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tv   Squawk Box  CNBC  November 12, 2015 6:00am-9:01am EST

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>> live from new york where business never sleeps this is squawk box. >> good morning, everyone. welcome to squawk box here on cnbc. i'm becky quick along with joe conce kernen. andrew is off today. when he was addressing the european parliament he laid out the ground work for more monetary easing believe it or not. draghi warning that signs of a sustained turn around in core inflation had weakened saying in his words downside risk stemming from global growth and trade are clearly visible in the euro zone. repeating a comment from a post meeting news conference last month draghi said today if price stability is at risk the ecb would act to ensure an appropriate degree of monetary accommodation is maintained. that was all it took to set things off in the currency markets. the euro trading below 107
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during that speech. it was trading lower than it did during the october news conference. obviously it looks like the central bank here is about to take off if it looks like the ecb is going to be moving in the opposite direction. you can imagine what that's going to do for the dollar. as for the broader markets, check out the u.s. equity futures now. the dow was down by 55 points. this morning we're looking at the euro but red arrows there. the dow futures are down by close to 30 points. draghi not the only central banker in the news this morning. at least six fed officials are scheduled to speak at various events today. including the chair that will be delivering welcoming remarks at a conference in washington. >> fed speak, here we go. >> all six of them there. i can't wait. it's -- they can't make a go of it at 107 on the euro. >> they'd like to see one to
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one. >> maybe they need to take a look at some of the structural problems with the way they try to do things over in socialism land. instead of of, you know, really $1, it's not fair to us. it's currency manipulation. >> the same thing the candidates are talk about but the same thing we undertook in trying to make sure that we were doing the same thing, right? >> yeah but the qe now, he said some stuff about extending to other areas. >> i don't understand how they would do it. >> buy other stuff i guess. >> central banks have a lot of different tricks up their sleeves more than just rates they can manipulate. >> among today's top corporate stories apple is reportedly in talks with banks to develop a person to person mobile payment system. i wonder about that. if it was just apple and two people i don't see how, how you could do it. >> you have to have the bank backing you up on all of these things but it sounds like what chase does.
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>> you know you make no money. just supposedly makes your iphone stickier but turn off your iphones when you're having dinner, we don't. my kids -- i don't need my iphone -- >> one night last weekend i said okay everybody is turning their phones off. we are sitting down. >> before i go on, i just want to check -- it's sticky enough. i wish it were less sticky. it's like a piece of gum. >> you said years agatha it's the only thing that makes you turn around and go back to work to get it. >> never had anything like that before. it would have to be like a body part that i forgot. the wall street journal zedd says that the service would let users transfer money from their checking accounts to apple devices and be linked to the pay system. this would let them complete directly with the service. no word on whether any banks signed on with am at this point. i would be appraise. >> as -- well, like i said, it sounds like something that they're -- it sounds like
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something that is already doing -- some of the big banks are already offering some of these services so it's who is going to be doing it. same thing playing out in the car industry. who is going to build the new car? it's changing boundaries. who is your competitor and who do you work for? >> right. who is your daddy? a development to a story we first told you about yesterday, fan dual and draft kings vowing to fight new york orders to halt bets on those sights in the state. the attorney general said they're running illegal gambling operations. but they call it hasty and uninformed and said that fans do not need to stop playing both sights and they're take money from customers in new york. >> did you see the tabloids on this? where was it? >> i didn't see the tabloids. even mike bloomberg -- >> angry, you bet. there are workers everywhere --
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gamblers everywhere who are ticked off at this. >> i was starting to think that might be fun to make the games more interesting. and the ceo is going to join squawk alley later this morning. but i was referencing bloomberg talking about this exxon saying this is like insane. but, you know, people, ags, that's just a steppingstone many times. >> usually. >> particularly here in new york. >> heading onward and upward. doesn't matter what you do when you're there. just slash and burn but you got personal things you want to accomplish, right? >> he hates freedom. that's what some new yorkers are saying about this move. >> yeah. well that's a good -- whenever you can point out someone hates freedom. who is not for freedom? like one guy. kim jong il. >> he's not two?
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>> no, he's the son. >> probably shouldn't be kidding about his name. >> yeah. >> euros. >> let's tell you about another story. facebook says that government requests for data jumped by 18% in the first half of the year. the company says that most of the items relate to criminal cases, things like robberies or kidnappings. request from u.s. law enforcement agencies make up more than 60% of the global total. in teal news this morning, iac interactive making a bid to buy angie's list. offering $8.75 a share in cash or in total about $512 million. that's a roughly 11% premium to yesterday's closing price. it's now taking the offer public after failing to develop what it called a meaningful dialogue with angie's list. last month they urged them to explore strategic alternatives but this is an interesting play on the internet. this is a place where you can get tips on who to pick up or
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listings for people that will work on your home. >> $500 million. joe's list. why didn't becky's list. here we sit reading a teleprompter. it's like a yellow pages. >> it's giving you people that you trust. >> rising on reports that black stone is nearing a deal to invest more than 800 million. they plan to announce a $1 billion share buy back program. pop eyes louisiana chicken posting better than expected quarterly results and slightly increasing it's guidance and improving a $200 million stock buy back that also came out in that release. up 6%. >> let's tell you about global news as well. greek workers staging another strike against austerity today.
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this is the first strike since prime minister alexis tsipras won the september election. workers stayed home. flights were grounded. ships were docked and hospitals were working on staffs. it started in athens as part of a bailout preview. let's check on the broader markets this morning which shows you what was happening. the futures weaker down by 30 points for the dow. if you're checking out what's happening in early european trade right now red arrows across the board there. france is down by .9%. and in asia, overnight, you saw that the nikkei was flat once again. the hang seng picked up 2.1% and the shanghai composite was down by close to .5%. oil prices got interesting yesterday. crude oil fell 3% to below $43. you can see that contract is
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even weaker. that yield is sitting at 2.317%. we showed you the pressure on the euro earlier although at this point the dollar is moving up a little bit. still right around 107. the dollar is stronger against the yen at 12299 and gold prices this morning look like they are up slightly. up to $1,096.50 an ounce. >> we have a couple of guests here now. jonathan and christina. i made a killing on fan dual last weekend. i mean -- >> you lie. >> let's pretend. hundreds of thousands of dollars. do i invest before the fed hikes rates or do i not go into the market. >> i was going to say market right now. >> go into the market. you're a goo into the market.
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>> i am a go into the market. >> says here that you -- oh, you stay out of the market, right? >> what i would suggest is -- >> don't give me some -- you're already waffling. >> no. >> yes or no. >> i got this money, it's burning a hole in my pocket. >> i would sit on the sidelines and slowly move into european equities now because valuations are attractive but i would wait because we'll probably see a slide in u.s. stocks in advance of the fomc decision. doesn't mean that it's long lasting. there's probably a really attractive entry point right after the fed comes out in december. >> you two are differing on the reaction to this move, right? >> the market wants the fed to get this thing over with. there's no reason to have zero interest rate policy. if you look at what happened since the october statement by the fed that they're likely to move in december, the market is higher. volatility is lower. if you look at how the market is responding on days when interest rates rise the stock market is
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rallying. the market is going to shrug this thing off. it's already baked in. you have this quarter point whether it's december or january, who cares, the market is buying. >> but we don't know how far and we're going to still have, every time they meet we're going to wonder. we don't know what the pricing is going to be. it's different. this is a rate of direction and difference that may be slow but in europe they're ramping up the free money. why don't i go to wrurp? >> she just went like this to you. >> i'm getting the eye nod. she's nodding to me and looking at you and going -- >> i'm saying joe, you're brilliant. >> thank you. >> so he's just ignorant. >> not at all. >> the fed has created an enormous amount of confusion because trying to be transparent lead to a lot of misunderstanding about what the fed wants to do. what exactly the me tricks atri.
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it solidified the view that the fed will act in december but this is the beginning of a rerating process as investors and market participants process that it's most likely that we'll see a rate hike. >> we have six fed official who is are speaking today. maybe that will clarify things. >> i like to say fear the talking fed. >> fear the talking fed. >> very good. >> yellen usually -- she usually doesn't talk. >> at this point janet yellen, charlie evans and stan fisher who are three of the six officials speaking today, those are the ones, they all make it sound like we're going to be raising rates, won't the market figure that's the case at this point? >> i think the market has come to that conclusion. the jobs report on friday solidified that viewpoint and now it's really about just
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processing it and that could lead to a small slide in stocks. >> the market has already come to grips with it but it has to process it so that it's not really coming to grips with it yet. >> there was a lot of confusion in advance of the september meeting and we saw the reaction to that decision. >> we did. >> we have to expect some kind of reaction now as this becomes more internalized. >> next year, what kind of return? earnings going to be okay? >> earnings will be fine. high single digits, low double digits. look, this year is not -- but here's what happened this year, oil fell apart. assuming that the dollar doesn't do anything crazy and oil stays in the game, it will be close to 10%. >> 10% for next year. >> 10% for 16. >> we need to be focused on those revenues. we have seen really a scarcity
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of revenue growth and that's what we need to be focused on. we should start to see some level of revenue growth in some sectors by the second quarter. >> so when you look at a macy's chart people aren't buying overcoats? it's nothing beyond that? if that was a consumer spending chart which it isn't necessary -- >> that's part of the problem. they're not selling electronics or cars -- they're not selling -- there's no restaurants in these macys where people are eating out. maybe it's not a reflection of where consumers are spending. >> 73 to 40 -- what are the main retailers in three months when we're raising rates just seem ace little -- >> well, i mean, i think there's a selective but significant increase in inventory. so certain companies are experiencing that and i think the larger trend that we're seeing, the theme with consumers is there's a recovery but they're being very selective in how they're spending their money. >> they're freezing but they got their electronics so walking
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along with their sticky iphones and their ipad 6 pluses or whatever. >> there's a total rotation on how consumers are spending and it's exactly the point you're both making. people are choosing to spend money on that iphone at the expense of going out to dinner or buying a new pair of jeans and i think that that is going to make it difficult and they're going to chipotle instead of mcdonald's. >> not on the west coast. >> people started going back yesterday. >> it's healthy food. >> this is the best time to be there because it's as clean as you can imagine right now. >> all right. hold the e.coli. give me a burrito. >> stores are back open. >> i didn't even see where you guys were from. what's your firm? >> allianz. >> a great firm. >> and you. >> rbc capital markets. >> i knew that. >> that's what i thought. >> decided to avoid the teleprompter completely.
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first time i've done that. >> yeah, avoid the teleprompter, you would never do that. when we come back this morning, walmart unveiling it's holiday season plans today including more inventory on sales and end to traditional door busters. first though here's a look back at this date in history. the future belongs to the fast. and to help you accelerate, we've created a new company... one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward.
