Skip to main content

tv   Squawk on the Street  CNBC  December 9, 2013 9:00am-12:01pm EST

9:00 am
you have to be careful how you apply it. >> larry, i want to thank you for joining us. if we don't see you before the end of the year, happy new year, merry christmas. >> same to you. that does it for us today. keep an eye on shares of mcdonald's. those shares were better than expected. in the united states and the rest of the globe, except for europe, it was worst than expected. we'll see you tomorrow. right now, it is time for "squawk on the street." good morning. keim carl quintanilla and david faber. here is the setup for the week. futures are largely unchanged. we have some comps from mcdonald's and three fed speakers on deck. the ten-year yield around 284. the nikkei up better than 2% as the yen slides in reaction to
9:01 am
the jobs number. the nikkei is now up 50% for the year. that is the best since 1972. our road map begins with momentum from friday's jobs numbers. markets looking to extend their momentums today after the dow and the s&p turn in their first jump since a month ago. >> american airlines begins trading today after they blocked the merger of american and us airways. mcdonald's same-stores sales. >> if you are attempting to travel for business, we're going to get you updated on the fallout from the big cross country winter storm as it moves out of the northeast. >> first up, stocks hoping to continue their upward momentum from friday's jobs. a 198-point jump in the dow sent the blue chips up above 16,000. they saw their weekly winning streaks snapped at 8. we came within .75 of a point on the s&p of making it nine
9:02 am
straight weeks up in a row. we haven't done it since '04. missed it by that much. >> lack of bad news. we saw friday the beginning of what a lot of people are thinking, wait a second. maybe the transition to a new economy, where the federal reserve is not playing that much of a role, can happen. that's what bernanke told us what could happen. it would be amazing as a swan song if it does happen speaking of the fed, front page of the business sentence, the first sentence of ben apple balm's fed piece. federal reserve officials are in no hurry to retreat. >> we're in a weird moment here. when i looked at the pan aklee of knees, not a lot of bad. not a lot of land mines. >> we had this conversation and promptly went down for a few days. >> true but the difference might be that the news flow is very positive this morning. it is indicative of the year.
9:03 am
sisco buys a company, u.s. air. no one is thinking they will do that. here is a stock that's been stuck at 33. >> the other one is stuck, period. >> then, we have gilead and this is like apple with china mobile. this is the moment in time that people think, that's new. they create reasons to buy stocks. i was on the phone with somebody who was very big in p.c.s. this has really accelerated. >> p.c.s? >> yes. that's the reasoning behind the intel upgrade. western digital, take a look at where that stock has been. my kr micron for a while. the banks are challenged because it looks like jpmorgan is trying to hire really smart people that may have influence in the united
9:04 am
states, no. china. i forgot how it is done. are they supposed to people that have just fell off the turnip truck? >> well-educated people that are in the communist party or people who can't do well and fail. >> a fair point. >> what a story in the times over the weekend. duff a problem with the linear relationship between those hires and business? >> i'm still stuck upon the idea that when i got into business on wall street, it is kind of like when you apply to college. i remember when i applied to college, i said, you mean to tell me that 50% of the people that get in, their parents went here. that's outrageous. well, you know, what are you going to do, sue them? >> apparently, you can. >> here we are talking about jpmorgan and yet another potential problem. >> your point broadly, the jobs
9:05 am
picture looks a little brighter. we are having persistently low inflation, which is worry some in its own right. >> go by clorox, the drugs. another camp said, go by parker hannafin. the world is accelerated. both want to put money to work. >> give me gilead. give me sysco, the right sysco. >> i think that inga is going to pull one out. bet against mcinner any, y, it mistake. u.s. air, more planes we bought because the balance sheets of the airlines are so slow.
9:06 am
speaking of airlines, let's move to the news from this morning. we have been awaiting us airways and american airlines will clothes their merger today. american will emerge from bankruptcy. the deal was denied by the supreme court. the company begins trading this morning as american airlines listing on the nad dabbing under the dicker symbol aal. doug parker talking about what it means. >> we have to provide a return to our investors. the last 10, 11 years are improving that airlines that can't do that are allowed to grow and expand. we expect to produce a profit that will provide a nice return for our investors. that's what they expect and that's what we plan to deliver. >> anybody who is in the equity of the failed american airlines has seen an incredible return. anybody who has bought the debt has seen a great return.
9:07 am
72% is being owned by the debt holders of american. you have an equity or recovery value on your equity here. an important thing to keep in mind, you are going to be delivering equity to an awful lot of debt holders who typically don't own equity and will be sellers of that and some workers. so look out. there has been a little bit of concern about a lot of selling pressure here in the early days as you get the equity. you are a debt holder and you sell it, because that's not what you do for a living. >> aside from all the integration risks that you see carriers struggle with again and again. >> i want to buy this. it is buyable because the company is good. i was so reassured that doug parker said the race won't go up, david. even though there is tremendous con s consolidatio consolidation. isn't it great? they are going to consolidate themselves. he will tell you if he is going to move rates up sharply. i said to myself, you know what,
9:08 am
it is so good for the consumer. he told us that. >> irreparable injury is what the critics said about the deal. we are trying to get this thing to go to the supreme court. it has been said that this year, it hasn't been the silicon valley stock purchase that was the big winner. it was buying an airline in severe distress that made you the most money. >> so many dreams came true. i buy fannie mae. it made money, rite-aid, an unbelievable story. sprint, an amazing story. sirius satellite, you are not supposed to make money this way. >> in the single-priced stocks. fannie and freddie you will see. distressed hedge funds that bought the debt of american airlines. that was a smart move. 1 billion in synergy is what they are sticking with for 2013. >> you think they don't just go
9:09 am
up because of the yellen/bernanke conspiracy. >> i think it has gone up because of fundamentals. american got 72% of the combined company delivered to its holders. this debt equity and otherwise. we'll see at carl's point. you and i at airlines and continental, not the easiest at all. >> the story this morning about the guy that woke up in houston on a united jet, woke up in the plane, locked in the plane and had to call his girlfriend to say, get the airline to get me out of here. >> he was not the pilot. >> he was not the pilot. it wasn't the pilot. >> they never got him. >> not in the terminal. >> those cost so much money. >> in the meantime, mcdonald's is out with its same story sales figures for november.
9:10 am
.5 led by 1.9 in europe. in the states, down .8. hurt by what mcdonald's is calling ongoing competitive activity. sales in the asian pacific also down. that persistent weakness in the states is making some wonder if this is no the a macro issue, if this is a perception, a share issue. >> when i pull up the wendy's ceo, inventiveness, trying to come up with new things all the time, keeping the menu fresh, i don't feel that with mcdonald's. i know you visited the l laboratory. >> there is a lot of design reinvention. the biggest complaint keeps coming back to the menu. they are under severe pressure when it comes to the discussion over a living wage, a minimum wage. their competitors, whether it is a pretzel hamburger at wendy's or a dorito's taco at taco bell,
9:11 am
they have not made noise with new products. >> and there was a trickle about the down fall of diet soda. people aren't buying soda with the same lackrity. >> i stopped. i have never been a big soda drinker. so i can't connect it to that. >> as for fast food, what about burger king? >> it is okay. >> i like wendy's more. >> you do? >> i see a turn in jack in the box over qudoba. i see panera doing a bit of a turn around. doing very well. del frisco coming up. >> a little steak for breakfast. never hurt. >> the thing about mcdonald's, in the long run, it has been
9:12 am
correlated with employment. you have a job to go to, you might stop and get a cup of coffee. if employment doesn't improve, you would hope at least that begins to show up in some. >> starbucks when they are doing plus seven or plus eight, they had some card. it went like that. the formulas that are really strong are working very, very well. darton not working. there, you have a challenge to management. the ones that are working are percolating higher. the restaurant group has been very good away from mcdonald's. >> a brief mention of sysco, the food company. a huge $65 billion in sales is what they are going to have. they are paying about ten times u.s. foods trailing adjusted
9:13 am
ebitda, $820 million before synergies. take a look at that move. it is not a merger monday. we have seen so few deals. so often, it seems this is the reaction from investors. they will end up owning, kohlberg, kkr, they will end up owning 13% of the combined income. >> we should dissting wish sysco or crisco if you want to call them something equally as pejorative. this company has done nothing. they step up to the plate. look what happens. there have been very few deals. when you get a deal, it is spectacular. they are moving more toward organic food, doing a lot of the right things, stock goes higher. they are making up almost the
9:14 am
entire purchase price in the accretion to the overall value. >> you should become an investment banker. >> this also is a way to get an exit, although i don't know, for the private equity firms so far. if they could just raise prices by .1%. it is very easy to see this deal. oh, a sysco truck, how did we get by that? >> or a u.s. food truck. maybe this leads to fewer trucks at the to-go rack. >> if you have to repaint a lot of the trucks, that could be extra cost. >> otherwise, i am raise sysco right now. we'll get an update on this crazy weather heading toward the northeast. former amr chairman and ceo,
9:15 am
donald carty will offer his input on the merger from the newest airline. a lot more "squawk on the street" in a moment. [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves.
9:16 am
all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.
9:17 am
9:18 am
what a game at lincoln financial field yesterday, 8 inches of snow as the eagles do fly and beat detroit. >> that's my picture. >> this was the picture that jim was tweeted from his seat yesterday. >> i can't see sean. >> you don't have to worry about it. that's first quarter activity. the nfl stops for nothing. >> sean mccoy, 217 yards rushing, breaking a team franchise record, a record set in '49. >> one of the great things was his interview after. he said, i want to thank steve for putting that number up but records are made to be broken. he is a fabulous guy. >> it is fun to play in snow like that. >> the eagles have the fewest soft tissue injuries of any
9:19 am
team. they had no one on injury. they have strength and conditioning. navy seal. never talk about plan. i saw mccoy in the summer. the practice ends and he is not quitting. he says, no, i want more practice. >> the punishing his body has taken. >> they got rid of andy reid's taco tuesday and fast food friday. they were doing snow angels. sorry, brent sellic, you got denied that touchdown. speaking of the snow, the east coast is getting slammed by this snowy icy mix. a travel nightmare. more than 1,000 flights within, into or out of the u.s. have been canceled today, according to flight aware. mike seidel is in leesburg, virginia, with the latest on the storm. good morning to you, mike. >> reporter: good morning, carl. out here, we are dealing with sub-freezing temperatures, right near freezing.
9:20 am
a lot of work to try to clean the ice off. >> that's too bad. it looked like it was going to be a good live shot. the snow is coming this way. i think we are going to start getting some snow in the city here mid-morning tomorrow. >> i saw total flights canceled, 2800 canceled as of sunday evening. three deaths in dallas over the past few days. it has been rough. >> it was towering on i-95 yesterday. it was closed at one point, just so many accidents. people were just. i know we have that here tonight. that was no way you could use cars. you need an atv. with the market, cramer is here to help you get off to a fast start. we will get his mad dash after the break. one more look that futures.
