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tv   Squawk on the Street  CNBC  October 25, 2013 9:00am-12:01pm EDT

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♪ i'm too sex see for my shirt, too sexy ♪ >> we're going to sex it up, andrew and me. we are vowing to sex it up next week. our stock of the day, it's ups. andrew, tell them to make sure they join us on monday. >> join us on monday. "squawk on the street" starts right now. have a great weekend. ♪ ♪ >> that's the way to start the show. good morning and welcome to "squawk on the street." i'm david faber with jim cramer. we're live from wall street. carl quintanilla has the day off. we're in record territory already. how about that ten. year note deal.
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we've been looking at it, 2.51. did you see all those bond issues yesterday? europe is back. a whole lot of green. really it was asia that might be a concern. japan's market off 2.8% overnight. let's get our road map this morning. it starts with earnings from economic bellwethers. procter & gamble and ups both seeing gains last night. and don't diskrount $ old gart of the internet era and amazon posting better-than-expected quarterly revenue. we're going to start with two companies being known as being barometers. getting a lift from e-commerce and strong europe export growth.
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procter & gamble said it earned $1.05 cents a share. the ceo gave his assessment earlier, jon moeller on "squawk box." >> we held sales in each of our reporting segments, grew 8% in developing markets, we grew 11% in japan and earnings were right where we expected them, why is which we're able to reconform guidance on the fiscal year, 5% to 7% earnings per share growth so we're right on track. >> right on track they say, jim. you believe it? >> yes. i think there's a lot of runway there. there were some issues in some the divisions, still haven't come back, hair and grooming. this company did not move aggressively into emerging
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markets. unilever did not have a good quarter. this is a great american company, it needed some stability. it's very inexpensive versus historical. >> what, about 20 times, between 18 and 20 sometimes? >> the two and a half on the 10-year, get 3% on proctor. proctor has as good a balance sheet as the government, if not better. we're going to talk about amazon in a moment. this is really the opposite to amazon. this is a company that is very bound by how we do traditional investment analysis. they're going to tweak and do better and in a slower and intermittent growth environment, proctor is a core position for an individual's portfolio. >> though we talk a great deal about innovation. you talk about a lack of innovation at p & g in the past, which has been born out in not
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dominating some categories they had in the past. >> colgate is the differentiateor. it's done a lot of technological improvements. it's been taking share in latin america. it's all done by technology. this is something that was always proctor's chief. it's one of the chief reasons you wand to own proctor is they always invented -- lafley's got to go back to the lab. this is an industry that's a technology industry now. we forget, under armour technology. you will get passed by unless you are innovating. we don't see technology innovating in pcs. we do see it in consumer.
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>> technology, we think silicon valley. it's far from the case when you're talking broadly speaking and i've always argued the greatest technology leap we've made happens to be in the oil fields. >> i have whiting petroleum on today and they talk about a particular oil they have in the bakken and how much oil is coming from that. america is pioneer -- core labs is probably the best innovator of all. these are scientists, david, engineers. >> exactly. >> talk about a company that uses a lot of oil, ala gasoline, ups. they look pretty good. remember the industrial economy comment from, what, a quarter or so ago? where did that end up? nowhere. >> i think these are the two
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points that are really solid here. package volume will be higher, 3.5%. holiday season will be another one for the record books. this is the prediction. >> 34 million packages globally on their peak day. 34 million. >> how does amazon get to your house? >> not as often flying because of those warehouses. >> strategy, they cost a lot of money. if you're an amazon prime customer, you get so much, they have to build those warehouses. the excellent ceo of international paper was on talking about the idea that amazon is a car gaining consumer. they're the engine to the u.s. economy versus say a lot of the retailers that they're kill ing. >> some. not best buy. let's move on duff poinpont.
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it will spin off its chemical unit into a separately traded sector. here's what dupont's ceo ellen coleman told jim last night on "mad money." >> we've been working on the future dupont, our transformati transformation. today we're announcing an advancement in that area, the creation of dupont, an integrated and differentiated science company and on the other hand, a very strong, industry leading industrial kem cass business standing on its own. it might be low growth and it might be volatile but it's a high margin and a very solid set of businesses. >> she broke the news right there last night on "mad money." >> i think of kullman, i think of one word -- impressive. >> why? >> because here is a person that's come in -- i'm not going
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to say a dowdy company. this is a company that invented teflon and nylon. she's decided it's a solutions company, whether it be cloud protection, better food, health and safety, 3m and higher margins. what coleman has done is get rid of the biggest commodity drag, that is just one of those companies. you can't give that company a multi-. who knows what it will earn. she's sacrificing that very big cash cow. when you think of whitener to take a look at toothpaste. giving you a high-growth company that could be very consistent with a multi--year growth path. we all need better food. she's talking about a crop protection, what's called a drug. let's imagine it's a drug. protection in latin america that is saving the harvest in latin america because of a bug that she's able to kill.
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>> we don't know what the performance chemical is going to be, 18 month, i think the stock is going to percolate up higher. it's the ppg model. i've got chuck bunch on tonight. ppg got out of the commodities, went very aggressive into high -- into high value added codings, okay, architectural codings and that stock's multiple has zoomed. you have a company that went from 50 to 180 when it got out of the old glass. coleman is using a page from
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that playbook. what i like about her is that kullman waited to spin it off until it's an up swing. she did it all right and she better start getting credit for how well she's running dupont. >> shares do look to be up. two of the biggest names in tech up sharply in premarket. microsoft earning 62 cents a share for its fiscal first quarter that was ahead of what the analyst expected. they expect improved sales for service software. and for amazon, it posted better than expected quarterly revenue. that did look for profits that did overshadow a 9 cent a share loss. the retailer gave indications of momentum heading into the holiday shopping season. let's start with amazon. huge increase in revenues and they're managing to lose more money. >> here's the deal. i am sick and tired of hearing media people telling jeff bezos
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how to run his company. >> do they do that? >> then there's the bears. they have to see profits. >> investors don't care. >> you know why they don't care? >> this company has accelerated revenue growth, plus 25% growth. i mean, we should be -- i totally understand the notion of trying -- the ridiculous nature of valuing this company, trying to put an earnings per share number and price per earnings multiple on it. we'll do it with twitter later on. we're certainly willing to do it with twitter. listen to me. this company's about execution. >> it is. >> and there is a line -- you would love this because of the lack of rigor that people have in covering it. they mention amazon prime is signing up millions of people. that was regardless of davenport. they said millions. 7 million? 9 million? doesn't matter, it millions.
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>> a true believer. he has believers, he has for a long, long period of time. >> you use it? >> of course. >> you use netflix? >> yes. >> you want a tesla? >> no. >> you're supposed to say yes here. >> i'm sorry. >> you always make it so hard. >> i'm trying to answer honestly. i don't really want a tesla. maybe i'd drive one, i don't know. so amazon -- it's a $150 billion market value. to those of you who say you can't put a multiple on it, you want to be praying in the church of bezos, right? >> yes, thank you. because this is the church of what's working now. and i know people hate the idea that why should this company not be bound, like all other companies? it's kind of like there's in market over here. you want to say to that human why do you allow amazon to have special privileges.
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not to mention aws, amazon web services. >> how do you get your presence, how do you shop? this is a secular change in the economy. would i go back and say here's the problem with trying to peg him to earnings per share. at 100 the stock was overvalued by that. in the end it's not making money, it's business. it's not about -- we're not at a philosophy class, we're not trying to figure out, wait a second, life is unfair because his stock went here but proctor's bound by earnings per share multiple. hey, that's just the way it is. you got to like live it. >> let's quickly hit microsoft before we go to a break. after market after the company did report better than anticipated earnings and revenues as well. it was the commercial side of the business. we know pc sales to consumers are -- >> that part of the business was strong. >> very understated conference
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call. delight. who cares what we did. i think, by the way, they're underestimating what they have in the future. i think the xbox is going to be killer. i had been talking to a lot of people in the gaming business. this xbox is going to be gigantic. there's many levers here, and it's just beginning. you've got a lot of new devices. i know it sounds odd that microsoft isn't going higher because it's an inexpensive stock. >> and they make so much money. >> the activist in -- go after the bad companies. i mean, microsoft, you've done your job. move on to the next one. >> we'll see. we'll see. i would say it's a little early for that. >> or you can split it up into three companies. >> we're going to move on. coming up, what did a comedian and "your money" have in money?
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we'll tell you about a louis c.k. market. he's a very funny man. take another look at futures. we are looking for -- across the board, "squawk on the street" live from the nyse after this.
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♪ louie, louie, we got to go, oh, baby ♪ >> kelly evans joins us here at post nine. >> i think i know what the music is about. i was joking about this being a bit of a louie c.k., it's when people were complaining about not having wifi flying through the sky 30,000 feet above ground. the point is that we yet again have a week where what's happened? the jobs data hasn't been great, the durable goods this morning want great but the market keeps moving to new highs and it's not just investors feeling a little bit leery about everything happening here. the government shutdown didn't help here but a lot of americans, whether they own stocks or not, are not seeing consumer confidence rebound. all of those positive things you would hope to see at this point in the cycle. it goes back to this issue to
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frame it for 2014 becomes critically important. does it become a year of speculation or of normalization. i think the dollar is going to be important to watch. in other words, do people start buying into stocks because it's going to be stimulating forever or can we finally get to a point where it feels like maybe there's some reflation in the economy, maybe the broader bases of joblessness are lower, maybe bonds aren't moving hire because we're not at that point yet. that's where the risk becomes interesting. the risk is you're starting to see speculation again. that's the conversation people are having. >> when i'm on the conference calls with ceos, what i see driving the country -- there's nothing in the country. i'm tired of asking them how much they hate the country's
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government. al mu al -- >> is it fundamentals or is it apple, is it financial engineering, alchemy where they're able to bore "at super low rates, buy back a bunch of shares, we know companies are leveraging up again but are we doing it in a way that's going to be growth enhancing or neutral? >> tim cook does do a bond af r offering and gets a great price. secretly what he wants is for europe, which is almost 1/5 of their revenues to come back. want europe to come back. dupont. if europe intra quarter did the swing -- >> why is the norwegian one of the biggest asset managers in the world saying we're not going to increase our allocation equity. we feel like the risks are out there. >> there's only 6 million of them. they got a lot of money in that.
