Transcripts For CNBC Squawk On The Street 20141112

Outlook. Why is the stock moving higher in the premarket . Mcdonalds ceo with a vote of confidence from the board. Whats coming at the fast food giant as we hear from the chairman. And a watershed moment for twitter ceo. It is twitters investor day as yahoo Ceo Marissa Mayer faces questions of her own. First up, macys reporting Third Quarter earnings, 61 cents a share. Revenues do miss as comp sales down 1. 4. Macys also reducing sales growth forecast for the rest of the year. The ceo says he remains optimistic for the rest of the quarter. They hold margins pretty good in this environment. Inventory is up but not by a lot. Macys is a tight ship. You can look at the socalled forecast and say this is not an aberration. Theyve repeatedly done this. Theyve cut forecasts, so to speak. You go through and see big buyback, optimism, easy comparisons. You see theyre not spending nearly as much money as you would think to get these sales. You take a look at the multiple on number of, say, foreign chan change. Thats not that expensivexpensi. Comps, we said, down 0. 7. People had lowered their estimates to one. Wouldnt you have expected more of a gas price tail wind. Great call. When the headlines came out, the stock was down a buck and a half. That makes sense because, geez, how could they do minus comps. Lets get two, three comps. Ive seen guys doing four, five comps. In the end, this stock remains a core holding for a lot of people who want an undervalued retailer. Because target keeps delivering when you see 9 million shares. Obviously has tremendous conviction. I dont personally want to own a stock that has negative comps. Of any kind . No. No, i mean, i got a costco out there doing really incredible numbers. Why do i need to own a macys. Theres a lot of companies in the sweeter spot. The mall is a challenged space. Macys is part of that. Also, 42nd street, i dont think it looks that sharp, but theyre delivering. Its the third drop in comps in eight quarters. It just shows you, you can be really well conditioned, but the environment is going to test you. Yes. And you mentioned malls. Im thinking what mickey said at our gala last week. The american mall is cookie cutter, cookie cutter. I thought that was a great interview. Sometimes we do things at cnbc, that gala, a lot of the juice at that dinner was so exciting. I would look at macys and say its not as bad as the whisper. There was talk this was going to be a major miss, that macys has not been hitting the ball out of the park. Terry lundgren shows you, dont bet against me. He talks about maybe we have different weather patterns. I think this is going to continue what has been a very nice run in retail, even as you would say, well, where is the line about gasoline, disposable income. Not there. Were going to talk later on, in a few minutes, about what you do with jcpenney today. Reporting after the bell. Much tougher. Men time, despite sluggish sales at mcdonalds, the nonexecutive chairman telling fortune, quote, were very supportive of donn. We see the Leadership Team moving forward with a sense of urgency. Language matches almost exactly what was in that comp release. Travel trust owns this one. Feel its a very inexpensive stock because it hasnt done anything. People probably say, why didnt they say, you know what, this is not exactly what were looking for. The fact that theyre for him in some cases, people will say, you know what, these guys are oblivious. I look at the last months numbers and i see improvement. Dramatic from september. Why not give the guy a chance . He puts up the first real good number. Maybe youre going to see a bit of a trend. Interesting. We talked about the yield all the time. The article quotes some analysts saying, what do you do when you go from the industrys best results to the industrys worst results in three years . That doesnt happen a lot. No, but you take a look at chipotle and say, what do you do . You serve this organic, natural, antifood chain, meaning the company that spawned us, mcdonalds. Mcdonalds is on the wrong side of history. Thats what people are worried about. The Soda Companies have been able to do okay. Wait a second. Burger king is not bad. Wendys holds up at the 8 level. If mcdonalds something clicks, youll see this big leverage. Thats why people hang out in the stock in the meantime. Theyre paying you that dividend. In order to be able to wait until some changes occur. Which youve said is part of your reason to buy. Either he gets it right or the board says enough. Its the twitter of fast food. Which were going to talk about in a minute. Yahoo meantime, buying bright roll for about 640 million. That deal is going to make yahoo s video advertising platform the largest in the country. Separately, reuters reports at least two big yahoo shareholders are pushing aol Ceo Tim Armstrong for a merger and want him to run the combined company. Cnbc and yahoo have a Business Alliance to share and coproduce editorial content. This is turning into a heated parlor game. What do these people want . Honestly. Did we really just have to sit there and say shes a total bozo, the stock is up 20 . Aol on the other hand is down 3 . This acquisition of bright roll is a good acquisition because it does program matic video, which is something armstrong is struggling to do. I say this whole notion that mayer has done nothing misses the point that its not financial engineering. Its genius that the first thing she did was negotiate a deal to get out of selling more alibaba on underwriting. What do you have to do to please shareholders . But that is not increasing page views. That is not increasing share in display. The stock price, you could argue, is untethered from those core metrics. Thats true. What youre doing is betting its going to be a good steward of capital. Is it doing well . Its caught up in what we all know but very few people talk about, which is the death of advertising online. When youre programmatic, that should say to you thats a spam way to be able to place ads which takes away the oneonone relationship, the gin and on toic relationship we used to call it, where you go out with a big advertisement firm and say, you need placement. Its placement across the board. Thats hurt yahoo more than anything else. It is the first big purchase since she got the alibaba proceeds in her hand. Well, the margins for video are holding up. On election night, you saw katie couric doing a yahoo presentation. You say, well, wait a second, maybe its catching on. We know that google that youtube havent even begun to monetize it. There is a sense that maybe this is the way to go. I continue that yahoo goes toward much more of a yelp model. They buy some of these companies that have been able to lever the yellow page of travel, restaurants, small business. Thats got to be a better way to go. I think video is going to collapse too. Its only a matter of time. You mean margins . Yeah, they flood the market in everything. Advertising on the web is horrendous. Tv advertisement, despite the downgrade today of voiacom, it holding up good versus web advertising. Why dont people tell the truth about web advertising . There is just a tremendous pressure down. Youve got to get away from it if youre yahoo . You have to use that money to get away from it and put together a grubhub, a home away, a yelp. Prices are going her way. She certainly can do it, but you cannot just rely on advertising. That market has just been destroyed by google. You know about this firsthand. I know from the street. If you look at the street. Coms advertising, you can tell if the company didnt have subscriptions, it would have been out of business a long time ago. Very tough environment. Meantime, 3. 4 billion in fines have been doled out to five major banks in a probe of currency market manipulation. Ubs, hsbc, citibank, jpmorgan, and royal bank of scotland will pay those to regulators. Ubs was hit with the biggest individual fine of 661 million. I think for viewers, jim, its hard to keep all of this in your head. Fines coming here, coming there, doj, global regulators. In this case, instances that go back at least a year. Theres a lot of checkbook writing. The thing i would point out is that when attorney general holder steps down, i think youre going to see a cessation of this. I think the new attorney general not going to be this is the swan song in the United States. This is one, by the way, where the tapes were bad. Guys, when youre on tape, dont say things like, what a great cartel we have going here. Lets just keep fixing it. I mean, honestly, when youre on tape, say things like, im a competitor. Dont use that language that basically says you guys are losers who are not part of our cartel. The tapes destroy these guys. This was a an easy open and shut. Does it mean anything for the way these shares trade . I think we got a couple jpmorgan downgrades today. One yesterday too. A key downgrade. Im thinking theres something to these downgrades thats bigger than jpmorgan. These read like, is jamie dimon going to be as aggressive . I look between the lines. I think jamie dimon, you know, has a terrible disease, obviously. Maybe you have to rethink. This will be denied by everybody nine ways to sunday. I look at these downgrades, and they seem too ephemeral. Theres not enough there