9:21 am
we have three on today.
9:22 am
with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. losing thrusters. i need more power. give me more power! [ mainframe ] located. ge deep-sea fuel technology. a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ brilliant. let's get out of here. warp speed. ♪
9:23 am
opening bell for this monday coming up in 6:30. let's start off here. >> everybody likes that. the spread between what you are getting in the united states, west texas and overseas, valero natural, that deutsche bank upgreats them. people have been talking about this trade for weeks and weeks. >> that's a big move. what's behind that move and why
9:24 am
suddenly is everybody getting upward here? >> then, cushing got bad again. they can't export enough. the prices are plunging because there is such a bottleneck. i think the bottleneck will be alleviated. i think they recognize you are not early in the move. the big stocks like eog that have been down and down, i would rather bet on them. >> than the refiners led by valero? >> it is too late. they are all upgrading now. it has been such a obvious trade. the quarter is going to be fantastic. this was down five. the great days are over. >> well, that's not what you expect of an executive to say? >> no. he said the free money. the free money days are over. memo to ceos all over the country. if you mimic mark papa and tell
9:25 am
the truth, your stock gets hit. >> free money, that may be true. get it now while you still can. >> take the free money. that's what i have learned. >> let's go from there to there. >> this is very interesting. we talked about sysco. whitewave is the company that's the best milk. they make the best almond milk, the most popular. they make soy, moving into some more organics. this is the opposite of the diet soda move. greg ingel is doing this one, a huge peyton manning fan. he wanted me to wear a peyton manning jersey on there. i was trying to say the nfl prohibits it. i just didn't want to wear it. >> why would you? >> just to please everybody. anybody in jersey had a 7 and a 9 combined, it turned out to be false. >> you like this story. >> i love hain and i love whitewave. these are dealers to the whole foods, fairways, sprouts, fresh
9:26 am
markets. safeway and kroger. natural foods is a big theme. >> this is fresh. i switched from soy to almond. i think almond is too sweet. i'm switching back to soy. do you use real milk? >> yes. >> are you out of your mind? cow milk. >> plant-based, man, plant-based, p.b. the opening bell is a few minutes away. we have a lot more sidewalk on t "squawk on the street" coming back after this. [ male announcer ] what if a small company
9:27 am
9:28 am
became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪
9:29 am
or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you are watching cnbc "squawk on the street." the opening bell set to ring within the minute or so. a lot going on as we talk about some of the things that are going right, some of the disappearing reasons to be bearish. last week, it seemed like 1800 was going to be the battleground. we may clear some of that. >> the only reason why you might want to be bearish, it does feel so bullish there might be something lurking. you have to be careful between now and christmas.
9:30 am
>> a lot of the lions shares come in the latter half of the month. you will see what it looks like here today. the nikkei, up 50%. here at the exchange, security company celebrating their spinoff from ingersoll-rand. >> this is a really amazing time. when you break up, what happens? >> good things. >> you shrink to grow. >> ingersoll-rand shrunk to grow. celebrating the merger of m amr and us airways grew. it is a big win for them. >> they have a big loss tonight coming. dallas. the cowboys. >> cowboys versus the bears.
9:31 am
i like the bears tonight. at home against dallas. >> very focused. he is very focused on his eagles. >> let's just talk about monday night football. >> when you spend the day in the blizzard, i don't know what it has done to you. >> we were pumped, very pumped. >> david, i know you are going to look closer at sysco. >> syy. it is the deal of the morning. some morning, we don't have many others to talk about. $3.5 billion in equity. is what they are paying, about ten times the trailing 12-month ebitda. they are also taking on $4.7 billion of sysco's debt. they can refinance that. we will talk more about it in a few moments. that and we'll couple that with a discussion of logic. acti activism has replaced mna.
9:32 am
share holders love it. they are talking about $600 million in cost synergy over time, over three to four years. >> wow, that is incredible. that's all i can say. >> it has added well more in market cap than what they are paying in equity for the company. >> extraordinary move. >> kraft gets this upgrade over morgan stanley. they see some good things coming out of productivity and restructuring. >> everything they do is lucky. they worked. should they have worked as well. some of these stocks have done so well in that consumer products group. it has people do this. the economy is never going to do better. they bought kraft, because it is staples. i no longer buy velveeta. >> that's because these are milk-based products and apparently you are all about p.b. >> velveeta is not milk-based.
9:33 am
cockroaches and velveeta are both alive. >> i didn't choose a real cheese product. >> cheese whiz. you get that in cheesesteak. >> velveeta is remarkable product. it has been able to withstand pretty much anything. >> you are going to like this one, jim. teen retailer, abercrombie & fitch has struck a new employment agreement with ceo, michael jeffries. >> i am going to buy a lot of stuff and return it immediately, ruin their quarter. >> it takes effect when the current one expires in february. amore simplified performance-based structure. jeffries has come under fire for comments made about the customers and hanlg fund and cage capital which called for his rest resignation. the wall of shame meant nothing to this company.
9:34 am
>> maybe he is making the performance based on -- i haven't seen the employment agreement. >> don't come into our store unless you are gorgeous. you like that kind of thing? >> maybe it paves the way. >> that group is challenged. >> and you want to see this man -- >> i want good for everyone, dalai lama and me. >> when i think of the dalai lama, i think of you. >> china thinks of the dalai lama and me. they are not too crazy about the little guy. i find him a man of peace. want to do a quick apple check, story. i am not sure where it was originally sourced. the idea china mobile will start taking their pre-orders on thursday, the world's largest wireless service.
9:35 am
700 million subs and apple is up, i think, almost a percentage. >> it did get thrown back. there are a lot of chartists saying the stock has a lot of work to do at these levels. it was a website that takes orders. i continue to think it is an apple holiday season. there is resistance here. it has been straight up and consolidating. carl icahn was no longer agitating. i think people felt not agitated. i say not agitated. >> he made a big deal of money. he did come way down. it is not binding for a 50 billion buyback that would commence an end with the fiscal year that ends in september of 2014. >> i am hoping he says, you know what, guys, the stock has gone up so much, don't use your cash.
9:36 am
he kind of says, you know what, we have won. use your cash wisely. stock comes in, buy if. don't just pay up. >> for a company that generates $50 billion or perhaps more in free cash each year, you can just keep doing that. >> true. >> that really affecting your overall cash pile. >> it has been a winner. i still think it is inexpensive. let's go back to mna and stocks. we mentioned sysco. we are talking about the food distribution company, doing a deal for u.s. foods. it is $3 billion in stock they are parting with. half billion in cash. 8.2 when you include that. one would assume they will refinance at a lower rate.
9:37 am
u.s. food shareholders will include kkr and clayton dulere. nice way for them to exit over time by selling then sysco shares. by the way, what a benefit. look at that. adding more in market cap than it will be paying in equity for the deal itself. annual s annual s annual senorgy, $6 million. you get $65 billion in annual revenues. these are tiny margins. they see combined cash flows of $2 billion. there is another example of a deal being richly rewarded by shareholders. we see so little mna. why is that? one reason may be activism. we talk so often about activism as a gentle trigger for mna. what i hear more often is
9:38 am
activism can be acting as a break on merger and acquisition activity. it would open them up to criticism when they do a deal that is not well-liked. the timeline on their potential job could be even shorter. they don't get the chance to make the big money. in some ways, it is acting on a break. some would say this morning, hologic, there is a company that did a lot of deals. >> bad ones. >> carl icahn came in and buys 12.5% of the company and says, hey, you guys stink. make something happen. they had a ceo search underway. they appointed a new ceo. icahn had nothing to do with that. he spoke with steven mcmillan. a lot of people are very high on. he spoke with him over the weekend. he did get two board seats.
9:39 am
he comes away with a new ceo. he had nothing to do with that. he is well thought of. for a company that did deals that were not generally looked upon favorably by the shareholder base. stocks suffered. they got rid of one ceo and brought in another old ceo who had a short tenure. they brought in this guy, two director positions, icahn. he hasn't been fighting on everything. you don't need to fight all the time. >> he is a lover, not a fighter, on these deals. >> i think hologic is the primary example of a company that overpaid and overpaid. it used to have the best technology in the world. it was an investor of business and daily stocks. i didn't know it had taken this long for them to change. they used to be in this equipment.
9:40 am
>> overall, very little m&a and perhaps part because of fears of ceos like carl icahn saying, you have done terrible deals, get out. we have two examples. >> thanks, david. the dow, not too much change. the s&p at 1808. let's get to pisani on the floor. the major indices are not moving but some of the higher sectors, gold miners, biotechs, housing stocks on the up side. financials are doing well ahead of the goldman sax conference. that starts tomorrow. over the weekend, everybody is talking about the theme for 2014. it is about evenly divided. some are going to say how the fed managing the interest rate scenario. a lot of other people were into the camp of a slow, gradual, global, synchronous explosion. here are the factors. three points, four points people are bringing out over the weekend. the global manufacturing numbers are clearly getting better.
9:41 am
the baltic dry index, at a two-year high. did you see over the weekend, the world trade organization did something. they actually agreed to a procedure to smooth customs procedures. that's apparently the biggest thing they have ever done. they have been around for almost 20 years. there is talk they might have a pacific rim deal trade going in the next couple of months. congress is near a budget deal. that's going to soften the effects of a sequester. wage inflation, still nowhere to be found. the yield curve escaping. that's been helping the banks. more money is flowing into equities. we don't have a great rotation but maybe it is a minirotation that's going on. i think these are modestly positive signs for the global economy. speaking of the banks, goldman sax is about to start one of the big financial conferences of the year, the financial services conference. tomorrow and wednesday. tomorrow morning, we'll hear from wells fargo, morgan
9:42 am
stanley, bank of america, pnc and suntrust. that's just in the morning. they are likely to provide guidance and some indication of what they think their business is going to be like in 2014. those will likely be stock movers. on mcdonald's, their same store sales in the u.s., a disappointment. japan was a little bit better. europe was a little bit better. the key takeaway, very low expectations for mcdonald's. maybe a good entry point. look at mcdonald's, it hasn't done anything, not nothing but it is up 8% or 9%. dramatically underperformed all of its competitors. >> wendy's up 80%, chipotle, burger king and even yum! brands, with all the problems they have had in china. never great to argue relative evaluation as the primary reason to get in but at this point, that seems to be the main argument. david, back to you. now, let's get back to rick
9:43 am
santelli. >> well, interest rates aren't up today but they are close to their highest levels due to the good report on friday due to employment. if you look at a two-day chart, you could see the boundaries. we had a spike up to the .292 area. that is something you want to watch. maybe it is more important on the retrace, on the bottom. .292 is on the significant level. that's when the market has started to flex its muscles. you could clearly see we are hovering at the highest levels since mid-september but close to extending that. if we look at fives to tens on a wider frame, the curve has stopped steepening a bit. this spread is at 136. its high was 143. it is still very close. you want to pay close attention. dollar/yen. if there is one country who is
9:44 am
really, really trying to weaken the currency, we will see how it works out. look at it first. the dollar, open the chart up long-term. you can see we are hovering very, very close if we break out to these may 17th levels to the highest dollar versus yen in five years. the pound, the king of europe at this point. that currency versus the dollar is getting very close to 164. as you see on the daily. open that chart up. we are not far away from levels december 3rd. just a little anybonib stickingn that chart. we have supply this week in the form of threes, tens and 30s. it is always that same old argument. are higher rates going to give us the same crowd. we will see starting tomorrow. carl, back to you. >> rick, thank you very much. facebook said to be considering something new. we are talking about the company adding a sympathize button. what's that all about.
