a powell boost and metcoin above 11k. >> and snap snubs social media a blistering p-ed about facebook and spread of fake news. >> and amazon's growing influence, we have an exclusive interview with andy jassy. >> stocks are on track for more record high. boosted by advancement of the tax reform bill to the senate floor. financials obviously rallied following comments by fed chair nominee jerome powell at his confirmation hearing he did say bank rules are tough enough he also got bitcoin surpassing 11k, after breaking 10k about 24 hours ago, jim. >> yeah, i know i'll get heat on this but even if you believe in bitcoin, the velocity of the move is a sign that it's parabolic and parabolic moves don't last and i know that when i look at that i say to myself, okay, if i owned it, what would i really be doing? the answer is when you have that big a gain you have to take profits. that velocity is crazy that velocity is not right. >> who's buying this thing some arguments say it's people in venezuela that want to buy nike and adidas and need a currently to do it to avoid inflation. i don't know >> i post ulated that -- >> nobody has seen a currently move like this. >> i've seen them go down. >> i shouldn't say never, zimbabwe -- >> but that's the other way. i remember i owned a stock, turkish stock, whirlpool of turkey, doing great going up every day. i didn't realize currentlies devalued by 30%. i've never seen anything like this that doesn't necessarily mean it's wrong it does mean it's qualcomm going to 1,000, remember that call >> of course i do. >> pizec. >> what's it -- there was another guy too. we used to have a voiceover on the old "squawk box". >> i remember i was asked about a stock and i said that stock is going to zero an sec investigated me. before it was finished the stock went to zero >> it was moot. >> cramer, maybe we have to stop that -- but going to minus 5 i would assume -- >> as joseph stigletz said bitcoin is successful because of lack of oversight, it seems it ought to be outlawed which is not an impossibility. >> when i speak with fed officials, you got your head in the sand this is a way -- i should talk to jack lew. >> i heard. >> former treasury secretary of the united states. if i were the head of the irs, i would say, okay, listen, we asked for anybody who withdraws 10,000 from a bank you know they have to ask. >> yes, i'm aware. >> this is 11,000. did you -- if someone spent $10,000 or taking out $10,000, i'd like the irs to know you know what a betting window -- ever win big at the horse race. >> maybe once. >> where's the irs >> not big enough for the irs to care. >> you don't think so? i think it's big. >> no, it is big, never won big enough for the irs to care. >> i hit it in the old days before i became a statesman. >> elder statesman. >> before a game begguandy liken my views, it's crazy they are not on this thing. >> four minutes in we've done a lot of bitcoin talking should we talk about yesterday's rally, regional banks, best day in months? all of the headlines are the advancement, really quick, bitcoin is on the front page of of the "wall street journal" first time, we haven't seen that yet. >> i walk down the street, how about that united health did you see travelers. >> no, they want to talk about block chain. >> there's a company called riot block chain. i want to know everything about riot and why -- >> they changed their name, haven't they >> how about laugh riot block chain. there's odd things going on. but the bank move is to give a remultiplization on the banks with the acknowledgement they'll be able to return a lot of capital. that was the code j powell gave yesterday. in the old days they used to yield 5% maybe that's what's going to happen replace colgate as a yielder -- >> how much of the move yesterday was due to progress on tax reform >> well, big taxpayers, a lot of the move -- >> just in general too the market gained strength as it got out of committee, the bill. >> but you look at bank of america and look at the base they have. if they can return some of that cash -- >> large asset base and deposit base. >> yes, look at bank of america, under valued at 27. >> i thought the point of the tax bill was to invest and create jobs not return cash. >> you thought that? really i looked at it, open an italian restaurant, got a mexican, now open italian, get a big break. >> have you figured out a way to be pass through? >> we don't need -- >> you have a team on accountants on it. >> we don't need to go into each person's personal -- >> right. >> but i'll tell you that there's a lot of things in the tax bill that when you call your accountant, they don't know. i think this thing is going very quickly. >> very quickly. more quickly -- to put it in perspective, it took two years the last time. it was a bipartisan effort if you recall, '84 to '86 on all sides, you had bradley and packwood, o'neill and reagan, you've got them all in there. >> what's in thiseni thing >> we're talking about a month. >> what's in it? >> the nondeductibility of state and local income taxes all i've been aware of and focused on our taxes obviously go up potentially dramatically where rich people in red states, their taxes go down and corporate taxes go to 20%. >> i do point out, there's a lot of people who say how can stocks move on this i look at jp morgan, it was a 14 times earnings now if they offer a much bigger dividend, i'll pay for that. right now i'm yield starved. it's not like the rates are so high -- you see cd rates >> no, what are they doing >> do you shop anywhere? >> i shop cds. >> they are all blanket as being a fraction of what your rates are. banks are doing great on your cds. banks should be doing better i think that that's a perfectly reasonable thing i'm far more worried about block chain, cloud, look at this, good company but they had slowing so it was real slowing, it wasn't like that made up slowing. they did not have the same average per revenue user i was looking for. sales force upgrade in price target raised by 9 people and it is two below where it reported i'm seeing cracks in the highest end of this market and boost in the lowest end but i'm seeing cracks in the highest end. sales force should be higher i don't get it. >> we have some news at home here this morning, nbc news announcing it is terminated "today" show host matt lauer for inappropriate workplace behavior julia borsten has details on that. >> reporter: that's right, nbc news firing "today" show anchor matt lauer after a review of sexual misconduct saying nbc news a detailed complaint by a colleague prompted a review and represented a clear violation of the company's standards. while it is the first complaint about his behavior in over 20 years. we were presented with reason to believe this may not have been an isolated incident he was one of the most highly paid men in television news in the flagship property "today" show, signing a new two-year deal with lauer to continue paying his salary reportedly more than $20 million per year into 2018 now lauer is credited with helping nbc maintain its lead among the morning shows with the highest ratings and most valuable 25 to 54-year-old demographic. and lauer's firing is certainly major shake-up for the "today" show, which is the most valuable ad time in the nbc news lineup the show bringing in over $334 million in ad revenue in 2017, that's just through september, according to ad research company smi. lauer has survived various overhauls of the "today" show so his absence will be in focus for the more than 4 million viewers who tune in to the "today" show every morning. and this worth noting this comes just a week after rival morning show cbs this morning fired anchor charlie rose following an investigation into his sexual misconduct as well a lot of people asking, who's going to be next to go >> julia, we'll cover that all morning long we appreciate that very much when we come back, john forte's exclusive with web services ceo andy jassy, futures the biggest gain in three months yesterday and dow and s&p are up almost exactly 2% for the month back after a break [lance] monica, it is absolute chaos out here! gale force winds, accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? 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[ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. some breaks news from amazon, amazon web services announcing new customer agreements with disney, the nfl and expedia, holding its reinvent conference in vegas in which john forte just sat down with andy jassy, we'll hear sound later on this morning. good to have you back. >> i think we're going to hear sound now. thanks for kicking -- teeing that off i just got back from vegas, i was out there for an interview with andy and it's interesting disney is going to use the cloud from aws for presumably some of this netflix like service they want to role out in the future amazon saying disney is going to shut down the larger data centers and switch over to amazon interesting because netflix was aws's first big customer expaid yan, going to use this across all of xpeexpedia's 200 brands i asked andy what he thought got disney over the hump into using this he said flexibility was a big piece of it. >> i think it's a big reason, not only does disney know they are going to save money, but the ability to innovate at the pace they want to innovate is a big factor and it -- just in the media space, if you look at all of the innovation happening there and the number of companies that are participating there, if you don't have the ability to think of new ideas and then to be able to act on them really quickly, you're not going to be able to compete favorably. >> i asked him about net neutrality given that he's got netflix and disney as big