to make me feel like you should sell jpmorgan. And no read through here on these probes. The probes are running out. There isnt anything what else are they going to do . Automatic tellers that spit out money where they were rude to you. They didnt be like gps. But youre saying these regulatory head winds exit with holder . That seems hard to believe. No, because well, fannie mae is telling me stuff offline that theyre really expanding the way you can get a loan. The banks have to be a little more forthcoming in loans. If youre wells fargo, youre saying is, listen, were out of the woods already. If youre jpmorgan, i mean, sure, absolutely, there could be some other guy in government. The fdic could call and say, listen, why dont wow pyou pay check of 5 million and we wont open a file on you. Some people would say its extortion. When the government calls you, and im friends with people on both sides, the government calls you, they say, listen, its 15 billion. Why . Because the next guy is going to pay 16 billion. Okay, sounds good. When we come back, were going to preview twitters investor day today. Oh, wow. I think you have some thoughts on that. Also ahead, walter price. Been pretty outspoken about twitter management. What does he want to hear just a few hours from now . Take one more look at the premarket. Doesnt look that good. If the dow can do it, seven straight would be longest streak of the year. In fact, back to march of last year. Squawk on the street live from post nine at the nyse when we return. Music. The getaway vehicle for all the confidence you need. Td ameritrade. You got this. 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. Twitter is set to hold its investor day in less than three hours. The event comes just days after the companys First Anniversary as a public company. Amid that big investor impatience with the management style of ceo dick costelo. A story that has become almost a Mainstream Press story. Yes, i think theres a sense theres two themes to this. One is that twitter should be one of the biggest, best juggernauts going today. As a matter of fact, there are lots of people who feel twitter is going to be indispensable worldwide. And theres a group of people who say the only reason why it isnt is because of costolo. He doesnt really know what it is. I have to tell you do you believe that . Yes, i do. Because if you follow the company, those of us who like read the releases and read the Conference Calls and were told to look at certain things, and then what he steers us toward, he disappoints in. This is highly there are not many people who are Top Companies that i find who could mix messages so poorly as this man. With a company that clearly could be worth a tremendous amount. There are other people who say, listen, if this keeps up, one of the big guys will buy them because its such a great franchise. I know partners who are disenchanted. I understand Board Members not that crazy about it. I just think, look, its just a gem. Its being obscured by this man. So you theres nothing he can say today . I mean, hes essentially a buzz saw hes walking into today . Yes, thats good. I like the buzz saw analogy. Theres no saving his job . There could be some bloomberg today where its basically, does anyone there know what it is . The answer is, i think a lot of people know what it is, but it may not be the top guy. I have very rarely ever said i think a top guy is just not the right guy. You havent put him on the wall of shame. No, i havent, in part because i recognize that im not saying its a foregone conclusion. But i think the momentum is there to say we need new blood at the top. If you look at the Conference Call, the grownup portion of the last Conference Call was the investment banker from goldman sachs. I just think that theres just one guy keeping this franchise back. Below 40 yet again. Buy, buy, buy. Just buy it. Where do you buy it . Below 40 . Buy it right here. I believe it was undervalued. You can say, youve been dead wrong, jim, its not undervalued, it just goes down all the time. This is one where if you had a new ceo, youd see a quick uptick. Shares down 38 for the year. Its been just a nightmare. And of course Monthly Average users were up 22 in the quarter. Year ago prior it was 38. Rapid deceleration. Im going to pay the ultimate insult. It trades like an oil stock. Maybe even oil drilling stock. Theres sea drill, transocean, and twitter. Thats ice cold. The day rates are going down there as fast as theyre going to transocean, but it doesnt have the yield. Were going to be on the lookout for any kind of news. Its the macondo of social media. Sparing no expense today. When we get back, well have cramers mad dash. One more look at the futures, which are negative on this monday morning. A lot more squawk on the street from the nyse straight ahead. vo watching. Waiting. 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. When diet and exercise arent enough, adding crestor lowers bad cholesterol up to 55 . Yeah crestor is not for people with Liver Disease or women who are nursing, pregnant, or may become pregnant. Tell your doctor all medicines you take. Call your doctor if you have muscle pain or weakness, feel unusually tired, have loss of appetite, upper belly pain, dark urine, or yellowing of skin or eyes. These could be signs of serious side effects. Are you down with crestor . Ask your doctor about crestor. Ghave a nice flight r bag right here. 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. Just about eight minutes until the bell. Lets get cramers mad dash on this wednesday. Looking at bill ackman. Theres a gem of a company, animal health, spun off by fooi pfizer. Theyre solving a lot of problem, including the recent problem with pigs. Theyre just the best. So what happens to the best these days . Thats who raiders go after. This morning, bill ackman, 8. 2 . They are apparently pushing for it to be sold. All the notes this morning say they want to sell this thing to valient. It really sin credibis incredib. You take the companies doing the best, you take a stake, and you basically say management is not doing enough. No. Does it matter if bill can get it done, or is it just having his presence there that makes it move . I think that these guys are giving her all she got. I dont know what more they can do. This is kind of like allergan. Everybody ends up making a lot of money with allergan. Can zoetis go higher . I think zoetis at 44 lets just say i had them in the mid30s and not much happened fundamentally. Thats a big story today. At t made some comments this morning. Pausing their investment in 100 cities on fiber because no one now knows whats going to happen. The president came out and said he favors Net Neutrality. This is something that would make is to perhaps you dont know whether youre going to be able to recoup the money you spend on equipment. These companies spend fortunes on this cysco. This is going to put there has been a sense that the equipment sector is not the place to be. Alcatel just had a very positive analyst meeting. So theres some hot money in the group. Maybe it pulls back. This is a very curious story. You know what . You dont pause spending. You have this directv. Maybe you blow it out. I want to find out more about it. But stephenson is a hotbutton guy. This kind of statement basically says, were not going to put as many people to work if you do this. Its a real shot across. Meantime, front page of the Washington Post goes into a meeting with wheeler, the chair of the fcc, saying that he does not he wants a more nuanced approach than the one the president has laid out. I think that everyone was looking at the fcc before the president got involved. President , hes in climate, right. Hes in Net Neutrality. And immigration. Hes obviously taking the big democratic win last tuesday and really gone for the republicans won. There is a sense in fact, the post quotes an aide saying the president relishes the Net Neutrality debate because he feels its a fight with republicans he can win from a populous standpoint. I think Everyone Wants a w. In the end, he needs a couple ws. Hes not in the playoffs. This is an easy one to pick. The American People, when you sit down, what do they want . They want netflix and they want it cheap and dont want to see buffering. He should have said, im against buffering. Everyones against buffering. Thats an easy win. Thats green bay versus the eagles. I sure hope otherwise. You come out against buffering, i think the American People stand with you. The American People. You dont like that circle. Well get the opening bell in just a couple minutes. Dont go away. My name is Frank Griffith and im a troubleman for pg e. Ive been with pg e for 17 years and i work in vallejo. I grew up in vallejo and this is where i want to be. I ride my truck around on the same hills i rode my bike around when i was a kid. As a troubleman, if your power goes out, you call and here i am. I feel like my job is important because all the people in this community are people that i know. My family is vallejo too so i need to make sure its safe for them. When i pull up to a house, i want customers to know im there to help. 