Transcripts For CNBC Squawk On The Street 20170914

Our own tenyear back to 220 we begin with riding the record run on wall street futures point to moderately lower open plus, dinner and a deal or no deal conflicting reports on an immigration agreement after President Trump dines with Democratic Leaders schumer and pelosi. Equifax blaming vulnerable web data, down 30 in the past week after another recordsetting day for stocks, the dow is on track for best Weekly Performance as we have two more sessions together again. Were kind of running out of catalysts. I got up and said, lets check the research its like, wow, okay, i see theres a note out about Tenet Health Care and whether thats going to be able to get anybody to buy it. And then i see a couple of notes about a couple of obscure companies that are too small to talk about emerson having good orders im saying, wow, im going to have some of your granola. That, theres a little sell side maybe theres something on coors out of jeffries, a lot of microcorporate incremental news. What i was hoping would be that there are so many conferences going on right now you get a better feel. I happen to have you know, i happen to have a sense there is a genuine industrial let in the economy. I got that from brad gentleman cobbs, one of the Biggest Trucking Companies he runs i see their trucks on the road all the time he just came out and said it he said, listen, jim, theres an industrialled growth economy. You hardly ever hear anyone just say, yeah, its out there but he did. I asked him, why de do it . He said, because its true thats always an added benefit when something is true yesterday we talked about the absence of anything from north korea, but this morning i see a nikkei headline thats worth mentioning because it says, north korea is set to show signs of Missile Launch prep you have to wonder whether that will pressure the market to some extent it will it will. When he says things like he wants to sink japan look, if this guy didnt have Nuclear Weapons. Every time you have an existential crisis from this guy, europe trades down and then we trade down. I find it then you Start Talking about fallout shelters and Start Talking about canned goods. I always think kraft, heinz, i think of stock when you think of canned goods. That would probably be the only Growth Opportunity they have at kraft heinz. You know velveeta theres no growth there at kraf kraft heinz gwynn the Product Portfolio and the fallout shelter. You can live on velveeta forever. You know, i dont know, is that on easter island, Christmas Island when we were dropping those hbombs. You can they preserve well everything theyve got theyre the existential play on it. Let me direct you to yields today, jim, because cpi firmed up a little bit over all the core didnt decelerate bank of england holds steady but they say, you know, we might consider this in a few months. So, we got uk yields on pace for the biggest weekly rise in two years. I dont understand why theyre not moving you got what i exactly most fear they have they have a weak currency we have a weak currency. They have inflation. Will we get inflation . We dont have it but they have to get serious they have to get serious and raise rates. That would send the pound up i go back and forth with will frost. He has a wilf mug in front of him in that morning show up. Have to get a david mug. What bothers me is do these guys have their head in the sand . Their equifaxing the situation. Its a verb. What does that mean put your head in the sand or blame the server. No trouble here. This equifax, its still too early to buy it. Lets talk to the energy markets. Wti just about 50 bucks. Thank you for saying it because, you know, we have got this without opec really coming out and sabre rattling, you keep hearing the saudis are quuting back, i know the refiners are the gasoline inventories are down theres a lot of people caught on the wrong side of this trade. And yesterday we saw slumber jay have one more file they have been saying 2018 is the year of oil. Thats the comeback. I hate in 2016 they said 2017 would be terrible. A lot of people are short what is the basis for that contention great question. The answer is, he said if youre one of these countries and you stop drilling, well, you know what, theres depletion. And a country its really currentoriented the countries have all cut back except saudi arabia and they cant do it. Well talk to darrell hamm did you see what was said about him . Yeah. Reports saudi ramco and the soontobe crown prince cracking down significantly on in a lot of other ways in the social world. Im glad you mentioned it because ive watched the oil stocks go up i listened to the people who say the e p stocks are overdone. They have to come back down. I will tell you, the budgets are all up, the budgets for drilling almost all up. So the u. S. Is Still Producing too much, but it may not matter. Because if countries are really running out, the way they say theyre are. Its an interesting moment in oil. Gas, biggest oneweek drop in u. S. Gas inventories on record we know why, right refineries crippled. And i think that matters. By the way, natural gas tremendous demand but there was an article theres a lot of negativity about natural gas, liquids. Are there too much of them the answer is, theres not enough piping capacity to get it out. This mexican news is not what you want if youre in the oil and gas, particularly in the gasoline business and natural gas business you want real free trade between the countries because its got to go to mexico. We dont have level demand a lot of a lot of natural gas exports this week and last week. But you need mexico to be friendly with us in order to be able to have our Oil Companies do business. Im surprised the president doesnt loop in texas a little more to talk about that. Speaking of the president , he is going to florida today. To survey damage from irma much of the talk today surrounds last nights discussions between the president and schumer and pelosi ayman javers has been covering that all morning long. I just had the opportunity at the white house to talk to Mick Mulvaney about that dinner last night. So much controversy in the past 12 hours about what was actually agreed to or not agreed to in that deal. The democrats, schumer and pelosi, put out a statement saying there was a deal on daca and Border Security. The white house quickly putting a damp other that. Mick mulvaney saying this morning there was no final deal actually agreed to last night. Hi the opportunity to ask him about this eruption of criticism we saw on the republican right last night in the wakes of those in the wake of those reports about a deal a lot of conservatives saying, this is a betrayal of the president by the president of his base Mick Mulvaney saying, no, no, no, thats not the case. Heres what he said. I dont think the criticism is fair. I think the criticism is assuming that the president is giving up on something hes not i think if you do end up seeing if you do end up seeing some type of Agreement Regarding daca and this massive but not wall Border Security were talking about, technology and people, all the things we need to stop drugs and illegals from coming across the border, if that becomes the framework for an agreement, that does not mean the president is giving up on his priorities. Mulvaney also said he thinks theres a possibility for a deal with democrats on taxes as well, but he said at the dinner last night where they gathered in the blue room around chinese food, they didnt actually get into the specifics of the tax debate. Mostly focused on daca and some other fall agenda issues, but he said he gets the feel there could be a deal there as well. A whole lot of dealmaking possible in washington this week, but nothing actually agreed to, according to folks at the white house, carl. Eamon, thank you for that quickly on this, jim, leader mccarthy seemed fine with this on squawk this morning but ann coulter and breitbart and Chuck Grassley are tweeting some critical remarks. Look, this is again, you go to bed thinking, wow, you know what, maybe theres going to be cooperation. You wake up thinking, what, were you kidding me were back to that one the confusion, the confusion does not help any business person the confusion does not help anybody trying to make direction in the stock market because it does this markets been up this week in part because of the spirit that maybe washington gets something done. It started with mnuchin saying perhaps were too negative this makes us feel perhaps were too positive. Published reports say the secretary requested a military jet to fly he and his wife to a european honeymoon the secretary made the request in order to have access to Security Communications as he traveled abroad. That request was later scrapped. Last month he and his wife traveled to kentucky on government aircraft to view the Solar Eclipse and received some brushback for that too many i dont know. You want to make a judgment . No, not really. Ill tell you about what we have coming up, actually. My issue with all these is that, yeah look, i i cant make a judgment about what the guy did. Its mean, were in the business where we have to pay. We know we cant take the free ride and i think that they have to know but im not making any judgment. If mnuchin wants to write a check, he can write a check right now. I know its not military all im saying is i care more about moonves and mcadam and i care more about ledger. The reason jim mentions that, we mentioned well speak to the ceo of verizon Lowell Mcadam and the ceo of cbs, les moonves. Ill sit down with both those gentlemen. This is the last day of this threeday conference theres been a good amount of news coming out on the media landscape. On tuesday we had our boss, brian roberts, presenting. Didnt really do a lot to stem the concerns about competition, new price competition in the cable markets, certainly for video subs when he presented there. That stock has been weak comcast, our parent. Charter has also sold off a bit over the last couple of days going into this conference, a lot of discussion and questions about whether or not