Transcripts For CNBC Squawk Box 20240713

There. Chinese vice premier liu spoke with u. S. Trade representative Robert Lighthizer and treasury secretary steve mnuchin. The Ministry Says they discussed issues related to a phase one deal and agreed to maintain communication on the remaining issues in the phase one talks. So, we are still very much in phase one talks. Bumping up against that december 15th deadline, though. Right. When you are expected to see new tariffs go in. Right. Thats been the big question do they do it its obvious they dont want the tariffs put in will enough progress be made at that point to say, okay, we wont so you think maybe not a deal by december 15th, but maybe enough of a deal to be able to i dont know. China trade wars are so 2019. Pushing into i just think you need to just, when we talk about beyond and impossible meat, i think you need to look into the future a little bit i just think you need to anticipate, not react. I just think it helps. What do you think happens before december 15th do you think a deals done ive just been talking about it so much that that youre sick of it. Im sick of it so, i think it is so 2019. But there is real uncertainty thats involved in it and some semblance of an overhang the only uncertainty is whether the administration thinks its helpful or harmful to be in the middle of it during an election. Thats what we need to figure out. Isnt that terrible shouldnt it just be, is it helpful or harmful for the economy . If there is a phase one that is done, youll see nothing done until phase two. The chinese said theyre going to wait and see what happens with the election themselves. Right. So if you get the first part that is taken care of, that at least leaves a truce or a detaunt. That will give you another 11 months i think that the top guys over in china actually get the internet, everything. Oh, sure. You know what i mean . So theyre not like everybody else who doesnt really get everything on the internet so they can watch exactly whats happening over here. Well, they also have an idea of whats happening there in their own economy, not the numbers but im talking about as the jockeying for bloomberg, warren, biden, all that thats going on. Theyll make a determination of whether, you know look, we oh, as we get closer to the election. They may not do anything. They may not. And of course, the administration said, no, no, no, were so good at negotiating, were going to have a deal. Well, theyre doing okay so far, if you listen to cramer i know that you think theyre, you know, art of the deal, bankrupt casinos, blah, blah, blah i know how you think but i think were doing okay negotiating. You do . Yeah, i do. No deals been reached. Who knows were in the middle my guess is you wont see tariffs put on. Were finally pushing back against china and the markets at alltime highs, so you know, just try to look at the bright side try to look at the glass as half full just dont,you know. There wont be a deal until yeah, but you say theres no deal yeah, theres no deal yet. We know, thats what were talking about, but there might be theres progress theyre talking. Thats what theyre saying, right . You read it every day. Well see. Were getting closer. Okay. Meanwhile, talk about Disney Disney plus off to a blockbuster start according to data reported by the New York Post. Research firm apptopia, is that it probably apptopia. The streaming service averaging about 1 million new subscribers put day. Or like here, dystopia. The mobile app has been downloaded 15. 5 million times since launching on november 12th the data shows many users are paying for disney plus, rather than taking advantage of a free trial. The service has generated more than 5 million through inapp purchases. Apptopia does not track people who fay for the service through disney plus website or the desktop computer disney. A 12. 99 bundle includes hulu and espn plus. Over the past two weeks, downloads of those services have increased by more than 50 the sorkin family happens to have been one of those that downloaded the Service Disney plus or the hulu no, we did the straight disney plus. We did, too. We did the free i mean, free they require the credit card oh, no, we went all in. Did you do the 12. 99 i wasnt the one who hit the button on it, but we paid for whatever it costs for three years. Oh, so you went in for three years . Yeah. Okay, so, what did the quick family think of this whole thing . Because the sorkin boys were very excited about the mandalorian, but we went through like the films and the boys were like, dad, ive seen that, ive seen that, ive seen that. Didnt you tell this whole story yesterday . Yeah. Okay. Deja vu. Okay, all right. I dont think we talked about it on air. I think we did. Yeah, i think people at home are going, i know the sorkin family, the boys didnt find anything they wanted. Okay, talking about netflix they extended anything else its tuesday there were a couple good deals yesterday. Okay, anyway, netflix has signed an extended Lease Agreement that will keep new yorks iconic paris theater open for years the 71yearold singlescreen theater closed in august when its lease expired. Netflix says it plans to use the theater for special events, screenings, and theatrical releases of its films. So iconic first time ive heard about it. It is. You went to the irishman at this theater over here no, no, i didnt come to the city for that. Whered you see it . Montclair. Oh, a special showing no, because theyre showing it over here, and one of the questions is whether netflix eventually either would buy a theater chain or would buy a series of theaters so they can say that these are theatrical releases. Right that way they can get into the awards game. Sort of adds they need help. Directors may want this was wapner land, wapner and i went to montclair okay. No elevator in the theater, though but i think tylers there, somewhere, too nick is there, right he is. Sopranos. Used to live there anyway, impossible foods is reportedly in talks with investors about a new round of fundraising i still im trying to figure this out according to reuters, the companys looking to capitalize on growing consumer demand for meat alternatives, given the success of rival beyond meat the report says impossible is looking to raise between 300 and 4 m00 million, lifting its valuation to between 3 and 5 billion. They caution plans may change based on Investor Feedback and i guess i assumed jumping ahead that when this replaces all meat across the entire planet, that the valuation would be more than 3 billion. And its a long way to go. I know its a long way to go. I know its a long way to go but the market you know, there is terminal pricing, and people if its going to happen weve just got to watch it its like, remember gene therapy . Gene therapy, gene therapy, gene therapy. The entire universe of Gene Therapy Companies ten years ago when it was or, dthen the other one stem cells. The stem cell industry, market cap of all of the companies combined was about 400 million. And its like, we read about it dont believe it until they show it and ten years ago they werent there. Beyond meat has been as high as 239. So at that point, it was, what, four times higher than it is right now. So at one point, it had almost a 20 billion market cap. Heres the question, what do they do with that money . Pay off early investors or do they use it to increase their production, right . Thats the big question with it. If you think theres more demand for it and you need to be able to see it, but if youre going to pay off the early investors right, what if you get 5 of meat replaced with this . Seems like it would be a 100 billion company. Right if you ever got to that point. I think that tells you about whos eating the stuff now and now its early its in burger king everybodys looking at it. Its on the coast its, you know its just its not necessarily in the stratosphere right now in terms of valuation. No. If its a real thing. Look, there have been talk for a long time that if you are going to bring up china into our standards on those things, they must eat meat, youve got to find another way to supply it. Or a meat substitute. Right youve got to find another way to supply it, and that might be this, but i dont think theyve made as many inroads there to justify some of those. I just think if i could own stocks, that i think if you believe in the story, believe in Climate Change i thought you dont believe in the story. I dont, but if i do, i would buy it, if i could buy stocks, because so many people like you do believe it and i would buy the stock you would buy it based on your belief. Okay. Based on the misinformed belief that you have. The investor being like a psychologi psychologist, psycho analyzing every market and crowds. So, the question is whether there is a big enough crowd. Exactly well, i just think eventually that, you know, these are very reasonable valuations, if, if i say if it becomes a true alternative to getting protein to the large masses of people around the world stocks to watch. We saw a big swing in the shares of cvs health. Look, Stranger Things have happened i think cramer likes tesla all of a sudden. Were you looking at his tweets today . He rode in a tesla elon musk so, anything can happen, you know, any time and its the x. Its that ugly cheese wedge version of the i like the s. The wings i like the s, the fancy one, but and i actually like the new ones in the right color, i think. I kind of think theyre all the truck you mean . No. Does the truck come in i thought it was just the platinum anyway because i dont think theres no paint thats part of the just the bulletproof windows and such after yesterdays close, the wall street journal reporting that activist investor Starboard Value took a stake in the pharmacy and health care company. Reports that starboards stake is small at this point recent talks with cvs management have been friendly, which is nice cordial. You know, exchanging pleasantries, apparently they mean friendly as opposed to hostile. Hostile, yes. Which is like, hey, idiots okay, carl icahn. Yeah, right. Alibabas hong kong listing made a solid debut overnight, trading 7 higher from the issue price. Alibaba raised more than 11 billion from its secondary listing, seen as a vote of confidence in hong kongs financial future after six months of protests that stock right now up by about 6. 6 is there do they make turkey yet yeah, theres a name for it oh, tofurkey is the toefie version no, i mean, impossible meat or beyond meat turkey. No, but i think perdue is working on those lines the problem is, okay, if you do a ground meat, its easier i know way too much about this to give the density of a steak you cut into it or a chicken breast or turkey breast. Thats harder because you can mush it up, but to be able to layer it talking about the mcribs again . Yeah, yeah. So, you could pour its not pouring it pour this into something that looks like a turkey leg, a mold . I dont think you have they dont have the texture right on that. Thats the trickier part doing any ground beef is an easier fake. Right we ought to let someone else handle turkey. Also filet minion there are a lot of things they cant do yet. No, believe me, i know. Ive seen what they can do and taste it and then had the after effects of it. So, coming up that might have been me. How do i ever know its different than your daily . Hardy effort, though. Not really. Todays squawk planner includes Quarterly Results from best buy were going to tell you why one analyst is out with a warning about todays notice. Plus, with markets at new highs, paul hickey is here from b Bespoke Capital to tell us whats wrong about the rally squawk box coming right back welcome back to squawk box. On the squawk planner, best buy set to report and 7 00 a. M. Eastern time this morning. New call from Morgan Stanley says the Electronics Retailer could announce disappointing guidance for the holiday quarter. We will bring you those numbers in instant Market Reaction as we get them on the data front, were going to get new home sales and Consumer Confidence data that comes around 10 00 a. M. Eastern time, joe. Fed chair jay powell said yesterday the fed remains firmly committed to meeting its inflation goals. Thats being seen as a signal that the central bank is unlikely to raise rates any time soon at a speech in providence, rhode island, powell said that the current stance of Monetary Policy is likely to remain appropriate as long as the current, in his words, generally good conditions persist. Well get more from the fed at 7 30 we have an exclusive interview with dallas fed president Robert Kaplan broader markets once again closing at new highs record closings have been tough to hang onto in the last two years, but our next guest says this time could be different here now is paul hickey, cofounder of Bespoke Investment group. Thats why we have the great returns but going back two years, they dont look nearly as significant, but its certainly been a good year in 2019 you think we continue on to more new highs . Yeah, i think so. And i think rather than ask people why the markets going to keep going up, i think the bigger question is why do you think the market would go down and if you have any good you have to ask a skeptic, what are the good reasons the markets going to go down and i think whats a big difference between now and the prior highs weve seen since the beginning of 2018 is just like you were alluding to in th intro with jay powell, the fed is not bringing down the neck of the market and thats unlike every prior high weve seen since the start of 2018, the market worried about the fed thats a big positive working in the markets favor here. Just like the expression you never short a dull market. In other words, you have no idea why it would go up the same applies the other way we have no idea you never know until hindsight why a market goes down so to say that you cant come up with anything doesnt make me feel that makes me feel complacent that makes me feel like, you know, that would make me worry if i cant come up with any reasons. And the other thing over the years, ill tell you something, bottoms you can almost theyre easier to sort of feel sometimes than tops. I dont know i think thats true. I dont know if anyone has ever called a top effectively. I mean, theres people that have been bearish the entire time, i see the same guy every day i think whats really interesting there is you think about sentiment, right yeah . And sentiment every time we saw a new high after that original high in 2018, investors were you know, we were excited oh, the new high. Back in october, that new high was met with more skepticism than ive ever seen with the market rallying at a new high. You saw on the Consumer