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The s p is above the fiveday moving average, which is obviously a shortterm trend. For 18 days. Thats only happened six times since 96. Just the scope of the rally off the oblgt low has been breathtaking. It really correlates with the total breakdown of oil. Short term, like today, you see oil ticking down. People say sell the market. That can be an hourtohour analysis. If you look at a chart of oil and chart of the the dow, youll see this gigantic divergence. As oil goes down, you collectively breathe a sigh of relief. When you see oil down short term and the market is down, just go the other way. Because oil lower is oil is a tax and its being cut back. Meantime, its going to be a busy couple of days for retail. Well work our way through macys numbers this morning. Jcpenney tonight. News on walmart and American Eagle in a moment. First, lets get the opening bell. A look at the s p at the top of your screen. Down here at the big board, coding systems celebrating its ipo today. Well talk to the ceo and nascar star jeff gordon in the next hour. Over at the nasdaq, ultra industrial motion corp. , manufacturer of Motion Control products. Speaking of retail, we havent gotten to fossil. Fossil, once again, we see kate spade now fossil saying basically what core said about weakness and accessories. Lets take it with a grain of salt. 18cent beat. Billiondollar share repurchase. This is a 5 billion company. That really emboldens people. This used to be a highmultiple stock. It is no longer. I think we keep looking at whats selling in the malls, and we just recognize that coach and now kors no longer the hot item. Its very hard. Youre playing fashion. When you play fashion, youre going to get burned. Yeah, it feels like kors ipo, and they were gods gift. Feels like that was two weeks ago. Thats the way it was for coach for so long. You just figured it was going to be good. Fossil was up and down during the period where they reigned supreme in this country. That was when fossil was really pushed on fossil was getting a five in the overnights. So fossil is going to be up ten. American eagle is going to be up almost eight as they raise their q3 view. You cut your numbers enough and do a better number, you finally have a bit of a pop. This game is played by a lot of retailers. I dont like it. Thats what happened to ab control bee. People were betting against fossil because of the apple iwatch. Analysts are saying do not worry about the iwatch. What do you do with jcpenney. Do you trust it after the bell . I think whats happened is if you can get macys up right here, youre going to want to stick with quality. Jcpenney do do a little bit of what American Eagle did. They lowered their expectations. I come back and say, you know what, walmart and target, which have been forgotten, act very, very well. Walmart had lowered expectations. Thats a gasoline play. Gasoline sr. Not against the gasoline going down, food costs have gone up. Affordable care premiums have hurt people. I like the discounters not in the mall. I like costco because its not in the mall. I just kind of want to distance myself. I dont like them. Sears is financial engineering. I dont want to be with that. I have the Container Store on tonight. Thats been a controversial stock. Its been a terrible stock. They talk about conscious capitalism. With a conscience, not like conscious. When i look at costco, i say, well theyve got a conscience. Theyve got capitalism, and theyve got samestore sales. Thats a place to go. Financials are going to be the laggard here. Jpmorgan the worst component on the dow. Is this the downgrade . I think the downgrade is glaring. I think people feel the stocks are a problem without the yield curve doing the right thing. The stocks got ahead of themself. They were cheap, now theyre expensive. I want to remain close to the idea that jpmorgan has had a big run and doesnt have theres people who have lost conviction in jpmorgan. Again, i suspect that people feel, you know what, this jamie dimon is not going to be as enga engaged. If the guy comes out of the next ten days, comes down here, sits right here at post nine and say, not engaged, are you kidding me . Ive been working 18 hours a day. I think people would say, i want to own that stock. Yahoo almost to 50. Shes done nothing except have the stock go up. Reminds me of when buddy ryan said, chris carter, what good is he, all he does is catch touchdowns. What good is that . Shes the chris carter. When you make that deposit at the bank, the money is green, they dont ask how you got it. Alibaba weve not touched on. Getting back some of what it lost yesterday. The 9. 3 billion in sales for singles day made a lot of news. Its not as fast as they were growing last year. But its the law of large numbers. I think there are a lot of people who just said, if he could spend that long with david, hes not focused. That was the longe esest interv ive ever seen. It was our version of charlie rose in the middle of the market. Yes. And there was this also, you never want to hear a guy saying, look, im rich. The existential thing does not sell. I see numbers that could go higher. That was a big event. Didnt really matter. They could have sold any amount. That run up at end was just too much for that stock to bear. Remains an inexpensive stock. Microsoft, a couple points on this one, jim. Usa today reviews the band, their new wearable with midding reviews. More important, its within 6 billion of catching exxonmobil as the number two s p market cap. Thats interesting. Exxonmobil has held up very well. Its been the least oil of the oils. I did some chart work. Youd be surprised. The force sr. With microsoft. Xbox is good. This guy has a way with wall street. People really like him. They love amy hood, the cfo. Who doesnt . Shes a fabulous cfo. By the way, macys cfo, another person whos loved. And home depot. Three women cfos. Im not being sexist. These are three of my absolute favorite, if not my favorite, cfos in the country. Its a great point. By the way, since nadullah became ceo, up 3 . And what have the clippers done . Thats a story to be told. Finally, big buyback out of dow. 5 million. You got them on tonight. Yeah, this is another guy. What does he need to do . The guy has done everything right. Its not enough. Its not enough. Its not enough. What does he have to do . The answer is just keep doing what hes doing. Listen to him tonight. Hes done remarkable things in terms of bringing up share hohor value. The achilles heel for dow is europe. Dow brings its natural gas in from algeria. Normally we would have thought russia was safe and al gee geri tentative. Alibaba is communism with a human face. Look, the russians are no friends. Theyre not our friends. Theyre not our buds. Theyre not pulling the shawl around our first lady. Thats for sure. So the dow is down 75 on some weakness out of financials. Bob posani is on the floor. Good morning, guys. U. S. Stocks are lower. Were lower across the board. Europe was not particularly good. Its still trading, of course. Sentiment there has been rather poor. Not so in china. The shanghai composite hit a new threeyear high. Up 1 there. Thats been a real big performer so far this year. I talked yesterday about a lot of excitement building around that Shanghai Hong Kong Stock Exchange link where Foreign Investors are going to be able to own shares in china directly if you have a hong kong brokerage account. Theyre talking about an explosion in trading there potentially. Thatll go live next week. Elsewhere, banks are generally to the downside. We had that u. K. , u. S. , and swiss regulators imposing fines on the big banks. Barclays did not participate on that. Theyre seeking a separate agreement. All of them except ubs are to the downside. You mentioned macys. I think the key thing is because they lowered their guidance for the fourth quarter, this whole argument that somehow weve had a lot of warm weather is going by the window. Still, i know a lot of loyal macys shoppers, including my wife. They love those constant sales. They love the attention and the fact you can order online and pick it up in the store these days. I agree with jim. I wouldnt count out terry lundgren. We have an ipo today. Axalta, the biggest car Coating Company in the world. They own 25 of the business, 50 million shares at 19. 