theyll follow through with what i reported through is its efforts to consider trying to acquire charter and putting together the necessary financing on both the debt side and, more importantly, the equity side to try to do some sort of a deal. And, of course, softbank, which efforts have continued to move ahead with a deal. According to conference participants, there seems to be a sense things have cooled a bit. Im not saying that in terms of my reporting at this point well see. This morning for his part, mr. Mcadam did say, were not buying anything in cable so but i want to hear that took a bit out of charter but we didnt necessarily think verizon was particularly interested any longer they made their attempt. Mr. Coulter, your unbelievable interview, said that distribution had been disrupted. Content may be king. Youre speaking to the king of content, les moonves i would run,fy were les, tony romo ten plays ahead because thats what people want to watch. At delivering alpha, jim chanos said hes betting against Continental Resources. Well get questions to harold hamm take another look at the premarket. As we said, dow 20 points from an alltime high nasdaq less than one point back in a minute experience the lexus rx with advance safety. Standard. Lease the 2017 rx 350 for 399 a month for 36 months. Experience amazing at your lexus dealer. Im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Equifax ceo Richard Smith expected to testify before a house panel october 3rd on the credit reporting agencys massive data breach. Which may affect as many as 143 million americans. Theyre blaming vulnerable Web Server Software for the breach jim, i wonder, we talk a lot about the public memory of things at chipotle or target is this longer than that i think he should be fired. He should be fired today i think the board is unbelievable what does it take to get fired i mean, this was you blame it on there youre the head coach. Honestly, he should be fired the board should just fire him its okay. Its okay to fire people hey, ive been fired its not so bad. I mean, you can pick up your life again whats this man doing still being the ceo . He blames it on a server we have how many people have we interviewed 5,000 interviews of people with Cyber Security who told you all these things could happen . And this happens they have your information they have incredibly Sensitive Information about you. And hes still there its not just its not just the breach itself, though, jim. Its also the response to it and the public communication that goes along with it i dont know theres a set way to respond to these, although theyre common enough you would think Corporate America would have a sense as to the appropriate way to go about it i dont think they have. No. The sort of piecemeal approach, not knowing what to tell people, not being able to communicate not just with customers but their vendors. In 2017. Yeah. You would thing at this point given how many breaches there have been you would at least have a tool box of, all right, we do this, we do this, we do this. You know its september this is a fabulous time to spend time with your family. Whats the matter . I mean, you know, look, he could go spend time with his family. It would be addition maybe go to help rebuild the caribbean or something but to be apple picking is a good thing to do in september. For other companies who hopefully dont but may encounter this kind of situation, no matter how mall the issue, you have to Say Something . You bring in fire after it happens. Lets bring in the fire department, we just had a fire at our place, but we knew we had candles next to the Christmas Tree i mean, what the heck . Everybody every single ceo has been on warning they have some of the most sensitive data. There are at least half a Dozen Companies that could have come in there and made sure this didnt happen. I have had companies on that have literally said, this something we can prevent no, this guy gets to keep his job. People all over america are like, wow, i can do the worst thing to happen to my private data and keep the job. Youre talking about affecting peoples ability to close on a house or get a business loan, right well, you know what, are people going to want to use this company if theres an opportunity for someone else you know what meanwhile, the stocks down from 140 to, you know, below 100. Buying opportunity. Youre kidding . Or youre serious . Be careful with the sarcasm. Half america doesnt get it at all. For half america that doesnt get it, if the guy were fired, i might consider the situation someone says i think its the opposite which is like, americas like, when what does it take what does it take . Im in the boardroom and i say to you, why should you keep your job . What do you say . Why should you keep your job you just destroyed our reputation why should you stay . Because i have good hair and its graying you got the edge on me. Yeah. I know how to give a handshake. Good handshake . The old shoulder pad. When we come back, well get cramers mad dash. What was that song that was the 1970s, baby, right back into my head. Earth, wind and fire i went to see them in 1979 in the amphitheater in l. A. We got it mad dash its thursday. Like to tell everybody what day it is so i can remember myself you want to talk amazon whole foods. I think theres research thats done that must be talked about. Theres a Morgan Stanley piece today. Whole foods, what happens next and how big it will be how theres not as much overlap as you thought whole foods driving faster prime subgrowth. How about that thats important we know how important prime is they also see theres going to be inflekting shopper growth why is this important . We had this gigantic decline in all of food retailing after this now theyve all been moving up this could put pressure on these stocks prime is opaque. We dont know whos prime and we dont know how many subscribers there are. Everybody estimates. We get different numbers even understanding a hire growth rate would be difficult for us to back into. Exactly what i like about this is that it is that its finally a thoughtful analysis of what the merger might mean. The merger might mean, in terms of what theyre saying s virtual circle for both those companies which is, therefore, a vicious cycle down for everybody else in the food business. And the food business stocks, targets been going up because of those 100,000 ads, walmart has been hanging in there. Kroger trying to stabilize very tough Conference Call from kroger this week very tough tough to listen to i actually felt bad. But my opponent this weekend is playing cincinnati bengal defense so i dont feel too bad and mr. Taylor on from Procter Gamble and some people are saying, wait a second, not everything he said is as positive i can imagine i can imagine. Thats the p g story, Something Else weve been covering closely on squawk on the street, not to stocks themselves opening belfour minutes from now. My name is Cynthia Haynes and i am a senior Public Safety specialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. About to ring the opening bell youre watching cnbcs squawk on the street, the opening bell in about a minute or so. Hell object the Halftime Report after lighting up the phone lines after talking about metrics and technology to the degree to which not going public hurts these companies. Employees trying to make ends meet in San Francisco is hard. Well, again, i always have to default to this brilliant interchange between you and coulter. Im trying not to be too reverential but he had Empirical Data that youre more likely to be acquired than you can come public it will be the dirt, the Public Offerings is notable, despite a revolution in technology we all know about and it continues the desire of so Many Companies to be private and stay private long beyond their key growth phase. Incredible. Incredible dont forget, blue apron, i saw a positive note about blue apron today, which was kind of the last big deal. And about how theyre going to do theyre going to have a provolone cheeseburger did you see that i did a perfect example of a company that went public because it probably needed to. The guys who dont need to, dont. No, they dont. Max solzburg was on tv and hes going from six to eight recipes. I know something my daughter will be interested in, theyll have marinated kale. Shes a big kale eater lets get to the opening bell s p at the bottom of your screen, the big board, social capital celebrating its ipo and chamath will be on the half time show at noon eastern shadowproof, a nonprofit dedicated to ending the disease of addiction we have to talk about sofi. I had mr. Cagney on a couple of times. Who will be stepping down. That company has a great Business Model every time mr. Cagney was on, he kind of reminded me of james cagney now i feel hes at the scene with top of the world, which was a great movie, by the way. Its funny. A private company, of course we need to speak more often about these companies because theyre so important even if they dont trade behind us sofi is one of them. They got a lot of coverage this week. Hes stepping down charges of Sexual Harassment your point is interesting, jim, they are disrupting lending. Big. They have this algorithm where they when you call to get a loan, they make you wait, even though they dont need to, because they dont want you to think they can make the decision in ten seconds, so they make you wait a minute because their algorithms are so powerful. I graduated from harvard law. I owed a lot of money, credit card debt, i had six credit cards. I went to goldman. What eefs saying is theyll look at where you went to school, where youre working and theyll give you a line of credit, which of course was impossible to get in the old days. But they actually did social lending. Look at you. They were even trying to set people up, like a match. Com thing. I dont know, david, something theres left swipe, right swipe. I dont know what that is. I have to be on an edm crews addition or emd creuise to know swipe. Lucky strike im just pointing. This is what they think about. They rebrand themselves every day, these younger people. Yes