Transcripts For CNBC Squawk On The Street 20150109

Crude oil does figure very prominently into the movements of our market. As you can see, wti down again. Not a great deal but down again this morning. As for the tenyear note yield hovering around amazingly enough that 2 level. That is exactly where we find ourselves at weekend. The first full trading week of 2015. We are going to have more on the jobs report in a moment. Our road map starts with continuing terror in paris. Multiple hostage situations unfolding. We are going to bring you the latest details throughout the show. Here at home the december jobs report comes in above forecast. Well get the administrations reaction from labor secretary thomas perez. First on cnbc. Nelson peltz launches a proxy fight for four board seats. Jim and i both will have more on that impending battle. December jobs report shows nonfarm payrolls rose 252,000, above forecast that were around 240,000. Unemployment rate down to a 6 1 2 year low. It is now 5. 6 . Some of the decline reflected people leaving the labor force. Average Hourly Earnings fell down 0. 2 . Here is how chicago fed president Charles Evans reacted to the wage numbers on squawk box this morning. Earnings growth on average its been 2 to 2. 25 now its lower for average early Hourly Earnings this morning. I think if we are going to get inflation up to our 2 objective and its now 1. 5 less than that, we have to see wages increase more. Thats indicative of one of the dilemmas we are facing. Thats why im in favor of being patient on raising Interest Rates. Mr. Dove there. Earnings decline. That is not supposed to happen. We all took those courses. When you get a tight job market, wages are supposed to go up. They are going down. Its got to be great concern because wages at the top arent going down. There is a tremendous disparity between people who make money at the top, executives or capital and labor. Its widening. It should be tightening. The winnertakeall society we all learned so much about in recent years. Why do you think thats occurring . As you point out, its somewhat surprising given tightening labor conditions. 5. 6 on Unemployment Rate. We talk about Participation Rates, but that is disturbing. Free trade has a lot to do it. You can pay an auto worker 22, go down south to mexico and pay 5. 50. Everybody is under pressure to try to keep their job. Labor has lost a lot of negotiating power because jobs are fungible. We have trade agreements with every country. Im not being political, just imperical about it. When you look at a macys or jc penney, they are laying off. Closing stores. What do you see in the oil patch . Tremendous pressure in the last six weeks on wages. You do but at the same time weve got a strong gdp number at least last quarter. These are good numbers. 252,000 jobs. I feel as though youre being morose. Theoretically it shouldnt be. I hook at these numbers and think its finally the year its on the today show. This is the year you are going to get wage relief and make more money. These numbers are saying thats not going to happen. I think you search for reasons and have to say, nafta, free trade, these put pressure. These have been with us for decades. Nafta is from clinton. Yes. I think 20 years ago. I think almost anybody who has a Manufacturing Business can offshore anywhere. I think the Financial Services industry had been a big hirer. Theyre not hiring. Retail is hiring but not paying a lot of money. You look at the great job growth there. They were talking about kitchen staff, how that is doing. There are so many people in the labor force. So many immigrants who will take a job. This is very unfortunate. We are in a situation, people want we are in a health carebased employment situation. If you Want Health Care you have to get a job. You are willing to do anything for a job in this country. This is a big change. It is hard. Theyll do two jobs in this country. This is an expensive country to live in. Certain parts of it are. There are big divergences given that. What it means for the markets overall, november was revised up to 353,000 jobs from what had been addition of 321,000. October nonfarm jobs revised, also up by about 18,000. Unemployment rate 5. 6 . Labor force participation 62. 7 . That is the lowest since september 08. Overall, this is a good number jim. What should it mean for the market . Its great for stocks. Obviously, the fed had to be on hold. Theres no wage growth. They want wage growth. Wage growth we have 5. 6 unemployment. Thats below the average of the last ten years. Worried about inflation. Deflation is far more important right now, right . Gasoline is up and down. I see tremendous cuts in the capex, but the Oil Continues to flow. Its going to be higher year over year in terms of production, which is extraordinary. That will keep inflation down. Its an ideal situation for stocks. Thats one of the reasons stocks should not have gone down at the beginning of the year and why stocks have been incredible in the last two days. I think there is a lot here to like except if you are trying to get a pay raise. By the way, this has somehow become a politicallycharged conversation. I think people at home are saying is cramer in favor of higher wages . Doesnt he know that hurts capital. Im saying i studied economics with galbraith. He is a smart guy. Its not supposed to be able to happen. You are not supposed to have the job growth have such great job growth and wages decline. I took his seminar. He preached this. Everything i learned in school is marxism. Another education not worth what you paid for. Not at all. We have two hostage standoffs in france. Hadley gamble is outside paris with the latest. Reporter good morning, david. This is the third day of a massive manhunt in france. A dramatic series of events unfold as we speak in the village just behind me. Two suspects holed up in a printing business. They are completely surrounded by french and Law Enforcement authorities. There is at least one confirmed hostage in that building. There may be more. Five people were expected to be at work today at that principles. We understand the hostages are their first priority. They are not going to move in unless negotiations with with these two suspects totally break down. Ap earlier reporting these guys are ready to go the way of martyrs. Also in a separate incident theres been here shooting in the eastern part of paris at a Kosher Grocery store. The mayor of paris tweeting she is on her way to that scene right now. That makes the third such incident in the last three days. Three days of manhunt and three days of terror incidents. We also understand now the French Police released the photos of the two people suspected of shooting a policewoman yesterday in a terror attack in an area in the southern part of paris. They released those photographs. Police saying these two are armed and dangerous and on the loose. Thank you very much hadley gamble. Well have a lot more following those two separate instances of terrible things happening. Lets talk about big news here on the activist front. A couple of weeks ago i said its its highly likely trian two hold a fight for dupont. Interesting debate i would argue here that will take place between trian which has nominated four director for this board. Still would be a minority if they got all of them on. And the performance she has been put up and dupont have said xeeds many of what they claim is their peer group. Granted the lows they saw because the stock came down sharply in 08. This is part of the thesis is what she accomplished she had the wind at her back. You start with the right concept. Its hard. The team at duponts not terrible. They are doing a lot of things. I know peltz doesnt like how they are doing it. This isnt start out to be as difficult. Peltz does not launch proxy fights. Only done one and a long time ago. Otherwise they typically do settle for a board seat or two, which is oftentimes mr. Peltz or maybe ed garden. In this case they wanted one board seat this summer. I think it is interesting dupont was unwilling to go down that road. I think that would have solved this problem. There will be a tremendous out of energy for coleman to have to meet shareholders. This becomes a referendum on ellen coleman. Its something the board and she were willing to take on. They didnt want to put one member on this summer which would have ended this. Weve seen in so many other instances where these Large Companies roll over for the activists to a certain extent. Loeb had to. Explain how this works. The first two are index funds, okay . Next one is capital. Capital becomes very important. What happens . Does kullman make a pilgrimage . Of course. There will be a great deal of focus on the large holders. They will look through everything. The white paper we got last september from trian. Why the company should be split and they believe there is still a good deal of cost that is unaccounted for, unallocated for. Which is gigantic. Arguments coming back from document will be we met with trian 17 different times. We incorporated a lot of what they told us into the boards conversation about the strategy for the company. We listened to them. We outperformed our peers over a long period of time now. Weve done seven divestitures. We bought back a lot of stock. We are attacking costs. What exactly is it we are doing wrong . They will also, i know use things like