Confidence report, which was released right around that time of that new high, more consumers were expecting lower stock prices than higher there was a barons big money poll, first time in the history of the poll since mid90s where you had more people expecting professional investors expecting lower stock prices than higher stock prices so there was massive skepticism on the part of the market and analysts had edding into earnings season, when we were talking about earnings season coming in in the beginning of october, there was the pace of negative revisions was, you know, off the charts, and investors the conventional wisdom was there theres going to be nothing good in the earnings reports to get the market higher and look what happened so, i think you saw typically the type of sentiment that you see, you know, after a markets been down 15 , 20 , rather than a market the sentiment you see when the markets i mean, there has been if you look underneath the surface of the market, there are people that say its, you know, the gains are more and more concentrated in individual names than some of the favorites, that a lot of stocks peaked six months ago, eight months ago, nine months ago. You see some supposedly, according to the bears, some troubling undercurrents. Well, so, energy has a lot of the energy names and if you look into the small cap area, numbers have been weaker because theres a lot of energy names in that space and theyre smaller caps so, that has hurt breadth levels in the smaller cap area. But even in the smaller cap, weve seen relative strength start to pick up a little bit. So, i mean, are we going to get 25 a year next year just like we did this year probably not, but theres no i dont see any, you know, major reason to suggest that were not going to see at least an average here. I mean, if we got were at 31 thats what i was going to ask you, 3133 on the s p so, you think 3500 is in the cards . I think at some point in the next year, just based on the average returns its not that much, only 8 . Two weeks ago if you had guessed on who was seeing maybe a meltup into the Fourth Quarter and she was mentioning we could see the s p get to 3,100. That was two weeks ago and were already above there, so weve seen a strong run. I know, but 20 , were at like 3,700, 3,800, right as the numbers get higher, the percentageas i know how that works, yeah sort of multiply but just to hear the numbers, that it just typically, when we have people on, and theyre talking about like a meltup, they totally undershoot it because the other numbers sound so crazy. Well but they never sound crazy when people are predicting 2,500 on the s p well, for 20 years, we were always looking at 1,500 on the s p, from 2000 through 2013. Right. That was the peak level now were double that. But we did see not a lost decade for equities, basically a lost two decades for equities so you know, were seeing these bull markets tend to last a long time and when it stops, i mean, we dont know, but right now were seeing sentiment levels that are, you know, slowly starting to come back into the market valuations are high, so thats one thing that people talk about, but valuations are never the catalyst for a market selloff theres usually Something Else has to spark that. Yeah, that we know about six months after it happens, unfortunately. All right. So, remember, were going to remember this. Remember, you were very, very happy. You like turkey, maybe are you excited about thanksgiving is that what it is what should be thankful for. Yeah, arguing with the family at the table who doesnt want to do that, right . Yeah, that happens nowadays. Arguments at the family tables no, we dont have anyone over that disagrees just the four of you. Yeah. We leave town thanks for coming in. Thanks. Believe me, people, were all on the same page. Right, right. Headed south. When we come back, amazon scoring a new cloud contract in microsofts backyard and taking a victory lap on twitter that story is next i am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Cool. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. Time now for the executive edge this morning a big score for amazon the Company Announcing that its cloud division, amazon web services, has now nabbed the Seattle Seahawks as a customer thats notable because the nfl team has deep ties, at least historically, to microsoft its owned by the estate of paul allen, the late microsoft cofounder until now, the team had been using microsofts azure cloud service. So, battle of the neighbors in seattle. This morning. They did it intentionally, then they took to twitter to kind of tout the whole thing, too. In the meantime, google said it has terminated four employees for clear and repeated violations of the companys Data Security policies. At least two of the employees were at the center of recent worker protests in San Francisco and had spoken out against googles contracts with u. S. Customs and border protection. Google says that the employees were caught searching other employees materials and schedules, including medical appointments and other meetings, and then sharing that information externally coming up when we return, the fallout from londons rejection of ubers operating license. Well talk about what it means for the company and other cities and what investors need to know now. As we head to a break, a look at yesterdays s p 500 winners and losers through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Down on the corner, out in th street good morning u. S. Equity futures little changed from last check. The nasdaq is eking out a very small gain now its actually in the red the dow indicated down nine. S p down about a point but any pullback would be from record levels, all three of those. Nutanix shares jumping this is a Cloud Software company. They dont make a creamy, nut chocolate sauce or anything. The Cloud Storage Company Reported isnt that what you think . Nutella no. Thats what i think anyway, reported a smaller loss than expected. Hungry revenue beat forecasts thanks to a 5 rise in billings and a 9 jump in software and sales, and support sales. Either that or joe lavorgnas company what is that, nutixis or something theyre all very similar hewlettpackard end prize reporting fourthquarter revenue that beat expectations, citing a longer sales cycle especially for larger deals because of trade tensions, but they still expect to return to Revenue Growth this year that stock is down about 4. 5 . And Palo Alto Networks Beat Estimates but shares are down as the Cybersecurity Firm is forecasting secondquarter profit falling below expectations as it deals with rising costs and competition that stock is off by almost 8 this morning also, check out pvh, reporting betterthanexpected thirdquarter results. The company seeing higher demand for calvin klein and Tommy Hilfiger brands in europe. Pvh also raising profit outlook for the year stock is up 0. 5 . And a developing story mandatory evacuations have now been ordered in southern california, this due to a wildfire that began yesterday afternoon and grew to cover more than 3,100 acres by yesterday evening. The socalled cave fire spread near the San Marcos Pass near santa barbara. Portions of the highway above 154 were shut down due to extreme fire danger. Coming up when we return, were going to talk about uber facing a loss in london yesterday when it was stripped of its operating license theyre appealing. Well get you up to speed and talk about what it means for the company next. And later, dont miss our Steve Liesmans exclusive interview with dallas fed president fred kaplan. Stayun tsaw ocn tedo qukn bc yes im stuck in the middle with you, and im wondering what it is i should do, its so hard to keep this smile from my face, losing control, yeah, im all over the place, clowns to the left of me, jokers to the right, here i am, stuck in the middle with you no one likes to feel stuck, boxed in, or held back. Especially by something thats supposed to do the opposite like your cloud. Its a problem. But the ibm cloud is different. Its open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. So it can help businesses take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. Ahooh, werewolves of london uber getting some bad news yesterday when the city of london stripped its operating license. The shares tumbled on that news before recovering somewhat during the day you can see the stock right now. Take a look at it. Youre going it see that uber has said it will appeal and can it continue to operate while the appeal is pending. They are up about 19 cents dan is axios editor how big of a deal is this for uber does it spread beyond london it is a big deal were they to lose london. They continue being on the roads. London estimates about 2 , 3 of overall ride hail revenue, certainly one of its five biggest global cities. Im not sure its a huge deal. They were first supposed to be suspended over a year ago. They were able to appeal, got an extension, et cetera when you look at whats happening in other cities, its usually more about ride hail as a category, whether even in the u. S. , right . Issues of whether they are drivers or independent contractors or in other places broader licensing. London is a uberspecific thing, so i dont think that necessarily has kind of waves that carry to other cities. You know, i wrote it off myself at first, but what i didnt realize before raie in rg some details yesterday was that there is a problem where unlicensed drivers can upload their photos onto this, so they can be posing as somebody theyre not. And thats a little concerning if thats what the Technology Actually allows, if thats what their system actually allows, that could be a problem, if other regulators start looking at that, too you have the problem where i think they said 14,000 rides were with unlicensed or uninsured drivers, i should say, because they werent who they said they were going to be i mean, just from a general security perspective overall, why have a system that you cant protect . No, look, youre absolutely right about that i shouldnt downplay the i dont even want to call it glitch because its not that its an exploit, if you will its a real problem, but again, its a specific one that uber should be able to solve. You know, they say theyre going to add some sort of facial Recognition Software im not sure whether that will work or not. But again, it does seem to be a specific Technology Problem as opposed to what weve seen with uber and other ride Hail Companies in the past, more of this fundamental should these Companies Generally be allowed to operate on our streets, and this isnt that. So, what do you think about the stock . At one point it was down about 4. 5 yesterday before it stabilized. Well, look, it makes sense that people would freak out about this as i said, if you look at uber, i believe kind of its five largest cities comprise about 25 of its ride hail revenue, so its a big deal if it was to come off the market. Theres also kind of i think i saw this in maybe the ft suggested, uber loses a lot of money on things, so if it has fewer drivers, maybe it loses less money but it makes sense that the stock would go down off of this, because it is a threat, as you said if other cities, whether they be in the u. S. Or globally, if they realize and im sure theyre looking now if this exploit that weve seen in london, if this is happening in other cities, uber at the very least is going to face penalties. Dan, while youre here, let me ask you about disney plus theres a report out today in the New York Post suggesting that disney plus has been getting a million subscribers a day. Thats pretty impressive number. What do you think of what theyve seen so far . What do you think of what the streets expecting i mean, the thing with disney plus and its hard for us to know right now is of those millions a day the numbers absurd its incredibly high we dont know how many are coming in because theyre verizon subscribers meaning theyre getting the service for free. Yes within my family, the service is free not paying anything for it im a subscriber, not paying anything for it. Thats the ultimate question as opposed to say netflix or some of the others where people have to put a credit card in and are charged monthly. Although if you look at that stock, it has really taken off based on not only what weve heard in terms of these numbers, what some of the early expectations were, what the company saw at that point. So pretty High Expectations getting built into this. Well, and there should be look, its been talked about im not the first. But the franchises and the ip that theyve got sitting in there is classic, its desired it is the sort of thing that if you have a child, you dont have to have your child find something. They want the content thats sitting there. Theyve already been asking parents to pay for it for years. Now again, if youve got verizon, its free, but even if not, its fairly cheap its an obvious play for anybody with kids or anybody whos a star wars fan, and theres a lot of those. Dan, good to see you. Thank for having me. Okay, thanks. When we come back, the dow setting another record, but our next guest has some picks with room to run. Well tell you what to buy at record highs right after this. Dont forget to subscribe to our podcast. Youll get interviews, original content, and behindthescenes access look for us on Apple Podcast or on your favorite podcast app and subscribe today. