Transcripts For CNBC Squawk On The Street 20141110

See extremely cold weather hit the country this week. Road map begins with markets trading in record territory. Investors eyeing retailers, many set to report earnings this week. Speaking of retail, what is the biggest day in ecommerce around the world, singles day is tomorrow, alibaba could rake in 8 billion in one day. Well go live to china. Mcdonalds october sales down, key figures across the board but better than what the street was expecting. U. S. Stock markets aiming to extend their weekly winning streak to four. The dow and s p each hitting new record, closing high on friday, despite the jobs number coming in below expectations. This week, investors bracing for a number of earnings reports from likes of walmart, macys, jcpenney, retail sales, abactual number friday, with a lot of fed speak. Alibaba is the focus. Im glad davids over there this is a stock, youre also buying yahoo how brilliant Marissa Mayer held back, more than 120 million shares from the ipo, this is a stock that has captured americas fancy, in part, we didnt follow singles day beforehand. This is 11 11. Singles day equal to day one on this alibaba, its equal to bigger than the entire cyberweek here. So youre talking about a company thats dominant and yahoo remains a great way to play it. Youve been saying, i think consistently for a while well, you didnt like baba above 90. Now you say 120. Yeah, lucky enough to break you say split hairs, wanted 82, traded down to 84, but ive been use 120 target because thats where its equivalent to facebook. You get superior growth and profitability to facebook but its the same multiple as facebook. Weve got to relook. Postsingles day its a letdown. By the way, single Biggest Online shopping day in the world kicks off in just a few hours in china. Alibaba looking to break online sales records. David, as we said, live at alibaba headquarters for the big event if he can hear us. David, good morning to you. Good morning, guys. Yeah, pardon my right hand over my ears. Theres presentations going on that are fairly loud. I can hear you fairly well, as well. Theyre all leading up, of course, until midnight here when singles day begins. The what is it 09 when it first started. Its the sixth singles day theyve had since alibaba basically started the holiday, if you will, started the tradition of giving yourself a gift if youre single, or if youre anybody else. Steep discounts available on its two main platforms, those be tmall at higherend merchants and millions of merchants on tabow. 137,000 participate. Last year amounted to 5. 8 billion in gross merchandise value and this year, as you said, carl, the outset of the broadcast, may be as much as 8 billion. Not only increased what theyre doing domestically in china, but try to bring the idea of 11 11 around the world. Its interesting, we spoke earlier today with a handbag maker that sells on tmall and they expect to do 20 of online sales on this one day. As well, you have a huge downdraft in traffic online at all in anticipation. Shoppers know the days coming, so they dont go online in the days before theyre able to get those very large discounts which can be 50 , 60 on certain items. 150 million packages were shipped last year, as a result of singles day. Again, logistically, the challenge will be an interesting one for alibaba and all of its partners. Remember, it owns 48 of china logistics but it doesnt own any of its distributors outright. Its not in the business of distributing packages, of holding inventory, selling direct or competing with merchants on its platform. Very different Business Model than amazon. One, of course, jim, as you mentioned reward since it went public of 68 six weeks ago, 280 billion market value. When i heard carl mention walmart earnings, i thought its incredible, this company is marriag larger in market cap than walmart. Its approaching well over 300 billion that will be sold off of its platform this year. David, great that youre over there. Youre going to be interviewing jack ma. What im trying to figure out with the stomach moving is, is there a dramatic dropoff in sales historically after singles day . Most wonderful time of the year and december 26th, you just stop buying because if thats the case, alibaba, about 120, where i expect it to be tomorrow, might be place to trim. Is selling season over november 12th . Theres no doubt, jim, theres a huge decrease before and obviously the day, again, to put in perspective, sold 5. 8 billion last year, they did 297 billion for the year. That gives you a sense as to the importance of the day for the business. Yes, things they expect them to fall off. The same time, bring more and more traffic to the site and therefore generate a lot more revenue overall. Thats part of the success here that theyre trying to at least redouble each year. And so its not clear how much they will fall off. Certainly they will, but again talking about a company that increased what was it, by over 49 when we got the quarterly numbers last week from the company. Thats expected to continue through this year. Mobile, of course, becoming a much more important part of their overall platform with, what, 35. 8 of people buying, using a mobile phone to do so. Well see, i think it will be important to judge how this day does. Well start getting numbers at midnight in the middle of of the screen in terms of dollar numbers how much is being sold right up to the second. David everybody cant wait. Its a great day today and tomorrow. David faber, well talk to jack ma of alibaba tomorrow. David, well check in with you later. In terms of retail, usa today, falling gas prices pump up consumer spending. Average price of gas has not had an up day since september 24th. Extraordinary. Its not like oils gone down in a straight line. Oils very low. This is a week where the retailers have to talk about two things in the future, not the past. That its possible were going to see a lot of disposable income coming forward. This is when i feel like has been driving walmart. Second, the polar vortex, if we can get a combination of cold weather, therefore, removing inventory overhang that a lot of the guys brought in for fall. For fall and we get the lower gasoline, they can say, look, our quarter wasnt so hot but you know what the future looks bright. If you sell it on the previous quarter, you may get bush whacked going ahead. Favorite names in the space . Looking at discounters . We know about those general deflation in apparel. Right. Charitable trust owns macys. Ma walmart higher. But you know what . If they have this, coats, h highend stuff, Burlington Coat factory could be good. Uggs, they have needed cold weather. They said the weather does matter, if its just stays warm, brady as a buy, that hurts them, bradys the spokesman. There are land mines out there abercrombie cut, back to neutral. Stevele upgraded it on the hopes maybe a turnaround there. We know after last week thats not the case. You cant own teen apparel. One of the themes has been, mall stores are doing badly but then l brands barclays saying you cant own soft goods. What im looking for is a discounters doing better, expectations low for target, walmart. I also think dont forget home depots come in, thats not associated with gasoline but it should be and it certainly associated with cold weather given the fact their inventorys geared toward winter. Good point. The other interesting story is that investigators are looking into october 15th, date we sat here and watched the treasury market go through ridiculous volatility. We asked Lloyd Blankfein about that day a couple of days after the fact. Heres what lloyd said at the time. Theres el mentes in the market start too look like elements of the equities market where automatic auditors are put in, you get gappy kind of moves and were seeing that in the treasury market compared to a you know, ironically, maybe less efficient in some ways, but often more orderly market where dealers with a sense of responsibility to their clients stand in smooth out the flows. Thats an element that also, in other words, sociology of the market has moved not just the regulation or and maybe theyre related. Now, two, three, steady over the past week. There was a criminal investigation a long time ago into someone knowing in advance the government was going to get rid of 30year boy it seemed like this is like that. Just it was the government went after the people who got the got a couple of seconds advance on the 30year going away, government put people in jail. It was criminal prosecution. Shocked people there hard to move 12 trillion market. It can happen. It can happen. If you have enough of a head start, theyll go for it. When we come back, new numbers from mcdonalds show the fast food chain cant shake its sales slump. I like these numbers. Why are shares of the dow component rising this morning . Well fill you in. Also a different type of organic growth. Share of whitewave foods up 80 in the past 12 months. Well talk with greg engels, ceo, later this hour. Another look at market. S p has not had a losing streak longer than three days all year long. Well see what kind of action we get when we start this session in a few minutes. Mcdonalds reporting a drop in samestore sales across the board in october, including global comps down a half percent, u. S. Down 1 . Sales, though, not as weak as street expecting. When compared to september, u. S. Down 4. 1 global down 3. 