customers trying to push a lot of data through the pipes. he said amazon is working behind the scenes to try to get its point of view about net neutrality across but wouldn't elaborate exactly how political amazon is looking to be but it is an interest that they have. >> got the price target increase yesterday from goldman, largely about pricing power and innovation at aws, new products that we heard about or mostly about new clients? >> andy is getting on stage in under two hours, so i can't spill all of the beans quite yet but we'll continue to roll out sound from him machine learning is a big topic and they are also mounting this approach in the face of microsoft and oracle and others saying hybrid clud is the way to go michael dell also told us that's his approach a specific rebuttal. >> i think the vm wear makes it so amazon is fabulous. >> we did talk about the hybrid approach but it doesn't seem like he's doubling down there. that's what i was pushing him on, trying to ask, where do you think this is going to go? we have sound later on what he thinks -- where he thinks the cloud is going to be in 5 to 10 yees years. it sounds like that particular assault any more than they have already. >> i want to congratulate you, this is s black box, the division worth $250 billion but working around it. you got right to the heart of the story, i'm trying to figure out red hat and what walmart is doing with them. but you got the heart of the story, congratulations. >> thanks, jim we'll see you again in the next hour. >> such a big story. this changed the world, amazon web services, it changed the world because it's just too good it's too good. i mean, read the snapchat piece, it's aboutal al go rigorithm an learning. >> and brought down the costs enormously. >> what walmart did to the country. >> on the 15-year anniversary on the birth of -- >> are you serious >> born internally. >> when did they start breaking it out >> only started breaking it out a couple of years ago. >> remember when they broke it out, that's when the stock started going up, like wait a second this thing is -- >> andy jassy was the chief of staff for jeff bezos, you can hear about it on the fort north podcast, jim. >> you know what, i used to think ft. knox was jp morgan amazon web services. >> isn't that where they keep the bitcoins >> ft. knox. >> it's also my podcast, andy jassy will be on this week and hear the full interview. you can see it here first. >> does this guy know that his mystique, does he know that people talk about him and he's the key to the kingdom he does. >> he also knows he works for jeff bezos though, he knows that. >> interesting, we all do. >> we all do >> either elon musk or jeff bezos. >> one or the other. >> he knows everything he needs to know about you. >> we're in service to musk or bezos. >> how about the fact when it was born we're talking about -- we're talking about john conner, right? >> without a doubt sky net. >> speegle says not to fear the ol go rhythms from snap chat. >> we'll talk about the op-ed, good piece on social media and fake news. see you in a bit when we come back, we'll get cramer's mad dash and count down to the opening bell. take a look at the premarket futures suggest a record for the dow and s&p at the open in about ten minutes. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. ♪ >> we're about seven minutes before the opening bell -- not sure who's playing the music this morning we're going to get to a mad dash, it's hump day an we want to talk chipotle. >> you want to talk about laugh riot block chain steve ells is out, he is chipotle, executive chairman but he actually talks -- it's interesting he says like we've got to move faster you need to execute better can i tell you about the irony here the ceo steps down and says we need to execute better hello, i mean, they've had since december 7th of 2015 when i thought it was over, when they had the boston college incident there have been two other incidents. this thing which i used to love, this thing is very worry some. because okay, so in other words we have a guy who becomes executive chairman and he says we've got to have better execution. >> can we go back to two years >> he was the executioner. >> he was. he was the executioner. >> the fact the stock is going up is a reflection perhaps of people's hopes that somebody else will actually execute. >> no other restaurant chain will ever mention on or off the record -- >> you're still missing -- >> all afraid it's going to happen. >> you like that you did when you thought it had anniversary -- >> taco bell after a terrible inciden incident -- jack in the box, i can't want to bring them up and say people say he's trying to knock jack in the box. had the absolute worst thing that could happen, which was deaths and they came back. >> they never recovered from this thing. >> no, they had more incidents you have to set the clock again to 18 months, i guess else is gone we don't know ackman's role. >> significant holder. >> 10%. >> these guys are like -- these were kings, david, they strode -- the world like ulysses and but turns out they are achilles'. >> i like that turned out that food safety, that's a lag. >> when they were kings. >> they were. >> nothing on block chain? >> say again >> block chain what about it? >> i went home with my wife last night -- >> internet of things. >> my wife was asleep woke up said block chain i didn't know what else to say. >> ai. >> no, machine learning. >> robotics. right back at you. thank you. we've got an openingelcong upig aer this. we need to be ready for whatever weather may come our way. my name's scott strenfel and i'm a meteorologist at pg&e. we make sure that our crews as well as our customers are prepared to how weather may impact their energy. so every single day we're monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. during storm season we want our customers to be ready and stay safe. learn how you can be prepared at pge.com/beprepared. together, we're building a better california. firstthen you put yourselfareer. through school. got the degree. you've given it your all, to reach the goals you've set. don't let student debt hold you back. refinancing student loans with sofi can save thousands. so you can get where you've always been headed... sooner. see how much you can save with sofi. the leader in student loan refinancing. and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they wanted out of life, and maybe even more. ♪ you're watching cnbc "squawk on the street. live from the financial capital of the world opening bell less than two minutes. busy morning as we watch yellen testifying in about 30 minutes, maybe her last time in front of congress she will say the expansion is broad based and likely reflect transitory factors. >> i hope someone asks her, where were you with wells fargo? why did you not put a federal magistrate on the board of wells fargo? why is there not someone -- retired judge on the board, distinguished jurors, why isn't ken fineberg on the board. this thing is out of control and this board remains on its own. where's the fed? they are trying to talk about looking at it. are you kidding me >> the fed is the regulator of wells fargo. we've seen companies time and again that are serial problems and magistrate is put on -- >> then you have dudley at the conference this morning according to dow jones saying the fed is giving thought to having a product like bitcoin for its own. is this story make any sense at all? >> i remember -- what's going on >> we're going to replace the tlar. >> where is bit coin, 12,000 >> 11,400 at last count. >> regulate it tax it, irs, $5,000 at the window but not bitcoin venezuelans don't have that -- >> they are. >> casinos the chinese are using a.t.m. machines but this is bigger than a.t.m. i'm astonished there's the opening bell at the bottom of the screen it is ww granger, supplier of maintenance and repair and operating products celebrating 90 years over at the nasdaq. pledge 1%, helps companies give back $500 million in philanthropy to date. >> it's a good company for a restaurant, you go to granger. like moes, got to go to granger. >> what's the problem? >> you don't have to -- just say yes. >> thank you >> just got an announcement out of senanapchat, they separate te social shared by friends from the media which is published by publisher publishers ties in what evan wrote this morning. >> how the growth of social media is also the thing that will undermine it in the long run more friends and likes and free content but he's been trying to differentiate snap from the very beginning prior to going public with the idea that we're enabling you to connect with the people closest to you and most important with you and have that conversation this seems to be continuing to go down the same road. but separate being off to a certain extent something more advertising driven. >> i'm not sure. i've been somewhat critical -- >> yes you have. >> i have a snap chat with him, sent to my daughter. what are you doing with that guy? he's great this is important because a lot of younger people -- not younger than millennial get the news from snap. i posted something on thursday that said if facebook were to move into the business they have instagram and instagram has stories but does not have news. this will be the de facto standard, that's how younger people get the news. they read the news, now he's going to say this is news. a lot of people post things that are not news. >> you're saying it's an answer to the instagram competitive threat >> i think it's great. evan speigle is doing the right thing. i think z man at facebook will say we ought to do insta stories. >> when he says their model is what netflix does, you pointed this out times, using machine