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. I will buy you a garden where your flowers can bloom i will buy you a new car, perfect shiny and new i will buy you that big house good morning welcome back to squawk box right here on cnbc it is tuesday, but i think for joe, it feels like a friday, right . As youre getting ready for the holidays. Better than a friday. Better than a friday . Because you have a long, long weekend. Two days from now, i still wont be here. Becky and i are manning the fort. You are friday, too . Yes. Thanksgiving. Its the best time of the year youre going to be here friday best time of the year black friday. I think ive worked black friday for 25 years. Its all about retail, right . Weve got work to do. This is it this is the moment. Okay. Well see. Do you have an agent . Is he any good i mean why would well, i dont know. I figured he might get you off on oh, you want to be here friday. Oh, absolutely. Because theres nothing much to do. This is like the super bowl of retail. Its exciting. So its not that you get to mail it in without even thinking about it, right . Nope. Okay. Maybe ill watch you should watch. Maybe ill watch. Sounds like its going to be unbelievable. Its going to be a big broadcast. Maybe ill get a if i were you, id get up early. Can i watch 8 00 to 9 00 or do you want me there for the entire time up at 6 00. If you have the day off, relax. I want you to bring yourself a neilsen box. Instead of playing golf or fishing or anything like that, ill watch you two good idea. Talk about retail. Bingo okay, meantime, the dow is on pace for its best month was that a promotion or what its like bloombergs speech yesterday. Oh, stop. Lets roll up our sleeves. Oh, stop. Lets get to it what was his final comment lets get it on. Lets get it on joe, come on. Lets get it on well, you said it yesterday. You said it yesterday. No, no yes. And i sent you his i was laughing i go my point is that he is the most confident, accomplished guy, butt without the enthusiasm theres an enthusiasm issue. Lets get it on. Okay. Lets get it on now. Our next guest were going to get it on right now our next guest thinks theres still room to run in the market. Here with a few stock picks from the index, Portfolio Manager at smead capital management, cole smead. Lets get it on. Thats better. How are you good morning to you. How are you guys . Good morning. We are good were getting ready for the super bowl of retail, taking place later this week. I dont think you have any retailers on your list of stocks that youre picking this morning, but maybe we can get into that in just a bit. But i did want to talk to you about some of the things you think are working. Your top pick right now is merck. Its already up 12 year to date, so i wanted to sort of get an understanding of why you felt the way you do yeah, with keytruda and their oncology work, we think theres great legs to that and were very early on in that process for their business and a lot of these pharmaceutical businesses are coming out of just a very tough period you know, we dont own it, but just as an example, some of the settlements in the generic space. You can kind of see a thawing process going on and a little bit of the sediment, tied to politics, legal battles, et cetera but they have been great businesses and really, going back four or five years, a lot of these businesses havent made much new highs because of the fallout of the valiant world has still been kind of coming about for four or five years. So, cole, markets sitting at 86. 15 if we had this conversation next thanksgiving, whats your expectation of where it sits oh, id love to tell you its at 120, but i dont get to know the future as buffett or annie duke or anybody else would tell you. We do know their earnings power is very strong, and thats the big difference between the market or the indexes youre talking about, and individual stocks the e of the next ten years is going to be where all stock returns are. The multiples are not likely to help stock investors over the next ten years in comparison investors in comparison. Lets walk through some of the other picks youve got theres been a bit of speculation of a buyout in this category walgreens boots alliance. Yeah, these are old lovers giving it another go kkr and stefano, the largest shareholder. The street has so much egg on their face it was like a carton of eggs throwing at the analysts they were all bearish. They had terrible views of the future at 10 to 11 times of the company. Now theyre all pulling a m mia culpa but still digging in none of the analysts have said its not going to work the Financial Community have said this is like texas utilities, the txu buyout. Its nowhere near that they make way bigger margins than a utility and they have a 16 owner that is taking these talks with kkr who hes done that with before by the way, you know, since beckys usually talking to buffet, i will not be shocked if buffet is stepping into the preferred with warrants or possibly equity on this deal. Why because its got a lot of the franchise opportunities buffet likes. Lets say the deal goes sideways for buffet and he has the preferred, he might become the owner. What . Hes sitting in the debt structure. He could become the owner if the deal goes bad for the people owning the equity. Why do you think this is something that would appeal to him . Its a Great American business, very consistent earnings power and the biggest question on the business is how do you want to price that growth not what is the growth of the business and use the teva lawsuit conversation yesterday as an example. Weve been in the era where theres been a slower number of generics coming to market. What that does, thats the single highest margin that walgreens sell in the back of the store, 38 margins thats the biggest margin thing. We have fewer generics or less new drugs to role to generic off patten this is totally outside his wheel house. Why would he buy a drugstore thats not something hes been involved in in the past. Health care stocks arent something hes been involved in in the past. Do you know anything or are you just kind of speculating because you look at it no, im saying the kind of business, the kind of profile, hed be a white knight to step on this like kkr people are making the same case why is buffet buying oxy thats not one of his kind of businesses but price and what he thinks hes getting for that is playing into i would not be shocked in oxys case he didnt buy it on open market they bought 300 million worth. In the latest filings that they showed but that wasnt until after they had already been offered the deal to step in and finance. I see where youre i see barons just wrote a piece, i dont know how it looks recent. I think it was andrew berry wrote that so i understand the speculation that youre raising here. And thats not needed thats not needed. They dont need that to have this deal come together. Kkr and facina but that barons piece was a pure almost a suggestion. In fact it starts saying, warren, heres your elephant heres an idea. Im not saying buffet is going to take equity but all of his deals are preferred with warrants that way if it works out really well, you have immense up side thats exactly what he did on oxy. I want to talk about another pick you have. By the way, its a company that warren buffet has liked. American express. Excellent business. Has been in business since 1950 whats the future of amex . The wall street journal had a piece about how much money theyre spending to attract merchants. Yeah. In some case giving Incentive Fees that wont pay off for five, six, seven years. Because they know theres a ton of 35yearolds like me, andrew 40 of millennial card use is coming out of amex right now why are they going at merchants . They want to entrench themselves with the customers when sapphire came at them and jpmorgan took that shot, what it did is it woke up American Express. Thats after the costco deal rolled off as well it caused them to say, how do we get close to our customers the uber deals, more flight opportunities and all of that came about, thats because their competition caused them to get in better shape. Its worked wonderfully if you look at the stock in the last few years. Exactly what people didnt expect coming out of the costco disagreement i think this is all just they have the ability to do this because visa and master card cant pay those kind of fees because they make such a tiny fee versus amex customers are making 5 to 6 on card transactions. Cole, we thank you for your perspective. Appreciate it. Wish you a happy thanksgiving. You too, as well. We hope you watch the super bowl of retail. I will be in the Office Starting at 6 a. M if you want to know whats going on in retail land online and off, theres only one place to set your tv. Nielsen box is going to be exploding. Weve never seen anything like this smoking and fire and right . Sarcasm coming up no, im the half full person. Im the u toeb yeah perstopia pt dystopia. Join us on set, eric cantor going to give us thoughts about Michael Bloombergs president ial run. And yesterdays merger monday. Plus, dont miss our exclusive interview with dallas fed president Robert Kaplan. Youre watching cnbc its been reported that theres a cyberattack on business every 39 seconds. Ouch. I dont even want to think about it. Comcast business has a solution. We go beyond fast with a cloudbased Security System that automatically updates, so you always have the latest protection. Phishing. Malware. Risky sites. It can help block all of that. Its one less thing for us to worry about. Comcast business securityedge automatically protects all the devices on your network. Call 18005016000 today. Of millions of americans during the recession. So, my wife kat and i took action. We started a Nonprofit Community bank with a simple theory give people a fair deal and real economic power. Invest in the community, in businesses owned by women and people of color, in affordable housing. The difference between words and actions matters. Thats a lesson politicians in washington could use right now. Im tom steyer, and i approve this message. Or trips to mars. No commission. Delivery drones, or the latest phones. No commission. No matter what you trade, at fidelity youll pay no commission for online u. S. Equity trades. Michael bloombergs antitrump ads ready to roll out. Well talk taxes, the 2020 election and well talk that with eric cantor lets make a deal. More than 56 billion worth were announced yesterday. Whats driving the end of the year rush and could more mega deals be on the way before the end of the year . Plus, we wrap up the Market Movers rumors with dicks and best buy as the second hour of squawk box begins right now. Good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. What did i miss . I missed something something just happened. Well find out in a moment. I was thinking about farming and becky which would be funny on any given day one of us might with me what . In studio, former House Majority leader eric cantor may or may not be in on the joke, i do not know. U. S. Equity futures 2 1 2 hours before markets will open up. Looks like the dow would open down 6. 5 off, s p 500 off a point and nasdaq off 1. 5 points. Fed chairman jay powell says that a key reason for this years rate cuts is because the economy was not as strong as anticipated when rates were raised back in 2018. Powell told a dinner audience last night that the policy is well positioned to support a strong labor market and return to the feds target inflation level of 2 . Activist investors Starboard Value has taken a stake in cvs health the two sides have held talks but its unknown what type of changes starboard might be seeking at cvs and earnings just out from Electronics Retailer best buy. That company reporting quarterly profit from 113 a share from the consensus estimate of 1. 03. This is a stock that people have had a lot of questions about because of tariffs that have been taking place. Right now its up by 1. 8 . Former new york city mayor Michael Bloombergs president ial campaign is heating up the campaign will hit the ground with why the billionaire thinks hes the best candidate to go up against President Trump. The billionaire media mogul was in norfolk, virginia he stopped in at a coffee shop where he greeted voters and sat down with nancy guy, the delegate elect that he supported in the virginia race bloomberg will not be accepting private donations. They made a record breaking 31 million ad buy ahead of the official announcement. Lets talk about the bloomberg bid and race for the democratic nomination with our guest host today, eric cantor louisville, kentuckys mayor, mike fischer he is the cochair of Michael Bloombergs campaign great to see you both. Mr. Mayor, why dont we talk about why you are supporting Michael Bloomberg. Why you are chairing him. Michael is ready to go from day one. If ever weve had a capable candidate, its him. He took on new york city for 12 years, elected three different times and made this the greatest city in the world, and then over this past decade has spent his time trying to figure out how he can give his money away in helping causes all around america, all around the world. Hes ready to go from day one. Hes proven that he can unify people and thats really what the country needs right now, for us all to get on the same page and realize diversity is our strength and work together. Hes a pretty different candidate than the other 18 candidates running for the democratic nomination. Were you waiting to see what he did with this . What were you thinking about the other democrats that have been in the race to this point . Ive been kind of sitting on the sidelines, but when mike called and explained what he was thinking about doing and ive just always admired his work as a fellow mayor, im a business guy that happens to be a mayor its hard to build a great business like he has and have excellence in the Business World and running the city. So i think hes one of the most accomplished, competent people i constantly say it. However, there is an issue of how does he excite the base. You see it in terms of poll numbers unto themselves, the way he speaks. I know him so i like him thats not an issue, but to the larger public, thats a big lift well, i think thats the key, right . If people get to know Mike Bloomberg and they see most people are not going to get to know Mike Bloomberg on a onetoone basis if we get to know bloomberg, he wins. Mr. Mayor, i want to know this listen, theres a general election play here kevin cheeky was out yesterday saying the general elections about six states and its about 31 congressional districts in those states and thats how theyre going to win the problem is, how in the world, again, with all due respect, i have a lot of respect for Mike Bloomberg, how in the world does he get through the primary and the democratic side of things . Hes way too wealthy the base is way too woke i cannot imagine how that works. How does he get through the primary. This is the struggle that the democrats are going through in the primary right now. What we need is a center left that can win the primary and the general. You can see in the primary right now, thats the tension thats taking place in comes Mike Bloomberg with a resume that is extraordinarily unique this knock on him as being a billionaire doesnt make any sense. Heres a guy who grew up in a middle class family. Of course i agree but im on fire over here what do you do with the rest of the Democratic Base who has been supporting Elizabeth Warren and Bernie Sanders. When they look, what has mike been doing with his Foundation Look what hes been doing with climate, with gun safety, with population health. Almost all billionaires are giving away i mean, for me those arent the right causes for me but there are a lot of other billionaires that have signed the giving pledge that still get completely hammered, called useless, called freeloaders so it has nothing to do with giving the money away sure, theres a vast difference between a giving pledge and