8, numbers investors would prefer. My Charitable Trust bought a lot when it got killed because the management, remember, thompsons putting through new people. Clearly theres an emergency there. Could it the beginning of a turn . Obviously, Natural Organic we talked about to gregg engles for whitewave, they are against the natural, but numbers, someone could say, this is the beginning of a trend because good managements come by, theyve done good stuff. In the comments, Thompson Says wreeshg moving with a sense of urgency. So you are you loading up on mcd . No, bought a lot i couldnt believe that i either felt that thompson gets it right or the board says enough. If tompson put big changes in, were all pulling for thompson because thompson got a hand so high it was hard to beat. When jim skinner retired . Yeah. Everything was systems go and then we got hit, like the sea change went on about Natural Organic. It would be great if the change his put in personnel changes, u. S. Personnel changes are starting to take hold because this is a dow laggard that could go quickly because its so inexpensive. 3 yield, down 2 for the year. Balance sheets so fabulous, lots different levers to pull. Every one of the markets looks good. Yum, pizza hut, did you see, expanding menu . Some of the sauces, sweet sriracha, barbecue bacon cheese burger, curry crust. Pizza hut took a big step, live november 19th. That was a division that people didnt care about, they only cared about kfc and china. So therefore, people took their eye off the ball. The stock has stopped going down in part, chinas more benign. I dont know about switch my dominos pattern, like the app. You like the technology. Share of gilead rising. Mercks attempt to shorten hep c treatment to four weeks came nowhere near the desired efficacy. Up 5 . Could go to 115 on this. This is big, because theres a couple of competitors out there lurking. Gilead is theyre on fire. Mirra raised target to 152, dividend could be on the way in 2016. They have a lot of cash. Plenty of interesting, smaller biotechs out there for merck just so were clear, my Charitable Trust owns that for other reasons. Very big drugs in the pike. If youre selling stock, be careful. These are some of these this bristolmyers, some older Line Companies have more game than you think. But gilead is doing a lot right, celgene is doing a lot right. Regeneron, and argala, regeneron. Dendreon, filing for chapter 11. A situation where Retail Investors became fascinate the with the drug provenge and it didnt work. It didnt price work. You have to recognize whether the diet pill, something that is just kind of looks like its the magic bullet for the diseases, there are no magic bullets other than gileads hep c. It cures. 180 Million People around the world . Its been one of the things where the Insurance Companies are praying for alternative. They just keep thinking, if we can pit gilead against someone, if we can make it gilead doesnt have a monopoly, but a lot of the guys, listen, were not paying but its hard not to pay for a cure. Its a fatal disease. It is. Meg tirrell, by the way, in boston, we might hear from her lateren on cramers mad dash. One more look at the premarket on this monday. More squawk on the street from the nyse straight ahead. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. We begin to rock steady just about eight minutes before the bell on this month. Cramers mad dash. Gopro is under pressure. Ive been waiting for the secondary. We a lot of people thought it was not going to happen until the middle of december, late december. 800 million of stock coming for sale, the giant short squeeze, its thought the shorts would cover. This will boost liquidity insiders. The quart was great, i think the Holiday Seasons going to be great. Selling through to chinas going to be great. I would like to use this i had taken it off at 90 as a stock i love. This when i saw the boar and go ride option the surfboard, enough is enough. You want to buy on the secondary. What level this is going to get interesting . Right here. I dont think the deals priced that much through. Shorts, its a monster short squeeze. Its the product of the Holiday Season. People who fight it have never use tpd got to use the ecosystem. So exciting. They did not list either an offer price or number of shares. New yoo, just 800 million. Waiting for this, waiting for this after having it gone to 90. I think the Holiday Seasons a great one for gopro. Toll brothers. Toll brothers is good, this is a prerelease. Ive got to tell you this, pulte home upgrade, inspires me to buy horton, horton reports tomorrow. Americas largest home builder. Home builder chart excellent. If youre looking for a catch up group, this might be the one. Interesting. In a period where we have a feeling rates might be lower for longer than we think . Yes. And i think the that mortgage politics are good refis are better. Whats mattered to the group, people are desperate for something that hasnt gone up. Talking about numbers about the rally, how few days there have been. People are looking for something to hold on to. Home builders make sense. And the toll is a highend product. Toll, the Contract Price went up, talking about low 700s. Bob toll delivers once again. I think this company is the most inexpensive in the group, but dont forget, horton tomorrow. Horton has not done that well. I think they could have good things to say, too, about orders. The market right now, feeling your temperature . I think you have this rolling bull market going ever since that we were able to take ebola off the table. People are saying earns werent good this quarter. I think thats a kinnard. What matters is the future. And gasoline controls. Some people you, had some numbers about disposable income and the not as well off and how much went to gasoline. 13 for the bottom fifth of american earnings goes to gas. Those people, whether it be dollar stores, walmart, target, walmart dow stock, whether it be mcdonalds, disposable income on the table and theres cold weather coming. Cold weather is answer to retail. Last week it was 50 degrees at night. We get the cold weather, people say ive got to buy uggs. Kid needs a new coat. Yes. Revenue right there. Well get the opening bell in a couple of minutes. Do not go away. woont so, your site gave me this Credit Report card thing. Can i get my experian Credit Report. Like, the one the bank sees. Sheesh, i feel like im being interrogated over here. Shes onto us. Dump her. phone ringing . Hello . Oh, man. That never gets old. No it does not. Not all Credit Report sites are equal. Experian. Com members get personalized help and an experian Credit Report. Join now at experian. Com with enrollment in experian credit tracker sm. For that moment, where right place meets right time. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. Youre watching cnbc squawk on the street, live from the Financial Capital of the world. Well get the opening bell in 2 30. A lot go on ahead of a big week of fed speak, but mostly it will be about retail and taking the consumers temperature, jim. Earnings, macys, jcpenney, walmart, with retail sales on friday, we mentioned low gas prices. You think the cold weather plus gas price decline . Yes, i do. What you having grown up in a retail environment as you have. If you have that warm weather and it go through to thanksgiving and these guys are caught and they have start discounting heavily, its not too late to get the cold weather. Im keen on that because the combination is so, so buoyant for retailers. Also, the election, i lot of people felt there would be a spirit of compromise. When i watched the president this weekend i felt hes not bulging. Thats okay because it means that nothing will happen. I know thats a cynical view but a view which says, if we dont have to get washington the business pages were free to talk about earnings, disposable income story with gasoline and cold weather will put a lot of emphasis going to the mall, which has been a problem. The mall numbers have been weak. People will flee to it. Some discussion on squawk whether the dollars due for a pullbakken riding a threeweek win streak. A lot of speculative positioning in the dollar. Even though the miners have increased amount miners have been insane. They dont stop. Its like chinas going to move. Oil is so clearly depressed, and a lot of people ask me, does oil go to 80 before 70 . Cold weather helps nat gas, nat gas the hottest its been since 2000, straight up, thats polar vortex. I believe oil will try to test lower and not succeed through that level. Really . Things are breaking for oil if we get the dollar to stabilize. Keep our eye on that, as oil has not been able to get back above 8 on still in the 79s this morning. Opening bell at nyse. S p 500 at the top of the screen. Here at big board, st. Judes childrens research hospital, highlighting fundraising event and over at nasdaq, inc research, provider of Clinical Development services for the biopharma and medical device industry, celebrating its recent ipo. We have not done fireeye. Jm morgan adding. Fireeye, number was good. Obviously, cyberterrorism very much in everybodys mind. If you go over the conference call, what you saw was a company that united statwas conservativ outlook. Money will go toward the buy. I like cyberarc, palo altos gotten too high. Target, stifel takes it to a buy, channel checks traffic. When i sit down with a company im impressed about a sense of urgent sip the stock has lagged. I think theyre omni