Average of a gallon of gasoline at 2. 84, the lowest in two years. And healthcare. Gov is open going live with the new Enrollment Period beginning last saturday after being plagued with problems last year. The new site will make it easier to shop for coverage and have enough computing capacity supposedly to handle open rollment. Michelle, over to you. Global news this morning, chinas news is Holding Steady with Consumer Prices rising 1. 6 from a year earlier. Producer prices falling 2. 2 , however. In europe, catalonia voting for independence from spain in a straw poll. Spain ordered the vote to be suspended and it went on anyways. And Russias Central Bank is allowing the rouble to float freely in the market. Starting today, it will scrap daily controls with the currency in freefall recently. Incredible volatility on friday amid uncertainty tied to western sanctions and a drop in Oil Prices Going above and beyond what they announced on friday. Well check on markets this morning. We are trading at highs and the accommodative central bankers around the world are pitching into the markets since we dont have any qe anymore, though we still have lower rates, not much is happening this morning. If youre driving in a car, the s p is indicated up less than a quarter of a point. The Dow Jones Industrial average soaring two points and expected to. And the nasdaq is up less than a half a point. Well get to the broader markets. Well talk about oil and the argument, is it good or bad for us here now that we produce so much oil . It does hurt the companies that earn that area and have moved in with horizontal fracking. The tenyear which has been seeing a little bit of movement on the yield higher, but not today down 2. 27 . Well take a quick look at the dollar. It looks like a good place to visit parts of europe at this point. 1. 25 now. Up date, 40 cents more. It was 1. 24 last week. I still thing a dollar is fair. I would like below parody, actually. Yeah. If it was it would be so much cheaper. They would let me travel more to europe. And in a real world, thats based on what we have going for us in terms of economic ability, it should be. Then finally i dont live in the real world, so i dont know what you folks are talking about. What is the price in hollywood . If you are in a guilded cage on the upper west side, right . The upper west. Lower west, so youre basically wherever at some point most weekends, arent you . You have fake hipster no, that would be if i was going i dont think you do the hipster in the city anymore. Only in brooklyn . The hipster would be over there, dont you think . Fake glasses and beard. Maybe lower east side. We should hang out in the lower east side. I havent been there in years. Do we look at gold . I dont know, is gold going to triple digits or under 1,000 . Wow, i had not pondered the question. It could when you look at what is going on with the dollar and no inflation. I would buy a couple of cougars you like the look of them . I like them. Always keep them on hand to bribe the border guards. When you live in a nation of law order, you think thats a joke. We dont have border guards. I dont need to bribe nip. We have a free at this point, dont we . Stocks on a threeweek winning streak. Joining us with a look ahead. Alison deents from cnt global and ed is the director at qma. Alison, we are at new highs. We only have a month or two left, what about next year . Is it going to be the year theres a day of reckoning or this is going to continue . I think its going to continue at a very slow pace. The markets fairly valid right now. My price target is 2,000 so we are pretty much there for this year. I see any further improvement in the market coming from corporate profit growth. And looking at top line growth of 3 to 4 and bottom line growth of 6 to 8 , i dont see the market doing much better than that next year. So what does that add up to . A total return of somewhere between 8 to 10 if you include the dividend yield on the s p. So a good market and better than a lot of other things out there, but not over a bust full market. Add 8 to 10 has been a safe forecast for about five years now for people that come on. Its because it doesnt assume anything about multiples. You dont have to make any assumption about what the pe ratio will be, you just use, well, the corporation will earn this much and earnings will rise this much, add in the dividend to get that number. Is that thats putting it briskly. Its really boring, pretty much the same. How do we do how did we do 30 last year . Evaluations were on the low side. In hindsight. Thats right. But as a result of the move up in evaluations we had in 2013, now stocks, they dont look terribly expensive by historical standards but fully prices. Why wont they get more expensive . They might. But theres always the possibility people become overly optimistic and back to the late 90s scenario where evaluations rise and rise. Turns out, you always give that back and it is prudent to expect to get returns roughly in line with Earnings Growth given that evaluations are fair. Ten year goes where . The tenyear, ive been wrong about that all year. I thought at the beginning of the year rates would rise but instead they have gone down quite a bit. I have switched over to the camp that my colleagues have argued for a long time, that we will have lower rates longer. We used to think of, i guess i think in my age normal rates are 5 to 7 on the tenyear, i wont be surprised if three was the new six. That is rates are more like what they were back why . Well, partially because of tremendous demand for fixed income product and the supply is relatively con strained. Both by the monetary authorities, but thats only part of the picture. Youre also seeing the deficit in the United States cut by twothirds in the last couple years with tremendous demand from institutions and foreigners to buy fixed income products to keep rates low in addition to what is done by the monetary authority. Do you know, andrew, what causes recessions and acronyms for it . An acronym for causes and recessions. I have an acronym for what can cause a bear market. Thats right. Rsvp. Recessions, shocks, value paying and policy changes. That is what causes a bear market. Thats right. As an asset all locator like we are, most of the time it pays to bear risk. So most of the time the stock market tends to work higher. The trouble is every once in a while the market makes a horrible downturn. To try to avoid those, they dont usually come out of the blue but they are driven by one of the four things. We were tested in october and were likely to go to a recession, no. Are we going to get a shock from ebola or something . We dont know by the definition of shocks but didnt think that was going to take us over. On the policy front, fiscal policy is more set in stone and Monetary Policy, the fed is pretty clear they will remain accommodative for another year or so. So youre always going to get downturns, but the question is, is the downturn severe enough to cause a bear market to cause big losses our clients want to get out. And i think that otherwise you pretty much want to stay fully invested. And we dont see any of the four things hitting us to cause a real change many the market environment over the next term. Alison, do you have a notepad . Did you write any of that down . Can you remember r. S. V. P. . If i quiz you. Shock, policy, recession no, i think they are all very valid. The one point i would make about multiple expansion is typically it comes in a declining environment. While rates most likely will go up dramatically from here, i dont see them going lower. If they do, its because theyll have one of the letters from the acronym, which is a recession that doesnt bode well for the market. You can find historical precedent where multiples went up at the same time as Interest Rates, cant you . Because the economy was going much better . I have to look back. Im not sure. I think you see the markets go up. Can you see . I think the only time you can find it would be the 1950s. So it went up after the war and the great depression. There was a period where Interest Rates rose and you had multipreside multiples. That was before my time. You brought up the return to nirvana possible in some like that, in the 50s. Maybe with the Housing Market improving. That seems to be the one thing stubbornly staying depressed. We should just do a well tax, andrew. Just smack them. Exactly. Dont mess warden the income. Lets start with people whose first name begins with w and worth more than 30 billion. Just 50 . I heard that the country last week had moved in a different direction. I heard this happening, did you hear about that . No, no, no. I heard twothirds of the voters stayed home and all would have voted for the other side. Theres a guy who said that. The warning on the front page of the New York Times today is flashing red. The gops path to the presidency is tight but real. Let me see. Gop path to the presidency is tight but real. Open up your wallets fast, readers. Anyway, thank you, alison and ed. Thank you. Thank you. Coming up, when we return, a live report from china where World Leaders are meeting for a major summit plus some of the biggest names in tech gathered on the red carpet last night. Its all part of an event to give 12 people 3 million each. Find out why when squawk box returns. But heading into the break, highlights from our own red carpet. The celebration of cnbcs 25th anniversary. Can i give you a kiss on television . Absolutely. Thank you, sandy. I do remember the photo of the guy on wall street. It was an awful photo of me. I look better than that. It was like a caricature. You look great all the time. I was gratified to hear all the stories of peoples First Experience with their blackberry and how it changed their lives. That sounds almost dirty the way you say it. E financial noise financial noise financial noise financial noise Mark Zuckerberg and mary milner are teaming up eachi yea to give 3 until to the scientific accomplishment. Youre looking live at the red carpet last night on the west coast. 12 break through prizes were awarded but take a look at what happened. We have for 3 billion years we have been evolving this amazing oregon called brain. And all of a sudden we can understand the universe and our place in it. And yet the people who helped us do this, they are not celebrated. And i think well learn how to celebrate athletes but i think its about time we celebrate scientists. In total 12 breakthrough prizes were awarded. This year the first to hop more mathematicians because we do celebrate sports and so many other actors, but we dont celebrate what is the nobel prize, though . Dont we celebrate science there . Not in a truly celebratory way. They will be very upset you said that. But i dont think you have physics and math. The point is to get kids to think that is what is cool. Right . Yeah, i guess i listen to all those complaining about the lack of engineers in the United States and yet when you graduate with an mba versus graduating with an engineering degree, you