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>> they're going into the bakken, they want to go into the permian. >> there's an element to a lot of parts to the world, whether it's the u.s. or asia and that may account for some of the bifurcation. >> speaking of comedians, seth myers saying his wife married him because of his blackberry. at a recent charity event myers joked i still have a blackberry. i just got married eight weeks ago and i figured the reason my wife knew i'd be loyal is if he's still loyal to the blackberry, well, he's never leaving me. >> it's funny. >> it's kind of funny. you're not laughing. you are not a fan. you don't like him. >> i'm thinking about how pumped up the earnings are -- >> whatever happens, nobody's going to be happy. >> cramer's money making advice is nothing short of amazing, it says so right here. he's going to give you some in
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all right. we got about six minutes before the opening bell. time for a "mad dash" on this friday. where are we starting? >> wi warehouse, reported better than expected numbers. the stock is breaking, did an equity here, real estate investment trust going higher. 34 price target. >> why? >> because pulp and paper, this
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is just a lumber story. it's housing. people do not understand it's a multi-year move. gigantic land over, some regard it as a hedge against inflation. i just say it's a well-run company. >> speaking of well-run companies -- just kidding. zenga. >> i like a study in contrast. it was the best of times, it was the worst of times. sometimes when it's the worst times, it's not as bad as people thought. they lost a huge amount of money but not a huge, huge, huge amount of money. >> one huge. >> yeah. they have new management coming in, they have cash, cash, cash. >> is it too early? carl joked is it too early to buy zenga? >> they turned around groupon. you need a gain. okay, got to deliver.
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we know from game stop. grand theft auto, you probably play that with your kids. it's -- i have the non-violent version of "grand theft auto." you only need one game. $800 million in one day, biggest opening of any entertainment title ever. >> can't stop talking about it. it's a shift in this country. >> we got the opening bell for this friday on "squawk on the street." stay with us. surprise, a sector that's benefiting from the boom. surprise, a sector that's
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new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you are watching cnbc's "squawk on the street," live from the financial capital of the world, where the opening bell is set to ring in 50 seconds. jim, what's the key to this market? >> the key to this market right now? >> yes. >> twitter. >> twitter? >> because it's a do-over. they can undo what happened with facebook if they do this right. one reason they're possibly going to do it is a man by the name of anthony, former ceo of the nfl, knowing how to price a
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deal. if he gets it right and duncan niedermayer gets it right -- >> and that going to affect that number of people? >> it's one of three disabling functions that made the asset class look bad. >> you can see the s&p realtime exchange. more green than red, i'd guess. here at the big board, it countdown to super bowl xlviii. we'll talk to alfred kelly, the man of the host committee. >> talking about twitter being the key to the market, let's go
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over to kayla tausche. sheep has she has a news alert on twitter. kayla. >> thank you very much. earlier we were at goldman sachs. now we're at times square where twitter executives have just arrived moments ago for meeting with the sales force and smith barney brokers. a warm welcome from the company. goldman is the lead underwriter. on morgan stanley's big oversize ticker broadcasting to times square, it says welcome to twitter at morgan stanley. it says a disclaimer about the effectiveness, what we have are the executives, mike gupta and
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di di dick costolo meeting. it's a big day for the executives. later today they'll going to jpmorgan. this is the unofficial kickoff to the investor road show that will begin on monday. guys, back to you. >> jim, they're talking about a range of $17 to $20. but many believe that may be conservative and we may end up higher. all of this, as you point out, after facebook. comparing the two is a difficult thing to do. twitter is far smaller. >> i'm just talking about in terms of being able to make it so a deal is managed better. i know morgan stanley probably less involved than i initially thought and the fundamental switch because that was during that period where the company switched to being mobile far faster than people realized. twitter is going to come with a $20 million valuation. >> 20? because now it's at about 12 --
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you think at first trade you're at 20? >> yeah. what i'm hoping goldman will do is try to whip this process into shape to make it so that individuals don't take it up so high and then get hurt. we've seen that too often. somewhere between google coming too cheap and, well, groupon. >> well, people have long memories and it may be they are cautious in part because of facebook. we'll see. not to mention valuation. twitter, you can look at the metrics, revenues are growing very rapidly. however, users are not growing as rapidly. >> you want to know whether advertisers love it as much as they usually do. zuckerbe zuckerberg, when he came out with a statement saying we're going to be able to monetize but not make the user experience bad, that was the beginning of the double. so twitter has to think of more platform, more user revenue stream without ruining the user
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experience. there's a very good argument about the national security person on the "new york times" who abused twitter. people use twitter in a way that is so unguarded and ungoverned, i think one of the things i would worry about is nfl. right now twitter is too ungoverned for the bosses, the man. >> what twitter has to worry about, and i don't know if they're thinking about this, one day the memo will come out at your company and says you're fired if you use twit peter. >> but the power of the platform is -- >> if they can broaden their audience. people want to advertise facebook, google, twitter. they think they can get the demographic. it hasn't shifted to the point where they're getting the lion's share. i do think facebook -- i want to
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be very clear. facebook has more staying power than twitter no matter what. >> no matter what. >> let's take a look at some of the stocks we've already mentioned this morning. shares of dupont is up about 1%. this was not unanticipated. this had been discussed and reported, the company coming out and saying we're doing it. >> if you remember nelson peltz suggested this, the stock did go to 63 on the spike, comes back down to 57, 58. now it's back to 63 on a spike and back to 61. >> two of the biggest winners, amazon and microsoft. let's take a look at shares of amazon, up 6.4%. similar move in microsoft at this point. >> david, you got to talk -- you mentioned to me earlier about technology and where you find it. take a look at nov.
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pete miller, who is a visionary in terms of developing rings, when you go to the utica and bakken, it's national oil well machines that enable our technologies. it core labs in terms of mapping, halliburton on some terrific sleep technology. i'll be talking to whiting petroleum about how they were able to get so much more out of the ground. it is in the end an innovation company, except it's the oil patch. >> the efficiency is increasing, their ability to get more out with less, with spending less. don't forget the capital that needs to be put in place in order to actually start fracking on something, which by the way is another thing that's unique to the u.s. that's where capital markets actually matter. >> during the election for merkel, they discovered in a very poor area of germany, former east germany, there's a
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gigantic shale, okay? and the greens have shut it down. poland shut down the shale, okay? u.k., big battleground. united states, it's not done on public land, done on private lands and so far the epa has looked away and in canada, they found out that there wasn't a real problem. and i know there's gas land and i know the other side, fracking. i'm an environmentalist. i know people feel i just play one on tv. fracking is working in this country and it's been a great development. >> and you've done a lot of work in what you would not think about you being involved. let's go to bob pisani. >> we had three pricings today, one here and two on the nasdaq. all talking below the price talk. we're looking here at sprague
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resources, an oil and gas distribution and storage company, pricing 8.5 million shares at $18. but the price talk was 19 to 21. it's looking $17 to $18. we'll get you more on the two nasdaq ipos in a few minutes here. we have good news from ups generally, microsoft also generally good news, amazon good news. ups, for example, beat by a penny. international package volume here up 6%, domestic package volume up about 2%, that's a decent number as well. when resorts look good in mckau, ebidta up and they're competing in philadelphia, four, five competitors with them. procter & gamble, they confirmed
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their 2014 earnings and revenue guidance. that was important. they just report a beat on their first quarter, the big multi-industry companies are where the problems were. eaton lowered their 2013 guidance. i think they had $5 million in revenue growth quarter over quarter. basically zero growth at all, talking about 2013 overall sales flat. they went out and said that, overall just flat right off the top. that's a real problem with the big multi-industry companies. it was ugly over in asia. there may be a little spillover here. we have the nikkei up, most companies beating on the bottom line 66%, only about half are beating on the top line.
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that's a problem with all the major companies. the new york stock exchange this weekend is going to be testing their systems for a twitter ipo. now ipos are very different here, conducted differently than on the nasdaq. on the 11:00 show, we'll talk about those differences. but they're going to be stressing their systems. there will be designated market makers involved. they're going to run through, put lots of volume through the system and see how it reacts. it's think it's a prudent thing for them to do overall. finally, this is a big charity, the nyse charity day. they're doing all their transaction fees on orders that's going to be donated to st. jude. a big day for them. right now $17 to $18 on sprague's ipo. back to you. >> let's shift over to the bonds. rick santelli, take it away at the cme.
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>> let's look at the short-term rates that could figure into trades. it's certainly not flashing red but it's flashing a little bit of amber. look at a one-month chart, elevated at 480, highest since august. however, open up the chart and in june it was at 11%. it's something people are keeping an eye on. as far as our 10-year, we could make a lot of hay about why it's moving, we could talk about the taper and issues politically. i'd like to look at tuesday's tlad weak release of the jobs report. this next chart of ten-year shows you what it's been doing since that report. that is the mover and shaker and we are down a bit. these are the lowest yields since july going back to june. let's look at key ten-year sovereigns, whether it's 176 on the bund going back to august
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1st or the gilt in the u.k., patterns are just about identical, different rates. foreign exchange seems to be an important issues and i've done special santelli research on what always moves the index and you get volatility when you see the release of employment reports. this is no exception. that continues to whittle away. you can see on your chart fresh lows back to february. also look at what's going on in the euro. stabilization is worth a lot when you overcompensation. is everything really rosie? it is. >> thank you, rick santelli. it will be the closedest the super bowl has ever been to wall street. it will be in the new york med tro -- metro.