channel strategy is good. I want to see a couple of quarts of brian cornell. The stocks very inexpensive. If you think cornell can execute unknown commodity. Come from pepsico. No one thinks pepsico isnt a great training ground. But saps club, nice man. Can he make changes in target . Sure has to. I like his sense that, look, i knee what were doing before is not good enough. Articulate about a strategy Going Forward . No. Not to my satisfaction. But that may be irrelevant given gasoline and cold weather. Transocean finally did have earnings they delayed last week. Thats a big gainer today, 2 . Now this is one this stock dropped as far as it was going to go, i think. When they reported that when they preannounced the gigantic, gigantic charges, what was incredible, the stock went down and rallied, down two bucks and rallied and finished off a little bit. People thinking think is the end of the big selloff in the oil drillers that are offshore. Im unwilling to make that call, if only because rig is rigs not that great. Its just not a great company. Again, if oil goes above 80, rigs okay. Rig needs higher prices because but youre not confident no, i think the permian is five times what is producing just a couple of years ago. Saudis have not pulled back. A lot of people, if they dont raise Oil Venezuela will collapse. The leader has ha political issue. I think oils not going to soar but not go down much. Norfolk, a big gainer. Warren buffett, we know stole burlington northern. Norfolk is a great gauge, does have a lot of coal, people feel that with natural gas going this high switching to coal. Fantastic for norfolk southern. Nat gas as we mentioned understand its the high in denver on wednesday, 19 degrees. Ive got to tell you, Natural Gas Companies are laying off like mad, selling futures like mad. To lock in some gains and therefore help Balance Sheet. The whole idea that all of this complex is going under. There are guys weaker. But i dont think that its the death knell for the oil surface and oil groups as the stocks are acting. Nike did get a price target upgrade, not moving a ton. If are you want cold weather gear, go back to the man we talked to and met, you were the emcee of the fantastic gala, 25th, i have to tell you, under armour is set up for a gigantic Holiday Season. Kevin plank, kevin plank, you kn he hes a bare nuclearings guy. He didnt have many good things to say about nike. No, or anyone they compete with. Mastercard, not a lot of good things to say about visa. This is like the nfc, you know, afc i was going to say nfc even the cowboys are gentle menially compared to the really rival in afc plank hates nike. I mean, its so visceral that i think i thought you were going to intervene and say, nike guys marks not that bad a guy. I think theres a t and p attitude, take no prisoners. The president s making comments on Net Neutrality which well get to. First up, sifma hosting its annual meeting in new york. Mary thompson has the chair, mary jo white. Delighted too have mary jo white, chair of the sec, joining us. First, an opinion piece critical of the sec in the New York Times earlier this summer saying its sluggish and ineffective. People were disappoint because youre a hard charging prosecutor and expecting a more aggressive s. E. C. How do you respond . First, i say, look at the facts in terms of what weve done in the first instance, which since ive been chair in april of 2013, weve been firing on all cylinders very strong, effective, rule making. I think over 25 significant dodd frank and other financial crisis rule makings have been done. Weve proposed or adopted essentially all of the jobs rule makings. Enforcement enhanced a record year last year over 4 billion in Civil Penalties and innovative cuttingedge access. Looking at core programs, the Market Structure in equity and fixed income. Effectiveness, the disclosure effectiveness review. Making great use of technology. Criticism comes with territory in washington. And i think that some of what you hear is people feel differently about our rules, often. But what youre seeing is i think criticism of a strong regulator, strong leader. Listen to the crit sfrp, be constructive but you cant lead or regulate to criticism. You do what you thinks best for investors and best for the markets and thats certainly what i and the s. E. C. Is doing. There was an article this weekend saying why hasnt the s. E. C. Written rules on mandated by dodd frank on executive compensation with regards to claw backs. When can we expect that . Yes, we were given a dozen mandated rule makings, weve adopted six, proposed three others, some jointly with other agencies and we have three or four yet to finish which includes the clawbacks. Important rule making. Its not as simple to do, which is often the case with rule makings as it might look like at first blush but important to get done. Since there are eight Priority Areas as i define it aunds dodd frank, executive compensation and swaps are ones to yet to finish, the rest were done. So im pleased with that progress. But also focused on finishing those rules. You closed up fiscal year recently. What are top three priorities for the new fiscal year . Again i think we need to complete our mandated rule makings under dodd frank and jobs act or work on doing that. Very focused on the comprehensive review of Market Structure, equity and fixed income markets, continuing the disclosure effectiveness review and making progress there. Always focused on making enforcement, Even Stronger than it is. But lots of priorities Going Forward and i think were doing them in the right order and very well. Anything specific you can tell us to look for in the next section months, as far as Market Structure, whether equities or bonds . I think youve seen some things already happen. I spoke in new york, in the late summer about both as to fixed income and equity area in terms of nearterm initiatives and far term, you know, respect to the fixed income markets, working closely with msrb and finra. Msrb has put out its best execution rule, which is very important for comment. Its with the s. E. C. Staff. I expect to see finra after that adopted working closely together to give guidance to brokers how to best execute and what it means, you know. Clearly down the road were looking at pretrade transparency. Number of nearterm measures that i publicly talked been ots equity side have either been done now or in the process of being done. One comes to mind, ask the exchanges to do a real comprehensive audit of their order types which is related to the conflict of interest issues that people have been focused on theyve completed those, the staff at s. E. C. Is reviewing them. Also expecting some of the rule makings that i indicated that id asked the staff to come in this year and beginning of next. Just about a minute left. I have two questions. First one has to be answered quickly. First thing a change in congress. The relationship with the s. E. C. Has been contentious in the past. How does the change with the republican control in the house and Senate Impact you . I found our relationship with congress to be quite good since ive been there as chair. I dont expect a change in that. Im i welcome the oversight rule. Its congress job to do that. You have a lot of experts in congress in the security space, so i look forward to progress and a continued, good relationship. Next question, president obama has nominated loretta lynch, she works for you at one point what happen can you tell viewers about her . Excellent. A prosecutors prosecutor. Has a strong, moral compass to do the right thing, very good with working with people, managing people, excellent choice. Chair white, thank you for joining us. Thank you, enjoyed it. Mary jo white, chair of the s. E. C. Back to you. Mary thompson. Bob pisani on the floor with the dow flat. A mixed open, carl. Thanks very much. Great overnight session in china as well as hong kong. Shanghai up over 2 . Announced a date for the formal linkage between shanghai and hong kong stock exchanges, thats november 17th. Youll be able to trade most of the shanghai stocks. A lot dual lists but stateowned enterprises. Small companies you cant trade. Youll be able to link in to them through the Hong Kong Exchange beginning november 17th. Thats a big change. Number of companies that nobodys traded before, essentially are going to become available. Well talk more about that as we get closer to that. Toll brothers, i think toll brors were good enough, orders up 10 , below expectations but revenues stronger. On a dollar level, orders were pretty good. I think its good enough, up 3 . Transocean, transocean reported earnings above expectation but was, remember, on friday they announced 2. 6 billion writedown, value of the rigs are left because day rates are down. Thats was a way to bifurcate everything. Today they said, this quarter we finished better than expected. Fridays news is more important but you see transocean on the upside. Waiting for retailers this week. Muted expectations. Remember for walmart they made 1. 14 this quarter last year. This year theyre only going to make 1. 12. Theyre lower than last year. And samestore sales flat. Nobodys expecting much from walmart. Slightly better for jcpenney. Last year, horrible, they lost 1. 81. Now theyll lose, the estimate, 81 cents. Theyll cut losses by 60 . Thats good. But still a long way to go. You can see, jcpenney down about 5 today here. I want to point out, overall earnings now, not only are they at record levels, were at up almost 9 from the Third Quarter but margins at record levels. People dont talk about this enough. Everybodys afraid margins are slipping. Im not seeing that, 9. 