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>> eunice joins frus from beiji. oh, we lost her. we'll move on to talk about retail. >> happening here, walmart actually announcing it's plans for black friday. you can say good-bye to the company's traditional door busters. for the first time t retailer will have the majority of deals available in stores and online starting at 12:01:00 a.m. on thanksgiving morning. the stores will open at 6:00 p.m. on thanksgiving day. walmart is focussing on investors saying that stores are stocking up to offer better product availability for advertised deals. always a lot of chaos every time they open the doors and they
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have door busters that change every hour. it leads to confusion with the shoppers so they're going to try it a new way. shares down more than 30% so far this year. >> perhaps toys aren't dead after all. research firm says that annual toy sales are projected to rise over 6%. nearly $20 billion this year. that would make it the strongest year in at least a decade. the toy come back is being fuelled by increation popularity of selectables acollectibles an on blockbuster films. more importantly forecasts declining results for the holiday quarter. that hit the stock pretty hard. today we're going to be hearing 3rd quarter results from kohl's and nordstrom. he is the ceo. also a cnbc contributor and we were talking before you came on, this was huge news yesterday that rocked the entire retail world. >> it was huge news.
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we all knew that macy's was a little heavy on inventories. we didn't think the sales would be good and yet when the news came out and they said the 4th quarter would be so heavily impacted they took the whole sector down and i think that was not just because macy's took a big hit but everybody else took a big hit because they said if macy's has to go this deep third third quarter, how is it going to be. as soon as that realization came it took down everybody that has to compete with macy's. >> he joined us and said this is great news. we're taking steep discounts and we are taking them soon. you pointed out that the weather was part of the problem but there's a lot of other issues happening here. >> weather is part of the problem. any retailer you talk to will say they're not selling and you can see why. the weather has been quite attractive. unfortunately, that's not for sales. so that is only part of the problem, however. we're seeing deflation in
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apparel of about 3% year to year. that's really hard to get your numbers up when your products are deflating and most of these guys are big apparel sellers. parts of 20% of their business may be home but almost everything is apparel and accessories. the other thing happening of course is its much more competitive. we didn't have it in boston the last time we had this conversation. that's only one store but we do have h&m and forever 21 and zara and the people pushing price. so it's not just weather. there's a lot going on and then of course we've got the internet. and any time you've got the fastest growth right now on amazon's business is in apparel. so when that starts to happen and price transparency is always there, availability is always there, it puts a lot of pressure on the rest of the retail sector. that's not going away. >> macy's does have the advantage of being a long time internet company. the 7th largest retailer when it
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comes to the internet and they invested pretty heavily in it. are you saying there's more they need to do on the internet front or is this something primarily about the stores? >> terry reinvented macy's and then he reinvented it again and doubled the size of the company. he's about to reinvent it again because what we're going to see is probably a reduction to my guess is 550 stores from the 800 they're running now overtime. >> how long? >> a few years. >> that's a significant drop. >> 40 this year. >> and i think then they'll be turning it into big show rooms, right? they'll be showing you the merchandise and you'll buy it online or off of your phone or however you want to buy it and beyond that they'll be putting the discount component of the business inside the store just like they announced putting ten backstage stores inside of traditional macy's. that's a throw back to when i got into retailing. we all had budget stores inside the department stores. like the basement in the big
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store in boston. it's a throw back to that but you need to use the space. the other thing that they're doing at a place like macy's and best buy is doing the same thing, putting lease departments inside the store, right? i mean, now macy's just announced lenses crafters inside the stores yesterday. but they already have lids and finish line and sun glass hut. they have all of this they're doing inside the store that absorbs the space as well just like best buy did by bringing in microsoft stores. >> where the store itself almost becomes a mall. >> the store itself become ace mall. someone said to me they're competing with simon and ggp when they do this. but the mall guys know they need the traffic too. they're trying to build the volumes at the mall anyway. so we're going through a fundamental change and macy's is good at this. nordstroms is the best omni channel retailer in the world. they were there first and off
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way early on price. macy's is just getting into backstage but macy's is also really good at the game. they have been doing more of that than anybody. >> yesterday all the retail stocks got hit. was that a fair reaction in the stock market? are people right to sell all the stocks at the same time? >> well, i think that they got nervous about the oncoming earnings season and said macy's was first. how tough is it going to be? i think nordstrom is doing fine but we see elevated inventories at kohl's. pennies put out a good number yesterday but still got whacked. do i think that's a fair assessment? yes. and i think the market is short-term so nobody really care what is 2016 is going to look like. they're really worried about the 4th quarter. >> which of these stocks would you buy now? >> macy's today. i can't imagine that given the fact that their real estate is, if you believe your alpha
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conference worth what the whole stock is trading for right now. they'll be a great retailer going forward. it's a question of your time frame. i'd buy nordstroms. any time they get cheaper i want to own them because they're one of the great retailers and they have it all figured out and they'll be one of the big winners going forward but i'd buy costco right now. any time any of the really good retailers that are going to be with us for a long time winning the game in their space, get cheap, they're fun to buy. >> what does this say about the health of the u.s. consumer? >> well, i don't think there's much wrong with the health of the u.s. consumer. there's a lot wrong with where they're spending their money but if you look at the forecast for holiday, isi just came out and raised their number for what they think holiday sales are going to be. mastercard just raised their number. what they think holiday sales are going to be. they're not coming in the
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apparel players and not getting their fair share of it because of what your last guest just said. people are spending it on, let's go out to dinner instead of buying the next sweater. let's buy a car. >> does that mean that macy's needs to start selling electronics and opening up more restaurants in their stores. >> why are they putting best buy in their stores? because they need to sell other things. why are they bringing starbucks in? they need to have that component to be able to drive more of the traffic and pick up more of the sales but the other thing we need to see is deflation in apparel. what is it like if you're in the mall and you have 3,000 skus in your store and 100 are apparel. but macy's will handle it better than other people. nordstrom handles it well. but it's tough now in this game. we have all of these strong off
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priced guys, whether they're truly off price like t.j. maxx and ross or really cheap like old navy is right now or the new stores or zara or forever 21 or any of those guys really selling fashion really, really cheap, that's just putting pressure on everything. i think the consumer, you know, wages just started rising, they have saved all of this money on gasoline, they're just not spending it in my part of the world or if they are, they're not willing to pay for the goods. >> thank you very much. good to see you. >> coming up, eunice back with us from beijing and i think her shot is unfrozen now and she has the sales from china's singles day. it's people buying gifts for themselves? explain this to me because it's the anti-valentine's day. so you're single. you're having a relationship with yourself? >> i think it's just grown beyond that. people just buy for themselves.
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they buy for each other. they buy for their husband, their wife, whoever, but overall what was interesting is that alibaba said that they wanot t turn singles day into a global event and this year 5,000 international brands took part from 25 different countries and 30 million chinese ended up buying something from an international brand. so who are the singles day winners? among international brands costco came in at number one. people were buying things related to health like fish oil, vitamins, nuts and honey. also huggies made it on the top five. 800,000 diaper packs were sold just on the one day. and in terms of imported products more generally, baby formula from any country ended up selling out. there was customer complaints in australia of a shortage because of singles day here.
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also japanese diapers and american nuts. kirkland was incredibly popular selling out more than 245 tons of nuts on the one day and the general trend we were seeing was that chinese people were buying international brands in areas where they're concerned about either their own health or safety. now in terms of overall sales, electronics did really well with 9.5% of overall sales. mobile phones also sold out. there were 3 million phones that were sold. mainly chinese brands. apple came in 4th which is interesting but people could get coupons for apple products. finally, in terms of some of the categories that were where you saw the best in class, nike came in top for chinese consumers for
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outdoor here. and also for cars buick came in number 1. people love buying buick's yesterday and one other bit of information that was a fun fact that was cute was that the priciest product that anybody bought across all the platforms was a limited edition asto aston martin d-98 and somebody ended up buying it for $603,000. so pretty good. joe. maybe it was you? >> no. but if i was going to give myself a gift. >> limited edition aston martin. >> gift for myself. that might work. >> all right. eunice. thank you. i don't think i'd spend more than $300,000 on a car. >> is that all? >> 600,000. >> coming up, bill rancic is here. he has plans to give small businesses a big boost. he knows trump really well too.
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have to ask him about that. >> first winner of the apprentice. >> first as we head to break a look at yesterday's s&p 500 winners and losers. ♪ vo: know you have a dedicated
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>> a rare blue diamond selling for a record $48 million. the 12.03 carat blue moon diamond was the show case gem at an auction in geneva. the jewel was purchased by a hong kong private collector that promptly renamed it the blue moon of josephine. he brought it for his 7-year-old daughter. >> i'm sure she appreciates that. >> here honey. >> i wonder if he's the little girl in willie wonka. i want that! i want it. >> things didn't end well for her. she blew up like a purple
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blueberry. >> i think so. i get confused between gene wilder willie wonka and the johnny depp. >> yeah. let's tell you about a popular seattle tourist attraction that had to be shutdown last night after it was struck by a rogue drone. this brings hundreds of people to pier 57. i was on this in may when we were out there. >> it was rogue. >> a rouge colored -- >> he saw it as it happened and took a photo of the zone and said it appeared to be trying to fly through the spokes of the ferris wheel. it didn't make it and then crashed straight through the outdoor table below. that is dangerous people. seattle police confiscated the
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drone and are now looking for its owner. this is where i want more regulation. i don't want them flying around. >> is that the one you were on? >> yeah. >> it's enclosed. >> it's enclosed. when we were there in may all the kids came from prom and were riding on it. >> enclosed doesn't help to me. it's the one in london. >> that one is really big. >> and really scary. i was right in the middle and people were walking around out near the -- and on the way up -- and you know you're still going up when it's stopping and i'm not even app the top yet. >> can i get off? >> at least you're starting to go down on you're on the way down but on the way it's up like we're not even at the top. >> why did i get on this stupid thing? >> everybody forced me to get on it. never again. coming up, bill rancic. number one, best hair around.
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for a guy that has some thinning hair -- look at that. most people recede, his is exceeding. what's the word for when hair grows forward? we'll talk about small business to politics. you're watching squawk box on cnbc. first in business worldwide. this holiday season, get ready for homecomings. i see you brought a friend? i wanna see, i wanna see. longing. serendipity. what are the... chances. and good tidings to all. hang onto your antlers. it's the event you don't want to miss. it's the season of audi sales event.
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>> well, well, well. big brands looking for 30 seconds of fame at the super bowl are prepared to pay the price. being snapped up for $5 million a piece now. they're giving one small
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business a chance to be show cased on the biggest stage in sports for free. here on set, celebrity entrepreneur bill rancic. he has been an advocate and spokesperson for into it small business big game contest. celebrity entrepreneur. >> that's a great title. >> no. really, no. because celebrity implies -- >> people know you. >> yes. that's the problem. that's where we have a bit of an issue there. >> i remember last year we had you on. it was successful last year? >> yeah. it was amazing. a young woman who won the commercial, her business took off. she is now with major retailers around the country. she had a float in the parade. i mean -- she definitely was put on the map as a result. now she is getting into different areas of, you know, online gaming and things like that for kids. >> what is different this year?