bloomberg philanthropies. Theres other billionaires that have given away money that are still being type cast as nasty billionaires. Totally different than mike in terms of really . Hes the best philanthropist if you were a mayor and saw how hes been working with mayors all over america. So hes the best . He puts his money where his heart is and he follows it up with action. You know what i think is very interesting about Mike Bloombergs entry in the race, it does Say Something about the what i see as a more bound list of candidates on the democratic side. Obviously there was an assessment here, im sure well polled and analyzed, that bloomberg said, hey, there is not a National Candidate here. Theres not someone who can excite the Democratic Base theyre just regional candidates even joe biden has suffered. Its the same commentary. An assessment of how bloomberg went through it. Lets say bloomberg gets the nomination lets forget what happens to that point how do you think he runs against trump . Its about pennsylvania, michigan, wisconsin, florida, north carolina, thats what theyre focused on im sure the Trump Campaign is as focused on. Ill tell you one thing, unlike the other democrats, Mike Bloomberg comes to the race and says, hey, trump is winning. Theyve recognized the fact that youve got to get out of this bubble in these coastal cities and say the heartland is for donald trump and im not so sure that Mike Bloomberg sells in the heartland. Lets get out of the the question to me is not just the heartland i actually i was telling joe, i got into this discussion yesterday with a young woman who couldnt even conceive of the idea of someone who has a billion dollars or more in this case of being the a lot more. Where do you hang out . That the idea of that kind of wealth unto itself was being argued to me disqualified. The new york times. What am i saying i know where you hang out. No, but the issue the on the merits of this discussion the question is how does he get over that . How does he take somebody who has that view, to the extent they do, its not a view i share. Completely. But its out there. How does he overcome that . Thats what campaigns are about. He has the resources to tell his story. Once the story is told, hes a middle class guy, done really good, giving his resources, most people dont know that they think of Mike Bloomberg as a big business guy they dont understand him as a guy with a big heart that fights for great social causes. Then i get then the next argument becomes about stop and frisk, right have you read any of the charles blow columns who say you cant apologize three days before youre running and think that anybody is going to give you credit for it. Im saying its on the left. That goes to the primary. That goes to the primary. Theres the primary. He jets off to bermuda on a private jet. What do good leaders do reflect on what is affecting. They apologize, they improve mike started the young mens initiative, it helped launch my brothers keepers with president obama and says heres how we invest in young men of color follow the money with him. See the heart. Some of the comments about women. What about the nanny state . Big gulfs. Im on the other side i said youre in the liberal this is new york city. He saved hundreds of thousands of lives with think about these suburban swing vote that everyone says now is in play. If were both arguing to pillar the guy from the right and the left, youre on the left youre on the left im coming at him from the right. Both sides. He has it coming from both sides. He has to protect so many flanks. This campaign is about threading the needle, no question about that. When you talk about population health, cigarettes, saving peoples lives, what hes done to fight the opioid scourage as people learn about mike, theyre going to say this is a fascinating guy that has helped thousands of people. Im going to take a look at him. How does he take on the economy when its the best economy in 50 years. That is a total wall street perspective there. When you come in from the heartland of america its about low income, wage earners in this country. Youre doing great. If youre in the middle class, youre struggling. Low income youre falling behind. Why is 3 1 2 unemployment the lowest minority unemployment in history, why is that a wall street you guys need to get out of this bubble youre in right here and talk to people on the street. Its 3 1 2 good or not you ask a low income how her life has improved. She says shes fallen behind you ask the lower income youve been president for 8 years theyve fallen further behind the wage increases are happening now. You need to get to main street. For eight years you could have talked to main street and they got nothing. That explains why the Democratic Party went further left. That explains what elected trump. Economic opportunity, the lack of it is the premiere issue. This is not a good time to run on the issue face it. How difficult is it to create a genuine grassroots thing on the ground or do you think you can do it top down thats what Elizabeth Warren has already come out. You have to do both, right . Mikes coming in late. His story has to get out there once his story gets out there, people will say, i want to get excited, learn more about him. Theres no question. This is an unusual way to come into a race. Right hes coming into the race because the democrats have not centered on a candidate right now and we need a center left candidate to win the general nomination mike can be that guy. Is he coming at this from the perspective of thinking all he wants to do is win the presidency or is he thinking if he can drag the Democratic Party further to the center that thats a success in itself well, i think, look, the issue is winning the presidency. Our country is fractured, theres no question about that we have to get somebody in the next four years whos going to pull the country together, restore the alliances so we can get the country back on track again in so many different ways. Thats the objective you have to win the primary obviously to do that i know enough primary voters are interested in that that theyre going to give mike a real hard look. Do you see Elizabeth Warren talking yesterday about having been through buying the election, im going out and talking to people. Bernie sanders talking about it. Hes going to get hammered. Thats what theyre going to say. Elizabeth warren is still out in the lead. Whats wrong with a guy im not saying that how do you do it legitimately. If you dont get any of the 63 million deplorables and you split hillarys 65 million thats your schtick on this. Schtick yeah. Wheres the other 60 million. You have to talk to the voters. You are going to get the deplorables or Elizabeth Warren . Bidens. Its an interesting tactic if you look at the way the democratic primary works because its proportional allocation of delegates. I assume thats the strategy to try and get through the primaries because unlike in 16 when my party went and had winner take all even for those with the plurality at this, maybe thats what it is. I think you go for the never trumpers you would appeal to people, republicans who dont like some of the those are the main ones i think you get more of them than democrats potentially. Voter turnout in both primary and general election is going to be very unusual in this cycle. A lot is yet to be told there. Mike bloomberg is not somebody to be underestimated. What happens . How will you judge success along the way as youre watching this, you think, this is what we need to get done here is super tuesday the big goal . Yeah, obviously all of the resources are going into that. Running a National Campaign from day one. Mike is running in places where no other democrat is running right now. Super tuesday is going to be a big test. What about the other mayor, you dont think the other mayor mayor buttigieg different guy different Life Experience than mike mike is ready to go from day one in terms ofbusiness experience and big city. Its just you have all the other candidates are a lot of them, all good people, all of them pounding the streets, setting up organizations, talking to voters, taking 85,000 selfies, three debates that theyve already been in. They have someone, a billionaire from new york city saying none of you are good enough, let me handle this is not it doesnt look good and its not i dont think its going to work. This is what politics are all about. Putting different points of view out there. This is the beginning of a fracture on the democratic side. Im glad hes talking about it if its bernie or Elizabeth Warren and not your choice, do you vote for them over President Trump . Yes, absolutely our country is in a very difficult spot right now i dont think were going to get to that point, but America Needs to pull itself back together the way that americas tearing itself apart from within is not a sustainable path i dont think youre going to see either one of those, okay but you would if you did if it got to that point. To support mayor bloomberg you have to be a relative sort of moderate democrat. I know this guy who happens to be mayor right now. Right so if we had much higher unemployment and a much lower stock market but we all felt like we were together, would that be your answer as to why this cup be try is in such horrible shape right now what you need is you need a country fighting together to go down the same path and giving everybody Economic Opportunity you can build a great economy at the same time. Thank you very much, mayor. Thank you, guys. Eric cantor is with us. Well have much more with eric when we come back. Louisville. Good Basketball Team this year, right . Great team. Chris mack . Im from cincinnati and i went to Saint Xavier High School although chris mack is awesome hes going to do great at louisville you have by the way, congratulations on becoming a grandfather. Dont leave yet dont leave yet. Were still on did you know were still on . No. Were still on. Were just talking about brandnew grandfather. Its week i have Virginia Tech over Michigan State high five. High five thank you before we head to break, stocks at 20. Go hokies stocks coming off another recordmaking day with the s p and nasdaq hitting record highs. These are all wall street things the dow still triple digits. It was a huge merger monday. More than 50 billion in deals topping that list. The 26 billion tie up between Charles Schwab and t. D. Ameritrade well discuss the end of the year deal kimang and rush. Squawk box coming right back it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. Welcome back, everybody. Merger monday. We have leslie picker here novartis is purchasing the Medicines Company and ebay is selling stubhub to viagogo megadeals are larger than 10 billion down 37 worldwide from last year during the summer months in the u. S. Deal making year to date is at its highest level since the same period in 2015. More than 1. 8 trillion worth of u. S. Targets have agreed to be sold that compares to 1. 7 trillion during the same period last year globally though some industry watchers are expecting a slowdown in 2020 as the trade war, recession concerns and of course the u. S. President ial election causes ceos to take a pause. Law firm Baker Mckenzie is predicting deal making to plunge 25 next year as a result, guys. Thank you for that. Were going to continue this conversation about deal making and this what seems like a deal making rush. Want to turn to our guest host who is in the deal making business now eric cantor, hes vice chairman, managing director at molus and company. What do you think is driving all of this exactly . Is it an end of the year thing Something Else happening i would say maybe there is some impetus to get deals to happen now there is, i think, on the horizon some uncertainty around mergers and trust law, regulatory issues that could arise if the election goes the wrong way. I think that that is something certainly that were telling clients. In the world of mna, weve said from the very beginning that this year starting slower and the you have ceos and boards saying to you handicap i assume they come to you saying handicap whats going to happen in washington next november . Very difficult to have a crystal ball we have a whole discussion there about what will happen right. Clearly there is some regulatory headwinds i mean, youve got the Elizabeth Warren agenda continuing to crank up lets say the democrats lose theyre not going to just go away, theyre going to triple down to the state level. We already see that going on now where theres a United Democratic hold on states, my state being one of them. We are bracing for that storm, that antibusiness storm thats going to come in when the democrats are in charge. So i dont think that the headwinds are going to let up any, but i think from what were telling clients in terms of the mna prospect, certainly the elements that weve seen in place all year, whether its the amount of dry powder sitting there in the sponsor community, whether its this churn in terms of businesses that used to not be up for sale, for every 30 years, every 5 to 7 years. I also think theres some great businesses that were seeing now in noncyclical sectors that have fetched some pretty impressive multiples and so, you know, i think that the cyclical sectors were already seeing a lot more scrutiny being focused on those and i feel a lot of that has to do with this uncertainty that were going to experience next year okay. Youre sticking around so weve got a lot more to talk with you about. Want to thank you. Nice to see you. Happy thanksgiving thank you. Will we see you before thanksgiving really. Im working. Ill be here. Siri is here as well. Siri is here youre here until 8 need you a little longer can i get you a 17 ounce sugary drink . Id have to pay a tax. No, youre allowed still. Thank god that coming up just a day after fed chair jay powell said the federal bank is strongly committed to maintaining 2 inflation well hear from dallas fed rm Robert Kaplan thats straight ahead. Squawk box coming right back coach saban, how is aflacs Program Different from Health Insurance . Well aflac gives you money directly, for things Health Insurance doesnt cover. Aflac we put together a little highlight reel for you. Heres aflac helping you with your deductible. Copays. Out of pocket costs. You look good paying bills. Get to know us at aflac. Com doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Wat t. Rowe price, hundreds of our experts go beyond the numbers to examine Investment Opportunities firsthand. Like a biotech firm that engineers a patients own cells to fight cancer. This is strategic investing. Because your investments deserve the full story. T. Rowe price. Invest with confidence. Squawk box this morning including stocks on the move best buy results are out exporting goods results expected shortly. Well run you through those numbers. Up next, dallas fed president Robert Kaplan is going to join steve esn limain a squawk box exclusive interview. As a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Welcome back to squawk box. Jay powell signaled that Interest Rates are unlikely to rise any time soon saying the central bank remains firmly committed to meeting inflaigs goa goals. Good morning, i am here with Robert Kaplan. President kaplan, lets start off with the outlook for growth. Yeah. I want to talk about short term and longer term our cnbc rapid update running at 1. 