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it is the countdown to super bowl xlviii at the nyse today, 100 days until the two best teams in football meet at met life stadium in new jersey. chairs of the host committee, woody johnson, chairman and ceo of the jets and jonathan tisch, co-chairman of lowe's corporation and treasurer of the giants and president of the new york/new jersey host super bowl committee. good morning. >> good morning. >> i hope both of you will be as close to this in a hundred days as you are right now. >> it's early! >> it is early. i'm a new york fan, all the way,
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baby. >> good. >> i'm curious, john, you were involved from the football side but there's going to be a lot of people coming to this city and this area. how big is the boost to the metro economy from an event like this? >> david, we're looking somewhere between $500 million and $600 million through new jersey. all of the various entities of travel and tourism are going to benefit and that means that the men and women who work in our industry will also benefit. >> don't you think -- this is a very controversial super bowl. we all think of the super boam as a sunshine event. we go down and you have a lot of days where you take some time off. it's not going to be this way. >> we're hoping to get a little snow. but the good news, unlike some other cities that have had super bowls that have also had snow, we know how to deal with snow. snow and sleet and all that
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stuff. probably 50 degrees and sunny. but the likelihood. but we're ready for anything that nature has -- >> are the fans ready for that as well? >> they are. >> you think so? >> absolutely. football fans are ready. they play in all kinds of weather. this is really going to be a game played in weather that football games are supposed to be played in. they're supposed to be played outside. >> that's true, that's true. >> new york fans, we're used to paying a lot of money for tickets, you want to go for the knicks games and rangers games, the ticket price will set records some are saying. >> i think people are going to want to be here, they're going to want to be part of it. we expect a couple hundred thousand people to descend upon town. many more that can go to the game because they want to be part of the action. >> you've got a brand. it's probably the most recognized and esteemed brand in the world, the nfl.
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you have royalties, you have clothes, you have a web site that's taken off and is remarkably well run for people who do fantasy and you have sponsorships. i want a piece of the nfl. when are you going to come public? >> that's a question for my colleagues. it's not a host committee issue. >> do you have any good ideas? >> well, i just think you've got something that would give everybody liquidity and i think it would be something everyone wants a piece of. everyone wants a piece of the nfl. >> it's basically with the exception of one team controlled by families. and they are warring. and so much you don't want the corporate mentality to invade football because football is all about competition, and i think the nfl has done an excellent job and with salary caps and all that and keeping that competition alive. so any team on any sunday, any team can win. and you want that -- i think
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that competition is what people find interesting. >> of course, the tisches have been involved for quite some time. not the best season thus far, though you do have a win under your belt finally. >> it's a disappointing start but our players and coaches are very committed to winning. they know how important it is for the franchise and also for our fans. we want to give the fans the best product possible, we have one win under our belt. our woes something a few more wins wouldn't satisfy. >> we all hoped. 4-3, we would expect it on the positive side but hoping you guys would get it done. i don't know what the odds are on that but they can't be good. >> we're not out of it mathematically. coach coughlin is one of the best in the business. nen we have a bye week and hopefully we'll be 2-6 when we talk about it sunday. >> other than it being freezing,
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anything else different about this super bowl? >> we're donating money to all kinds of after-school activities, we've collected 167,000 pints of blood already, planted trees in rockaway. there's a lot of things behind the scenes that will last years and years after the super bowl. people will say look at all the great things that have happened because the super bowl was here. >> i think the really great thing is that it's in new york and new jersey. this is the center of the world as far as i'm concerned. over a billion people watch it. it's going to be exciting to see it in new york. >> first of. super bowls, it sounds like. >> thank you. >> alfred, thank you as well. we got breaking news on consumer sentiment coming up and cramer's "six in 60." we're back after this. yeah, i'm married. does it matter?
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you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm. what are you wearing, jake from state farm? [ jake ] uh... khakis. she sounds hideous. well she's a guy, so... [ male announcer ] another reason more people stay with state farm.
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it's time. "six in 60."
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let's start off with sirius fm. >> this time they did not dl delivery. they've gone from buy to hold. i get that. >> and this is ugs we're talking about. this company, a lot of people short it. it's going to go higher. >> wow, look at that move. that's what you want. >> columbia sportswear. >> it's also a technology company. they made warmer coats. they guided up. it's been a really well-run company. >> eastman chemical. >> here's a commodity chemical company that did not deliver. look how quickly they take them down. not what people want. >> capital oil and gas. >> i regard this as a biotech stock of oil. pennsylvania, doing well. >> and sherwin-williams. >> disappointed last quarter and
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now back, better than expected. >> let's go to rick santelli for breaking news on consumer sentiment. >> university of michigan sentiment disappointing at 73.2. for a final read. this is the weakest since december of 2012. and it makes many scratch their head a bit because they all know that stock markets tend to dictate how confident many are and stock markets have been doing pretty well so maybe there's other issues here but a miss in the october final read of michigan. we still have inventories and sales on the whole sale side. david, back to you. >> jim, what do we have coming up on "mad money"? >> how are we supposed to feel about the government, the dysfunction, confident? this man has delivered an unbelievable level of performance. we'll hear again about what an amazing quarter. whiting is right there.
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vol ke i know bob miss and pisani sai disappoint. >> that's a great trio you got. >> i'm trying to do america. these guys are not constrained by washington. they're doing their business, making you money and that's what it's all about. >> it is what it's all about. >> no our business. >> let's go over to simon now. he has a look at what's coming up in the next hour of "squawk box." >> microsoft is up a staggering 93% this year. is microsoft a must-own stock? we'll talked to rich sherlund. >> and the head of the business roundtable will be here, john engler. and twe'll talk elon musk, is h
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welcome back to "squawk on the street." august reads on inventory and sales on the wholesale bigger than expect, inventory up .5, sales up .6. last month we saw inventory
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upgraded .1 to .2. sales moved from flat to up 0.1. >> let's kick off with amazon. courtney, we'll go to you. >> reporter: analysts are raising price targets and earnings estimates. investors are not concerned about a loss of 9 cents on the bottom line. for amazon, it's all about the top line growth, topping revenue consensus, marking 24% year-over-year growth. the company guiding q4 revenue in a range for 23.5 to 26.5
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billion. amazon adding 9 million new active customers. more importantly the company says it's added, quote, millions of new amazon prime members in the last 90 days. it's estimated the group ranges from 10 million to 15 million. so the addition of millions more is impressing wall street today. they're known to have stronger retention and more cross shopping abilities there. while -- amazon continues to grow faster than the econ market. twice as fast in the third quarter. trading at fresh 52-week highs. look at the company's future potential. jeff bezos not on the earnings call, the cfo giving big answers to the questions. not holding it against amazon
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today, at least eight of them are raising price targets on shares this morning. kelly? >> a 10% move, courtney, it's just amazing for this company. thank you very much. >> now we switch and take a look at microsoft's major beat with shares up sharply after the company reported double digit gains in the third quarter. rick sherlund joins us now. did you just raise that to 40? >> yes week did, from 38. >> good morning, by the way. >> good morning. >> it was a good morning for microsoft. it's amazing to see the share's reaction. in what you say is not necessarily a better quarter. >> yeah, it was less bad than we've seen from the company in quite some time. seems like things are starting to stabilize a little bit. the pc market has actually grown for the last couple of quarters. consumer is down left. it's not to suggest that things have ranged ratically in the pc
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market. it just that they're a little less bad and the commercial part of the business, which is 60% of the revenues was up about 10% again this quarter and is fairly stable. >> it goes back to the discussion of yesterday, is this a company you want to split up? what about enterprise? yes, enterprise had a pretty good quarter. does it add to -- >> we've advocated before that xbox doesn't fit too well with the rest of the business. and search possibly as well. could you give search back to yahoo! and sell it to maybe to facebook. you don't have to be in the search business and do the search processing yourself. you can cut costs, just like yahoo! does with microsoft now. so there are some things you can could jettison without -- the stock is up 33% so far this year. i think we've had numerous conversations where you felt people just don't get it.
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or perhaps you're hearing my conversation for a while, i didn't get it. >> well, let's not talk about that. let's talk about word in particular and the office product because that is a major component of the beat here, is that right? sales of office above expectations. >> no, office actually from the consumer side is down probably 20, 25% on the consumer side. >> what about business? >> business was up. it's mostly, though, when we talk business with microsoft, it's their server and enterprise products. so it's more where they compete against oracle and database. >> just specifically on office, he would say that ballmer has made a major error in not making office ubiquitous and mobile. what's happened this week very importantly, he's not putting out his out to he can sell more tablets. tim cook came through this week and said our own office suites
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will be on our products for free. are they going to on office a long time ago for other platforms, instead of trying to protect windows, go after the market opportunity. of a half of the consumer office uses we might very well buy office for that device. that's really where iworks will be competitive. if i were new management, i would probably by jefr note. let's exploit the tablet opportunity, the native tablet opportunity for lightweight, collaborative kinds of organizations. >> well, i hear the company is perhaps looking for a new ceo. >> well, i am --
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>> i've been an advocate for bringing in mumulally. he's been working at emc, he's working on the next generation of cloud computing platforms. he could catapult microsoft into a leading vendor with amazon and he would probably pursue this opportunity on ipads and say forget this fidelity. so there are things, good management here, i think could do to innovate and address new markets. >> rick, with such a strong move, just to resit rate up now and so many in the oofring.
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>> a lot of people dug their heels in and said i don't care what's happening with the corporate governance side, the business is getting hurt by tablets. they've been feeling a little bit of a short screen for the last month or two. new management will offer the promise of a -- and so then what do you do with the cash? do you cut stocks? if mulally decides to take the job, you could do it. >> what a difference management can make. great to see you this morning. >> have a great weekend. >> the health and human services secretary kathleen sebelius is
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on the hot seat. hampton pearson joins us. >> reporter: she was on a call center yesterday, saying people are working 24/7 to fix the web site and over 700,000 applications have been filed to access the site. in phoenix, the embattled hhs secretary was once again asked about calls for her resignation. >> the marriage of people calling for me to resign are people i would say i don't work for and do not want this program to work in the first place. i've had frequent conversations with the president and i've committed to him that my role is to get the program up and running, and we will do just that. >> and secretary sebelius is in as you ten, texas today. and she's scheduled to testify next week above the same.
