Transcripts For CNBC Squawk On The Street 20141105

Morning. Our road map begins with a new Gopcontrolled Senate for the first time in eight years. Implications for the rest of the president s term and the markets. Media earnings also out. Time warner lifts its outlook. We have a beat from Rupert Murdochs 21st century fox. Both stocks rising after a drubbing yesterday. And better than expected adp numbers. Well get that ahead of the big jobs number coming up on friday. But last nights midterm elections resulting in a power shift on capitol hill. Republicans retaking the senate for the first time in eight years, capturing at least seven seats and defeating democratic incumbents in states including north carolina, colorado, arkansas. The gop also strengthening its grip on the house, winning governorships in blue states like maryland and illinois. It is a stinging defeat for the president and his party, who by the way, is scheduled to hold a News Conference this afternoon and is planning to meet with congressional leaders in both parties on friday. Market last three midterms has traded higher the day after, jim. Tends to like this. Initially, i felt as the day went on from the early morning, i was like, okay, wait a second, were going to have a budget wrangling now because the government runs out of money in december. You even tweeted this, in fact. Yes, but the makeup of the republicans is not tea party. Its more mainstream, more business oriented. I think what were seeing david always loves when i make these sweeps comments. I think weve seen the High Water Mark in Government Intervention in business and the High Water Mark in personal and Corporate Taxes. Its going to make people more confident. I think thats the takeaway. Which means good things for stocks. Yeah, well, good things for stocks that do well. If someones going to say, jim, are you saying that this is the free pass to buy fire eye and trip adviser . No, you still have to deliver the numbers, but youre going to get a higher price to earnings multiple because youll have more confidence. That sounds like a very strong conclusion. I hope thats correct. We dont know. Obviously the stock market has done quite well over the last, whatever its been, six years. What about the opportunity perhaps to actually move ahead on some legislation that people would think will not happen, whether its an Energy Policy or immigration, keystone, tax reform. No. Okay. So wait a second. We get a higher confidence, but we dont get anything . We just dont have to read about them anymore. We started doing getter. Infrastructure . No. Nothing . No, none of this. Oversight of the fed. No. Keystone is dead. Transcanada is doing a workaround. This has been the least producti iive congress ever, is that right . This one will equally be. I see people buying the coal stocks. The Energy Department is going to say, listen, we like coal . What im wondering is if this new majority in the house and senate will result in some form of compromise with the white house that will end up at legislation that would be beneficial to the country as a whole. No. Okay. I just wanted to know. Youre saying its the absence of government, not the work of government. I mean, its a procorporate, antilabor government thats coming in, in congress. It could make it so perhaps there will be less rhetoric thats negative. I think well get a continuing resolution. The idea of just buying stocks off this, you have to this makes me feel more confident about the companies that are doing well and paying for their earnings. No, im not going to keystone. The president is going to suddenly like fossil fuels . Hes taken the executive reins on things that have to do with climate change. Thats not even an issue as to whether you could get a carbon tax or any of that stuff through congress. Certainly not this congress. Its just less of a factor. What, are they suddenly going to start drilling . Were trying to cut back drilling. All the issues that at one time might have been more important were kind of neutered. None of this. The president hates congress. No Corporate Tax reform . You dont think has a shot next year . Unless the president gets his way on raising personal income taxes for rich people, i dont think so. Did people suddenly get nice . Is that what happened . They got nice. No, but theres another election in two years. The republicans are going to want to show were different somehow. Yes, the defense spending will go back up. I think that will absolutely happen. But look at the action in Lockheed Martin since october 15. Those stocks correctly predicted this election. Look at the utilities that are heavy coal based. It isnt like the stocks didnt see it coming. Its the commentators didnt see it coming. The stocks were seeing it and they were right. We will see. Lockheed martin missed the quarter really badly, and the stock has done nothing but go up. It was a great puzzle until last night at 12 30. Meantime ahead of fridays october jobs number, data out this morning from adp shows that 230,000 jobs were added last month. Thats slightly above forecast, marks the seventh consecutive month in which adp said private payrolls had grown by 200,000 or more. September payrolls were revised upward, by the way. Not bad when you take the general labor picture. Theres some who argue that actually the job market is poised to break out here. No, i thought this was good. Remember, im concerned about the job growth in the oil patch. Eog put up spectacular numbers yesterday. Makes you feel better. Some people are saying, listen, that is rearview mirror. Thats when oil was 90. I think that anything that says these things smack of job creation, i want to hear more what pay checks has to say. I think Small Business will be encouraged by elections. The Small Businessman is not going to say, im going to pick up the paper and find obama has done one more thing to make it risky. Im not trying to be liberal or conservative. Maybe the days when the Justice Department calls a big bank and says, you owe 600 million, maybe those days are diminishing. Those are all executive decisions. No shortterm changes. Youre going to get more of that, not less. Nothing short term matters. 2016 matters tremendously. If youre of the belief nothing will get done legislatively and he wants to create a legacy here, it has to be executive action. The legacy is done. The Affordable Care act. Its done. What about in this market, oil prices, where we are. The saudis, people are trying to understand, are they really serious about trying to cut price here . Is that for real . Then couple that with this other thing i dont think we talked about enough, which is the japanese are buying everything in sight. Kuroda will bid on anything. Bank of japan governor kuroda giving a speech after the announcement on friday. You know, basically saying were going to do again whatever it takes. Dont even doubt us in the slightest. But look, lets be some of these Japanese Companies reported good numbers. Maybe the low water mark there was the sony blowout. I dont think theres a limit on additional easing, including on bond purchases. No limit. They ought to cut taxes. By the way, the pension fund it moving up its allocation of stocks dramatically. They are changing things. I know that there are people within even our own network who will say thats phoney. Once again, when you go to chase with the gains or jpmorgan, you go to wells fargo. I have found when you deposit money with them, not once have they ever said, you made that money off the illgotten gains of japanese stock. They have never, ever told me this is totally because of the lower Capital Gains rate. If its green, its green. Draghi, its like, reason, were not taking that money. That was made because draghi decided by any means necessary. They tend to take the money. Would you buy the nikkei here . Im saying yes. Really . Not here. Not up because thats always been a foolish play. Im saying toyota should do much better here. And by the way, toyota today sees record profit because of the yen. Theyre devaluing their currency in a big way. Theyre buying everything in sight. Theyre propping up their own equity market, perhaps even ours, by buying anything they possibly can. So buy it and sell it. Im not saying its like buy and hold. Not like Warren Buffett doing some buy of the tokyo electronics. Meanwhile, you have the impact of lower fuel prices across the globe. Thats in dollars. Be careful. Okay. Ill be careful. The Saudi Oil Minister is meeting with mexico and venezuela in the next couple days. Mexico wants to open its Drilling Market to outside. China is thinking about opening. I just look at oil and think the biggest problem with oil is United States. If you go over the eog release, theyre producing so much more oil than the saudis can ship us here. Lets not forget its the revolution. Its the renaissance that is driving the price of oil. Were going to be back to where we were at 10 Million Barrels a day peak, okay. Were going to exceed peak if you look at eog. Well exceed peak in two years. That transcanada pipeline, forget all that. Bhp has to export. We have to export the stuff. Were driving the world price down. No one wants to think that because its inconceivable. Meantime, gas prices here below 3 on average for the first time in four years, even though polls show most people dont expect that to last. Were conditioned to believe theres no way these gas prices can stick around. It is going to last. Thats why chipotle is going to go to new highs. Thats why elle brands is going higher. I know michael kors you dont go buy a handbag, not that id get in the nittygritty of handbags. As a result of the savings. You might go buy for your wife. You might go to olive garden one more time. Look at costco. It never stops. Thats not mall based. Notice, the age of costco and the age of walmart. I am between the two guys who really get it. And let me throw in amazon. Your point was an interesting one, not mall based. Weve been talking about that a lot. These are all going to become data centers, these malls. They blame the mall. This is another reason to pay for alibaba. Which gets a series of price targets. 