mr. Garden had something to say last spring where he said ellen has been her own activist. Like pepsico. When you talk to the trian side theyll see the peer group is not correct. Holding Company Structure in which this Company Operates if you go back has just resulted in moving from back and forth, buying to selling with no true accretion over a long period of time for the company. Needs a different strategy. Allow us to be there as a minority on this board to listen and offer our perspective. And not necessarily to say we want the company split. Of course they are saying that. Do you believe that would create value, jim . Im not sure any more. I think getting rid of tio commodity business the way she wants to get rid of it which has a different Board Structure than peltz wants, i think is wrong. I think many of the things kullman is doing brought out a lot of value. Analysis is 80. I think dupont is a well run company, but could be better run. I would want john myhre on my board being one of the finest minds i met in finance, head of ge capital. A brilliant, tough man. Duponts board have good people. I would want john there. The trian side is why wouldnt you want myer . Did you see his background . Remember heinz, that was a board seat peltz got. When i met with mr. Johnson was the ceo when there was a significant battle and there was a coming together. I crow chuck bunch of heinz and johnson told me on mad money, peltz came in with great ideas. We were initially reluctant, but we loved his ideas. I dont know why you wouldnt want a smarter guy than you have coming in saying ive got an outsiders perspective. Especially when it was collegial. Sandy cutler had a lot of meetings. I think maybe dupont thought they were productive. Maybe trian thought they were offensive. Trian is going to claim the targets, whether longterm 7 Topline Revenue growth is not something that can be met begin the current structure of the business. They cite the fact at least ms. Kullman promised to deliver the numbers and they reduced guidance. They missed guidance several times. 14 was the year which they listened and learned. Now they are trying to hold them accountable, so to speak. I think its interesting they those to go this route at dupont and have the battle as opposed to just give up a seat this summer to mr. Gardner or peltz. If you buy with nelson peltz, you make money. You buy again. 80, worth 75 today. Ingersollrand. Look what they did. They said let us in. They had great ideas. Ingersollrand was a monster win. It crushed the s p. The relation with timken hasnt worked out. In the end fundamentals overtake all of this right . Ellen has moved the business from less cyclical into more proprietary. They made a judgment to some degree too shortsighted. Now they have to spend all their time meeting with big shareholders. That will take your eye off the ball. That was a major distraction. Let loebs people in. Management distraction and an important component which are rare for a company this size. We want to notify you about a date of delivery glitch affecting our bottom ticker there. The current prices in the ticker are correct but changes being displayed are not updating correctly. Well work quickly to fish the issues. Well continue to stay on top of the hostage situation in france. The nations largest drug store chain and european pharmacy giant are now one company. Merger resulting from walgreens and boots getting together. An exclusive with the executive vice chairman and jim skinner. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Your old 401k is rolled over into a Td Ameritrade ira. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better Td Ameritrade. You got this. Another look at futures. 252,000 jobs added in december above expectations. Having perhaps a minorly positive effect. There are too many cross currents right now. Theyve got a lot of earnings upgrades, downgrades. Well have more on those two hostage standoffs in france. The evolution of luxury continues. The next generation 2015 escalade. Well, a mortgage shouldnt be a problem your credit is in pretty good shape. Pretty good . I know i have a 798 fico score thanks to the tools and help on experian. Com. Kaboom. Well, i just have a few other questions. Chuck, the only other question you need to ask is, what else can you do for me . Ill just take a water. Get your credit swagger on. Become a member of experian credit tracker and find out your fico score powered by experian. Fico scores are used in 90 of credit decisions. Weve got a lot going on. We have 6 1 2 minutes before the opening bell. Lets get to the mad dash. Macys first given there is news there. Macys is freaking out. The comp stores were not blowout. They will end up Closing Stores. Obviously being compared with jc penney not as good. 14 stores being closed. Retail whether jc penney macys or pier one. They are Closing Stores because that is the new face of retail. This is omni channel which is code for amazon is killing us. The value bricks and mortar its not something to freak out about. Five below, bed bath macys all regarded as not so hot. 140 million in savings they will reinvest in Technology Talent and business development. I looked where the stores are. Obviously, close underperforming stores. They are not sitting still. He is not going to take a beating. He will continue to close stores. These are no longer growth retailers. They are like home depot. They realized dont put up a lot of stores go for more profitable stores. Its a bold action. Before you move on to other things, i would note 175,000 employees, they are saying they are going to stay level. Begin the unemployment level and lack of wage growth. They are not lowering overall employment. They are adding some and getting rid of others. You have to add to the business you chronicled so well in your amazon documentary. Thats the behind the scenes stuff. Nordstrom is ahead of everybody else except for macys. Terry lundgren is continuing to drive profitability. Thats what they want. They want great operating cash flow. Not just top line. That is smart. Bed bath wants it too. Five below doesnt know what its doing. Container story very inconsistent. Its nuts, all over the board. Pier one was very good plus 8 . You mentioned different names, all broadly under the banner of retail. They seem to be moving. The Container Store hasnt seemed to got anything right since they went public. They are claiming this quarter started is very good. I have questions about that. Let me talk about something really important. Troy alston was the heir apparent to howard schultz, stepping aside, unpaid lead. I think troy alston is fabulous. You do. Why do you think that . I met him. Great operation. Chief operating officer of starbucks. Howard was doing big stuff. This company has a great bench. I think its a shame i dont want troy alston to leave for a second hes so great. If you sell on this, you are making a very short term and incorrect room. This is a familyrelated issue. There are times im deadly serious saying this guy has to spend more time with his family. Its totally real. There will be changes coming in starbucks. Charitable trust owns it. Dont sell. Should i be concerned . Do not be concerned. Is this a stack of bibles situation . Cant, its totally business. I believed every word that came out last night about starbucks. I dont think you should sell the stock as much as i believe they wish troy would not go. He is so good. They have a good team there. We got news while weve been speaking over the last five minutes regarding the Keystone Pipeline. It appears Nebraska Supreme Court weve been waiting for this ruling struck down a lower Court Challenge or ruling that essentially will allow for it to go across parts of nebraska. Youve got the house then the senate going to vote very soon. Expect it to pass a bill saying we want this. Then the question is will the president veto . I think hell veto it. Bill mckiven i think his group will win. People dont understand the way oil flows from harvesting which is where this is from the tar sands, so to speak. Canadian companies have not been sitting still. That 800,000 a day will come here. What about the idea it comes across our country and ends out to china anyway . Theres trains pipelines. Do we need it. This is about venezuela versus canada. They are going to take Venezuela Oil or canadian oil. If you take the pipeline venezuela gets shut down. You will shut down the country of venezuela. Nigeria doesnt import to us. Where is oil going . Nordic america tanker reported a gigantic boost in its dividend. Why . Day rates are big. They are the largest fleet of tankers. A lot of Hedge Fund Guys are buying oil, putting it on tankers, betting it will come back. Day rates are up. Tankers are not going anywhere. Filled up with oil. Dont think trans can has been sitting idle. You can move it east through canada and send it down. There are ways to get that oil here. They have not banked on the president. They do not believe our president will ever approve it. Six years ago it was not much of anything. Venezuela versus canada. You hear the applause starting to go here. There it is the opening bell about 12 seconds or so before the official start of the trading session here at the New York Stock Exchange on this friday. Ringing that bear triple point ventures. Celebrating what is it celebrating . You can look back there it is. Recent