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>> up next, twitter is now making the rounds on wall street, kicking off its road show today. find out what investors want to hear from twitter execs and who the big deal makers could be. plus, the view from the golden state. what west coast visitors think of its antics. plenty more of "squawk on the street" right after this. [ male announcer ] what if a small company
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welcome back. twitter is setting a price range at $17 a share and kicking off a dry run for its upcoming road show. kayla tausche is tracking that for us outside the midtown manhattan building. good morning. >> reporter: good morning, kelly. just about an hour ago, dick costolo and mike gupta came here to morgan stanley for what's called a teach-in, answering questions about valuation, business model and no doubt other questions from clients that have already started pouring in. very different from the bank's operation during the facebook
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ipo, there was no signage, they kept their involvement under wraps, notoriously because their lead banker michael grimes, who is notoriously quiet and a bit quirky as well. he's infamous for steering that facebook shift and blocking other buyers out. this time i'm told grimes is being assisted by executive colin stewart. they'll go to lunch and head to jpmorgan in the afternoon to wrap up their day of meetings there. of course goldman this time is in the driver's seat. they're pinning on the company was what is considered a reasonable valuation of $11 billion this they reserve the right to raise the twice and all that depends on what happens next week when they formally meet investors and answer the questions about demand, et cetera, come monday in the
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mid-atlantic states. >> thank you very much, kayla tausche. >> simon hobbs outside with a view of the exchange. simon? >> you see we have some ceos on tour here. we say what an opportunity to see if the atmosphere differs from the west coast from here on the east coast. ken cruz is the president and ceo of sunstone hotels, owns 22 hotels and then the president of farmers andm merchants back founded by your great grandfather. >> that's right. >> what is the atmosphere like? >> currently it's stable. >> just stable? >> yeah.
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banking as a whole is stable and improving. >> are you left-handing more? >> yes. lending is improving. the banks as a whole, the community bank sector is stable now. we are lending, albeit rates are very low and margins are squished. >> so you're got making as much have you got in california? eight, i think? >> no, we've got some good experience in california, san diego, los angeles and have a nice hotel in portland be, oregon. a lot of it is fueled by the housing recovery, which fell off very hard in california. which is helping to drive the broader economy. we've also got a real good dynamic with ooebd traffic in the u.s. the california marks tend to be gate way, the final piece of the
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puzzle, are the groups booking into your hotels. >> group books, 20% up on a year-over-rear basis. we have a very solid group base going into 2014, which is a big change from the other four years of this recovery where group hasn't been showing up nearly as strong as business transit. >> you preannounced last night in order that you could talk more freely about this, for which we're very grate approximately. >> oh, good. >> you beast on the last kwur because you're lowering your estimate because to lawmakers about to start budget talks next week. >> in spite of the child play in washington, d.c., we are hitting record numbers. it's not just a 16-day shutdown, there's ancillary impacts for a
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couple weeks after that shutdown. there's no long-term impact to our portfolio whatsoever. we'll be short term. but the horseplay has directly impacted the economy in the fourth quarter. >> henry, one for the left field. forgive me for asking this. but you're a banker. what do you think about the fine the coming through for most lie li jpmorgan but also owes owes. what do you feel about it? >> you know, i think it's a lot of political pandering, candidly. the fines are -- there's a whole part of the think stra caused the economic multi-doent and did and are. >> thank you very much. >> henry. >> simon hobbs on the floor for
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us. >> the atlantic magazine is now asking if elon musk is the greatest inventor alive. one thing for sure, musk has had a terrific year. what does he think himself of the stock's rise? take a listen. >> the market obviously goes through these periods of exuberance and depression. in our case the stock has a lot of volatility. so it depends so much on what people believe our future execution will be. our stock price is obviously far too high based on historical financials or even or current financials. so the value is shech -- as that confidence waxes and wanes,
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we'lly big swings in the value of the company.
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welcome back. shares of tesla down about 3% today. the atlantic pussing tesla co-founder elon musk on the cover of its november technology issue asking whether musk is the greatest living inventor. it's part of a cover story package that includes the 50 greatest breakthroughs since the wheel. joining us now, the man behind that cover story. james, it's great to have you with us. >> thank you very much, kelly. great to be here. >> a lot of people if you said greatest dreamer, thinker, innovator even would think elon musk but his actual inventions been that significant to deem him worthy of this ward? >> we undertook the survey to go to a lot of people in tech and did a lot of research and asked them who they would nominate,
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people who were young enough who have a career head of them and old enough to have accomplished certain things. the person who was clearly first was elon musk. we had a number of other people, jeff bezos and a few others. musk came up on more lists than anyone else. >> in doing the report, what are the areas you single out and identify elon musk as having invented enough things or having had enough significance across the industries he's involved in, if you could just kind of run us through his accomplishments on that front. >> he first came to the tech world through pay pal. he's within of the leading figures on three front. one is tesla, having short-term stock problems today but has been more successful than many thought in the realm of electric
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cars. the other is spacex and then solar city. he's got i don't know attention talking about this hyper loop, which is and fantastical pneumatic tube to get people back and forth. all of them have gone far enough for people to say there are many of them at once. >> i'm just trying to think who the other great inventors that are alive at the moment. you haven't mentioned mark zuckerberg. social media has changed the world. >> sure. >> it's only one trick and that's not good enough for you as you set the parameters. >> we're just surveying our experts and go with what they
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told us. bill gates was also not on this list, even though he's still the richest person in the world nor steve jobs because he's no longer living. but jeff bezos has been for a combination of technological web sites, going from his niche of selling books to selling everything. we thought it was interesting from people leading the field who they pointed to. >> it's fascinating, which is why we have you on. you've done this for around 30 years it says in your bio here. we do have a new breed of ceo, don't we? earlier it was the ceo of netflix who said he thought excess momentum, i paraphrase, and maybe that was why we've had
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people sell out of it. we've had tesla, again mentioning tesla, saying he's not sure that it deserves the capitalization. for -- >> i think that is very interesting. there may have been some prelude to that with the initial ipo letter from the google founder saying that they thought that there was a risk of their potential being misread by the market. people are innovateors and real founders recognize it is the long-term test for their product as opposed to the day-by-bay fluctuation. think i it is healthy to see this cautionary note. >> it's interesting to think about this and whether it's in the realm of social media. was the list long? was it short? did the composition tell you something about the strength and dynamism about the american economy? did it raise any concerns in.
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>> the main message of our technology package is one of reassurance for the american technology. i talked about where people would like to be doing their inventing 10 years from now and despite all the problems in the u.s. political system they although this remained the most dynamic and supportive market for general you'llly supporting companies. >> james fallon, joining us with a discussion about to play ups during the holiday season. tdd#: 1-800-345-2550 see opportunities.
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welcome back. about an hour into trade this morning, here are the stories we're squawking about, 7:31 on the west coast, 10:31 here on wall street. university of michigan consumer sentiment was below consensus forecasts and down from 77.5 in september before the government shutdown hit. shares of sherwin-williams up
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3%. >> ups posting a bigger quarterly profit, getting a lift from e-commerce and strong europe export growth. the stock hitting a high this morning. in line with the broader dow transports. they are now sitting at record highs. let's bring in our hatfield transportation analyst with raymond james. and donald, who is also a st. louis cardinals fan. must have been a long night for you guys. >> yeah, can i hear just fine. >> you have to be impressed with the amount of opportunities being provided ups via e-commerce add growth in e-commerce. it's kind of like pitching. you can't have too many good pitchers and with ups you can't have too many options and opportunities for people to manage their e-commerce transactions and that's what they've been doing. they've been expanding those
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options. as a result they've been winning. >> right. i get it. what's the advice to shareholders now? >> we have been neutral on the shares. but we have to admit that the performance they put up lately makes us question that judgment. >> donald? >> yes. i can hear you, simon. >> as long as you can hear us. we just wanted to make sure. hopefully you heard part of what he said there. but what's your opinion on the results? >> the results were stronger than we anticipated. for quite some time they were losing market share to fedex, still losing market share to fedex, but not nearly at the pace they were. growth was up 2.3% on ground, this quarter up 3%.
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they're accelerating the rate they're growing. but nevertheless, the business a rising tide lifting all. >> paul hatfield, what's your take on this? >> it's not a zero sum game. i think there's opportunities for both of them to excel. what we see is distribution patterns changing, watt people shop changing and that plays into the hands of fedex and ups. we've had both stocks rated outperform for a while and we expect them to continue to perform. >> just on that subject, overnight of course, art hatfield, we've had amazon report and the cfo is quite clear on the e-commerce side of things and let's assume they're leading the industry and walmart is behind them. they are going to build fewer
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but bigger fulfillment centers. does that change the game for these guys? >> no, i think they can provide any service. i think any of these positions that the companies want to take on the retailing side can be accommodated by fedex and ups. i think a lot of changes that are occurring fit in with how ups and fedex offer services and it may be a detriment to traditional legacy patterns and the changes will most definitely benefit fedex and ups. >> amazon cutting the minimum for free shipping, cyber monday will be as big or bigger than ever. is what's good for one good for both? >> absolutely. art's absolutely right. part of what's happening in e-commerce is facilitated by what ups and fedex are pioneering and making happen.
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as we go through this season, these stocks gain value, normally just because people notice them. they gain visibility. it's not -- we notice them much more this time of year than we do in, say, february. >> good luck to you both. >> good luck to the cardinals there for him. >> and warnings of a stock market correction today. the warning raising some red flags for investors. dominic chu is at headquarters with a couple of signing to keep an eye on. >> some investors are looking for signs of caution. they're looking at american sentiment. in the latest reading investors were the most bullish or optimistic in at the months and
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the least bearish or pessimistic they've been in the last 20 months. second, is the market too rich lirichly valued? many say now but some say it's trading at 16.5, versus the long-term average belief 16, in other words, stockings are more expensive than they've typically been in the past. the third is momentum. a lot of momentum obviously in terms of stocks. some of thieves high flying names, think netflix and tesla, they've slowed down a little bit. fourth, we're seeing big name stock games in big companies like google and priceline going over $1,000 a share each. gray wolf execution chief market analyst mark newton says he gets nervous when he sees everyone talking about thousand dollars stocks and when carl icahn stops tweeting about the stock market. and according to investor firms,
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investors are using record amounts of borrowed money or margin to buy stocks. there are others there might be worth taking a look at, especially if you've been fortunate enough to protect profits. no crystal ball but those are definitely some signs of caution investors we talked to are looking at. back to you. >> climbing the wall of worried but if you look at the fund flows, the money's coming. >> they're still going to equity funds, yes, that's right. >> coming up, john engler will weigh in on the state of business and what he thinks washington needs to do now as budge talks start. he'll join us live right after the break. mine was earned orbiting the moon in 1971. afghanistan in 2009.