350 number for fiscal year 2016. Now im thinking its selling at 30 times earnings. If you give it a facebook multiple, youre going to get a 125 stock. Lets take it to 125. Its amazing, not to mention yahoo is 0 for 47 a share now. Why not . Especially if they can do it tax efficiently. I dont want to put words in their mouth, but they were giving that impression. Yahoo is worth 1 a share currently when all tax efficiencies are done. Im raising my target yahoo from 60 to 62. I had a chartist last night. Shes saying there could be a bottom in twitter in the next 48 hours. Wow. Were down to hours now. I thought that was one of the greatest calls ever. That really says change is going to come. Thats great. Amazing how they can do that. Theyre twisting the ceo story. Not like cupid. No. When we come back, a lot of earnings to get to this morning, including results from time warner and fox, who are seeing their shares rise today. Also ahead, the company known for caldwell banker and century 21. Well talk to ceo and chairman richard smith. Take a another look at the premarket. Did you know dow is coming off two days without a tripledigit move . First time since the end of september. Thats how volatile october was. Oh, man. A lot more squawk on the street. Back in just a minute. Old with terrible chest congestion. Better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. Oh, what a relief it is. Here we go tthats why i take metabiotic,ed toa daily probiotic. Health. New multihealth metabiotic with bioactive 12 is proven to help support a healthy immune system. Experience the meta effect with our new multihealth wellness line. Time warner reporting Third Quarter operating profit of 97 cents a share. That was ahead of street estimates. Revenue also above consensus, helped by subscription growth for turner broadcasting and most importantly hbo. 21st century fox also exceeding. All of this coming, of course, a day after these stocks were down sharply when we got earnings from discovery. Ceo not painting a particularly pretty picture for the ad market. Yesterday on the earnings call, theres no question the last two months things have slow. Theres no question on the volume side. Theres no question theres more scatter in the marketplace. And theres no question that advertisers are holding their wallets closer even on the movie side and kind of coming in late bursts. Then you get fox, which looks fine. You get time warner this morning, which looks strong. Both Companies Buying back a lot of stocks as well. Did you see the buyback . Fox, you dont see it as much. Time warner, he bought back 69 and change. He bought a ton back. They bought back 4. 9 billion so far this year. 69 million shares. In the quarter, they bought back 1. 3 billion. Now they have 870 million shares. 1. 1 billion in 2010. Reporter hbo earnings up 7 . Better than anticipated. All of which goes back to this thesis of, are things slowing or not . Is the ad market slowing, or is there some sort of bifurcation for programming that some programmers are not doing as well with what theyre showing . It doesnt cost all that programming, those stations you dial around, they keep winning on that stuff. How about the number of women aged 18 to 49 watching Linear Television down 13 since last season. 13 . What are they watching . Those are big numbers. Theyre watching netflix. Kevin spacey retweeted me yesterday. Did he really . Thats cool. But these same companies are benefitting from that trend because theyre creating the content for netflix. When you have a movie franchise, it doesnt just die. A lot of times weve discounted the movie earnings, so to speak, from the film studios. We discount them. With netflix and everything else, these things live on and on. Not just living on in our consciousness, but living on as revenue producing entities. So do talking dog videos and cat videos. You and i dont come in on mondays and talk about the cat video we saw. Thats true. I think they pay more for them at netflix. I attached a go pro fetch harness on a stuffed dog yesterday and watched it through the eyes of the stuffed dog. Thats a video youre probably going to want to check out. Thank you, and i will. The question is, is the pie staying the same and digital taking more . Although, frankly, twitter, lower guidance. Facebook even lowered guidance. No, no, no. They spent more. But they also came in with a number that was below what consensus was for next year. They said, dont go above us. I could argue that sort of thing. Theyre saying its an investment year. I understand that. I was on the time call. I dont know if you were on the time call. The digital spending is up very big. Particularly auto, by the way, for advertising. So i looked at the time in call and said that digital Spending Continues to go up. I think it crosses 30 , giving money to program ads to google, yahoo maybe to twitter. You maybe of the total market. The money is going that way. Theres no doubt it is. And time said, listen, were trying to do programmatic. But they like programmatic video. Its a long way from when facebook went public and gm said, we dont know if this is even going to work. Its because of the hand held. You heard the alibaba call. Final thought here, keep an eye on time warner, disney, diacom and fox, all of which were down sharply yesterday and will likely reverse today. Elsa outselling ana, by the way. Talk about a franchise. Thats incredible. Its a great franchise. You do have an fx head wind for a lot of these companies. You say tomato and i smash your tomato. All right. Well get cramers mad dash as we count down to the opening bell. Take one more look at the premarket. Stocks tend to like the day after midterms. Looks like well get maybe a tripledigit open to the upside. Back in a minute. [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. All right. We got about 5 1 2 minutes before the opening bell. Its hump day. Mike, mike, mike. I love when you do that. Lets start with fire eye. Not a good story. Get your visine out. You got fire in your eye. What happened here . They kind of changed their model, but the guidance was disappointing. I love this. This is my favorite. In january we expect nongap loss per share of 2 to 2. 20. Were narrowing that range to 2. 05 to 2. 50. Thats not narrowing. That was the kind of thing that went on throughout this call. They widened the range. But they did switch their model to a service model. Theyre going to be combative about the fact the stocks declined. In the end, they did cut guidance. In the end, there was an increase in day sales. In the end, it looked like a hockey stick quarter. Nobody expected that. I did not like the quarter. But i like cyber security. I know you do. Do you like pennsylvanalo alto . I saw the go pro riding on the surfboard, that was enough. There is a point at which you throw your hands up. One more real quick. Trip adviser. The guy with the eyes. Lower growth. This is the triple whammy. That is not going to be helped. The japanese are not going to buy this stock is my takeaway. This is on the list of no buy. Its not on kurodas buy list. Priceline may not have been yesterday either. Priceline is actually better. They were cautionary. Priceline is you dont want to expect anything negative when they talk about european negativity. All right. We got the opening bell coming up after this. Bulldog what, what mattress discounters veterans day sale ends tuesday. But mattress discounters has the Largest Selection of memory Foam Mattresses under one roof comforpedic. Icomfort. Posturepedic hybrid. And wow four years interest free financing on the entire tempurpedic cloud collection and, get a queen size serta mattress and box spring set for just 397. But hurry the veterans day sale ends tuesday. Mattress discounters femalsave hundreds on beautyrest and posturepedic. Choose 300 in free gifts with tempurpedic. Even choose 48 months interestfree financing on the new tempurchoice. The triple choice sale ends tuesday, veterans day. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in just under 60 seconds as we start this day after election day. Something the markets tend to like. In fact, the last midterm in which stocks were uniformly lower the next day was 1990. 