ipo. Over at the nasdaq Walgreens Boots Alliance celebrating its merger. Well speak with Stefano Pesina and jeff skinner. Now theyve gotten it straightened out. You saw the realtime exchange at headquarters. Does appear to be more green on the board. Market digesting a better than expected jobs report. Not that much better. Lack of wage growth. Will that perhaps not put pressure on the fed to actually move . Its going to be part of the conversation taking place. We are looking at a 2 ten year. Are we going to go higher during the course of this year . You believe not really. I would assume because of the story we started out with this week which is in europe ecb waiting on the 22nd to get some details about a program for quantitative easing. Negative rates in germany. That is shocking. Negative rates for five years. Its ridiculous. You are seeing retail down. That makes sense. People are interpreting macys, bed bath and extrapolating the Container Store saying stay away from retail. It had a big move. Im not opposed to ringing the register. Biotech doing great. Its a very complicated market. Regeneron, big approval. Tremendous results for new hypercholesterol drug. We see alexion should have been down more. Want to get back to headquarters and an update on the developing hostage situations in france. Michelle . Reporter there are two hostage situations under way in france right now. Both connected to the terrorist attack that occurred two days ago that left 12 dead. Lets start in eastern paris where dramatic pictures are rolling in Police Surrounding a supermarket that specializes in kosher foods. Witnesses heard gun fire. A man with a gun has taken hostages. Weve seen reports between five and seven people. The suspect is believed to be involved in the shooting of a Paris Police Officer yesterday. Also importantly, connected to the two shooters at wednesdays attack at Charlie Hebdo where 12 people were massacred. Police released these two photos saying be on the lookout for these individuals because they are armed and dangerous. One or both individuals may be in that supermarket. To the second hostage situation near Charles De Gaulle airport. Police surrounded a small Industrial Town of about 8,000 people. No one is permitted in or out of the town. Helicopters hover overhead. The two suspects who killed the 12 people wednesday who have been the object of a massive twoday manhunt are holed up in a small print shop holding at least one hostage. Police made contact with them by phone. They said they want to die like martyrs. We are waiting to see what happens. Soon as we know more well bring it to you. Judge, in terms of what we know about potential dead at the kosher market i see wire reports that say two people have been killed. Is that your understanding . Yes. There are conflicting reports how many. Its possible people are dead there, as well. I have to tell you, there were a lot of reports coming in that turn out to be false. As you can imagine, people in paris are concerned. We see reports there may be a situation here or there. It turns out not to be anything. Theres a lot of information coming out. We try to bring you the best we have. We appreciate it. Well check in with michelle throughout the remainder of the show. You were talking about biotech and some of the equivalents that could create genetic competitors to therapies out there. And gilead announced a deal with anthem. Gilead we started with gilead announcing a deal with caremark to match what abbvie had done with express scripps. People are saying is there a price in biotech . Abbvie is down badly. My Charitable Trust oebs and totally believe in them. No longer do the biotechs have Pricing Power. I disagree with that. The yields youll see next week youll hear a number of companies that have all the Pricing Power in the world. There is this pill the abbvie pill versus the gilead pill. It looks like everything express scripps didnt tie up cvs will do. These guys cvs, walgreens and rite aid are best performers. Want to get back to our jobs number this morning. U. S. Closing out its best year for hiring in 15 years with a healthy gain in december. Unemployment falling to a sixyear low. Lets get the first reaction from the obama administration. To do that is labor secretary thomas perez. Always a pleasure to have you. Good morning. Happy new year. And to you. A very strong number following a strong number prior to that november. Jim and i were talking about the lack of wage growth. I would be curious to get your opinion as to begin what seems to be an evertightening labor force with 5. 6 unemployment. Why arent we seeing those wage gains . We are seeing a lot of progress. I need to note we looked at all the prognosticators a year ago and what they said 2014 would bring. One of the people closest to predicting the reality was this guy jim cramer. So jim, you called it far better than just about everyone else. We have made a lot of progress. We havent seen this Unemployment Rate decline since 1983 84. We see 58 consecutive months, 3 million jobs over one year. You are correct the Unfinished Business is to make sure that the prosperity we see across america is shared prosperity. The undeniable Unfinished Business is to make sure we have steady, real wage growth. As you know and discussed on your program many times, this is not simply a product of the great recession. This is decades in the making. Thats why the president is so focused on lifting the wages of ordinary americans. While weve seen progress, weve got work to do. Today he is in tennessee talking about Free Community college. My parents always taught me education is the great equalizer. We were the worlds leader in education for decades. We lost that edge. When you educate people and give them the skills to compete for those manufacturing jobs out there, for jobs in i. T. And cyber, thats how we lift wages. We have to do things in the short term like raising the minimum wage passing a longterm transportation bill. We are moving in the right direction. There were seven job seekers for every job opening a few years ago. Now there are less than two. We still have slack in the labor market. As lock as we have that slack, we are not going to continue to see the wage gains we want to see. We are undeniably moving in the right direction. You put your finger on the biggest piece of Unfinished Business. Thank you for the kind words that someone thought i got something right. I want to talk about the Community College thing. I thought that was one of the most significant things i heard in ages. The way you get wage growth is to have a better educated labor force. Absolutely. How about the student loan thing . People are willing to work for whatever they can get because they owe so much in student loans. Any way to make it so they are not having to take any job or two jobs to pay that debt . Absolutely. I spend so much time in this job and in my previous jobs with Community College president s. Community colleges are the secret sauce to building the middle class in america. Ive seen so many students some coming right out of high school some are 32 years old, they lost their job, theyve got to upskill and retool. Community colleges give them that opportunity. What the president is saying nobody should be prevented from punching their ticket to the middle class and climbing the ladder of opportunity because they cant afford it. Thats what the president is doing. We need to be bold. When folks came back from our wars and fought our wars we had a gi bill that said we need to educate our returning veterans. We need to think similarly big and bold in the area of education. Thats the long term solution. I talk to ceos everywhere across this country. They are bullish about the future. They want to grow their business. Their biggest challenge is too frequently folks applying for their jobs lack the skills these employers need. We can fix that. We can do this. This is an investment. Im confident we are going to see Business Leaders rally around this. I know educators are. This is about the middle class, how we grow it. Mr. Secretary, the Keystone Pipeline has been taken on by supporters as an opportunity to create jobs. There are people on the other side who say it wont create many longterm jobs. Is the president going to veto the bill currently in the house and senate that would allow for that to move ahead, and the Nebraska Supreme Court clearing the way for the Keystone Pipeline . The president has already spoken on the Keystone Pipeline. Last month was a great month for construction. 