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>> we got some pretty cool finals. we're down to the final three. we had tens of thousands of people that applied and narrowed it down and narrowed it down and we have a group of guys out of san francisco. chubby shorts. >> why? >> they're paying homage to the shorts that their father wore. father's wore. >> after working with her for awhile, her mind is always in the gutter. >> now i get where you were going with that. >> she has a whole -- >> what are you talking about? >> we'll tell you at a break. >> those are nice. very patriotic and good for veteran's day. >> we have a fellow that created the world's strongest coffee. death wish coffee. it's the world's strongest coffee of your money back. he's killing it. >> i had some weak coffee this morning. >> that will keep you going. >> this will get me going? >> yeah. >> i like that. i need it in a keurig pack. >> they're trying to go that route. it's impressive.
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>> it's almost like, you know, you're into coffee for a reason. it's like nonalcoholic beer. i want caffeine. >> that is yours. you can take that home and that will keep you awake. but guy has a great story. he sold his home and moved home with his mom to put it all on the line. so it will change his life. that's for sure. and our 3rd finalist is a 3rd generation 5 and dime. you can buy anything from davey crockett hats to harmonicas. >> did you have one. >> i didn't. i was born in '71. >> you don't need to see that. but those were big. >> how many stores are there? >> one store. but they do like mail order. they have popcorn and ship all over the country so they're a great, you know, family business. it's a brother, sister, and a
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cousin and third generation. it's the fact that they have survived three generations is pretty impressive. >> let's shift gears. so into it, when we have a three page tax code in the united states from one of these republican candidates what's going to happen i wonder? if we had a flat tax or something? >> when brad smith comes on that's probably a question -- >> but that was my lead into the donald because you know him well. do you think he'd make a good president? >> i do. people who can make decisions or who are in the decision making process because they're there out of desire rather than necessity they make better decisions. he's someone that loves our country. he's not doing it for the money and he's not a career politician and he knows how to make good deals. you know that. that's what we need. >> so career politicians, every decision they make there's a finger up in the wind to see how it's going to play with the public. >> not all of them.
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>> most of them. but it's all about what is going to play well. except for hilary, she's very sincere -- >> she's got your vote. >> yeah, well, i'm not going to say who i'm going to vote for. might not be here. i'm not sure yet. i haven't made up my mind. so you're saying because this has to do with the more pure motivations for why -- >> he's a winner. he likes to win. i like people who like to win. i think everyone does who is in a role to lead our country and who can make good deals. i mean, that's what it's about. it's about making good deals and making sure -- >> some of the stuff he wants to do though probably -- he would eventually be able to hire really good people too. >> without a doubt. he hired me. >> may have to come back and say that sounds good and plays well and everybody wants to do it but maybe we can't do it way you're saying you want to do it. do you think he would be amenable to to being reigned in?
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>> i always said donald trump is a great conductor. he has great people that he's able to bring on board and get things done and that's what it is about. it's about making that music with incredibly talented people in the pit and he is someone that can do that. he can make great music. he's building these incredible buildings. he's done it. it's not just talk. he's walking it like he talks it. >> have you talked to him lately? >> i communicated with him right before he announced and he's been pretty busy. so i think that was in may when i was here last. >> good luck with the deal. >> hopefully we'll come back with the winner in january. >> i don't know whether i hope for the strong coffee or the guy with the chubby underwear. >> or the hat. >> i'll give these to you becky. >> thank you. >> thanks for coming in. >> appreciate it. >> when we come back, red flags in the ipo world and what these
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warnings could tell us about the broader markets. stick around, squawk box will be right back. ♪ the future belongs to the fast. and to help you accelerate, we've created a new company... one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward.
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welcome back, everybody, caution signs on the road to ipos.
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some weary of pursuing public offerings. match group and payment startup, square, setting out to test whether the ipo market is ready to swing up, although analysts project it could be the worst year for ipos since 2009. joining us now, jay, senior editor at deal reporter, and, jay, thank you for coming in. >> thanks for having me. >> looking at lousy numbers in terms of the ipo market this year. what's that a sign of? >> sign of investors are generally uneasy about a lot of the companies that have been trying to come out this year in terms of listings, some of them have been highly levered, private equity firms like first data, and some are concerned about leverage, others are more, like, bioteches or technology companies that don't have a proven business model so they are skeptical of some companies. >> in the past, skepticism was washed away by an ever-rising market. part is the market has not gone anywhere this year, and when it
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has, there's been rapid swings. what's a bigger enemy? a market that's not continuing to climb or a market that has a lot of volatility? >> i think it is probably both, the decline in the market and late summer was a big impact on ipos. prior to that, a lot of investors had a fear of missing out. they did not want to miss an ipo that might skyrocket on the first day of trading, and now investors are worried that, potentially, they buy into an ipo, the stock could do down the first day, and they don't want to take a risk so they are out of the market. >> it's not necessarily that we're bringing new skepticism to the companies as much as wait a second, the market changed drastically. it's not a moment market anymore? >> right. lending club last year soared on the i prgs o, but since then, they decline every day. that zsh so if you bottomed to the ipo last year thinking it's a win, it is not. now investors are worried about that. >> when's the last time we saw activity like this, seeing a big
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upswing in ipos, and it dropped off drastically. >> go back to 2000 and the bubble. >> 2001? >> right. >> right. >> hopefully that won't happen again. there's signs of that, the snapchat breakdown yesterday, that's another issue. >> just concerns about if things -- the rug yanked out from under them? >> right. and maybe the tech companies are not worth the valuations that the private markets said prior to the past few months in the private market. that's the issue with square, listing initially below where they were raising money in the private market. >> what about a company like albertson's, nothing to do with technology or anything else that's happening. >> they were rushing the ipo after the merger with safeway at high leverage. the asset ran into bad luck with walgreens the same day they were set to price. that's a specific case, but generally, investors do not like
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highly levered companies that private equity firms push out of the market. >> jay, thank you. >> thank you. coming up, "fortune" unveils top business people of the year, the list when "squawk box" comes right back.
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market alert, draghi hinting at monetary easing sending the euro lower overnight. the comments that sparked the move straight ahead opinion. dire consequences for the u.s. economy, a dropoff in rail car orders is a sign that the economy's on the wrong track. morg morgan brenan will explain. walmart explaining the black friday strategy that could keep shoppers at home.
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we'll have the details. the second hour of "squawk box" begins right now. live from the heart of new york city, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe kernen with becky quick, and andrew is off today. breaking this morning, a dovish speech from draghi addressing the european parliament laying the ground work for more easing next month, warning easing is inflation and repeated a comment from a post meeting news conference last month saying price stability is at risk and the ecb needs to act to ensure if it is at risk, act to ensure a agree of monetary
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accommodation is maintained. he also went on to say that europe is behind the united states in terms of the economic recovery which he could have said at any time in the last 150 years probably, o at least 100 years because that's been true because of the way they operate over there with the entitlement state, which we're hurdling to now. euro below 107 against the dollar in the speech, trading lower where it did during the october news conference. i just read what's in the prompter, becky. people think i make all these commentaries. i read what's that. u.s. equity -- >> prompter reader. >> prompter reader. well paid, but under compensated. dow jones down five right now. nasdaq is up, s&p is down. i would any that traders are at this point, your mother, your sister, europe, qe, here, going up, and do we want them to go up or not go up? does it mean the economy's
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better if they go up? does it not? good news, bad news. i'm not sure. >> i don't know what's going to happen. >> medium news is good news. >> you'll see volatility, though, as people make up their minds. >> be careful, that's out on a limb. >> there's a shakeup. >> we have not seen much mountain last -- >> no, but i don't think this is necessarily baked into the cake just yet. >> okay. let's get to the top stories at this hour. greek workers staging another strike against austerity today, the first general strike since the september election. talks with e.u. and imf inspectors yesterday. fan duel and draft king fighting to halt bets. they are said to be running illegal gambling operation, but they call the letters hasty and uninformed and say the fans do not need to stop playing. both sides are continuing to take money from customers in new york. the companies have five business
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days two days ago to respond to the ag's order. walmart announced plans for black friday. the retailer will have majority of deals available in stores and online at 12:01 thanksgiving morning. the stores open at 6:00 p.m. thanksgiving day. they are focusing on inventory saying stores are stocking up on popular items to offer better product availability for the advertised deals. we'll have more details coming up at the bottom of the hour. in deal news, aic interactive made a bid to buy angie's list, barry diller's company, obviously, offering 8.75 a share in cash, roughly an 11% premium to yesterday's closing price. iac is taking the offer public after failing to develop what's called meaningful dialogue with the company. last month, activist investor urged angie's to explore
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strategic alternatives. analysts warning for decline in manufacturing, a signal of the economy? we have more, always a leading indicator to transimportaports h all the time. trouble on the horizon? >> could be. transportation equipment, not a sexy topic, but one to watch in 2016 because there are cracks in transportation equipment which until now, joe, is a bright spot. rail car orders plunged 83% last quarter according to the railway supply institute hitting the lowest level in at least 27 years. we are seeing softness in class a trucks, big rigs on the highway, ftr reporting that preliminary october orders while up are 45% lower than a year ago. this is the time of year orders jump as companies finalize budgets for the upcoming year and order accordingly, but they
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expect this sector to be a drag in 2016 with production of rail cars, trucks, trailers falling 20-35% next year, and wells fargo is more concerned pointing out over the past 45 years any time machinery and industrial production decline, it's demarked a u.s. recession. that trend is not actually happening yesterday, but the risks of it are increasing headed into 2016. this speaks to what a growing number of experts are now warning that an industrial recession tied to mining and manufacturing may be taking root. this is one of those potentially leading indicators around that topic. >>number. i guess you don't need a lot of rails to move little smart phones around, right? you don't even -- apps you don't even -- you don't even send those by rail, do you? >> well, no, right? the infrastructure changed, digital infrastructure, by so much stuff, so many goods move
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around the country by railroad, by truck -- >> how do you possibly explain -- did you see the number, went from, what did you say, 60,000 to 7,000? >> yeah. >> do we have enough rail cars? do we need upgrades? >> keep in mind we have -- >> oil. >> backlogs on rail cars and tank car rules came out this year so they were hanging back on the rules before they ordered. >> largely tied to oil too. >> exactly. >> looking for the orders for oil you're drilling. >> oil explains a lot. >> in general, there's softness within the railroad industry this year. there's talk of consolidation, not -- it's not coincidental we heard about that, so these are bright spots, but a lot of folks i spoke to and economists said, you know, coming out of the recession in the last couple years, it's industrial led, it's energy, manufacturing tied to that, and now that we're seeing the softness there, that's the concern. >> and the other issue to add to that is with the dollar getting stronger and stronger, it's not
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going to help any of the industrials with that either. >> exactly. >> morgan, thank you. our guest host for the hour runs the world's second largest stock exchange with market capitalization and 20 other exchanges around the world. he's the ceo of the nasdaq. bob, great to have you here today. >> my pleasure. >> talk about the markets and what's happening right now. >> sure. >> we've seen the nasdaq is leading the way, the technology stocks leading the way. nasdaq up 8% for the year versus the dow and s&p that are flat. >> yes. >> what are you seeing in what people and traud ders are interested in? >> with respect to the ipo market, it's strong, but not as strong as in 2014. >> the numbers fell off the cliff in the third quarter, 4 billion versus 40 billion. >> yes. i still see activity. we priced ford yields yesterday and the calendar between now and end of the year is strong. 80 80-85% of what we did in 2014. that's not bad.