24 years ago. Wow. And theyve been positive the last three midterms. Thats one of the best stats ive heard. Usually i dont buy these things. But that is very compelling. Well see what happens. Of course, the president s going to speak around 2 50 p. M. Eastern time this afternoon ahead of his meeting with congressional leaders at the white house tomorrow. Lets get the opening bell here at the stock exchange. The s p at the top of your screen. At the big board, governing services kicking off its General Council forum. Over at the nasdaq, Market Access holdings, operator of an electronic Trading Platform for fixedincome securities. Is alibaba going to be the one to watch two days in a row . It has to be the numbers just come up so big. There was such a strange element yesterday until we had this interview that was so great. The whole idea is, wait a second, did we fall into another amazon . It wasnt. It was more like, look, while we dont give guidance, while margins did decrease, dont expect necessarily theyre going to continue to decrease. Stock was at 98 when we did the interview. Its been up ever since. Its very difficult to try to value this stock anywhere below 120. Comparing to amazon maybe. Their Business Model is very different. They dont even take control of inventory and benefit enormously because search and advertising is such an important function of the commerce that goes on from all these merchants who need to be noticed on the site. Exactly. And the mobile people love it on mobile. It was a fabulous Conference Call. It was my friend jane penner used to work with me on the street. Knows exactly how to orchestrate a call. She is the tuscany of Conference Calls. Listen, its wow. Youre talking almost a 270 billion market value for this company. Wow. Well above walmart. Whats walmart now . 240 . Walmarts doing its best, man. I say expect less, pay more. Its the largest retailer now in the world. Theres a lot of people the ramp in china, the beginning of what i regard as being the americanization. Youll be able to get on there and buy things that are made very cheaply. Please dont buy the stuff that doesnt have the seal of approval. It could be slave labor. I mean, this is a giant. That Conference Call was like an american company. There was nothing in there that made it seem like there was anything other than this is a Great American company that happens to be based in china. American owners. It is chinese. Its not clear to me yet the american owners fully understand how the business works. Itll take time. Theres multiple businesses under one roof. Yes, complicated web of businesses. The inventory is the bain of your existence, and they have no inventory. They dont buy stuff. Devin, rig, baker hughes, apache. Whats going on with the oil story . Devin had a Remarkable Growth in the quarter. Eog has a chart. If anybody doesnt believe that we can produce oil cheaply, they have a chart that shows you each shale and how much money they make, even at these levels. Some people are going to say these are going to fade midday. All these results are based on 90. I come back and say, these stocks are oversold, but if oil does go under 75, youre going to have to sell this. Which it did not yesterday and has not today. 75 is this magic level that a lot of people feel its not going to go below. Really . Wti at 76 doesnt make their world a lot more painful . It does not rock their world. If thats what youre asking that is what im asking. You got to go through the eog. Eog is not producing like in saudi arabia, but the rest of the country, theyre one of the lowestcost producers. With this straw, you hit oil. You stick a straw in the ground and you hit oil. Thats how cheap that is. Eagleford is much better. You go over the eog call if you want to know why the stocks are up. Theyre machines. American technology has lowered the break so much that you see these companies are making a ton of money. People are reluctant to short them now, knowing they can make so much money. Might not be a good idea to short activision. 23 cents beats buyy a dime. They raise on the full year. Call of duty. World of war craft. How much do you get paid when you playing call of duty . Did they raise the minimum wage . Some states did pass minimum wage. If i play call of duty in those states, do i get paid higher . Dow is up 93. This is a new alltime high for the Dow Jones Industrial average on a week in which the utilities and the transports have also set record highs. Its an unusual combination. Then again, you have Interest Rates low so people want to buy the utilities. You have gasoline low so that the fuel costs for a delta, for american airlines, spirit, even though spirit will say, listen, thats not a big increment for us. And a lot of these companies have hedges. When the hedges come off, theyre going to do very well. Its really a remarkable market. The breadth of this market is so great. Yet, the gloom around the market remains palpable. Why is that . The same reason why the president was rebuked even though the gloom around the market. I want to explore that statement. What does that mean . I dont think that anyone thinks that the economy is that good. I think its okay. 3. 5 gdp growth is not bad. Do you ever hear people i think weve all learned our lesson. Keep, you know under promise, over deliver. People have had their head cut off so often. Were still dealing with the hangover of the great recession. People feel stocks are a tarnished asset class. All they do is go up. They certainly have for some time. Many of the media stocks, which took a drubbing yesterday, in particular the two that reported earnings. Time warner and fox both up sharply this morning. Viac via viacom not so much. Cbs will report after the bell tonight. Its also up at least over 1 , though not making up for the losses yesterday. Well see. Perhaps something of a bmixed bg in media land. And i did feel fox was going to steal time warner after this quarter. I asked him to come on the show many times. He called me a Great American and then said no. All right. Well, im working on it too. Im not going to go down the patriotic front. When i see other guys on other shows, it drives me crazy. I know it does. I wonder what he thinks of charlies comments. Unbelievable war of words between dish and cnn. The Conference Call, if you havent read it, is such a great read. He takes everybody on. Goes after a reporter, really funny. Talks about the power of comcast and Time Warner Cable and the 30 million homes, our parent company, and what that strength is going to mean and how people will view dish as a result. Perhaps more positively because theyll see them as helping them fight off. Is the heir to howard biel . I dont know if charlie is that bad. Hes worth like 14 billion. Direct from the cbs evening news roomro. Dow is up 75 points. Cross an alltime high for the industrials. Lets get to bob posani on the floor. All ten sectors of the s p are on the up side today. Even though the dow isnt fully stating whats going on, were being led by energy. Its not that earnings or even the revenues, which were great, by the way, its the comments on the production levels and where they were going. They raised their estimates of fullyear production. They didnt cut estimates. They raised them. Now theyre talking about up 31 year over year. The Prior Guidance had been 29 . Production is going up, not down. More importantly, pioneer natural resources, they had an Even Stronger comment about their production. Their production is going to grow 18 to 19 . Thats at the top end of the previous guidance they had talked about. Look at this comment. Put up this full screen from the ceo. We can grow production 16 to 21 through 2016 in a 70 to 80 oil price environment. This was the most important comment of the morning i have seen in terms of comments on Oil Production levels. We can still be profitable, healthy too. They had additional comments about that. Its different when you look outside the u. S. Shale business. Thats why rowan is very important. This is one of the biggest oil drillers in the world. Theyre in saudi arabia. Theyre in the u. K. Theyre all over the world. Theyre mostly not in the u. S. They had a very interesting comment. They had good numbers, but heres what they said. We are seeing softness in jackup and deepwater markets worldwide. Theres the concern about a cut in Global Capital expenditures in the Energy Business in 2015. Thats it right there. And thats the downside of this. This is where you have to be careful. U. S. Production levels way up, but Capital Expenditures elsewhere maybe to the downside. Meantime, a big up mlp today, Master Limited partnership. They were talking 37. 5 million shares. Right now, indications are 31 to 24. This follows on shell last week. Another successful mlp. Let me move on here. Pipeline discussions. Not a lot of move. Transcanada is just up fractionally. A lot of people said play canadian natural resources. Thats also up about 1 . Finally, were moving on here. Seasonal strength, november and december. Theyre talking 2015. Let me turn to the Stock Traders almanac. Heres an astonishing statistic over there. First off, 2015, president ial preelection year. The dow has not had a loss in a preelection year since 1939. Think about that. No loss in a preelection year, which is 2015, since 1939. Heres a more amazing stat. Year ending in five, 2015, theyve had outstanding numbers all throughout the last 130 years, averaging up 28 in the Dow Jones Industrial amplg. Thats right. People are looking at 2015 right now. Everybody, guys, playing seasonality. Thats the hot thing these days. Back to you. All right. Thanks very much, bob. Lets talk a little allergan. I want to get to a guest on mad money later tonight youre not going to want to miss. Yesterday we got that ruling from the court in california where allergan allerghad been t to keep bill ackman from voting at the meeting. The judge did not rule that ackman cannot vote those shares. In a way, a loss for allergan. Though, it did in some ways succeed in getting the judge to say, this raises serious questions. Raises the idea of a choice of remedy there that could reveal itself in the form of serious monetary damages to mr. Ackman who said you took our shares knowing a lot more than we did at that time. While allergan is going to appeal the ruling and while theyre hoping