yes, they do jim, wti hits 50 for the First Time Since august 10th. Its not supposed to be there. Thats really amazing because, boy, you know, it had been 49 and shorted, 43 and then buy it. That trade had worked three times. I guess the fourth time was not a charm. I dont know if it can hold there but people are positioned longly on the oil. Schlumberger, watch that i was wondering, what about ge, do we watch that no it hurts your eyes. It really does. You need those glasses. You need the ones that actually work you need eclipse glasses. I use eclipse glasses with ge you cant look right at it it will burn your pupils do you know animals, like you had to keep your dog inside because theyll look even dogged recoil from looking at ge stock. Jim, we havent touched on a couple big stories today one is lattice and canyon bridge. I went to the lattice site. Its a consumer i didnt see anything in there that would necessarily make you think that we should stop the chinese but we take chinese steel to build bridges . I mean, hello. Well, listen, National Security is National Security. National security be able to play video games well, apparently they have some semiconductors. It is it is a semiconductor corporation. I got married under a lattice. Its 700 million market value, going down, you can see, today. The signal it sends for larger deals and what may be even more stringent reviews from the committee for investment are you talking Foreign Investment from the United States. Im not going unical even money gram and financial, which jack ma is trying to buy that so, there are other deals that that, you know, people will get concerned about when you look at what were the potential implications of this deal on the National Security front and the fact it was blocked. Im not denying they dont have Fabulous Technology im just saying that this is if you really want to make a point to the chinese, you stop letting their steel come in. You dont shut down a bid from lattice. I mean, for heavens sake. Send a message to the chinese that we dont want your steel. Meanwhile, it has such a dirty smell, ruins the air. How about this crypto news. D dimond commented on it. Now chinas btc will halt all trades after september 30th. Doesnt say why. I dont understand why some were thoughtful people on the fed who are willing to opine on anything dont come out on this i mean, this is something they should opine on because it is what you use to look, i think theres some very smart people who are in this. I know that every time something goes this goes down, people sell nvidia. 10 of nvidia is cryptocurrency cards. Theres a lot of other uses for nvidia like switch, adobe. This goes down every time theres a negative have i to tell you, its people who dont know nvidia selling nvidia because they think its entirely cryptocurrency mining its not its not unfair. Its just not fair that this stock is tarred with that. But youre not confident it could sustain a big decline in bitcoin. If bitcoin got cut by a third who am i to go against jamie dimon. I think his speech about the coin, which also included the bank, i did think it was very stark. But, you know what, after this dies down, people come back and do it. Speaking of equifax, remember, a lot of ransomware, people dont want to hear this is like bitcoin, but you cant pay cash to people who break in and ask for ransom you have to do it in bitcoin thats why you have a bitcoin customer desk, to translate bitcoin to dollars because its a way to be able to deal to get around regulation. Its not the most encouraging case to bet on the future of ran someware. Almost every check i get a check for 11 for a talk my testifying in the good wife about why i felt bitcoin was legitimate but it was at 230 when i did that. You should have just bought bitcoin instead of getting the 11 bucks a month. It has to be paid in bitcoin. A true genius had me say it was great. I said, listen, this is just going to make your career. So, ive got you know, people watch tapes of me and its horrendous ive got a tape that says i like bitcoin at 250. I remember. It was a great episode i was happy to see you in that its funny you get those checks are hilarious. A get a couple like 2 bucks from wall street what point do you stop cashing those checks . It costs too much remember they used to do that they used to do that at spy magazine send checks to celebrities. Donald trump cashed one for 13 cents. January 2012 is when i made that call on bitcoin now the johnnycomelatelies can we come back to equifax and your belief the ceo should be fired were down another 5 today. When they watch this show and say, hey, maybe we should let the guy go. Stock was near its highs of the year now, of course, its gone directly from the highs to the low in a space of a week. I think the stock is crying out for action you know, like, bring me the head of alfredo garcia, which is a really good movie. I dont understand this at all what do you have to do in Corporate America to be fired . If this guy were an nfl coach, where would he be right now . I think hed be Coaching High School in some west texas school this is ridiculous Everybody Knows its ridiculous. Were all kind of puzzled about it whos on the board there we should check the board. Yeah, i havent looked. Its made of plywood, that board. I didnt mean to insult plywood. Lets get to bob and see whats moving on the floor bob, you there sorry, guys talking to chamath behind me a lot of buzz behind me about the ipo. I just want to get going with whats happening on the markets before we get to our very interesting ipo today. I want to show you the futures because we were okay until about an hour and 20 minutes ago you see that dip down we took there. Thats when the headlines started these headlines about north korea said to be showing signs of a Missile Launch. A little nebulous, i know, but you can see we dropped the market a little on that. That was about 8 20 eastern time we recovered a little as the market has opened, as you see. Thats definitely still out there. Sectors right now, weve had mini rallies this week in three different groups here. Number one, energy stocks. Weve seen oil, again, over 50 today on oil weve seen many Oil Companies up 4, 5, 6 banks as yields moved up, they moved up again on higher than expected cpi retail is also in a mini rally not today, but last few days thats been doing well tech has been kind of lagging here in the last few days. Keep an eye on that. Lets get to our ipo trading today. Social capital hedosophia, 0 million shares they upped the terms it was 50 million at 10, and now 60 million normally we show you ranges. Not a fixed price like 10 9 to 11, say you dont see that here because this is a spac, special purpose acquisition company. They dont have a value because theres nothing to value the money goes into a trust. Its very unusual these spacs out there. Theyre based on a similar premise. A seasoned manager in an investment space, they bias sets, assem bble them in a port portfolio. Assets are held in a trust until the acquisitions are trade theres an element of rick here. Youre essentially saying the managers are saying, trust me, i have experience. I can buy companies that are priced that will make you money. Spacs are hot this year. 20 have gone public so far thats the highest number since 2007, according to renaissance capital. Why are they popular first and most important, theyre helping the ipo log jam. Theres hundreds of companies weve talked about thats waiting to go public that cant or wont in the current climate. In the case of tech, theres a giant valuation gap between unicorn pride evaluation, what the company is willing to pay for them spacs offer a way for some to go public they also offer investors an out clause, my term, but the money sits in a fund until the manager announces hes going to buy something. If an investor doesnt like the deal or the price, down the road, they can back out of the deal that gives a lot of people xhfrlt that they can possibly get out of the deal. This is not a cheap way to buy companies. The initial investors will own 20 of the company at a fraction of the penny everybody else is paying 10 so, public owns 80 , initial investors own 20 , essentially, at pennies on the dollar in the case of social capital, the manager team led by chamath, right behind me, hes there with the head of the New York Stock Exchange, tom farley, this moment hes one of the original members of the fasth book team pep spoke at our delivery alpha conference yesterday. You want to hear him right here on cnbc, noontime fast money half time report with scott and the gang hes standing over there this is one of the great days, one of my favorite things to do as a reporter is stand by people who are taking their Companies Public for the first time. Well hear more about what he might be interested in in investing. Thats the key question. Remember, guys, whats the man going to buy its going to be technology companies. The key question is, all of these tech ipos, these unicorns out there, can he buy them at prices that are attractive to investors . That will be the great question. Right now, the dow down 5 points ill go and talk to chamath for a few more minutes were not close, by the way. We dont see any indications right now. Ill let you know as soon as we see whats going on. Thank you for that, bob pisani lets get to the bond pits and check in with rick santelli. Rick thank you, carl hotter than expected cpi for august the point four headline read was the highest second highest of the read 0. 