50. Thats in the middle of the range. Again, an auto coating supplier there. They were leveraged in a buyout through the Carlisle Group. Theyre the number one auto paint company with 25 market share. Weve got another Exchange Traded fund. I told you yesterday about an interesting one. Today weve got one on Cyber Security. These Niche Products are trying to find a particular home. Sometimes they work, sometimes they dont. This one is the pure funds Cyber Security etf. Its going to begin trading today at the new york Stock Exchange. A basket of Cyber Security stocks. Its an interesting idea. These kinds of Niche Products look for people who want to own them. Sometimes they work and sometimes they dont. Ill give you a couple that have done good here. Theres a clout computing etf. Symbol is skyy. Thats run by first trust. Thats gone 350 million, 400 million in assets. Another robotics company, the symbol is robo. Thats garnered 150 million in assets. Not big but enough to keep it going. So these Niche Products are reasonably successful so far. Right now the Dow Jones Industrial down 70 points. Were still waiting for indications on axalta. Guys, back to you. Bond markets back in action today following the veterans day holiday. Good to have Rick Santelli back. Good morning. Good morning, carl. Bob really nailed it. Many markets, including the treasury market, getting back on track and monitoring some of the weakness in the european boards. So as you look at a chart going back towards october 1st of tens, first of all, we are in congestion. Rates are down three basis points and fives, tens and 30s. We are really in a congestion area. Notice early yesterday it was around 85 basis points. Its now at 75. Were getting back, linking up with that type of post momentum on the fixed income. If we look at the dollar index, twoday chart will show you virtually mixed today. As i look up at the futures, i see the yen has had a bit of a rebound. Yet, the pound is under a lot of pressure. So it is working out. The euro a little bit of a rally. But if you open that chart up to the dollar index to summer of 2010, you could really see how spectacular the move in the dollar index is really propelled by weakness in the european Foreign Exchange markets. If we look at the asian side, you can also see what a big move thats been. Look at a twoday dollar yen. Down today, clipped to 116 yesterday. When was the last time we had anything with 116 or higher on the dollar yen . Oh, about seven years and one month ago, october 2007, as you can see on this chart. Carl, back to you. All right, rick. Welcome back. Rick santelli, talk to you soon. A lot more coming up on squawk on the street. Were on ipo watch, waiting for axalta to trade. When that happens, well be joined by the ceo and nascar superstar jeff gordon. Also, the north american debut for what Royal Caribbean is calling the first smart ship. Well have a live interview with the ceo when squawk on the street comes back. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Twhat do i do . You need to catch the 4 10 huh . The Equipment Tracking system will get you to the loading dock. There should be a truck leaving now. I got it. Now jump off the bridge. What . In 3. 2. 1. Are you kidding me . Go. Right on time. Right now, over 20,000 trains are running reliably. We call that predictable. Thrillingly predictable. What makes you happy . This month im not happy. Say again. This month im not very happy. Why not . Too much pressure. Pressure from various i think i tried to make myself happy now because i know if im not happy, my colleagues are not happy. And my shareholders will not be happy and my employees i think my customer not happy. So im adjusting because maybe, you know i dont know. Maybe the stock goes up. Maybe i think too much about the future. If you missed any part of yesterdays exclusive interview with jack ma, you can watch it on cnbc. Com. I thought what john ford said on this program yesterday was smart. Jack ma needs more jack mas in china. Right now all the attention is around him. Yes, thats a good point. Lenin, famous mass murderer, who really got communism going in the soviet union and spread over to china, had a saying that i thought always resonated. If the rich are unhappy, its their own fault. Jack ma ought to be a little brighter. Hes government the whole weight on his shoulders of china. Show a little more enthusiasm. That was that moment in the thing where i just said, no, no, no, come on. We dont need to hear that. Youre unhappy. Geez, theres 7 Million People on the planet kind of jealous of you. We have axalta open at post five. Ipo today. Were going to talk to ceo Charlie Shaver. Very controversial. Ync why is that . Axalta is the performance Coating Company of dupont. Nelson peltzs team felt that dupont gave away this business. When you see the stock going up and the private equity guys obviously making a lot of money, it does resonate. Now, in colemans defense, the ceo of dupont, hes done well. You havent done as well as pepsi co. I know nelson peltz. I believe sometimes declaring victory is great. Just a tremendous gain. Dupont, i mean, maybe theres more to split off there. I think duponts done a pretty good job. Not as bad as nelson peltz said. Hes a rigorous thinker who wants more. You know what . Everybody deserves more. I also think that coleman did not do that bad a job. There are some people who feel Home Builders have gone up too far, too fast. I like this group very much. As youve said for a while. I think this group has got terrific momentum. Beazer, its amazing they made a comeback. I thought horton, the ceo, very bullish. Three to fiveyear run. Stewart miller at lennar. I do not want to go against the Home Builders. Short timers, you want to take profits, fine. But this most recent decline in Interest Rates is playing well. Smuckers cutting on folgers. Yeah, prices come and go. Its not the first rodeo for folgers. Last night at the veterans concert that was amazing. Did you see Bruce Springsteen with dave grohl . The boss. Starbucks has hedged a huge amount of coffee. Obviously folgers may not have done that. But thats a very fine company. Im not anxious to dump it. All right. Well move on here. Well get to stop trading with jim in just a minute. Dow is coming off the lows of the early part of the session. Squawk on the street will be right back. There was no question she was the one. She reminds you every day. But your erectile dysfunctionthat could be a question of blood flow. Cialis for daily use helps you be Ready Anytime the moment is right. You can be more confident in your ability to be ready. 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Meantime, six flags is hitting the ball out of the park. Why try to call a bottom . This is a Butcher Block stock. Lets stay away. You want the other side, a stock that has got great momentum. This is one aye been behind ever since there was a fantastic piece in new yorker saying they have tremendous ways to be able to go against cancer. This is the hottest small biotech stock in the country. They do targeted hematology work. They have some phase one work thats extraordinary. I have been behind this one and stay behind it because groupman is not only a great doctor but a great writer. To learn more about this, i direct you to the new yorker piece. New yorker at 300 this year. Thats been a winner. Jim, some people think the ukraine chatter is one reason why were sticky here. You got to stay focused on ukraine, particularly when you hear about russia making more deals with china. Obviously ukraine, every time it goes front burner, it can cause the market to go down. I am not this is the lone area of the world that i think people must focus on that theyre not. Because its not going to go away. Theres got the germans are intransigent. The United States is intransigent. The russians are certainly mischief makers here. Keep an eye on it because every time you hear that theres rebels, tanks going, youre going to have the market go down. You walk away from apec, you want to feel good about this Climate Change deal that the president managed to put together with china. Thats a big deal. Whether or not we can verify theyre holding up their end is a story to be hold later on. Of course, if the Keystone Pipeline isnt developed, theyre going to send that heavy oil over to china, burn it, and four days later l. A. Is going to feel it. Having lived in l. A. During the period where you couldnt go outside, i dont know, felt like china. They cleaned up l. A. Whats on mad tonight . We have dow. We have Andrew Liveris. The stock is starts to react. We have a very controversial stock, which is the Container Store. This is a store i like very much. But the stock has been literally it opened and has been cut in half. Theyve been missing quarter, missing quarter. I will say the stock is down so much it is tempting. Lets find out how the Holiday Season for containers which if you go into my refrigerator, its stocked. But that hasnt been enough to do the stock well. Good to have you back, jim. That was fun, wasnt it . Yes. When we return, twitter Ceo Dick Costolo feeling the heat. The companys investor day just a few hours away. Ahead of that, well talk with walter price about what the Company Needs to do. Were back in a minute. Act i. Scene 3. 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 . 