Its one thing to raise the top tax rate to 39 . Which i dont think is killer. But if the top tax rate is infinite, then its killer. I certainly agree with that. But i dont agree with your characterization of what happened in the campaign. A lot of the economic focus of hers, if you remember, was on a different conception. How could we get growth up . It doesnt come from just cutting taxes for high income people and hoping it trickles down. I think the problem that Hillary Clinton faced is that ultimately the campaign was defined in the negative as you should vote for me because donald trump is not fit to be president. I will give you 20 bucks for every time more than five that Hillary Clinton used the phrase free market. In the entire campaign. Didnt talk about it. Didnt discuss it. Also her argument made no sense. So shes going to give us higher taxes, more regulation. The only positive for the economy was this Infrastructure Spending which would be a positive. But the net was not a positive for the economy. It was a contest of world views of where growth comes from. I would characterize republicans say it comes from absence of government, low taxes, low regulation. And the democrats version is it comes from investing in your people and your nation. The infrastructure, the human capital, as it were. And theres a big dispute theres a centrist view that it comes from a balance of both. That it comes from unshackling the free market as well as very targeted, very limited government assistance. Look. The free market brought us to the party. I agree. Okay. All you could take away in my opinion was either the government will take care of you or the government will tell you what you can do and not do. Im sorry. Listen to Bernie Sanders. He made sure it doesnt work. It doesnt kevin, i had an argument not an argument, a discussion with larry kudlow and trumps numbers didnt add up. That the tax cut was going to be a huge tax cut, huge deficit increase. And larry said to me, an election is not an omb debate. That at the end of the day what you have is one candidates going to cut taxes and lower government, another candidate is going to raise taxes and increase government. And thats what people heard. And they didnt engage in a sharp pencil or texas instrument calculator analysis of the candidates different plans. But what were seeing from the trump team now is theyre picking competent people to have the omb debate. So hes actually i need to do a segment now on dynamic stories. Saying donald trump is now doing things that are if not completely the opposite, very different from what he described through the campaign. By the way, omb speculation is gary is in the hunt. That would be fabulous. He was a chief operating officer at goldman. You have to understand something about goldman. Theyre really well run. This is competence. I think its going to be problematic. Hes going to look for stuff the government spends on and looking at the p l on that, hes going to get rid of it. Because its the government. Its just l. Im sorry, garys a lot smarter than that. Im making a joke. Okay. All right. Didnt you used to have a sense of humor . You used to . If im going to be here with you i have to have a sense of humor. On that note, kevin, austan that was a joke. Up next, Global Reaction to todays jobs report. Plus much more of our exclusive interview with the outgoing starbucks ceo Howard Shultz and incoming ceo Kevin Johnson. We now believe that we can take elements of the roastery and bring it down to a different type of store. About 4,000 square feet, twice the size of a starbucks store and build reserve stores in the same theme of roasteries. But we also believe therell be 20 to 30 roasteries around the globe that will shine a halo on the entire company. Well build out a new retail format of 1,000plus stores of reserve stores in this brand. And then were going to integrate into existing Starbucks Stores reserve bars. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Take a check on stock futures in the aftermath of the november jobs report. We are lower now. Weve entered the jobs number with the s p and dow with a positive open. Now a negative open. Were looking at nasdaq about down ten. On track for its worst week in ten months. Staggering stat. I have no idea what to do with that. I think thats the problem. No, i dont know and i dont even know if we worry about the fed anymore. The market is right, right. Were moving onto Something Else at this point. When we come back, well head down to the new york stock exchange. Jim cramer will join us with his take on todays jobs number and the news of the hour Howard Shultz stepping down. More squawk box straight ahead. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. And i am a senior Public Safety my namspecialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. Kevin johnson starting in april is going to be comprehensively all in the chief executive officer of star bubuc coffee company. He is managing the team, setting the strategy, im here to help and support. There should be no misunderstanding whatsoever. And Kevin Johnson is well equipped to take the company to the next level. And thats going to be a wonderful opportunity for our shareholders. Were here live in seattle. That was Howard Schultz, the ceo of starbucks, handing over the reigns of that ceo title to Kevin Johnson. He will remain the executive chairman. Lets bring in my good friend jim cramer to the conversation. Id love to hear his thoughts. He has some of the best questions and got so much out of it. I appreciate it, jim. What do you think the reaction this mornings going to be in the markets . Well, first, thank you so much, andrew, for letting me ask some