6 was in january that certainly captured the markets attention you could clearly see it on interday of twoyear of course, the twoyear is short maturity maybe more susceptible to any changes in how this data could affect janet yellen and company. Its already moderated we settled at 205 friday, 222 today, moderated to 220, settle at 219 the numbers arent huge. As you see on this oneweek chart but its been steady the new way to gauge how wild the treasury complex is isnt necessarily how many basis points it moves. It really is the fact that getting so close to 2 last week and not getting at or below it is really very important, especially in the context of the three auctions that were all mediocre this week and where were trading right now in terms of yield now, if we look overseas, we know bank of england had their meeting today. Boy, it definitely affected markets. One of the reasons is same dynamic were contemplating today with our cpi their inflation is moving up, a lot of positives in their economy, charts may be down but guild jumped up to 120 if you look at a oneyear chart, uts not the high nest a year, only a month and a half or so. But it really could break out more to the upside, if we consider whats going on in Foreign Exchange dollar index, really, its still down a fifth of a krencent after rates moving up. It is holding its bottom in the euro, does have a 118 handle finally the pound versus the dollar, we all know its basically at a oneyear high, september 2016, but it got goosed a little today. We continue to monitor that. Our central bank and all the economic impulses going on in the uk saw this big slow turn. Its going to be interesting to see how japan and the ecb have to deal with that slow turn. Back to you. Rick, thank you very much when we come back, Lowell Mcadam followed by cbss les moonves, who has been lighting it up at goldmans communacopia conference it can detect a threat using ai, and respond 60 times faster. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It is. The cloud. The ibm cloud. The cloud thats built for your business. Designed for your data. Secure to the core. The ibm cloud is the cloud for enterprise. Yours. The ibm cloud is the cloud for enterprise. At ally, were doing Digital Financial services right. But if thats not enough, we have 7500 allys looking out for one thing, you. Call in the next ten minutes to save on. And if thats not enough, well look after your every dollar. Put down the phone. And if thats not enough, well look after your every cent. Grab your wallet. Access denied. And if thats still not enough to help you save. Ooo i need these well just bring out the snowplow. You dont need those well do anything, seriously anything, to help our customers. Thanks. Ally. Do it right. Amazons streaming of thursday night football begins two weeks from today take a look at the companys ad promoting its coverage this is the amazon. And in it something weve never seen before. Bears and packers. Packers are playing right here on the amazon streaming. On this date, thursday, september 28th, bears and packers are playing on amazon stream for the very first Time Thursday night football is coming to Amazon Prime Video thats a lot of effort to go through to promote bears packers. Geez. Its going to be an interesting game packers looked really good this weekend against seattle. The nfl is a very powerful organization, that they were able to get many different outfits to televise these games. Amazon may be the way younger people watch football. I dont understand the deal. Do you think it moved the needle at twitter and is the difference here prime . What i think it did. I think it did ive watched the games on twitter. I told the ceo, ive watched the game on twitter. He asked me to do it it was a lot of fun. Amazon is the fall channel for one of my kids and the others fall channel is netflix. They didnt plug in the cable when i at my beach house. I mean, this is how you watch it for a lot of people. I dont understand david is going to ask, im sure, les moonves,you know, what happens if it streams everywhere good picture of a bear there. Weve been parsing nfl ratings this week. Impacted, some say, by the hurricane. A lot of watchers in florida and texas didnt watch moonves, whom well hear from in a moment with david, is arguing if youre a creator, youre not going to get as rich on netflix as you are selling to the back end of a broadcaster i mean, thats very i mean, i spent a lot of time analyzing his Business Model and trying to figure out why netflix trades where it does versus cbs. The fact is, one of the fangs, amazon s disrupting the whole thing. As someone who watches man high castle i can easily watch move have yous on amazon just like i was watching ozark and narcos 3, its easier. Well see what moonves says about that hell talk philadelphia. Better talk romo. Romo is my hero. Looking good in the booth we will get trading with jim in a moment dows up six points. Im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Time for cramer and stop trading. Who are the board much traders at equifax you see mark templeton, retired ceo of citrix, one of the foremost Cyber Security companies. What is Richard Templeton saying about smith . He was ceo of a Cyber Security company. How about siri marshall, an independent director he was the general counsel of General Mills when steve sanger was there. Now, who is steve sanger a man who said maybe john stump should resign because of wells fargo. I call on these board members, who no one think is paying attention, im paying attention to you and i want to know what you were doing you were ceo of a Cyber Security company and youre going to give that guy a pass . General counsel of General Mills when steve sanger call steve sanger, hell tell what you to do Richard Smith, spend more time with your family were going to watch to see what happens with equifax. Ftc is confirming their opening into a look of the breach. That just hit the wires. What do you have tonight on mad money. Remember, when you buy a boat, you have to buy insurance. Which means you get a new boat now, not my 17foot boston whaler i insured that, too. Its unsinkable. You could cut it in half and use the tape in the ads and it would stay up. I dont know. We never got to lastminute irma looking at impact of delivery southwest, some pain out of harvey. Yeah. Look, i think southwest will go up just like american air went up after they announced the pain out of harvey. This is a market when i was delivering alpha, Julian Robertson wanted to trade everything i said, facebook, amazon, they would be trading substantially higher in the 60s, 70s, and 80s i dont like to bet against robertson. Hes a fine man. Great show. Mad money, 6 00 p. M. Eastern when we return, interviews with loule mcadam and les moonves at goldmans communacopia conference i count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. Being the incredibly busy man that i am, ive asked chase sapphire reserve cardmembers to scout the world to find my next vacation. Elton, what are you up to . Im having breakfast in uganda. Uganda be kidding me, elton its a. Its a joke. James, were going to look for gorillas hang on, what . Thats a real silverback gorilla. Look at it no, dont look at it. Shhhhh stay. Okay. Im freaking out sapphire reserve, from chase. Make more of whats yours. Track tuned handling, and aggressive styling. The bold lexus is. Lease the 2017 is turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Hit could be the next big thing i should totally get that domain name. Get your great idea online too. Get your domain today, and get. A free trial of gocentral from godaddy for tech advice. Dell Small Business advisor with one phone call, i get products that suit my needs and i get back to business. Good thursday morning. Welcome back to squawk on the street. Live at the New York Stock Exchange well be joined with with a couple of big interviews coming up in the next hour, verizons mcadam and cbss moonves, who is already making headlines with espn and disney. Check on the markets another tough limited range they open dow is up less than 0. 1 , up 18 points. Well see what happens as crude crosses 50. Our red map for the hour begins with President Trump trying to woo democrats on tax reform and a possible deal on d. R. E. A. M. Ers. Well go live to washington with the latest. Equifax in the headlines the ftc is investigating the massive data breach. Pharma bro behind bars Martin Shkrelis bond has stopped. 8 1 2 years since the last bear market ended and stocks continue to hit record highs in a tight range of trading, so when will the bull market finally come to an end Mike Santolli has written about that for cnbc. Com and joins us when you take a look at behind the fact that its the second longest and second strongest bull market in history, the fact that its been 8 1 2 years since march 2009 bottom doesnt help you very much in handicapping when it ends delivering alpha, i think its fair to say its a late cycle environment, not a lot of obvious value out there. Have you to ride this. The question s how long can it stay late . I think the indication is, for a while longer youre not seeing the leading indicators of recession you would expect to see 8 1 2 years in i think its because its been this kind of slow burn of an expansion and not really kind of a runaway running boil the return to this bull market have been relatively restrained by the standards of long bull markets. 15 annualized since march of 2009 for the s p without dividends. Only 5 without dividends in the last ten years normally when you get a major bull market peak, youre up in the 15 and 20s on a tenyear trailing basis credit markets holding together. I think the big question is, 2018 earnings, when you had one of these midcycle rebounds in earnings, a year after that midcycle bottom in profits, stocks start to struggle it will be about next years results. I think its interesting you said the credit market is holding in there. Right now. For my panel on delivering alpha is that the credit market may be sending a false significant any versus the equity market. Absolutely. If thats the blind sfpot of thi cycle, maybe were in trouble. If credit markets are true to their historical purpose of sniffing out trouble before the equity markets, then i think you still have to say, look, youre somewhat reassured. Mike, dont go anywhere lets bring in Gabriella Santos joining us here. Great to have you. Im reminded of mike took note of leon coopermans comments where he said conditions that normally lead to significant market declines are either not present or not forecastable do you go along with that . I think we have in our minds that we have to have a bear market some time soon because that has been the experience over the last 20 years but if we go all the way back to 1900, weve really only had ten bear markets we have to have a significant recession, significant access of president in the economy and thats not what we see at this point in time. We would agree were probably later cycle but not at the end of the cycle even if we get a recession, not the same kind of recession we got the last two times out. Do you have a list of things that would spark a recession so, if we think about recession, we can either overcool into a recession and thats been kind of the mindset for the past few years were growing so slowly, well stumble and fall into a recession. We dont think that will be the case it will probably be the other side, which is an overheating, right, which weve seen before inflation starts to pick up, demand is so tight thats probably ultimately what we expect to happen a few years down the line. I mean, i think thats completely fair to say i do think, though, you can come down on the side of even if this bull market grinds on, even if we go a long way without recession, you can say assets are priced to deliver kind of modest returns at best down the road i think thats what People Struggle with. Is theres no obvious kind of edge you can get in getting great returns out there with 1 fed funds, 2 treasuries, 3 Corporate Bonds and 5. 