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welcome back to "squawk on the street." breaking news, cnbc has learned senator rand paul, republican senator from kentucky, has threatened to put a hold on the nomination of president obama of janet yellen to be the new federal reserve chairman, this according to a source close to the senator. he informed the senate leadership of his intention to put the nomination on hold this weeks. he's insisting on a vote on his fed transparency bill. some hold was expected. it was not expected he would tie it to his fed transparency bill. i talked to those in the senate and they said it's complicated because many republicans are co-sponsors of this fed transparency bill. the senate is not in session so paul cannot put a formal hold on it. my understanding is he will formally do that next week and
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wants consideration of his fed transparency bill calling for an audit of the federal reserve. guys? >> ted cruz said as far as the tea party was concerned that he had an open mind on yellen. steve, can you help us on a financial market perspective where we don't want a holdout, we want certainty for financial markets. if some of these guys don't like yellen, it doesn't matter because it has to be a majority. do they have a veto? >> i think if they get 60 votes, they can override this hold. and whether or not there's a formal filibuster is unclear to me. i'm sorry, simon, but you're going to get into john harwood territory. i understand he wants to put a hold on it but the actual mechanics of this is something i only know a little bit about. i believe 60 votes. >> thank you, steve. >> thank you, simon.
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>> that's an interesting development. for now let's get back to kayla tausche. >> reporter: just moments ago, we saw the executive team being led out of morgan stanley. he's taking them around to his competing banks, which is an interesting detail that hasn't usually happened in these ipos. we saw dick costolo, i asked him how the meetings went and he said good. we saw cfo mike gupta. the lead underwriter i'm told there will be lunch there as well. these are important meeting as they're answering questions from the people who are selling these shares. back to you. >> kayla tausche in midtown
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tracking down twitter. thank you. >> official budget negotiations are set to next week but both sides of the aisle are saying don't expect anything grand. what does that mean for businesses? john engler joins us now. good morning to you. >> good morning. great to be with you. >> governor engler, thank you for your time. first of all, what do you make of the news here there probably isn't going to be any grand bargain out of washington but that maybe there can be a small compromise. should we expect the small compromise? >> well, look, a compromise is a good thing and just keep moving ahead. start learning how to work together again. the nice thing that we have is sort of a regular order process where we've actually got a real conference committee and i've got a lot of confidence in chairman ryan and chairman murray. the two of them can, if they're allowed, work something out. can they get much bigger, the grand bargain? pretty hard to do, not much time. we need it to the country.
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we still have the overhang of the entitlement programs which will need to be reform. it's better to do it earlier than later. >> maybe if we can get some compromise on a smaller piece of the issue, it will warm hearts for a grander deal later. i can't help but think about the news that steve liesman reported, rand hall possibly putting a hold on the nomination process for janet yellen. that is going to be a political battle for the federal reserve chairman. >> i think an overwhelming majority are willing to give the president his choice to head the fed. the process is a little unseemly getting to miss yellen, i think she'll take over and take over on time. what we've got to get back to in washington is the ability of the parties to work together. it's okay to disagree, but the process still has to move on.
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there are always elections to chang the composition. there will be one in 2014. but in the meantime let's not try to shut the country down or cripple big institutions just to make a political point. the ceos at the business roundtable think that's silly and it gives america a bad image around the world. >> yes, but the important this evening governor and the testing and worrying this evening ng is the fact they didn't want it to happen it did, still business was ignored. what does it mean when you have the ceo of starbucks, schultz, going out and taking full-page advertisements in the press, delivering 1.5 million signatures to capitol hill saying get your act together and counting. if he has to do that, isn't something broken? >> what's broken is the ability of the people who are in the process to let the process work. one of the things we've been
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dpo doing for a long time, too long, speaker boehner said we need to get back to a regular order of business. >> forgive me, that's not really what i'm asking you. i'm asking you is the link with business broken? are you able to function trying to intervene, trying to get stuff done when it is so polarizing that many of the ceos on your roundtable don't want to get involved. they don't want to take on the tea party. >> all around the country, 50 state capitals with legislatures, they have splits and they get their work done. why is it that only washington isn't functioning? i think the process can work but the people in the process have to let the process work. i don't think they've done that. maybe everybody's learned some lessons this past month and just maybe we'll get back to doing the people's business. because they've got to look if
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you're a democrat or republican, these numbers, and say that most americans say throw them all out. >> governor, just briefly, what is your organization doing to help make that happen? >> how is the what? >> what is the business roundtable doing to help the two sides come together on a compromise here? >> what we're trying to do is say, look, here's what we think would be in the interest of job creation in america. that's what the business roundtable wants. we don't want 2% growth, we want 4%. there's a whole series of strategies which provide that certainty that you talked about, the predictability and the right policy. so we try to lay those out there and say here they are. and we also, because we don't endorse candidates, we don't give money, we say, look, for the country, for america, this is what you need to come together on. >> okay. well, we'll see if they're listening and certainly we'll see if we can reach a deal, even on a small scale come december. that's governor john engler, now president of the business rou
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roundtable this morning. thank you so much. >> thank you. >> still to come, the man who invested in elon . in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price --
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welcome back. on the back of the news we got moments ago from our own steve liesman that rand paul is threatening to put janet yellen's nomination to the federal reserve on hold, on monday, we'll have his father joining us on this program at 11:30 a.m. eastern time. >> a man who would like to abolish the fed. >> yeah, i don't expect him to change the message. back to full strength in chicago. life in the cme. rick santelli, welcome back. >> thanks, simon. you got me all fired me up, because your last comment is going to tie in with what i want to talk to. simon referred to what's going
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on with janet yellen in the senate, and maybe the son of ron paul is going to just try to abolish the fed. you know, i know there will be a lot of fun made out of some of these hearings, especially with the extreme group worried about deficit and debt and the federal reserve. but i think with good reason. once again, we look at the dollar index, it is at the lowest level -- close to the lowest level of the year. the lowest level in two years against the euro currency, so let's just think about the effects and why the dollar is moving. why anything is moving. let's take stocks, push that off to the side. investors love what's going on. whether it's in washington or it's with the federal reserve or whether it's the heart of the senate hearings, potentially qe. why? because stocks keep moving higher. listen, people that make money don't necessarily have the same type of conscience while they're trading as they do after the bell. that's for another discussion. let's consider that the dollar over the last four months has lost about 6% of its value against the euro. we see the yen has lost about 3%
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of its value in the last four months. but that's not even talking about the effects qe has on the emerging markets. we talk about the emerging markets. but let me tell you something, canvassing them with liquid, liquidity, qe, and then rolling it back, and putting it back, it can't be easy to deal with. so over the same last four months, where we see the yen and the dollar moving so strongly, in a weak fashion against the euro, look at the euro, versus the ru the rupee, 10%. how do you think that will make exporters feel in europe? as many in this country will use the excuse of what's ghing on in washington, or, you know, the old bad-weather-excuse for everything, and i like to look at the markets four the way they r let's be honest, 148 on the loss, later than expected jobs report, lower participation rate, a new pass at the lowest level since august 1978.