learning, there it is, ol algorh to recommend content to subscrib subscribers, they are doing the same thing. >> i think that's great. >> then he says doentd worry the ol algorithms will not take over. human beings write algorithms and can account for human behavior. >> evan hasn't tweeted much but tweeted a piece of a 60 second video introducing this new product. essentially. >> we're separating the social from the media and reorganizing snapchat around your relationships to make it more personal we hope snapchat feels more familiar and inspires to express yourself with your friends and explore more content that you love >> he's right. this is very good. because that's been the way and you really can't tell. younger people have come to me and said do you see x and it will be a story completely untrue, proposed by their friends. but now we'll distinguish. evan spiegle, starting to like him. this is important. >> in terms of social media, follows what was said yesterday about twitter, calling them part of the problem, having an inherent bias blocking or canceling certain accounts on one side of the political spectrum and not the other. >> seems to be a straight shooter who does a lot of that stuff. at twitter dorsey is busy promoting bitcoin. >> probably dealing with protesters on his lawn about net neutrality we haven't talked a great deal about that that was a huge reversal. >> yeah, showing up at his house. >> we thought it was going to be unilever, kraft heinz, may be protesters. >> that might have gotten very nasty. >> can i say that evan spiegle, this is breakout for him, he knows how many 18 to 21-year-olds get their news from snap and it's not clear. did you ever look at the news feed, it's very good. >> i never have -- >> the inisstarados, maybe you'l get it you know what that is? >> no, what. >> a desperate instagram person trying to make their mark -- >> i see >> like the eagles tune -- is that what you're doing >> that's a good song. >> not bad. >> why didn't mention block chain in this. >> the whole thing does not -- >> big lebowski, not the eagles, man, love that line. there's nothing in here about block chain -- i do think that evan spiegle is making a very good point, it's going to help the stock. cutting losses would help the stock. >> you don't think he's trying to play off the moment right now in terms of fake news and the concern about it and just use that as an opportunity >> probably true too. >> speaking of cutting losses, rbi ups well mart -- >> did you read that >> yeah, i'll give you the synops synopsis, i'm upgrading, honestly that was like the most -- it makes evan spiegle look like thomas jefferson that was a bad upgrade i went and turns out the stores are clean and he's got a website thing that's good. upgrade. >> this is the last -- went to walmart and bought a t-shirt hold the buy u.s. 1, route 66, whatever it is, merrill lynch. i'm not kidding this was an upgrade that you do when you're like i hope i can -- i hope carl doesn't mention this on the 9:00 because it's really embarrassing the stores are a lot cleaner than i thought i'm waiting for him to say the fresh fruit, i tried the cantaloupe and they were perfect -- never mind. >> i'm here reading the at&t's response to the government's complaint which is worth hitting this morning and you have a copy as well. >> i found something i agree with, defendants admit that at&t is the world's largest telecommunications company. >> there's hope. >> this was filed late yesterday or later in the afternoon yesterday. it's a worth while read. you can see at&t shares are up and time warner also up a bit. we don't know when this is going to trial, the u.s. government versus at&t. but a couple of interesting things came from this rebuttal one of which is that at&t apparently has offered its third party distributors the same arbitration protections the government embraced in the comcast nbc universal deal namely, that upon closing, turner has formally and irrevocably offered its distributors -- not clear whether they accepted this -- licensing term for seven years after we close the deal with you to broadcast turner. we can invoke a baseball style arbitration if we're unable to reach an agreement for our turner networks and arbitrator would decide the fair market value of what turner is worth to those distributors and importantly, they say as well, that we would not go dark on any of those, with any of those distributors, to that ends while the u.s. government alleges competitive harm, they are wholly without permit. the commitment eliminates even the theoretical risk that lies at the heart of the case that that risk turner would be more inclined to threaten go dark on distributors they need to have all of the distributors sign up and say we agree to all of this. >> right. >> but they are trying to litigate the fix instead of bring it down to the larger issue, this is what we propose, let's litigate that. >> that's a smart strategy. >> could be. >> that makes it so it's practical because they've got to advance the ball right now the justice department says listen, there's nothing within reason. this is very good. >> if you're time warner, this is smart. >> >> petrocelli was good, yeah. we haven't heard one on one from the government at this point they are also in the answers fifth defense claiming improper selective enforcement of the antitrust laws and that is where it appears they are likely to make the argument about white house influence. >> man, can you imagine the document search on that. >> but may or may not impress a judge, right, even if they find something on that front we'll see. >> this is really -- >> claim executive privilege too on that stuff? >> do you know how many deals this could block >> that's the bigger issue i'm surprised to a certain extent whether politically influenced or not. the fact the government went after at&t time warner has to give others pause. i'm not talking about within the media realm, whether it's the talks between fox and disney or how fox would view potentially doing the deal i described so many times, it extends to cvs aetna. >> i mean, if i were the lawyer i would say listen, you've got to put this thing on hold and igs ice it. >> it was extraordinary. >> bank stocks going again geez. >> we've got records for the dow and s&p. a lot of of consumer names at the top of the s&p including chipot le. >> good morning, carl, happy wednesday, everybody the important thing is markets are up modestly 13 to 10 banks again in the lead. not only here but over in europe bank stocks are having a great day. deutsche bank, your paribaas, s santander on the upside. u.s. banks again leading, powell was testifying in the middle of the testimony had a little back and forth with elizabeth warren and base beingally implied banks were sufficiently regulated. and that was the takeaway and banks all rose and outperformed yesterday. they are doing so again. look at the sectors for today, the kbe, etf for banks, up about 5% this week those are big, big moves for the big banks up there and it's even the regionals that are doing well on top of that. retail having a great week overall. usually you have a problem post thanksgiving with the retailers. not happening given the bill sell-off energy can be kind of flat, oil has had trouble meeting that $60 mark materials down and tariff talk hurting some of the aluminum stocks right now the question right now, where are we what is going to happen now that the markets are the new high let's review the three things that moved the markets this year, first record earnings and we know what would kill that, if we entered some recession in 2018, that would kill the earnings. hopes for a tax cut is a major thing and big question is how much of a premium is there in the market for that. there's a debate some people say 5%, some people say more and i think the most important thing, the hopes the fed would continue on the moderate rate rise trajectory and powell implied that would happen is there any more premium for tax reform in the market at all? he we don't know that's hotly debated the bigger question, how much more room is there for global economic expansion that really powered the stock market, which is the reason the stock market is at new highs. can we see an expansion of earnings continue and can the multiple stay, high right now, can that sustain itself on global economic growth that's the big issue we don't have an answer on that and we have people warning about things, potential problems out there. the european central bank had a semi annual report out today, they noted two things, investors are still long risky assets like stocks and high yield and the central banks are starting to unwind the fiscal stimulus policy pointed out this could be a problem. here's what they had to say, some indication that financial markets may not be fully alert to the possibility that the current favorable market sentiment can change quickly in other words, they are warning everybody, be careful out there. finally, everybody is talking about bitcoin. a lot of people have asked me bitcoin etf, i cover that etf business here. the reason we're seeing the bitcoin boom in the last few weeks, this derivative markets coming that are adding legitimacy to the whole bitcoin issue. the cme and cboe will launch bitcoin futures in a few weeks possibly and the sec denied the exchange traded funds for bitcoins on the grounds they are unregulated. if we get bitcoin futures would that be enough of a regulated market for them to approve etfs. i don't know the answer but it's hotly debated right now and some of the etfs that have been denied for bitcoin, they are certainly going to reapply more on this on trader talk on cnbc.com and carl, we're up 93 points in the dow. back