perhaps the s. E. C. Will choose to step in, that seems to be something of a long shot between now and certainly december 18th. So one might be forgiven for asking, well, if theyre going to have the meeting, is it time for allergan to start to move into sales mode . People saying not so fast. They still seem to be saying they think they have more time at this point. Others might disagree. In fact, the question is, if they do think they can still fight, how do they do it . If they dont, who do they turn to . Remember earlier this week we got that disclosure in a proxy from allergan for the first time saying, yeah, we did get approached by another party regarding a potential transaction. We cant provide assurance in the outcome or disclose possible terms unless an agreement is reached. That was six weeks ago or more. The question, is activis still there . You probably want to ask them, david. You might want to ask him, jim, when he comes on your show tonight. Brent saunders, great builder. Whether he wants to keep building. Some say it doesnt fit nearly as well. You can see it right there. Up rather nicely in recent weeks. At 15 times, that would get you to 150 a share. This is a company that has yet to do a deal in the last calendar, or 12 months or so. But it needs to. Many people believe it does need to. The question could be asked of actavis as well. Do you need to do a deal . I will ask him. Ill say you asked in case he takes it personally. Tell him i sent you. I want to ask the softballs. David is throwing you curveballs. Thats fine with me. Hes not talking to me. Not sure what actavis is up to. By the way, in our neverending attempt to inform you, real quickly, two movers. New skin down sharply. You see that . Yeah, that was awful. Herbalife yesterday. Nu skin today. Mondelez up nicely after a strong quarter. On margin expansion. Not necessarily on organic growth. Im going to have fred hassen on tonight, the former chairman on the board of avon. I dont know about that direct sales model. All right. Lets move from stocks to bonds, get to the bond pits and Rick Santelli at the cme in chicago. Rick . Thank you. If you look at a one and twoday chart, you definitely see the adp had a mild effect at 8 15 eastern. Over 200, wasnt a bad number. Thats for sure. It was solid. Its trending solid. Could be more solid, but its improved dramatically over the last several years. That is reflected. But the next chart starting in october really tells the story. Here we have fives up two, tens up two. Parallel shift. When rates moved lower, it was a capitulation atmosphere culminating on the 5th of october. The way its crawled back in orderly, baby steps almost every day really shows that the market is comfortable in these areas. Most likely were going to be spending a whole lot of time between 2. 25 and 2. 60. Maybe under 2. 50. If we switch gears to Foreign Exchange where the order is not nearly as orderly, where the ranges arent nearly as tight, all you need to do is look at dollar yen. The dollar is exploding, but the real issue is that the yen is falling apart. And for good reason. You know, theres no limit to what abenomics is going to do. Thats reflected in the limitless selling we see in the yen. If you open that chart up, its almost exactly to the day, seven years, since weve been this close to a 115 handle. The euro, not free falling like the yen, but obviously suffering its own kind of central bank draghi issues at the moment. If you look at an intraday, you can see some action there as we still hover for the last several weeks around the same comp. That sellerly august of 2012. Carl, david, back to you. All right, rick. Thank you very much. We do want to bring your attention to a worthy cause that is near and dear to the cnbc family. Tonight at the museum of the city of new york, the lulu and leo fund is hosting the art of healing. The Charity Buzz Auction is now live. A lot of the items up for auction include set visits to shows like squawk on the street here at the big board. You can attend all three triple crown races, have lunch with kara swisher, a private gymnastics session with olympic Gold Medalist shawn johnson. All to help foster creativity through the arts. The address, chari charitybuzz. Com lul leo. Its going to be a great event. I hope we do great for them. Matt lauer going to be there. We have some unbelievable outloud auction items im going to do tonight. Youre going to want to be there. Every one of them is one you cant price. You cant go on ebay. You cant go on amazon. You cant go on alibaba. These are one of a kind. Do you do the fast voice . I used to. I got trained professionally. Are you kidding me . No, i got trained professionally. I did a lot of it. I had a problem with my vocal cords. Yes. You do a lot of talking. I developed nodes. I was doing 15,000 words. The average american can do about 10,000 words. I had to cut back. This is cutting back . The current jim cramer. Im clocking you at least 14,500 words. I had my words counted by a great doctor. It was 15,000. That was about 3,000 more than words than i can do. Thats why i was developing nodes you were doing radio at the type. I had to give up radio at the time. When we come back, it is music to the recording industrys ears. Were going to tell you which superstar has pulled off a feat thats not been achieved in 14 years. Record high for the dow. Well be right back. Music buyers arent hating on taylor swift. Her new album, 1989, has sold almost 1. 3 million copies in its first week on the market. That marks the biggest sales week for an album in 14 years. She took to her instagram to voice her gratitude to her fans. I think its the number two album of the year behind only frozen, which came out in 2013. Dont you love it . I think shes really talented. I agree. I dont know whats more impressive, her musical skill or marketing skill. Shes the real deal. A powerhouse. Unbelievable. Well see it changing the face of music if you look at the spotify story. Well get stop trading with jim after a short break. Dow is up 50 points. Dont go away. Bulldog mattress discounters veterans day sale ends tuesday. Get four years interest free financing on the entire tempurpedic cloud collection and, get a queen size serta mattress and box spring set for just 397. Mattress discounters time for cramer and stop trading. Theres a stock called chuy. Its not impacting fiesta group, which is just doing terrifically. Great numbers last night. If youre going to sell chipotle off this, this is a seventhrate chipotle. Dont forget jackinthebox and qudoba doing well. Im not telling you to buy thac bell. What do you have on mad tonight . We have actavis. Fred hassan, the notion of biotech passing old pharma. Then marathon. Lets talk about the Saudi Arabian flooding us with oil and whether its keeping our, you know, keeping a lid on our prices and eogs of the world. Well discuss what happened in congress too. Actavis. Thats what im going with. This was the most fun show ive done in ages. Thanks a lot. Mad money, 6 00 p. M. Ism services after the break. Ro. Ro. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . Welcome back to squawk on the street. Breaking news. October read on the bigger part of the economy, service sector. Ism manufacturing rings the bell at 57. 1. Not a bad number, but not the 58 we were looking for. Not the 58. 6 in the rearview mirror. Going back two months tells the story. In august, 59. 6 was the best read that equaled august actually, august of 05 is the last time you had a higher read. So not a bad number. Lets go through the internals. We saw a pretty solid adp report. New orders, we always like to look at new orders. That didnt do what we saw ism do on the manufacturing side. Didnt rocket up. Its firm, but it lost a handle. Moved from over 60 to under at 59. 1. Sara, back to you. Thanks very much, rick. The dow still up about 40 points. For the first time in eight years, republicans will control the senate and the house. Cnbc chief washington correspondent john harwood back at hq with all the details of the results of the midterm elections. How late were you up, john . About 1 00, 1 30, Something Like that. It was a tremendous night for republicans. They had breakthrough wins all across the board in the senate. They also had some great upsets in governors races, including larry hogan winning in maryland, where nobody had expected it. Most of the focus was on kong. Lets take a look at where the senate is right at this hour. Republicans have got 52 seats so far. They could run up the score further because the two undecided seats are alaska, where the republican has been leading over the democratic incumbent. And louisiana, where Mary Landrieu faces a runoff. Shes going to be the underdog in that runoff. Thats a solid majority for mitch mcconnell. Lets look at the house of representatives. The house picked up seats to have the largest majority that they have had since before the great depression. Were projected about 250 seats right now, although all the ballots are not counted. Why do those things happen . You have to look first and foremost at the mood of the country and its attitude toward president obama, who is of course the most conspicuous political figure in the country. Look at compared to bush in 06, his midterm, and clinton in 98. Bill clinton was at 55 approval. George w. Bush had fallen down to 43 . Remember, he was struggling then with the iraq war. President obama at 44. Some polls had him lower. These are the exit polls. It shows that the comparable bushlevel popularity that obama had matched the result because in 2006, of course, democrats seized both the house and the senate. Theres a deeper malaise in the country about our economic futures and the failure of our economy to deliver rising wages to average families. Look at the attitude when you ask people in the exit polls, do you expect life for the next generation to be better than the current generation . 