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91,000 people var musing, not counting as unemployed, and the last minutes, i believe on the 16th, all of that weighs on the dollar. but foreign exchange, especially when it's between the yen, dollar, euro, like swimming in a five-diameter-circular pool. you bang your head a lot. the other currencies will get the gps, and what that means is for dominated investors. >> yeah, i think it will be a tail. thank you very much. good to see you. now, no profits, no problem. shares of amazon jumping today despite not posting a profit. they're up -- they were up earlier about 10%. 7.5, anyway. after the bell, we'll debate whether that's a warning sign for the stock. stay with us. "squawk on the street" will be right back. i love having a free checked bag
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good morning. we're live here at post 9 at the new york stock exchange on this friday, and let's begin with the check on markets today. taking a look at the dow. up about 26 points at this point. small gains across the s&p 500, and the nasdaq. the interesting one to watch is the level of the nasdaq, just south of 4000 for the first time in over a decade, and amazon, in particular, getting some focus this morning. shares of sherman williams are rallying. the paint company is moving higher after revenue beat analysts' estimates, and shares of zynga. look at this one. a nice gain today, up about 10%, 11%. the online gaming company saw third quarter revenue come in above estimates, and says it
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expects to be profitable on an adjusted basis this coming year. and the "road map" for the next hour. shares hitting an all-time high on amazon, after posting higher than expected revenue in the third quarter. despite the move, amazon still posted a quarterly loss, which begs the question -- how high can the stock keep going if the company isn't making any money? we could be less than two week, meanwhile, from twitter's ipo right here on the floor of the new york stock exchange. this is sure to be the most anticipated ipo since facebook. >> which, of course, had massive problem when is it started trading. how can the new york stock exchange can make sure the same thing won't happen all over again? we'll try to get you the answer. shares of tesla continue to soar. they're up around 400% so far this year. it's gotten to the point where even elon musk says tesla's stock has probably come a little too far too fast. what does the future hold? we'll ask the man who first owned the model s car and was an early backer of elon musk. but we begin with the news
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we brought you a few minutes ago, senator rand paul threatening to put the nomination of janet yellen to the federal reserve on hold. steve liesman rejoins us now from headquarters with more on this one. good morning, steve. >> good morning, kelly. the reason why it's a threat right now is because the senate is not in session. the yellen nomination has not yet been brought to the floor. what happens now is you'll have a committee hearings, reported out of committee. and when it gets to the floor is when you have a formal hold put on. what we do know, according to a source to rand paul, he has threatened to put a hold on the nomination, doing so by informing the leadership of this this week, and will do so more formally, we understand, next week. what he wants is he wants a consideration of his audit the fed bill, introduced a bill that was first introduced by his father, senator ron paul, and causes for greater audits of the federal reserve, and the federal reserve has opposed this, concerned that too close a view on the federal reserve would cause politics to get into
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monetary policymaking, and the federal reserve has contended there are many, many audits of the federal reserve, just not in the making of monetary policy. so, kelly, a lot of people expected this, expected the yellen nomination not to sail through. the complication here is he is tying to this bill, which has many republican co-sponsors. this bill actually passed the house back in 2012, never came up for a vote in the senate, kelly. >> all right. and, steve, it's a great point. we should also remind people, outside the u.s. especially, that the senate is democratic while the house republicans -- or the house of representatives has a republican majority. >> correct. it will take 60 votes, however, in order to do cloture on this nomination. >> all right. that's what we were wondering. we'll get more from john harwood. steve, thank you so much. >> pleasure. shares of amazon trading at all-time highs after reporting better than expected revenue, but with no profits still to be found. is the stock a buy? >> joining us is collin belcher,
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and aaron kessler, from raymond james. guys, good morning. >> good morning. >> good morning. >> collin, you know, it was one thing when it was a young, little baby of a company growing up and growing quickly, and people were buying in for the growth opportunity. it's another, now that it's arguably matured, still not profitable. what exactly is the investment thesis for amazon here? >> well, i would disagree with your premise, kelly. i think that amazon still really is in the early stages of growth. and retail, certainly, they're the leader in ecommerce, but still significantly smaller than companies like walmart. and in media and technology, amazon is still very early in tremendous multibillion growth opportunities. so focusing on profits for amazon now would, frankly, be shortsighted when they have much revenue growth. >> aaron, i'm curious on your take, doesn't it come down to, for example, if the company isn't profitable, are you speculating they'll be profitable in the future, or
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discounting future cash flow -- you know what i mean? can you explain from a balance sheet point of view how you put a number on the shares. >> yeah, limited profitable. we upgraded the shares to a strong buy. our thesis is they can get to a 10% operating margin from the low single digit margins they have today. yeah, on a discounted dark flow basis, or some of the parts basis, we think they can get the 10% margin longer term, and that will drive appreciation in the shares. we're expecting smaller margins, but as collin said, we expect them to still invest in the near term, which is the right move. >> collin, so for this stock to keep working for people, do all of the factors that point towards its future, size and profitable have to keep working each quarter? or what could trip up the company at this point? what could actually spook investors out of the stock? >> sure. i mean, well, for now, i think the revenue, the top line, is the most important metric for amazon. as long as they're growing in excess of market rates in ecommerce, for example, to this
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level that i think is good enough. i think what would trip up the stock or the multiple at least, would be amazon missing on both revenues and earnings. and we haven't seen that. we've had a softer top-line quarter. they've actually showed a little bit leverage on the bottom line. >> aaron, that sounds, then, like this company is executing, despite -- there's so much cynicism around it. and the move today is just amazing, again, for the fact that it hasn't reported a profit. where do you see ultimately shares going from here? >> yes, so we've set price target today of roughly 450, sum of parts analysis. we think it can get there, especially as investors start to see more margin leverage. we think that does happen in 2014. that's the next leg of growth, is strong revenue growth as we see margin kick in a little more. that will be the next prowess for sure. >> collin, in a word, your price target? >> 365, but with $100 billion in
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revenues potential in the next year, certainly we see upside to that if they continue to execute every quarter as they have. >> okay, yeah, well, it sounds like it's still a wide swing potentially, even though you see its future there playing out relatively well. we really appreciate it coming in. >> thank you. stocks surging for mike roy soft. josh lipton joins us live from san jose with more. a big move, josh. >> yeah, absolutely, kelly. microsoft reports, beats, and pleases, reporting 62 cents per share on revenue of $18.5 billion. some analysts had thought mr. softy would swing and miss. instead, commercial revenue jumped 11% to 11.2 billion. double-digit revenue growth for the productivity offerings. cloud revenue doubled. cfo amy hood saying it was a great start to the fiscal year.
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also said that for the second quarter, the enterprise business looks strong and they're set up for a fantastic holiday season. on the consumer side, microsoft said revenue from products and services -- which includes the surface tablet and xbox -- rose 4%. microsoft said surface revenue grew to 400 million. the division's revenue rose, even though revenue from pc-makers, who license windows, dropped 7%. but it was better than forecasts. investors clearly hoping that maybe we are now seeing stabilization here. of course, microsoft still does face a real challenge. how do you build a sustainable revenue model when you are no longer the dominant provider. also the main products eroding the windows ecosystem weren't selling, the new ipads and kindles. the new catalyst for microsoft, is a new ceo. jason maynard says they'd like to see a cost-cutting guru, and they think it would stifle
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innovation, saying he would like to see someone who fill the product and tech sal vision of bill gate, regardless of who is picked, analysts think we'll have a new ceo named by the end of the year. guys, back to you. >> thank you very much, josh. everyone probably remembers the massive problems after facebook started trading on the nasdaq last year. now, as twitter gets ready to start trading, the new york stock exchange is trying to make sure the same thing doesn't happen this time around. and we'll tell you how in just a moment. plus, here we go again. a new deal by blackstone going back to the future, and maybe not in a good way. we'll explain when "squawk on the street" continues. the american dream is of a better future,
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this year's long-awaited ipo is almost here. twitter's roadshow is starting in midtown, manhattan, with the ipo coming here to the floor of the new york stock exchange. we think two weeks from now. more or less. this weekend, the new york stock exchange is going to try to get everything in order ahead of that huge floatation. bob pisani is here to tell us more about that. a full rehearsal, mate. >> a good chance to educate people about how the ipos work here at the nyse. i'm excited about this. they're testing the systems this weekend in preparation of the ipo. they routinely do testing of the systems on the weekend. they went out of their way to announce they'll be doing a specific test for the twitter buoy. why would they do that? it's more than likely to be aimed at twitter, that they're doing everything to ensure a
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smooth open. here's what will happen. outside brokerage firms participating on a voluntary basis will be able to connect to the systems and run a simulated auction. they'll put twitter in the stock file, test the order flow, the conductivity, publish the balances, and then open the stock and let messages flow through the system. they may open up the system to do multiple tests, meaning they'll test other stocks, as well. secondly, there will be some level of market participation, designated marketmaker participation, the old specialist, to ensure there's a realtime test. there will be people on the floor. the important thing about this is that the nyse process is different. the nasdaq process is electronic. but at nyse, there's a blend. here's how the process will work at the nyse and always works. days before the trading, the underwriters build a book of orders to buy and sell several days before the ipo on the evening before the stock trades, they size up the demand and set
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an initial price for the stock, that they're going to pay for it. on the day the trading begin, representatives of the lead underwriter meet with the designated marketmaker, dmm, to go over the demand of the stock. the dmm will be getting interests of buy to sell from the crowd, the floor traders, the people we show every day who have orders to buy or sell. the rest of the time, up until the stock is opened, that may be an hour or so, the dmm conducts an open auction. he'll indicate how much there is for sale, and people yell back and forth, i'll buy x amount, and what price range they'll open the stock up. this is an indication. you hear me talking about it. it can be as wide or narrow as they feel necessary. 20, $22, $20 to $25. the dmm sets a price to open when everything is in. everybody gets the same opening price. the dmm will yell to the crowd and to the underwriters on the phone, "the book is frozen." it's a famous line down here. that means, that's it, folk, no
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more orders can be placed. anything after that doesn't count. the stock then begins trading. now, what they are testing for most of all is what happens after the stock opens. they're going to stress the system with a lot of offords -- of orders, and i know this sounds cumbersome and old-fashioned, and it is. i have witnessed north of 1,000 ipos happen this way. the beauty of the system is that nothing happens unless the dmm says the stock is opening at this price, and it's a beautiful way to ensure an orderly open. >> and it is great to see you so fired up. you really are genuinely -- >> it's great to get a chance to explain it to people. >> i was going to say, the 140-character, that would be the challenge. >> yes. >> i love the education. here we go again. sources tell cnbc blackstone will issue the first ever bonds backed by single-family rent at homes in a $500 million deal.
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diana olick joins us live from washington with more on this one. good morning, diana. >> good morning, kelly. we know what mbs are, bonds backed by mortgages. these are bonds backed by single family rental homes. so investors get not only the rental stream, but they could also get a cut of the property if and when it sold. now, blackstone sources say they'll be making the first offering as early as next week in a $500 million deal. blackstone is the largest investor in single family rental ho homes. a lot of investors out there doing this, buying and rehabbing the foreclosures. blackstone through its invitation homes has spent an estimated $5.5 billion on more than 32,000 homes according to a recent report from kbw. this securitization is really just the next step in leverage, but investors say they already have a lot of questions. >> -- acted like, you know, we are and traditionally the sbrs
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deal, and from an ongoing perspective, looking at the operations. this is a, again, a new asset class. and so, we want to make sure that the sponsor that has invested the equity is going to be able to collect rents, rerent the properties in a fairly short period of time and be efficient about operations. >> again, these could be launched by the middle of next week. jpmorgan, credit suisse and deutsche bank will market the deals. they represent a few thousand homes. we don't know exactly where the homes are located. we know that most investment in single-family rentals has happened in southern california, arizona, and nevada. now, sources say that at least one of the tranches in this deal with be aaa rated, but investors say they won't be looking at the ratings so much. they'll be doing their own homework on this one, because no one wants to get burned the way they did in the subprime mortgage crisis.