7 for the s p 500. Tenyear average 8. 5 . Everybody said margins will fall apart, thats the beginning of the end. As of now, not seeing that. Let me talk about the earnings and the gainers and losers. Dean food doing well, up 12 . Kellogg on the flat side. Barrons positive on it over the weekend. Juniper networks disappointment. At t talked about cap x budget and that was on the disappointing side. Obviously a Major Customer of juniper. Right now the dow down 12 points. Thank you very much, bob pisani. Notes out of the white house this morning the president s making astatement on Net Neutrality. If you cover media, you understand some of this. Arguing the s. E. C. Rules, to protect Net Neutrality, prohibiting paid prioritization. And reclassifying broadband Consumer Service to regulate like a netflix, the quarter not overwhelming but, wow, you know, thats what people had been most fearing, the buffering, netflix, buffering. So that does help them. Thats the easier play. I would never recommend people get rid of the cable stocks because they did well. Well see if the commissioners hooeds what tcommr s heed what the president s saying. Rick santelli. Good morning. A lot of people on the trading floor. A lot of traders on the trading floor. The wall street journal article, what happened october 15th . After watching a lot of football and junkie bear football yesterday, they call it offsides. I think that suffices, a lot of offsides players midoctober. If you look at oneday, look likes Interest Rates pop back, as we came to our time zone. No. If you look at twoday, it says the whole story. Post nonfarm, pretty much all of the top tiered economy, markets moved the same, rates lower. Foreign exchange, dollar giving up ground. Every futures contract against the dollar marginally higher. Tenyear rates towards sum, you can see what we did is we held the 2. 35 closing basis. Technically, it shouldnt be shocking that rates are back down, potentially, to test 2. 25. If you look at twoday bunds, similar dynamic. Yield curve, the flattest its been on 5s to 30s, going back to early 2009. We need to continue to monitor that. Its been a dynamic all year, along with flatter curve, lower rates. If you look at dollar yen since october, its a breathtaking move. And that isnt even the whole thing. Basically from 105 to 115. Although we see the dollar giving back. Today the same said for the euro versus the dollar. We hoover around 124. 5. It wasnt long ago we were at 139. About a month, its truly impressive move that the dollars had at weakness of many of the developed economy currencies. Carl, back to you. Rick, see you in a bit. Rick santelli. When we come back, exclusive interview with whitewave ceo gregg engles here at post nine. The Company Behind verizon organic, silk and land o lakes posting earnings. Tomorrow, 10 00 a. M. , davids interview with jack ma taking place in china. Dows down eight points. Ok, if youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Whitewave foods, wwav, the maker of silk almond milk, organic milk, earnings beat, helped by Strong Performance in north america but lets not rule out europe which is pretty good. You have something to talk about with that. Joining us here post nine for cnbc exclusive is whitewave ceo gregg engles which has been a big winner for people. Greg, i know that people are selling down the stock after it opened but, to me, it seems like that maybe its just currency, conservative guidance. This was the highest organic growth of any package food company. 12 organic growth in the quarter tremendous. 50 operating income growth. Categories are strong. European business has been phenomenal this year. We have 24 top line growth in europe which is unique, i think, in the marketplace today. But people are, i think trying to figure out holy cow, thought we had an american company. We have a euro translation you have to be aware of Going Forward. Q4, two points of top line related to fx, right . You had euro and high 130s last year at q4. Dow noun in 120s than will take steam out of the top line from a reported basis but organic basis, trend continues of high teens to 20 growth. One of the things that, carl, this man has been very conservative, thats very important, because i dont see in the release talk about china where because of the food chain they desperately need plantbased milk. I think plant base is a tremendous opportunity for us in china. We sell first products there in the first half of december, well have a launch, were excited about what that holds for the future. And if you see the same kind of trends in china and plant bases we have in north america and europe, it will be great for our shareholders. Raw milk costs up 24 ye yearoverye yearoveryear . Raw milk costs significant cost inflation for us in the u. S. They rolled over and started to come down. Dean foods probably talked about this morning on their call. Last month, start to be a significant drop in milk input costs. That will be good for everybody across the spectrum. Now let me ask you about brand extension of verizon. A desperate bid to get growth, are you taking that space away from milk . We are doing terrific jockb x extending the horizon brands. My kids are all over the horizon brand, mom trusts it. So we are taking that to meal occasions and snack occasions that are family and kid focused. We think thats got tremendous room to run. Repeat purchase on that brand is terrific. Momentum versus peyton manning. You know, i think we got peyton on the ropes, right . Just consistency. But. Maybe we can beat payton maybe they are new england. Oh, that hurts, that is painful. We had whole foods on last week. Thoughts on the retail channel and who owns that space in terms of your categories as some of the bigger, broader retailers try to get a piece of that pie. Look, the whole consumer environment is moving towards better for you and health and wellness, everybodys going to play there. Everybody has an effort there whole foods is a uniquely positioned retailer in that space, incredibly high quality, seems like theyve got momentum back, thats exciting for the overall category. Best s p name last week. They have technology, you are so right youve done right with kroger. But i like that whole foods. Theyre on the move again. They are. Its good for the whole category. A big sign. Thanks. Good to see you. Gregg engles. Well get stop trading with jim in a minute. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. Its in this spirit that ingu u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Im just looking over the company bills. Up . Is that what we pay for internet . Yup. Dsl is about 90 bucks a month. Thats funny, for that price with comcast business, i think you get like 50 megabits. Wow thats fast. Personally, i prefer a slow internet. There is something about the sweet meditative glow of a loading website. Dont listen to the naysayer. Switch to comcast Business Today and get 50 megabits per second for 89. 95. Comcast business. Built for business. It wasnt instantly visible, the hit that cable stocks are take on the president s comments about Net Neutrality. Comcast, our parent, and Time Warner Cable, both slapped to the tune of 5 to 6 , as the president said he wants fcc commissioners to sake steps to protect what they call Net Neutrality. I think it could matter. As i said, i know people feel its selfserving because i work for comcast, but you know, all breaks in comcast stock has been a win. I think that the group is going to be fine. All right. Whats on mad tonight . Saluting veterans, one of my favorite live shows. 75 west point cadets coming in. I wish we had anthony nodo, cfo of twitter, hope move up within that organization. We have the the most to hire veterans of many of executives i follow. Clorox, one of the things about ebola, clorox kills it as don kn knauss says color r clorox kill everything. Go ahead and put your bag right here. Have a nice flight traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the most ontime flights are nothing if we cant get your things there too. Its no wonder more People Choose delta than any other airline. So open an account with schwab. And when a market move affects, say, a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move, wherever you are. And start working on your next big idea. And start working on your next big idea. For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. Getting breaking news from the United States Postal Service on some employees data that might have been compromised. Brian sullivan at hq the post office hacked. Up to 500,000 of its employees personal information, including possibly Social Security numbers, have been compromised in what it calls data intrusion. The biggest employer in america, saying as many as 500,000 employees may have had not only Social Security numbers but contact information, addresses, whatever it might be, hacks into by somebody. Again, no indication of who may have done this yet but the post office, in a statement saying, that the fbi is indeed leading the investigation. They make a note that no customers of the post office, none of the kiosks should have been at risk. Purely internal post office systems, including employees, guys but 500,000 people in a possible data breach in the post office, employees, including