Squawk alley. We are live from post 9 at the New York Stock Exchange. John fortt joining us from out west in san francisco. Sara eisen, though, the big story outside p g headquarters in cincinnati. Carl quintanilla has the morning off. We have a lot to get to this morning, but we are going to start with that breaking news from cincinnati and the big proxy fight over the future of proctor and gamble lets get to sara. Sara weve got a discrepancy here in the vote, michelle. P g says that it has won and that nelson peltz was not voted to the board of proctor and gamble, but we just talked to nelson peltz of trian, and he says it is way too close to call and they are going to continue to go through and count every vote, make sure some votes were not done twice, and go through it, because we are told that this is a matter of 10 million votes, and the company with billions of votes outstanding. 2. 7 billion shareholder votes to count. So that is where we stand right now. The Shareholder Meeting has wrapped up nelson peltz in talking to us say even if they did win, the fact that it was so close is a no confidence vote on management and on the current strategy. Heres what else he just told us moments ago. Our numbers say it is as close to a dead heat as possible i think our numbers show we are in the lead this morning we dont know what they came in. They dont know what we brought in, but if anything, its plus or minus 1 . We need to really count it and understand it. And he says even if they did win, they should invite him to be a board member because it was so close and because a lot of his points resinated that they need to shake up the culture of this company. Hes called it an insular culture that they need to focus on smaller brands, they need to be focused more on Digital Management has argued they have a Transformation Plan in place, give them time, they just started. David taylor has been the ceo for two years and the stock has outperformed in that time. Hes just giving a little press conference after theyve announced the vote, then hes going to come straight here to the chair and speak to us exclusively outside of p g headquarters guys sara, do you think mr. Taylor is going to be under extra pressure when he sees the stock is down in the wake of his declared victory, even though we know its in dispute by trian . I think that he will certainly play it down, the stock price, and certainly some of the wall street Institutional Investors were on the peltz side i think hell also say were going to continue our engagement with peltz and they have had a relationship in speaking to each other ahead of this proxy battle and listening to ideas that nelson has had ever since he disclosed his stake earlier this year he still has 3. 5 billion worth of shares, about 1. 5 of the vote, but you can bet theyll ask about that stock price reaction, what it tells him, what it tells peltz, which we asked, is that shareholders should be disappointed with this company and he presents it as a company thats sort of stuck in the dark ages and they need an outsider to come in and change and he thinks he has a shot to do it, whether its in the vote counting or continuing to press on with getting a board seat on this company sara, at the same time, the stock price is still up about 8. 6 year to date. Thats in line or better than many other staples companies, and you spoke there with mr. Peltz about some of the tail winds ahead of the next quarters results, which gives the Company Management quite a lot of leeway now to protect themselves absolutely. One of those key tail winds, and the company has argued this is largely responsible for some of its struggles over the last few years, is that stronger dollar, which turned in 2017 into a much weaker dollar. Proctor and gamble does a lot of business abroad, so all of that business is worth less when the dollars strong, its worth more when the dollar is weak, and that should be coming as soon as this quarter but i think investors are going to write that off and parse some of the more underlying trends in the business are they able to Grow Market Share again, thats something that peltz has criticized the company for. Are they able to turn around key brands that have continued to struggle like gillette, which responded with lower razor prices, but it losing shares to brands like harrys and Dollar Shave Club we were following how the breakdown would go, looks like peltz won black rock and state street p g won vanguard and its employees. Remember, this is a much larger than your typical retail shareholder base, 40 , and 25 of that is p g alum because of the stock compensation plan, so that was a win for p g, but again, they are all still ferociously counting, even though p g has declared it a winner sara, quickly, if nelson peltz did win this vote if everything is locked and counted, hes slightly framed in the interview as still a victory for the activist investors, but if he lost the vote, surely thats an odd answer well, because it was so close, and if you think about it, almost 50 of the vote is a very strong statement that shareholders made, including two key index funds here, which were big question marks going into this and i think his point there was, he put up a very good fight no matter what. Hes not convinced its over yet, and that sends a powerful statement in itself that the Biggest Company ever to face a proxy vote with a very powerful board made up of current and former ceos that put what he says is 100 million, the company says more like 30 million into this proxy battle and they can barely win this he says is definitely a message loud and clear for other Big Companies that nobodys safe sara, great stuff thanks very much well be back with you for more in a few moments time. Kind of like election night, one side claiming victory, the other failing to concede, markets moving isner 2004, he won 43 of the shareholders withheld their vote for him. The board said thats a loss and took away the chairmanship from him. Remember how