9:45 am
stick around to find out. also ahead, the car dealership responsible for selling the first tesla model "s" purchased with bitcoin. "squawk on the street" will be right back. ♪ the world is changing faster than ever, creating new opportunities for those who stand ready to seize them. in a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, our flexible, collaborative approach helps forward-looking companies not only run better, but run different... to give your customers every reason to keep looking for you.
9:46 am
so if you're ready to see opportunities and see them through, we say: let's get to work. because now more than ever, the future belongs to those who challenge the present. yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home.
9:47 am
take the energy quiz. energy lives here. take the energy quiz. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare.
9:48 am
welcome back to "squawk on the street." i'm sharon epperson. natural gas, the best performing commodity today, a surge to a six-month high on the heating demand incurred from the icy/wintry weather we are seeing in new york across much of the northeast and the country. we are looking at a mixed picture in oil prices. both are lower but crude proved more significantly. we had german production numbers that were lackluster. also, we are seeing the premium
9:49 am
of brent to wti come in significantly from where it was a week and a half ago or so. when you look at the commitment of traders reports, it does look like people are trimming their net long positions in wti, though we have seen gains in recent days. still below the moving average. gold prices are holding steady here, around 1,235 an ounce. the market will be watching that very carefully. they are anticipating what will be done at the fomc meeting next week. facebook is reportedly toying with the idea of adding a sympathize button as an alternative for users tagging their statuses with negative emotions. give them a hand. what other buttons should facebook be considering? tweet us as squawkstreet. we'll get your responses later in the morning. it does bring to mind the moment where you want to tell someone, i saw your post, i feel for you
9:50 am
but putting a like on that is awkward. >> another example of this company trying to react to what the users want. it is a very fine company. this is a button. like just didn't fit a lot of scenarios. sympathize does. maybe you could be something on the negative side.
9:51 am
9:52 am
9:53 am
9:54 am
9:55 am
9:56 am
we are going to find out what's going on. alliance data, a lot of people wrote this company off.
9:57 am
very exciting times right now. >> it is going to get more exciting when dallas takes the field. >> when we come back, a lot at steak for the banks. one day for regulators vote. we will talk to harvey pitt in a moment. ♪ [ engine revs ] ♪ mccooey [ santa ] ho, ho, ho, ho! [ male announcer ] get the all-new 2014 cla250 starting at just $29,900. you can fill that box and pay one flat rate. i didn't know the coal thing was real.
9:58 am
it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. the day building a play set begins with a surprise twinge of back pain... and a choice. take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] that's handy. ♪ ♪ [ male announcer ] 1.21 gigawatts.
9:59 am
today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪
10:00 am
back to "squawk on the street." an all-time closing high for s&p the merger between us airways and american airlines officially closes today making the new american airlines the largest airline in the world. the moment banks are worries about. tomorrow, regular ltors will vo
10:01 am
to approve the volcker rule. harvey pitt is here to tell us what that means for the banks. >> the market stocks are looking to extend friday's gains. let's bring it chad and dan. good monday morning. >> good morning. dan what do you think about where we are and where we may be headed? >> the bias still has to be to the up side. the fed meeting is a bit of a near-term hiccup. the secular outlook for stocks over the next 12-18 months, you still have to think is to the up-side. the threats that are being detailed are no different than what we have seen over the last 18 months. >> friday marked the beginning of a sentiment shift where people finally said the taper will be a good thing. it was sort of a slip camp on
10:02 am
that before friday. now, coming into today, thomas from jpmorgan saying this is a good thing. stocks will rocket before this happens. do you share that view? as the economy starts to say, we are in this self-sustaining recovery. we do believe that market multiples are fairly valued at this point. you have to start to see the economy increase in regard to the growth trajectory as well as on the earnings side. earnings have not been as robust as everyone expects them to be. we would be mod estly biased towards equities and stay more bearish on bonds at this point. >> a lot of the bullish arguments for next year center
10:03 am
around top line growth coming back. are you in that camp? >> to some degree, i am. >> as long as you brought that up, i want to jump off something that was brought up, the market multiple. it seems to be the biggest boon of contention among bullish and bearish clients. the point that was made about how the s&p is a fair value is an entirely valid one. we have to remember that an average multiple by definition means that some of the time you are above it and some of the times you are below it. it doesn't mean you trade at average multiples. i think we are in a period of time where the multiples are expanding and i'm not sure just because we achieved fair value, that means the multiple expansion has to stop. >> where i think i may differ with dan is that the federal reserve has been extremely accommodative. it has really pushed multiple expansion with lack of economic improvement as well as earnings growth. >> when you look at revenue growth as well, it has been
10:04 am
lackluster. as the bed pivots towards more of a less accommodative role, the multiples are going to be tougher to come by. you are not going to get that huge expansion. are you going to get it on the earnings? i'm not so sure you are. operating margins, historic highs. you are not going to get it from leverage. what we really need to see happening to get this market to the next level where we are in a bull market, you are going to need improvement within the income data and more important, you are going to need credit growth. that doesn't mean we are going into hebea bear market. that doesn't necessarily mean it has to be that terrible. fair market range, between 14 market multiple and a 17 market multiple. you are not in a bubble territory by any means. >> when you think about the one place in equities where money has been coming out of in the
10:05 am
next few months, you probably have a take on this. your income funds, utilities, some of the high dividends payers, that's a cycle we are not going to see. >> we have to remember that higher interest rates have made utilities and the so-called bond equivalent equities less attractive than is the case. let's not pretend that the yield on the ten-year is 5%. it is 2.8, 2.9%. that still suggests that equities are modestly less attractive. it is not significantly less attractive. >> dan, the times today says the fed is in no hurry to taper. are you at the zero percent chance of a taper at this december meeting. >> no. there is definitely a chance that they taper. i think what i tweeted the other day, a really -- i thought it was interesting. we are five years into this recovery. the fed has always been inclined
10:06 am
to do more rather than less. market participants have consistently assumed the fed was ready to do, rather than more. when you haven't achieved the sustainability the fed is working for. >> there would be a surprise. that's one thing they have tried. >> i completely agree with dan on that. i this i thnk that perhaps a ta comes in march. the federal reserve could be there longer than census. we expect they will continue to do quantitative easing. the other big talker this morning is the possibility of a budget deal being reached without a crisis, without a shutdown at hand. maybe this year, the holidays can bring that out in a little bipartisan spirit. we have congress moving closer to that elusive deal that would prevent another long fight over the debt ceiling and funding the
10:07 am
government. we have john harwood live in washington with the latest. john? >> kayla, this is snaking along very, very slowly. it is not a big deal. i have been calling this a deal in baby steps. what it does is it would, if it is struck, they're still negotiating over small points. if it's struck, it will reduce the likelihood of a shutdown and another debt crisis in january. but it wouldn't have much deficit reduction. it would not go after any of the hot button items like social security or medicare, which need to be dealt with over the long-run. it wouldn't close any tax loopholes. those things have proven too partisan for these budget negotiators to tackle. yesterday, in the nfl, the kicker for the denver broncos made a 64-yard field goal. record for the nfl. this is more like a 6-yard field
10:08 am
goal. they haven't kicked it yet. i do think they will before congress goes home. it is a minimum achievement for people to cheer about. >> john, it is interesting when you talk about some of the little sticking points here. one is the benefits for the long-term unemployed. that is making up a record percentage of the people in this country who are unemployed. do you get the sense that congress is looking at the jobs report and saying, hey, maybe we shouldn't move the needle on that right now? >> i think that is difficult in part, because when you look at the size of this deal, we are only talking about $90 billion over two years of lifting the sequester caps and replacing them. it is more of a reshuffle. the unemployment extension would cost $25 billion. that is a very large chunk of change to add on to that pretty small deal. i think the unemployment report contributes to that being sidelined. democrats are indicating they are not going to fight to the
10:09 am
last stand on that issue. i do think that is likely not to be settled in the budget deal. that doesn't mean it might not happen in january. i don't think it is going to happen as part of this deal. >> our john harwood in washington covering those budget talks for us. >> now, boarding, the world's largest airline. the merger between us airways and american airlines officially closing today creating the brand new american airlines. we'll get more after a short break. ♪ [ bell ringing, applause ]
10:10 am
five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.
10:11 am
10:12 am
welcome back to "squawk on the street." kraft foods looking pretty tasty after morgan stanley upgrades the stock. they raised their target to $60 a share saying kraft is its preferred value play in u.s. food. carl, back over to you. >> thanks so much. the new american airlines is ready for takeoff. the merger between american airlines and us airways closed today making the new american airlines the largest in the world. phil lebeau is live at the dallas-ft. worth airport. >> reporter: good morning, carl. how big will it be? it is the world's largest. when you take a look at all the mergers that have played out over the last five years, you have three major carriers, a fourth if you include southwest with american being the largest by seat miles followed by united and then delta.
10:13 am
the new american airlines will operate 6700 daily flights flying to more than 50 different couldn't tris. very strong in latin-american as well as to europe. not as strong to asia. this is a global network this airline will run. it also has a new ticker symbol, aal. they rang the opening bell for the nasdaq which is where the new american airlines ticker will be traded at. earlier today, on "squawk box," we had a chance to talk about doug parker, the american ceo. we asked him about the pressure he is now facing to be profitable in this environment. >> we have to provide a return for our investors. we know that. the last 10, 11 years have proven that airlines that can't do that are allowed to grow and expand and do all the things we want to do. we expect to produce a profit that will provide a nice return from our investors. that's what they expect from us. that's what we plan to deliver. >> a lot of investors have been cashing in on the airlines.