Social Security numbers. The post office becomes the latest victim of allegedly cyberattack. The Social Security numbers the key there. Brian, thank you for that. More trouble for gm. New report says that General Motors ordered new ignition switches two month before the official recall. Phil lebeau. We have seen email at the heart of this report, we can confirm that General Motors did order at least a half million replacement ignition switches long before vehicles were recalled the email sent from General Motors to delphi, which made replacement switches, highlights urgency of the issue with General Motors telling delphi essentially, we need to see shipments asap. Put together an aggressive plan and i can adjust the schedule accordingly from gm executive to delphi. Why is this important . Look at time line, the email sent on december 19th of last year, on december 17th, top executives at General Motors, met discussed the recall issue but did not issue or discuss the ignition switch issue but did not issue a recall. It wasnt until february 7th that an actual recall was issued. And that was initially for 800,000 vehicles. We reached out to General Motors this morning, for some comment regarding whether or not this is an indication that General Motors new about the ig anything switch problem earlier. Gm saying, this highlights the problems that we had with the situation and the system. That situation and the problem of highlighting recalled parts has been identified and corrected. As for the ignition switch recalls, 1. 29 million ignition switches have been replaced so far from General Motors. In other words 1. 07 still need to be repaired. And General Motors hasnt heard from 700,000 owners of these vehicles that still need to be repaired. Theyre sending out gift cards, trying to entice owners to have them fixed. Shares of General Motors, the stock down, oh, about 14 over the last year, down fractionally again today. Guys, were going to see this as lawsuits play out over the next six months to a couple of years where emails are going to start coming out and it really highlights the question of how far in advance did General Motors know about these problems. Phil lebeau, thanks very much. Meantime, president obama asking the federal communications commission, fcc, so set what he called the strongest possible rules on Net Neutrality. Want to check on the cable stocks here. Obviously the white house and administration taking a hard line on this idea of paid prioritization, the content providers actually pay the Internet Companies here to ensure that they get a smooth delivery of traffic. Reaction here . Yes. It took a while but we are seeing comcast, Time Warner Cable take a hit. Netflix hasnt responded to the upside as you might expect. But the president did say, the fcc commissioners to a large degree that hes appointed should prohibit paid prioritization, implement the strongest rules to prevent Net Neutrality, regulate it more like a public utility. The president says Net Neutrality built into the fabric of the internet since its creation but also a principle that we cannot take for granted. We cannot allow Internet Service provide to restrict the best access or pick winners and losers in the online marketplace for services and ideas. Los angeles is strong. The reaction of the stocks strong as well. That cuts a number of income streams in the future for Internet Companies that they may or may not have done deals further down the line. The question equally as important, comcasts takeover of Time Warner Cable still go through . Theres a lot of talk, carl, you know better than i, 0 you do this all the time on squawk alley, a possible grand bargain where the deal go through but further conditions attached. The pipeline key for the future. Various terms used in media like blocking, throttling, when basically the types of service from your isp, the speed is slowed down or sped up, thats what paid prioritization is. The broader public will get familiar with arcane names and tools used but thats where the debate is headed now. President obama says its part of his plan to have a free and open internet, something hes been promised since campaigning. Interesting to see whether he can get the rules down. This is the decision of the fcc, not the administration. And something thats going to take a long timing to clarify in the least, though the stock reaction immediate. Sales falling at mcdonalds and al regions last month. Stiff competition on fallout from the supplier scandal hurting the Fast Food Companies numbers not as bad as the street expected. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Welcome back to squawk on the street. Check out the shares of merck, moving lower after data from a mid state study showed its attempt to shorten hepatitis treatment to four weeks by adding gileads drug to its own drug coming bin nation showed disappointing results. Gilead, its moving higher on that news. Back over to you. Thanks a lot. Mandy drury. Shares of mcdonalds doing okay. Global comps down a half percent, domestic sales down 1 . Joining us this morning sam anderson, steve anderson, miller tabaks restaurant analyst. Thanks for having me on. Is this a sign of progress or getting easier comps . Whats the dynamic now. Its a bit of both. Starting to see the fact that the companies have been cycling through very tough same restaurant sales in 13 of the past 19 months negative sales. However, we see some progress, and i think the management talked about simplifying operations, reorganizing management structure, the basics, first with lower gasoline prices, seem to be helping the sector overall. Mcdonalds no exception to that. Also a popular monopoly promotion, something they havent done since start of 2013. That helped get people into the restaurants. Still behind wendys and burger king but i dont think mcdonalds is out of the game yet. Gas prices and job growth, which we know heavily leveraged to, are one thing. But are you telling me theres a danger, this was about monopoly, in other words, a oneoff, because the contrast to september is dramatic. Thats a possibility. But we think also the thing that has to help them is that you have to focus on executions at the fraunt level. I think if they get that, get core customers back, defected to both wendys andburg king, i think the danger for mcdonalds is going to rely more on discounting the core lunch and dinner day parts, you know, some markets weve seen them offer extra value meals for as low as 3. 99. That has to have concernsome of the larger peers in the burger Quick Service space. I cant tell you how many articles ive read about the return of the mcrib, what is the meat in. Is that a big deal in terms of sales for mcdonalds, does that signal the direction theyre going into . The mcrib hasnt been offered in about two years then wouldnt be offered to every mcdonalds, 25 wont offer it. Its a cult favorite. Theres a website that shows where mcribs are offered on a yearround basis. I think it will be a traffic driver. Besides oneoff promotions, they have to focus back on squugs and thats the thing thats going to drive people back. On that subject, people that i talked to, analysts within the sector, are concerned for thompsons job. Almost 2 1 2 years he took over from jim skinner. I think the onus has to be on him to return same restaurant sales to positive in short order. I think what makes it challenging is that overseas looks more challenging. I think the u. S. Consumer environment is improving. Thats a bit of a contrast. With operations in europe, still negative, same restaurant sales probably another quarter before we see them return to positive on the wake of the supply chain concerns. What are burger king and wendys doing better than mcdonalds . When it comes to the trend towards fast casual, chipotle, a challenge for fast food in chelg general but you mentioned outperformance of burger. They have seen positive samestore sales. There are two different strategies unfolding. Burger king has take aint value centric approach, offering two large sand wimps fwiches for 5 wendys focused on Higher Quality items. They may be more expensive than burger king and mcdonalds but theyve succeeded but even there, i think the onus is on wendys to turn around. They last week reported disappointing still positive same restaurant sales and some of the more competition in that core lunch of the day part is now starting to affect some of the Quick Service peers. On the stock, is 90 a firm floor . Does it trade between 90 and 100 . What happens now . Probably going to stay here for a while. I think youre not going to see it fall below 90. I think there are a lot of coupon clippers who will keep the stock up, at least at 90. The dividend yield does protect it to some degree. See what november looks like, steve. Thanks again. Thank you for having me. Over to eman javers. Carl, thats right, the president a little while ago putting out eight statement, though the president s in china, the white house releasing the statement, also video to go with it. They expect this to get a lot of attention on the internet. Let me read you the key points here that the president s making in the statement. He says, so the time has come for the fcc to recognize that Broadband Service is of the same importance and pluft carmust ca same obligations the other Vital Services do. To do that the fcc should reclassify consumer Broadband Service under title ii of the Telecommunications Act while forbearing from rate regulation