48,000 construction jobs were created. Thats 12 times more jobs than would be created in the construction of the Keystone Pipeline. I want to create jobs but we want to make sure we are continuing to create jobs across the board. Literally, one month of construction growth was 12 times the estimates of job creation in the Keystone Pipeline. Our focus on job creation has been broad based. We are seeing those results in the numbers, 3 million jobs created last year broadbased growth. We are going to continue to keep on this so we can sustain this pace of growth continue to tighten the labor market so we can lift real wages. Exactly where we started. Thank you as always. Appreciate your time. Great. Always a pleasure to talk with you. Thomas perez, the labor secretary. Lets get to the floor and mary thompson. We have a mixed market in the wake of todays jobs report which was better than expected. As david as jim were pointing out earlier, the fact we saw declining average hourly wages, that will keep the fed on hold a while. That should be a positive for the markets. An expectation we could see continued low Interest Rates. After yesterdays triple distinct gain in the dow jones, a pullback. Dow is off the worse levels of the session down 22 points. Its coming off those lose. S p which opened to the upside traded lower. Nasdaq which turned lower briefly is up about two points. Lets look at some of the sector leaders in early trading today. Well watch the energy sector. Oil is trading below 50 a barrel right now at 49 and change. Materials the leaders with technology and utilities in early trade. We are keeping watch on the retail sector. We are starting to get data on the december sales. Right now a little bit weaker. They were talking about it earlier. Macys closing some stores to remain profitability. The Container Store lower after it lowered its Sales Forecast for the full year. Steve madden lowering its profit forecast. Taking a hit, too. Gap samestore sales for december were up 1 slightly better than expected. Foot locker and ralph lauren both being downgraded over at janney for different reasons. Foot locker has been a nice move to the up side. They say time to take money off the table. Ralph lauren, they say headwinds it faces including the global economy. Dow off 19 points. S p lower. Nasdaq trading up about three points. Thanks mary thompson. Now to the bond pits and Rick Santelli in chicago. An interday of tens tells you a good chunk of this story. At least on the surface it doesnt seem excited about this mornings data. Im sure since wages is the linchpins to much of the activity in the fed, twoday maybe represents it more. Yesterdays change 197 to 203. The fact we couldnt get above or challenge yesterdays high yield caused many on this Trading Floor to start buying a bit. Maybe the whole key today is about the yield curve. The flattening yield curve has in many ways believed that 2015 would be the year we see an end to zero Interest Rate policy. Most believe its liquidation and does go hat in hand with what Charlie Evans said today and represented all along. Why should we raise rates . Thats going to be grappled in the market via spreads. Tens twos fives or 30s, we added a lot of basis points. 10s to 2s is close to the flattest since the summer of 12. 5s to 30s is the flattest in seven year. Bunds versus 10. 150 continues to be home base. Dont look for any wild ranges in either direction really. If you look at the Foreign Exchange markets, i look at the board is highly unchanged. Not a lot of volatility in this arena. Unchanged or not, we are flirting with the lowest levels of the euro versus the greenback since about december 2005. Back to you, david. Thanks very much Rick Santelli. Walgreens Boots Alliance rang the opening bell at the nasdaq in celebration of the merger. Very nice to have both of you gentlemen. Appreciate you taking the time. Mr. Skinner, if i could start with you. Mr. Pesina is taking over as ceo. Why not have a permanent ceo in place to have taken over for mr. Wassen as opposed to having this interim and search at what would seem to be a crucial moment begin you announced a closed merger . Thank you. It is an exciting time for Walgreens Boots Alliance. Greg decided to step down after the merger. He made that decision after a thoughtful process up until the time in december when we made the announcement. The reason the timing is such as it is at the moment is because we had a proxy out there for a shareholder vote to combine the two companies on the 29th. Once greg made that decision we had to disclose it and announce it. The timing was a little bit of an issue. We would have liked to have had a permanent ceo in place. We move on. Stefano is imminently qualified to be acting ceo. He knows the business extremely well and is the partner that brought these two great brands together. The largest individual shareholders of the combination, if im not mistaken. Thats correct. What are you going to do differently, perhaps, than mr. Wassen in your role as interim ceo . Well of course greg and myself have worked together for two years or more to put this company together. We have a common vision. I will continue on the vision we had together. We will try to accelerate as much as possible because, of course we live in an environment, in a industry which is changing quite rapidly and we have to be up to the speed of the market. There are a lot of people who watch our show and say United States is the strongest country on earth. Youre on a continent sliding and sliding. Why would we want a Great Company like walgreens to go overseas at the worst possible time . Say it again . Why . We know europe is week. United states is strong. I like the international. Mr. Wassen and i talked constantly about it. This teams like an illfated time to go international when the u. S. Is so strong. Well first of all, we decided this many years ago. Of course we dont have the magic bowl to gaze into the future. But the reality, we are creating a company for the long term. Today the u. S. Are going strong. I have to say our business is not doing so badly. In the last few years during the worst crisis europe ever experienced, we have grown more than 10 a year. At the end of the day, its true europe is not particularly strong today, but our business i could say, is still very strong. If i could say, it is a longterm view of the enterprise when you look at the reach of 12,800 locations. And distribution to 180,000 pharmacies around the world in 25 countries. Obviously, we have the longterm view of this enterprise going forward. Mr. Skinner, how far along are you in identifying a successor to the interim ceo sitting next to you . We are in the middle of the process right now, david. It will be a couple of months before we are able to identify the appropriate successor and candidate. Mr. Skinner, youve long been identified with mcdonalds. You did a fabulous job from 2004 to 2012. Stock went from 26 to 100. Since you left the stock has gone from 100 to 94 during a period when the dow went from 12,500 to 17,800. You instituted a plan to win, you obviously won. Are you concerned the stock has gone down during this period when the stock market has been so strong . I would say no i cant speak on behalf of mcdonalds. Ive been out of there 2 1 2 years. I have great confidence in the leadership of the company and don thompson. Theyve suffered substantial headwinds, as you know over the last couple of years. This is a cyclical business. Im sure they will move forward with the appropriate strategies to recover in the market. Why do you have great confidence in mr. Thompson . Because he was my handpicked successor, one. And two, hes an effective leader and very capable of delivering for the mcdonalds brand. Mr. Pessina, how is business here in the United States for walgreens right now . I believe we can be satisfied to what we are seeing now. As you said the market is picking up. Walgreens is doing well in this market. Of course we are full of hope for the future. Are you seeing a benefit from lower gasoline prices . Lower gasoline prices here and europe are they benefitting you . Yes, of course marginally. Transportation is one of our costs. Its not the major cost we have. Thank you both for taking the time with us. Very much appreciate it. Thank you. Coming up stop trading with mr. Cramer. Squawk on the street back after this. There are some live pictures of paris at this point. Two unfolding hostage situations in the country at this point. We are going to be following it and bring you updates as warranted about developments involving those two separate situations at separate locales in different areas. Lets move on to stop trading. It that is time. Markets weak. Only area holding up is technology. That makes sense. Its not affiliated with the retail debacle. You ask me what the key to the market is. Bank of america upgrades yelp hold to buy. It is mobile social it has local. It is very powerful. I agree with this upgrade. Let me say the social media stocks have finally caught fire after having a horrendous last month. Watch yelp. That will determine whether technology is going to move. We need it constantly. We need a book store, we want tacos. Every time. My family thought i was a genius. I use yelp constantly. What do we have on mad money tonight . We are going to go over dupont. How do you follow nelson peltz . Do you make money now if you buy it . Well have everything about this. I think this is the most important proxy fight we are going to see in a long time. Excellent. I will tune in for that. Thank you buddy. Have a great weekend. Coming up more on that hostage situation in france the jobs report and the markets. I am never getting married. Were never having kids. Mmmmmm. We are never moving to the suburbs. We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. Female announcer its time to make room for the new mattress models during sleep trains huge year end Clearance Sale, get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. Save even more on floor samples, demonstrators, and closeout inventory. Plus, free sameday delivery, setup and removal of your old set. Why wait for the new models . Sleep trains year end Clearance Sale is on now . Guaranteed your ticket to a better nights sleep breaking news. November mid Fourth Quarter, wholesale inventories and sales breaking news up 0. 