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again, you have to look at this on a yearly basis. >> third quarter -- we had massive market activity. >> exactly. >> the huge drop, maybe that throws things off for the quarter. zb for that quarter. >> right. >> first and second quarter strong, fourth quarter is stronger. yearly basis, 85-90% where we were in '14 which was a historically strong quarter. we could be doing worse. we're happy with that progress. i think with respect to your question on the traders, like anything else, there's caution as there always should be, and what the fed is going to do has been the question of the year. to me, it's clear they move in december, a good thing. one thing traders do not like and markets do not like is uncertainty. there's a period of uncertainty now. let's take that out and there's a good path from there. >> what about volatility. i mean, we've talked about that a lot this morning too, and we have not seen much except for that period of activity in august and september. >> yeah. we have had historically high,
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and started in july, august, and september, so volatility's back to, i think, historic lows, right? >> 17 or so. >> volatility numbers have been trending lower over time, and so we're, you know, kind of in a new normal with respect to volatility. >> does that change if the fed raises interest rates to get back to the process of normalizing rates? >> greater volatility in the yield curve with different opinions in terms of what happens next. i think with respect to the equity markets, i think the volatility is only partially driven by what the fed does, really the business climate, and in the u.s., the business climate is relatively strong. our ipo backlog is at a regular rate, nothing exceptional, nothing poor, 77 applications in listings, and that's confidential filing so we can only be seeing the tip of the iceberg. we don't know as much, but 77 number is a healthy number. >> what did you hear from
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companies considering listing and then maybe saw what happened in august and september and maybe rethought about whether it was the right time? what was the conversations you heard? >> same conversations. companies debate this every minute of every day as we go up think the listings, hyperattuned to the time and moment and looking for the window to be open. a little heightened concern, but if you talk to a company ready to go public, they are heightened, you know, no matter what the year is, no matter what the environment is. >> one of the things we've talked about, and watching technology stocks in particular is that there's not the need to get to market as quickly as there used to be. things changed. secondary market is easier to tap investors, and companies you think have to go public get valuations of $50 billion or something and still not be a public company. >> yeah, there's a couple different issues in the statement. one, the facts are, companies are taking longer to become public, and in the last decade, length of time doubled. that's significant.
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we, at nasdaq, started nasdaq private market, announced acquisition of second market just in the last two weeks. we certainly believe staying private is a good alternative, and we also believe that when you become public, you need a fully mature business model and should not rush the date. when you become public, you're facing endless series of quarter and you want to stem the model looking at this on a quarterly basis. if you stay private, you need liquidity. you owe liquidity to the employees. they might want a house, early stage investor. that's what nasdaq private investor is there to give early stage companies, companies that want to stay private, some require liquidity events they need in the environment. also, the jobs act allows you to stay private for longer period of time because now it's only up to 2,000 shareholders. you can have as a private company and employees do not count. before that, it was 500 and employees counted, a natural
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trigger to force you to go public. you don't have a forcing event now so companies have a reasoned approach. >> it's a good thing? >> i think so. don't go public too soon. i want companies to wait longer, provide the proper liquidity to the investors and employees and make sure they become public with a mature business model. >> usa today has a story how amazon is breaking the barrier as the most expensive stock, looking at the s&p 500, looking at valuations on this saying the company has now cracked the 900 price to earnings barrier that existed in the past. what do you think about hearing stories like this? it's not near the levels we had seen before. i think you were still looking at yahoo! -- or -- yahoo! back in 2000 looking at a 2225. >> i would say on the aggregate, the nasdaq 100 in the year 2000 in the height of the dot-com
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bubble had a pe ratio of 100 across 100 stocks. today, it's around 23. while amazon is an outlier with that number, and, of course, raising the average across the 100 stocks, you seed a dramatic difference of the compensation of the index today than you did 15 years ago. >> concern you to hear that? some companies like amazon deserve a valuation like this when the street believes in them? >> the fundamental tenant of our market is full transparency. look at the transparency requirement of our market governed by the fcc, it's superior than any other on the planet. with that transparency, investors can make informed decisions, right? investors look at the amazon business model, have all disclosures, decide what the ability is to grow into the number, right? you have to grow into the number. at the end of the day, the valuation has to be governed by a measure of discounted cash flow. run the models.
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with respect to the revenue base and entrenchment with the american retail consumer, how do you monetize that? i don't have an opinion on that, but, clearly, we give the information to people make informed decisions. >> all right. bob is our guest host. >> a couple stocks on the move and to be watching today, coal shares higher in premarket trading. company's earnings and revenues beat street estimate, but check out the chart. same store sales increase was also larger than forecast. we will also, you know -- >> that's a huge -- >> weather? is that still weather? macy's, just specific to may ma? walmart too? three separate tracking stocks, and david faber is at the liberty investor meeting, more on this on "squawk on the street." coming up, "fortune"
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unveiled list of the top business people. revealing top ten after the break, and presidential candidate, rick santorum stomping for support in new hampshire, joining us for planning of the economy, and talking to vitu, the largest electronic maker. we'll be right back.
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welcome back, everybody, "fortune" has a list of top business people of the year, and joining us to reveal the list and this year's top pick, lee, fortune assistant managing editor. start with five or go with one? >> up to you. >> number one. >> cutting to the chase. that's mark parker, ceo of nike, and this is a list that's based purely on mostly on concrete results, looking at one year, three year profit and sales growth. we look at total shareholder return and look at leadership. mark parker, so funny, the writer of the story, adam, interviewed, founder of nike, the classic, you know, founder-type, and he just said the first words, what took you so long? the media's been missing the story, and that he's been his performance killing it, the
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stock has doubled since mark parker became the ceo. this is a company with 62% market share. we know that nike dominates, you know, sneakers. it is of 62% market share with the next closest competitor is sketchers at 5%. you rarely see that kind of dominance, and what's particularly interesting is it's doing this after all these years, growing and maturing a company like this is really something special. >> nike, i don't think of sketchers the competitor, but under armour. >> good point. >> or adidas, the other levels. >> my first job was a sneaker reporter for a magazine called "sporting goods business," and i followed this for a very long time. nike, reebok, aadidas, a lot has changed. the history is littered with people who tried to come up and start new companies to take a share of nike. under armor has done it. they are a competitor. but lululemon is a competitor,
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it's a new landscape, but there's still numbers that are astounding. we were really pretty itch pressed by that. >> looking mostly at numbers, but you say leadership. how do you measure that? >> well, we leave room for intangibles. leadership and ability to influence outside the company. mark parker is interesting. he's an introvert, thoughtful guy, not like phil knight at all. there are traces of tim cook, steve jobs in here because he's been behind the scenes, with the company for 40 years, and he's a disciplined, thoughtful, really respected guy, really into design, that whole design thinking is how he came up through the company, and lots of other things. he's also 6'4". never knew he was tall. >> run through the rest of the list, mark zuckerberg is number two. number three a andrew wilson, ceo of electronic arts.
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>> an interesting turn around story. the company had four years of terrible losses, and he came in, turning it around, an era where everyone thinks the consul is ir relevant in gaming because of the digital onslaught, but he made it relevant. >> tim cook, ceo of apple, obviously, everyone knows him well. >> yes. >> aj, the ceo of mastercard is number five? >> yes. mastercard is posting incredible results making a push into technology, but it's really their results. i mean, he's doubled profits and revenues in five years, and so, and, again, a noted leader as well. >> great. run through the top ten, mary dillon. >> she's amazing. >> ceo of ulta beauty. >> one of the top stories. >> lee june. >> yeah. you know, until uber had the recent valuation, this was the biggest unicorn. people think of it for mobile phones, china based, huge
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international expansion plans doing much more than phones, aiming to create an apple-like ecosystem of devices. >> you have travis from uber. how do you measure that? sales, revenue, share holder performance. >> you have to ignore his $750 million burn rate every year, right? in this case, he's a blazing disruptive trail in business so that's where we look at the other factors, yes, no profits yet. revenue, you know, he's got revenue. we did a story a couple issues ago about $2 billion. >> we don't know the numbers. >> we don't know. we just know the impageact on business and taxi industry and others as well. >> thank you for joining us. >> thanks for having me. it was fun. thanks. may si's under pressure, but the ceo earned praise from one high profile ceo. that story is next. time now for today's aflac
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. now the answer to the trivia question. what product was first advertised on american television? the answer? herbal life. welcome back, everybody, macy's under pressure, stock fell 14% after a sales decline of 5%, but more importantly, more that it expects comp sales for the year to decline and lowered its profit expectations for the full year pretty substantially. the ceo spoke yesterday about the challenges the company faces. >> december 27th comes, and volume just drops off precipitously. earnings is forecast down for fourth quarter because we're going to take mark downs. great for consumers. consumers will have a field day because we're going to have a lot of values out there for consumers, but we're going to get rid of the inventory. >> last night, under armour ceo
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defended the ceo in washington. first of all, he's one of the best executives in retail, and macy's is a power house, without question, they set the tone. what you're seeing is a lot of inventory and people reacting to the second warmest september and, you know, probably one of the warmest octobers in recent resi history, that will have an effect. >> seen that play out with the other retail stocks hit hard yesterday too, but, joe, as you pointed out, a long term chart of the stocks it's more than the weather. >> is there one that is not like that? >> that's what i was trying to figure out, a retailer focused in the pacific northwest at this point? maybe? >> trace of the 900 pe. >> well, no, just from in terms of weather, thinking the nordstrom. >> that's a big one. >> all the market cap going into, you know, if it's a zero sum game, it's all accruing
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to -- that's jeff the laughing attack hitting new highs. >> he's now passing -- the fourth richest person on the planet. >> he's not happy. >> i don't know. amazon prime is a wonderful product, so easy to shop. >> it is. if anybody else guarantees they get it to me in two days, i would spend more time on their sites, but i know if i get it there, i shop not amazon, but only prime. >> i agree. i look for prime eligible and buy those. >> right. >> why? >> shows up in two days guaranteed for free. when we come back this morning, rick santorum is in new hampshire talking up the plan for economic growth, wanting to audit the fed, increase minimum wage, and repeal obamacare. futures are flat, dow down by 9 points. s&p futures down by 1. nasdaq is basically flat lining. the future belongs to the fast.