to you. >> 2631, bob big day for macro. good morning, rick >> good morning, carl, indeed it is in so many ways some of them pretty darn simple first of all, i look up at the board see 177 for 2s, i look at 10s, 2.38, 30s 2.81, bunds up 4 basis points around 8:00 eastern janet yellen spoke, 8:00 eastern we saw german inflation data, a little on the hot side. you can see yellen was on the hot side regarding the economy and it definitely was respected and noticed in the markets, both issues quite quickly look at interday of 10s and here's what is significant, look at a one week of 10s it happened at the midpoint of the year around 2.33 and took it above the recent range traders went scrambling a bit. another interesting feature, the long end led today and we see steepening, yes, don't get to say that one much, only a few basis points but steepening nonetheless. if you look at the two-year in europe, the shots, it actually is under minus 7 0 basis points and yield moved up several basis points all the way up to minus 68 one week of bunds may be more significant like 10s popped above the recent range and finally even the dollar index had a move but not a huge move, euro has been drifting lower we can debate as to what hot erin flags may or may not lead mario draghi to do and what that would wash out further currency. all in all it seems though macro is a view now being taken by many fx traders. they've been long in the euro and european investment is somewhat favored but in the end they think it's a multiyear softness in the euro we'll have to wait and see carl, jim, david, back to you. >> we'll see you in a bit. roich dutch shell restoring the all cash dividend. we'll hear what the ceo told brian sullivan ahead of the opec meeting tomorrow dow is up almost 90 points, at a new record back after a break at t-mobile, when you holiday together, great things come in twos. like t-mobile and netflix. right now when you get an unlimited family plan, netflix is included. ho ho ho! t-mobile covers your netflix subscription... best christmas gift ever! ...so you can binge watch all year long. now you're thinking christmas! and now when you buy any of this season's hot new samsung galaxy phones, you get a second one free to gift. that's one samsung for you. and one to give. t-mobile. holiday twogether. [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. shell making a big move to appease investors, it will go back to an all cash dividend brian sullivan just sat down with the ceo and joins us at post nine with what he said about oil prices and a lot more. >> good to be a guest here, guys take it easy on me the free cash flow guidance is a big deal they have what's call in europe a script dividend, you can get your dividend in a piece of stock. jim, people want cash money, they are going back to cash. we sat down -- i think the stock reacted pretty well to it. the net get is still a concern, little too high. we sat down with them. i asked them first off about that but then got into oil and opec because that's what the audience cares about what he sees from oil prices and volatility going forward >> i think there will be a considerable degree volatility in the prices you have to believe that the fundamentals may be telling you with the market tightening again, demand growing quite profoundly at the moment and investment levels having come down quite a bit over the last few years, in the long run, there is going to be a tightening of the market >> all right, so that caught my ear because when i hear demand is growing, we know that production is also growing, so i pressed him. i said do you see demand growing enough to meet increased production >> i think so in the long run, absolutely if you look at it, 1.7, 1.8 million barrels a day of demand growth that's quite trong much faster than, for instance, shell in the u.s. can respond. we will have to rely on growth from non-shell, and non-opec in order to fill the gap. >> so guys, if you're an oil bull, it's kind of good news he's saying demand is growing fast enough to meet 5 million barrels a day and russia going up >> a very contrary view to everyone tells me. people tell me china is slowing, electric car engines, that fossil fuels are on the way out, that demand is not there because of the way that everybody is switching to ways that are not as fossil intensive. did he speak at all about the 20, 30-year picture. shell has always thought like exxon. >> they announced also they're going to try to cut their carbon footprint in half. >> they are carbon >> that's kind of what i said. you sort of -- he said we're gas. a good guy, we're gasoline also. there's going to be skeptics, how does shell, carl, they are -- >> they're an energy company are they buying windmill farms. >> they're going to amputate t get the lower footprint. >> i don't know. >> they're going to make investments in wind and renewables they already have. they're going to increase that that's what they were talking about. >> i love them, but you know - >> you're right to be skeptical. the full interview will air today in power lunch >> dealing with a legacy from poorly timed deals, to say the least, right >> they were a buyer then they were a seller. and there's some talk that analysts i have talked to last night and this morning, who suggested are they going to have to sell more assets to meet this all cash dividend now, no more paper. it's cash, and also bring down their net debt >> did you ask about the other giant oil company that's trying to reconfigure their properties. >> i didn't. >> general electric. >> where were you going with that >> knew it >> by the way, they were a buyer when they should have been a seller >> yes they are very levered oil, except for health care go sffan, odtu brian sullivan >> we'll get "stop trading" with jim in a minute. dow is up 89 alright, off you go. casual fridays at buckingham palace? surprising. what's not surprising? how much money nathan saved by switching to geico. fifteen minutes could save you fifteen percent or more. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. 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 ameritrade's elite service team can handle your toughest questions right away- with volatility, it's 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. trading. >> i could pick a lot of stocks but i'm going to pick macy's if you look at all the retailers. target, kohl's, they're all flying and that's 100% tax rotation money rotation out of companies like mastercard or visa or need i say any technology company, because they all do huge amounts overseas so they're not going to benefit enough no stocks are really heavily for sale cloud stocks hecavily for sale you have a rotation the likes of which i haven't seen in ages where a stock like amazon which doesn't benefit from tax reform is losing to kohl's, to macy's rather extraordinary what's happening right now. the banks are in a rotation, which says that no one is selling. there's like no sellers of jpmorgan at the 103 level. this is extraordinary what's happening today. >> you thing the promise of the tax bill - >> today is the day. today is the day where this tax bill better succeed. or we're going to see a massive sea change this is a bad day for tech because tech does not benefit from the tax bill. it's a great day for down and out retailers because they do benefit. any domestic company really benefits our parent company >> our parent company. >> stock is up all tax. so be aware. this is the first day that i have seen that this is all the rotation is about tax. so the tax bill better succeed you do not get amazon down 23 after announcing it was the best cyber monday ever unless it's a rotation into macy's, which i recommended the other night. target >> you'll get pbh. >> they'll give me the straight dope about what's going on at jcpenney, at macy's. bob sulentic talking to me about real estate. things are very much in flux it's really extraordinary right now. i don't think people realize how extraordinary the moment is. stocks that have been getting crushed, costco could be up three on this. home depot, only in mexico and canada, the could be huge. i don't know call me confused >> i will. >> i'm going to do machine learning after this. >> we'll see you tonight "mad money," 6:00 p.m. >> dow up 116. when we come back, a lot mor with john's excluse thivwi web services ceo andy jassy. don't go away. is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. welcome back to "squawk on the street." i'm diana olick with breaking news pending home sales jumped 3.5% in october well beyond expectations to the highest level since june still down 0.6% year over year, but that's the biggest jump we have seen in a long time driven entirely by sales in the south, which rose 7.4% for the month. that is likely due to all that pent up demand following the hurricanes realtors in houston have been saying that the market has bounced back much more quickly than they expected as for the rest of the nation, sales slightly higher in the northeast and midwest, but slower in the south where inventory is slimmest. remember, the pending home sales index measures signed contracts to buy existing homes, so it's a forward indicator of closed sales in next two months what's the problem inventory. 