and other provisions less relevant to Broadband Services. He wants Broadband Services to be brought under the fccs Regulatory Regime but done want them to regulate rates, that is go into details of prices, whether the fcc will do that or not is going to be the next question. But this is a broad assertion of what president obama thinks ought to happen on this issue of Net Neutrality. Interesting moment here this morning for fcc chairman tomorrow wheeler, who woke up at his house here in washington, d. C. , to the sight of protesters in his driveway. They were blocking him from leaving his house this morning. These are proNet Neutrality protesters, blocking the chairman of the fcc from getting in his mini cooper there, heading off to work here in washington. He is viewed, wheeler, that is, somebody who is not necessarily as friendly to Net Neutrality as these protesters would like. He had a long dialogue with them and theyre saying theyre going to continue to try to block his ability to get to work throughout the day today. Although he did seem friendly, actually, chatting with them. Very nice moment in terms of aggressive protestering here in washington. The latest on Net Neutrality. Take a look at broader markets. Dow down seven. Mixed picture. S p and nasdaq in positive territory barely. Still digesting the jobs report on friday. Chief strategist and economist joins us toronto with more comments. Blending in your analysis of the economy and what weve seen in earnings, 9 gain from october 15th bottom. Can that continue or have we seen big gains already for 2014 . I think the big gains off the lows have been locked in. Sara, the reality is that some of the impediments to the market that caused that corrective phase in september, part of october, which was valuation, technicals and sentiment, have all gone back to where they were back then. This is right now, look, the news on the u. S. Economys good. But at this stage, looking at valuations, more than fully priced in. Retail i in focus this week, retail sales friday, a lot of the big retailers reporting earnings. State of the u. S. Consumer, you and i have gone back and forth about athis, 3 gas price at the pump, how much is that going to stimulate the u. S. Economy and the u. S. Consumer . Light now nationwide, i think that numbers down it 2. 95 a gallon and every penny at the pump counts. Depends if you want to look at this, from june, its like a 70 cent decline, that translates into roughly 100 billion of crash flow relief at annual rate to the consumer sector. I think going into Holiday Shopping season, when you couple that, not just gasoline price relief but we continue to chug along with over 200,000 jobs per month, even without big wage increases that will help out aggregate personal income. The outlook for the consumer, especially the beaten down low end group is constructive over the course of the next few months. One reason, of course, trading close to record highs, the journal this morning chooses to have a very large article about Revenue Growth for these companies, suggesting that some people have longterm concerns about stocks because while you have Profit Margins at a record level of 10. 1 of sales the overall revenue isnt growing, theyre concerned how much deeper companies and ring out further market expansion. Is that a central concern or is it kind of over here left field . Well, its almost a doubleedged sword, we dont have we havent had through the cycle very good topline growth. And part of that is because of the contours of that payroll number as the microcosm on friday. We dont have a lot of wage growth. We dont have a lot of wage growth but at the sam time it helps contain cost. So thats how you have Margin Expansion or sky high margins. My sense that is you are not going to need to see a lot of Revenue Growth because we just basically imported from the softness of the overseas economy what the saudi arabia has been doing, opec in general in terms of oil prices, the big drop in Raw Material Prices is a godsend for a lot of u. S. Manufacturers that use raw material as the primary source of input process. On the subject of the wage growth, everybody talking about friday in the employment report, do you think we overemphasized th that . That is a lagging indicator. As you create jobs now at the fastest rate in the last ten years, presumably wages will pick up down the line. That will be a natural cycle. No question. Wages lag the cycle. Usually by years. Im actually looking at it with amusement. The whole focus, like on friday, never mine all of great parts of that overall employment number, everybody focuses on wage number. The fact of matter is that when you look at 12month trend in average earlier Weekly Earnings during the great reagan sigel in the 19 0s that everybody longs for, rates growth according to that measure didnt bottom until 1986 and we were in the fifth year of the expansion. You can get long periods of time where wages lag the cycle but the labor market will operate under losses of supply and demand. Its just that the information transmits into the labor market much more slowly than it does in the market for stocks, bonds, commodities, real estate, talking about human beings here and it take is along time for people to realize bargaining position with bosses is improved materially. Dont forget it takes time for contracts to roll over. I agree with what you said. I wrote about it friday. If the big surprise in the past year was wages tepid, i think the big surprise will be the mean reversion trade the other way, prize people to a large extent to the upside in the next year, including the federal reserve. After years of being bearish, sounding bullish, as you have been and right, on the economy. David rosenberg. Next on the program, its a big week for retail earnings, both macys and jcpenney set to report. Who will come out the big winner on this Holiday Season . Who is set to profit the most from us shopping . More on that after the break. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov kicking off a week of tail earnings with jcpenney starting off. How do they line up in advance to the allimportant Holiday Season . Stacey witlet, good morning. Good to see you. I think the danger is here pessimistic going into the Holiday Season i know they report but the Third Quarter is not as important as what will happen over the next three months. Gas prices low, highist Consumer Sentiment and consumer confident in seven years and creating more jobs. In the economy this year than weve created for last 15 years. That to me would indicate a strong surprise to the upside. All of those are very true but concentrated toward the highend consumer. Sentiment driven by the highend consumer. Yes, gas prices help when they come down and that level is sustained. But last year in q3, gas prices incredibly low and comps were disappointing. So, you also have to take into account theres been food inflation, so maybe some of the gas prices has help and maybe some food inflation has sucked that up. What is your advice . What are you telling hedge funds . Theyd love to play this. I have been quite negative for holiday this year. Weve seen blowups already. Weve kohls, walmart, abercrombie, a massivement of preannouncements. Interesting because most of the street was positive going into the second half of the year as inventories had been controlled. But its just not panning out. Its not the case. The consumer is waiting, theyre focusing around times where there are heavy promotions, were going to see that again this year, on black friday, and see margins sufficient somewhere disappointing sales with only a few outliers like Limited Brands and tjx being winners. What about walmart matching prices with online retailers like amazon . Its a big deal. Something we have not seen from walmart. Are you not optimistic it will make it more competitive the Holiday Season . Great point. Think what the retailers are doing. Theyre target, free shipping, they were the first to fire the warning shot. Walmarts going to match, best buys going to match. Everybody will match and drive margins down, the major issue. Stifel is raising target today. Interesting word out of adobe, went to get the best deals. Theyve gone through trillions of visits, data points. Black friday isnt day to find the best deals last year. It came the sun before thanks giving. Absolutely. What we saw last year was so interesting. Black friday, i would say, officially, is dead. Black friday started the week before black friday last week. If you went into macys, best buy, amazon, having deals every ten minutes. Get out early for the best deals. Dont wait until black friday. Thank you for coming in. Speaking of black friday, cyber monday, the largest Online Shopping day in the world one you might not know about. Find out why singles day could mean billions of dollars of sales for alibaba when we come back. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. The ultimate arena for business. Hour after hour of diving deep, touching base, and putting ducks in rows. The only problem with Conference Calls eventually they have to end. Unless you have the comcast business voiceedge mobile app. It lets you switch seamlessly from your desk phone to your mobile with no interruptions. Ive never felt so alive. Get the future of phone and the phones are free. Comcast business. Built for business. Wish i could be like the cool kids because all of the cool kids seem to fit in the largest Online Shopping day, turns out not cyber monday or days leading up to christmas. It is singles day. Last year singles day almost 2 1 2 times bigger than cybermonday. Expecting to rake in 8 billion in sales over 24hour period. David faber will sit down with alibabas chairman, jack ma. An analyst with suntrust to preview the event. Upcoming singles day should be bigger than the entire u. S. Cyberweek. How are you arriving at monstrous numbers . What amazing, you mentioned last year 2 1 2 times cyber monday in the u. S. If you look at last years cyberweek starting from thanksgiving to the week out, its going to be larger than that entire week in the u. S. We think 8. 5 billion, which would be 45 grower off of the 5. 8 billion last year, which is tremendous because you think last year 80 yearoveryear. Tough comp but tremendous groer. Is there any other number to suggest investors play this . Does amazon get a piece of pie or retailers that alibabas working with on this day . Yeah, it should be some retailers. You had tmall, first year, difference between last year and this year, first year where you have brans going global. Used to be chineseonly holiday. Now seeing it global. Thats going to help the growth rate. Jd. Com will participate in china has well. What about, i mean, the stock has been it came out with earnings, investors love the fact its profitable, love the margins. Is it already priced into the stock . We know this is a record day for alibaba or can they take this the traffic drivers into sites on this day and keep momentum going through the shopping season and into next year . The last quart, the First Quarter they rearted, acceleration in active users, in mobile, you see this strong growth in singles day on the 11th. You see as a proxy for how well the quarter may be able to outperform and people have to readjust estimates. Robert, as the valuation of alibaba approaches 300 billion, were struggling to make sure we cover this in the right way, this is the first time the singles day has had prominence in this country as it has in at the moment. I wonder over time whether well be less gung ho, in particular what happened to the weeks in advance of singles day is that alibaba offers rock bottom prices that they can lock in for small downpayment according to the journal and complete the purchase on the 11th of the 11th to boost figures. In other words, it doesnt give a us a clear idea on margins, valuation. Its a metric we may learn to take more with a pinch of salt as time goes on. I agree, one of the risks going into. First time youre seeing it go global, thats a big part right there seeing brands embrace this. Their coo said they think it could be a global phenomenon in five years or so. When you turn towards margins, a company that has 50 ebitda margins and you look at last quarter and back out acquisitions, they had 54 margins, right. Compares to amazon, mid single digits. The profitability here has a big influence on the valuation. Obviously the numbers are dazzling for ordinary investors. You like the stock. What would you tell those on the sideline concerned that the structure of alibaba gives an extraordinary power to the management in making decisions that the Chinese Government is obviously key swing factor here and that the chinese economy is slowing. Factors that are persisting and overhanging on this stock and on some chinesen vestments. Two big risks in our report, one, chinese gdp, how fast that grows over the coming quarters and years and number two, Chinese Government. As far as control, structure of the organization, weve seen very successful examples in the u. S. , facebook, google, et cetera, being among those. Robert peck, thanks for joining us to preview gigantic numbers well see tomorrow. Dont miss david fabers interview with alibabas jack ma, tomorrow, squawk on the street, 10 00 a. M. Eastern. If you have a question, send it to us askjackma. Wonder if hell quote famous american movies as he tends to do when he interviews. Wall street expecting big bonus payouts but for most its likely to be another disappointing year. Kayla tausche joins us more. A survey comes out every year closely watched by the financial industry and it comes from johnson and company, and it is forecasting that bonuses on wall street will drop 10 when they are paid out at the beginning of next year. Payouts will vary widely, though. Investment bank willing see the most upside due to, of course, record m a activity, more bonds and ipos underwritten, as weve seen a lack of volatility in the market. The lack of volatility helping Asset Management where High Net Worth clients investing more of their money. And those banks have been seeing balances rise. But onhe fp side, Senior Management earnings will suffer, of course, margins for banks under fire. Traderers in both equities and fixed incomes see bonuses drop, as much as 10 , Johnson Survey says. Many traders ive talked to pinning hopes on the recent volatility to provide a lastminute boost in the next couple of weeks before managers of banks decide what payouts will be. Banks determine compensation by a set percentage of revenue, they pay between 35 and 40 of revenue in compensation. The more revenue, the more employees take home. Jpmorgan at top of the Investment Banking heap, but Morgan Stanley 20 jump in fees from last year. So that should give you a sense where earnings shake out. Outside banks, its a different story. Hedge fund will suffer due to poor performance, private equity for multipleyear running, employees will see a fairly even rise in pay, up to 15 , according to johnson on the back of banner years in that sector. Guys, people say, why do i care what wall streets go take home . That is to make me more envious of what theyre getting . No, there are two reason its important to the economy. One an xatindicator of people moves, people leaving the industry and going elsewhere. Secondly, bonuses taxed at 50 . An important revenue generator for government. Are there big layoffs happening . We havent seen big, big headlines but as i understand, its in a mode where there are layoffs and those that stay, higherups get the bulk of the bonus pot. Layoffs are coming from changes in the Business Model, were still seeing banks trim the number of branches they have. There are tellers laid off. Given the falling Mortgage Applications people give layoffs in mortgage banking. Weve got numbers on that on friday. Its about the change in the Business Model. Very careful not to make rash decisions on yearoveryear changes in trading activity but some effects given the volume. Thank you. Dendreon filing for chapter 11 bankruptcy today. Stock falling 70 on that news. The company could pursue reorganize of its drug. Mig tir rel live in boston. Meg . Sarah, the latest in a long soap opera that saw the market cap, more than 7 billion at its parq peak. The technology was a breakthrough for Prostate Cancer. Its run into a number of problems including taking on more debt. The breakthrough nature of the Technology May have contributed to its downfall. Its expensive and complicated to manufacture and administer. The sales are taken out of each patients body individually, then sent to be reengineered to better fight cancer and reintroduced to patients and theyre fragile el whys. Its difficult and expensive. Dendreon, when approved, wasnt facing as much competition in Prostate Cancer as now from Johns Johnson johnson. The downfall a lot of things, competition, low profitability, difficult to make, difficult to take, and so you know, nothing wrong with immunotherapy, theres a story that didnt work out perfectly. Reporter so the question now becomes, who will buy provenge and dendreon to keep manufacturi manufacturing . The company will stay on the market, we hear from analysts its used in 3500 patients per year but question who wants to take this on. Will they be able to afford the manufacturing, make it profitable . Companies with Prostate Cancer sales forces could fold it in. However, i spoke with eric schmidt, it could be difficult to fit into anybodys portfolio. Will we see provenge stay on the market . Next on the program, david stockman, former director of the omb under president reagan, joining Rick Santelli live on the fed. Squawk on the street will be right back. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov check out sothebys. The stock moving higer as its Third Quarter loss narrows. Last week posting a record 422 million sale of impressionist and modern art, as we can see, the stock is trading up by over 2 at 40. 28. For the year, the stock is down about 25 . Back over to you, carl. Thanks a lot. Over to the cme group, check in with Rick Santelli. Hi, carl. We have a special guest this monday morning, in the 80s called him the wonder kid. I call him the wonder man now. David stockman, former omb director under ronald reagan. Thank you, sir, for taking the time. Happy to be with you, rick. All right. Three topics to cover. First topic, Infrastructure Spending. I personally think that after the whole shovelready debacle, that trust is the Biggest Issue to welcome true Infrastructure Spending that it doesnt get slush funded and contracts award fairly. Having said that, what is the deal with infrastructure, we not spending not as much as we have historically . Whats the real numbers, david. Thats not correct. Infrastructure is just another thinly veiled excuse for more deficit spending, as if 18 trillion of National Debt is not enough. Were spending 3. 