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kelly? >> right, diana, that's why people are saying, shouldn't we be worried this is the bubble playing out all over again? >> well, look, the devil is going to be in the details here. we'll be looking at where the homes are, what kinds of markets they're in, do the markets have the possibility for appreciat n appreciation? where are the rental streams coming from? what are the jobs in the markets? there are so many questions going into this. again, a lot of people will be looking if they'll be slice-and-diced, whole pools, so much more to come. >> all right. diana, thank you very much. diana olick has the latest. steve liesman has more information for us back at hq. >> just talked to a senate democratic aide who said paul's ability to block the nomination of janet yellen should not be overstated. the democratic aide pointing out that under senate rules, he would need 40 other senators to join him to block the nomination. paul, as we reported earlier, has threatened to put the nomination on hold. as we suggested earlier, he'll
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need help to block it. he wants the audit, the fed bill, fed transparency bill, to be considered by the senate in return for releasing that hold. he has informed the leadership he intends to put it on hold. but the first thing out of committee, all kinds of stuff has to happen procedurally before there's an actual hold put on it. and the belief right now is they have the ability to get the yellen nomination through. kelly? >> all right. we'll see if that changes. steve, great stuff. thank you this morning. >> thank you. many of you have probably watched a tv show or a movie on the go. even if you have an ereader, it's tough to read what you want when you want. think netflix for books. we'll explain when we come back. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help.
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monthly subscriptions for access to thousands of book titles from big publishers like houn on their ipads and electronic device. welcome, from oyster. >> thank you very much. >> what is a subscription? >> so it costs $9.95 per month, and for that price, our subscribers have -- can access an unlimited number of books from a catalog of over 100,000 titles and growing every day. >> why on earth would the big publishers sign up to do what you're doing with the publications? >> so what we offer is a new channel to bring in new readers. what we found is when people can read books and explore freely, they actually end up finding a lot of books they wouldn't have read, and that allows them to read more books. >> what's amazing is how quickly you've grown. how many users do you have? >> so we have grown pretty quickly. just launched the service last month. aren't giving full subscriber
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numbers. we've been pretty blown away by the response from readers, and really focused on kind of building a base of people that loves our product and growing that base over time. >> and what about the business model? because that's what people around here always want to know about when we talk about the next big company. >> of course. so we work with publishers to acquire the content that we deliver to our subscribers. when we started the business, we knew content acquisition would be important. we worked with publishers to develop a model that could thrive over the long term. and today, we have over 100 publishers we're working with. >> where do you hope to be in five years' time? >> we think a large, independent company. if you look at companies like netflix, and movies like spotify, in music, and these are large, independent companies, and there's no reason we can't do the same. >> it's great for book looker, but we've seen what netflix did to the local independent store. book sellers are struggling. is this a nail in the coffin for barnes & noble? >> it's complementary to the
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brick-and-mortar. i still go to my local book store. i read print books. and i love discovering new titles on oyster. the combination can get people to read more. >> speaking of ebooks, are both offers available, or is this just for physical ones? >> this is just ebooks. >> oh, just ebooks. >> iphone, ipad application, just ebooks. >> good to meet you, eric. eric stromberg, the co-founder and ceo of oyster. the bells are about to sound across europe marking the close of the session there. we'll have details for you as soon as we come back. stay with us.
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[ bell sounding ] the european markets are closing now. >> yep, closing on the session, and indeed for the week overall. before we go any further, hats off to the brits. astounding growth in the third quarter, rising at an annualized rate. the u.k. economy, for some reason, accelerating away where others are not. meantime, relatively mixed close, as you can see. the major standout today, and remember we're at the height of earnings season, is the number of c.o.s disappointing because of the currency effects. a, the euro at a two-year high. and more importantly, they're making money in the emerging market, and the currencies have plunged. and we saw this here with whirlpool, electrolux is cutting
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some jobs. it's a third week of gains, the melt-up continues on both sides of the atlantic through, importantly, this week, the ecb announcement on the stress test. rbc says today it thinks 15, 20 banks will ultimately fail that, it won't be systemic. only 4% of the banking sectors. so we trade higher into the weekend. let me mention finally there will ab strike in french soccer. yesterday, the 43 clubs that own the soccer clubs in france announced they are going to stand firm with a strike slated for november the 30, against, specifically, the 75% marginal tax for anybody who earns 1 million euros or more, $1.3 million. the owners, according to the strike, say it will affect 120 players, and most of the french soccer teams are run at a loss, as you know, and they can't take it anymore. >> the owners are calling --
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>> the owners are calling the strike. >> the world is upside down. thank you. when you think of fracking, you think of huge natural gasfields in america's heartland, but there's one surprising city on the east coast seeing a boom thanks to hydraulic fracking, and it's philadelphia. brian sullivan is live from philadelphia as he continues his cross crossing of the country with more. brian, good morning. >> reporter: kelly, good morning. i know your co-host there is usually swimming in champagne pools, on cruise ships. we're here at the shipyard in philadelphia. a different story here. right behind us is the liberty bay, brand-new 800-foot ship that will carry nearly 800,000 barrels of oil. we talked to john bond, helping to oversea this project. listen to what he describes the ship as. >> the product itself is actually 126,000 cubic meters, but i think more interesting would be the fact if you equate that the gallons would be approximately 33 million gallons. >> reporter: think about that. 33 million gallons, kelly. she'll be floated next week,
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sent up to alaska to carry crude oil from alaska down to the west coast. and why we're here, the oil boom is helping with shipyard job, because they have orders for six of the ships. this one, and this one over here, exxon mobil's, and other customers, as well. oil and gas, being drilled, whatever over there, is helping jobs here, good jobs, that will last years in the philadelphia shipyard. on "street signs," we've been up in cranes, down in the prop. they may let me take this out on the water if i can sweet talk them. >> maybe you should offer them champagne, brian. maybe that'll do the trick. >> simon, is this different than the royal caribbean? >> yes. yes, it is different from royal caribbean. as you know very well. it's a very different approach, yes. they're carrying oil and royal caribbean carries passengers. >> it's not as long. >> hey, a great week of
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reporting, brian. love "street signs" all week. >> reporter: thank you. let's focus on proctor & gamble, the shares sliding after the company reported first quarter earnings. p&g profits rose 8%, but core earnings slipped from the previous year. joining us now, john forche from jpmorgan. happy friday. >> happy friday to you. >> what did you make of the results? >> i thought the results are generally solid. it may have been hope for a little earnings upside and the earnings were generally inline. what they're focused on is the organic growth, which came in slightly ahead of the expectations, particularly in the fabric and home care, and the baby care business. beauty care, which has been the biggest concern for quite sometime was weaker than expected. so that's another concern that could be weighing on the stock today. >> if you have management in the room, and you weren't just listening to them on a conference call, what would you say to them? what would you want them to do? >> well, i think what people are looking for is more innovation
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here. this is a company that's got its hat handed to it over the past couple of years from a market share standpoint, somewhat because of pricing but because they haven't innovated enough. i think investors are looking at them and saying, you need to get more beauty care out there, whether it's hair care, shampoo, skin care, and that will drive the revenue going forward. the other thing i tell them, they're doing a great job cutting costs and that needs to ramp up, as well. >> that won't be news a lot of employees want to hear maybe. john, just actually a question about the bigger strategic picture. the bifurcation has been something that strategically p&g needs to consider going forward? is it possible to be a consumer products company in this day and age if that's ultd maltly where and how people are shifting the way they spend money? >> you know, i think it very much is. proctor has gone the opposite
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direction in terms of really lowering some of their exposure of the pharmaceutical category over the past couple of years. they've increased their exposure on the otc side to some extent through new products. the real issue for proctor is they're very developed-market focus. they haven't had enough growth in emerging markets. so colgate gets one-third of the sales from latin america, proctor gets 10%. it's more of a geographic issue in my mind than a category issue or, you know, moving out of consumer products. if they can get latin america exposure, russia, china, et cetera, it will help the growth of the overall company versus its peers. >> where does p&g fit in the grade of the stocks you cover? what is the best way for people to make money? >> i still like beverages. proctor & gamble, it's a huge company. we're seeing growth slowly accelerate, but still a ton of skepticism out in the market, people thinking they can't get it done, it's too big to grow,
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but we're seeing top line slowly move forward, they're getting a huge amount of productivity, which they can ramp up further. i think investors should take advantage of the skepticism, and i think the stock has more upside relative to the group and relative to the market going forward. >> john, have a great weekend. thank you, john faucher on p&g. >> thank you. over to dominic chu with a quick "market flash." >> callaway golf teed it up and knocked the cover off the ball. the golf equipment maker posted a narrower than expected result for the quarter. it led them to boost the full-year guidance for profits and sales. the former head of adams golf is in a turnaround effort. shares of the company up 28% year to date, and up 40% over the course of the last year. so e.l.y. share, kelly, doing great in today's trading. >> that's incredible. that's a huge move. huge move. incredible. thank you, sir. it's been amazing ride for tesla. the stock up 400% this year.
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it's up so much that elon musk is saying the market cap is higher than it deserves to be. where does tesla go from here ? our next guest was an early investor, even owned the first model s. steve jurvetson will join us in just a moment. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. always go the extra mile. to treat my low testosterone, i did my research. my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal
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and getting $400 price targets from analysts, but an ugly profit picture. should you care about profits? plus, a reversal of fortune. many high-flying momentum names are getting slammed this week. coming up at the top of the hour on "the half." kelly. >> thanks, melissa. from space x to twitter to tesla, it has an investment in pioneering technology and has been described as the investor who saved elon musk's spacestreams. so what is the next big tech idea he's following? steve jurvetson is managing director at fisher jurvetson, and he joins us now. good morning. >> good morning. >> it's fascinating to go back and see the investments over time. you have been around since '85, invested in hotmail. and had one of the first s car, and kicking things off with tess la, since it is in the news, venture capital, in terms of valuation, is the source of a
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lot of concern, especially talk of a bubble. when you hear a guy like elon musk, like reed hastings, saying they're feeling wary about where they're share trade price is. what's your reaction? >> i commend them for being very straightforward and saying thank you to the market, you know, you have so much trust in our ability to execute. but they also feel a bit of obligation, to earn the price that the market is affording to them. we as investors, you know, investment companies, when they're ideas and people have a dream of changing the world, making all cars electric, and if you step back and look over a five-year, ten-year period, bubbles don't matter, the oscillation doesn't matter, and the institutes are in the noise. and we look at the long arc of history. and 20 years from now, gas cars or electric cars? >> and does it work on a case-by-case basis? in other words, does it work for tech companies when they need capital, that it'll play out well over time? or would you defend the comment about market valuation more broadly?