5 junk bond yields. Theres a difference between a bear market or 5 or 10 correction, which we still have not seen in over a year. You have north korea out this morning threatening Nuclear Weapons to sink japan. Thats scary stuff why does the market seem noum a lot of these big risks thats a crucial distinction. Bear market, here were talking about big recessions, big shocks to the economy those are very rare. But then you have corrections, pullbacks in the market. Those tend to be very common we should be seeing a pullback 5 at least once a quarter we havent seen that so, we are due for one, statistically speaking in terms of geopolitics, i think theres a big distinction between the continuation of rhetoric, which is what were still getting, versus an actual military confrontation thats a very, very different animal the market is really focusing n rhetoric versus military confrontation. When you do this kind of analysis and say were not seeing any scary leading indicators, any stresses in the system, i think it tells you when the first 5 or 8 or 10 correction will come, but the likelihood that that one isnt the big one. I think thats really what you fall back on in saying, its going to maybe get you through the correction to say, its unlikely that this was the ultimate peak. And sort of adding what coop said at delivering alpha, 5 to 8 could happen any time. Thats in the realm of almost noise in the grand scheme. But i think the point you made is so crucial its not to say we expect double digit returns after that correction were still speaking of valuations being 10 above average, so more muted returns hence, why our focus is more towards the international story. What else is out there at an earlier phase . However, another big feature of this bull market, especially this year, mike, has been rotation, in and out of sectors, different sectors leading. It was the defensive sectors last year. This year its technology and health care and some of the more Cyclical Industries like industry crude is back above 50 maybe we could see leadership changing right the market has found a way that tells you the market wasnt ready to take broad scale punishment i think its worth noting, in september the worse performing stocks through the first eight months of the year are outperforming the markets. Youve had this kind of reversal trade. Its another kind of rotation, airlines up, energy bouncing, retail bouncing. So, yeah the market kind of finds a way to make it makes it tough if youre trying to find the hot sector. Do you think markets are responding to the president s bipartisan outreach and is that giving greater confidence to people who thought maybe the agenda flat lined . I think over the past few months a lot of that stimulus expectation generally priced out of the market, out of expectations were not saying we should go back to expecting a massive tax cut or a massive infrastructure package. But we are likely to see some sort of compromise, modest fiscal boost at the end of the day, we prefer to focus back on rather than speculating about politics, is speculating about not speculating, but thinking about some of these longer term themes in the economy that later ending cycle, that strong consumer, that tightening federal reserve. Yeah, i think the market has quit trying to chase each turn of exactly the fortunes of the various parts of the government right now. The underpinning has been a weaker dollar and lower treasury yields macro move. Today the dollar is up and treasury yields are higher never know if thats the new trend. When you were talking about sector rotation, we think whats unsustainable this year was the move down in yields. It made absolutely no sense to have tenyear yields near 2 in this later cycle tightening fed kind of economy. So leadership change can include better performance for things like financials versus defenses. Thanks. Good to see you as always. Gabriella santos and mike. News to get to out of washington as carl alluded to. The president hosting Democratic Leadership for dinner last night at the white house may have reached another deal that impacts the budget. Our eamon javers joins us from the white house with the latest. Deal or no deal, eamon thats the question of the morning. The president has left on marine one. Hes going down to florida today to talk about hurricane damage but hes left a lot of official washington scratching their heads trying to figure out exactly that was there a deal or was there not a deal last night at his dinner with democrats and what the heck actually happened there . Conflicting statements across the board from almost everybody involved i had the chance to talk to Mick Mulvaney, the director of the office of management and budget, who was in that dinner last night. I asked him about the pushback from the president s base last night. He said a lot of the criticism of the president , he thinks, is unfounded because the president s not giving up on wall funding then i asked him specifically, was there a deal or was there not a deal last night . Heres what he said. There was no final deal there was a great deal of discussion about a bunch of different no final deal no final deal we did talk about daca we talked about Border Security, the president s priorities there. We also talked about taxes and a bunch of other things for the fall agenda. On taxes, mulvaney said they didnt drill down to real detail on tax reform but he did think he got a sense of the room the day before he told me he wondered if democrats could come to any deal at all with President Trump. Last night, though, he saidhe felt the deal possibly coming together in the room on taxes. So, a little bit of optimism on bipartisanship but thats got some of the partisans in washington really frustrated right now trying to figure out where exactly this president is going for the rest of the year, guys. Back over to you yeah, well see when we come back, the ceo of Continental Resources, harold hamm, is with us, responding to some negative comments heard at delivering alpha conference and why he says the trump boom may just be getting started. Dont miss davids exclusive interviews later this hour with the chairman of verizon, loule mcadpam, and cbs ceo les wel rhtve lbeig back. Usaa to me means peace of mind. We had a power outage for five days total. We lost a lot of food. We actually filed a claim with usaa to replace that spoiled food. And we really appreciated that. Were the webber family and we are usaa members for life. Its not just a car, its your daily treat. Go ahead, spoil yourself. The es and es hybrid. Experience amazing. The president s meeting with Democratic Leaders, Chuck Schumer and nancy pelosi on tax reform and daca causing a rift within the gop our next guest is a longterm supporter of the president he just wrote an oped for cnbc. Com hot off the wire, no one can deny the economy has shifted into high gear with trump. Harold hamm, Continental Resources founder, chairman and ceo. Welcome back to the show, harold good to be with you thank you. So, we know youre a big fan of President Trumps Economic Policy agenda. But 4 economic growth, no economist is talking about that, even strong supply siders. What are you seeing theyre not . Obviously, you know, what a trump rally when he was first elected and its become much more than that weve seen the market react. Weve seen business react. All across the spectrum. So, absolutely, you know, we saw 3 we can see 4 . We need some policies instituted and thats going to be up to congress to do that. So this tax policy, a lot of Good Opportunity here for both sides of the aisle and i think theyve come together and get this done well see 4 gdp its a good move. Just to be clear, the 3 was a quarterly gdp number the trick is getting it to be sustainable for the entire area. President trump meeting with democrats, talking deals and now theres a report trump says the rich might pay more in taxes if he does bring democrats into the fold here and start to change his ideas around taxes, do you still feel that we can get that kind of stimulative bump to the economy . Everybodys going to pay more in taxes the rich pay most of the taxes paid today and we all know that. Let me make one comment on gdp weve seen gdp come from 1 to 3 last quarter. Thats the latest quarter. Thats the territory were in. So, weve made great progress, you know, with this administration so far. But we were there harold, i mean, weve been here the last couple of years. Were well aware that q1 has been seasonally weak you actually youre saying you believe that the change in quarterly gdp this year is different than years past . Obviously, carl, weve seen a good move, you know, from going from 1 to the latest quarter being 3 thats territory that were in so, policies matter. You know, taking the foot off the neck of business, releasing that pentup potential thats out