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welcome back, everything, this is cnbc. blackstone invested 820 million in a computer company, announcing a share buyback program. viacom matched estimates, revenue is short. you see the stock is up by 5 cents. also, britain's rolls royce slashed profit for the fourth time in a year, warning it may cut dividend, and spares and services for existing engines. morgan stanley expanding retail banking operations, offering checking accounts and crept cards for years, but reuters say they're savings accounts and certificates of deposits next year to keep assets from rival
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banks. less than 90 days from the first contest in new hampshire and iowa, but the sheer size of the gop field dilute the impact of the races. pennsylvania joining us now from manchester where he's talking about the plan to unleash economic growth. we talked about whether you were in studio. better not be in studio here with us. no reason to be in new york city right now, senator, you should be in new hampshire. >> i'm doing eggs in politics this morning right here, so, yeah, i'm here. campaigning yesterday here. we'll be here the rest of the day today, and headed back to iowa next week. >> can you, just for the viewers, highlight your plan to generate growth, and then we'll talk about the constitutions
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we've had. i don't know that the economy is great, continue policies, or whether the economy is horrible because of income inequalitity because the middle class has been basically not making any money. so i'm not sure. do you have an opinion? is it a great economy or horrible? >> oh, i don't think it's a great economy. it's not a great economy for most people in america. you know, the fact of the matter is the democratic debate, you would have thought there was a republican president, i mean, just ripping the economy saying that, you know, we have to elect a democrat to fix the problems in the economy, and they are the runs running economic policy the last eight years, and in the last eight years, i mean, i think we've seen it. asset values up, markets up, real estate values are up. wages are not way up. and the bottom line is that they are right. there is a hollowing out in the middle of the country, and i think it's clearly because of the antigrowth policies of the administration. you talked about keystone pipeline, the fact they are not
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creating jobs in the energy sector as fast as they could be created, and you look at what's going on in our manufacturing sector, i was at a manufacturing sector yesterday, and it's very, very tough to be competitive when you have very high tax rates, a regulatory environment, antienergy, antimanufacturing, makes it very, very difficult to be competitive. you have, you know, all this emphasis on additional burdens and regulations on anyone who makes anything. that's a big driver for a lot of wages in the country. it's always been a big driver, is that sector of the economy, and one of the reasons that i put forth the plan i did was to create a strong pattern of growth, focus it on making sure that we have a very favorable tax code for manufacturers. it's a 20% -- i try to make it very simple. all sorts of income capped at 20%, capital gains, dividends, ordinary income taxed at 20%.
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there's a simple tax code. it's 20% code. all the deductions, everything, all the special provisions eliminated. just go to full expensing for all, for all expenses, and allow a media expensing, no appreciation tables, so it's a really very powerful incentive for small businesses. big businesses, full expensing does not mean much because of the regular capital expenditures involved in, does not play into the bottom line taxtaxes, but sl businesses with sporadic investment in capital, full expensing is a powerful incentive to grow the small business which is, of course, what happens. >> here's what i see as a problem. i don't have the, you know, changes. i don't know where you draw the line on who actually is paying taxes into the government and who is actually receiving help from the government, but it's a large number of people that do not pay taxes, so cutting taxes
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to 20% does nothing to help the people because they are already not paying taxes. on the other hand, cutting it where the money is are with people that have assets and income and that have money. when you cut taxes down to 20%, the people that the left are going to say benefits immediately are going to be people that already have money. that is not answering the question as to how to help the 40 or 45, whatever it is, government infrastructure helps jobs, or raise the minimum wage, but, you know, if republicans could come up with a way to level out opportunity, not outcome, i don't know if democrats need to legislate equal outcomes, but what's equal opportunity? can't wait for trickle down from corporations with lower tax
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rates? >> well, here's what i say, a couple things, number one, i'm supportive of infrastructure, but we need it out of washington, d.c. i'm on the board of a private company doing infrastructure, and washington adds 20-40% to the cost of infrastructure projects. there's, you know, do we not trust the state of north carolina to build roads? is it really something the federal government has to oversee? we need to really cut back the federal role and transportation, get that money back out to the states, let them deal with it, a lot more jobs would be created, and a lot less pubureaucracpurb involved. i'm for infrastructure, but not from washington, d.c. when it comes to the tax code, though, yes, a 20% flat tax, we've a per person credit, it's per person, not per filer. it's a robust credit that helps american families. it will reduce the tax burden on millions of americans and makes it a very, very simple tax code
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encouraging work because you're only taxed ever at 20%. that's the maximum tax rate. there's no eitc phasing out, all the other tax credits that phase out which discourage work. you have very high marginal rates when you phase out rates. phase out the programs, so it's a very, very simple code that i think will actually encourage people to work. yes, it does provide lower rates for higher income individuals, a lot are small businesses, that will use the dollars to invest and grow businesses. they are very pro-powerful growth as sects to this, and, no question, the tax foundation says it creates about 3.5 million new jobs, increases wages 7% in ten years, 1% increase growth per year for ten years, real benefits to hard working americans. wages go up. >> optics are all -- i know what they will say during the general election, and the optics are going to be same old same old, republicans -- >> well, i mean, if you look --
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joe, if you look at -- >> bob, a big wall street type here, i want to see what he has to say. >> i talked to more business leaders than people on the planet, and they have three concerns that they would like to see addressed, and i think if we address the concerns, you can get into a period where you have higher growth. one is, we see throughout time trade deals help the u.s. economy. right? we see as a net job benefit to trade deals, certainly the business community strongly in favor of increasing number of trade deals incollusive of tpp. second, there's a dramatic need for skilled immigration in the country. we have over 5 million job openings not filled because we have a mismatch between our citizens and the skills required forev for those jobs. third, we have massive amounts of capital overseas that will not come back until we have a
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fair global tax system. do those three things, right, the economy will be on a firmer footing. >> yeah. let me go in reverse order. as far as assets overseas, part of the tax bill is to allow repatriation at 10%. i think there's no question that under that idea from ten years ago, a lot of money came back in the country, and that's the case this time around. i agree with you. we need assets back into this country to be invested here in america or distributed here in america. on the issue of immigration, you know, we have t90 million peopl in the country not working. you're right. i was at a trade show two days ago in chicago for sheet metal fabricato fabricators. they need 250,000 welders in the country. rather than going overseas, we have 90 million people on the sidelines in the country for a variety of reasons. one, there's no skill match. we have guidance counselors telling everybody to go to college. we have a president saying go to college. that's wrong. we need to have leaders in the country, business leaders,
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talking about, go to work after you finish high school, go to trade school, go to -- get vocational training. get a 70,000 welder job and do what the guys at the trade show told me yesterday, you know, start out as a welder, start as a tool and dye maker, move up the ladder in the company into other jobs. that's the path to success that's really available. folks, many of whom on the program say manufacturing is dead. that's not true. we have to tell the truth to the american worker. >> all right, senator. i don't have one of those game show bells -- >> i heard ya. >> okay, good, appreciate the time, good luck up in the -- which state? live free or die, i think? >> yes, it is. >> that's new hampshire. >> antitaxing might work with those people up there, i think. anyway -- >> it will. >> it will. thanks, senator, see ya. when we come back this morning, deal hunters out there are already planning their black friday strategy. retailer walmart announcing changes the way it rolls out bargains including one that
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retail is different this time, right? >> there are some differences, yes, becky, good morning. walmart is matching macy's and target starting in-door buster sales at 6:00 p.m. on thanksgiving day. beats $169, $131 off normal price, lg 55 tv under $700. samsung 55 inch under 1,000 bucks. wall mat betting big on tvs. they expect to sell 15 million tvs this year. if you want to shop door busters from home on thanksgiving, you'll be able to. for the first time ever, the discount retailer's offering the vast majority of deals on line is a hours earlier, starting thanksgiving day. target's doing the same. to explain the thinking behind the strategy yesterday. >> you can buy it online or come into the store. we're agnostic about that. so we should be. our job is pretty simple, to
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give the customer what they want. >> the retailer is bringing back the one-hour guarantee in-store on thanksgiving promising designated parts of the store can purchase five door busters between 6:00 and 7:00 p.m. they are offering all deals at once rather than a series of staggered deals as it did last year. becky? >> all right. court, thank you very much. see you soon. >> thank you. and it's possible, really is, make a dream come true. you can come in here, sit right over there, in the chairs where we sit, would you like to come see "squawk box" live in studio and then have breakfast with us? auctioning off a morning with "squawk box" to raise money for the lulu and leo fund, the charity's new initiative is called choose creativity, the auction ends at 3:06 eastern this afternoon. if you want to bid, go to, search for "squawk box,",
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search for "squawk box," posting information on our facebook page, and it's below fair value right now. >> what's ethe bid? >> you saw it. 6750, and fair value is 7500. >> can i bid now? >> yes. >> i'll bid fair value. >> 7500? >> yes. >> we'll take it. >> that's nice. >> of course, he's already here. >> you are here. >> i can come again then. >> would you play golf and bring two people? >> would love to. >> bring two people, u.s. open course. >> it is. pga next year. >> pga next year. i mean, throwing that in, i mean, if that's -- people can pay more to see bill griffeth than "squawk box." glad they are doing that, but maybe we should add that? >> go ahead. >> sounds like you did. >> you'll do it? >> i'll do it. >> seen you play, that's the downside. >> well, neither one of us played that well.