often get paid more. So its my contention that if the market really demands more engineers, they will start paying them more and more. Its just there are so many engineers being produced in Companies Like china, eventually all the stuff gets outsourced. Someone told president obama to have a degree with mitch mcconnell. He said, really . Why dont you have a drink with mitch mcconnell. Kids dont take communications and business, you take engineering. Really . You know what happens in engineering . Every man in my family is an engineer. Every uncle, my dad everybody. Your social life goes out the window. Maybe they dont live boring lives. I am not putting down civil engineering, but you do ee eee. Mechanical engineering, get ready to not go out for four years. But you want the engineers to be walking out the red carpet hanking out with Mark Zuckerberg. It takes a certain kind of person. You do you were at m. I. T. For a while, wasnt it fun . Not in engineering, but it might help as you see the jobs in that area. It might help get more i think right now people arent going into banking anymore. They are going into different things. They are going to silicon valley. If it continues to be this lucrative, you cant tell people to be an engineer. I do think celebrating success is a nice thing. By the way, i dont know if we have time, but have you seen the surry rvey on the wall street j . I think our red carpet looked better than their red carpet. But you pointed out we have problems with the young movers. We get the old movers and shakers but we have to find a way to get the young movers and shakers. We have to merge the breakthrough prize. Okay. Coming up, we are going to talk to the indexs newest member and well talk movies eventually. If ben affleck has a movie, you go and urge him to go into politics chch politics. Which is just what the world needs. His buddy just played a bad guy. I shouldnt say that because you disappoint know that right away. Nevermind. I saw interstellar on imax and it was awesome. The chair shakes when the rockets take off and stuff. Awesome. 70, though. And thats not including a vat of buttered popcorn. Anyway, as we go to break, heres a look at the last weeks s p 500 winners and losers. You probably know xerox as the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. And life gets lived. So right now if you get the 15 gig plan, well double the data and make it 30 gigs for the same price 30 gigs . Wow thats a lot. You dont have to do that for me. Its the same plan for everyone. Families. Businesses. Whoever. Riiiiight. yelling no celebrity treatment here yelling really isnt any celebrity treatment. Just a normal guy, getting a great deal. Were just saying it loudly for some reason. Get 30 gigs of data to share with family or your business. Switch to at t, buy a new smartphone and get a 150 dollar credit per line. Many americans who have prescriptions fail to stay on them. Thats why we created programs which encourage people to take their medications regularly. So join us as we raise a glass to everyone who remembered today. Bottoms up, america. See you tomorrow. Same time. Another innovation from cvs health. Because health is everything. receptionist Gunderman Group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. I scoured the news for something ominous or for the music, and i got nothing. Its an intense monday morning. The president s in china. There are things going on in the world. We had two kinds of music. We have light, sort of that music. We sort of have light. And the dow morning numbers indicate up 2 points. Will this give it to you . Cyber attack wars. I think michelle has already nailed it. Yes, youre right. Lets cue the music again. Cue the music again. Here we go. Another bond swings thats pretty serious. Here we are in the New York Times. The gops path to presidency tight. But it is possible we could have a republican president. Thats a warning. Turn up the music. Good morning, welcome back. That sounds like football music. Did you know the jets won yesterday . Who did they play . I wasnt focused on it. The new york jets. We live in new york. I wasnt focused on it. Welcome back to squawk box here on cnbc. Im joe kernan along with Andrew Ross Sorkin and michelle carusa cabrera. Becky quick is off today. It takes roethlisberger had 12 touchdowns in the last two games. I heard they played the cubs. Do you know who roethlisberger is . He had 12 touchdowns in the last two games until yesterday. No touchdowns for the home runs the mets. Come on. Who are you looking for . Anybody. Bueller . Crickets. Disneys big hero 6 won at the box office, 56. 2 million in ticket sales. In second place, i saw interstellar reporting 50 million in its first weekend. Let me tell you, Anne Hathaway says Matthew Mcconaughey takes adventures like no one has ever seen. They must love her because the actress from zero dark thirty is in it as well. We were talking about science. The whole plot revolves around relativity. When you travel at the speed of light, time is dilated and length is contracted. And things are different as einstein proved. If you travel and come back, people age. Think of the different plot twists you could make where and your loved ones are aging. Is this two thumbsup, three stars or four stars . You need to distend a lot of real belief. But it is really well done. These arent really i guess they sort of are its definitely a higher class of beings maybe somewhere. Something weird. Theres a lot of weird things. But a little bit of gravity involved, but on an