10:14 am
take a look at the airlines index. it has performed very well in this environment with moderate jet fuel prices and improving economy and the consolidation game that for the time being seemed to have played out. a lot of investors are saying, is this as good as it gets when it comes to the airline stocks. doug parker says, no, we can still produce. there is still room to go with these airline companies in terms of profitability. carl, you have to wonder, how much room is there to run for these airlines stocks. >> the best sector of 2013 so far at least, unbelievable run, phil. when parker says that the impact on consumers is not going to be too painful, do you buy that. >> yes and no. the industry is moving in the direction of planes that are going to be more filled. as a result, you have got smaller planes flying to these mid-size cities. you have got tighter capacity, which means it is going to be costing you more to book a flight and think about this from the frequent flyer standpoint.
10:15 am
united, delta, and american will each have about 90 million frequent fliers. you think you are catching in miles any time soon for a free seat. it is going to be tougher and tougher. we are already seeing that develop within each programs. a consumer, you are not going to see a huge jack up in prices but it is not going to be the most consumer friendly environment. >> hard to believe there would be no impact as all. phil, thanks so much. we look forward to hear a lot more. what a difference a year makes in 2012, best buy was one of the worst performing stocks of the year. you know this year has been different sitting on triple digit gains. which losers could turn into big winners in 2014. we'll pose that question in a few minutes. [ male announcer ] here's a question for you:
10:16 am
where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here.
10:17 am
you're talking to the guy who hasn't approved a new stapler purchase in three years. but then i saw the new windows tablet, with a real keyboard, usb port, and full office. it's a tablet that works for work. plus, it's got apps and games, for after hours, of course. compared to an ipad -- way more value. these tablets are such a steal; i couldn't find a reason not to buy them. ♪ honestly, i wanna see you be brave ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average.
10:18 am
t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
10:19 am
welcome back to squawk on the streets. stocks and interest rates continue to rise. it is a relationship that many traders are watching closely. how has that played out during other big market moments in the past? dominic is back. there are two key pricing indexes. bond prices move inversely the yield or interest rates. simply put, when bond prices rise, interest rates fall and vice versa. the other is a basic point of view here. the prices of bonds basically move in opposite directions of stocks. think of it like saying when folks want to buy stocks, they sell bonds to help pay for them. that being said, stocks and rates move in tandem in a very
10:20 am
normal and general basic sense. over the longer term, you can see this relationship play out in the charts. we have highlighted four time periods of interest to demonstrate this concept. back in '98 to '99, in the tail end of one of the most bullish runs, yields went from 4.5% to 6.5%. during that same time, the s&p went higher by 44%. the internet bubble burst and stocks plummet and a decline in treasury bonds down to 3.5%. as we approached the last record high tore for stocks and subsequent drop, the same relationship between stock prices and yields. fast forward to today. the s&p is up 13% since april. yields have gone from 1.7% to all the way to nearly 3%. that has some traders wondering if stocks have more room to run
10:21 am
to the up side if the nor mality of that relationship holds. the bigger or substantive issue lies in whether or not this signals that markets are getting back to normal. are traders and investors returning to a normal pricing dynamic for stocks and bonds. it was during the financial crisis when interest rates and stock prices difficue verge. when that comes, investors and traders are prepped for it. they are starting to price in some of the more normal dynamics we are seen in years past. >> that did color some of the narrative. our dominic chew. as he says, stocks are edging slightly high are. he has said the ten-year is the northstar in your words. that continues to be the case? >> if it gets above 2.9, i think we are going to see some pressure. if it gets past 3%, i think you
10:22 am
would see some outright selling. interestingly, on friday, it spiked up to 2.93%. stocks he stocks hesitated but it came back. there was a inflationary guide that indicated inflation was dropping somewhat. that probably put the fed back on hold. i'm going to be very watchful. wall street folk lore says that big moves on payroll day tend to sis pa dissipate over the next three days. >> today, we do get a lot of fed speak, sort of the last burst before the big policy meeting in december. wa are y what are you listening for today? >> we have three fed presidents and four speeches. one is going to speak twice. given the lineup we have, it will be slightly hawkish. even there, what you want to do
10:23 am
is interpret against that background. how will fisher respond? does it look like it is going to come close enough? i think they are going to have to walk very delicately. they know the markets were considering perhaps a move in december. i think you may hear them soften that down. walk us out toward next year march probably. that will be good for the market, i think. >> the band of resistance you see continues to be 1811. >> 1811 to 1814 in the s&p. if they breakthrough that, you could get some algo rhythmic follow-up buying. shorts are betting it won't go through there. if it goes through there, they will be forced to cover their shorts. keeping a close eye on that number. see you later. >> a big thing on everyone's minds as well as the markets. i know, carl. i was in the carl driving from baltimore to new york city. after dumping snow on a lot of the east coast, that nasty winter storm is lingering.
10:24 am
bringing fog and freezing rain to a lot of monday morning commuters. still, the weather channel's jim cantore is live in andover, massachusetts, with more. what are you seeing out there? >> guess what. we have another system that's going to impact the same areas tomorrow, which, when i did nightly news with lester hold on saturday night, that system wasn't on the radar. this kind of a pattern that we are in is developing these systems almost out of nowhere here. we are having to deal with them. like you said yesterday, in earnest. that was an absolute, overachieving system. nobody predicted that kind of intense snowfall to come down. we saw many, many pay the price in terms of the weather. here we are in andover, massachusetts, 25 miles or so north of downtown boston. this is the northern fringe of the whole event. we are not seeing a huge impact. we have to remember, the snow removal equipment is far greater than baltimore and washington and dallas, texas. when you look at the flight cancellations today, of the
10:25 am
1300, 700 or more are canceled in dallas/forth worth. the delays continue and the really big problems continue in the dallas/ft. worth area. it is starting to show some signs with snow in northern texas. dallas isn't going to get anything out of this. what we are going to see is snow break out in west virginia and virginia tomorrow morning, philadelphia, baltimore. all these areas will be in it for the morning rush-hour. we are talking about anywhere from two to possibly six inches of snow. something that wasn't on the radar on saturday is now very much on the radar and potentially a big impact event for the northeast. the airports and travelers and those trying to get out to do some christmas shopping, this weather has really hampered people to get out to the malls. back to you. >> something we watch closely. jim cantore. the future of financial regulation is now. the volker rule, a key piece of
10:26 am
frank set to be approved by a whole host of regulators tomorrow. harvey pitt is here to break down what it means for the regulators and the economy when we come right back. ♪ ♪ [ male announcer ] the mercedes-benz winter event is back, with the perfect vehicle that's just right for you, no matter which list you're on. [ santa ] ho, ho, ho, ho! [ male announcer ] get the all-new 2014 cla250 starting at just $29,900. you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real...
10:27 am
david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. losing thrusters. i need more power. give me more power! [ mainframe ] located. ge deep-sea fuel technology. a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ brilliant. let's get out of here. warp speed. ♪
10:28 am
some of the biggest names in
10:29 am
tech speaking out against government surveillance, apple, google, yahoo! facebook, twitter and more issuing an open letter calling for reforms and restrictions on spying by the federal government. >> dr. jones is going to the house of mouse. disney has bought the rights to the indiana jones franchise from paramount. they own production rights for the first four films and has an option to make a new one as soon as they don't nuke the fridge. i have no idea what that means. >> i am not an indiana jones viewer. i can't comment. >> stay out of the light. >> someone back in the control room knows what that means. >> the refrigerator to avoid a nuclear explosion. that's one of the weaker indiana jones films. meanwhile, the new american airlines is ready for takeoff. the merger between american air and us airways closed today making the new american the largest airline in the world. what does this mean for the airline industry? on the cnbc news line is robert
10:30 am
mcadoo. we just had jim cantore from the weather channel on who said of the 1300 flights that have been canceled so far today because of weather, 700 are out of dallas-ft. worth on a day, very big news day for a company that's going to be head quartered there. do you think that's fortuitous? does that affect the situation? >> say that again. >> roughly half of the flights have been canceled because of this horrible winter storm across the country are in dallas-ft. worth as american is set to get off the ground on its first day as this pro form ma company. do you think that will set it off on a bad foot? >> no, no, we have bad weather every year. this is something we just have to deal with. not a big deal. >> what is it like to integrate
10:31 am
what is going to become one of the largest airlines in the world? over 100,000 employees, thousands of routes? it is sort of like turning a cruise ship but where does it start? >> well, first thing you have to do is get all the employees pulling on the same end of the rope. i think this particular management team has done -- looks like they have done a very good job of getting that started. that's one of the things that typically gets in the way. the other things people have to worry about is the i.d. sit. si where you try to bring the marketing side together. the thing that goes more slowly and which we have never had any particular big problems with is the slower part of getting the actual operation of the airplanes integrated into one entity. the faa takes that one very slowly and makes sure that that one always does go right. that's the one where safety is involved and that's the one that always goes well. we have never had a problem there. the employees are the first
10:32 am
things that have to get happen by about the whole thing. that's probably the thing that looks best about this merger. >> i know the employees have been talking about the executives for the last several months that this has been on the table. how does this ultimately reflect on the consumer side? will prices go up? there has been some disparity in terms of whether that will actually happen. what's your take on this? >> i don't think -- i think what you're going to see is the same thing we have been seeing the last four or five years, which is, yes, the average price of tickets across the board on all airlines may go up a little bit but it is not because somebody takes a $300 ticket and decides to raise it to $330. it means there will be a little bit more discipline and less likelihood there will be surplus seats floating around which get thrown in at $59 and $89 at the last minute.