29 straight months of drops to the lowest several since 1991. and that's when the realtors began tracking it. if we don't see more supply of houses on the market, sales will begin to weaken again. a good jump for october. >> thank you very much >> good wednesday morning, everyone welcome back to "squawk on the street." i'm carl quintanilla with melissa lee and david faber. sara eisen is off. market is doing okay after the best day in three months not quite a 1% gain today, but dow is up 100 points s&p up to 2632 >> our road map this morning starts with another day and another record the dow and s&p soaring and the rally isn't showing any signs of a slowdown yet >> speaking of an incredible run, bitcoin goes past 11,000. less than 24 hours after topping 10,000, as the crypto currency overstretched? we'll discuss. >> and amazon announcing new customer agreements. what andy jassy told our own jon fortt about those deals. >> so marketss are mixed this morning. the dow and s&p hit record highs today after coming off their biggest gain since september we mentioned bitcoin crossing 11,000 for the first time. for more on all this, let's bring in david and brian good to see you both, guys bitcoin, what do you tell people what do you tell people on the street do you think it starts to suck some oxygen out of the room from tech or something else >> yeah, it's more like what people on the street tell me about bitcoin, which is that - >> you need to learn >> definitely like it. there is obviously a lot of attention in the u.s what's interesting is when you look at google searches, the u.s. isn't in the top ten for countries searching for bitcoin. it's really a global phenomenon, not just a u.s. phenomenon as much as we heard about it here, there's still plenty of attention elsewhere, which probably pulls the stock price higher over time >> any idea what is in the top tn in terms of countries >> south africa is almost number one most of the time the nether lnldz, austria, switzerland. a bunch of smaller developed markets. the u.s. is currently 11, 12 >> signs of blow off tops? how do you characterize bitcoin in the larger scheme of asset price? >> if you look at it from a price move compared to so-called asht bubbles in the past, it's been a move. the '90s pales in comparison to bitcoin. i have been telling my friends wrong information on bitcoin each thousand dollars up early on, we're looking for an alternative currency to dollar in fact, the dollar has been strong so you know, this now the shift seems to be more about the block chain and the technology and the ledger, but we still don't necessarily know what digital currency will need for the block chain to work. i have some caution on it. to me, it seems more like speculation than a credible investment right now >> is there any competition for dollars between the u.s. stock market and bitcoin if we're in an environment where there are more coin-based accounts today than charles schwab accounts, don't you think that incremental dollar might not be going to stocks or if you believe there is cash on the sidelines, the cash on the sidelines may not at this point, with stocks at record highs, not that bitcoin is not at record highs, but may not be going into stocks >> over time, investors will want something the ican quantify, earnings, cash flow. very difficult to do with bitcoin. very difficult to value. it's not to say there's not money on the sideline that couldn't continue to find its way into bitcoin markets can remain irrational for a long time, in my poip, but i think investors will come back to fundamentals. >> let's talk about what's going on in the markets today, which we saw yesterday a rotation out of technology today, a very sharp rotation out of technology. you look at the faang stocks we're down at least more than a percent across the board in that sector so from big cap technology, should you be bogue into the financials or industrials which is what we're seeing in the past couple sessions? >> absolutely. saw it start yesterday with the comments coming out of the senate you're seeing it continue today. the financials have been this group that we have liked for a long time. been very frustrating to own because of the flattening yield curve. we think now is the time to be in financials, be in industrials, and be in large cap. the one area we're worried about, small cap had a 9% rally from back in september, versus 6% for the large caps we're worried small caps will get hurt if we don't see a tax bill this year >> isn't the expectation we will see one? >> it is a degree. if you look at the prediction markets online, only a 40% chance of congress passing a bill this year >> goldman is at 50% this year is one thing, but early '18 is not that far away, right? >> it isn't that far away. i think at this point, markets are valued, small caps at 22 times, large caps at 18 times. >> are we betting a lot on this thing getting through? >> i don't think we are. if you look at most of this year, it's been large cap, growth that have really outperformed if this year was betting on tax, it would have been the value names like you have seen over the last couple days investors need to ask themselves a question in the near term, you might see if this bill passes, and i suspect it probably will, you might see the more cyclical parts of the market rally like we have today in a little bit of a sell-off in growth, but will this lead to new sustained higher levels of growth when we're already near full employment, when cap x has already been climbing as a percentage of gdp? if not, i think we're still in a slow growth world that favors growth companies and what i fear is this could bring forward some fed tightening which paradoxically might in turn flatten the yield curve. >> that's exactly where i wanted to go. i wanted to dovetail what jay powell said yesterday in the confirmation hearings with this notion that there could be a shock on this side it sounded like he was willing to let the economy go a little hotter to make sure that inflation was actually in play he was dovish. let's see what happens let's see with prime working age males if they get back into the workforce before we actually pull the trigger so if we're to marry that with the belief that perhaps things could run a little hot, are we setting ourselves up for that possible volatility shock that so many people have been so concerned about hitting this market, when they say that the markets run or is going to come to an end, it's usually because of a volatility shock. >> yeah, the issue with volatility is if you look at the history of the vix, it runs very low for a long period of time, and then it doesn't spike. it just begins to climb slowly we'll have to see that climb first before we really worry about a volatility shock the vix doesn't go from 10 to 20 and stays there. it goes 10, 12, 14, 16, and then 25 so we haven't seen that curving up in the vix curve just yet >> well, the last time we had this was in middle of 2015 into early 2016 on the back of fed tightening. that was the last volatility shock. that was the last correction in the market so what i'm saying is if you get stimulus but not sustained higher levels of growth, i agree, the fed should be cautious here. but if they proceed with tightening, and the bond market isn't buying it, that could be the next leg of volatility >> reflections on powell yesterday? some calls him a carbon copy of yellen some said he might be more data dependent than yellen. did anything he say sound different? >> he voted in line with janet yellen since 2012. when the market, they're trying to set up the market for three interest rate hikes in 2018. that could bring forth some volatility unless the yield curve steepens on sustained levels of growth i suspect in the aftermath of that, the cycle continues and the growth of the parts of the market outperform the cyclical parts of the market. >> that was good nice tie >> nick and brian. >> check out shares of chipotle resuming trading this morning after being halted the restaurant chain announcing it is kn ginning to search for a new ceo. the current chief executive will be part of the search team and wants a new ceo is found, he will become chipotle's executive chairman and focus on innovation the stock is up 3.4% on the news the analyst reaction this morning to the shakeup is interesting. they're pointing out it was fairly surprising given that they just recently streamlined the ceo position sort of caught them off guard here >> some discussions about the timing of the announcement and what does it say about the quarter. some reflection on ells' legacy of the assembly line fast casual concept. he did create this thing, although mcdonald's came in relatively early i they think they had a dozen restaurants or so. but he did change the way americans eat to a large degree. >> he did. this would imply, of course, they need a continued turnaround the language around the last quarter, and i'm quoting here, was we're making meaningful progress on our turnaround we're tenoring the fourth quarter with a positive sales trend. this was a belief that our strategy is paying off that was a month ago when they reported earnings. >> an interesting point here also to keep in mind as we go forward with this stock is a new ceo is probably going to set the bar low. there's an expectation there's going to be a reset to the stock further than the takedown of the fourth quarter estimates here. we could see that continue to 2018 just be prepared even though there's a pop in the stock, that the bar will have to be set lower. >> no longer leading the s&p this morning amazon, though, just announced major customer agreements in las vegas at their annual reinvent conference aws releasing details of new deals with disney, the nfl, and expedia. jon fortt sat down with andy jassy in a cnbc exclusive and is going to recap their conversation all morning long in addition to playing the whole thing on your podcast. >> that's this weekend on fortt knox but aws is the most profitable unit at amazon, and these deals are an example of its current edge over the competition. i asked jassy about his competition, oracle specifically he tends to take some shots at them in his keynote. take a listen. >> really