imax it was amazing. But it was expensive. All in with the popcorn and the twizzlers, just with the family 100 bucks easily. Yeah. And you werent in the great seats that go all the way back. No. It was just the imax. And i didnt realize that imaxs are just like theaters. If you can see it on the imax, you would rather. President obama is in asia this week. Susan is joining us there with highlights from the apec summit. Reporter hi, there. The apec dinner is taking place and all the World Leaders, the most we have seen in beijing since the 2008 olympic games, are all decked out in traditional garb. Usually representatives of the coup industry are hosting this year, so u. S. President barack obama is dressed up in a silk suit along with russian president Vladimir Putin and of course the chinese president xi it is jinping host this year. Usually we get a photo op at the end of the dipper and people are watching closely whether or not theres going to be an icy greeting between the u. S. President and also the russian president as well. But we did have barack obama closing off the ceo summit. First time hes addressed the summit in three years to say as long as im in office, i will invest in you, apec. Which represents 60 of the worlds global gdp, 40 of the world population. There was an audible gaffe and the most exciting announcement he made during the speech to extend the visa length now of chinese nationals visiting the u. S. Take a listen. Of course, that will be good for the businessmen going back and forth all the time. But keep in mind last year 1. 8 million chinese visitors to the United States contributed 21 billion to our economy and supported more than 100,000 american jobs. This agreement could help us more than quadruple those numbers. So get this, Business Visa now for a member is ten years. If youre a student you get five years. Basically this shocked the crowd. There was a notable audible gasp when that was announced. And i want to highlight the reengagement at the apec summit between the chinese president xi jinping and the japanese president shinabe. There were territorial disputes over the islands and there was a question on whether or not they would shake hands at the event, but in 2012 is the first time they have shook hands to meet up. That was a bit of a relief for the people watching the apec summit. Quick question, a tenyear tr visa for travel. What was it before . Much shorter than that. Okay, thank you. Thank you, susan. Joining us now to talk about politics is john harwood. Mr. Harwood, good morning to you. Good morning. Did you read the front page of the New York Times . Did you write that . Yes. Did you hear what everybody look how pale he is. The blood has all left his face. What . Did you see the headline . A republican could win in 2016. That michelle and joe of course a republican could win. Whoever thought they couldnt . Well, we needed the New York Times to take it upon itself to sound the warning signals. Danger will, rogers. To get fundraising going and the ground game, right . Its the get out the its never teerlly to start. Thats all. Hes not buying it. And if you have jeb bush running on the republican side, you would have a serious chance should he be able to get through the nominating process. So that we know exactly what someone is thinking, yeah . Lets talk about that, john. You mentioned jeb and saw the interview over the weekend. The former president talking about his brother saying he thought it was a 50 50 chance. I thought w. Said it was a 50 60 chance . No, no. Ha, ha. 55 48. He has a book coming out about his father, what is your handicap on it . You know, i have been assuming all year that it was not going to run based on what people who are close to him have said to me. I get the feeling that hes recalibrating and theres a greater chance than earlier. I really dont know how to predict it. Usually if somebody has been mulling Something Like this over for something this long, its a signal they are not going to do it. But theres rising pressure within the Republican Party for him to run. John boehner wants him to run. And so i think hes taking or giving a very serious look and i would expect well know the answer by mid january. A couple things happened over the weekend with this headlining across drudge for the weekend. The president and him, obama, angry cut him off. Yes, and i saw the white house saying it didnt happen. But look, joe biden is much more a creature of the senate than president obama ever was. So buy den would be more sensitive to the idea that this is a dangerous step for the president to take if he goes the executive route. And it seems clear hes going to do it. Theres a new republic piece on Valerie Jarrett, your friend. Im looking at joe when i say your friend, Valerie Jarrett, because you know shes my friend. Thats the funny thing. You think we like each other. Even though youre more politically inline, i dont think she really likes you. Both are hard more more importantly is the president doesnt have the same number of visors around and he wouldnt really push back. Do you buy that . Not really. Valerie has taken a bunch of hits and did a piece much tougher that the new republic piece saying that what the president needs to do the last two years is fire Valerie Jarrett as she symbolizes his sources of information. I dont think thats the president s problem. I think there was somethi something they mentioned three names, plouffe and robert gibbs, too. And they have all sort of these guys leave and then they sort of, almost like they