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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. Breaking news. September wholesale inventories and sales up threetenths inventories, up twotenths on the sales. On the sales, its a win. We were looking for a small negative number, so up two looks good until you look at the revisions. Last months sales originally down eighttenths. Inventorys expanding a bit. We need to pay close attention to that. Why . Of course, we want to see if the widgets were making want to get consumed. Doesnt seem to have a huge impact on the marketplace. Looks to me like the 12th session in a row tenyears are going to close between a 230 and 237 yield. Thanks, rick. We have some more breaking news at this hour. More bank fines from the regulators. Kayla has the details. Yeah, sarah. We are getting word of a settlement from the comptroller of the currency on those Foreign Exchange manipulation charges that we learned about just in the last few weeks. This is going to be 950 million against three u. S. Institutions. Bank of america will be fined 250 million. Citibank, 350 million. Jpmorgan chase, 350 million as well. This is a separate settlement and a separate press release from the fines that we saw very early this morning from the Financial Conduct Authority out of the u. K. And the cftc with five banks, two u. S. Banks, and three european banks, that also concerned this, what they called exceedingly egregious manipulation of Foreign Exchange rates. In total, these fines are stacking up. Jpmorgan and citigroup each paying 1 billion with all three of those agencies combined. Roughly 600 million for the european banks. This is a costly issue, one that weve telegraphed, but it also is a har venger of further settlements to come. Remember, the doj is still investigating this, as is the Federal Reserve here in the u. S. A statement from the fed this morning where they said that the agency has worked closely with other authorities in the u. S. And overseas and carrying out investigations into Improper Conduct in the markets. The fed is continuing to investigate in coordination with other authorities, including the department of justice. The dojs investigation also concerns potential criminal charges. So guys, while we have a lot of news coming out of the pike on this and very expensive news at that, this is hardly the end of the road on this situation. Well send it back to you. Well keep following it. Thanks, kayla. Another almost 1 billion fine related to that probe. Meantime, macys out with mixed Quarterly Results this morning. Revenue missed and the retailer did lower its outlook, but the stock has actually been higher this morning after being lower after the results. Lets bring in matthew boss, senior retail analyst at jpmorgan. Has an overweight on the stock. Are you surprised to see the stock trading higher given sales were a disappointment . Negative Comp Store Sales and a lower outlook. I think what macys showed you this morning is best in class. This so sales missed, down 1. 4. That was worse than our model. The Gross Margins were better. This Company Finds a way to hold it together. If you really take a look ben d beneath the surface of the print, there was an asset shift out of the next quarter. They took a more conservative approach with the fourth quarter, setting the bar lower. I think investors are looking and saying, conservative bar for the fourth quarter, better set up for a best in class name. Really conservative. It was 10 below what the street was expecting for the fourth quarter, which is the most important when it comes to holiday spending. Why does macys have to lower it and set expectations lower . From a bottomline perspective, i think part of what in terms of looking versus the street was the shift of an asset sale into the Third Quarter out of the fourth quarter. That was basically a 10 cent shift. Taking all things into account, its really the sales assumptions that were lowered in the fourth quarter. Again, id rather see macys, all of those companies in apparel taking a more conservative approach and potentially the underpromise, overdeliver becomes the case as opposed to missing during the important Holiday Season. Would it have killed them to throw a bone to those who think gas prices will be a tail wind . I think what this does is it clears the bar for some of your generalist investors, some of your larger picture as they take a look and say, look, i can own a macys at 11 times earnings when i get doubledigit growth plus a 2 dividend. We just released a note and i was saying i think your risk reward is mid50s to high 60s. Mid50s is embedding ten times earnings for a company thats giving you a 13 to 14 return profile. I think high 60s with 6 of earnings power as you look out to 17, best in class reset bar. I think macys sets up well from here. Inventories, is the environment getting more promotional or less as we get into the thick of it . I think the environment is getting more promotional. I think whats key with macys is their inventories are clean. Nordstrom is changing their promotional structure. Theyre moving to these clearance sales. Pretty much every specialty retailer we cover has announced negative with the exception of American Eagle. Its a tough backdrop. I think theres pockets of inventory out there. I think its going to be a really promotional fourth quarter. I think with inventories clean and a promotional game plan, macys is as clean as it gets. Next up, jcpenney after the bell. Walmart, kohls, nordstrom out tomorrow. Is this an ominous signal for some of the others . I think in terms of being able to hold the pnl together, nobody beats the Management Team at macys. Youre going to see samestore sales worse across the board. I think youre going to hear from jcpenney. The real question there is their ability to hold the margins at the same time as trying to recapture some of these sales. Again, its tough out there. I think you really want to be positioned with who you believe in. If youre not following it as closely as you are, these individual companies, it does seem odd that Consumer Confidence is at multiyear highs, that gas prices are at multiyear lows, yet the retailers, even the best in class ones with best executers, are having such a tough time negative sales right now. I think part of the Third Quarter was weather. When you have 75degree temperatures in new york, midoctober, its pretty tough to go out and buy a sweater. Its not the best environment to go buy a coat. Look, i think part of it was weather. I also think that theres some shifts that are still taking place. Theres no real fashion. Theres no real must have fashion item right now in apparel. I think its a bit of a different story in apparel versus some of the other sectors like the convenience stores. We cover those. Theyre starting to talk to some benefit from gas prices. I think youll see it at the dollar stores. I think apparel is something thats going to take a little bit longer to see some of the benefits. Thanks for joining us, matthew boss, on macys. Thanks for having me. Shares of twitter are positive this morning as investors await comments from Ceo Dick Costolo. So far this year, the stock plummeting 30 . Since its ipo last november, costolo has replaced five highprofile executives. Are investors losing confidence in his vision . Joining us this morning is walter price. You can probably tell from a blue screen we might have lost walter. There he is. Walter, good to have you this morning. Great to have you. Thank you so much. Thanks for letting me come on. You were outspoken in the journal. Im just very frustrated. When you talk to them, i think they understand the problem, but theyre afraid of alienating those who tweet. People are losing confidence in him. Have you been this outspoken about another ceo publicly . No, i havent, actually. But ive been pretty frustrated because the company has said even going back to their ipo that they understood the problem, that they wanted to improve user engagement, make it easier to use the service. Here we are, you know, a year later and i dont see the progress. Im looking forward to seeing more tangible signs of progress. What would constitute progress . Is it a new ceo . I dont think it has to be a new ceo. I think the Management Team understands the problem. I think they just need to have Development People that can help users get more engaged more quickly, particularly users that are readers, not active and avid tweeters. I think theres a huge audience out there that they just need to figure out how to engage that audience. To be fair, the flip side of this argument is that facebook, which its often compared to, shares stayed under 30 for a year after its ipo. They went down almost 50 after the ipo until they figure kd out mobile. Could it just be part of the new social media as Public Companies maturing into companies that investors can like and be confident in, whether its a management problem or just a knowing who you are kind of problem. Yeah, no, i think thats correct. When you fix the problem and you have basically a great service, fix the problem meaning getting users engaged as facebook has done, then you can have very rapid Revenue Growth from advertisers. Advertisers go where users are and where users are engaged. Its magical. Right now twitter hasnt found the magic. When you talk about engagement and the worries of alienating the user base, what changes i mean, tactically, do you think need to be put into place and why would it alienate those who are already on twitter . I think people on twitter are there because they like to see their tweets. Frankly, many of the tweets are irrelevant for someone thats looking for breaking news or interesting opinions. I think they need to curate the site to people can find these nuggets and find them easily and use them. Then theyll spend more time going to twitter and itll be, you know, a positive feedback loop that results in users using the service more. Curation has been a stick you print for a long time. Then theres the high turnover in the coo and cfos office. I think good management, good technical management, is hard to find. I think twitter knows what they want to do. Maybe theres some tension inside of twitter thats not completely visible thats showing up in these management departures. Different philosophies about how to increase user engagement. I hope we get insights into that today. Would you rather see the cfo