not much of a comparison aws is a lot more functionality by large amount. we have a much larger partner eco system of systems intergrarts who built practices on top of aws. they start with aws because we're a significant market leader there's not much of an eco system you'll find at oracle we have an expression we use internally which is there is no compression algorithm for experience you can't learn until you get different elbows of the curve and scale. >> not talking a lot of smack about the competition, but acting like he doesn't have to look over his shoulder too often. i also asked jassy about the company's plan to make acquisitions if they're going to do more of them, perhaps big ones he flat out answered take a listen. >> yes, i think we will. you know, we have done -- we've probably bought about eight or nine companies over the last few years. >> which is not a lot. a lot of your competitors are buying that many in six months >> most of them have been relatively small acquisitions. they have been great teams and great technology we would like to do more i think there's two things that sometimes give us pause. one is we tend to be a little more rigorous maybe than others choose to be in our analysis evaluations, and sometimes the evaluations that are out there haven't matched what we can kind of get our heads around. >> your own stock has a nice valuation on it? >> i'm not passing judgment, jon, but sometimes we just can't get our head around some of the valuations the other thing for us, too, is we have a history and confidence in being able to build ourselves, so at a certain point, if we know customers really want something, and we're looking at something that we believe can accelerate our efforts in that area, but we just can't get our heads around the valuation or it's not the right fit, then we're also not afraid to go hire people and build it >> and they're going to be building a lot, guys my sense is, i asked him about productivity applications, for instance a lot of people don't know, amazon has its own version essentially of microsoft office that they offer in some circumstances, but it hasn't really been big. i asked him, as you're building up cloud and profitability, are you going to layer in more applications like that he said yes, customers are asking for things like the sort of customer service apps that amazon uses internally to deal with customers they're looking at rolling that out to more people so watch out service now and the likes of those so he's perhaps not talking about that on stage, but investors should certainly be listening because if you're looking at how aws is going to grow profitability, that's an area where he has a target >> how do you think about aws versus google and microsoft right now? in terms of the horse race who's first, who's fastest at the moment >> andy jassy tries to keep the focus on infrastructure as a service, which is one segment of cloud. and amazon, aws, have a huge lead there if you're looking at specifically microsoft, they're going to talk more about applications more about office 365. they have a huge business there. it's growing at a really nice pace so all these numbers that show the multiples that amazon is ahead of others, those are looking purely at infrastructure now, microsoft is trying to use applications to grow an infrastructure oracle is trying to do something similar. google, not really clear what they're doing. they should be way better in cloud than they are, but we'll see what moves they make andy jassy argues even if the others are running faster, amazon is so big that as it runs, it's still staying a good distance ahead we'll see how that plays out i think the company would say something different. >> in terms of the horse race, price cuts have been key in winning that share, and a lot of analysts are saying they said all the right buzz words at the conference yesterday when it comes to machine learning and a.i. and all that, no price cuts have been announced. is that a good thing or is there some expectation there will be another round? >> i think there's going to be another round of price cuts. part of what they're talking about is something called serverless cloud computing what that involves is you don't designate when you're using amazon's cloud in certain instances the exact number of resources of servers that you're going to use you just say, here's the job that i want done some of these things at amazon, the features they're rolling out, people can pay more for those. so maybe you get price cuts on the base, but as you add more of these services, which andy jassy has told me they absolutely plan to do, m & a is part of the plan, they end up making their money. >> thanks, jon, jon fortt. >> when we come back, we'll take you live to the l.a. auto show and hear from the ceo of bmw north america, and later, a check on the state of media. we'll speak with robert bakish ghbatrt"ilbehe see wl rit ck terminated matt lauer for inappropriate workplace behavior in a statement, they said on monday night, we received a detailed complaint from a colleague about inappropriate sexual behavior in the workplace by matt lauer. it represented after serious review a clear violation of our company's standards. as a result, we have decided to terminate his employment while it is the first complaint about his behavior in over 20 years at nbc news, we were also presented with reason to believe this may not have been an isolated incident. our highest priority is to create a workplace environment where everyone feels safe and protected and to insure that any actions that run counter to our core values are met with consequences no matter who the offender we're deeply saddened by this turn of event but we will face it together as a news organization and do it in as transparent a manner as we can >> when we come back, we'll talk to bob bakish for his take on that and lot more. dow up 75 points we're back in a minute duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than $1 a day! his secret? selectquote. in just minutes a selectquote agent will comparison shop nearly a dozen highly rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $21 per month. give your family the security it needs, at a price you can afford. since 1985, selectquote has saved over a million families millions of dollars on life insurance. welcome back to "squawk on the street." let's send it over to phil lebeau live at the l.a. auto show with the ceo of bmw north america. hi, phil >> hi, melissa let me bring in burr hard koon first time we have talked to you since you became ceo of bmw north america. this is gorgeous tell me about this >> first, thank you, phil. great meeting you this morning well, this is a car which is really an example for bmw of actually one of 25 cars we're going to launch between now and 2025, and 12 of which will be completely electrified i think it's a gorgeous looking car. >> this is a taste of the future >> it is a taste of the future, but a lot of the technology in the car will be reality, not like in the future and years, years, it's worked on as we speak. >> let's talk about bmw and electric vehicles. the persession here in the united states is when you talk about a luxury electric, people say tesla dominates the market who else is in that market you've got strong sales when it comes to electric, and it's a focus for you guys, correct? >> if you look at america, i think america more than any other countries are open to new technology americans are excited. if you have ever driven an electrifiied vehicle, it's fun. it's an excitement for us, what it means it we're going to sell this year about 100,000 vehicles globally, electrified vehicle. in america, we're going to sell about 25%. >> 25%, and you brought up a great point. if you look at the five series a great example of vehicle where the people want a plug-in version, correct >> it is and i would like to give you one number on the 5 series the 5 series is very successful vehicle for us if you look to next year, next year, we're going to sell about 25% of our 5 series electrified. and as we are in california, of course, california being the biggest state. >> absolutely. >> self-driving vehicles getting a lot of attention here at this show when does this technology really start to move into these vehicles so that if i go out and i buy a new 5 series or a 3 series, whatever it might be, in the next three to five years, when do i start to see some of the tangible fruit of that self-driving technology really take hold? >> i think that we have to divide that in what's possible already now and what will be in the future i think for us, a big milestone is in 2021, where we actually are going to launch the i-next, and there will be a lot of technology in the car which would probably be leading technology globally in that arena. having said that, there's an infrastructure that will be probably in several cities around the globe where we will have autonomous driving, but let's say in the country, it will take a while until we get there. >> real quick, how do you like the market right now, what you're seeing in the u.s. as far as luxury demand >> it's a stable market for us we are basically currently in a change from going from sedans to suv. if i look at bmw, i look forward to a great future. if i look at some of the products we'll show in a few minutes, we show nine products which are just around the corner all paying into a great future >> the man who runs bmw north america, an i-8 roadster back here, carm gorgeous, george i wish i could show it to you. they'll show it in about a half hour back to you. >> that's a big piece of the evolution in the industry, phil. great stuff. our phil lebeau. when we come back, you'll hear from the president and ceo of