5 of gdp on infrastructure more than we ever have historically and, frankly, that compares to 3. 0 in europe na progressives are saying more in light than we are. If you look at high roys and transportation, spending 150 billion, more than ever before. But the one that i think demonstrates that this whole idea that were starving infrastructure is a myth is to look at d. O. T. Budget, which is the Infrastructure Agency in washington, when bill clinton left town it was 50 billion in todays dollars, no one said that he was starving infrastructure. Today its 80 billion and rising, nearly 70 more. So, we dont have an infrastructure issue. The thing the federal government can do is maintain the interstate highway system, 90 of its in good shape. If we need more money, it should be financed with gas tax, user fees, and congress is simply unwilling to raise taxes to spend more. If were not going to raise user fee, lets not add to the National Debt by buying shovelready projects that we dont need in the name of infrastructure, which is, you know, vastly exaggerated. All right. In our final minute and a half, quantitative easing, we put at least for this rendition a tombstone on. But weve had three other renditions, so when we came back and had the fourth, which was called the third, because of the twist, are we really done . And what has it accomplished . And if it wasnt such a great idea, why is the rest of the world trying to mimic it whether japan who mimicked it times five or europe trying to get it front and center with regard to the burner of finance . Because i think the entire Global Economy is impair, imperilled by outbreak of monetary madness among a handful of central bankers. We saw the evidence of that with kuroda a week ago in the october massacre. I mean, hes a mad man to think that with the central bank of japan having 50 of gdp on its Balance Sheet already that hes going to add 80 trillion. Thats the equivalent of 3 trillion annually in the u. S. Scale economy. Draghi is driving europe in this towards the same disaster. How could anyone think that europe, where governments have 100 debt to gdp, where total debt, including private is 400 of gdp, needs lower Interest Rates or even negative Interest Rates. That isnt the problem. The problem is there are cost structures too high, economys are too riddled with status taxes and regulatory interventions in other impediments to growth. The Central Banks cant do anything about that. Here we may be off qe after 3. 5 trillion of bond buying accomplished very little. But we still have interest res in the money markets at zero, were in month 70 of zero cost money. Its a massive inducement to speculation in the kerry trades. Its accomplishing nothing for the mainstream economy. And simply fueling the mother of all financial bubbles, which one of these days is going to burst and take the economy right back into the sewer. We hope it doesnt weep hope somehow that the growth in our economy will lead the rest of the world but that certainlies a dangling participle with regard to the factual awareness now economies improve and not on the back of debt. David, a pleasure, thank you. Simon hob, all yours. We hit a fresh record high on the s p 500, all three indices of course seen significant gains this year. Begging the question, how will we trade in the last two months of 2014 . Bob dole will join us live with his forecast after this break. Requires precision and anattention to detail. G it takes knowledge, hard work and a plan. At baird, we approach your Wealth Management strategy that same way. As an Employee Owned firm we have the freedom and resources to create customized financial plans built to last, from generation to generation. Well listen. Well talk. Well plan. Baird. Edit score. Again. You should check out credit karma. Theyre like free. How . Ads. Credit karma . Yeah. Credit karma. Really free credit scores. Toasty or frosty . Exactly the way you want it. Until boom, its bedtime your mattress is a battleground of thwarted desire. Enter the sleep number bed. Right now save 400 on the c4 mattress set. Hes the softy. His sleep number setting is 35. Youre the rock, at 60. Silent night not so silent . Elk bellow sleep numbers even got an adjustment for that. Give the gift of amazing sleep, only at a sleep number store. Where youll find our lowest price ever on the c4 Queen Mattress plus 36month financing. Know better sleep with sleep number. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Stocks relatively quiet as we open up for another new week although the s p 500 did just edge to a fresh record high. For many 2014 has been a year of surprises, many firms starting now to publish their year end thoughts and look ahead for 2015. Moving Asset Management held its yearend round table discussion this morning and chief equity strategist and senior Portfolio Manager bob dole joins us now. Welcome back to the program. Thank you. It was a candid round table discussion. What did you forecast . The good news was because it was intimate and a round table it was more longlasting as opposed to anything between here and the end of the year. We talked about how the environment from an economic standpoint is Getting Better here in the u. S. How most nonu. S. Areas continue to struggle. How good the earnings progress has been. Volatility has certainly picked up but weve enjoyed the good side of that for the moment. They were the subjects we talked about among others. Youve done this for 34 years. 34 years youve been a Portfolio Manager. Obviously various other firms, big firms, as well as the one youre in at the moment. How do you structure a portfolio for 2015 . What wins next year . I think its going to be a pick up from the cyclical sectors because there were lots of back and forth in the Global Economy, many of the defensive sectors like utilities did well again this year, simon. I think next year, as the u. S. Economy gets better, as we begin to see some nonu. S. Economies responding to policy, cyclical stocks to include technology, some industrials, even some consumer cyclicals will do better and the bond like equities utilities, my example, will lag. That will be the first place i would start. I would focus on free cash flow, geography, where do the earnings come from. The more from the u. S. The better, for now. I hate to always have to end up talking about when the fed will raise Interest Rates, but i guess we have to. In particular, of course, janet yellen decided to be very clear on friday when she was traveling outside of this country to say that there could be or there would be or people should expect volatility as they begin to raise Interest Rates here. I dont know, why did she do that . Who is that directed at . Is that at the emerging markets . Do i need to worry if im investing here as you suggested i should . Weve been through a period notwithstanding the last 30 days of unbelievably low volatility thanks in part to the massive liquidity provided by the fed and other Central Banks. And what miss yellen is saying, thats not going to last forever. Were heading back towards something more normal and normal is more volatility than with weve been. I think shes suggesting that to everybody. Policymakers, bankers, investors. She could have said think the worlds heading back towards a bit of normalcy compared to where weve been. Thats the message, simon. You alluded to this when you were talking about utilities and other stocks with bond like characteristics but the sell side got the bond call completely wrong in 2014. Is 2015 the year we see the 30year bull market in bonds come to an end and see sharply higher Interest Rates . Youre right. The sell side got it wrong, many on the buy side did as well, as you well know. Heres what i would say. The low in Interest Rates was 2012. The tenyear treasury was below 140. The most recent panic low in yields last month was 186. Were making higher highs and higher lows and i think we will look back and say, july of 2012 was the low for Interest Rates and since then, weve been working irregularly higher and i think that continues next year, correct. We could talk for hours, bob, but the clock beats us. We have to leave it there. Thank you for coming. Thank you. Bob, chief economic strategist and chief Portfolio Manager. To jon fortt with whats coming up next on squawk alley. Good morning. Do you know what tomorrow is . 1111 not just a cute date, it is singles day. This is a bigger deal than a lot of people in the u. S. Might realize. Especially for alibaba. Well get into that. Also the white house, out with a position on Net Neutrality. Thats stronger than some might have expected. Well talk to mozillas chairman Mitchell Baker about that and more on the tenth anniversary of fire foxx. And the chairman of xprize will be with us with the latest winner. Dont miss that coming up on squawk alley. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Sensing. Good morning. It is almost midnight at alibaba headquarters in china where singles day, the largest Online Shopping day of the year, is beginning in just a few seconds. Its almost 11 00 a. M. On wall street. Squawk alley is live. Welcome to squawk alley. Just past midnight in china which means singles day has kicked off. It is the Biggest Online shopping day in the world. 24 hours of deals and p pro motions. Our own david faber is in china where he will interview alibabas founder and executive chairman jack ma tomorrow at 10 00 a. M. Eastern time. Good morning once again. Well, carl, weve just started, of course, the biggest