10:33 am
the average price may go up a little bit. i don't think the consumer will really notice anything that they haven't been seeing all along. we have cut capacity system-wise for all the airlines offer the last five or six years and it has driven the average price up with that. >> finally, bob, people think about the root structure of american and how they ruled and how u.s. air ruled in this part of the country. where is the sweet spot for the new carrier? >> i think the real sweet spot is that american has really been hamstrung in terms of its ability to take people out of the eastern one-third of the country to europe. they have had so few slots and so few domestic flights into kennedy airport. they haven't had an ability to feed their urieuropean operatio out of the eastern one-third. you have a philadelphia hub that's a full-blown hub that has 50 or 60 cities that feed
10:34 am
american that american has never been able to feed into kennedy, out of buffalo, rochester, louisville, all kinds of city will have the ability to fly the new american airlines to europe and the new american airlines will have a gathering system under the american airlines name that didn't exist in the past. >> thanks so much, bob mcadoo, from imperial capital. certainly, a story we will continue following. >> carl, i wanted to point out, you mentioned miami. this is in "the new york times" today. a full-page ad on the back of the "a" section. congratulations to the new american airlines. we are so proud you call miami home. >> a powerful hub, for obvious reasons the big story on wall street, moving on a little bit. is the party over for wall street? a toughened version of the volcker rule is expected to be approved tomorrow. joining us to discuss this is harvey pitt, ceo of calorama
10:35 am
partners. thank you for being with us on a big day. we have been talking about the volcker rule for three years. a lot has been telegraphed ahead of time. this has been aimed to keep banks trading for their own accounts to put customers on the hook for any losses they could sustain. are there any surprises when this gets rolled out tomorrow? >> there are several. first, the reason it has taken so long, there are five agencies, each required to adopt their own version of the volcker rule. they had to agree and that's always a hard thing to do. then, i think this charted some very new territory and has led to a great deal of complexity. third, the initial rule proposal raised more questions than it responded to. as to the new features, i think
10:36 am
we are going to see more restriction on hedging portfolios. we are going to see greater restrictions on what constitutes proprietary trading, which is not clear and it has been rumored that there will be a ceo certification requirement, something akin to what i did at the sec in 2002. >> mike mayo, one of the more aggressive analysts says he has been doing financial stuff for 80 hours a week for 25 years. in his words, i can't tell you where proprietary trading begins and ends. do you have a handle on what it means? is it just a matter of you know it when you see it? >> i'm sorry. if i know what -- >> proprietary trading is by definition. >> well, it is intended to mean
10:37 am
trading by banks solely for their own benefit and not as part of the normal process of serving their customers. that's a very simple statement of a very complex concept. >> harvey, there are two steps to this process. the first is implementation. i know the companies are looking forward to having a rule and being able to put it in place. the other side is enforcement. ultimately, who will this be left to, to enforce. will it be the ceo, will it be the fed? how will this work and how do you eventually enforce it? that's the best word. >> the first place where there will be enforcement will be internally within the banks. that's why the volcker rule is, itself, the embodiment of the lawyers relief act of 2013.
10:38 am
people are going to need guidance on what they can and cannot do then, because ceos will be required to certify or at least it is rumored they will be, they are not going to put their names on the line unless they have had a lot of assurances that the programs each bank sets up are in compliance with the act. once that happens shall the regulators will take over. there will be all sorts of inspections and examineses. each of the five agencies does regular, routine examinations and inspections. out of those examinations will come potential enforcement
10:39 am
cases. >> as we mentioned, the new american airlines began trading on the nasdaq about an hour ago. whether we came back. we will talk about one of the men that helped that happen for the exchange when "squawk on the street" continues. mine was earned orbiting the moon in 1971. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. [ bagpipes and drums playing over ]
10:40 am
[ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. ya know, with new fedex one rate you can fill that box and pay one flat rate. how naughty was he? oh boy...
10:41 am
[ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year. take the energy quiz. energy lives here. take the energy quiz. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare.
10:42 am
u.s. air and americans parent company closed their merger today. bob mccooey is the senior vice president at the nasdaq. he joins us from dallas. good to have you. good morning. >> good morning. nice to be with you. >> nice win here. a big name, a hallmark name. talk to us about what went into bringing this to the exchange.
10:43 am
>> we asked tom horton and doug parker to review their lis thing in conjunction with the announcer of the merger. they did this and took us up on the opportunity and allowed us to compete for their business and show the long-term value of being part of the nasdaq family. we are honored they listed with us today. the stock is acting well. it was amazing to be here with hundreds of employees, the energy among the new american really terrific this morning. >> that value proposition you have mentioned has been popular with a lot of the household name companies, kraft, mayrriott, money graha moneygrah mon moneygram. what do you tell these companies? >> we do the same pitch to talk to anybody about the value we have at thaz dabbing. it is about combining our world leadership in corporate solutions, those businesses that help a company be the best
10:44 am
public company they can be. that was reinforced by our acquisitions of thomas reuters, ri and pr multimedia assets earlier this year combined with some very unique visibility opportunities we talk about, our global leadership in technology and trading and we combine that with lower fees and we think we have come up with a very, very compelling proposition for companies that are looking to ipo on us. 121 companies so far this year or companies that will be willing to go through a review like american did in conjunction with their listing. >> bob, we make no bones about the pierce competitive war between the nysc and you guys. we are broadcasting from their floor. we try to talk about you guys as often as we can. how would you characterize the new issue for you, the new transfer issue since facebook? are you happy with where your pitch is right now? >> i think we're always trying to make sure that we can have the opportunity, carl, to talk to companies. we talk to them on the ipo side
10:45 am
three or four years before they are ready to do an ipo and talk to them and get them to understand what the benefits of a nasdaq listing would be in being part of our family. at the same time, we talk to companies that are listed on our competitor's exchange and try to help them to understand where the world is today. american airlines listed on the new york stock exchange long before nasdaq existed. the opportunity for us to have this inflex point of reviewing that lifting and having them come to us based upon the outcome of that review is very gratifying. we are honored to have them listed. >> a lot of marquee names looking to go public, chrysler, ali baba, hilton. a lot of coverage about how some of these companies may be leaning towards the new york stock exchange. what would you say to a company that is on the fence about where to list? >> i would say, talk to american
10:46 am
and kraft about their experiences. talk to the 121 companies that chose us this year more than have chosen our competitors. think about what are the long-term benefits of being listed with your exchange, what are the partnerships we can create between our two companies. one of our key acquisitions this year was thomson reuters, rrpr and multimedia businesses. those are services we are able to provide. we think they are very valuable. we are excited to be able to talk to prospective companies about coming to the nasdaq. >> finally, bob, for all the success you have had this year, how much does it sting when a twitter does come to the nysc or do you not think about that? >> carl, it is one listing. they are a great company. we wish them well. in the end, we move beyond that. we are really focused on two
10:47 am
things. one is talking to other companies about the nasdaq value proposition and the long-term benefits and two is we have 2650 companies that are listed with us. i spend most of my time on the road talking to those companies making sure we can keep them up on the initiatives that nasdaq is doing, what we are doing in washington, d.c. and in terms of market structure, the value we create for them each and every day as part of the nasdaq family. >> bob, congratulations. stay out of the cold in dallas, man. the weather down there has been crazy. bob mccooey joining us from the nasdaq and aal, the new ticker symbol for american airlines american airlines, one company back from the dead being bought after its bankruptcy filing. one year's stock loser turning into one of the next year's biggest winners. what stocks could repeat that trend in 2014. seema mody is back at h.q. she has the answer on that. seema. we are talking it the dog to darling trend when some of the
10:48 am
biggest losers of one year become the best performing stocks of next year. bank of america and morgan stanley were down double digits. thanks to recovery in the housing market, bank stocks went well. the best-performing s&p stocks gaining 110% while morgan stanley gross about 18%. hewlett-packard, pitney bowes and cliff naturals were the worst performing in the s&p. pitney bowes best buy became the darling of this year. currently, two of the best performing stocks. cliff natural continues to bark like a dog, one of the worst on the s&p this year. peabody, newmont mining made the list of some of the worst stocks. i got whether they will be the daryleings of next year. ubs points out that steel demand is still recovering slowly from
10:49 am
the financial crisis. steel producers are facing a buildup in inventory. for peabody energy, the bulls say they did come off a strong earnings but the bears are arguing it came from cutting costs. cool demand is slower than usual. that could ramp up as the global economy improves. lastly, tara data did post revenue growth in the u.s. as well as in new york. analysts write that the lack of growth in emerging markets is a concern. analyst casting some doubt on if this dog to darling trend will continue. back to you. >> seema, thank you so much. imagine being able to buy a tesla model "s" with a bitcoin. that happens in california. we are going to talk about the general manager of the dealership behind that sale when we come back. terone. there, i said it. see, i knew testosterone could affect sex drive, but not energy or even my mood. that's when i talked with my doctor. he gave me some blood tests... showed it was low t. that's it. it was a number.
10:50 am
[ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed topical testosterone replacement therapy increases testosterone when used daily. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breast-feeding, should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. in a clinical study, over 80% of treated men had their t levels restored to normal. talk to your doctor about all your symptoms. get the blood tests. change your number. turn it up. androgel 1.62%.
10:51 am
you can fill that box and pay one flat rate. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. ask me what it's like to get your best night's sleep every night. [announcer] why not talk to someone who's sleeping on the most highly recommended bed in america? ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit to learn more,
10:52 am
and find a retailer near you. welcome back to "squawk on the street." monday, i'm not a big monday person but we're going to plow through anyway. listen, i love technicals, i always have. we'll look at big picture targets for the ten-year. big picture doesn't mean we'll go to the rate i'm going to show you a minute in a straight line but it good to have a target. numbers 21, 34, 5, 89, you know
10:53 am
the drill. you know how to get the important numbers. take any two, 34, 55, divide it out, you get one of the very important retracement levels. if you skip one, 34 divided by 89, you get the next one. but when you go the other way -- and this is key -- let's take 55 divided by 34, what you get is the golden mean, i'll round off. roughly 1.62. why is that important? july of 2012 we hit the low yield on tens. where was that low yield? 1.38. let's take 1.62 times 1.38, what you end up with on this is, 223 basis points and the trick i like to do is, this is to see where your target is. take july low 138, golden mean expansion of the range, and what you end up getting is 361, which in my opinion would be your wide
10:54 am
target. let's switch gears. let's take another wide view. i've been talking a while about italian banks and lending and credit, and the bank of italy released new information that really paints this picture. if you look at nonfinancial firms in households, lending to that group down for october, 3.7%. that's the biggest drop on record. if you look at just the financials, it was down close to 5%, i think the exact number 4.9. whether you're in the u.s., japan, whether in europe, in this case, or the uk, the big deal about how all of these central banks have dealt with post-crisis issues is through blah, blah, blah, blah, blah, and bazookas that are imaginary. in the end if the time you buy through the blah blah blah blahs isn't utilized properly you end up like we are in italy. if the loanable funds, the capital that moved into these households and businesses,
10:55 am
continues to drop, their longest recession on -- not on record, i believe in the last 20 years, most likely extend. it's the ka nair ray in the coal mine. when you buy vous time through verbalization, if you don't make good use, there's chapter two. chapter two's the big deal for the early 2014. back to you. >> thanks so much. rick santelli. tweet time. facebook toying with idea of adding a simple these button for users tagging statuses with negative emotions. squawk on the treat. given the hand, what other button should facebook be considering? we'll get some of your answers next. announcer: where can an investor
10:56 am
be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates.
10:57 am
[ male announcer ] if we could see energy... what would we see? ♪ the billions of gallons of fuel that get us to work. ♪ we'd see all the electricity flowing through the devices that connect us and teach us. ♪ we'd see that almost 100% of medical plastics are made from oil and natural gas. ♪ and an industry that supports almost 10 million american jobs. life takes energy. and no one applies more technology to produce american energy and refine it more efficiently than exxonmobil. because using energy responsibly
10:58 am
has never been more important. energy lives here. ♪ squawk on the tweet, facebook reportedly toying with the idea of adding a sympathize button as alternative for users tagging statuses with negative emotions. it brings us to the squawk on the tweet. help facebook out. what other buttons should they be considering in in addition to sympathize? bill writes, awkward button for those creepy family holiday pics. john writes, yeah, your kids haven't gotten any less cute since yesterday button.