a in the ceos position . Investors seem to like him. I really like anthony. Thats why we bought some stock. I think hes a very levelheaded and logical guy. But, you know, he hasnt been a ceo before. I think he works closely with dick. So maybe thats the magical combination they need to rejuvenate the company. All right. Just to put a period on it, walter, whether or not you buy more stock or sell any stock is not necessarily contingent on dick staying or going. Is that correct . Thats correct. Were going to find out a lot more in just a few hours. Good to have you. Please come back. Great. Thank you. Walter price joining us from san francisco. Lets send it over to dom chu for a quick market flash. Social media to chemical companies. Check out dow chemical. The stock is moving higher after the chemical maker increased its Quarterly Dividend a nickel a share to 47 cents a share. Also said it would buy back an additional 5 billion worth of shares. That almost doubles its repurchase program. The company is being pushed hard by Hedge Fund Manager dan loeb. And in a programming note here, dow ceo Andrew Liveris will be jim cramers guest live tonight on mad money, 6 00 p. M. Eastern. An interview none of us want to miss. Thank you very much. When we return, Royal Caribbean launching its first smart ship with robot bartenders and virtual balconies. Well be live on the deck of the new ship with an interview with Royal Caribbeans chairman and ceo richard fain. Simon has that when squawk on the street continues. Female narrator its posturepedic versus beautyrest its posturepedic versus beautyrest with up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Mattress price wars are on now at sleep train. Your ticket to a better nights sleep with everything from bionic bartenders to virtual balconies, the quantum of the seas is being the called the worlds first smart ship. Our simon hobbs is on board, joined by Royal Caribbeans chairman and ceo richard fain. Good morning. Welcome to south jersey. A lot of people in the industry have waited a long time to see the quantum and finally today they get their chance. Remember that the business trick here is to put new things on ships so people at home go, id like to sail on that. Therefore, they can increase the price and raise the margins. Richard fain is with us. Thank you for having us on board today. Great to have you. There are so many original features to talk about. The one that stands out is the passenger capsule behind us here thats basically raised 300 feet into the arm on a mechanical arm and moves to either side of the ship. It really is one of many exciting things, but its fantastic. Youre in effect 30 feet over the water and you get this amazing view from either side of the vessel. Theres sky diving in a wind tubl. Theres bumper cars. This cost 1 billion to build in germany. Youre only keeping it here for six months. Then youre going to take it to china and home port it in shanghai. Why take the best and brightest to shanghai in a market in which you dont have so many ships an dont know so well . Were growing very quickly in china because the Chinese Market is an exploding market. Were getting terrific interest from the chooi these. Were getting great pricing. So we are bringing our biggest and our best. Of course, for the new york area, were also bringing back the sister ship six months later here into new york. And theyre sending it to the u. K. And then we have the third ship coming. So we definitely want to service this market, but its wonderful. This is a terrific problem to have. Everybody wants this vessel. There are so many exciting things. We have got three of these ships, and its not enough. The other thing youre doing in china is youre selling a ship to actually the same partner as priceline has. Then youre going to operate it jointly. Its a joint venture where you learn how to operate a chinese brand in china. Where does that take you down the line . Well, first of all, our own brand is just exploding in china because the middle class is growing so much. So we see that as an enormously growing market. But we also see a market for indigenous chinese brand thats really not an international company. So we are working with sea trip to see if we can put together a joint venture that will give us the opportunity to play in both markets. Do you lie awake at night and dream of being a lodging ceo where you go asset light, get rid of the shapes, make somebody else own them, and you just operate them and take out the risk in this industry. Because this is a really cyclical, risky business. No, i dont dream of that. This is an interesting business, but its one with great potential. And we have the assets. Our assets are extraordinary. And theyre part of what makes us who we are. I think for the bulk of things, that will continue to be our model. What we need to do is bring our return up to higher levels. Thats happening now. You have the doubledouble. Weve spoken about the targets you have on return of equity. And the doubledoubles working. Let me ask you specifically about the caribbean. You have plagued one another within the industry. Norwegian, carnival, by having too many ships in the caribbean and having to discount year in, year out. Does the china factor change that . Obviously youre chasing demand in china, but youre also taking presumably where you can capacity out of the caribbean. What im asking you is does the china factor mean there will no longer be cheap cruises in the caribbean notably in the winter . Well, i think youre seeing two things from china. One is, as you say, its actually siphoning off capacity from our western markets, caribbean and elsewhere. And thats helpful to the markets. But the other thing were doing is were building demand. The issue isnt too much capacity. The is not enough demand. A ship like this with all the new features and the excitement shes generating is building demand for the whole industry. Theres a halo effect. Not only is this ship doing well, but its helping our other ships because its really saying, wow, look at all the things i can do on a cruise ship. Thats bringing people who have traditionally said cruising isnt for me. Well, this ship shows it is. Because youve always said your main aim is the vast majority of people that dont cruise. What percentage of the population cruise . Only 20 of americans have ever taken a cruise. And 40 of people on board are usually firsttime cruisers. Thats right. So we need to convince the people who havent, who have this old ideas of what cruising is about. When you see a ship with the north star, with bumper cars, with sky diving, it helps overcome these old things that this is a sedentary vacation. My final question, and this is very personal. Why do you launch ships in the biggest media market in the world in november when it can be this foggy and this wet and this damp . You could do it any why . Why do you do it in november . We want to make you feel at home, simon. I feel like im in britain. Building these ships is incredibly difficult. We have to take them where they are. One of the beauties of this ship is her ability to handle this kind of weather. The enclosed spaces on this ship are as spectacular as the open one. Were out of time. Traditionally, i believe this is the time when Mickey Ericsson sends an email congratulating his rival. Richard fain, chairman and ceo. Its going to tour around here for the next six months. Importantly, its the slow boat to china. Back to you. I think id like to see you if the bumper cars at sea, simon. You will on power lunch. Oh, good. All right. Simon hobbs. Its an allday outing, sarah. Not just the one show. We go through the day. We miss you, but looks like youre having fun at sea. Up next, youre looking at axalta making its debut here at the new york Stock Exchange. The stock trading higher in its ipo, up more than 5 . The company ceo will be joining us live here at post nine with his first reaction after the break. And i have diabetic nerve pain. Its progressive pain. First that feeling of numbness. Then hot pins. Almost like lightning bolts, hot strikes into my feet. So my doctor prescribed lyrica. The pain has been reduced and i feel better than i did before. [ male announcer ] its known that diabetes damages nerves. Lyrica is fdaapproved to treat diabetic nerve pain. Lyrica is not for everyone. It may cause serious allergic reactions or suicidal thoughts or actions. 