there in america it all counts and it all matters. Thats what this is all about. We did want you, harold, to respond to some chanos he said hes shorting your Company Along with other oil and gas companies. Heres what he said about Continental Resources. Take a listen. If we dont get a big pick up in this companys fortunes in the back half of the year, which the company is counting on, well see a company struggling to pay its interest yet again. I guess his big clarnlgs harold, is the industry is being looked at through rosecolored glasses, his phrase, and most of the money that comes out of production, out of the ground, goes back into cap x, negative cash flows, high debt and thats not sustainable or attractive to investors. W we would like to you respond to that. First of all, i can say, who . Who is this guy . Short seller, okay you know, theyre always out there. They operate under a little different Regulatory Environment than we do as ceos were required by s. E. C. To tell the truth and be totally transparent. Thats exactly what we do. Those numbers are all out there. For anybody to even put forth the suggestion that we havent had great expansion and Wealth Creation in this industry with horizontal drilling and all the technology thats come about the last ten years, i mean, its totally ridiculous for anybody to make those type of statements you know, they get caught these short sellers get caught on the wrong side of a position and they Start Talking their book thats what we have here absolutely the balkan has come as the best pure oil continental is up there in Technology Innovation in that play certainly, all those players, our company included, was on a terrific run, some 8 up for a lot of those we gained 4 that very day he said that and 5 the next day. They get talking their book and heres a good example of that. The stock is down, though, about 30 . Looked at the e p etf, its down 16 for the year why do you think the underperformance of your stock well, were like everyone else were tied to oil prices thats what im here to talk about today is, you know, some of the things that concerns me one of that is the overforecasting of eai numbers you know, when people get on the wrong side of forecasts and certainly eai has been there this year, predicting growth of supply in america of over a Million Barrels, that was their number, this year growth was to be over a Million Barrels a day and basically what were seeing at this point is its going to be half that basically, a 500,000 barrel mistake. We met with eai. We met with those folks. Good people. They need more tools to do a job. Everyone looks at them as the authority on supply in america, the unbiased authority and they need the same tools we have in the industry theyve seen the data and theyve made a recent correction with Shortterm Energy Outlook in september they moved 20 and reduction of their prior estimate and so thats helpful. Its not enough. Theyre still 360,000 barrels a day high its coming the right way. Were seeing inventory drawn do down were 118 Million Barrels over that were getting back in the range. Opec is doing their part youre seeing Oil Prices Move towards 50 today we said oil prices under 50 in the world is unsustainable after creating oil for the world i sincerely believe that were seeing oil prices the right way today. Things are correcting. Were getting there. But we need help from governmental agencies like eai and i think under secretary rick perry well see them get to the level they need to be. A couple things i know bps dudley said we do not expect a big drop or spike in oil prices. Do you go along with that . And for how long do you think harvey and or irma are going to cloud the overall macro picture on crude not very long weve seen production shut in in the gulf they dont mess with it, you know, a storm comes in down there, they shut those rigs down, they shut production down. You know, youre not going to have leaks and stuff due to storms down there. They shut it down. You know, that cramped supply a little bit weve seen that. We also saw i mean, you cant have all this high and oil low weve seen cracked go to as much as 35 a barrel in this country. I mean, thats thats a huge margin for refineries. So, big numbers. Anyway, a lot of that will correct, but we have seen spreads abnormally high. Thank you for joining us on a number of topics the stock, the tax policy and, of course, your latest oped at cnbc. Com we appreciate it harold hamm, the ceo of Continental Resources. As we go to break, take a look at shares of Tenet Healthcare they have hired add virs to explore strategic options, including a potential sell dow is up eight but we managed to get the first intrarecord high since august 8th. This is a story about mail and packages. And its also a story about people. People who rely on us every day to deliver their dreams theyre handing us more than mail theyre handing us their business and while we make more ecommerce deliveries to homes than anyone else in the country, we never forget. That your business is our business the United States postal service. Priority you so they called the fire, yodepartment for us. Clearly, my first truck was on the scene within five minutes. I am grateful we all made it out safely. To protect what you love, call 1800adtcares she cant become a guitar legend just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. About on the fight between png and peltz for board seat the vote is happening october 109. Procter gamble has been strongly pushing back against it new this morning, yakman Asset Management which claims to own 1. 3 billion of Procter Gamble stock is supporting peltz. Heres a letter. Since our founding in 199, this is the first time, the fund says, we have written about an election of directors for one of our portfolio companies. Were doing so because of the deputy of our conviction it is in the best interest of all P G Investors to have peltz join the board the letter went on to criticize the costly proxy fight p g has been waging. They say they like peltz, hes the fifth biggest other than and yacktman, 1. 3 1. 3 billion were starting to hear from big investors as we go into this vote well see which way it goes. When we come back, two big interviews david sits down with the ceo of s aianesenowell mcadam, and th cbchrm l moonves good morning heres your cnbc update. In the wake of the eight deaths at a sweltering nursing home in hollywood, florida, emergency workers around that state making sure elderly residents are safe. Firefighters relocating 122 people from two assisted Living Centers near orlando in coral gable, an Apartment Building for elderly tenants were evacuated. Witnesses have identified spokane shooter as sophomore caleb sharp. Police say one student was killed a classmate, who had tried to reason with caleb sharp. Three others were injured. Secretary of state Rex Tillerson meeting with British Foreign secretary Boris Johnson along with french officials in london on the agenda, International Efforts to pressure north korea and also the chaos in libya. And mexican earthquake victims are turning to shelters for food and a safe place to sleep, saying relief supplies have been slow to arrive nearly 100 people are known to have died from last weeks massive quake. More than 5,000 homes were destroyed in one local town alone. That is the news update this hour carl, ill send it back downtown to you sue, thank you very much. Lets get to david faber as Goldman Sachs communacopia conference hey, david. Thats right. Walked over here, Lowell Mcadam, ceo chairman of verizon our guest. Nice to have you from a venue weve spoken at a number of times. And always lots of change in your business. Lets start off following up on some of the comments you made in your presentation earlier here at the communacopia. Specific to something weve discussed before, but lets get it out of the way. You said youre not interested in cable any longer. Right you talked about infrastructure but why . Why are you no longer when we say cable, were talking about charter, but why david, i think you were one of the early ones to see there was a huge amount of hysteria around mergers and i think a week didnt go by that we werent mentioned as we were going to buy disney or cbs or charter or comcast or whoever. And look, cooler heads are running these businesses i think charter has a great company, great Business Model. We are very focused on deploying fiber and 5g thats where we need to put our capital dollars. And buying a Cable Company and having to reconfigure their network didnt make any sense for us. Last time we spoke was wendell weeks from corning and you were focus thissed on 5g when it comes to that, there had been a thought that owning a cable plant would be beneficial. If you go the route of not dealing a deal, doesnt the dense fiction that you need of the netted work made an overbuild a reality and cost you a lot more money no, actually, because if you have to buy that asset and change it out, youre paying for it twice in the meantime, chairman pi of the fcc and local mayors, matter marty walsh in boston is a great example, theyre saying this fiber deployed in our cities will make a huge difference to how people live their lives and theyre clearing the decks to us theyre giving us access to street furniture, conduit, all of those things to accelerate the build. Where are we on the build youre seemingly ahead of everybody else in the industry, in terms of what you say for your expectations wheng will be a reality we bought xo which gave us fiber and spectrum we now have a deal pending for approval with Straight Path that gives us more spectrum right now we have more 5g cells deployed than anybody else in the world. We literally have hundreds of them this network will usher in what i think is the Fourth Industrial Revolution in this country it will be focused certainly on consumers but more on industrial applications, so the auto ton mouse care, health care, smart cities, education is a big deal for us things like virtual realityand gaming that we talk about. This is going to provide that and the status of the trials, they have gone better than we anticipated. Virtually