8 on inventories. That is almost triple expectations. Down 0. 3 on sales. That is not what it we want to see these numbers totalling out. With regard to october numbers, we saw the inventories there get upgraded by 50 , up 0. 6. We saw a drop in sales there, as well by a level of 0. 2 unchanged. What is interesting is that inventories number up 0. 8 is the biggest runup since april last year. You want to pay attention. If you are building widgets to add the gdp, its better to build them and find somebody to buy them. We want to monitor this for the ultimate direction of gdp and inventories contribute to that. Sara eisen, its all yours. Thank you on that disappointing data. Dow down about 100 points. Lets dig deeper into that one. Steve liesman joins us now. Sort of a mixed bag on all fronts. Im not sure why rick is so sure the inventories is a bad number. Did you see ratio to sales, did that go up . Im pulling it up right now. On a whole as a contribution to gdp, its not good. It subtracts. Higher inventory adds to gdp. I think we werent seeing the addition people were looking for. I thought it was double what was expected. I was looking for 0. 4 and it came in at 0. 8 . Correct. What i want to talk about is this jobs number which came in right about a little bit higher than expectations. 252 is the number. You want to add back revisions. 252 plus 50 is 302,000. Thats the equivalent of jobs added if you take revisions of october and november. Unemployment coming in lower than expected. We were looking for 5. 7 got 5. 6 . Earnings down 0. 2 . There is a puzzle out there. That is how is it we have such a relatively strong job market but earnings are down . I have a theory i cant prove, but ill talk about that in a minute. Look where the jobs are. A lot of construction jobs which is a puzzle given how lame the Housing Market has been. These construction jobs have been relatively strong. Leisure hospitality has been strong. Professional, business services. Manufacturing, not a bad number. Government coming in at 12,000. We seem to have seen the end of firings on the government level and getting modest growth in government hiring. We talked earlier with Charlie Evans, the chicago fed president. He gave us an instant reaction to the jobs market both this issue about the puzzle of lower wages and how all of this factors into fed policy. Earnings growth. On average its been 2 to 2. 25 across a variety of measures and now lower for average Hourly Earnings this morning. I think if we are going to get inflation up to 2 objective and its 1. 50 on core we have to see wages increase more. Thats indicative of one of the dilemmas we are facing. Thats why im in favor of being patient on raising Interest Rates. Quick theory on lower wage numbers. What if we lost a bunch of Oil Field Service jobs in the last month as a result of whats happening with the oil prices but we gained a lot of holiday sales jobs . That would mean we ended up putting low wage workers to work but losing higher wage earners. If that happened it would have shown up in the breakdown. I have not had a chance to see the breakdown, simon. That is not immediately obvious. Manufacturing employment increasing by 17,000. Its not obvious that was what was happening. My bigger issue is still the deflation is what is the problem in this country, not inflation. You cannot have inflation in this country if wages are not shifting. And they are clearly not shifting steve. I guess you are right in the sense there is a general notion of Wage Inflation being a precursor to general inflation. Its not a very very tight fit there. I will say its perhaps a huge puzzle. You would expect with higher employment that we had, and now you can almost say we added 300,000 the last two months. You have a running average that is well north of 240,000 now. You would think that would be what you would see in terms of higher wages and working against that deflationary story. I know ill speak to you throughout the course of the morning. Thank you, Steve Liesman on the employment report. Two hostage standoffs this morning in france. Cnbcs hadley gamble is live in paris with the very latest. Good morning. Good morning, simon. We have a third day of terror here in france. There are two hostage situations. There are three gunmen. Two of those gunmen the kouachi holed up in a printing business in the village behind me. Police surrounded that building. French authorities telling nbc news they believe there is a link between these two brothers and a shooter at a Grocery Store in paris. Earlier a gunman came into a popular Grocery Store in the eastern part of paris. Held people hostage. We dont know how many are held hostage in that incident. You have to remember also police releasing photographs of the incident that took place yesterday. That was in the southern part of paris. Three incidents in three days. All linked to terror. We understand these three gunmen nbc news reporting by french authorities, they knew about these guys. Intelligence networks were aware of these guys and they may all be linked to that same cell and it may be linked to al qaeda. These three gunmen holed up in the village behind me surrounded by police. Ap reporting they decided to go as martyrs. French authorities will not move in unless negotiations fall through. Thank you hadley for the update on the developing situation. Well continue to check in with you for more insight into this. Lets bring in former ncis assistant director for counterintelligence operations Robert Mcfadden, Senior Vice President with the security firm. French police are now fighting two hostage situations. Up to this point, that is more definitive than we heard this morning. If that is correct, it tells you at face value the conspiracy is more far flunk than just two brothers and one cohort. Very interesting situation right now. What is the fear with that that there could be more copycats or more organized terrorist attacks . Sure. Absolutely. As far as the fear a better Case Scenario the conspiracy would have been just the brother and maybe one other person, a small wolfpack attack. If the indications are consistent and broader, after successfully resolving the situations, safety of the hostages, intelligence must be how far the plot goes what other conspirators there are and how to stop those plots. How do you keep the rest of france safe in the meantime. I would imagine huge numbers, major operations are going on in both situations. How they potential lly trying to prevent anything else from happening. We heard 80,000 French Military were involved. That speaks to leadership and the idea of resiliency trust, Law Enforcement and Security Services. To the extent possible avoid a bunker mentality. Not an easy thing to pull off. It seems we are going to be covering a lot of these. Thats how things are shaking out. Not all terrorist attacks are the same. Im sure you would distinguish between those that are systemic and big threats and those that are not. The french people i speak to view this as two guys having a go. While they might in the yemen take credit for that there is no proof there is a cell on the ground. They didnt have a get away car. They stole one which is how authorities were alerted to their identity. Now theyve got some sympathizer who is not made a major onslaught but walked into a shop and held people hostage. That is scary, but not a systemic mass scale attack we would typically associate with al qaeda is it . I agree completely with that assessment. That provides a good balance on a number of issues. There is a tendency to conflate all the different scenarios. We are hearing comparisons to the mumbai attack or the el shabab attack in the kenyan mall. The only Common Thread is violence. The way we are looking at it it appears to be a small cell. And to be determined. Is there any direct command and control in al qaeda in yemen . We are hearing at least one of the brothers went there received some training. Dont know what that means. The facts have to inform how big and how much of a response there is in france and other places in europe. Yes. Im not sure how keyed in you are to the politics of france, the politics of france the racial issues they have. Frankly, to a lot of people its like a tinder box there. There are right wing forces that would attempt to make more Political Capital out of what is going on than the Security Forces might want. It finally made it to the front page of the wall street journal today. What would you say is the priority for everybody else attempting to Police France begin the emotions are riding as high as they are . You speak to that context within france that a lot of us may not be aware of here. You talk about the demographics for 10 of the population ethnic north african. France has something we have not had here in the United States. Thats the issue of assimilation and integration within the greater french society. That is another macroissue. Theres roiling rightist politics in the forefront of things going on in france right now. National leadership and local leadership have their hands and their tasks set out before them to avoid at any way possible backlash against the minorities and muslims. Any other violence that may break out as a result of that. Thank you Robert Mcfadden for joining us on a moments notice to weigh in on this developing story. For more how all this is affecting the market lets bring in art cashin with ubs. Before we get on to the meat of our dinner here on financial markets, lets deal with this terror threat. Very, very strong powerful rally that came out through this terrorist attack from tuesday afternoon to last night. S p up 3. 