5 for the Fourth Quarter. Thats the median tracking forecast does this seem like the low to you in the growth slowdown is it up from here yeah. We think Fourth Quarter is going to be weak, we at the dallas fed. We think we have a good chance to grow at 2 next year. One of the reasons the Fourth Quarter is going to be weak, we believe, is probably a significant inventory adjustment which might be as much as half a percent or more of gdp. Just means people have been destocking probably the reason they were destocking is there was a lot of pessimism over the last number of months about future growth prospects. So businesses destocked. Well see that show up in the Fourth Quarter but we think things will stabilize. Weve got a good chance to grow at 2 next year. So lets go to the long term part of it is 2 the runway we cant get out of it we cant go below it we cant get above it. A lot of folks want us to grow id like to grow more heres the issue weve got some structural issues that are not going away. Aging demographics aging work force which means slowing work force growth and our productivity has been sluggish, mainly we think at the dallas fed because of lack of investment in skills training and education and also this sluggish cap exthex that were g due to deglobalization is reducing productivity. So gdp growth is made up of growth in the work force and growth in productivity we think of the dallas fed potential gdp growth is 1 . 75 to 2 . If we dont make policy changes over the next five to ten years it will slowly decline. Less than that . It will, yes. What if we were to, for example, stop this deglobalization which i think is a euphemism for the trade war or the other way around isnt that somehow subtracting from growth right now . Yeah. I think weak manufacturing weak Global Growth weak Business Investment all relate to uncertainty regarding trade. And if that got stabilized, i think wed have a chance to see those measures improve. How fast could the economy grow if we put the trade war behind us . Im still of the view and were of the view potential in the u. S. Is around 2 and for people who are disappointed in that, im disappointed in that and we should be because were very highly leveraged as a country, particularly at the government level, but if you want to grow faster, we need policies away from Monetary Policy Monetary Policy is not going to address this if you need you need infrastructure spending, you need immigration reform, you need policies that improve education, skills training lets talk about Monetary Policy is the mid cycle adjustment over for me, yes, it is for the time being i think policy is in the right place right now. And how do you come to that conclusion it was my view back in june that we needed some adjustment and one of the tells of that for me was the shape of the yield curve. And a lot of people say the yield curve doesnt mean what it used to. I dont actually agree with that i think when you have the fed funds rate above every rate along the curve, it was a signal to me it has to be adjusted. We now have a more normally shaped yield curve and that to me is reinforcing the fact that i think 1. 5 to 1. 75 on the fed funds rate is about right. Id need to see some Material Change in the outlook to cause me to want to adjust that rate lets talk about the risks. The fed was raising rates in 2018. Yeah. And then it cut them. Yeah. Sort of two steps forward, one step backward or one step forward two steps backward yeah. In any event, is it okay to run the economy at a funds rate of 1. 5 to 1. 75 are there risks being created, for example in debt . Yeah. When we run rates that are historically low, you create low balances thats a nice way of saying stock market pes get higher, cap rates on real estate get lower and you worry about consumers leveraging up and buying more goods and services with leverage and so im watching all of that. But on the other hand, we have to accept if potential growth is 1. 75 to 2, fed funds rate is going to be historically lower than were accustomed. Look at the 10year treasury over the last year it went from 3. 25 to 1. 75, i think the markets are telling us that if prospects for growth are this sluggish, youre just going to have lower rates than weve had historically. This is one of the cool things about squawk box, we have leader cantore on the desk. Go for it. President , its good to see you. Good to see you, too, eric. Good to see you this morning. Theres been a lot of coverage on the increasing indebtedness on the part of Corporate America. Yeah. Theres been some scrutiny on the clo markets, and just wanted to understand what you think systemically that that poses, whether there is some risk i mean, theres folks out there who have a namm lnalogized to d the ombs market and how does that fit into the slow growth environment and the potential for rates to either go up or what happens if they do with all of this indebtedness so to your point weve got a record level of corporate debt to be specific bbb debt has tripled over the last few years. Leveraged loans as well as dd and d debt has grown dramatically its not like 0809, the problem then was the lenders were leveraged right now the buyers are leveraged. My concern is if you have a downturn where we grow more slowly, it means that this amount of debt could be an amplifier. And what i mean by amplifier, higher percentage of cash flows are being spent on servicing debt i dont think the clo market will be the place the problem occurs because i think the clo structure for your viewers, that was the traunching of bank loans. I think it will fare reasonably well in the future the thing i am worried about is if you get two or three bbb downgrades to bb or b, that could lead to a rapid widening in credit spreads which could then lead to a rapid tightening in financial conditions. Were more vulnerable to that now with this amount of corporate debt you need to just provide the background you spent a little bit of time at Goldman Sachs where this sort of area is not something youre unfamiliar with. Right 23 years, yeah. Let me go to this issue here of worker shortages. You have a sort of different idea about the Capital Spending decline, and youve heard from some of your folks in the dallas district. Yeah. Which is not a small district. Yeah. That one Reason Companies arent investing is because they cant find the workers for it. So its the secondary reason. The first reason i hear not only in texas but nationwide is policy uncertainty generally its not just the trade dispute with china, its trade uncertainties globally the threat against mexico that happened 2 1 2 months ago even though it didnt occur logistics in supply chain. Auto tariffs against europe. It creates enough uncertainty that most businesses have said were going to put capex on hold the second reason is they cant find workers, engineers, Service Oriented workers when i ask them what are you doing about it theyre saying, were just delaying cap ex, were slowing cap ex were not sure if we can staff some of these projects i think its a secondary reason. I think its worth noting we are very tight in the labor force. Were getting under represented groups in. I hope that continues but we should recognize, weve got a historically tight labor force. Robert kaplan, dallas fed chairman thank you for joining us good to talk to you. Becky, back to you in nasdaq. Steve liesman. When we come back, this mornings Market Movers and then senator warrens tax plan isnt just for the ultra rich. Robert frank will bring us that story. Squawk box will be right back. It is nice. Nice . This is the mostawarded minivan three years in a row. The van just talked. Sales guy, give em the employee price, then gimme your foot. Handsfree sliding doors, stow n go seats, man, yall getting a hook up and yall dont even work here. Pacificaaaaa welcome back to squawk box. The consumer remains in focus for a lot of investors given this mornings bigger earnings reports. Were going to start with shares of best buy which are up 4 on roughly 150,000 shares of premarket volume the Consumer Electronics reporting better than expected profit and sales they had strength in sales in things like appliances, headphones, Tablet Computers and services that out weighed weakness in gaming and home sales. They are very excited about the upcoming holiday season. Now up are shares of Dicks Sporting Goods 75,000 shares of volume. They posted better than expected profits and sales and better than expected sales growth it boosted its full years earnings guidance. Hard lined goods, apparel and footwear well end with shares of Burlington Stores which are higher by around 1. 5 . Roughly 60,000 shares of premarket volume. Reporting better than expected profits on sales that narrowly missed estimates better than expected it boosted its full year profit outlook. Three specs of green back over the board. Dom chu, thank you, sir. When we return, Elizabeth Warren said she wants to tax the rich to give everyone else a chance thats what shes saying her definition of rich seems to be falling rapidly robert frank is going to join us with a preview of what is to come r roberto. She says shes taxing the 1 of the 1 . Americans making 250,000 or more would also get a tax hike and could see rates as high as 67 look at what it could mean for your taxes and your investments coming up after the break. Portu. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Nongmo, made with naturally sundown vitamins are all sourced colors and flavors and are gluten dairy free. Theyre all clean. All the time. Even if sometimes were not. Sundown vitamins. All clean. All the time. Im not your charity case. I am not your excuse to buy a new dress for the annual fundraiser. I am not the poster child for your big donation. I am out of debts and in my own home. I am off opioids. Im graduating on time and on my way to a great job. I am. We are. What it means to live united. Welcome back, everybody. Senator warrens plan to target wealth for more taxes may include another big segment of the middle class robert frank joins us with more on the story good morning, becky on the campaign trail Elizabeth Warren said she would raise taxes only on the rich so when you make it big, when you make it really big, when you make it top 1 10 of 1 big pitch in 2 cents so everybody else gets a chance to make it. Her wealth tax along with that, shes proposed a dozen other tax increases including one that would raise taxes on those making 250,000 a year her Social Security plan includes a payroll tax of 14. 8 on those making 250,000 or more. This would affect more than 5 million american households. Now a taxpayer making 350,000 would pay an extra 14,800 a year in income tax. She would also limit deductions for those making about 320,000 of course, restore the old top tax rate of 39. 6 . So the top federal income tax would top 54 . Back to 1971 levels and for those living in new york city or california the combined federal and state taxes would be over 67 . And by the way, its not just wage income, Investment Income or Capital Gains would be taxed at the same rate even when you dont sell Social Security taxes are capped at about 133,000. Bernie sanders, joe biden, pete bought g buttigieg would raise that raising taxes for those making more than 133,000 a year. Would all of them get rid of the cap or some of them would just raise the cap so you pay for it a little longer some of them would get rid of it some of them start it again at 250 and they all have different rates. There is this oddity where Social Security payroll taxes go up to 133, it will go up a little bit more next year and then it stops. Its not an oddity. It starts out as an Insurance Plan they didnt want to call it a tax because they didnt think they would get it passed throug congress at that point. Oddity, its not progressive, as progressive thats what they many democrats, including them in washington want to change it. It was designed that way by fdr. Right. What about the enforcement . I thought it was a big issue listen, this stuff is ridiculous it will kill the economy god forbid this is ever passed but what about enforcing this kind of wealth tax theres other countries that have gone through this and its basically said you cant to it yeah. Well, part of warrens plan is to spend hundreds of billions of dollars over ten years for better irs enforcement and better irs auditors and more staffing that is a constant problem that we talk about a lot where audits for the wealthy has fallen she would spent a lot of money a lot of the proceeds for the wealth tax would go into enforcing the wealth tax. The illliquid investments thats tough. Lets bring in our guest who is a cnbc contributor so probably up in one of these higher brackets just for that. Senator heidi heitkamp, former senator of north dakota. Now one of the country founding Board Members and as i said cnbc contributor. Senator, its good to probably not that did not put you in the higher bracket, did it the cnbc zsh no, nah. No, it did not. Okay. No. No thats all right. You heard roberts report. Your party has a lot of programs that they would like to introduce obviously that would need to be introduced. Whats your idea about which new programs are most important and the way to pay for those programs what kind of tax what do you think . I think the first thing you could do is not pay for them, which is apparently in vogue in washington, d. C. , on both sides of the aisle. Thats an add howhohome hy attack. Thats nastiness. The roman emperor. Okay. You have on the record. But what would lets separate. Lets come together, heidi. Lets come together. You betcha. What do we do well, lets separate Social Security from income taxes for a moment okay. Because Social Security, theres a lot of discussion about raising the cap. In fact, theres a bipartisan proposal that donut holes the cap. You know, stops it at a certain point and then picks it up when the firefighters so the firefighters would continue to get a break but over like 250, thats pretty popular. Eliminating the cap to try and bring solvency to the social