every variable, whether its line of sight versus nonline of sight, how it acts in vegetation, how it penetrates buildings, the distance that you can transmit with millimeter wave are all better than we had planned. What about the money youre going to need to spend youre at 18 billion cap x, does that need to go up because of the expense of 5g . We dont think so, at least in the short term. We dont spend any more on 5g, we dont build fios in the old architecture this new 5g architecture is purposebuilt. You can use it across any application instead of purposebuilt. We think were fine. You think youre fine let me move on to the competition that we all know is raging in the wireless business, of course. The unlimited plans, for example, and your willingness to go there in your comments you said there was some concern that limitless would be a race to the bottom but we can differentiate a lot from the competition what does that mean . Youve seen the early stages of that and what weve done with our new offerings we announced in the last couple of weeks. So, can you give a different quality of video most people on a cell phone cant tell the difference between 400 and 1080p. You give customers that sort of option the other thing that its done for us, david, its allowed us to cut our costs i talked about reducing our cash cost by 10 billion over the next four years. But as you make the network more efficient and you simplify these offerings, you can still differentiate yourself in the marketplace starting with the network, but then doing things like our new loyalty program, verizon up, to differentiate yourself from the competition. I get both fios and im a wireless customer. You havent linked those two yet. Youre not giving me a break there yet. I want to do that with products versus just bottom of the bill discounts. On that subject, when i look at one of your competitors, at t, about to close the time warner deal, theyre already offering a discount on directv now. Theyre over the top offering. 10 bucks, i think. Theres a possibility theyll be able to say to people, you know what, youre an at t subscriber all along the way here, hbo is free thats pretty compelling how do you respond to Something Like that . We havent seen that move the needle at this point just like unlimited, it was out in the marketplace for quite a while before we felt we had to respond to it. Youll have les moonves on in a few minutes. If we wanted to offer Something Like hbo, call les and get showtime in a commercial arrangement, i dont need to own the content in order to provide that to customers. Youre not concerned about the competition ledger and tmobile, they recently did this netflix deal it does appear there is there is incentivizing going on and you have relied so long on the quality of your network but that might not be enough to move somebody to you as opposed to go to one of these other providers. I dont know that you have to give away something that has value in order to sell your service. And i think thats where thats the edges were going around at this point let me give you the comparison to houston when that hurricane came ashore, we loss less than 2 of our cell sites. Our competitors said publicly 75 of their network was down. This was a case where adverti advertising claims meet reality. At the end of the day, customers will buy based on their experience doing what they need to do, not whether they have netflix or not. Right you guys have always done a good job. I was walking over here through the memorial of the world trade center, and i remember those days where you guys were heroic in those efforts not to mention sandy theres always something, you guys get the network up pretty quickly. Our team runs through a crisis couldnt be prouder of them. The telethon that went on the other night, we had 4,000 employee volunteer to staff those phones to take care of those hurricane victims. And as you mentioned on the air, were the only company thats done 10 million toward the recovery effort. So, i couldnt be prouder of our team and how theyve responded. Back to content because you did say during your talk that some content deals are coming for you as well. What does that mean and what will they be how we think about content now is different than, i think, the other carriers do. You know, in the past wed think about 5 million fios subscribers or 115 mobile subscribers. And our old facets now we have 1. 3 billion users. I think first about how i can address that global audience and then use that same content to come over to our wireless asset and then ultimately to our fios asset. You said how do you make oath matter, you said youre going to make oath, that being aol yahoo matter its not clear to me it does matter i know they have a lot of people eyeballs, conceivably, but its not the power of hbo how do you think it matters . First, we need to get the integration done Tim Armstrong and his team have done a great job were getting the platforms organized and product strategies ive seen will bring content to customers when they get up in the morning, theyll want to go to that oath app and see what they constructed for themselves. I think that will matter to customers and thats going to pull more people to Wireless Service and ultimately to our 5g service. Go90 has not been a success would you agree . Yeah, go90 has been the platform we will use to deliver the Video Services over oath so, from that perspective its been a success going to consumers with it is an ott play its a very crowded field. We may partner with somebody, we may use that, but id say from an infrastructure perspective, weve been satisfied with it as a consumer offering, not so much. What have you learned from that experience thaw may then, therefore, change as you try and have a new approach . From an engineering perspective, its things like infrastructure and getting the system to scale properly but its all about the type of content. And as i mentioned earlier, and ive talked about it from a yahoo perspective, sports, news, finance, and lifestyle, we stay in those swim lanes, customers will responds. You wont be buying disney or cbs any i dont plan on any of that thanks, david. Let me end on a Different Company quickly. Youre on the board of directors of general electric, ge. Curious, are you disappointed at all in the performance of the stock price . And are you happy with your new ceo . You know, no board of directors is ever going to say unless their stock is going up a percent a day that theyre happy. But, you know, i think jeff did a great job while he was there John Flannery is a tremendous leader and i think hes going to go into the business, clarify the strategy and move the company forward. So, i think all of the directors are very excited about john. We appreciate you always taking time with us. Thank you. Thank you, david. Lowell mcadam, chairman and ceo of verizon back to you. Great stuff, david. When we come back, well go back to david at the goldmans communacopia conference. Hell sit down with les moonves, chairman and ceo of cbs. Well tell you why Martin Shkrelis bail was revoked when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. 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We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Martin shkrelis bail has been revoked and he is in jail meg joins us back at hq with the details on why and what is next for the pharma bro the saga never ends. Never does. And really the story of Martin Shkreli kind of began and at least ended for now with Hillary Clinton. It was about Martin Shkrelis drug price increase in 2015 that Hillary Clinton was tweeting about when she tweeted about drug prices that really affected the whole biotech industry in terms of stocks at the time. Now Martin Shkreli has been sent to prison because of some facebook posts about Hillary Clinton. Yesterday in a bail hearing, it was really around these facebook posts about hk clinton that the prosecutors ask his bail be revoked and remanded to custody. The judge ordered that happen. Essentially these facebook posts last week asked his facebook followers to bring him one of Hillary Clintons hairs. He said he would pay 5,000 per hair he later said it was satirical, and joking prosecutors said it was an escalating pattern of threats and harass since his conviction culminating in those facebook posts. Shkreli apologized to the court in a letter this eek the judge called his posts a solicitation of assault and remanded him to custody yesterday. His attorney spoke with us briefly outside the courthouse take a listen. We are obviously disappointed we believe the court arrived at the wrong decision, but shes the judge. And right now we will have to live with this decision. So, shkreli went directly to prison last night. His sentencing has been set for january 16th back to you. Meg, thank you. Following the latest on Martin Shkreli. When we come back, davids exclusive interview with the chairman and ceo of cbs, les moonves. You wont want to miss that. In the meantime, lets sent it over to john with whats coming up on squawk alley. Good morning. A mb of hacks have congresss attention. First, theyre looking at facebook over what happened during the election. Also turning attention to equifax. Is anything actually going to happen this time ldiin [pony neighing] what . Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at Td Ameritrade. [he has a new business teaching lessons. Rodney wanted to know how his business was doing. So he got quickbooks. It organizes all his accounts, so he can see his bottom line. Ahhh. Thats a profit. Know where you stand instantly. Visit quickbooksdotcom. Welcome back to squawk on the street. Im david faber at the communacopia conference. My guest is les moonves, the ceo of cbs its been a while since we talked in person glad to have that opportunity. Pleasure to be with you. You have spoken here as well not very long ago. You made an argument that you had made in previous interviews of late with all the focus on over the top and the disappearance of the bundle. You continue to say, theres a misconception. The move to ott is a positive for us are people listening are they getting this . They are starting to get it when other companies talk about the loss of cable subs and the people are cordcutting. When people are cordcutting or theyre leaving cable, theyre going somewhere. Theyre not going to the thin air. So, they are buying other air. So they are buying other services, and we are involved with the traditional mvpds who would carry our channel, but were also involved with skinny bundles, the ones doing smaller packages of 40 channels, as well as we have cbs all access and showtime over the top, which are direct to consumer offering. So, no matter how you want your cbs, theres different ways to get it, and if you leave one service for another, we are still there and were getting paid more for it right i want to come back to that. Overall, you and i have talked about this its been a subject now for so long, but it appears were in the midst of real change, where people are cutting the cord in ever increasing numbers. Is that your sense no question about it, no question about it. I think theres always going to be a place for the larger bundles, always households who want 180 or 200 channels, but people are cutting the cord, they are going towards a 40channel package or a netflix or a cbs all access. Its definitely happening now. On this subject, though, you know, retrans dollars have become important for cbs by 200 youre talking about certain targets, but when you lose video subs, those local affiliates are being cut off doesnt that intentional infringe on your dollars being paid from the Cable Companies to local affiliates, therefore, cbs . You know what, they are going elsewhere. If they leave the cable operator system and go to an over the top system, we will still get paid for those subs over the top guys include local affiliates, as well . They do on all access, the local affiliates will share in that money. In addition, they are making deals with the skinny bundles as we are as a matter of fact, well often make deals for them. We represent our affiliates in the deals with the hulus and the youtubes of the world, which are two of the bigger, you know, directv now, as well, are the skinny bundles skinny bundlprio as a result well get paid, as well no dim munition as a result of increasing trend of people dropping video none whatsoever as a matter of fact we set our target by 020 well have 2. 5 billion in revenue were now saying if you include the skinny bundles, that number will go higher, maybe 2. 7 and beyond you mention all access, of course, and you have targets there, already at 4 million between showtime and the cbs all access, youre talking about getting to 8 million by 2020 im curious, disney just came into the marketplace with the idea of a direct to consumer offering were going to get it 2019 correct do you think its going to be a success . I think it probably will. Why disney has great product. Once again, as you look into the universe, disney said, okay, they didnt want to be part of the netflix universe, they wanted to do it themselves its something we decided we would do a few years ago we went into this in 2015, and once again its offering content in different ways, and people are going to choose what they want to watch. People are tired of paying for things they dont want to watch. Theres a lot of people who want disney, just like theres a lot of people who want cbs you know, we launch our big gun, star trek, in about two weeks. Does that work, does it attract people star trek, star wars, which disney is going to use to attract people we think star trek is going to do extremely well ive seen the first ten episodes, its really, really good we think thats going to be a big shot in the arm for all access its done better than we thought it would do, but this is our first big gun out of the gate. Sports is also an important component of all access. Correct lets talk about the nfl, which has been important for cbs for a long time. I remember talking many, many years ago about paying so much and saying are you paying too much i guess we can ask the same question now the ratings last thursday were not good good game, too, kc and the patriots are you worried that nfl ratings are down for good . No. Im really not concerned if you looked at the sunday night game, that was up. Sunday afternoon was down a bit, but we were in the middle of the biggest hurricane in decades so, when you see, you know, millions and millions of people watching the weather channel, i think the nfl is still the best property on Television Im not worried about a decline. What about amazon streaming ten games . Theyll be streaming the same time youre broadcasting them. Does that hurt no, it wasnt hurt. I think the nfl, like everything with i. P. , intellectual property is trying different ways of doing it a viewer watching on amazon gets counted on cbs i think as we go forward, the nfl will have a Network Presence and were still the big gun there, still the mass provider, but there will be a digital partner in terms of this deal and every future deal that they do how does that play out . Is it your expectation youll be competing against youtube at some point we mentioned amazon already for these rights as they come up i think as our next nfl deal comes up in 2022 for the big package, i think theyll be part of the conversation. I think broadcast will be part of it and i think youll see combined offerings from now on so i dont think it doesnt worry me about us being extinct. Once again, the super bowl is always on the network, its always the big place nowhere else do you get 20 Million People every week watching the big bang theory, nowhere else do you get 110 Million People watching the super bowl the networks will still be a big part of it given the importance, though, of over the top and what youre talking about direct to consumer with all access, what i hear about some of these services is the turn is high people turn them on when they know theres something good and can easily turn them off is that your experience is there higher turn of all access . As i said, we havent had our big gun yet, which is star trek. Well see. We expect thats going to give us a great shot in the arm what showtime has done for their offering, theyve spread out their premier offerings as opposed to two at a time, theyll do a new show once a month throughout the year to prevent churn and we think thats absolutely working. Is nielsen still relevant yes they are still the way we get paid so many people are watching stuff outside of their home, watching it all the way. Do these guys really actually measure that audience . Nielsen is not perfect. They are Getting Better and better we want them to be better and better we need them to measure delayed viewing, which becomes a bigger and bigger piece of the pie. Look, from broadcast we get a lot of people who watch the show in the given time, but over the course of the next seven days the number could go up as much as 50 , 60 , 70 we need nielsen to capture that. Nielsen is still the only game in town. Others are coming up nielsen is still the scorekeeper. So we still have to play by their rules. Although ads as a percentage of your overall revenue have come down and down exactly which i can remember talking about this ten years ago right it was a goal of ours to get our advertising, which had been over 70 . Were now below 50 , close to 45 in advertising revenue, which is a major change. We have, obviously, spun off the outdoor business, were in the process of selling off the radio business, and the other Revenue Streams that we have, retrans reverse comp, over the top, plus content sales internationally have grown these are nonadvertising related businesses but on advertising, i have to ask you one, ipg was recently at a conference, they seem to indicate scatter pricing was down is that your experience . Not true. Not seeing it at all seeing strength seeing strength first of all, were about to begin the season we just came off an extremely strong up front. Cpms were up, volume was up. By the way, up across the board for all networks, even networks that were down considerably were up in addition thats backed up by a very strong scatter market scatter is not going to come into play for a little while because the season will begin, but were not seeing any weaknesses its your expectation absolutely. How would you overall then characterize the economy that youre currently selling into . You know, we feel very bullish on advertising we do. We think, you know, we cant wait for the season to begin this is an odd time of year, because as you talk about advertising, its all going to depend on ratings, and not what the overnight ratings is remember, delayed ratings are now much more important. Leslie, we always appreciate your taking time with us. Always a pleasure leslie moonves, cbs ceo back to you guys, squawk alley is fast approaching. Thank you very much, david. Good morning, its 8 00 a. M. In hawthorne, california, 11 00 a. M. On wall street, and squawk alley is lye. Live good thursday morning, welcome to squawk alley, im Carl Quintanilla with john ford, sara eisen henry joins us this morning, business insider, founder, editor in chief. Great to be here. First up, political pressure on big techs, from are reports Robert Mueller has a red hot focus on facebook, twitter, and other social Media Companies for the roles they played in the election and considering calling executives from the companies to testify on the hill. Now cnns jeff zucker calls on the public to call social Media Companies accountable, speaking at the women in the world canada summit he says it is outrageous that facebook will be not more transparent about the advertising they took from russia facebooks behavior has not been transparent and this is a huge issue. Of course, follows ben smiths long piece yesterday, guys, in buzz feed, basically arguing the tides are rapidly turning and for some of these companies, henry, they are going to be caught in a vice between the left and the right you agree . Oh, absolutely. I think the last couple of years really are the years that Silicon Valley idealism has collided with the real world, and there are two issues one is the media issue facebook, google