10:59 am
and diver writes, too much information. robert writes facebook should add a monetize button. i think they've been working on that one for i while. >> users have been asking for this dislike button or a hate button or insert negative sentiment here for years now because there is stuff that comes up on your feed and you think i don't like that but i want to let you know i'm reading it and weighing it. >> or tweet something about a relative who has passed away, it's awkward to like that. but you want people to know they've seen it shows you how complex communication has gotten on social platforms over the past of years. >> i've had people writing in full posts, if you don't like my kids, unfriend me. >> facebook, cramer mentioned t earlier, a big winner for his charitable trust, gotten in high teens, low 20s, got out of it for google. >> watching jpmorgan, it's up in
11:00 am
the green with the rest of the market and the rest of the financials space after we're getting positive sentiment on this idea of taper. but it was down in the premark because there was a lot of coverage over the weekend about this probe to its china hiring practices and a connection actually between one specific deal and one specific higher. >> larry thinking the whole thing go as way. interesting to watch shares today. here what happens you missed earlier on. >> welcome to "squawk on the street." here's what's happened so far. >> we're making our economy the opportunity economy where you know, if you want to build a business, you want to get a job, you come here. >> which outs are cost me more, which will cost me less. >> nothing about the transaction will affect prices. supply unchanged. as long as demand stays the same, nothing should happen to
11:01 am
prices. >> i was reassured doug said the ra rates won't go up, tremendous kol solization. they're going to restrain themselves. it's not going to cost more. >> he's going to tell you if he's going to move rates up, stick it right in the eye. >> this company's done nothing. they step up and look what happens. moving more toward organic food, doing the right things. stock goes higher. >> people are going to need guide 'on exactly what they can and cannot do. then, because ceos will be required to certifier or at least it's rumored, they're not going to put their names on the lean. >> the "squawk on the street" countdown to christmas is in full swing. ho, ho, ho! ♪
11:02 am
>> good monday morning. live here at post 9 of the new york stock exchange, a check on the markets. s&p managing to climb here. 1808 is where we stand. art cashin this morning saying might see a band of resistance around 1811 to 1814. dow of course gaining 8 points 1027. sysco surging, acquiring u.s. foods, 3.5 billion in cash and stock creating a company with 65 billion in revenue. shares up over 30% at the open now up 13%. american airlines group, carrier formed by us airways amr merger, rising on its first day as a combined company. more on the merger creating the world's biggest airline. don carty will join us live. how the deal might reshape the landscape. discover communications making a big bet on contents.
11:03 am
later, david faber sits down live from the communications conference in new york. >> a tesla model s sold with a twist. paid with bit coin. we'll talk to the general manager of the car dealership behind the sale. s&p trading above its a all-time closing high. we haven't seen a correction and that's worrying for our next guest. jerry schwartz, he's here with is 2014 outlook. we did see a span of some down days over the last couple of weeks. but i take it it's not enough for you at this point. >> well, we haven't seen a 10% correction in 18 months. a lot of people are starting to say, when is that correction coming? it's hard to know when it will come. i believe the market is being supported by strongfuls. i i don't know when you'll see that. i see the markets supported by underlying fundamentals today. >> is the worry on the
11:04 am
correction enough to keep you from telling clients to put money at work in this market. >> it's so hard to know when it will come. i certainly would say if it did come, i use that as a buying opportunity. a lot of people are waiting for this great rotation from bonds to equities. maybe you know the fact that everybody's waiting for this correct that you may not see one, it could be a surprise that you continue to see the market grinding higher throughout 2014. >> japan, obviously, a big story overnight. 50% year-to-date. you have an etf that does look at hedged equity funds there. what's your take on what they've done this year? >> i'm a believer in abenomics. you have a lot of supportive forces, they're going to be the most aggressive central bank in the world, just as we're starting to talk about taper in the u.s., whether it's later this month or next year, they're starting to talk about ramping up their asset purchases. all of this monetary easing is helping support a weaker
11:05 am
currency. seeinging the yen go down to 103 this morning. weakening yen is supportive for their equities given the strong exporter nation of japan. talk about the great rotation in the u.s., there should be a bigger rotation in japan given they had the lowest bond yields in the world with60 basis points in treasuries. talk bay third of the s&p 500 stocks. over 90% of japanese stocks have a yield in treasury. >> you think they reach inflation targets about what the knee kaninknee nikkei and yen d >> they'll do whatever it takes to get the 2% inflation. they set out two years to achieve that and people don't think their current stances will achieve it and they're getting closer to 1%. i think they may be doing more overtime. i take them at their word
11:06 am
they'll do whatever it takes to achieve 2% target. >> your take on europe. you believe the earnings psych until europe is getting under way but it seems at least today we have spotty data out of europe. where would you put your money there? >> europe's coming out of the recessionary environment and starting to see positive gdp growth. if you're looking to invest in a local recovery in europe. it's the opposite of what's happening in japan. a weak yen is helping exporters, strong euro helping the strong exporters in europe. dfe is a european small cap etf that gets you access to the local european recovery story. >> thank you for your time this morning. watching shares of mcdonald's as well, the world's largest fast food company, global same-store sales up a half percent in november. europe restaurants making up for the u.s.
11:07 am
senior restaurant analyst at jeffrey's, good morning to you. peter, what happens it going to take? zero in on the u.s. persistent weakness here, why is it happening? is it going to reverse? >> well, you know, i think the good news for mcdonald's they do more traffic and volume than many competitors, $2.7 million per restaurant, average volume about 1300 transactions per day per restaurant compared to chipotle at 550. bad news, they're struggling to get incremental traffic. in the month of october, closed the gap versus the industry down 180 basis points worse versus 310 in the month of october. but we don't see that reversing soon. there is no breakthrough product. economy's improving but not enough i think to warrant a push for mcdonald's. >> andy, europe, the bright spot, no secret in terms of this month's report. but of course, mcdonald 'has a
11:08 am
large promotional strategy in europe, buy one big mac get one free. do they have to introduce that strategy to other regions? >> well, they've been working on a variety of value messages over in europe. some countries have certainly responded. the french business, in particular, has been the one that's changed the tone of the overall european business, having been positive now for four months in a row. the uk and russia have been solid, even throughout the economic challenges in europe. the real question is, can they get germany going and the german consumer does tend to really be conservative and kind of hurnger down in some of these challenges. if they can get germany going, europe may continue to look better in 2014. but i don't think that's a forgone conclusion yet. >> we keep talking about the lack of inflation in this country. that's certainly one thing that
11:09 am
they could use to get a bit of pricing power. i wonder if, with all of the pressure they're getting over the wages they pay employees but the pressure to maintain a dollar menu or some price discipline, what happens to margins in 2014? >> i would say they do have some price in their comp now, over 2%, maybe call it 2.5%. they will see wage inflation as everybody else will. they may get relief on the commodity side. seeing commodities up marriagely for next year. so, you could get help there. but i think, you know, on i goer to it basis, they have to raise menu prices. they're hoping food at home index sees more inflation than they're seeing this year and that will allow them the opportunity to take more menu price. if they take 2.5%, 3%, they can offset the majority of the wage inflation they'll see next year. >> 95.70 here, we know what a laggard it's been relative to the dow this year. where's your target?
11:10 am
>> we're in the low 90s on our target price. we continue to think the stock is sort of fairly to fully valued here. we would expect another below trend growth year for earnings next year, maybe 5% earnings growth, as there will be some margin pressures, in our view. g&a costs significantly higher next year. it will take some comp improvement. we think the stock's fairly to fully valued around a market multiple now. >> peter, andy, appreciate your insight as we watch the comps month after month. guys, thanks. we've got our eye on top tech companies, teaming up in hopes the government will reform practices and laws regulating surveillance of individuals. it comes on the heels of leaked documents that show surveillance of users through online games datinging back to 2008.
11:11 am
this has been going on for five year? >> yeah. one of the interesting things about this call for surveillance reform is who's not signed on. no apple, no amazon on other big names in the digital economy on here. so that's interesting. but also here, over the months there's been a shift in attention. everybody was concerned about china, right, google versus china, microsoft had issues. but there's this broader conversation. file like they don't want to point their fingers directly at u.s. government because that's uncouth but people in silicon valley ticked off about the nsa surveillance, what's happening as far as tapping data at the source. i mean the methods that have been used to get this information, they're unhappy about it, looking for change. >> the defense, though, during the beginning of the nsa surveillance leak back in june, we started hearing the beginning of this, you could actually
11:12 am
thwart certain attacks by connecting some people and their communications and the best defense i heard you can't find a needle in a haystack without a haystack but what can you find when looking at someone's gaming you're trying to connect a bunch of different data points you, might find something interesting. if you're able to connect this gamer who is having a conversation with that gamer, maybe what they're talking about isn't the game because these games have communications capables. a lot of time people have been using back channels like that talking about something they don't want eavesdropped upon. the broader issue for business, american companies are concerned that the world won't trust them and they're looking for growth in emerging markets. when any large american company now has this suspicion cast upon them because of what the u.s. government is doing, not a good thing. >> like a scarlet letter, difficult to get off. you mentioned amazon and apple not participating in this
11:13 am
campaign so far, why? >> i don't know why. i don't know why. i'm going to be asking questions about that. certainly they've come forward at times saying we don't like what's going on. we want more transparency from the u.s. government and others about the kinds of requests they're making. to be more specific and transparent about those requests, they didn't sign on to this particular letter, though. >> interesting how they're coordinating on immigration issues, too? >> yeah. >> we'll see where this leads, if they get any traction. >> more intense lobbying of sorts, make their messages known, wants known out of silicon valley. >> fierce rivals banning together on these issues, which is an interesting tentativeness. >> absolutely? after bankruptcy, merger with us airways, we'll talk about what's at stake for carriers and consumer with former amr ceo donald carty.
11:14 am
rick santelli. >> yes, we'll use numbers, quantify it's been 15 months, september 2012, since qe-3 introduced. has it lived up to the hype? we'll look. results, well they don't surprise me. they don't surprise jim bianco. will they surprise you?d u get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping th the reliability of fedex. [ male announcer ] fedex one rate. so i can reach ally bank 24/7, but there ar24/7.branches? i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum!
11:15 am
(cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save. ally bank. your money needs an ally. ask me what it's like
11:16 am
to get your best night's sleep every night. [announcer] why not talk to someone who's sleeping on the most highly recommended bed in america? ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit to learn more, and find a retailer near you. welcome back to "squawk on the street" on monday morning.