5 . The market doesnt care does it . I wouldnt say it doesnt care. The market is not intimidated. It is not terrified of a bigger spillout. They see it as an awful thing, but hopefully an isolated event that is not going to move over into other areas. I want to hit that Economic Data we got at the top of the hour. Wholesale inventories which is a celebritior to Economic Growth did come out a lot better than expected, 0. 8 . That helps with growth but sales were down 0. 3 . I think that is what rick pointed out in terms of a negative going forward. I wanted to clear that up. Its not the kind of Economic Data you want to see in terms of growth for the economy. Thats the problem. Its going to give you a bump in the gdp, but you are not going to get the residual benefits. What is your interpretation of todays jobs report which on the surface was good. Lower Unemployment Rate best year for job creation since the end of the 90s, but below the surface had worrisome issues like a lack of wage growth. I yield to the ten year. It seems to say this is not going to accelerate the feds time table at all. I think thats why the market which was looking a little nervous both on the oil front and on concerns about the fed, now is more relaxed. On the oil front, i think can i jump in before you get on to that. This should be a great report for the market. Its saying we are generating 250,000 jobs consistently. There is no Inflationary Pressure that would lead to the fed having to move up Interest Rate rises. They might have to step one stage back yet we are unable to rally on that. Why is that . You dont know what the quality of those jobs is. Apparently they are very good. Its construction 50,000. Health care up 34,000. Manufacturing up 17,000. Its good quality growth, isnt it . But the wages are not up. Since when does this market care what people earned . They care very much what people earn. Thats one of the stagnating parts of the recovery weve had. We talk about inequality of income. Its a major topic. If people are getting jobs and not making money, thats of some concern. Is the feeling the fed is vindicated keeping Interest Rates low for a long time or a feeling that doesnt do anything to boost wages . I would agree with the latter. Its not yes, the fed was very smart. I think it is the fed has been somewhat ineffectual. You are talk about lowering rates. Look where the rates are already in the ecb. This is the classic pushing on the strong problem. Add it up and what does it mean for the markets . Can you still get a rally in this environment where things are obviously not perfect, but the Federal Reserve is on hold for now . Sure. You can get a rally. Youve got to put a couple of things together. Earlier oil was somewhat weaker. Oil becomes a threat and a drag on the market. If it moves today down below 48. 5. If it stays above, its not a major factor. The other worry coming in was all the discussion and rumors about what the ecb is going to do. There are rumors they might not go ahead, that we have one of the new members of the ecb council talking about if we are going to buy sovereign debt that will probably include greek debt. Well buy it before the elections coming up. You came into the market here in the u. S. Saying im not sure what the ecb is going to do. Even one of the reports that supposedly was leaked was not through an enormous amount of buying. We discussed this for two weeks in detail each of those points every single day. The bigger issue is surely this massive move. I make no apologies bringing it up again. This massive move to Government Debt around the yield. The four horsemen of the apocalypse may be standing at the door of inflation. Thats the bigger issue. It is. The classic pushing on a string. That becomes a real problem. Im looking at the yeartodate gains. This has been such a stomachchurning start to the year. The dow briefly positive for the year yesterday. Looks like negative and the only sector thats in the green is utilities. This monstrous run continues in utilities. Are they overvalued . Would you tell people to buy this because of the low rates . Well low rates make them attractive. There are other things working that make them attractive too. Natural gas is going down. The cost of the fuel that the utilities use is getting cheaper and cheaper. Their profitability can go up. It makes it still a relatively attractive area. Happy weekend, art. You, too. Art cashin from ubs. Well talk to the New York Times London Bureau chief on the ground in paris and ask about what he is seeing and the latest on the situation there. 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You have written this is potentially a very dangerous situation, not just for france but for europe in general. Reporter its a very fraught moment. People are hoping by the end of the day that the gunmen problem will be resolved one way or another, hopefully without more dead. The two sets of gunmen seem to be holed up. They have hostages but police are there. They are no longer on the run. Of course everyone is very anxious. They wonder if there are more accomplices, if there could be other events. Of course there will be inevitable questions about how safe the country of france is whether there are intelligence failures, whether the police and Security Services should have been more attuned to these brothers. If they knew one of them had gone to yemen, et cetera. This is all down the road. But for today, there is a feeling of a city certainly under siege, and very very anxious about more dead. But also the implications of this kind of terrorism attack. Is this indicative of a larger cultural war in france thats going to get bigger particularly with more military action in the middle east against isis . The french are very active in mali and other places or is this a small group, isolated group that for whatever reason decided to activate itself. In other words, was it operating under orders or was it selfsustained and selfstarting . These are all very important questions. Can i ask you a question specifically about what weve seen on our Television Screens . A lot of people carried pictures of members of the Public Holding signs above their head that say je suis charlie in sympathy of the satirical magazine that was targeted in this attack. What do you think they are saying . What they are saying is we descend the french state and constitutional freedom and individual liberty that Charlie Hebdo represented at a very sharp and vulgar end as part of the free press. And that we are sympathetic with the magazine the dead at the magazine and what the magazine stood for, which were french values and rights against what are perceived to be attacks from the outside by radical muslim. When you say the rights of the french what the french stand for, is that are they saying, i am moving across a line here on race and on voting that the establishment may not like . That is a very serious question and important one. Im not sure i know the answer without opinion polls. I think mostly it is saying we are who we are and we had a revolution and we have our rights and freedom and we will stand up against terrorism and violence. There will be some people without question who will see this as a form of active war inside the country from a very small group of people who do not feel that they are charlie and who see Charlie Hebdo as an attack on their own religious and cultural values. Part of the great drama in france has been this very aggressively secular state, which is secular by its history since the revolution and its constitution confronting a very religious group of people. Not all of whom of course we know are radicals. Charlie hebdo went out of its way to mock religions of all kinds. It mocked everyone. It wasnt just muslims. But a small group saw it as an act of war. In some sense, they retaliated. How big this is one never knows. There is no question there is a general feeling in france that there is a problem here. Sure. The problem has to do with identity and the integration of all french under the same set of values. Thats a very difficult job. Its a problem for britain and germany and denmark, too. Absolutely. Its been good to talk to you, sir. Thank you for your time. Steven erlanger. Straight ahead on the program, Goldman Sachs jan hatzius will join us live. How could a luminous protein in jellyfish impact Life Expectancy in the u. S. , real estate in hong kong and the optics industry in germany . At t. Rowe price we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Welcome back to squawk on the street. Im morgan brennan. Check out wynn resorts after Morgan Stanley upgraded from overweight to equal weight saying it believes the stocks recent selloff was overdone given its favorable positioning to benefit from a recovery. Stock is down about 15 over the last two months. The jobs report just out in the last few hours. Payrolls, that number coming in higher than the consensus was looking for. Unemployment rate went down 0. 