questions. Your interview wu fantastic. A great comprehensive half hour. I feel better. I feel better. When i saw the news i heard the news and we got the news and i was immediately very dis appointed because i love what howards done. He is iconic. But what howard did subsequently in our interview is state, look, this is how its going to go. Im still very much involved, but we do have technology problems. Kevins better than that, better at that than he is. I felt like if youre going to be able to leave a company, do it in this style in stages slowly helping out kevin, i think starbucks stock just like howard said is undervalued. So the stock down about 3 . It was down as much as 10 when the news first hit. Where do you think its going to begin the day or end the day rather . Well its like i read your piece this morning in the times which is excellent. Their natural reaction is, wait a second, he is steve jobs, as you point out. You cant do starbucks without howard. But then you hear, listen, howards not really going anywhere. Many times weve asked him that. I think if the stock goes to 55, 56, thats kind of an overreaction. Big Analyst Meeting coming up. Felt very good about the business long term whats going on. I dont know, i mean, you sell it now, you sell it a week from now you say to yourself why did i sell it. Fair enough. And by the way, these jobs numbers well, you know what, bonds i want Interest Rates stop going higher and these momentarily did make Interest Rates stop going higher. But not the nasdaq, thats a whole other kettle of fish. Theres too many Tech Companies not doing well. Okay. Thank you for that, jim. We will see you, you got utx Ceo Greg Hayes going to join mad money later today 6 00 p. M. Dont miss that. Squawk returns in just a moment. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Our guest host this morning ken langone, weve kicked off old euphemisms about the stock market. I just saw one that says stock market goes down when fear is dictating, stock market goes unwhen its enthusiasm. Enthusiasm. We also heard about just animal spirits. Exactly. Things dont even have to change for people to conjure up some type of buying theres a genre leaf prevalent across the country that the insanity, and i think i use that word, the insanity that came out of washington these last eight years is coming to an end. Forget about taxes. Regulation is strangling america. People have said that progressivism is hard to legislate down. If its going to come, it has to come from the ground up, from people. And when you try to legislate it on top of people, you get a pushback. Well, you cant manage a society. And you cant manage an economy. And i think, you know, i hope the new president understands that hes not going to sit in the oval office and say you cant move and you got to stay but you arent worried about that. I think yesterday you saw this as symbolic. All symbolic yesterday. Worried about 1,500 jobs, im going out there, look what i did. On the markets you said you thought the markets should rest at this point. I think the markets a little ahead of itself. I think itd be fine if i it stayed here three, six, nine months. Go sideways. Let some earnings catch up, let some dividends catch up. Do you think at this point that the bitterness on the left theres recounts, demonstrations, senator warren and Bernie Sanders are both going to go after mnuchin and make it very difficult, you know, theyre going to challenge different nominees. Do you think that ever they can challenge. Look, dont ask me to rationalize Bernie Sanders behavior or Elizabeth Warrens. Theyre not going to stop this guy from having what he wants. This guy will fight, okay . And theyll fight with them, the candidates. The thing i think we need to understand is that weve paid a terrible, terrible price for government interference in the last horrible price. Do you think trump can be i mean, if hes divisive, i dont know what we had the last eight years. Do you think a guy like trump can heal some of the divisions that weve yeah, because he won against both democrats people forget. He didnt have the enthusiastic support of the republican party. Didnt have it. Right. Look at what bush did. Look at what romney did. As i said, my eye on romney how can he out of simple selfrespect after what he said about this man go to work for him as his boss . How long can the republicans keep the average working man on their side . Absolutely. For more than one term. Really . They lost them for 30 years. Fifty years ago the heart of the Democratic Party was the deep south. Yeah. Today its republican. We have a moment in time to embrace these people and more importantly have them embrace us for the good of the country. We have to be antipolitical. Weve got to say doesnt matter who you are, weve got to fix this. Doesnt drain the swamp. Were going to stop this crap with bureaucrats, lobbyists, consultants, this has gone on for too long. Did anyone call you yet . No, they dont want to call me because i would be no, please, im having fun. Home depot is doing fabulous. Labor secretary . Nothing. Elaine langones husband, period. Look what need to be reversed there. Theres a good example of reverse. Labor secretary langone. Depoliticize hold it. Byebye. Thank you. Make sure you join us on monday. See yall. Squawk on the street is next. Take care. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Final jobs number of the year, 178,000 roughly on target, Unemployment Rate to 4. 6, the lowest in nearly a decade. Wages were below estimates though. Premarket is sorting all that out as the dow goes for a fourth week up. Watch europe ahead of the italian referendum this weekend. Bonds rally a bit on that wage component