22 , the lowest in 20 years, said, yes, they expect life to be better. 48 expect life to be worse. When you have an unpopular president and a pessimistic electorate, thats a prescription for the party out of the white house making big gains. Thats exactly what happened last night. John, throughout the day here were obviously going to discuss energy and health care and tax reform and all those immediately obvious issues. Before we let you go, can i ask you where that leads us on the Supreme Court . And the fact the democrats will obviously lose their ability to get a new Supreme Court justice through the senate. There was a suggestion that Ruth Ginsburg might step aside earlier in the year so that she at least could be replaced on the lame duck session. Given that she said she didnt think they could find somebody appropriate to replace her, and time is so short, is that now off the table . Oh, i think so. She took it off the table herself and indicated she intended to stay as long as she could. I dont think its impossible that president obama could get a Supreme Court nomination through, but i think its very difficult. The more robust that republican majority, the more difficult it is not only for the Supreme Court but other judicial vacancies and administrative posts as well. So any cabinet vacancies are going to be difficult for the president to fill. All right, john. Thank you so much. Our john harwood, whos had a busy 36 hours or so. This election could also have big implications for the fed. For that we turn to our senior economic reporter steve leesman, who has more. Hey, steve. Carl, good morning. There will be a big difference between republican bills passed in the congress that just happened. Those that challenged the fed have a much better chance of ending up on president obamas desk. Theyve offered bills that would allow for auditing of the feds Monetary Policy. The new senate could also challenge president obamas nominees to fill two vacant slots on the feds board of governors. Also likely to be some effort to roll back some of the doddfrank efforts that were out there. The doddfrank regulatory requirements, banking legislation, much of which the fed enforces. I do think that there is some ability now for a Republican Senate to start to influence not only Monetary Policy but regulatory policy. The fed is one thing, but the regulatory policy, i think thats where you may begin to see some agencies react to the new senate prominence as far as republicans are concerned, as far as approving additional appointments and the rest. Cantor added the current course of the fed ending qe and inching towards higher rates sometime next year could take some of the edge off these republican efforts, but it wont necessarily stop them. Quick comment on the ism services. As rick said, 57, not a bad number but not as much as expected. When i look at the details, the employment being higher, exports were down. We saw that also in the ism. Maybe some of that weakness overseas affecting the u. S. Finally, the adp this morning coming in better than expected. 10,000 better than expectations, up 230,000. You can see the nonfarm payroll estimate for friday, which were counting down towards, 233,000 is the number that were looking for. I wouldnt think anybody, the forecasters out there, would change their estimate for friday based on todays adp numbers. Now back to carl. Any of us will do, steve. Well see you soon. Steve leesman back at hq. Clearly steve raises important points about the fed. U. S. Stocks seeing gains this morning. Now up 52 points on the dow. Lets bring in the chief Global Investment strategist with charles schwab. He joins us from denver. Also with us, bill stone, chief investment strategist with pnc Asset Management group. Welcome to you both. Thank you for joining us. Thank you. Thanks. Jeff, let me kick off with you. Lets run with what steve has put on the table here. Certainly in public, in hearings, things can get a lot tougher from the fed. Presumably, therefore, it could be argued in order to ensure that it is not the subject in part of the 2016 election campaign, it plays defensive from here, moves very slightly, more quickly perhaps on Interest Rates and has a more wholesome debate about whether it might sell off some of its balance sheet. Do you think it moves the needle, jeff . I dont think it moves the needle that much, simon. If you look at where Market Expectations are for the fed, theyre way below what the feds own expectations are regarding its own policy. I dont think the market is pricing in a whole lot of action from the fed in 2015. Maybe a little move later in the year. By and large, the fed not going to be a major issue for markets in the u. S. In 2015. The European Central bank will be doing a lot more. The bank of japan will. In the u. S. , i think fed policy wont be the biggest driver of stocks. Bill, what would you be talking to investors about in relation to the election . Theres energy, health care, the possibility of comprehensive tax reform. I guess a lot depends on what obama says this afternoon, on whether hes going to stand there vetoing or whether theres compromise to be had. Yeah, i think youre right to say the baseline is probably not a ton of change. You can see on the energy front, maybe more prodevelopment. Probably a higher chance that we get the oil exports approved. Maybe a higher chance of some comprehensive tax reform. Honestly, thats still a hard thing to do no matter whats going on. I think maybe part of why youve seen a little bit of a positive impact is just that there is that possible upside surprise that we saw in the late 1990s where you saw congress able to work with a president and get a few things done. I think that would be a net positive. Maybe immigration reform. Thats an outside shot as well. Hang on. On immigration just add a quick positive. He can just push immigration through at the executive level and may signal that as soon as this afternoon, surely. Yeah, and thats why you hope maybe hes willing to Work Together rather than you know, thats kind of sending a rough message to start with. Thats why it will be interesting to see how it starts, i guess, this relationship. Jeff, i just want to take it outside the United States for one second. This is a big market story as well. Weve seen how u. S. Equities react to policies overseas, especially from central banks. The ecb meets tomorrow coming off of that blockbuster move by the bank of japan. How much scope is there for disappointment . U. S. Stocks on what draghi does or does not do. Well, if you take a look at the last couple of years, about a third of the gains in the european stock market have konl on ecb policy days. Draghi knows what the markets want to hear. I think he wants to deliver it to them. Lately hes been setting up this environment where he leaks something out, suggests some idea, and then its very difficult for the rest at policymakers at the ecb to back away from it once it becomes embedded in the market consensus. I think well hear more of that from draghi, but its still a little bit too late, too late. Perhaps one of the more positive things for europe is the republicans may give something obama he wants, trade promotion authority, the ability to get this Transatlantic Trade Partnership deal done. That could be a 1 boost to european gdp. Could be a real positive. Regular viewers of the program who are interested in the ecb should goog tle the reuters report which came out yesterday. Just before we let you go, bill, oil appears to have stabilized somewhat. Where are you now on broader impact for these big falls weve had in crude . Major, major moves. Well, i think, you know, the positive is for the consumers, of course. Youve seen some, i guess, damage in the stocks of the oil services and those kind of names, but the net, i think, when you really play it all out is a net positive, at least at the moment, for the u. S. Economy, as long as it doesnt fall too far. Frankly, we will likely be the biggest producer of oil coming up here next year. Guys, its good to see you. Thank you, both. Thank you. Thank you. Were going to stay overseas now. One big story in the currency market today, the russian ruble continuing to hit new record lows. Michelle Caruso Cabrera with the latest on what that means for russia. Just in the last few moments, the russian ruble breaching 45 for the First Time Ever against the dollar. A record low. You can see now its back to 44. 8. Slightly recovering. What you see at the bottom of that chart is the dollar strengthening over the ruble. The news today, guys, is that the Russian Central Bank has made a startling and significant announcement indicative of the pressure theyre under. Theyve announced theyre essentially going to abandon trying to manage the currency. They spent 29 billion last month trying to defend the ruble, sometimes 2. 5 billion per day. Now theyre going to reduce that to 350 million only, and within their press release, they basically say, look, the ruble is now going to be set by market forces. They got 440 billion worth of reserves, but you can go through that really quickly when youre trying to defend a currency. Though in fairness, to look at the chart, theyve not been very successful, which might be why theyre abandoning. Thats the whole point. They raise the rates by 1. 