viacom, robert bakish on the state of media, tax reform, and more later on, at&t firing back at justice for blocking its proposed merger with time warner becky quick is going to sit down with randall stephenson at noon eastern time dow up 81 points and the s&p basically back to the flat le. ckn mitein and so am i. like how when you buy the amazing new iphone 8 you get another one on us. see we give you more phones and more spokespeople. are you guys doing a spokesperson thing right now? yes. awesome, can i be in it? well, it's kind of like a two-phone deal. so two spokespeople. got it. k. thanks. at&t it's time for more. it's time for more. buy the amazing iphone 8 at at&t and get a second one to gift, on us. we are the driven... the dedicated... the overachievers. we know our best investment is in ourselves. we don't take no for an answer. we fight for what we want. even for the things that were once a given. going to college... buying a home... and not being in debt for it for the rest of our lives. but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. i'm sue herera here's what's happening at this hour nbc news "today" show host matt lauer has been fired the news coming from nbc news chairman andy lack lack said the decision to fire louer was made after an employee filed a detailed complaint about inappropriate sexual behavior in the workplace. lack added it may not have been an isolated incident >> ivanka trump telling an audience in india that women make up half the population, so it is time to stop thinking in terms of, quote, women's issues, end quote. she made the comment on the second day of a three-day global business forum in southern india. >> these aren't women's issues we're half the population, so we have to just start thinking about them as critical issueser not women's issues the role of strong male voices in this conversation, to the point, is very, very important >> the airport in bali has reopened after being closed for two days due to an erupting volcano. but the country's president is warning that the danger has not passed and he urges anyone near the mountain to evacuate that's the news update this hour i'll send it over to jackie for the eia inventory report >> good morning and thanks so much looking at oil prices paring their losses as the department of energy reported a draw down in crude oil inventories, 3.4 million barrels. but balancing out that number a little bit, the increase that we saw in gasoline inventories of 3.6 million barrels. kind of the same on both sides of the coin there. i will say this, u.s. production up another week. 9.682 million barrels per day. you need to watch that figure very closely because no matter what happens tomorrow at the opec meeting regarding the opec and russia output cuts, if u.s. production continues to rise, you'll see these prices come under pressure, but crude prices have seen a 25% gain in the last three months alone, leading up to this meeting, melissa >> all right, jackie, thank you. jackie deangelis at the commodities desk >> snapchat is making changes to its app interface. evan spiegel announcing a change in its feed. they'll be separating friends from brands on different sides of the screen. spiegel also speaking out in an axios op-ed, blasting social media, accusing it of fueling fake news. saying content designed to be shared by friends is not necessarily designed to deliver accurate information he also saying the personalized news feed came at a huge cost to facts, saying this is a challenging problem to solve because the obvious benefits that have driven the growth of social media, more friends, more likes, more free content, are also the things that will undermine it in the long run i think he makes some pretty interesting and valid points our expectation for free everything is really how social media grew up and created its business model look where we are. >> although so much of the conversation around snap has been did they go to market too early? clumsiness in dealing with the street here they are, retooling a big part of their ad budget, nine months after the ipo >> they did stress initially as well, even leading up to the ipo, the fact that they were -- their service was more aligned with your close friends, an ability to communicate with your close friends, which he seems to be emphasizing today as well >> the fact that network effects didn't apply to them as much as they would to a twitter or facebook >> thought doing anything for the stock, as you see down over 2% >> although a tough day for tech, obviously. >> yellen is on the hill she's testifying on the economic outlook before the congressional joint economic committee our senior economics reporter steve liesman is monitoring that and joins us with more morning. steve. >> good morning, carl. fed chair janet yellen in what is likely her last testimony before congress. she just said it is important to move the policy rate up towards a neutral level, do so in a gradual manner so the fed doesn't have a kind of boom/bust. she sees modest upward pressure on wages, but it lesson from the modest wages is that the economy is not significantly overheated. i want to show you what she actually did say about the economy, quote, the economic expansion is increasingly broad based across sectors as well as across much of the global economy. i expect that with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further, supporting faster growth and income on inflation, she's a bit less certain than a week ago. she said current inflation is a result of what she thinks are tranlsatory factors. she thinks the inflation level will move back up to the fed's 2% goal. she did maintain her concern it wage growth has been moderate. we're in a curious moment where the fed chair and fed chair nominee, jerome powell has been nominated to replace yellen. i will say so far, there's very little difference between yellen and powell in their economic or monetary policy views, carl. >> steve, we're going to rely on you to keep us honest on what she says this morning in front of the joint economic committee. steve, thanks very much. when we come back, a deep dive into the state of media the president and ceo of viacom, robert bakish, is with us. later on "squawk alley," we'll hear from 21st century fox executive chairman lachlan murdoch. you don't want to miss that. watching the markets carefully as the dow is up 82. and the s&p roughly flat "squawk on the street" will contin aerhiquk eaueft ts icbrk. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. here's a question. what tech stock is on pace for its best year ever adgniocnveal the name at trinatn.bc.com more "squawk on the street" coming up. let's get over to julia at business insiders initiative conference with robert bakish. hey, julia >> good morning to you, carl and bob bakish, ceo of viacom, thank you for joining us fresh offstage bob, it's been such an interesting year you have now been running viacom for just about a year. and you just today announced an appointed a new chief transformation officer how much does viacom still need to change? >> look, viacom, it's been an incredible year in '17 i came into the chaer, and it was apparent that we had a bunch of work to do, particularly stabilizing the business i went to my playbook, which is you need a plan. we rolled out a strategy we significantly reworked the team to make sure we had the right people in the right jobs and began to execute you look at '17, i'm really happy with what we accomplished. we rolled out this nogz of flagship brands which is about prioritization, our ad sales business went from minus eight in the quarter i took it over to flat last quarter. that's a big improvement our distribution relationships, we said we would broaden them, bring more value to the table. we did exactly that. along the way, renewed or extended half the subbase. we moved the needle on content and i irp, so got a lot done now, we're not done. to your question and obviously, the world is changing as we move forward. there's tremendous opportunity but i believe people need to own specific things to insure they get it done. in the case of the chief transportation officer, that's about managing a set of initiatives we are putting in place to drive our business going forward. and he's a guy i have worked with on the international side he's ideally suited to this. >> your stock is up double digits since your last earnings report, but it is down i believe about 20% over the past year with all the changes you have already made, what's it going to take to turn the stock around? >> look, people look at viacom as a pay tv business and pay tv, there's some concerns about today and they're not wrong. we certainly have a large pay tv business at the core, what viacom is is it's a company of passion content entrepreneurs that are expert in creating, producing, packaging, and monetizing content. if you look at that, we on a global basis, and if you look at that, we have an incredible asset base we have a 100-year-old studio, which yes, had a couple rough years, but is on track to producing great content and has a library spanning thousands of titles we have thousands of hours of content in our network library, and i believe there's great opportunity in the space >> the companies you're competing with are bigger and spending more on content than ever not only do you have netflix and amazon investing billions a year, but you're looking at rivals emerging and getting bigger the pending at&t/time warner decision, a lot of talk about the fox assets do you need to recombine with cbs to compete >> we were talking earlier, you mentioned content, content is at the center of virtually every conversation content is what viacom is. you look at it, we talked about paw patrol off