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>> depends on your holding period. i think tech is special in that you can have profound shift, exponential changes in market share that occur through mechanisms that are unprecedented. and so, people are in differing points of view. is this going to succeed or is this going to fail? you notice in the dot-com boom, and any new technology, that expectations and reality can get out of whack and people can have all kinds of different opinions. but that noise is the way i would describe -- the noise is different to the long-term trend. do you believe in a long-term trend, and invest like we do and hold for 10, 20 years. >> yeah, i mean, steve, a lot of the criticism at the moment is your industry is involved in a scattering approach, that it will spray money around in order to get a lot of equity stakes, basically play the numbers, if you like, with the hope that one or two will succeed. and an awful lot of companies that are growing are starved of the operating cash that they need to actually leverage where they are. i mean, what do you think about that criticism of the industry in general?
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and are you different -- do i get the impression that you are clearer in your bets and doubling down to a greater extent? >> that's exactly right. so at an industry level, you have a ecosystem of start-ups to investors, from angels to venture capitals, and many see it as expanding in investments. and we think we're the only company, and we invested in tesla. same with space x. same with solar city and their particular strategies. same, frankly, with skype, when we invested in that company. we're not looking for three or four more skypes or tesla. we're on to the next industry. >> that's exactly what our viewers wanded to know. what are the three most exciting investments out there right now in your opinion? >> well, from the space x perspective, we're noticing access to space is dropping dramatically, meaning the cost of getting something to orbit.
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the entire fleet of satellites could drop. the capability to sort of enable the next few months is to watch the entire earth, every meter, every day, to see every crop and its health if you're a commodities trader, to see every car and every parking lot of every retail store in the world every day. that capability will be arriving next year, enabled by space x's lower cost and people rethinking satellites. >> wait a minute. i don't want to get you off track. there will be a lot of people who say, wait, i thought this was about people doing space tourism. now it's going to be about monitoring of everywhere on earth for any reason that anyone's willing to pay for. >> that's right. space tourism is an interesting niche in space. we're much more interested in businesses that are enormous, like, you know, agricultural monitoring, disaster response teams, and monitoring everything you may want to do for earth awareness, from climate, you name it, and have the daily data. >> steve, do you go in knowing you'll be able to monetize? do you go in seeing a pot of gold, or are you kind of just doing stuff that's useful for
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people in a kind of social media way and hoping at some point that the cash rolls back in? >> no, we try to invest in companies -- and i in particular -- i believe one day history books will be written about. think about the transition to electric cars or becoming a multiplanetary species, if we colonize mars and space x. these are the kinds of things that would be historic. there are businesses like hotmail and skype, where we don't need the revenue model at the time of the investment. we know they'll radically change how we communicate, and ultimately human intention can be monetized, whether it be by advertising or promotions. we don't worry in those kinds of consumer internet companies as much about how they will ultimately make money, but we do for most of the other companies. >> steve, i interrupted you, kelly asked if you could give three exciting investments. you gave us one, space x. what would the other two be? >> there's a whole new resurgence of robotics and a path to artificial intelligence. google autonomous cars, humanoid
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robots in the workplace, doing anything a human can do sitting down. these are the beginnings of a new way of robots in the workplace that will improve productivity and bring jobs back to america where they may have been outsourced before. a third category, if you're interested, is industrial/biotech 2.0, we program organisms to make food, chemicals, and eventually fuels perhaps, from waste and waste feedstocks, and we literally write the code of life like a computer program. and the generations would have to physically cut and paste. now we treat it like a program. >> what company embodies that space? >> yeah, synthetic genome x, or genomeattica, making plastics from sugar, and glycos out of houston, making food from wastes
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of food manufacturing. >> a glimpse of the future that will thrill and terrify people. thank you so much for joining us, steve jurvetson. >> thank you. earnings results this morning prompting some big moves in several stocks. the earnings squad will break it all down next on cnbc. ed bag with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪
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welcome to the "earnings squad" where we dissect the
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stories everyone is talking about. i'm melissa lee. joining me is dominic chu and jackie deangelis. to the scorecard. with 49% of the s&p 500 companies reporting. 12% have met estimates. 21% of the reports have come in below forecasts. starting off with zynga, posting market gains after third quarter earnings. jackie? >> we looked at the numbers yesterday. a two-cent loss, better than expected. down 36% on revenues, also better than expected. up 14%, shooting up, in the after-hours session. a couple of things to think about here. first of all, the first quarter on the books for the new ceo. he's bringing in a coo to work on the mobile gaming strategy, so that's important. analysts saying they like the cost cutting and management changes, there could be a turnaround here, but it comes back to mobile. if they can't get that right, it's a serious problem. >> the user trends have not been favorable. even analysts came out raising the price target, saying the user trends have not been good,
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and they face competition in terms of investors' attention when it goes to going public sometime soon. >> it has to be don matrix's biggest challenge, and he has to show that the trends will reverse. >> the monthly average users, fell by half. very significant. >> let's turn to the ugg bootmaker. shares of the company surging 15% this morning. dom, we know the squad, we talked about it yesterday. >> yesterday afternoon. saying it was your company. we wanted to highlight it, because the results are there. they came in just the way we thought they'd come in. it's about the holiday shopping season. they've taken a lot of the marketing spend they were going to do in previous quarters and pushed it into this. they want to make sure the boots they're selling are not just fads, but they continue to do well. remember, weather is also a big deal for uggs. the last couple of winters have been warm, cutting in on sales. >> i wear them whether it's warm or coal. they're so comfortable. >> you don't have --
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>> i don't have -- i'm not against uggs. i just haven't gotten around to buying a pair. >> i might think about them. >> i might try the pure line. it's a lower-cost version. >> you got it. >> a training sort of pair. >> i like it. >> let's talk western digital, reporting stronger than expected quarterly profits. an interesting move here. it had initially fallen on the report. but look at the action today. up very strongly. it was a very good quarter that they reported, but the guidance was not good. in the quarter, they reported stronger gross margins, they reported stronger pricing than a lot of analysts had expected. but the fiscal second quarter, the current quarter, guided lower on the revenue and the eps line. this is a stock that's had a monster run. it's a momentum stock that's helped lead the s&p 500 higher. so we see a 3.4% gain, something you would not have expected given the report that we got last night. >> well, what's interesting about this, it's all about cloud computing, right? they're selling these higher-margin storage products to the cloud companies out
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there, and that's helping those margins. that might be behind what's behind the huge move in the stock just today. they're selling better -- better profit -- >> that's the thing, against the competition, as long as you're the best in breed and group, it helps. >> that's right. that's it for "earnings squad." back with more during "street signs." coming up on "squawk on the street," we're less than a week away from halloween, and this friday, luxury is going orange. $20 million in the palm of your hand. why this diamond could set a new record. coming up after the break. ♪ ♪ [ male announcer ] more room in economy plus.
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welcome back. we're less than a week from halloween, and today's million-dollar minute will certainly get you in the mood for halloween. an exceptionally rare bright-orange diamond is about to hit the auction block and make history. robert frank explains. [ engine revving ] >> reporter: it's like staring into a roaring fire. >> a vivid orange diamond. >> reporter: this extremely rare, supersized rock is hitting the auction block. >> almost 15 carat, the size of a guitar pick. >> reporter: and it's about to set a new world record. >> we have it priced at $17 million to $20 million. at $17 million, the stone will cost $19 million with the
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buyer's premium already a new world record per carat and for any orange diamond. then it's a question of how big of a world record it's going to be created. >> reporter: we're in the halloween right now. this would be the most expensive jack-o'-lantern. >> that's the perfect color for the perfect season. >> reporter: the fire diamond isn't the only thing burning up. the broader diamond market has never been hotter. >> over the course of the last ten year, they've gone up 300%. if you want to buy something that's portable, that's tangi e tangible, that is eventually going to keep going up, because there's only so much of it around, a diamond is your investment. >> yeah, guys, the diamond price story now is unbelievable. we had a world record set last month, $30 million for a diamond. then, in another three week, we'll see that perhaps double, diamonds going up for auction in geneva, setting $60 million. it's just -- >> oh, my gosh. >> -- amazing what's happening
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with prices here, and a lot of theories about why suddenly diamonds are so hot. >> yes. is it just me, or is it very small? >> it's pretty small. >> for 20 million bucks. it's small. >> for an orange diamond, it is massive. i mean, just remember, simon, the last orange diamond to sell at record price was under $4 million. this could sell for more than five times that. there's just never been an orange diamond anywhere near this size. so this -- >> so how much more expensive are orange diamonds than clear diamonds, like, four, five times? >> yes, yes. so about four, five times. again, the biggest single diamond, clear, flawless diamond, was sold 118 carats. this is much smaller than that. but the orange diamonds are just so rare. you've got to get the ride kind of chemical compounds in there. there's never been anything this big. >> very difficult if you're wearing green. >> yes. >> orange and green should never be seen. >> yes. is that an old -- >> yes. >> i think anything -- i think anything would go with this diamond, simon. anything.
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>> thanks, robert frank. have a great weekend. >> you, too. >> thank you very much. have a great weekend. >> you, too. thanks. that does it for us on "squawk on the street." going to the east coast and the "fast money halftime report." here's what we're following today. a rumble in the jungle. amazon surging to an all-time high despite losing more money. will wall street ever care about profits with the tech giant? and visa taking a charge after coming to the dow. should you load up on shares before the earnings? and the broad markets may be at all-time high, but the high-flying momentum names have been losing steam -- tesla, green mountain, yahoo! facebook, all pulling back. it's "halftime report," so let's start off with the action. the question here, dan, is the force still with the momentum name, or should investors be


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