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[ laughter ] >> we have to keep our day jobs here, joe. >> we do. >> think about it, but i want at least 20. goes to be 20,000, starting bid. >> vitru financial, one of the highest frequency trading firms, and the ceo is joining us with a read on investor sentiment and volatility. stick around, we'll be right back. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
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next guest at the helm of the world's largest electronic market makers, and shares are up 20%. joining us now, douglas, ceo of virtu financial, and still with us, our guest host, president and ceo of nasdaq, a long strange trip it's been for you, doug, hasn't it? ready to go public, and then "60 minutes" does the piece, and you pulled the ipo. meanwhile, the guy that wants fair hfp says you were doing the share. why didn't you get the message out then you were not one of the bad guys? >> ironically, when the piece aired and we heard it was going to be about iex and brad and those guys, we thought, terrific, we were, you know, one of the first guys, when they came to virtu, sure, signing up,
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great, business model. we're going to come out great in this, and when i saw the 60 minutes story, i said, well, that's not the case anymore, but, you know, it is what it is. >> so you wait around a year. >> yep. >> and come out, price high end, up 20% from there. >> well, we have a great business model, performed, and at the end of the day, what we have done is take the very necessary financial intermediation function applying technology and automation to it making it more efficient than 30 years ago. >> doug, i have fond memories of fellows on the floor in the smocks yelling. technology's replaced that. you and vinny recognized that in the early days. tell us how marketing operates today compared to the days of the floor. >> right. there's a lot of guys like vinny, starting on the floor, a market maker in the exchange, and pioneers said this very necessary function can be done more efficiently, like, 200,
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guys in a pit making funny hand signals is not the price discovery. applying automation and technology, make it more efficient. really, the industry, the buy side, the consumer demanded those prices be made more efficiently. they offered spreads, the compensation they make, collapsed, and ultimately, everybody benefits. we are efficient on what we do, making markets in over 225 markets, we do with 150 people. we are in 35 countries now with 150 people in four offices with a lot of technology and automation and risk management applied to that specific function. >> it was complicated back when we were discussing it back then. >> yeah. >> and even listening to brad on the piece, you have a feel of what it will be, buy the market maker, make pennies or something, but it was a tax on traders up to a couple billion
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dollars. virtu does it differently? you're not a perpetrator he was talking about? >> talking about things in a market structure that was 2006, 2007, and 2008. the market is more efficient. we've never been a front runner or doing things people allege happened. we are simple in the way that we provide prices. we just post two-sided bids and offers in the market place, and we have to be at the inside. we don't have customers, right? we're a wholesaler that provides price, that service more efficiently than the next guy. >> important point to recognize with doug's efforts and others, the transactions costs in the industry in the last 20 years have come down 90%. not too many industries you can talk about that, 90% reduction in the cost of trading. >> every time you talk to the traders on the floor at the new york stock exchange, look, fine, fair, well, stripping out costs, but if there's a real problem, a market crisis, the electronic guys disappear. what's the answer to that? >> well, the answer is, look, you know, market makers have never said i'm going to stand
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here, catch a falling knife, stand in front of a run away train, we're not compensated to do that, obviously, august 24th, virtu and others traded a lot, but in terms of volatility and times of excessive volatility, there's only so much to do. there's volatility and issues. i'm not defending the industry saying the markets are perfect. i'm not here to say 11 securities exchanges and 40 other pools of liquidity does that make sense. it probably doesn't. there's an extent that does not make sense. if you had less pools, we could ag gait liquidities. >> you stand by. you diminish volatility? you soak up volatility in big moves? don't cause them? >> absolutely. we don't cause them. we are passive quoters, joe, so at the end of the day, natural buyers and sellers say, listen, i'm concerned about greece, concerned about what happened
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with the swiss frank depegging. i need in and occupant of a position, making a fundamental investment decision, and at virtu and other firms, we don't have a fundamental view or disposition of the market to absorb it, make a risk, and make a tick to pass it on to somebody. >> thank you. thanks to bob for joining us this hour, and people are right, classy move bidding without thinking about it. >> good charity, appreciate it. >> bob, we appreciate it. >> thanks, bob. when we come back, our guest host, billionaire real estate investor, jeff greene. "squawk box" will be right back
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the great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families of modest income safe and good accommodation. citi got involved very early on and showed an enormous commitment. and that gave other investors confidence. citi's really unique, because they bring deep understanding of what's happening in africa. i really believe we only live once, and so you need to take an idea that you have and go for it. you have the opportunity to say, "i've been part of the creation of over 27,000 units of housing," and to replicate this across the entire african continent.
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. fed speak and jobs data in focus, real estate investor, jeff greene, here to put your money to work, and why america could be headed off a cliff as a result of globalization and tech. founder of tom's shoes expanding the philanthropic focus on your feet. he's now investing in socially minded companies, talking innovation and philosophy of the one for one business model straight ahead. back on the bid market, inside the most expensive mansion with 11 bedrooms,
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waterfalls, garages, and infini infinity pool for $159 million as the final hour the "squawk box" begins right now. ♪ from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box," on cnbc, we're less than the the 0 minutes from the opening bell on wall street. futures now worsened a bit, down 37 points, dow, s&p 500, and down over 6 on the nasdaq. >> catching you up on the stories investors are talking about today. opec keeping demands steady ahead of a highly anticipated cartel meeting next month. oil prices, though, yesterday,
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falling below $43 a barrel, and today, that continues, wti down 58 cents. draghi laid ground work for monetary easing next month, warning signs of a sustained turn around in core inflation weakened, saying central bank is ready for action. you know what that means for the euro? more weakness. dollar more strength, you see this morning, the dollar sitting at 107.24. greek workers staged a strike against austerity today, the first general strike since the prime minister won the september election. talks with e.u. and imf inspectors restarted in athens yesterday as part of the bailout review. kohl's jumping in premarket sharing, earning 75 cents in the third quarter, 6 cents above estimates, i say jumping, above 10%, but look where the stock is now. >> hit hard yesterday. >> must have.
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>> after may macy's. >> six months, whatever it is. same store sales up 1%, better than the .60% analysts looked for. angie's list, target of a cash offer from iac interactive corp. the business for the consumer review website operator worth $8.75 a share, 10% above yesterday, and angie's list would review the bid. macy's cut the full year forecast, raising concerns about the health of other retailers. warm weather in september and october hurt sales of jackets and winter items. the ceo joined us yesterday to talk about plans the company has to offer steep discounts for the holidays to try to move all the inventory. >> the reality is, particularly in the northeast, it is much warmer this year than last, and at some point in time, you run out of days to tell through the
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invento inventory, december 27th comes, and volume drops precipitously. we'll take markdowns. consumers will have a field day. a lot of values out there for consumers, but we'll get rid of the inventory. we have to before christmas. >> shares of macy's down 14% yesterday. they are down more than 36% just over the last three months. he says the company is now focused on a turn around plan with more specifics coming on that. jeff greene knows the value of takiing risk, he made his first billion shorting mortgage backed bonds in the housing recessi recession, and since tripled his wealth in a portfolio high end real estate, but who is counting. today, the biggest fear is america could be headed off a cliff as a result of globalization and technology. jeff greene is the guest host for the next hour. you have a meeting of the minds that you're putting together down south, jeff, while you still can, while it's above
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water, but you actually have on one side, you got neil ferguson, one of my idols, who i love, love his -- what he writes, got eric cantor there, and allen gracin as well as washerman-schulz. >> we have the former labor secreta secretary, excellent on the issues, and we have -- >> neil and eric better come with broad shoulders. >> well, you know -- >> the people you named, robert reish and marielle. >> and we're trying to -- >> i mean -- >> we wanted them to come. >> sure you did. >> so busy these days. >> coming up with ideas, obviously, but is anything other than just pure redistribution going to be on the table down there for you, jeff, or just do a wealth tax of 50% on people like you. >> joe, that does not work.
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>> why not? you don't need $3 billion, 50% wealth tax, put your money where your mouth is. >> at some point, i don't have wealth to redistrict. >> then what happens? >> oh, geez, we have to tighten the belt. >> the fact is we know that socialism does not work. i'm absolutely convinced that -- >> a socialist is running, how do we know it does not work? >> historically does not work. absolutely convinced, joe, with global equalization of wages and exponential growth of technology killing jobs the way they kill jobs, the free enterprise system we know and what's been good to me, absolutely not equally districted to create a fair and just economy. we are destroying jobs at a pace that -- we will destroy jobs in a pace never seen before. >> equalize come or opportunity? >> opportunity -- >> oh, you're a freudian.
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how do you do it? you heard the other night, we need welders, they make more than philosophers. secondary education that does not include getting a useless liberal arts degree or -- >> look, i mean, first of all,ed idea that welders, everyone becomes welders is silly. the worker shortages are silly. the fact of the matter is that, you know, we are destroying jobs at a record clip. i mean, if you look at, as app example, when we had the first had the internal combustion engine and then the horseless carriages, the car was called, look at horses. they were put to pasture. what's happening now because of the exponential growth of artificial intelligence, the way software, computers, robots are taking over the workplace, what's going to happen more and more is the american worker will be marginalized. the american worker is going to be, you know, producing a product with no value because what's happening is artificial intelligence is growing -- if it
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grows at 1.5% a year, okay, if right now, artificial intelligence does the task of 100 iq person, ten years from now, that artificial intelligence does the tasks of 120 iq person. >> this will be -- it's going to be different this time because the bets have not paid off, and disruptive technologies have been additive to the quality of life. maybe the middle class is hallowed out. compared to the middle class 100 years ago or middle class or the poor, the poor in the country versus the poor in other parts of the world, capitalism's done a lot to raise the level of living for all, living to 80 years old now, poverty rates down, a billion people have been lifted out of poverty. what's the solution to do this? >> well, first of all, i wish i could tell you i had a solution. this is a challenge i don't think anybody's addressed. look at the presidential candidates. they are not talking about this. look at -- on the right side, it's pro-growth, less
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regulation. on the left side, hillary clinton says let's have free college education for all, free public universities. what do the people do after university? the problem is nobody's being honest with the american people. we have a differing type of problem facing our economy today, and we can't use -- we're trying to use traditional, republican and democratic solutions to nontraditional problems. do i have an agenda? no. assembling the brightest minds from all walks of life? >> some of them. >> from everywhere, stanford, m.i.t., and guests in the audience, friends of mine coming, whether it's paul singer, leon cooperman, oliver stone, a lot in the audience. john skully is coming. people will be here joining in a conversation, talking about how to make the country work again. >> you spent time researching this, though, where do you think the answers potentially lie? you spent a year putting the conference together? >> okay. good question.
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i think that the good news is we're still the biggest economy in the world. we have the greatest universities. this is the place that people all over the world, when they do well or intern nearentrepreneur to come. we have a lot of entrepreneurs, a lot of great stuff going for us, but the current model is not working. we have to figure out how to reinvent our economy. if we think just cutting taxes and cut regulation, sure, there's more businesses, but they are not employeeing people, beemployeeing people to sweep floors. the other places in between, look, working through college, i was a busboy at a hotel, able to climb the ladder, each year, one step at a time. what's happened now is there's a lot of places at the bottom, and there's a few places at the top, all the other steps up the ladder have disappeared, and we have to figure out how to create an economy that works. >> part of the problem is we're looking at a post-world war ii economic situation where people
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go, work in the workplace, have a job f40 years, the company cares for them with health insurance, pension, 401(k) plan, that's blowing out of the water too. look at the rise of people who are basically working for themselves, and employed part-time in different places. >> becky, it's up sustainable. i have three sons under age 7. my worry is not that i will not provide for them financially or get them educations, but what world will they inherit? it's unsustainable. i gave that example earlier of the horses put out to pasturement what happens when all the workers are no longer able to offer anything of any value in the economy because artificial intelligence robots took over -- >> pinning everything on artificial intelligence. >> joe, the horses -- >> people are not horses. >> i agree. >> the reason we need a whole new system because art official intelligence is going to -- okay, if you come up with a
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system, let me know, but in the mean time, small businesses are what has made this country great. it's impossible -- it's very difficult to start one now in terms of getting bank financing. >> i agree. >> the average person makes 50,000. they are not big fat cats. at least at the start of this, at the beginning, before we change, the entire way way do things in the world, why not make it easier for what's worked in the past. >> i agree. >> why not get out of the way of private sector, small business, and regulations -- >> joe -- >> corporate tax -- >> i agree. >> you do? we don't need to throw it out and let robert -- >> i agree. get better educations, putting -- i saw band-aids on the gushing wounds, but they do not last long because gushing wound is technology and globalization which destroys jobs at a pace never seen. we have to address it. >> 5% unemployment, and we, the first ferry computer was in 1958. >> 5%.