camera before we came in. that is the number one preschool franchise in the world and that is an asset that viacom is under the viacom house. and you look at just this week, we bought the shores back to the u.s., mtv in the form of florida/alabama shore. the highest rated premier. there's plenty of opportunity in the assets we already own, and we're focused on unlocking that, and '18 is going to be an exciting year. >> what about the importance of scale? viacom is a small player compared to all these other giants especially if we see more vertical integration, which is expected, you'll be really small compared to everyone else. what about the idea of recombining with cbs, which was on the table just over a year ago. >> there are many ways to achieve scale. one of the things i learned in my international role was we were a small player, therefore, we had to act like a bigger player how did we do that we did that through partnership. we partners with key distributors, we partnered in the ad space where we had a small share. and that is one of the playbooks we're using here getting closer to our distributors, distributors like charter where we're doing multiple things with them. so again, i feel very good about the assets we have i think there's enormous potential ahead. and good news is we're already executing on it. you mentioned the stock price. there's real value here and people will see that >> are you interested in making acquisitions at viacom >> we will look, look, we're overwhelmingly focused on our organic business and execution we will look opportunistically we might do a small acquisition here and there, for example, one of the last things i did in international was acquire the number one broadcaster in argentina. we closed on that deal in i think november of last year. that was a fantastic deal for us so we will look for things that are incremental to our strategy and can accelerate it, but i feel very good about the assets we own >> you're not advising your main shareholders as well as board member sherry redstone to think about a recombination with cbs >> the board, i spent a lot of time with the board. they are 100% onboard with our strategy again, our strategy is about organic execution. they're happy with the progress we made, and they, too, see the potential ahead. >> one thing that we were talking about a little off camera, certainly is a topic of a lot of conversation. corporate culture, especially in the wake of all these sexual harassment lawsuits, allegations, and firings just today, matt lauer fired from the "today" show. how are you addressing these issues at viacom >> that was sad news about matt. one, it's not a hollywood problem. it's an all industry problem, including u.s. government. two, not a u.s. government it's a global problem. i was in london a couple weeks ago and the topic of conversation was not the u.s., it was other countries we're committed to a safe workplace. we look at this as a catalyst and watershed moment to help that initiative broadly speaking at viacom, we're committed to that >> what kinds of changes need to be made, and what kinds of things are you doing as you try to figure out how to strengthen the diversity of the workforce >> i'm a big believer in diversity and inclusion, whether that's male and female, whether that's people of color, one of the things i learned is great ideas can come from anywhere, that means from different perspectives you have to listen to different perspectives who often reflect the audience you program to, by the way. in order to get the best product. and so that is something we're also committed to. >> so are you doing internal investigations we're just in a lot of ways trying to figure out what the next steps are for companies as they try to manage in this time of crisis. >> look, we are looking at all our policies and procedures, and yes, if we're made aware of something, we will do an investigation and we will take action you know, that has resulted in some small actions to date because no company is immune to this but i think it's really about keeping this front and center. maintaining a commitment to a safe workplace, and if things happen, you know, taking the appropriate action thas what we're focused on >> it's interesting. as we talk about culture and maintaining a culture with diversity, it's also about a culture that can foster innovation because you're competing not just with the media companies but also with the tech companies, with the facebooks and googles of the world. what do you do when you're trying to compete with them to pull back ad dollars that have moved over to digital? >> this whole notion of entrepreneurship and innovation is key it starts with having your employee base know what you want to do. that's why you need a plan and why you need to communicate a plan and we do that regularly to the organization in fact, i have another facebook live feed to the whole company tomorrow once they understand what they want to do, then you is to listen to them great ideas, as i said, can come from anywhere. the idea for our personalized nick jr. service came from france that's a product we now distribute around the world. so you need to have a culture that brings ideas forward. you need to listen, and then you need to decide ultimately what you bring to market and invest in >> viacom is part of this new direct to consumer bundle that does not include sports. how important is this kind of package to your future and in taking your relationships away from the cable companies and more direct to consumer? >> so consumers are looking for value, and we're in a world where one size no longer fits all. and there's opportunities at different price points in the market certainly, the traditional price point that large bundles, that business is alive and well maybe it's declining a couple points a year, but it's still a big business >> a lot of people would say it's not alive and well. they would say it's alive but not growing the way it used to >> i agree with that not growing the way it used to why is that? because there's other choice in the marketplace. you have these virtual mvpds that are at a lower price. directv now and sling. both of which are filling in some of that deline in the traditional universe, and there's more product coming. again, outside the u.s., we saw these skinnier bundles, and we saw the consumer appeal of that. mostly because there's some lower income levels out there, but the reality is in the u.s., budgets are under pressure too, and that's why consumers need to have choice. they need an entertainment skinny bundle, and we believe that will be a sector of the market over time, we'll see how big it is, as you mentioned, there's one product in the marketplace today. we're part of that, and you know, we look to more activity there. >> do you need phyllo to succeed, to compensate for the fact you may not have all your channels included in the skinny bundles moving forward how important is that? >> i would like philo to succeed. depending on what research you look at, anywhere between 25% and 50% of consumers don't value sports enough to pay for it. we're not talking about a narrow slice of the market. i'm not saying philo will be that big, but it's definitely a sector of the market it should be added to the ecosystem. that's good thing for content and a good thing for viacom. >> as a longtime media executive, were you surprised by the department of justice lawsuit against the at&t/time warner merger? >> i think we were all a bit surprised. at the end of the day, i'm not an antitrust lawyer. i don't work for at&t/time warner so we're watching like anyone else. >> do you think that deal will ultimately go through? >> time will tell. >> what about all those interests in the fox assets? who do you think is the most natural buyer there? >> again, you know, interesting story. there's some people who are rumored to be looking at it. we'll have to see if there's a transaction. atthen end of the day, my focus is on running viacom i see extraordinary opportunity in these assets. that includes in our traditional business, growing share, and by the way, we grew ratings ficely in the last quarter. ratings this quarter are a little softer, but we're continuing to grow share we see opportunities to improve our margins. and then accelerate our participation in these next generation platforms and solutions like our advanced advertising business, like what you saw with philo, like what we're doing with viacom digital studios. a lot of opportunity out there >> a big announcement today from snap about how they restructured their snapchat app how important are platforms like that to your future? >> we live in a multiplatform world. if you look at the relaunch of trl, there's a big multiplatform component and that includes product on snap. >> a fascinating area to watch bob bakish, thank you so much for joining us melissa, back to you >> thank you, julia. when we come back, more on the media space. you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. welcome back to "squawk on the street." opening higher with dow jumping to record high level telecommunication stocks in focus this morning that group of stocks among best performers in the s&p. among leaders pushing higher, centurylink, verizon, at&t, up 2% in early trading. at&t's move comes after it filed a response to justice department's objection to time-warner. that does it for this hour of "squawk on the street. send it back to "squawk alley" at the new york stock exchange back to you guys. >> thanks. at snap headquarters in venice, california 8:00 a.m. on wall street and "squawk alley" is live good wns morning welcome to "squawk alley." i'm carl quintanilla thanks for

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