shareholder votes in america go, they are sleepy nobody does them, you know exactly. Much more to this to come throughout the show. Meantime, lets get an update on walmart. Shares up big this morning as the Worlds Largest retailer moves through its annual analyst day presentation Courtney Reagan has been monitoring the event and joins us with the latest one dow component to another, walmart shares are soaring, halfway through the analyst day, shares up more than 4 right now. Its the best single day percentage move in about 17 months, trading at levels not seen in two and a half years, so why are shares higher . In part from earnings and sales guidance, but also from a new 20 billion twoyear share buyback. Walmart reiterating the current fiscal year, racketing analyst expectations for fiscal 2019, forecast earnings will grow about 5 , so the high end matches analysts expectations also expecting sales to grow 3 for 2019 both comp sales and ecommerce sales seen growing remember how big walmart is, so thats good for analysts to hear mark lauries presentation, though, thats what most analysts were anticipating that wrapped up, and we know ecommerce is where the big growth is, so ecommerce is forecast to grow 40 in fiscal 2019 with the expenses associated with that, expected to start to decrease after this year think of that as the startup within a bigger traditional retailer, so the expenses are higher lore hired 250 category specialists so far for the digital team, so what they are doing is focusing on the top 1 million products to make sure they come up ranked in the right way, the display is right, the descriptions are optimized lore says walmart has given him and his team the independence to move, test ideas like store associates delivering packages, experimenting with a. R. , v. R. , and drones and more. The number of stores that will have walmarts grocery order online and instore pickup is expected to nearly double to more than 2,000. A key focus for walmart, remember, its the countrys largest grocer, especially as the space gets more competitive with amazon buying whole foods and u. S. Expansion from liedel and aldi michelle got it, thank you so much, courtney lets talk more about walmart and the ecommerce sector, especially when we see the move happening today. Lets bring in victor anthony. Karen short, retail analyst at barclays joins us. Karen, good to have you here the stock at one time up 5 , now up 4. 5 . They do have sales growth, which is pretty outstanding considering the retail environment in the last year, but what else, why is this stock moving so sharply today . Thanks, michelle, yeah, i think part of it is i do think going into today there was a view from some investors that the environment had gotten materially worse and that there was some expectation at least from people who were short that there would be another reset, and we just could not have disagreed more with that stance. You know, if anything, its the environment has gotten worse because walmart is being aggressive and making it worse, but i think it was a bit of a setup in terms of why the stock is acting well, but the guidance, as courtney outlined, is very robust how crucial is mark lore, jet. Com, and the ability to reinvigorate the ecommerce platform to the story . Mark is a very big part of the story, but its working with greg thorn, as well, leveraging four walls, as well as the ecommerce, and what they are doing and as doug said, they are acting very rapidly and decisively, and if you think about what they are doing, they are testing anything and everything in the new world of retail, and no one in retail that we cover comes even close to doing that besides amazon, and thats why walmarts winning. Does this kind of guidance, this kind of reiterance and commitment make you worry for amazon i think amazon is in such a strong position, doesnt make we worry, but ecommerce is wide, theres multiple competitors i spent time prior to the acquisition of by walmart and i was somewhat lukewarm about his ability to compete against amazon, but did think he was a visionary. That was one of my main takeaways after spending time with him and the company i think hes a huge asset. I think what hes doing, his vision for the company, you know, extent in terms of shipment promotions, artificial intelligence, a. I. , should make that a big focus i think that gives walmart, i think, a nice Competitive Edge against amazon, but im not too worried about amazon i think all the different initiatives that they have under way in terms of convenience, selection, prime, gives them a really strong competitive advantage over the next ten, 15 years. Will groceries prove to be a mistake for amazon to enter into, and with walmarts expansion for online expansion, as well, well ahead in that area i think walmart is well ahead, but groceries are such a small percentage online, so its a category thats right for disruption in the space, and who better to do that than amazon . So i think it was the right move for them i think they ultimately will be successful, so im not too worried about their ability to really compete there i think, you know, hes had the midas touch. Hes had failures, but for multiple categories hes shown he could grow businesses and develop categories over time and i think hell be successful there, as well karen, is walmart doing enough to stave off amazon here, the stock price that we see the move today, mark lore and what weve seen the stock do year to date is that enough absolutely it is. Also keep in mind they have ten times the number of stores, bricks and mortar, that whole foods or amazon with whole foods now has. As doug outlined in his prepared remarks, they get two times the customers who shop in the store and then become ecommerce customers and these same customers spend more in the store after they become ecommerce so its not that youre losing sales to ecommerce at the expense of bricks and mortar all right, guys, lady, excuse me, thank you. Take care, good to have you on thanks. Switching