Security System. And so thats a separate issue i think than the issue of what to do with income taxes right i think andrews done a great job on your program talking about all the ways the income tax structure, as we have it today, benefits the rich and how you can avoid taxation with stepped up bases, how you can avoid it by simply transferring your wealth to thank you, heidi. A nonprofit when you look at kind of the strategy, you could do a lot of things to equalize the income tax structure without all these kind of crazy ideas. Ill ask you a question that eric just asked me during the commercial break its a very thoughtful and smart question, which is he said, look thats high praise. The elites, intellectuals, whatever you want to call them understand these issues, 1031 exchanges, carried interest, step up basis on debt. All of these things i can go on and on and on. I think the argument you were making to me was that the larger populus, if you will, that doesnt really change the you know, move the needle for them and whether that is right. Well so i think its so much easier to say 2 cents were going to charge you 2 cents and that creates a whole nother infrastructure. You know, all the states used to have a personal property tax they abandoned it for a lot of reasons, mostly enforcement saying in many ways its inequitable but it also is an enforcement nightmare. To have a national personal property taxi think reintroduces a bad idea that the states got rid of years ago and that many countries tried and have failed. And so lets talk about like trusting the people to understand that the tax code does have these loopholes and we can change it, but its just not the sound bite that people want to say, oh, yeah, were going to get rid of like kind exchanges a and were going to get rid of carried interest oh, by the way, we dont liked stepped up basis and by that time peoples eyes glaze over. But its important to understand that the real challenge here is not to kind of recreate a sound bite but its to make the system more equitable and the question that i would ask back to all of you is we have growing income and wealth disparity in this country. How do we fix that problem and i know a lot of you guys will say, well, you just grow the income earning opportunities and shorten the number in the labor supply and that will grow the income so far that hasnt worked very well and so as you were talking before, we do have a labor shortage but yet we have not seen the kind of wage growth or Business Investment that would invest in that wage growth that may grow those big programs. Heidi, good morning, by the way. Hey, good morning, eric how do you how do you do that i mean, first of all, i think theres a discussion we had about this disparity of wealth and income and whether its cyclical just like capitalism is cyclical, but what are the priorities in terms of pennspeng because Elizabeth Warren has a plan for everything as we know theres a price to be paid for a plan for everything so what are the priorities how would you spend that money if thats what youre advocating to close the gap well, one of the things that i think is its a longterm systemic challenge we need to invest in Early Childhood education. We need to invest in keeping people healthier longer. We need to do the things that we should be doing on infrastructure which hopefully will grow the economy and spread that wealth kind of consistently across all levels. But the real challenge that you have is that were in a changing economy. Weve gone from manufacturing, yes, mr. President , we are not going to be the Manufacturing Center that we were back in the 50s weve transitioned to a Service Economy but we havent transitioned our Education System to transition to the high paying opportunities that are much broader than simply sitting on the factory line and riveting, you know, a rivet into an automobile. Okay. Senator, have i highlighted anything effectively in as youve been watching is it really just andrew doing a good job i mean, do i have do i ever do anything good joe, youre there for color commentary, arent you, not really substance okay. You betcha okay. Where are you coming from us today, heidi im in the bismarck. Near fargo . Good you betcha okay thank you, senator also, we want to thank eric cantor for spending the hour with us. Always a pleasure. When we come back, the battle of trucks heating up. Well talk more about ford, tesla, the tug of war of words Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. Complaining the game Michael Bloomberg enters the game how the deep pockets will create problems for the 49ers. Michael bloomberg is making a bet. He doesnt need people, he only needs bags and bags of money. And road warriors the tug of war between teslas cyber truck and the ford f150. The new challenge from elon musk the final hour of squawk box begins right now. Good morning and welcome to squawk box here on cnbc. Live from the Nasdaq Market site in times square. Its hustle and bustle oh, my god, whats happening. Weve got an audience. Happy thanksgiving. Along with becky quick, Andrew Ross Sorkin crowd pleaser. U. S. Equity features are flat, up 16 on the dow up now on the nasdaq take a little over take this show outdoors. Yeah, we could. Were in times square. Need some barriers please. At your own perfect ril peril we are green. Just fractionally. Never a lot after trading at alltime highs the ten year is at 1. 74. Lets get you caught up on stories investors will be talking about. Shares of best buy reporting better than expected earnings. Best buy raised the full year forecast and that was enough to get wall street excited about things. It is appearing more than likely that a phase one agreement could slide into the new year. Two housingrelated reports are on todays economical lender the case schilling report on home prices is out in under an hours time. 10 a. M. Eastern time well get the government report on new home sales. Want to get over to steve liesman. He just finished up the exclusive interview with dallas fed chairman kaplan. Interesting interview we talked about where we are right now and where were going. Kaplan said that the Fourth Quarter he expects to be weak largely because of an inventory adjustment i said, where are we going he said, we have a chance for a 2 growth. Heres what he said about potential growth in the United States im still of the view and were of the view potential in the u. S. Is around 2 and for people who are disappointed in that, im disappointed in that we should be the immigration reform. We have debt creating systemic work and it could amplify it. Steve, stay with us for more on the fed what steve heard, joining us is Nathan Scheetz nathan, good to see you. Good to be here lets talk about this do you think 2 is the best we can do in terms of growth in the United States . So 2 is a good benchmark for thinking about growth over the next year and beyond i continue to believe that there is some up side to that, and the kinds of policies that president kaplan mentioned, infrastructure and the like would be very constructive but more imminently this has been a one engine expansion in the United States where its been the consumer, consumer, consumer and at some point are we going to see more Business Investment . And i think this is why its so crucial that we get some resolution on the trade front. The corporates arent going to invest when they dont know what the International Picture in terms of openness and trade looks like. You know, corporations have been sitting on their hands to a certain extent is there a point where they have to say, okay, we throw in the towel and were going to invest because there is demand here. So we havent seen that point yet. I was hoping that they would they would reach that point and they havent and to be clear, i would say through the cycle Business Investment has been slow, its been lackluster. It hasnt been terrible, but it still feels given the strength of Corporate America that there is another cylinder yet that could that could kick in. But their Financial Resources are using more for share buy backs and to some extent for acquisitions. Steve, do you have a question, too . Nathan, i want to do simple math the politicians do growth in round numbers but economists dont have to do that. 3 , 4 , 5 , if we could do 2. 5 , that would be a pretty big victory in a developed economy like the United States if i get rid of the trade problem and i get allow the benefits of the Corporate Tax cuts to play through the economy, can i get to 2. 3, 2. 5 and what kind of improvement would that be to the u. S. Economy . I think that is exactly the dimension improvement thats plausible, that if we got some more investment. Is that going to take us to 3 . I just dont see it. Thats tough. You know, as you say, 2. 3, 2. 5, Something Like that, and you aggregate that up over a decade its money. Its significant. Its real money yeah. What about the risks that kaplan talked about, this corporate debt issue he said the nation essentially is over leveraged. Whats your take on that so i believe the consumer section aggregate is in very good shape thats an important caveat on this you know, there are some leverage issues in the corporate sector, particularly in the bbb space. But our sense is that these firms are largely bbb by choice. They make decisionsto put the leverage on their Balance Sheet and many of them are working off that leverage. And as a result of that the high grade investment returns this year have been on fire as these firms have improved their leverage picture nathan, you said the trade war is something thats looming over corporations, but weve maybe taken on the chinese in a way we havent in the past do you want to see that just tamped down so that corporations will spend or would you like to see if we push it longer if we make progress on that front and reach a fairer agreement with the chinese . So i think it would be wonderful if we could reach some kind of resolution on these issues with china. These are issues weve been negotiating with the chinese for the last decade plus the question is whether this vigorous trade war that President Trump is pursuing is the best way to get that youtd come and i would say that the alternative would be a multilateral approach the complaints that the u. S. Has with china, many other countries have with china. Lets use that multilateral leverage and do it in a coordinated way to press the chinese to make these necessary reforms. Its just not clear that hes getting any more traction than anyones ever gotten before. Lets talk a little bit about what you have been hearing not only from kaplan today but also what we heard last night from jay powell it sounds like they are in a big way trying to hand off the baton to say, okay, washington, congress, its your turn to come up with some sort of way of funding the economy here. So i broadly agree with powells characterization that the glass for the economy is more than half full. This is this is a good economy. The fact that were still growing at 2 . We have low unemployment rate. Its the 11th year of an expansion. Theres a lot to like. Theres also more work to be done and i think the feds right. The fed has cut rates. Its moved policy to a stimulative position Monetary Policy is appropriate and now we need trade policy and fiscal policy, which im not exactly sure what fiscal policy looks like right now im not saying that we ought to have that we ought to have more spending. Impeachment. It may be that what we do is we need a strategy for longer term sustainability. And that may evolve over time, even some increases in taxes, but there is fiscal work to be done it also involves infrastructure as we mentioned. Nathan, thank you for coming in today its great to see you. Steve, thank you. Coming up, as retail giants gear up for black friday, black friday yup. Retail giants, going to be a retail bonanza on cnbc on friday. Huge. Black friday. Becky and i will be here. In the hot seat. Well be buying, too. Set your doddfrank vrs buying or i hadnt thought about it but maybe. Set the alarm clocks. Gather the family around maybe even have some leftover turkey that morning and pie. Lets not forget about the little guy next, were going to talk about Small Business saturday which follows black friday. Little guy, the big guy. We have the Small Business Association Acting commissioner joining us after the break and elon musk putting the cyber truck to the test but no broken windows this time around there it is. Whoa i dont know, man. Look at how funky that other thing looks if you just put yourself objectively thats not are gat looking vehicle either thats coming up right after this as a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Im not really a, i thought wall street guy. Ns. Ptech students around the world. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade welcome back to squawk box. Take a look at the futures ahead of the market open dow looks like it would open 28. 5 points higher nasdaq 5 points and dow 1. 5. Tom barrack is under fire. Hes being pressed by an activist investor to resign pressing the company to fire him. Blackwells capital sending a letter that just came out to Colony Capital saying, quote, with mr. Barracks track record and personal issues, no reasonable, phi dufiduciary woue him. Hes clouded by two congressional investigations, one reported criminal investigation into his political and personal activities. He destroyed more than 775 million just in the last nine months alone as the ceo of the company. Shares of Colony Capital are down 16 over the past year. In addition to calling for barrack to be ousted, blackwell is seeking to replace i believe there are two Board Members, i believe there are four Board Members. Sell assets, repurchase shares we should say mr. Barrack had already planned a Succession Plan with another individual who they say is actually one of his Close Friends who he plays polo with so they go after him for that. They say barrack is now technically residing in aspen. They say how is it possible hes living in aspen when the company is based in california its remarkable letter there has been a back and forth between barrack and blackwells for quite some time. There was a stand still agreement that blackwell has had that i believe ended over the summer where they approached them before on this. They dont i should say blackwells does not own that much of this company they only own 1. 85 of the company. 2. 