2 . Jan hatzius, Goldman Sachs chief economist joining us as helyhe regularly does on jobs day. People would like to see wage growth something for the dofbs and hawks, wouldnt you agree . In general, its a constructive report in the sense we are creating a lot of jobs. We had four months in a row of more than 250,000 new jobs per month. I think at the same time we are finding despite the fall in the Unemployment Rate there is still a bit of slack in the labor market. The best evidence for that is the wage numbers. You shouldnt take monthtomonth changes in wages too literally. They do jump around quite a bit. I wouldnt make too much of the fact they were down. If you look at the yeartoyear change last month they were up 0. 4 . That was the early signs of wage growth. I think some people got a little overexcited. That number looked spurious even last month. You didnt see it in the production in nonsupervisory worker series which tends to be more stable. The take away from what we are seeing on the wage front, employment cost index, is that for now, wage growth is still well below the sort of levels that would call for monetary tightening. Why is that . Why isnt the tightening of the labor market and pressures we are seeing better Economic Growth contributing to higher wages . We are seeing broad base gains across industries. The best explanation is while some indicators of labor markets slack are close to normal. 5. 6 is no longer that far away from a normal Unemployment Rate. If you look at broader measures like under employment rate that is at 11. 2 . Employment population ratio is still quite low. We still have people working part time but would like a fulltime job. I think the labor market is not back to normal. Thats why we are not seeing major upward pressure. Is it not back to normal or this is what we should expect is normal . True. What it says is that we can push the labor market to a higher level of utilization. Can get more people jobs. We can see more above trend payroll numbers before we need to worry about the inflationary consequences of that. I do think we are going to get there. While you are right wage growth has been flat and stable for a long time i dont think thats a permanent state of affairs through more growth and more job creation. I think we can get to a point where in the end you get 3 4 wage growth which is more normal pace. Judge, maybe theres just a lack of animal spirits. Its so difficult for you to gauge objectively through data. Be that young entrepreneurs starting up business or people having the good utsuts to demand a pay rise. We just had a 5 gdp quarter. Payroll numbers over 250,000. All of that would be more plausible to me if we were seeing weak Economic Growth. We are seeing strong Economic Growth but not cumulatively enough growth to create Inflationary Pressures. The elephant standing in the room for most of us is why theres been this huge surge into Government Bond markets and treasuries, whatever it is that has forced the 10year down to 2 . This stampede over so many sessions this year to drive those prices down where people are taking a loss subjectively on the Interest Rates. And people talk about deflation and it being a bad omen as to what Central Banks are about to fail to do. Tell us what is the view . I wouldnt make it as dramatic as that. We have good growth in the United States. So far. Yes. At the moment. We are looking at a picture that is a strong growth picture. What else do we have . We have mixed Economic Data everywhere else in the world, most other place necessary the world. Weve got a European Central bank on the cusp of a major monetary easing. Weve got very very low inflation numbers, which are probably going to get lower before they bottom. There is one aspect here that by itself would be expected to push up bond yields but there are other things on the side of that. There are people who say youve got it wrong. You agonized for six months or a year over what the fed would do with qe and raising waits. What you should have focused on is growing demand deficits opening up like chasms around the rest of the world. No economy on its own can act in isolation with what is happening everywhere else. If the take away from that is other Central Banks shouldnt be more aggressive easing monetary policies, i agree with that. The commentary is Central Banks cant do any more. They cant generate growth and inflation. Maybe the fed managed a trick or two, but the rest are failing and will fail. Partly because they havent there are lots of different Central Banks. The ecb has not yet tried hard. I think they will try harder. Well see. Is it by itself going to be enough to lift europe into a strong expansion . I dont think so. I do think it is going to contribute at the margin to better growth in europe in 2015 than in 2014. That is an incremental thing. Its going to be far away where we want to be begin the starting point in europe. Its going to go in the right direction. Wanted to get your thought on the adjustment to these low oil prices. Its a positive for consumer spending. Do you see negative impact on the u. S. Economy . It is a positive how much more so . I see a net positive impact. The positive Consumer Impact is bigger than the negative impact on energy capex and ultimately u. S. Oil production. I do think the positive impact is smaller than it would have been five 10 or 15 years ago because of the rise of u. S. Shale. We havent made changes to our 2015 Growth Outlook because the improvement that would be coming from the decline in oil prices has been offset by other factors. In particular the appreciation of the currency. We are still at 3 q4 to q4. Thank you for joining us jan hatzius. Well talk to a former fbi profile and chief Hostage Negotiator about the situation developing in france. A double hostage crisis. Someone who has been on the inside. Well be right back. Bulldog well pup, its out with the old and in with the new during mattress discounters year end Clearance Sale. Pup look i found a red tag bulldog that means folks can save up to 40 on clearance mattresses. Pup oh heres another bulldog that means up to 48 months interestfree financing on tempurpedic. Pup i found another red tag bulldog what . Where . Pup right here, silly [laughter] bulldog that tickles mattress discounters year end Clearance Sale ends soon. Mattress discounters for the latest on the two unfolding hostage situations currently under way in paris, Michelle Carusocabrera back at hq. Two hostage situations under way in paris connected to the terrorist attack two days ago that left 12 dead. The two new suspects connected to a French Police officer shot dead yesterday. The most recent hostage situation is in eastern paris where Police Surround a supermarket that specialize necessary kosher foods. There was a shootout that left one person injured. Police say a man with a gun has taken several hostages. Number unknown. Police say the individual is inside, is wanted in the shooting of that Police Officer yesterday. And that he is connected to the shooters in wednesdays attack of the satire magazine Charlie Hebdo where 12 people were massacred. There were reports of two dead at the supermarket. Police say no deaths only one injured. The two new suspects are these Individuals Police say are armed and dangerous. One or both may be in the supermarket. That is not confirmed. To the second hostage situation near Charles De Gaulle airport. Police surround an entire town there of 8,000 people. No one permitted in or out. Helicopters hover overhead. Children are held in lockdown in a nearby school. The two suspects who killed the 12 people two days ago who are the subject of a twoday massive manhunt are holed up in a print shop and Holding People hostage. They say they want to die like martyrs. Cherif and said kouachi. Just moments ago, reuters reports that the gunmen at the paris supermarket is threatening to kill hostages if the brothers in the other hostage situation are harmed. Thats according to police sources. Back to you. Thank you very much for that. For another perspective on this situation in paris, lets bring in the former fbi profiler and chief Hostage Negotiator clint van zant. Welcome to the program, sir. Thank you for sparing the time. From what you just heard and what you can glean, what are your conclusions . Where are you on your realtime analysis of this . Well there are a number of factors going on. Number one, the paris police the gign have complete tactical control of this. They are very good at what they do. They are very good at tactics and hostage negotiations. They have 400 officers dedicated just to that. Plus 80,000 cops working this case. There is to question theyre in control. The issue right now is its getting dark in paris. Darkness starts to fall at 5 15. Its now after 5 30. Will darkness help the police or help the hostage takers . We have this known link now between the two situations with this male and female hostage taker at the jewish Grocery Store threatening to kill if in fact the other two brothers are not released. We are looking at something akin to back in the 70s. The bader minhoff gang in germany that was a terrible terrorist group. 