focus. At least ten dead as wildfires spread across northern californias wine country, forcing thousands to evacuate, while destroying hundreds of homes and businesses our aditi roy is in santa rosa now with the latest. Aditi . Reporter hi there, wolf. Thats right, this neighborhood has been incredibly affected by these wildfires. Its basically been decimated to the ground take a look behind me. This is a car, its barely recognizable out this way were stepping in what was the driveway of a home. This was the garage and take a look back here thats just an empty shell that remains of the front of this home it is a community thats been devastated by these wildfires, fires that have killed ten people and left 20,000 people fleeing for their lives. They have affected nine counties in california, most of them in northern california. And 1,500 homes and businesses have been destroyed. They include those everimportant wineries and hotels in the area that comprise the critical Tourism Sector here its an industry that brings in about 50 billion in Economic Impact in the u. S. Every year. Some of the big names that have been affected in this area that we know of so far are the Mountain Grove hotel here in santa rosa, that was a story were also hearing reports the hilton hotel in santa rosa was also damaged the Paradise Ridge winery also reportedly burned. In napa there are reports of damage at the silverado resort were still awaiting names and the damage estimates are still in the rough stages, but theres also a blaze burning brightly in anaheim. Thats about 500 miles to the south of us in orange county, california, where thousands have been evacuated there back to you guys aditi, thank you very much for that still to come, proctor and gamble Ceo David Taylor will join sara eisen for an exclusive interview following the results of a proxy vote. First, the latest on d. C. s Silicon Valley crackdown and her thoughts on the Mark ZuckerbergVirtual Reality tour through puerto rico. Stay with us, squawk alley is back in a couple minutes you ever call your broker for help . Once, when volatility spiked. And . By the time they got me an answer, it was too late. Td ameritrades elite service team can handle your toughest questions right away with volatility, its all about your risk distribution. Good to know. Thanks, mike. We got your back kate. Does he do that all the time . Oh yeah, sometimes he pops out of the couch. Help from real traders. Only with td ameritrade. Welcome back, Mark Zuckerberg getting backlash after broadcasting a Virtual Reality tour of the devastation in puerto rico following hurricane maria. Take a look. One of the things thats magical about Virtual Reality, is you can get a feeling youre in place rachel and i actually arent even, i think, in the same building, in the physical world. It feels like were in the same place and making eye contact we can highfive. There we go and so now, you know, this is were looking around and, you know, it feels like were really here in puerto rico, where its, obviously, a tough place to get to now and a lot of people are really suffering with the aftermath of the hurricanes. And for more were joined now by maha. This seems like a situation i cant see how they did this without realizing what the optics were, calling it magical, saying it feels like youre there. It does not feel like youre there if youre not hungry and without power, right yeah, they clearly missed the mark on this one it was in poor taste certainly, the laughing, the joking, the highfives, its not something people typically do in disaster scenes. I will give Mark Zuckerberg and facebook the benefit of the doubt. Mark zuckerberg spent a lot of money to highlight issues of disasterstricken areas like this, so i think the intention was not was to highlight the devastation, as opposed to make fun of it. But where does this come from i guess, is it a case of just because you can, does it mean you should, tech is the answer for everything i mean, is this a blindspot, what im trying to ask, that is pervasive across Silicon Valley . This isnt just necessarily a onetime thing i believe its a onetime thing. Its uncharacteristic, certainly, of somebody like Mark Zuckerberg, who has been so sensitive to issues like this in the past, doing his tour across the united states, really trying to connect we certainly havent seen this with many other companies, so i personally think its a oneoff. But at the same time, theres something about it that reminds me of, you know, him saying that to suggest that facebook had a role in meddling with the election, having an impact on the outcome, i guess is what he said, was ridiculous well, its the sense that tech tends to be for the good and not seeing the ways things could go wrong. Two separate issues the result is somewhat the same. The issue associated with the puerto rican hurricane was so unfortunate and, clearly, he was trying to highlight how his technology with oculus and v. R. And a. R. Could allow one to feel like they are there. It just didnt work. Yeah. Clearly, a lot of people felt that way moving on, Silicon Valley remaining under pressure from washington, struggles to realize its role in russian interference during the 2016 president ial election microsoft reviewing its own records for signs of russian meddling so far google, facebook, and twitter have been called to capitol hill to testify in front of congress. Maha, is this affecting the value of startups that play in this space, that could be touched by the kind of regulation that some imagine is inevitable after this . I am a huge viewer of homeland, and this feels like a reducks of the last season where we have russian bots and foreign bots that were infiltrating the social media and really changing the tide of communications or how people viewed it via fake news or fake media. So, yes, it is absolutely something that we are taking in Silicon Valley seriously over the last several years youve seen a spate of Cybersecurity Companies being funded and