3 billion market cap so they have, what, 40 million in the company the question is whether they can influence enough other investors who are unhappy with look, i mean, genuinely the stock has not performed. There is a reasonable argument to make the stock is not performing, that is 100 true. The question is whether they can get enough other investors to get on board with a campaign effectively against barrack. Hes already laid out a Succession Plan. Are they on board with the Succession Plan . They want it to happen sooner . No, they dont like this Succession Plan either whether that is enough, i dont know they say the chosen successor has never been in this industry, which is true to some degree and that hes a friend too close to barrack, this is not some kind of separate person. Thats supposed to happen, by the ay, not until 2021 so lets see what happens. Well see what barrack comes back with. As we head into the busiest shopping season of the year and the show on friday, our next guest is focused on supporting independently owned businesses across the u. S lets welcome chris pilkerton. Small Business Associations acting business administrator. The tenth annual Small Business saturday is coming up november 30th thanks for joining us. Hows the state of Small Business in the United States right now . It must be a positive story for you to tell . Its a very positive story. Thanks for having me Small Business saturday is really a celebration of what Small Businesses do all year long as you mentioned, it started ten years ago in 2010 and since that time consumers have spent 100 billion on Small Business saturday and just last year in 2018 over 100 million americans participated the best part about it is that 67 cents of every dollar that folks spend locally goes to stay in that community and support initiatives like education and public safety. And Small Business are at the forefront of it. What in recent years has either and im not just talking about this saturday, but Small Business in general, do Interest Rates step in lower Interest Rates more access to capital looser Credit Centers . What is it that its such an important engine for the overall economy. Sure. Sure. Whats been helping and what still needs work sure. So one of the things thats very key, its been demonstrated through recent surveys is Small Business optimism has never been higher thats a byproduct of the great economy, of the historically low unemployment rates as well as the job opportunities. We see millions of jobs across the country and with those jobs that are available we need Work Force Training associated with it and so the sba has been working closely with the administration, our partners, the department of labor and department of education to try to find those workers and skill and reskill those workers. In fact, the sba recently did a maker space competition where we awarded job training dollars to different maker spaces that were training folks in various areas across the country and more importantly to the specific jobs that were available in those areas. So we need more training. Does that mean that there is a shortage of workers for Small Business ventures at this point . Or the right workers with the right skills so one of the great things that i get to do in this job is travel around the country and whether its meeting with a fifth generation ohio fire truck manufacturer or going to albuquerque, new mexico, and meeting a veteran owned Small Business that makes custom plastic toys for lions and tigers and bears across zoos all across the world, there is a sense that folks want to continue to find those people that have those skills and so what were doing at the sba, as i mentioned, is working really closely with labor to figure out ways where we can get that training to folks and i think most importantly, you know, usmca is one of these opportunities that Small Businesses are looking forward to theyre excited that this president is pushing forward, just not on the economy but on opportunities forex ports as well in the u. S. In the usmca theres actually for the first time in history a Small Business chapter dedicated to Small Businesses i. P. Protections and cutting red tape Small Businesses are here domestically but theyre exporting also do you have Small Businesses needing to pay people more we see some wage gains which might not be great for Small Businesses in terms of margins, but its good for everybody else if we get some wage gains in that sector of the economy are you seeing that . Is it tight enough to generate that so what im hearing anecdotally when i go across the country is people are looking for more Business Opportunities and with those Business Opportunities those wage gains are there because theyre picking up more contracts. For example, i was at a maker space in philadelphia and there was Construction Companies there who were utilizing some of this equipment that was too expensive for them to have, laser cutters, 3d cutters, printers, they were teaching them how to use the equipment. With those extra workers they were able to apply for more contracts and employ those people and they had firsthand knowledge that those people could actually have the skills to conduct the work that needed to be done. Okay. This saturday, Small Business day. So go into your community and buy some stuff from a Small Business. Go to sba. Gov and shop small. Thank you we appreciate it good luck. When we come back, teslas cyber truck versus fords f150. The tug of war thats gone viral and now more challenges are being made well have that story next right now though as we head to break, check out the futures. Looks like were in green even after all the major averages closed at new records yesterday. Dow futures up by 30 points. S p up by 1. The nasdaq up by 4 servicenow pr workflows in the cloud, huh . Mmhm. Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Welcome back to squawk box, everybody. The futures this morning indicated a little bit higher. Dow futures up 21 points after gaining almost 200 points yesterday. Nasdaq was the biggest gainer up by 1. 3 . This morning it is up fractionally. The viral video tug of war between teslas cyber truck and fords f150 pickup generating some buzz and some controversy that video released by elon musk days after the review showed teslas vehicle pulling the ford f150 up a hill. This prompted a ford ceo to a challenge. In the meantime Neil Degrasse tyson said if the tesla truck is in rear wheel drive then it would only offer mild traction he suggested musk redo the test with a fully loaded f150. Musk agreed and said he would aim to do this next week people were talking last week how there was slack in that. Normally when you do a pull off you would not have any slack there. You dont get the running start from it in the link between the two. Is this incentive to buy the vehicle . Its incentive to get more free advertising. For us to talk about it, thats for sure. That is for sure. Yeah. Not going to play no. I wonder if degrasse what if it was on mars, would a Different Gravitational pull have more on that . Im surprised he weighed in on that, something in the rear of the truck do we need a physicist . I dont know. We need to be cast in blade runner to get this car. Is it blade runner. Its mad max. Those are retrofitted old trucks. That looks like you threw some pieces of steel on top of it. The fire. Thats a little mad max. Coming up when we return, a lot more on squawk box, what are some of the early polls have to say about Michael Bloombergs run for president. Were going to show you. Frank luntz and bradley tusk who worked on bloombergs Mayoral Campaign right here in new york city going to join us after the break with a look inside the Campaign Head to a break, take a look at u. S. Equity futures. Most people think of verizon as a reliable phone company. woman but to businesses, were a reliable partner. We Keep Companies ready for whats next. man we weave security into their business. Virtualize their operations. woman and build ai customer experiences. We also keep them ready for the next big opportunity. Like 5g. Almost all the fortune 500 partner with us. woman when it comes to digital transformation. Verizon keeps business ready. But a Company Develops a way by tto actually attack it. In, what drew me to Capital Allocation in Health Sciences was the potential to help many people through investments that help fund medical innovation. My team and i often choose to invest at the very early stages of human trials. Investing lets me use everything ive learned as a doctor to help make a positive impact. So thats why i go beyond the numbers. The two companies, they say, expect a final pact to be signed within a few weeks the combination of those two would create the fourth largest automaker. Alibaba made a successful hong kong debut this morning it was the largest stock sale and they jumped by 6. 6 in their debut session. And a judge has ordered cbs to turn over records regarding its merger deal with viacom. Theyre looking to see if the deal unfairly benefitted sherry red stone who benefits both companies. Michael bloomberg kicking off his bid for the president ial campaign hosting the first event on monday Northern Virginia saying hes willing to use his own fortune to take on President Trump senator Elizabeth Warren wasting no time for blasting him for what she calls buying the election. Michael bloomberg is making a bet about democracy in 2020. He doesnt need people, he only needs bags and bags of money and if you get out and knock on 1,000 doors, hell just spend another 37 million to flood the airways and thats how he plans to buy a nomination in the Democratic Party i think hes fundamentally wrong. Yeah, right were now joined by bradley tusk, founder of Tusk Ventures and in washington, frank luntz. Frank, the mayor is out there now. The former mayor is now out there campaigning on the trail for the first time youre seeing the blowback already from some of the leading democrats in the fields and the question i have is in terms of how you think the mayor can or cant, i dont know where you land ultimately, capture that Enthusiasm Gap between the sort of very, very left and this sort of moderate left. Your response to Elizabeth Warren, shes trying to buy the electi election shes offering medicare for all, offering free medical care for immigrants, shes offering free tuition and free everything. So is Bernie Sanders if thats not trying to buy the election, i dont know what is as far as bloomberg, in south carolina, nevada, iowa, New Hampshire, the first four states, that represents 4 of the democratic delegates the week after that, march 3rd, which is super tuesday, it will be almost 40 of the delegates chosen Mike Bloomberg has the money and the time to make a difference in those states these other candidates are spending tens of millions of dollars on just 4 of the electorate bloomberg will have the opportunity to make investments in these other states when all the other candidates are literally bankrupt thats the positive for him. The negative for him is that democrats arent asking for another billionaire to run theyre not giving steyer, tom steyer in this race, theyre not giving him significant support to be blunt, democrats dont like millionaires and billionaires it will be very hard for bloomberg to reach that majority hes going to have to draw upon independents and republicans who can vote in half of the super tuesday contests. Although anybody can see the difference between tom steyer and Mike Bloomberg they are billionaires but thats the only similarity between them. Bradley, what do you think the mayor has to do to overcome this issue of folks out there who just say by being a billionaire unto itself that is a disqualifying event . Ultimately we have to frame this election about do you want to let someone whos ideologically pure but loses to trump in reelection or do you want someone who can win in november if democratic voters prefer to have someone who can be the most woke on twitter, thats not going to be Mike Bloomberg, thats warren or if they want someone to win they want mike. Democrats are saying this one is going to have a better chance at beating trump and therefore im going to support that one . I think its not that complicated when someone like warren is offering free medicare for all, college tuition, all of these things and embracing socialism in a de facto way, voters understand that well enough to say, okay, how does this match up against trump . Theyre hyper aware of who trump is if they dont want him there, theyre thinking whos best fit to replace him in a general election frank, isnt there some statistic if you didnt do well in either iowa or New Hampshire or finish in the top three youve never had a nominee its a totally different ball game with a guy who can spend 150 million though. I mean, should we look at history to judge whether you need to win one of those early primaries. Lets look at history and common sense Rudy Giuliani had this strategy in 2008. By the time they eventually got to florida, even his first state he was out of it history does suggest you have to win iowa or New Hampshire. Different now let me give you the statistic. 69 of democrats would prefer someone who can beat donald trump. 