know they can be more attractive to media if they i am doing this so they dont look like yes men anymore, but it would make a difference if those three days were key and they are gone. Who the most of the people get exexhaue exhausted. You get the first round of people, they exhaust and then you get the second round of people and the third round of people. Thats one of the reasons shes there. The president needs people they feel comfortable to provide continuity. But i dont think that the stabbing is the main challenge for the president to be facing. He has a difficult economy and a very tough republican majority in the house and now in the senate. And those are the issues. The inability to raise incomes and to see more broadbased economic progress, really substantive setbacks. Thats step. Its a very decision he made to pull back on that redline issue with syria. Thats on him. Thats not on president obama made a comment about the midterm elections regardless of what happens two years from now. He said tuesday was possibly the worst day if i recall, and i may botch the actual language, for Hillary Clinton. Actually what tuesday represented was a hate, if you will, of all incumbents and all things washington and that she was washington. Your analysis. Very reasonable argument for a republican to make. There is an incumbent move that was really focused on the incumbents of the president s party because hes the most conspicuous political figure in the country. If is were a republican, i would say exactly that. She is washington. Shes been washington for 30 years. We dont like how washington is working. Lets get somebody from the outside. Shell have a response to that, of course, but i would expect to hear that from a lot of republicans and try to make the case shes yesterdays news and voters want to move on. It might be more done, you know, i still contend that at least we have more to do with it now than we did. The cycle is so quick right now, but hillary is not an incumbent. If she runs, shes going to distance herself. She will distance herself from president obama. But within two years, what do you mean by Big Government, joe . Well meet you on the other side of the cycle. Regulation, yeah. Just everything we had redistribution, just everything with john. Look around, what caused the election and the wave . Listen to me for a second. No, joe, the big in Big Government is medicare, Social Security and medicaid. So now we think they are fixed and they are not. But i think those are big promises we cant keep. And if scott walker rants to run against Hillary Clinton against that, sbhooel delighted. Coming up, the stock is soaring 20 this year. First, a quick check on what is happening in the european markets right now. How can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. Welcome back to squawk box. Time for the squawk box planner. Well be hearing from dean foods and sothebys. Mcdonalds is going to report sales at 8 00 a. M. And sec chair Mary Jo White is holding a fireside chat at that event. Americas infrastructure of water will cost close to 650 billion to continue operating. One company to benefit is American Water works, the largest publicly traded utility. A solid stock for investors up 20 this year and just recently added to the dow jones utility average. Joining us is susan story, ceo of American Water works. Good to have you here, susan. Thank you, michelle. Great to be here. Lots of good news in your report, but well get the bad news out of the way. You missed on revenues because of unseasonably Cool Temperatures this summer. Explain that, is that as intuitive as it sounds, if its not that hot out, you dont water your lawn as often, is it that simple . Thats absolutely correct. We have a really cool summer, people dont fill their pools up and they dont go outside to hose off, but the Third Quarter is typically our biggest quarter because of those factors. Interesting. We were talking about the elections, and actually the elections were significant for you on tuesday for a completely different reason than what most of the country was focused on, correct . Several communities decided you were going to control the utilities now. Thats correct. In fact, part of our growth strategy, the first being investment in infrastructure, which we can talk about later. The second being acquisitions. And those are acquisitions typically of troubled utilities, water and waste water. 84 of the entities that deliver water and waste water in this country are public entities. So when they have competing priorities, when they have aging infrastructure, and the federal funds have dried up, they turn to us. In three of our cities, there are referendums. The City Councils agree to sell the systems but had to go to a public referendum. And im very pleased that we were 3 for 3. And not only that, we were 65 in one, 70 in another and 77 in the other. A pretty significant trend there. I look at your company, you serve 14 Million People in 40 states. Off market cap of 8 million. Duke in the utility sphere has only 7 million customers, half the number of customers with a market cap of 49 billion. Am i wrong to think those aught to be closer . That you both seem like utilities . Well, actually our market cap with the recent runup in stock price is closer to 9. 3 billion. But the difference is when we serve 14 Million People, thats not metered customers. In the utility industry, sometimes people report as metered customers and other times they report as the number of people served, which is about 2. 5 to 2. 