5 Percentage Points on from id. A huge moves in terms of Interest Rates. What did the currency do . It fell anyway. So yeah, they were struggling for sure. All right, michelle, thank you very much. When we come back, House Majority whip steve ska lease will join us in his first interview since last nights elections. Hell way in on the results when squawk on the street comes back. Ough, but thank you. Thank you mom for protecting my future. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Its in this spirit that ingu u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Female announcer tuesdaduring sleep trains triple choice sale. For a limited time, you can choose to save hundreds on beautyrest and posturepedic mattress sets. Or choose 300 in free gifts with sleep trains most popular tempurpedic mattresses. You can even choose 48 months interestfree financing on the new tempurchoice, with headtotoe customization. The triple choice sale ends tuesday, veterans day. Sleep train your ticket to a better nights sleep the votes are in, and its a clear republican wave thats wiped out the democrats, taking control of the senate, retaking governorships, expanding the partys majority in the house to its largest level since the 1940s. Joining us this morning, first on cnbc, House Majority whip steve scalise, republican from louisiana. Easily won reelection yesterday. Also worth noting that louisianas highly Competitive Senate race is now headed for that runoff, december 6th, between democratic senator Mary Landrieu and gop challenger representative bill cassidy. Thats going to be interesting. Congressman, great to have you. Good morning. Hey, good morning. Great to be with you. Mitch mcconnells already given an interview to time this morning. They ask him about whether or not the plan it for republicans to repeal obamacare. His argument is not a full repeal but trying to use appropriation. Wed like to move a bold agenda through the first 100 days to get the economy moving again, to address problems, including things like obamacare, that are dragging our economy down and killing jobs. Lets get our country moving again. That ought to be our focus in the first 100 days. There are a lot of good bipartisan ways we can get there. Whats that going to look like . Are we talking keystone . Are we talking trade, Corporate Tax . Give us some lowhanging fruit on that front. Energy production is the first place you can start to create jobs immediately. As you mentioned, keystone ought to be on president obamas desk the first week were in session in the new majority. Thats something that has broad bipartisan appeal and would create over 40,000 jobs. Really good to get our economy moving again. Then you got to look at things like tax reform. Getting a budget passed early, putting tax reform in place where we can finally be competitive as a nation again. Im tired of seeing Companies Moving overseas because we have the highest Corporate Tax rate in the world. Lets keep those jobs here in america. Lets bring a lot of those jobs back by making a competitive tax rate again. Should the fed be nervous theyre going to be truly audited now . I think we ought to have an audit the fed bill that moves all the way through. Again, very bipartisan. People realize it makes common sense. Nobody can tell you what the fed is doing. Lets just have an audit and see whats there. President said hed be the most transparent president ever. Heres a great opportunity. Lets start getting control over washington spending, start living within our means like every family in america does, like every state in america does. Higher minimum wages, congressman, prove to be pretty popular last night. Passing in five different states. Thats typically been a democratic policy. Is it something you think republicans can latch on to, higher wages, something we need to see to get our economy moving. Well, if you look, there are independent reports that show the federal government increasing the minimum wage would actually cost our economy over half a million jobs. Thats not something we want to do. If states want to change their minimum wage, thats a state responsibility. At the federal level, we ought to be focused on the broader picture to create a bigger middle class. The middle class is struggling right now. Were not seeing an increase in jobs in the middle class. Were seeing a lot of parttime jobs. Lets get that fulltime economy back going again, create a middle class where people can actually work all the way up and achieve that American Dream again. Congressman, i think what a lot of people in business would like to see is compromise so me through without a president ial veto. The fact youve got in the house this very big caucus, does that mean Speaker Boehner can really lead from the middle, more to the middle of the party than can the conservatives, or is that negated by the fact that in the senate a lot of the moderates on both sides are kind of being knocked out. What im saying is, is it a more moderate gop now that can do deals, or are we basically back where we were . I think where we are is in a position where we can finally move bills not only through the house but through the senate. If you look at a lot of the bills the house passed, over 350, many focused on job creation, getting the economy moving. Most of those were bipartisan bills. In fact, over 90 of the bills weve passed out of the house were bipartisan, but they never went anywhere in the senate. I think you saw that repudiated last night. Not only was it a referendum on Barack Obamas failed policies, but i think people were frustrated by the fact you had a senate that was refusing to take up any bills, even the bipartisan ones. Lets go take some of those bills up. Again, you look at energy production. You look at some of the things that will get our economy moving again. Those were very bipartisan. Lets start there, see if the president is willing to work with us on getting those issues addressed for people across the country. Congressman, the white house has said in the past they will not negotiate on the debt ceiling. Market has some lingering concerns about what happens if he repeatedly vetoes appropriation bills in the house and the Senate Just Passed them again. Whats the likelihood of the danger of a shutdown . We want to get beyond all these crises of the moment and these showdowns. The president needs to work with us to actually plan ahead. We see things coming months in advance before we get to the debt ceiling. The president shouldnt wait until the midnight hour like hes done in the past. He needs to start working with kong ear congress early. Every president has work on reforms to spending at the time you work on a debt ceiling increase. Thats nothing new. Its always happened. This president needs to just get used to the idea of working with people, both republican and democrat, in congress to address real problems facing our country and outofcontrol spending is one of those real Problems Holding our economy back. Congressman, thanks so much for your time. Great to see you as always. Steve scalise joining us from louisiana. Also a quick programming note, the president will hold a News Conference today around 2 50 p. M. Eastern time. We will have full coverage of his reaction to the midterm elections this afternoon. Up next on the program, realogy up more than 10 in just the last month. The ceo will join us live for a first on cnbc interview after this break. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Tthats why i take metabiotic,ed toa daily probiotic. Health. New multihealth metabiotic with bioactive 12 is proven to help support a healthy immune system. Experience the meta effect with our new multihealth wellness line. We asked people a question how much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to like, pull it a little further got me to 70 years old im going to have to rethink this thing its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. So i can reach ally bank 24 7, but there are24 7branches . Its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Shares of realogy rallying more than 2 right now after beating wall street estimates for earnings. The real estate brokerage, which franchises brands like century city, Coldwell Banker reported revenues of 1. 