11:17 am
take a look at utility sector, biggest loser among the main s&p sect sectors. dominic chu with more on that. >> that's right. utilities are the standout underperformers today as stocks try bill on friday's gains. out of 31 s 1 stocks, 27, 28 ofm are down on the day. losses are being led by companies like agl resources, a natural gas distributor, also diversified utility provider coned. dominion resources, on the downside. relative outperformer, though, in the trade, edison international, a global electric power company up .7 today. >> thank you. merger between american airlines and us airways closed today. the largest airline in the world. will the merger work? don carty former amr chairman and ceo, now chairman of virgin
11:18 am
america. cfo and vice chairman at dell. it's been too long. good to have you back. >> good to be with you, carl. >> are you surprised this got done? >> well i think there was a time a month or so ago, there was some doubt. but i always felt it should get done and felt in the end wisdom would prevail and it did get done. >> seemed like a reversal from early rhetoric justice was putting out there. who should be afraid now that it's happened? >> i don't think anybody should be afraid. some commentary you've heard is probably true. the airline sti. industry's goi to be healthier. it great for american and its employees and customers and investors. but i do think there will be some tightening in capacity. i do think the consequence of that will be slightly higher average fares as fewer discount seats are available. i think on balance, it's good for the consumer and business as
11:19 am
well because it provides for a really viable airline industry going forward. >> don, when the justice department sued to block this, just a few months ago, everyone was saying this is the end of airline consolidation, last deal that could have possibly happened, will not happen. now of course it's gone through. first day of trading. and this morning on "squawk box" doug parker said he's not sure this is the end of consolidation. do you think we're at the end of the line? >> i think the big transactions have occurred. is it possible that one or two of the other smaller carriers get caught up and further consolidation? it wouldn't surprise me greatly. i think the important structural change has already happened. domestically at least. i think as time goes by, we'll see more changes internationally. >> don, your insight on boeing, a head lean here, eads is going to cut 5800 jobs, according to
11:20 am
union representatives. we used to talk about them as airbus and boeing like the pepsi and coke. surprised how asymmetric that battle has become? >> i'm not. i think the battle ebbs and flows depending on what product and what position is in at the time. i think you're going it see periods where airbus will look very strong. and you'll see periods when boeing looks very strong. >> don, you've got experience as an executive at dell as well. that is another company in a serious transformation now. employees have until december 20th to figure out whether they're going to accept these buyout packages to leave as the company tries to right size, give us your take on the future of dell. >> well, i think, as everyone has said, the transformation is an exciting prospect for michael and then investors. on the other hand, it's a challenging job. you don't transform these companies easily. on the other hand, i believe michael has a great vision of
11:21 am
what this company needs to become. i think the acquisitions they've done to date have been thoughtful and selective and have created a great base for dell going forward. so as now an observer of dell, after being on the board for over 20 years, i'm excited for michael and the team. >> you foe we keep hearing enterprise, there's stabilization in terms of pc demand among corporations, are you hearing that, too? and. >> i am hearing that. i think that those that have suggested the death of the pc are premature, corporations need this technology, need pc in their business. we'll be buying a null of pcs for many years to come. now, is there a segment of that business that's been displaced by mobile devices? sure, there is. i think we're seeing stablization in the base enterprise area. >> love how we talk about the death of a pc from a desk that
11:22 am
has four pcs on it right now. >> exactly. >> it's great to see you. please come on again more often. >> love to. >> joining us from dallas. four pcs here, thousands more at our headquarters. we're just one of many companies doing that apr. a stroke of genius or insanity? somebody bought a tesla with a bit coin. that's next on "squawk on the street."
11:23 am
with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. ♪ [ male announcer ] 1.21 gigawatts. today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪
11:24 am
is caused by people looking fore traffic parking.yre. that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants,
11:25 am
and that certainly is huge. electronic currency, meet electric vehicle. upscale car dealership in california announced it sold this tesla car use the crypto currency bit coin as legal tender. the dealership is run by the general manager at lamb bore
11:26 am
deanny newport beach. we're interested this. as of right now, just a random smattering of retailers and vendors that are accepting bit coin. what made you decide to get on board? >> thank you very much, and good morning to everybody. pleasure being here. we -- we just had the opportunity to receive a call from a gentleman from all the way from florida and we did your due diligence. we tried to accommodate our customers, our requests. this was a bit odd. we looked into it. i've been reading, reading the paper, european papers, even about this currency. so we did our due diligence and we find out that actually we would have been receiving u.s. dollar and that for us was very good. >> due diligence on the currency itself, due diligence on the person using it, how did that process work? >> well, due diligence on the currency, what does it mean to
11:27 am
us, somebody buying with mutual currency. by using a little program that bitcoin uses, which is actually bitbay, we would have received u.s. dollars. so for us, that was very good. it's like if you come into the dealership and want to buy a lamb boorghini using gold bars wouldn't accept it. you go out, exchange it, come back to us. that's how it worked. >> technically you never held the bitcoins yourself just the person completed the transaction, you ended up with dollars. if this had involved you holding bitcoin for any amount of time, would you have done this deal? >> i don't think so. i don't know. we accept only u.s. dollars. i don't accept euros or foreign currency. i would not venture out with bitcoins. >> pietro, what stage did it become clear to you or your employee that would be the
11:28 am
currency of choice? is he there on the lot? by the way, i'd like to use bitcoin to pay for this? >> well, actually, it was. he was -- the transaction on the phone, constantly on the phone. was not present. he bought the car sight unseen. within a description of the car he said also mentioned, can i pay in bitcoins? we said, let us come back to you. that was it. very simple. >> of course, it's a big sale. you wouldn't want to miss out on a big sale. it is interesting that you were willing to accept doing the transaction on your behalf when you just said that if someone came to you with gold bars you would say exchange the gold bars for dollars and come back to us. you didn't say exchange your bitcoins and come back to us. >> the transaction and our bank account we received wire in u.s. dollar. you can say that i didn't want bitcoins and i never touched
11:29 am
bitcoins. that's how it could happen for us. >> one last question. have you seen impact on your tesla business since the fires became a story, so to speak? >> we're a lamborghini dealership, and tesla was just a pre-owned, we're not a tesla dealer. didn't change much that side of the business. we will keep selling lamborghinis and exgottic cars. tesla is an interesting product. and when we have it, we sell them. >> have you seen anyone else asking to buy with a bitcoin or was this a one-off thing. >> no, i received a few calls they seen advertising and promotion and they say, i'm flying over from another side of the country, i'd like to see a lamborghi lamborghini, can i pay in bitcoins? if it works in the same way i receive dollars, it will be happening again. >> interesting trend.
11:30 am
thank you for being with us. >> by the way, i don't know if you saw over the weekend in "new york times" an interview with john waters, the director asked about gift cards and christmas. the rudest possible gift is a gift card. the only gift card is a bitcoin. you have to be a hacker to know about it. i won a bitcoin gift certificate. you can use it to buy hitmen or drugs. >> i don't know. if the person at least knows what store you like shopping in, they give you a gift card, it's better than nothing. better than getting a nome or a snow globe. >> but you have visa, amex, it's as good as cash. i count turn that down. >> bells are about to ring in europe. a few moments left in the trading day. we'll get the close and the impact here in the states. le an] for every late night, every weekend worked, every idea sold... ♪ you deserve a cadillac,
11:31 am
the fastest growing full-line luxury brand in the united states. including the all new 2014 cadillac cts, motor trend's 2014 car of the year. now during our season's best event, get the best offers of the season on our award winning products, like the 2014 ats and srx. impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
11:32 am
11:33 am
count you down to the close. actually uk and europe have closed, largely in the green. unexpected decline in german industrial production for october. take a look at major european markets. of course, after blockbuster overnight in asia. we've mentioned the nikkei up better than 2%, bringing year-to-date gains to 50%, that's the best for the nikkei since 1972. unbelievable. >> unbelievable, especially considering seeing deceleration
11:34 am
in gdp. markets still on a tear. we want to bring in bob pisani with a look at what's moving at big board. >> important thing here, kayla, it looks like a tight trading range. that's very unusual. but bonds are very much under control. if you look at overall market, it still keeps advancing even when you get mixed days. look at the nasdaq. quietly, slowly, another new high. essentially a 13-year high. look at 10-year chart. a 13-year high for the nasdaq. not in new highs but key groups like networkers keep advancing a few points every day. airline are having a great day. american/u.s. air deal done. aal, new stock symbol, don't see that every day, nice move for the airlines. 11-year high, index for the airlines, 11-year high that we just hit a short while ago. select stocks keep moving forward. the same with home builders. home builders topped out in may. we're off maybe 10% since then. but it's stable for the last
11:35 am
couple of months in the home builders. emerging markets, tremendous change in direction this year. 25% swings. but now they've stabilized in the last several weeks. india closed at an historic high today. that's had a lot of problems earlier in the year. one group that i am very concerned about right now is the energy group. remember how big the expiration and production stomachs were in the year? they can't seem to get a lift anymore. they've been in distribution for a number of days here. a cold snap, a big storm, and stocks are selling off today. here's the sector you want to watch, etf, it's the xop. this owns all the stocks essentially. i'm putting up a three-month high because it topped out in october. essentially it's been under distribution since then. the big guys are selling more than they're buying. and that's been a problem now. again, on a day like today, you think with natural gas up, given the cold snap we've had in the
11:36 am
northeast, nat gas up 2%, these stocks will get a lift normally. they aren't. that's a worrying sign for everybody who piled into them earlier in the year. >> bob, thanks so much. for more on the markets, chicago, check in with rick santelli. rick? >> hi, karl. of course my guest, thanks for taking time, jim bianco. for all practical purposes a solid report on jobs on friday. but as we try to discuss what it all means, i would like to remind viewers and listeners that it's been 15 months since september 12 that qe-3 began. whether or not living up to the notion that it is helped or not, really doesn't bear out that fact if you look at the facts. let's throw up the chart. jim, the chart's up there. tell us what it means. >> september 2012, fed said we need to do qe, 85 billion a month, because the economy's weak. and it's in a problem.