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Again, some of those websites affected, our own cnbc. Com as well as bbc, usatoday. A note from google. The company says, our engineers are already on this and will be providing an update asap. In response, some of these websites are actually not loading their ads themselves. So again, if you go to some of these websites, youll notice no ads on there. Its because google has one of their ad servers having some problems. Well bring you more details when we get more on this situation. Back over to you. All right. Thanks for that alert. Shares of Axalta Coating Systems climbing more than 5 after the paint Company Debuted today on the big board. The company raising about 975 million in that ipo. The Carlisle Group selling 50 million shares. Joining us first on cnbc at post nine, axalta chairman and ceo Charlie Shaver and fourtime nascar cup series champion jeff gordon, whose car paint scheme includes axaltas color of the year, radiant red. Did you choose the radiant red . I didnt, but its an amazing color. So charlie, we should talk about the history a little bit about this company. Originally part of dupont. The Carlisle Group bought it back in 2013. Why now did it decide to take it public . Yeah, thanks. You know, we actually have about 145 years of heritage with this company. Weve been around a long time under the dupont tutelage. As you correctly pointed out, the company was brought out a couple years ago about carlisle. Were the fifth largest Coatings Company in the world. We felt like it was a great opportunity to take the Company Public and take our place alongside many of our peers and competitors who are also Public Companies. Carlisle still holds nearly 80 . Any plans to release more shares after this initial offering . No, i dont think so, any time soon. They own a big holding. Still we have a lot to achieve over the next couple years. We look forward to continuing to work with them as we grow the company. Some of the auto related stocks that went public had very successful ipos. Is that part of the reason here you tied to auto sales as most of your paint goes to commercial vehicles . Yeah, were one of the largest in the world in automotive paints, both new car and in the refinish world. So we believe the next few years, the auto park continues to grow, the emerging middle class around the world. We think the next few years being in the sector is going to be a good place to be. Theres still worries about given the run rate were at right now, that were in some sort of peak auto environment. Why dont you think thats true . I think, you know, about 75 of our business is outside the u. S. We have a unique ability to look into a lot of emerging markets like china, places like brazil. We see good, strong, fundamental demand right now, even though some of the countries may not be growing their gdps that great. The worlds desire for transportation at the individual level continues to grow. Jeff, you go back with dupont 20 years. This is our 23rd year. The longest tenure with any one sponsor . Yes, it is. What is it about them that made you stick with them for so long . Well, first of all, the timing was perfect. They gave me my shot. I started my nascar Sprint Cup Series career with dupont when they first came on. Theyve been credible partners. Thats what nascar is all about, having great partners. I think were sort of a testing bed for their products. At the same time, we know we have the best quality coating out there to do what we do. Now axalta coming on board and really reenergizing the excitement of the marketing and the interaction with the customers. These last couple years have really been fantastic for the partnership that weve been able to continue. There must be some cool statistics about what a coating, the right coating, can do for your time. Is there something . If nascar would allow us, i know axalta could really design something amazing. We put a few extra clear coats on there if theyd let us. I want to change the topic a moment, charlie, because some investors might be aware of axalta after nelson peltz of trion, who wants to make changes at dupont, pointed to this sale to carlisle of axalta a few years ago as a problem with management. An example of some of the leadership issues as dupont. What can you tell us about that sale and what it says about duponts leadership . Well, look, i think i cant really comment on dupont because i wasnt there. I think we got a great business. Weve also put a lot of money into the business. Weve really focused on it. Weve also brought in made a lot of changes to the business to really grow it. I know you werent there at the sale. Thats right. I was part of the Carlisle Team that came in. Weve put a lot of money in the business to really grow it and focus in growth areas. We feel like we got a really Good Business and just made it better. You must be happy to see crude oil declining so much. Im sure you have high raw material costs. Roughly half of our cost of goods are hydrocarbon based. We think two big benefits from that. One, over time our Raw Materials will go down. Obviously, our customers like that as well. But we also think for the consumer its a stimulus. Miles driven for people buying cars, getting out on the road. Over time we think those are just a great factor for our business. Finally, jeff, whats up with the come on. Its not the first time. Well, this new format that nascar has come up with has really created even more intensity and more drama, obviously. Theres a lot on the line. So theres a lot of passion that we have about winning and winning championships. Thats what comes out when things dont go your way. You know, you feel like you were wronged. It brings that passion out. It was heartbreaking. It was heartbreaking that we didnt make it to the final four. Weve had one of the best teams all year long. I feel like weve done everything we needed to be there and still not being there. But were going to go and finish out there season in a big positive way and go into next season and have another great year. I would not mess with you, man. Thats all i have to say. Thats great seeing you guys. Thank you very much. Thank you. Jeff gordon and Charlie Shaver. Nice of you to be here for your ipo on post nine with us first on cnbc. Thank you. Great to be here. When we come back, walmart abandoning the oneday only black friday sales model this year. Dont worry. Retailer has other bigger plans. Details on that when squawk on the street returns. Location. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com welcome back to squawk on the street. Check out shares of allergan, which are moving higher. Bloomberg is reporting that acativ and itself are discussing a possible deal, valuing at allergan at 60 billion or over 200 a share. They are citing people familiar with the matter. Allergan shares up by about 1. 5 . Actavis down by 1 . Interesting were hearing price tags associated with a possible deal. Theyre trying to fend off a hostile takeover. Back over to you. Oh, yes. The latest in a longrunning soap opera. Thanks, dom. The worlds biggest retailer has big plans for this Holiday Shopping season, but not all of those plans revolve around black friday. Courtney reagan has the details on walmarts holiday strategy. Yeah, thats right. So with the influence of the internet and thanksgiving hours, black friday isnt isolated to one day anymore. So walmart is just another retailer like target, best buy, and others offering staggered deals, hoping to keep consumers shopping all weekend long. The Worlds Largest retailer releasing plans for a fiveday promotional stretch from thanksgiving to the monday after. Deals will begin online just after midnight on thanksgiving day and will be offered in Stores Beginning at 6 00 p. M. On thanksgiving night, again at 8 00 p. M. , and then staggered over the next several days it on a variety of products. And walmart executives laughed when suggesting we should rename the period. Instead of calling it black friday, just november. Promotions include 350 off a visio tv to 150 off beats by dre headphones. Walmart also bringing back the onehour guarantee. Shoppers in the designated areas of the stores between 6 00 and 7 00 p. M. On thanksgiving are guaranteed the ability to purchase the gift they want right then. Thats good for shoppers traveling away from home that weekend but still shopping. Its also walmarts way of making sure supply satisfies demand. Something that hasnt historically been the case for retailers on black friday weekend. Now, every store at walmart has crowd control plans in place for safety as well. Retailer also offering Interactive Store maps to help find where these deals really are going to be. Sarah . All right. Too bad. That Great American tradition of waking up at the crack of dawn for black friday may be a thing of the past. Thanks, courtney. Meantime, forecasts for a big winter freeze are causing swings in gas. Traders betting on low prices but many of them could be caught off guard. Our kate kelly is live in deerpark, texas, with that story. Morning. Reporter good morning, carl. Its 46 degrees here in deerpark, texas. Were preparing for an early freeze in natural gas. The commodity already giving traders a run for their money so far this year. Its still early days. Going into early november, the Trading Community was about as short as it had been in two years. Helping to push prices down to about the 3. 50 mark or so. Until colder than expected forecasts for this month actually pushed demand and prices back up to about 4. 50 before settling down again. I see were just a touch before 4 right now. Kyle cooper, the head of research for cypress energy, which is a local hedge fund, says the weather forecasts for this year are all over map. Because of that and other factors, we could see extreme volatili volatility. For example, if we see a warmer than expected winter, and right now were thinking it will be in line with last year, which is colder than average, you could see prices that are actually higher than expected. Maybe even going im sorry, lower than expected, maybe going under 2. But on the upside, if we have infrastructure problems, if theres trouble getting gas pipes to the northeast or chicago, we could see a much bigger differential in price. All told, were expecting another volatile winter. The Trading Community here is bracing for it as the cold sets in. Back to you. All right. Nice glasses, nice hard hat. Thanks very much, kate kelly. Up next, bb t ceo kelly king will be joining us live for a first on cnbc interview. Is it the beginning of a wave of Regional Bank deals . Well find out. Squawk on the street will be right back. Already 41 companies are investing almost 80 million dollars, and creating 1750 jobs. 