31 prefer someone who is very close to them ideologically. Right make no mistake, beating donald trump is the highest priority for primary democrats. I thought that was biden. Poor guy what happened . Damaged goods . We talked about this. Biden cannot completely sentence he cannot complete a thought. I have trouble completing sentences but im already moving onto the next one. Thats why were not nominating you as president. Otherwise you would be a shoe in. A wonderful piece in the atlantic about bidens stuttering problems. Did you read it . No. Its touching i dont know if you think it explains the idea that he cant finish a sentence. It doesnt explain when he finishes a sentence. How do you overcome the billionaire stigma if that can even be said aloud you have to go to certain states texas is a great example not all democrats are from the progressive wing in texas. Its the same thing in california there are some states that allow independents and others that even allow republicans to vote if you can get the crossover vote in those states and remember, guys, theres a 15 vote threshold you have to get 15 to get a single delegate. Mike bloomberg has the money to invest enough in every state that he will pass that 15 threshold. He could actually win more delegates than the percentage vote that he gets. Still, the majority of democrats are on the Progressive Side and once it gets down to 2 or 3 candidates, its very hard to see Michael Bloomberg as the actual nominee hes going to be a punching bag for a large part of the Democratic Party already is its going to be tough. Yeah. Okay . You were saying earlier, joe, i think its fundamentally the right question which is if its a different ball game, then by doing things very differently mike might surprise everyone and win. He wouldnt do it to fail. I can tell you the data shows a clear path to victory. Even putting that aside, look, were challenging basic assumptions. People who dont compete or win in the early states dont move on their fund rising drive is up and they cant move on. You know what he has for everybody, andrew, and i will say this, just for just across the board for most people it would just be better if we knew now it was either going to be trump or bloomberg, for everybody rather than trump or Bernie Sanders, rather than trump or Elizabeth Warren, rather than so even me yes. I think im welcoming that at least thats an alternative to which is just crazy town. It seems like a win more for the democrats or more from republicans who are never trumpers or who dont want donald trump well, in the general election youll need the combination of both to win the democratic primary, frank is absolutely right. People can cross over and win those votes. Just keep one thing in mind, in 2018 the 43 house seats flipped from republican to democrat, open seats turned democrat those were not super left wing progressive districts. Those were moderate suburban people. But as eric cantor pointed out earlier in the program he said, look, you have to win ohio, michigan, pennsylvania does Mike Bloomberg translate in the upper midwest in some of those states look, everything the man has done in his career has worked out pretty well. Starting his own company and turning into one of the biggest in the world or running for mayor or all of the things he does out of his foundation do i know fundamentally hes the choice for people in western pennsylvania, no, but he seems to win time and time again. By the way, guys, all he has to do is remind people of what new york used to look like and what it looked like afterhe wa mayor. Democrats, as well as republicans, want someone with results, want someone who can have an impact, want someone who can actually say what they mean and mean what they say and that does describe Mike Bloomberg. Except all the tiny little cups theres a lot of folks that dont like nanny states. You want your big gulp back. If you look at me, so do i. Give it me. I want it. But if i dont want it, id want to be able to have it. Im not going to have an ideological fight with you im going to tell your viewers, there are 750 super delegates that cannot vote on the first ballot lets not forget about them. After the first ballot if no one is chosen, they come in. If bloomberg can appeal to them as the most electable candidate, once again, there are technicalities of the democratic primary rules that you cant count him out. Doesnt hillary still have those super delegates or theyre free finally they can vote for anyone they want to in the second ballot. A week from thursday. Do you remember those poor bernie. Poor bernie. Geez but bernie still would have lost. I know. Bernie got 44 of the actual chosen delegates he didnt do as well because of the super delegates. Whos going to be the nominee . Whos it going to be, frank . I still think after all is said and done if you made me project, i would project Elizabeth Warren, but weve talked about bloombergs viability and be we need to keep emphasizing it because this is a real candidacy. What about the other mayor whos a moderate supposedly . Hes gaining, gaining, gaining. Watch him in iowa. I think he wins in iowa. He wins in iowa yeah. If he doesnt do that crazy scream. Howard dean. If he doesnt do that, i dont see mayor pete doing that. I would like to see you and howard dean, see which one could scream louder. Whew i mean, look, pete is up at iowa. Hes an impressive guy. Really impressive before mike got in i was supporting him little bit of a question of timing, right . He is peaking right now. Howard dean did the same thing i think it was back in 04 by the time the election came around the moment had passed the question is is he cresting at the right time or is it a little too soon. If hes cresting too soon, what about elizabeth war sflen. Shes already a month ago she seemed more despite franks thinking she would be the nominee, a month ago she seemed more likely to be the nominee than today voters have short attention spans. Arguably the later you get in he may have some woke stuff. Let me throw one statistic. Stop and frisk and other women issues frank, final word. Mayor pete is everyones second choice so he has the capability of adding still more votes and hes got the highest favorable to unfavorable ratio that gives him the greatest potential in iowa than any other state. Frank and bradley thank you, guys. Coming up, how about some stocks on the move this morning plus, with stocks surging record highs, where should investors look for opportunities l t into that and much more on squawk box. Itions to live better and healthier lives. We started livongo with a vision of transforming the health and Care Experiences of People Living with chronic conditions. 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The futures now are in the green. Which means new records across the board. S p up a point dow jones up 24. 5. Nasdaq indicated up 4 1 3. Dom chu with us. Were going to continue the consumer theme for earnings. Well start with shares of dollar tree getting hid heart premarket. Down 13 on nearly 500,000 shares of premarket volume they reported better than expected profit and sales than consensus estimates, but its Current Quarter forecast is below estimates due in part to the anticipated tariffs on chinese goods should they go into full force during the course of this quarter next up we have shares of abercrombie fitch. The teen apparel retailer is down a percent roughly 130,000 shares of volume after it posted worst than expected profit, sales and sales growth at established store locations. The socalled same store sales were better at the Flag Ship Stores they said tariffs would dampen profits this quarter as well thesharesare off a percent well end on a big up side move here premarket shares of dicks up 11 on over 450,000 shares of volume the Sporting Goods retailer reported better than expected sales growth driven in part by a 13 growth rate in its online sales and by the way, guys, ecommerce made up 13 of sales in that third quarter. Those shares up about 12 premarket. Back over to you. Dom, thanks lets bring in our market panel. Joining us is christian mumani and mike santoli, cnbcs senior markets commentator. Its not december yet, santoli no. Another two or three weeks of a christmas rally if it were to happen, and im not saying it will, but the default every morning seems to be green. So far, yeah. And we could last week was interesting because it was like this barely perfect septemberible shakeout and i think a lot of people said, maybe we finally get it down 2 . Just a little bit of a pull back to buy yesterday had the feel of people feeling like im not sure if i can wait for that. The market doesnt feel like it wants to give. There was a little bit of a chase and empty the tank and get s p to 25 year to date at the close. Russell 2,000 breaks out it was hard to figure out. The only question is are people just kind of, you know, emptying the tank early before we get into, you know, december, january when you have to pick up the numbers to make sense. We might have been flat last year but if the headline around december 31st is at 25 or 30 growth and the s p i mean, you cant really discount that if we were flat in 2018. Thats a big year. The biggest in more than a few, right . So i think what matters is, one, we have had a really good 2019 second, that we are at alltime highs. I think that sort of tells you how the people are feeling about things to mikes point, i think theres a decent chance that december actually ends up being softer than it typically has in these types of years because we have already priced in a lot of the good news, whether that is with respect to the fed, whether that is with respect to the reacceleration, whether that is respect to the trade. Just trade flat, low volatility yes, exactly. I think that is going to be the story for all of next year its going to be one of the lowest volatility years we have had in a long time. Even with the is going t drive that more than anything else is the fact that the fed is on hold. Theyre not easing and theyre not tightening and theyre expanding their Balance Sheet. So if Bernie Sanders is a democratic nominee and favored in all the polls, you think it is going to be quiet and no volatility as an investor, im a betting man. Am i assigning a high probability to that outcome . The answer is no what is the probability it is somebody other than donald trump. A decent chance who is it going to be you have your choices. Deval patrick . I think it is the mayor or the previous mayor or Elizabeth Warren, the real issue is how likely do you think the policies of the union are going to change in a meaningful way, in the current construct. Thats what people are going to focus on in 2020 and i dont think that is going to be as significant as people are making seems like the president s, both obama and trump can do with a pen. Elizabeth warren became president , she doesnt need congress to do things to absolutely throw a complete wrench in the works. I think that is possible. It would be a sign of significant probability. But, no, i dont think who besides trump then . Bloomberg . I think it could be any one of them. We dont have enough information to know or even for the market to start to handicap. It is all out there people havent voted yet. So drastically it doesnt happen in the we know who the choices are. Could go multiple directions. What would happen with any individual elected, reelected or for first time . It is choices and what policies they would implement and the likelihood of those policies getting implemented i think even if there is a reason to worry, it is not in first half of the year first half of the year is going to be one of the least volatile we have had in a long time because of the setup that we have on trade and policy. Potential plays joe was talking about a christmas rally. What about a santa claus rally what is the likelihood of that im a little bit strict constructionist on what a santa claus rally is. Has to come between Christmas Eve and new years if you see it build up to that point, does that take away the idea that potentially were running ahead of where we typically would be for the normal Fourth Quarter rally. But so what . Years up 20 going into november they tend to be strong finishing. I dont think it is that easy it handicap i know every box is being checked off. The fed has gotten out of the way. He tolds you he wants Inflation Higher that means easier versus tighter. You have a good message from the market that Economic Growth is bottoming globally and financial conditions remain easing the one issue is tariffs on december 15th, maybe a little more likely, like we dont see anything at this point. I dont think we see anything on that front. And even if we even if the market starts talking about it, that would be even if there is not a deal, maybe those get pushed off. It is worthwhile, what is not going to happen in 2020 as well, just as much as we talk about what is not going to happen is value is going to have a spectacular run. What is not going to happen is rates are going to go up meaningfully what is not going to happen is energy all of a sudden is going to do spectacular performance. Basically a low volatility environment that supports the current winners for the foreseeable future. What else was i i just your prediction is for low volatility 2020. Yes at least first half of 2020 is going to be one of the lowest election years do 2016 they got after a big rebound, they get locked into this range and zone and people just kind of ride it out. I dont know if thats going to happen it just seems like the previously, remember, president obama, some of thinks what are now mainstream but back then characterizes socialist views,so far left of anything he ever even in his wildest dreams thought of. Now it is i just dont see why that isnt something that we need to something that that millennials are so clueless about economics and life in general. The makings of a really good wall of worry among people who have money in the market thats good i dont are any monhave any the you said cohort. Cohorts yes more age than wealth. The economy the oldest millennial next year turns 40. Can we quit it they better start acting like theyre 40 then. Thank you. Thanks or at least get a clue about something, thanks. All right. All right lets get counsdown to the york stock exchange. Jim cramer is there, getting ready for his show coming up youre on board with tesla youre going to buy one . We cant get a charging station in brooklyn. If we could do it, i know my wife wants to buy one. Were constrained. We talked about it last night, whether we could be a situation where we have a place in summit, new jersey, where we cant just do it there. She wants an x she you cant stop her. She loves cars she wanted a 94 range rover. We bought it in summit, she liked the mini, we got the mini. This is the new thing. It sounds like youre on board too. Not just lisa. Shes the driver. Shes the driver i have to admit it is an unbelievable experience. And i thought when they threw the rock at it and it went through, that would be some sort of sea change, no, all it did was encourage more i know theyre refundable. I give up. The car is too great threw in the towel. Never thought i would see the day. Threw in the towel. Unbelievable. My wife i can set up. I dont need him to set up the test in front of broad street, where we want to do it time to do apples to apples. But, look, you cant fight your wife, your spouse, your kids im going back and forth with my daughter in spain. Dad, it is about time. My daughter in new york. It is about time thats enough. Two what am i going to do continually look at the Balance Sheet . Amen i cant take it anymore. If everybody in my family wants one, im done. I cant fight this i cant fight this now you love president xi too . Hes a great guy no, i dont president xi, not a fan. Thats different can i count on you with that my wife doesnt like president xi no, this is a car, not a country. Different. Jim, thank you. Communist country. Well be right back Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. Make sure you join them tomorrow them. Thats us. Big show huge show. They will be they will be taking over tomorrow and friday. Squawk on the street coming up next happy thanksgiving good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Futures are steady as china says it reached consensus with the u. S. On relevant phase one issues some increases in guidance europes largely unchanged ten year 173 caseshiller home prices up 32 in september year on year. Road map begins with theec