11:37 am
if you look where the economy is now, relative to september 2012, it's not better. gdp is lower. the payroll job growth is the same as it was then. inflation is lower. and while the unemployment rate is lower, most, if not all, because of the participation rate. if the fed is driving on data, data's not bert than when it was started and it's not better indoin june or july. >> your notion is, are they going to taper? >> no. >> okay. >> at least not december. not next week, not january. >> you won a coupy doll. many in september, including myself, were thinking, why would they buck what the market had done in the fixed income, rising rates they should have gone with it. you, using the same argument you're using now, in september, one of the lone soldiers that said it's not going to happen. you continue to think that way. but you've also heard some things about our future
11:38 am
potential future fed chairperson, janet yellen, expound. >> the fed ajournumps december . if they take up her nomination this week and she passes, bernanke feels there shouldn't be two chairman in the same meeting. he would resign in the week, she would run the next meeting and press conference, if she passes this week. we might have a different fed chairman next week. >> say all of that is real -- i'm not saying it is, came out of jim's mouth, not mine -- say that's real, my guess, everybody's going to jump to the conclusion, that means they're doing that because she wants to begin the taper process. your answer to that is? >> no, it's her meeting, her fed, and she's more of a believer in qe and it makes the taper next week and in january less likely, if she's running meeting right away. >> just the facts, ma'am. thanks, jim bianco. >> thank you very much, rickson. discovery communications ceo
11:39 am
david zazslav. [ male announcer ] here's a question for you: if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year. take the energy quiz.
11:40 am
energy lives here. take the energy quiz. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
11:41 am
yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] fedex one rate. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. coming up on "the halftime report," abercrombie one of the worst s&p performers but the company's giving the ceo a vote of confidence in a new deal. we'll find out what's going on there and if he could land on herb greenberg's worst ceo lisp td ameritrade says the retail investor's more bullish now than
11:42 am
in two years. whatnary buying and selling. and there are only 15 trading days left in the year. we're covering all market action straight ahead on the half. >> secessions, amaze. jon fortt here. >> i missed it, carl, apple did sign on to the survey license reform note. it just amazon that's left off. interestingly enough, apple in with microsoft, google, and the others. >> wow. that club more inclusive than we thought. next guest, taking the consignment store online by offering a platform for customer boz-t to resell old clothes and giving them a cut of the profits. ceo of thread up and jon fortt here at post 9. good to have you. >> thanks for having me. not only was i not aware of the space, but also the competition that is within it already.
11:43 am
how active is it? >> it's a huge space. we're seeing folks funded every few months a new competitor online. it validates our leadership early bringing consignment online. >> jamess, interesting space, my sister-in-law used it for her daughter's who is a toddler. my concern is inventory. you've expanded. women's clothes in there now. from my glance, more than 130,000 women's items now. a lot more than you have for boys or girls. is that a problem? are you going to be able to turn that inventory over or write it off? >> yeah, sure. we focus on buying at right price. we think about ourselves as arbitrage business. these aren't mercedes s classes, it's clothing that moves through the system at a high rate. it's about understanding your pricing and we buy at the right price, able to sell it at prices consumers love. it's predictable when items will
11:44 am
sell. so we feel confident in the merchandising that we're doing. >> james, this is a big business. toward the end of the year, as people are trying to prepare tax returns when you consign your clothes you can write them off. i'm wondering, seeing people taking to thred up rather than a traditional consignment store. >> but we see it's around convenience and allowing consumers to make extra cash at the end of the year or at the beginning of the year is where esee customer wanting to live. we see huge upgrowth in the new year people are saying i need to make extra bucks and it's easy to use thred up and that's why they love it. >> kids' clothes makes sense to young parents, john, i'm looking at you, because we know how quickly they outgrow clothes. what you going to do if you don't have a family member with whom to pass it down. >> kids is where we started, our
11:45 am
bread and butter. clothes don't grow, kids do, the anchor of the brand. what we see with folk they come on, use the kids service and really it's the mom in the home that starts buying clothes for herself. that's where womens has been a huge success for us in growth. as family starts with kids and move to women's product. they come back more and more. >> one of the tricky things here, though, the return process. if you get an item that isn't as advertised, it's not as good quality, you can't sell it, or if the item doesn't sell and the person wanted it back, what are some of the speed bumps in your business that you've encountered over the past few months like that? >> the biggest hurdle is getting people to suspend disbelief and give used goods a try. we see ourselves as the third wave of a larger industry around first it was about buying certified pre-owned cars and then about certified electronics. so, you know the biggest -- the bumps for us is getting trial. after that, customers are happy with the product and the quality
11:46 am
and the fit and we take returns like any other retailer. the reason why our returns are lower than industry average, items are affordable that customers are happy with what they get. and especially on the kids' product, kids and grow into it the hand me down economy, but we're confident in the product we're putting on line. >> reid hastings, what does he bring to the table. >> a 50-year, 100-year company what reid brings to the table, give me advice, helping me think of building out a great team and story for the long term. i think that wisdom and that leadership is something that you know is really kind of priceless. >> i'll tell you, carl, i think this sort of thing works better for kids who are less active, let's say. i got a couple of boy, i can barely keep the clothes on them
11:47 am
interest disintegrating. >> please don't send us those. >> don't worry. >> james, thanks for your time. we'll be watching. >> janes reinhardt. still to come, another big interview discover communications ceo david zaslav on a new content initiative. facebook toying with the idea of adding sympathize button as one alternative. the squawk on the treat, give them help, what other button should facebook be considering? tdd#: 1-888-648-6021 there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021
11:48 am
tdd#: 1-888-648-6021 or go to to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum. tdd#: 1-888-648-6021 and only $8.95 a trade. tdd#: 1-888-648-6021 open an account and earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 to learn more. tdd#: 1-888-648-6021 so you can take charge tdd#: 1-888-648-6021 of your trading.
11:49 am
11:50 am
let's get to squawk on the tweet. facebook report lid toying with the idea of adding asympathize button. brings us to the squawk on the tweet. help facebook out what other button should the company be considering? jet writes, how about a self-destruct button? david writes, get back to work button. that's a good one. market bull, one of our favorites, writes, i would not eat that button. for all of those people posting pictures of their dinner, breakfast, lunch. >> any and all of the above, we like to think there aren't many
11:51 am
of those people, but there are, sometimes ourselves included. >> any button that tells people they're being a jerk, that would be nice, too. >> yes. >> not that that ever happens on social media. >> not that we're jerks either. >> a big interview from david faber, ceo david zaslav live from the ubs media conference talking about a new content strategy, that and more. ♪ [ male announcer ] this december, experience the gift of true artistry
11:52 am
and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. at the lexus december to remember sales event. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. so i got the windows nokia tablet. it's, well, impressive. it's got the brightest hd screen, super-fast 4g lte, so my son can play games and movies almost anywhere, and it's got office for school stuff. but the best part? i got the lumia 928 for my daughter for free, with the best low-light smartphone camera
11:53 am
this side of the north pole. dad for the win. mm! mm! mm! ♪ honestly, i want to see you be brave ♪ yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here.
11:54 am
ubs media conference under way in new york city. ceos gathered to discuss the changing face of the industry. david faber joins us from the conference, where he's joined by a special guest. >> carl, thanks very much. we are joined by david zaslav, of course, friend of yours and mine, ceo of discovery home to, well, you know, so many different programs, honey boo boo, shark week, deadliest catch. i could go on and on. >> why don't you. >> cake boss is a favorite in my family. i love to start with in the u.s., we always talk international, as we should with discovery but you've been able to outpace growth in the fouser a long time. how much longer can you keep
11:55 am
doing that, or do you fall to the growth rate that most cable networks see? >> first, i would say we have a different belief system at discovery. a different strategy, rely, than many other media companies. we have 14r channels. when i got here we had 5% market share. other companies had 10 channels and 20% mark share. we have to invest more in content and grow flu channels. we invested in own with opera. >> profitable. >> top network for african-american women. invested in i.d., now a top ten network, crime network in the u.s., invested in destination america, animal plant et, science. overall strategy was, make discovery and tlc stronger but invest in a lot of new channels, velocity's another new channel. market share has grown to 11% of viewership on cable. we grew our portfolio 4% in a
11:56 am
mark that's flat. year before we were up six. the year before up four. >> do you think you can keep doing it? >> that's the question. >> we think we can. this year we grew four. and we still believe, if you tell great stories with great characters under a strong brand, more people will watch. in the u.s. we're going continue to do that. i think we can continue to win. on tonigp of that in the u.s. viewership has flattened out and subscribers have flattened out. the advertising mark remains strong. the ability to get cpm growth when the differential between the broadcast cpm and cable still significant, it's a big helper. and in the u.s., we're getting paid more money for our content. we have netflix and amazon buying content. ability to get higher subfees from the distributors in the u.s. has gotten better. >> there may be weakness in the scatter mark, have you seen it?
11:57 am
>> we haven't seen it. market remains relatively strong with good pricing. there was a bit of a slowdown last year and we're feeling a little bit of a slowdown but we are feeling it's seasonal. >> a little bit of a slowdown now? >> we are. we think it feels steady. >> let's talk about sports and international, which combine id with euro sport a year ago you did the first deal in acquiring 20 -- >> 20%, a right to take control of the end of next year. >> you mentioned it, including just in the presentation you gave downstairs you may move quickly to do that than is your right under the contract? >> we have announced we're in discussions about the possibility of taking control earlier. we're just in those discussions. >> what would be the advantage of doing so earlier than you might otherwise? >> well, we think it's a great asset. we're working very effectively with tf-1 in terms of taking our
11:58 am
local sales teams and our distribution teams in the 59 countries where your sport is, we're getting to know at asset better. we're in the style of whether it makes sense for both of us to do something sooner or wait until late, that's all. >> why sports? why a great asset? >> well, euro sport has a fantastic brand, it's in 59 countries, has between 1 and 4 channels. a lot of very good sports and they're profitable. it's a great compliment to what we have. we have eight channels in 59 countries. some of the countries we have 14 channels. we have local teams in every one of the countries. if we can add euro sport brand with very -- it would take very -- no incremental cost to represent them in the market, and we think together with discovery that's the number one channel for men, that we can maybe drive more value. and they've been great to work
11:59 am
with. >> talk of this conference, to a certain extent, ceo of time warner cable here earlier, consolidation, we don't know fit going to happen. as a content provider would you look favorably or worry if there's was consolidation among the distributors. >> you have two distributors from the sky, dish, and directv, you have two phone guys, great verizon and at&t, effective, very good product and a cable distributor. there are a lot of markets like italy where it's basically just rupert and a small system that berlusconi owns. in some markets you can great product. but if you don't have a competitive distribution mark you can't get significant value. in the u.s. it's competitive. the fact there's consolidation, i think in the end that would be good for the industry because it might mean there would be a
12:00 pm
quicker and more aggressive push into tv everywhere which would be good for all of us. >> we have to leave it there. as always, thank you. >> great to see you. >> a brief time. appreciate it. david zaslav. >> appreciate hearing from david and david. discovery up 32%. scott wapner and the halftime. >> thanks so much. what we're following today. abercrombie shares down 30%. why is the company giving its boss a big thumbs up? correctly called sysco surge now jon najarian on another name poised for a pop. the market whether stocks are about to embark on two-week rally to the finish. was friday's job-related jump the beginning of bigger things to come? it's "halftime," let's play the action. joe, what's in store over the


info Stream Only

Uploaded by TV Archive on