5 billion with shares at 68 cents. Joins us now, president and ceo of realogy holdings. Richard, give us a little color an what you saw during the quarter in terms of housing sales and deals and transactions. Good morning, sara. Thanks for having me. Were seeing more confidence in housing than weve seen in the recent several years, though i think people are generally of the view that housing now is a good buy and theyre jumping back into the market. Slowly, but nevertheless. I think it was a solid quarter. Were comparing against a weak quarter in 2014, if you recall. That was a quarter when everyone accelerated closings ahead of a rising rate environment. We do not have that dynamic today. What we have is increased confidence in the housing market. You know, we just learned this week and thanks to diana o olick for pointing this house, the percentage of firsttime home buyers dropped 33 this year. Whats it going to take to bring them back to the market . Actually, its just marginally down. The firsttime buyer has been slow to get back into the market. I think its a combination of issues. One, the traditional form of financing a firsttime buyer purchase is fha. Fha fees are very high. Extraordinarily high, actually. I think those fees are going to have to come down. The underwriting standards do not have to change, but the methodology is going to be a necessary change. What i mean is that banks have a very difficult time adjusting to the new environment, which holds them accountable, even for technical defaults. So the putback risk is very high. Lenders know it, and theyve been reluctant to lend to firsttime buyers for that reason. A firsttime buyer traditionally is a higherrisk buyer. But with some basic considerate underwriting, we can get the firsttime buyer back in the market. Sir, curious about your response to the Zillow Trulia merger. Is that going to have an affect on your business . Theyre very good suppliers to us. Theyre good alternatives to traditional print media. On a combined basis to the extent they continue to represent the same value we see today, were fine with that. We clearly indicated that to it the market. What about the information that seems to be migrating online at this point . Is that causing any decline in the fee the brokers charge . No, actually, if you think about it, put it in that context, youre taking offline information and concentrating it into an online application so its more convenient. It makes for a better and more informed consumer. So we have not seen that, nor do we expect that to happen. We think a better and more informed consumer is good for industry and good for housing. Mr. Smith, can i take you back to where we are in housing and the issue of firsttime buyers. Is the market i dont know what proportion of what you sell are new builds, but there is a suggestion that the market is failing to supply whats really needed. In other words, the home buyers, in order to maximize their profits, are basically building bigger, more expensive homes and theyre not giving the supply the firsttime home buyer might require or less profitable ventures. Is that something you see . Is that something we need to be cognizant of and try and deal with in some way . Thats a very astute point. Builders are reluctant to build firsttime buyer product. Their margins on that business are typically lower than the higher priced homes. But they will reluctantly get back into that will market. Several have indicated their intent. We think that will happen sometime in 15. We also believe many of the homes that were acquired by constitutional investors will start flowing back into the market as homes for sale. So to meet that demand, there must be product and the products have to slowly come back into the market. Were confident it will. Very quickly, republican congress. Does it change anything when it comes to fannie and freddie reform . No, i dont think so. I think there will be a lot of cat and dog fights over the next few years. I think whats important is well have a proeconomic growth agenda, and that will be good for housing. All right. Richard smith, thanks for joining us. The ceo of realogy holdings. Okay. Back to it the oil market and breaking news at the new york merck with jackie deangelis. Good morning. Oil prices moving slightly lower here. We were up about 1. Now about 70 cents after the department of energy announced a half a million barrel build for last month. That is less than traders were expecting. Thats why were down a little bit. Peter is one of the floor traders here. I want to talk about the price action weve seen in crude since we hit 75 and change yesterday. Weve bounced back up. This is less than weve seen over the last few weeks. Where do you expect these prices to go . It was pretty close to what was expected. Thats why we dont see the market trading wildly right now. In the beginning of the week, we had panic selling to the downside. Thats the type of scenarios we had. We got the same old news weve had from the saudis that they want to attack north american production. I just keep thinking that a year from now, if you look at the longterm charts, might they get more than what they bargained for and maybe at 50 rather than between 60 and 80 of what theyd like to get the highcost producers out. Its interesting you mention that. A lot of people bearish on oil prices, calling for prices maybe at 65, 60. What happens in the interim . Do we see a pop before we get there . I think you trade at least up into the mid80s before you correct back down again. But i think its very dollar dependent too. Should we have a really strong dollar, thats when youll see for the long term we could pull back as far as 50. Thats the question too with the dollar index. Where do you see it going . Looks really strong. Id say it looks good to the upside. Okay. Upside dollar index bad for crude prices. Again, we are trading up 90 cents right now. 78. 09 is the price on wti. Thanks a lot. Straight ahead, at least eight firms raising their price targetings on alibaba. The stock in the green on that news. Well talk about that after the break. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Alibaba continues to dazzle investors after a major revenue beat yesterday. A number of analysts continue to up their price targets on the stock, which by the way is up more than 50 since this initial public offering. Over 270 billion in market value. Even with a lot of buys on wall street, will the chinese ecommerce giant continue to deliver . Joining us here at post nine, former yahoo coo. Also, the ceo and president of the Student Learning platform which posted an earnings beat earlier. Your stock is actually up. We had a very good quarter. Not from your ipo price. No, not yet. But were working hard to do it. We had a lot of unbelievably good and strong signs. The platform now is 15 million students. We grew our subscription businesses 102 , our Digital Businesses grew year over year. A year ago when we went public, everyone was worried, what would amazon do to our textbook business . We outperformed on the textbook business. This year would be the first year we would produce free cash flow. A year ago we used 28 million in cash. A lot of the signs of the business are extremely strong. And amazon in its last quarter cited weakness in the textbook business. They did. We seemed so surprised they were surprised that students would prefer to rent textbooks at 80 cheaper than buying them. But we tweeted we happily recommend if theyre uncomfortable with the rental business, they can send them all to chegg. You participated a great deal in our coverage of alibabas ipo not that long ago. The stock up 50 . Is this justified . Can it keep up based on what you know about this company . My experience is every time you bet against alibaba, youre wrong. Youre betting on ecommerce, which is moving, you know, tremendously in the right direction. Youre betting on mobile, which is moving tremendously in the right direction. Its like elon musk said years ago when people were betting against tesla. Its inevitable. Its inevitable the Chinese Market grows. Its inevitable mobile grows. Why wouldnt they be the continued winner in that space . Whos going to take them on . Then you look at the Global Expansion. Ive been impressed since day one. One argument would be you can lose by spending too much or paying your employees too much. Watching expenses and compensation rise. Not a danger . Well, its given their Profit Margins and growth rates, its really temporary. Its like the facebook thing. I dont know why people were surprised by that. We knew they were going to be folded in. When you look at the overall growth rate and the market opportunity, theyre smart investments. I love the way you do this. You do this long list of wherres why theyre so great and at end go, Global Expansion. Thats the big issue. If they have global ambitions, how do they grow outside china . We had a suggestion on the show yesterday they might buy yahoo here. Thats crazy talk about what they might get up to. Whats your take . What are you hearing . My expectation is what theyre doing in the u. S. So far because Global Expansion for them could be asia, could be anywhere. Theyll have a much better chance of expanding in asia. In fairness, he needs the u. S. Hes here, hes present, hes been in hollywood. This is a key target. I think eventually it becomes a key target. My understanding of what theyre doing today is theyre making large bets on investing in companies but not necessarily planning to own them to operate them. So theyre looking at a lot of the emerging Ecommerce Companies growing quite strongly, and theyre thinking about the future. But i dont think theres the same sense of urgency that perhaps the rumors suggest. Theyve been hinting actually at doing a deal we got hints from both ceos last week with apple on apple pay. You like that idea . Well, i mean, again, why not . Theyre in the payments business. If apple pay for the consumer makes ecommerce and mobile commerce easier and retail commerce easier, why wouldnt alibaba want to positively impact and get rid of friction in their commerce system . This is a company when we met them in 2004 and 2005, there was no shipping in china. There were no credit cards in china. They keep finding ways to invent the solutions to their problems. Including inventing a holiday coming up next week where theyll ship Something Like 150 million packages in one day. Its shocking. Dan, before we let you go, yahoo . Your old employer. Of course, you referenced the deal you did. The stock approaching 48 a share. They have a lot of money now. Theyve obviously got potentially a tax efficient way to dispose of the rest of the stake. Do you think theyre going to spend that money wisely . Marissa mayer has been focused on talking about her stewardship of capital and how good thats been, in her opinion. Where the stock is today, which is based almost exclusively on alibaba and yahoo japan, so as the ceo of a company, shes very likely thinking, how do i now make the operating business more successful . I think shes going to try to find the right balance between what you get back to shareholders and what you buy. Whatever she can bid on that would be great, facebook, google, apple, can all outbid her. Shes in a very difficult situation. I think shes trying to figure out the right path forward. Right now it feels like do no harm as they think through whats possible going forward. We could have you here all day. Come back soon, all right . I will. Thank you. Still ahead, the ceo of coupons. Com will be joining squawk alley live after the qua companys Quarterly Results came in. The stock getting a huge boost today. Well be right back. Its time to start thinking of the perfect present, and whats better than some memorabilia . Specifically a cnbc 25 baseball cap. Signed by the entire squawk on the street gang. You want it . All you have to do is guess fridays nonfarm jobs number. Tweet your estimate to squawk street. Dont forget the hashtag nailthenumber. Oh, yeah, you have to be at least 18 years of age to enter. Sorry, kid. You have until 8 29 a. M. Eastern friday morning. Good luck. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. 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Utilities have set a record high in todays trading, up more than 20 year to date. Its up 14 just over the last three months alone. Leading the way higher in todays utilities trade, nextera energy, also nrg, ppl, and of course Public Service Enterprise Group as well. Interest rates, yes, they may be slowly creeping higher, but theyre still very low on a relative basis. Back over to you. All right, dom. Thanks a lot. Lets get to the cme group and get the Santelli Exchange with Rick Santelli. Hey, rick. Good morning, carl. Id like to welcome our postelection guest, andy bre nerks nard. Thanks for taking the time this morning. Thanks for having me. Always a pleasure. You know, i remember starting a year ago and then almost every interview with fed insiders and followers, id ask one simple question. Is the deterioration i think thats going to happen in europe going to affect global economics, therefore transmit to affecting policy . The answer was always no. We know that wasnt the correct answer. Tomorrows the ecb meeting. Has mario draghi created an addiction cycle for u. S. Style qe that he may not be able to deliver on but the markets now pricing in and expecting in in . Is that whats going on . Rick, you hit it right on the head. Theres going to be a lot of talk tomorrow. There are a lot of people that are going to give draghi a hard time tomorrow. I think youre going to get some real fireworks. You certainly have that potential. So stay tuned. A lot of people are not anticipating much. We think with what the japanese did last friday and the kind of talk youve seen this week out of europe, we think tomorrow is certainly worth watching. Yeah, we agree with you. Now, i guess the question is, i think its very important. If mario draghi is going to be the quarterback of this qe team of central bankers, did he put the ecb in this mode of an addiction cycle intentionally, thinking that once established and once priced in by the market, once the expectation was built in, that he would in essence then slay all his foes, other more staunch central bankers, that do not want to go down that path . Was it intentional, you think . Absolutely. Nothing with draghi is basically up to a guess. Theres no question that he had this game plan. Hes been implementing it now for a year or maybe actually two years. Hes got the germans in a corner. Whether its going to be qe with sovereigns or qe with corporates, were going to get some kind of additional qe well beyond whats already been announced. Now, how will merkel look at this . We all know that there are and for lack of a better term, theres a tea Party Dynamic in the political issues of germany as we speak. Is merkel going to be able to go along with this program . What do you think her reaction is going to be behind closed doors after tomorrows meeting . I think shes going to be very upset. I think shes going to try to work ways around it, but at the end of the day, i mean, you have literally almost no growth, zero growth coming out of europe. And germany, really, i think theyre now expected to be 0. 8 gdp. Its less than 1 . In reality, she may fight it for political reasons, but i think shell acquiesce. Andy, thank you for your opinions today. Always interesting. Simon, back to you. Although, at the last council meeting, she was quite supportive of draghi. Worth taking a look. Stocks relatively mixed today after the midterm elections. The one and only art cashen will join us live at post nine to break down the action today. The inaction today and his thoughts for the future. Health can change in a minute. So cvs health is changing healthcare. Making it more accessible and affordable, with over 900 locations for walkin medical care. And more on the way. Minuteclinic. Another innovation from cvs health. Because health is everything. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. Forecast for 2014 citing recent acquisition of the grad cad. Better than expected Third Quarter results so the on balance its trading down 13 . Rival 3d printers are down as well. 3d examines ex one all in the read today. Currently up 44 points on the dow. Art cashin is here now. The midterm elections. And mr. Coroda saying there is no limit to what im going to do. Thats the bank of japan governor. Yes. But the roar out of the box took us only back to mondays highs in the nasdaq composite and the s p index. So there was a sense of uhoh there is a double topitis routine. And then stories about the saudi arabiaia and the oil pipeline and speculation about terrorist relations. And oil rallies and all that is dissipating a little now. Back to the election. Mitchell mcconnell the majority leader in the senator gives that News Conference at 2 00 this afternoon. And president obama will speak at 2 50. Are we desensitized to the political situation. Is there hope that something could happy and we could rally on . A lot will depend on the tone of those two conferences. What tone will the president take . Well he is going to say hes going to work with them because that is what they say. Not necessarily. He may talk about limits on certain things. For example, appointments. And confirmations. That could be critically. Not so much the Supreme Court but a variety of other things. So it will be the tone here that will traders will look at. And the real question is if it is going to make obama uncomfortable it may make janet yellen equally uncomfortable. Now that the republicans have control in the senate there are several republican senators who are not particularly happy, including shelby whose probably due to become chairman of banking. And he had been a fan of the fed and now has turned against it kind of. So it could be a little uncomfortable the next hearing they get to. Can i just point out with gold and silver, 4 and a half year lows. The dollars stronger. Towards 115 against dollar yen. How is this action influencing u. S. Equities because these are stunning levels. And unfortunately they probably will continue to be. And you are right. It is all about the dollar. And, you know, if the dollar keeps strengthenings, it belittles many reasons people have for owning gold. So they are moving away from it. Even though we are in this currency war, where bank of japan fired its massive baa zook and says that is limitless and says everybody is expecting something from the ecb. Interesting people arent turning to gold. Certainly if you were a japanese citizen would be sensible to buy gold because they have avowed they are going to depreciate the yen as low as it can go. Would make more sense to buy the dollar, which is what theyre doing. They are buying the dollar. And i think what you have watch for is i think some of the etfs and other things tied to gold are doing this lick dating as things move down. Did i read somebody dumped a ball and a half dollars of futures at 3 00 a. M. This morning. So it goes on in quite liquid situations as well. Its unfortunate. And what you had yesterday in the e. U. , everything changed at 5 a. M. New york time. And when they looked at the gdp and said guess were not doing as well as we expected. So the market can be vulnerable. I would suggest viewers keep an eye on the monday highs. How are we positioned art . Going into mondays job report . People are expecting a reasonably decent number. But that is becoming its own little problem and paradox. Because you are starting to hear the same thing again. Are things getting so good the fed has to move early. So if the jobs report is too good that is bad . To some degree. Because you are now beginning to look like the Unemployment Rate can get down to 5 at the beginning of the 2015 when the feds projection doesnt have that until the end of the 2015. Were out of time art. Thank you. Jon fortt with whats coming up next. We have a show you dont want to miss. Were going to hear from tony fidel at nest. And synchonos. And what do you get when you mix technology, marijuana and food. Magical butter is a new company. Best since sexual chocolate from coming to america. You dont want to miss it you know how fast you were going . About 55. 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