30 of that gang 30 of the trigger pullers were women. France has said that about 30 of the possible trusts they are looking at who returned to france are also women. Theres a number of situations going on. Im not sure i could be corrected on this that given the link was supposed to be with yemen that theyve been training many female terrorists. Lets put that to one side at the moment. The suspicion is always you trawl back to history to wellknown terrorist groups. Again we have this portrayal of something terribly sophisticated, something terribly well planned. At this point in time surely as night falls across paris, you have to look at what the state of those people are. My suspicion, and i know nothing. God knows im not on the same continent much as yourself my suspicion these would be have a go guys who got hold of some machine guns and were able to fire in the right direction. They didnt have a get away car, they stole it. The woman they stole it from recognized them. At the same time we have no idea those people in the kosher shop are in direct link to the people near Charles De Gaulle airport. They could be listening to the radio. Its that type of unknown that is quite dangerous in this situation, they are unplanned, unprepared, and more importantly scared. Yeah. Know my analogy with baderminhoff gang was women being involved women being triggerpullers. The drive force i think is al qaeda for this ongoing situation. Its an important point. If these are people working for al qaeda, which are promising shia law, i would think its highly unlikely they have women in their midst unless i lost all control of sensibility here. Yes. Yet yesterday it was the french authorities who indicated fully 30 of the people they are trying to watch for possible terrorist ties in and around paris and in france are women. That situation is ongoing, too. With the realization al qaeda will use anybody, it appears, who will do their bidding, who will participate in these activities. Sharia law is thrown out when women are willing to strap on an explosive vest. Take us back to what michelle reported a moment ago. If they are linked and that threat was made inside of the Kosher Grocery store, you have been there as a negotiator in a hostage situation before. What do you do . Ive been there with simultaneous situations that are linked and trying to talk back and forth. Authorities contain, isolate and negotiate. They contain each situation. They isolate the members in each situation from any contact with the outside world. There are ways to do that technically. Shut down telephones cell phones, internet. The french are fully capable of doing that to isolate and now negotiate at two separate sites. If it was just you and i neatin talk you into surrendering that conversation is just between the two of us. Now we have this other link. You are not only negotiating for yourself you are negotiating for people at a separate leak. That complicates it. What it does though the french are still in control. They are not going to let these guys move from the location, either location where they are at. They are going toeahe down. Eventually if the hostage takers make a wrong move if they start to take action against their hostages, that will likely trigger an assault by the authorities. Mr. Van zant we appreciate your time. Thank you for joining us. Clint van zant former fbi profiler on the situation in paris. Up next a big business story today. Trian nelson peltz taking on dupont, stepping up his fight to break up the industrial giant. David faber has been reporting on it all morning. More details when squawk on the street comes back. I know i have an 810 fico score, thanks to the tools and help on experian. Com. And your big idea is hot dogs shaped like hamburgers . Nope. Hamburgers shaped like hot dogs. Thats not really in our wheelhouse. You dont put it in a wheelhouse. You put it in your mouth. Get your credit swagger on. Become a member of experian credit tracker and find out your fico score powered by experian. Fico scores are used in 90 of credicisions. Welcome back to squawk on the street. Check norwegian cruise lines falling on news of that management change. Frank dell rio new ceo. The stock is trading down 4 and a half percent. Thanks megan. Shares of dupont down a little over 1 after news we did expect late yesterday. Trian a holder of about 1. 8 billion worth of their stock is nominating four directors for its board at dupont. A proxy fight not often entered into. Known for oftentimes getting its way at least to the extent of getting a board seat. And in case after having owned the stock for 18 months and trying to get one board seat they have been montitor theing the situation and have decided to move forward with a significant fight for a significant company. Saying, you know what its our strategy that is the best for dupont that. Strategy dupont will tell you has included any number of divestitures. A has included a significant repurchase of shares. Has included finding ways to cut costs at the company. That is all not enough for trian which arguing essentially dupont in its current structure is still a Holding Company with disparate units that dont allocateal allocate costs properly that would be better off if they were split. In the latest letter talking about their decision to mount the proxy fight. They say listen we want this to not fw p a judgment whether or not to split the company but on the performance of the management. Particularly ceo Allen Coleman and it is going a referendum in part on her. Which is one reason why the company chose not go the settlement route with trian even though it it would have been involved giving the activist investor one board seat. The key here as it always is the large institutional holders will also want to hear from the proxy Advisory Services which can prove so important in this. Certainly sz going to start off simpbl on the dupont side with taking a look at total shareholder return. I think we have that for you. From december 3 1, 2008 until the end of last year we outpace everybody. The proxy peers, the s p 5 chemicals and s p 500. What is the problem. First you are measuring after a lousisy year in 08 when the stock was down dramatically almost a new bottom for it up from there. And say simply say there is a lot that can go better. We dont have time go through everything but well be following this. My question for you. I was following the pps. Does this make it less likely they are going to pick a proxy fight with the pepsi . Its difficult to mount two at the time particularly for a narms only had one in 06 with heinz. Activist or no a lot of people say really the fundamentals of dupont and the broader environment that were dealing with dictate what happens to that stock price and not that many people see that much upside having spoke on the people from a potential split when they do the sum of the parts analysis. Well leave it there. Lets get to Rick Santelli in chicago for the santelli exchange. Thank you simon. Back in the 70s. Jim bian krco, in the 70s you could take this thing and put kits on it. Where you can make it look like a rolls royce or a hot rod. I get the feeling that is what were doing in the u. S. Economy and europe. We put fancy parts and paint jobs but underneath. The fancy is the payroll report. Thats good. That should read to wage growth. Its not. Charles evans says were going to stay o on track because it ought too. That is another issue together. And also the Participation Rate is going don. If were creating a quarter million jobs a month we shouldnt have a quarter million leaving the workforce at the same time were creating the jobs. So the numbers are very inconsistent. And it paints not a bad puch but a the inconsistent picture. Policy gets marked up on what . Policy gets marked up believes i guess. And results. Yes. Results. Result results. It seems as if that is the part thats missing. Fed wants to stay where it is. Because they like the policy. It ought to work. But are there results that we can point to that will outweight the potential unintends consequences of the bubblicious environment we may leave ourselves in. Im with art cashin a half hour ago testimony. The fed is not there to guess tight. They are not there to say we have lef rates at zero and no inflation came. They have there to create inflation and weve been trying. Actually im going to have to take issue with. The con congress of legislation stipulates. They defined it as 2 s and they have been for six years try to get inflation zbri created a little flurry on our channel today. I saw. Up. Yes i understand once again it is painting that pretty paint job. This is going to make potentially Fourth Quarter gdp better, right. Absolute i. What is the problem when you dont get the right arish. Inventory is pulling sales forward. It is another number going to make Fourth Quarter gdp look good because you created the products you are going to sell later in 2015 in the Fourth Quarter. But the sales are there to say were not going is sell as fast as we thought and we are going to slow production. And what were seeing in wages that gives you another dimension of this is kind of the new normal. Kind of bumpy. And to sum it up i think the fed is going to look at all of this and were probably at Fourth Quarter to 2016 for the first rate hike unless we start to see the numbers under the surface that everybody looks that call them start to turn around. Jim, thank you very much. And i never officially wished you a happy 2015. Back to you. Really important point there he made. A live update from the ground on paris. It is 11 00 a. M. Eastern. Im kayla tausche. Our top story is two hostage situations ongoing in paris just days after gunmen attacked a