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>> still people are around. >> look at the wage levels, they have gone nowhere for the average worker. >> 40% where they were in 1960. the average person in the country is better than the average person then. this sounds like, to change the entire way we do things, the entire economic system, central planners are the only people doing that. really? how is the market place doing it? >> we need big ideas. whether it's a different workweek -- >> central planners. >> no. see what happens. >> obviously, we have a lot more to talk about today. don't miss this conversation. jeff's with us the rest of the program. when we come back, the fast track process of the transpacific partnership under fire. some argue the deal helps create jobs and cuts taxes for american companies. others say the deal destroys the middle class and promotes companies moving overseas. u.s. trade representative michael froman is joining us on why he thinks the deal creates a level playing field for companies overseas. "squawk box" will be right back we've created a new company...
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one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward. accelerating innovation. accelerating transformation. accelerating next. hewlett packard enterprise. prge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.
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. the trade debate rages on as well as the debate at this table. the tpp will create strong rules and strengthen alliances, and others, though, think it
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encourages businesses to go overseas amongst other thing, michael froman is joining us, the united states trade representative overseeing the efforts to get tpp passed, and, ambassad ambassador, thank you for joining us today. >> great to be here. >> before anyone's seen the text of the tpp, this was the most maligned trade pact seen maybe since, i don't know, maybe 20 years or longer. what is actually in the deal, and why do you think it's good for america? >> well, we start from the fact that we're already an open economy. we have very low tariffs in the united states. we don't use regulations as a barrier to trade. in fact, it i wampacts 80% of t goods we take from tpp countries comes in tax free, and other workers faye high tariffs and other barriers, what tpp does is disproportionally eliminate barriers to export more and every time we export more, we
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support more good paying jobs here in the united states. it levels the field by raising standards in other countries, environmental standards, property right standards, puts disciplines on state-owned enterprises, creates rules of the road for the digital economy, all of which play to the interests of u.s. companies and u.s. workers. >> obviously, there will be some winners and losers here in the country based on this. looks like agriculture will be a winner under this deal? where are the areas that you see some potential losers coming out? >> well, actually, because we have a very open economy, we are already competing rest of the world. we try to take and pay a lot of attention to the import sensitive industries we still have to make sure that we are taking care of them as well, but because our barriers are already almost close to zero, by us eliminating barriers in other countries, small businesses and larger businesses and farmer rs a and rarnchers gain on imports. to the other question, high barriers in markets motivates companies to move there to serve
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them. eliminate barriers, companies stay here, employ america workers and use this as a platform for the rest of the world. >> surprising to see both sides of the political spectrum arguing against the tpp. in the past, republicans would support this, but in election season, there's tough talk from republicans and democrats saying they are not going to support this. they do not like the deal. many of them before they read it. how tough is your job to try to pass this? >> as people read the agreement, out there in public, months and months before a vote in congress, when they read the agreement, see the benefits for american exporters that they will support it and have the necessary bipartisan support to move forward. >> mr. ambassador, you don't have enough republicans, but the scary thing is that it's the president's, you know, it's the president's plan. the more trouble's coming from that side of the aisle.
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>> well, we work on both sides of the aisle. >> i understand that. >> democrats and republicans to build support for this, and, again, i think as people understand the agreement, understand the impact that it's going to have on various sectors, opportunities it creates to expand exports, expand business, expand employment here in the united states, we'll get the necessary support in congress. >> well, i think on the right, you've got -- i don't know, guys pointing to they don't like the how long you get patent protection on drugs, that it's only five years. on the left, they don't want any patent protection whatsoever on drugs, and you have the general next that maybe closing our borders will keep jobs here. the complaints from the right are kind of specific, that there's no currency, you know, manipulati manipulation, edict, and china's not a part of it. i don't know what they're talking about with that. >> well, china -- you're right, china is not part of it, and, in fact, there is a currency arrangement with tpp, and
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secretary lew at the treasury department and his fellow finance ministers in the tpp countries agreed to an important agreement on laying out criteria for what the appropriate exchange rate policy is, increasing transparency and accountant mechanisms. >> the point is, there's specific, like, sort of sticking points on the right. you got to convince the new democratic party that they are the center of today's democratic party, convince them that globalization is even a net positive. that's where you got to do the hard work, even though the president is a democrat. >> you know, i think there's no doubt that globalization impacted our economy. people shouldn't confuse with globalization and trade agreements. globalization's a fact of life. it's a factor of a lot of different developments like containerization, ease of air travel. trade agreements is how we shape globalization making sure globalization reflects interests and values. >> i don't know what to say here. >> mr. ambassador, the questions asked here are china not involved. how should we read that in terms
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of american interests in the pacific? because of china's not being there. >> well, tpp is not directed against any country, including china, but it is directed at setting high standards for this region, and then encouraging other countries to meet the standards, exactly what it does in terms of demanding openness of other countries, but also higher labor standards, environmental standards, intellectual property right standards, these disciplines first time ever on state-owned enterprises, compete fairly, internet, rules of the road to define for the region, and it's important the rules of the road, for have very important region, reflect our interests and values. >> chiming in here, we're the biggest economy in the world, and, you know, the most innovative economy in the world, the ones inventing all of the apps, the iwatches, greatest technology, and the things that will be exported, so i don't know why we would fear opening
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our markets up in a big way to the great innovative products that our economy creates. >> right. >> i agree with that. i think as you were saying earlier, we have tremendous strengths in our economy, in terms of our entrepreneurial spirit and great universities. we want to drive more investment in the united states, have this the platform of choice where companies from all over the world build here and because of the trade agreement, sell them all over the world. that's what tpp is a part of. >> that makes a lot of sense. it'll get done. right now, what are the the numbers? i mean, you got enough republicans. you got enough democrats to do this? >> well, you know, we just passed trade promotion authority this year, and that's poured in the necessary support about the house and the senate, bipartisan support in both, and that's a good foundation on which to start, but we're going to be continuing to talk to republicans, democrats in both chambers, explain the agreement, address conditions and concerns
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and confident for the economic regions and strategic reasons that necessary support will be there. >> all right. thank you, mr. ambassador. >> thank you for having me. >> toys are staging a comeback this year. maybe people can keep making toys. the latest holiday toy forecast -- >> oh, misfit toys, remember this song? >> oh, yeah. hopefully no layoffs in the north pole this year. a look at the hot toys this year. "squawk box" will be right back.
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still to come, breaking news on the jobs front. and then, a look at america's most expensive home. a florida mansion modelled over the palace in france selling for a cool $159 million. we'll talk high end listings when we come back. right now, though, heading to break, u.s. equity futures, a little bit of pressure this morning, dow futures down 58, s&p down 6, and nasdaq down by 12. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade.
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you got this.
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welcome back to "squawk box," breaking news, initial and cometing claims, initial jobless claims, 276,000, more than we expected, but the last look, 276, stays the same, no revisions, 2.174 on continuing claims, a different timeline, and, of course, the numbers are going all the way back to november of '73, so 42-year anniversary since we've been this low, and the president says we created a lot of jobs to do
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the math we have. lowest in 42 years in claims, jobs created. where's the growth? where's the horsepower in the economy? oh, there's the question. joe, back to you. >> you just going to ask the question? [ laughter ] >> well, i wanted to see if i could get a response, you know, really, that is the issue, is it not? >> it is the issue. the solution and the opposing view points on the solution are where the -- there's the rub, i think, rick, and we're seeing it played out on the big stage on a daily basis. hopefully we can -- >> absolutely, a big stage. >> on the big stage. you know, someone once said that's why we have elections. >> what did i just hear when i was coming in? i heard that somebody had a radio on, i think nurses and postal workers have thrown their -- tied their cart to bernie sanders. i don't know. no comment there either. i'm leaving that dangling out
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there. >> not surprised. >> i like that. you did that on purpose. the last name. any ware, thanks, rick. u.s. toy industry expected to have the strongest year in a decade following several years of kids choosing video game and mobile apps over toys, but according to the npd group, annual toy sales are going to rise by 6%. >> yeah. >> that's a lot of people to like. >> that's my fault. >> the math? >> no. >> it's my wife's fault. >> kyle's back into the toys. >> it's nice, physical things you grab on to. $20 billion this year, up 4% from last year, and the biggest increase, the toy comeback fueled by increasing popularity of collectibles and toys based on the big hollywood block buster films. here's a look at the big toy makers with hasbro leading the way up 36% over a one year period, and matel, the barbie
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problem, and jack specific, i don't know what they do. no big fad toy this year, i don't think, is there? >> star wars. >> that's huge. >> not a pet rock. >> teenage mutant ninja turtles. >> and mind craft. the costumes and toys. two mansions trying to top each other in price. robert frank is here. >> a mansion in florida is on the market as the most expensive listings in america. the megamansion is called the royale, listed at 159 million, in florida, 60,000 squart feet main house, imax, 30 car garage, listed last year for 139 million. at the time it was the most expensive listing in america,
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but weeks later, jeff greene's beverly hill's estate listed for 195. jeff cut the price of his estate to now 149 million, and they boosted a price by $20 million so now palais is on top. the listing has several improvements including an added parcel of land, plans for two guest house, and an ice skating rink, go cart track, bowling alley, and a nightclub. >> is that the queen of versailles? >> no, this is near del ray. >> palaces -- >> there's a lot of those designs in florida. jeff, i want to ask you, we have news here to break. >> yes. >> is your beverly hills mansion still on the mart? >> it's not. the listing expired in october. my wife and i took it off the market. it's a great investment. look, if somebody comes along
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and wants to buy it -- >> you were renting it for how much a month? >> $450,000 for the month of august. >> for a month. that's crazy. >> what will you do with the property? it's a full working vineyard and a crazy mansion, rotating dance floor, what do you do with the land? >> seven acres of producing vines, making wine every year, and we're going to develop that into an organic farm on the property. >> so get this straight, in beverly hills, acreage goes for up to $10 million an acre or more. you're going to have -- farm beverly hills land? >> absolutely. >> growing tomatoes in land that sells for $10 million? >> not just tomatoes, but potatoes, onions, corn, so -- we're going to talk to a lowle farmer who is going to take the product and sell in a local market, and, of course, we'll eat the organic foods, and our
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next door neighbor can walk through the gate and ours -- >> neighbor is? >> barley diller is next door, excited about the farm as well. >> barry's going to bring his farmer's basket, pick tomatoes. >> absolutely. hopefully he'll get involved in crop selection. >> you realize this is a crazy use of land? why are you doing this? >> first of all, it's vacant now, not used at all, so why is it crazy? as a matter of fact, there's a little stream there that runs in a creek. we're going to be able to water without using any of the l.a. water that's so precious. it's aexciting. >> farmer in beverly hills. >> what streets do i recognize? where is this? >> well, off of coldwater canyon, above the beverly hills hotel, mile and a half, up the hill is where it is. >> okay. >> we've got a farm, a vineyard. >> a benedict canyon. >> coldwater is to the right of the hotel. >> because -- okay, i have to go
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out there, get all the land. >> that's amazing. >> we have 25 acres. >> it's a working vineyard in thee prime spot. amazing when you're up there. the views are fantastic. i mean, you would probably get incredible amount of money just for the land. >> yes. >> total is 25 acres? >> property is 25 acres? >> the farm? >> 2 acres. >> the vineyard you keep? >> joe, come out and spend time with the farm workers to see what they go through in los angeles. they are yacht a union, paid a little more than minimum wage, that's for sure. >> how many acres do you node for a golf course? >> 150. >> you do, yeah. l.a.'s south or north -- what was for sale? south? might develop that. >> more broadly, you made a billion dollars -- became a billionaire by shorting the housing market, a famous bet. what do you think of the market right now? >> yeah, is your move to take the property off the table a sign that you think the real
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estate market is flagging at this point? >> the housing you mentioned earlier, the house we own in beverly hills, it's like finding people in a hay stack. how many people can afford that? >> how do you know what it's worth? >> look at the replacement cost. that's only way you can. if you take 25 acre lot, like this property that we own, it's been graded substantially, can't do anywhere, graded before the antigrading laws in los angeles. >> below that, the broader housing market, are you worried? not worried? strong? building a $300 million development in west palm beach, bigst thing in decades, bullish bet on housing. >> on south florida. we have ageing baby boomers, retirees, they are coming to florida. after the weather coming here to be in your studio, and, you know, people are coming to florida. that's a picture of the building that's beautiful, building two to story towers in west palm beach, excited about that, but in general, i'm a believer,
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talking about we'll have a slow growth economy because of the forces of globalization and suppression of wage groe. if you have a slow growing economy, there's low interest rates, low inflation, which means it keeps asset prices higher. >> condos? >> sorry? >> are they condos? >> rental. >> representi irenting for? >> luxury reppals. >> you're negative on middle class, but you're building buildings charging $12,000 for rent. >> it's a 30-story tower never meant to be built for people who are wage earners. you know, we do -- >> how much is it per month per rent? >> they are a lot. >> somebody's making money for you to build two 30 story towers in palm beach. >> first of all, there's only been one class a tower built in 30 years in west palm beach. >> i'm with ya. i love it. you're a capitalist when it comes down to the money.