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First energy, also exelon and wisconsin energy. A tough day overall for the utilities. But they have been on a solid ride over the near term. Thats for sure. Thanks a lot, dom. A big bank deal this morning. Bb t looking to acquire u. S. Is questi susquehanna. Are you keeping the name or not . No, well not be keeping the name. The economies of marketing and advertising are such that, you know, you really need to use the bb t name throughout the footprint. Well be changing it over time when we get to the conversion. A lot of investors wonder whether your appetite is getting larger and whether or not regulators are entering a period where theyre going to let some of these regionals, some of these super regionals buy more than they have in the past few years. Yeah, well, you know, weve always tried to grow on a steady basis organically first and for years, as you know, carl, weve done a number of mergers. We try to do about 5 to 10 of our asset size in mergers each year. Thats what well be at about this year. So i think the regulators are certainly willing to see mergers. I think to a large degree they see the logic behind bank combinations. And i think the focus for the regulators is whether or not theyre prepared to make the acquisition in terms of, you know, investments in systems and processes, governance practices, et cetera. So i dont know that they have not been in the past, but i think today theyre receptive if it makes sense. After this big deal, following on that question, would you expect to see a more meaningful pickup here in Bank Industry consolidation, especially in the u. S. , which remains much more fragmented than other parts of the globe. Yeah, i think the longterm drive for combinations in the u. S. , to your point, is such that you will see combinations. It just makes too much sense. The cost for banking today to be regulatorily compliant is increasing substantially. Technological costs are increasing substantially. And so skill, you know, really does matter. So yes, i think over time you will see more combinations. You know, whether or not were a little ahead of the curve, others will be immediately right behind, its hard to know. Mergers are very unpredictable, for us and everybody else. Over time, i would expect you would see combinations. Hey, kelly. We got this big fine for a number of banks around the globe today. Various downgrades here and there on much larger banks. Arguing that the regulatory head winds are going to get worse, not better. We have an exiting attorney general. I never want to get you in trouble, but in general, for the space, is it are head winds on the regulatory front going to be better or worse . You know, i dont know a lot about the Foreign Exchange issue. As you know, were a mainstream bank. Were a long way from a wall street bank. But i think in from the wall street bank. In general this is a dated issue. And a lot of what you have been reading and hearing about over the last year or so are dated issues. They go back years and years. So i personally think that we are seeing kind of a plateauing of regulatory focus. I certainly hope and pray Going Forward it is going to be subsiding somewhat. But i think that you are reading a lot more about it now doesnt necessarily imply that they are more vision about chasing issues with the banks. I think it is more of a carryover. Kelly, great to have you. Congratulations. Im going to miss the susquehanna fulltimename a lit well work hard to make bb t sound just as good. See you soon. Thanks. Shes been called the 9 billion witness and j. P. Morgans Worst Nightmare when we come back. The whistle blower joins us live with her side of the story when we continue. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. 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You were a Due Diligence manager in the mortgage unit of chase leading up tot crisis. How did you find yourself wedged between a giant like j. P. Morgan and another giant like the Justice Department. As a deal manager working with the Due Diligence managers, i saw some things there that i thought was wrong and raised them up through management. And eventually wrote a letter setting out specifically what i was seeing on one deal but also general problems with the diligence across the board. So years later when these investigations started, the sec spoke to me and took some information and then really the d. O. J. Out of sacramento broke the story wide open using the testimony and information from that letter. And when you say you wrote a letter about what you had seen and some of the practices in that group, what exactly was that and why did it strike you at suspicious and why would that been something that then would have been of interest to the sec and d. O. J. . The first flag was when we had a new diligence supervisor coming in who was senior who wasnt send emails and would tell us we couldnt send emails to him. Which is exactly what you expect when you want Due Diligence and compliance is you want to create a record. And then one deal we we had a loan pool come in. And very quickly about 40 had over stated incomes to. A point of a manager saying her income was 117,000 which is five times bigger than our data was showing us they should be. And when you give those loans they are very likely to default. Which is going cause problems. And these were the type of anecdotes and evidence that helped the Justice Department and other agencies put together what became a 13 billion fine finish j. P. Morgan. Yes part was tax deductible. Part did go to consumers. But the article paints it as a terrible outcome for the country. Why do you feel that way . When that was money that the country didnt have before. Well i think the difficulty is the country is told this is all an accident and no evidence to go forward. And there is a mountain f evidence. Reports, email, reports, external reports, testimony from other employees. So i think the concern is when this can happen, and it can get written off as we just didnt know what we were doing then you can see this happening again. And if you care about investors and the ordinary american who is lost money in this, you cant let this happen over if over again without holding someone, whose accountable, to account for what they did. The department of justice retained its right to bring criminal charges in the future. We could still see those. J. P. Morgan has declined to comment citing the confidentiality agreement they had. Which owe ostensibly had as well and chose to break. But if j. P. Morgan could speak, what would they, say, and paint you as an employee and tried to do the right thing . I would hope so in certainly i did what you were supposed to do as employee. I saw problems and raised it up the ranks. Regardless of what the results would be for me personally and others did as well. I would hope what they would actually want was to see this taken care of properly so they can have the trust of investors and the general public. And for those who overstated their incomes to begin with, do they ever face accountability or not . There has been some of that. The bigger concern, even this one deal, this as billion dollar security. So wore were talking about a lot of money where any one of these and it has to be done correctly. Obviously j. P. Morgan is who you are critical of and also the Obama Administration should get some blame, correct . Is that what youre trying to say, the d. O. J. Im actually almost more critical of their response because when you look at the complaints and what else happened at all these other bank, citi or bank of america. The real question when you noi know Securities Law and you know the industry and studied White Collar Crime is how it possible you could have this much fraud and not a Single Person has done anything criminal. This is a very big point of debate for the industry. Elaine we appreciate you bringing your story to us as well. Elaine fleischmann. Thanks. More from you i know coming up in a bit and squawk alley. Including you are going to be all over the countdown to twitters investor day. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . 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You have been disparaging on food in the past. Let me tell you. There are 18 restaurantsen and you can book them on line. Cruises have come a along way. Simon much more from you aum day. I might even come join you out in byayonne for the smart ship. For now over the carl. It is 8 00 a. M. In industrsa francisco. 11 00 a. M. On wall street. Squawk alley is live. Welcome to squawk alley. Jon fortt, kayla tausche. And dow breaking a the winning streak and also twitter. The investor day kicks off in little less than an hour. And shares of the company down about 20 over the last month. Down 38 for the year. Jo