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i like it. it's nice. it is good to see. put your money where your mouth is. >> we just finished 550 units that rented a beautiful, on 25 acres, the old atlanta spring training facility, and those rents are two bedroom for $1600, affordable for someone who makes -- >> you could have sold your house out there, obviously, you just need to -- what's the -- what was your highest offer? you don't know how markets were. you get down, that's why, you know, when you have a two-sided market, that's what allocates capital. where was the market for that house? >> well, i think, look -- >> 120? 70, what is it? >> worth north of $120 million. >> okay. >> the question is you have to wait for the buyer. it's like in new york, the penthouses that people build that are $100 million. >> 19 the, that was not a real price? >> can't say that. there's nothing like it anywhere in california. >> then go to 299. >> it's like look at the painting, how much did it sell
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for? >> 170. >> why was it 170? there's only one like that. this is that of housing. >> 149 others like it. not as good. right? 30 nude? >> that puts it in context. >> not for that one. >> you're right. >> you want the best, you pay for it. you want the best, you pay for it. >> thank you, guys. >> thanks, report. when we return, buy a pair of shoe, give a pair. so far, nearly 50 million kids have got a new pair of kicks, just sunglasses too, and the company's chief shoe giver and founder joining us. good golf every too, right after the break with the business overdate.
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tom's hit a milestone of 150 million shoes purchased meaning 150 million pairs begin to children in need, and after being capital took a 50% stake in the company, the founder is investing half of proceeds in new companies with a social purpose, and blake is here, the founder and chief of chief shoe giver at toms, and, also, he appeared yesterday at the fast company innovation festival in new york with model and entrepreneur, kristy, wife of ed. great to see you. >> great to be back. >> did sunglasses too? >> sunglasses, bags, coffee, we want toms to be a lifestyle
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brand, store, core focus, just pass the the 50 millionth child to receive shoes, proud of that, and then, also, we're investing in other social entrepreneurs. >> you, obviously, people can take a stake in, like, bane or something, and then what do you do -- what's the expansionary plans? >> a lot of international expansi expansion. that's why i chose them, helping companies go global on the retail front, something we have little experience in. i mainly built the business through sales and wholesale business like in jourp journeys and those partners, looking to build the retail footprint globally, they give us a lot of experience and capital to do that. >> so your thing is shoes. trying to see how you leverage your expertise into something else, like, do you know matt damon? >> i know matt. what he does at is amazing. >> it is amazing.
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how can you leverage what you do with something like that? trying to figure out that. >> we do some work in the water space. when we sell coffee, we create water projects in the areas because one of the things is the farmers use a tremendous amount of water when making coffee, so we give water back to the communities. >> oh, so -- i mean, i guess i can't ask about the state of the consumer, can i? i mean, do you have a feel for -- people don't necessarily buy toms just for -- >> the interesting thing is the -- i started the company in 2006, ready for the ten year anniversary, and never forget, the entrepreneur mentor of mine in 2008 and 2009 said, blake, you know, an entrepreneur never wastes a recession. that's an opportunity for entrepreneurs, and interestingly enough, our business was growing, you know, at incredible rates during the last time we had a recession, and, you know, i think it -- in those times, you know, customers are more careful about what they purchased.
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it's more important what they are buying has something with meaning. i think, especially, as we go into the holidays and people are thinking about gifts, you know, people love to give gifts where there's a give back, and i think that's one of the reasons we always have successful sales at the holidays, although the shoe is a spring and summer shoe. people want to give something with more meaning, so, you know, when people buy less, they are more thoughtful in what they are buying. >> no plank? >> i know kevin, yes, i do. >> you do? >> yes. >> any convergence? that guy is a machine. >> yeah, we're two very different human beings in the footwear space. oftentimes we're on panel, and he's full testosterone like i'm going to crush the competition. we take a softer approach. >> crushing the competition with 100 million pairs of shoes you gave to kids, i mean, there's -- >> oh, no, we like competition, but we just take it a little bit different approach in the way we do. >> not expanding beyond shoes, apparel or anything? >> no, i don't think --not a
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need in developing countries for clothes. yes, you know, school uniforms are important. if there's a product giving back school uniforms, maybe that's the case. >> blake, who is your customer? i think about the things you talked about k doing what millennials did before they did it. are they your customers? someone who is older? >> it's interesting. one of the biggest challenges at toms is that kind of everyone is our customer. it's really not about an age. it's more of a, you know, a way of thinking. you know, so we have, you know, people in their, you know, 70s and 80s who love the idea of purchasing something and helping someone at the same time and the shoes are comfortable. they wear the shoes too. you have the teenage girl, a huge customer segment for us, building the business with journeys, and they love the fact they are meeking a personal statement about their values whether wearing toms, and the moms, i mean, that's another really core group for us, but you can see, it's a huge marketing challenge for us. how do you speak to all of those different customers segments
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still sending a message to what the brand is about? >> right. >> all right, thanks. >> thank you for having me back. appreciate it. >> see you soon, february at the latest. jim cramer from the new york stock exchange when we return. the futures now, indicated lower, now down 70. it's worse. we'll be right back. the future belongs to the fast.
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would you like to come see "squawk box" live in studio and then have breakfast with us? we're auctioning off a money with "squawk box" to raise money for the lulu & leo fund. choose creativity. the auction ends at 3:06 eastern this afternoon. if you want to bid go to and search for "squawk box." we'll also post the information on our facebook page. greinfeld is already off the hook. he did $7,500 and somebody else came in. >> what are you raising money for? >> the lulu & leo fund. it's a great organization that is trying to help kids make sure they realize their potential. >> we'll do $10,000.
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my wife and i will do $10,000. >> but i'm going to be at breakfast. >> what? >> can i sell it -- >> jim cramer is down at the new york stock exchange where jim cramer joins us now. i saw kohl's chart and got scared. >> kohl's, obviously, kohl's side of the street, the weather must be freezing. macy's must have been warm. this was -- >> look at the chart from where it's been and where it's gone. that scares me in terms of the consumer. >> kohl's is not macy's. macy's has that big dollar exposure because of the flagship store. i think that kohl's was already prepped in terms of what macy's says to be automobile to bad. kohl's is citing nike's shoes. that general retail would have included them. the chart included them.
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they've already been knocked down. when they did one point comp, when people were looking for one point comp, everybody was thrilled. there was a time when one point comp would have sent this thing down huge but at least it didn't disappoint on top of that. >> what else got your attention today and anyone posting results that were out of the oord, good or bad? >> rolls royce. rolls royce is losing share to general electric. i think they're trying to say there's a let-up a little bit. ge is the kind of last industrial we have. it's the last one left. we don't want to lose that one. we've lost a lot of other industrials. >> over 30, or it was. >> it deserves to be because it's clean. it's got the best organic growth of any of the industrials. no longer has the financial aspect. and 82% of that company is not china and not oil and oil is not
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doing that bad either. >> very good. all right. thanks, jim. >> when we come back, stocks on the move ahead of the trading session. plus, some final investment ideas from our guest host and billionaire investor jeff green. . but achieving the right outcomes has never been more difficult. xerox engineers a better way for people, process and technology to work together. improving how the world shops, travels, pleases customers, learns, banks, and stays healthy, so... life works better. work can work better. with xerox.
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welcome back, everybody. real estate developer jeff green. you talked about the program that you're hosting at the symposium. if someone is interested, how could they come? >> go to closing the it's run by our institute, the green institute. and we still have a few open -- it's almost sold out. it's a small conference. only 300 guests. we've got about -- all kinds of very exciting speakers. andy mcafee, tony blair, even to talk about some of the winning and struggling in sports, we have mike tyson. >> december 15th? >> december 6th through 8th. >> we had the wrong -- >> we had the wrong date on that. >> december 6th through 8th. sunday night to tuesday afternoon right after art basel in palm beach.
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>> you need more people to come or you just want people to know about it. >> we'd like some more people to come. like we talked about earlier. i hope this san exercise in buying insurance. i hope a new president is elected and the democratic ideas will all come forward and we get ideas from everyone. less regulation and pro-growth policy. good paying jobs. i think that what we're trying to come up with an alternative just in case, if my hunch is right, that artificial intelligence and robotics and software and globalization are going to continue to destroy good paying jobs. >> what's your hunch on the stock market right now? >> you know, i think the stock market is probably -- i'm not is super bullish or super bearish. interest rates are going to grow modestly. i think they're going to do a modest increase to show the 0
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has to come to an end but it's going to be a quarter point. i think stocks will, in general, do well. i would be surprised if you see more than a 5% or 10% swing in either direction. >> is the house open in february out in beverly hills? is the staff there if i -- >> any time you want to come. joe, we'll -- you can pick some crops in the farm. >> i've got one particular crop i'm interested in. thanks, joe. join us tomorrow. "squawk on the street" coming up next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david is up town at liberty media day. his exclusive with john malone is coming up. stocks are on track for the


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