8 times the numbers. But the market doesnt think youre going to be as profitable as electric utilities. Why is that . Still too much government interference in pricing . Is the secular trend toward privatization not happened enough . Well, interestingly our p. E. Multiple in the wear industry is higher than electrics and gas. Our forward p. E. For 15 is around 20 and currently its about 22. If you look and compare to electrics, they are 15 to 17. Got it. Good to have you, susan. Appreciate it. Thank you, michelle. One last thing, listening to the sectors on engineers, as an engineer we do have socialized but they just look a little different. Weekends only. But am i right or am i right, you saw, like, the Communications Majors and the there are some majors that arent quite as demanding at. What kind of engineering . Which one . Mechanical . Industrial engineering, i actually began as a Nuclear Power plant engineer. Youre right, i did have a roommate with a lot more free time than i did. Shes not a ceo, is she . See what happened . You see my point, you have a major in engineering. Tell kids you major in it and you have a drink with mitch mcconnell. Forget about it. I have a calculator, i dont want to learn any of that stuff. Good to have you, susan. Thank you. We have covered water. Lets talk about beer. Too much beer, think thats impossible . Not so according to the nations kraft brewer. Find out why when squawk box comes back. H money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. Welcome back to squawk box this morning. Its time now for squawk booze news. I could be drunk doing this. New problems brewing for the craft beer industry. Craft beer has become so popular, its created a distribution backlog across the country with outdated franchise laws from the 70s hindering distribution or so says our next guest the ceo of the Brewers Association. Good morning to you. Good morning, and b rue. Thank you for not coming with any beer this morning. My apologies. Lets talk about this because you do have a distribution problem. To some extent, the distributor laws are sort of like the issues that tesla are facing today. Good analogy. In terms of the franchise issue. That is correct. And so what are you proposing what happens and which state dos you have it the hardest . Id say the worst states for small and independent craft brewers are in terms of distribution law are probably connecticut and georgia have two of the most onerous laws. But its a state by state issue. Theres not a one size fits all model. Explain why it matters. If you dont have a distributor on your side, you cant legally get into some markets, right . Very good, very good. Yes. So brewers are required in most states to use a distributor to get their beer to market. So for our members, for small and independent craft brewers, this is an access to market issue. And you cant sell direct . In most states, that is correct. You cant go supermarket to supermarket saying let me put these on the shelf. Thats illegal. The Brewers Association supports the threetier system, but there are laws at the state level that are what we feel inhibit competition between distributors. Well, you say here if bob brewers uses kd, i cant fire those. Which states are those . Georgia, texas you saw you support distributors. Absolutely. Yet you do want to go over the top, if you will, and sell direct. This isnt about selling direct. This is about modernizing and why wouldnt you as a craft beer maker want to sell direct . To go to your website if you are a beer maker and say i want a six pack and have you fedex it to me. Distribution is a tough business. Were in the business of making beer. Were not in the business of distributing beer. We just want the right to be able to change distributors. If youre not meeting your sales goals, i think i should have the right to say id like to sell my beer through michelles company. And so what kind of campaign do you have going on . This is a state by state issue. Every state is a little bit different. We would like to work on a state by state basis and work to change the law at the state level. What do you make of all the consolidation going on in the business . Especially craft beer makers which i dont know if you call them craft beer makers when they become a subsidiary. No, we dont. That changes the game for us. The Brewers Association defines a craft brewer as a business thats small, independent, and traditional. But youre right, andrew. Can the customer feel the same way . Thats up to the customer. There has been massive consolidation both at the distribute tier. There used to be three, four, five thousand distributors in this country. Now lets less than a thousand. This is an access to market issue. Thats important because its the beer drinker that fuels this revolution. They want choice. They want diversity. They want flavor. And my members from the products that deliver those desires. All right. Okay. Bob, thank you for coming in this morning. My pleasure. Even if you didnt bring beer. Next time. Coming up do they have their own lobbying business yet . A distribution some people say they should start the National Beer and marijuana distribution business. Its like Peanut Butter and jelly. In the late 70s, i think it was legal back then. As i recall it was legal then. When i was going to colorado, it seemed like it. The nations Biggest Stores set to report in the coming days. Check out the futures as we head to break. Squawk will be right back. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Big week for retail. The nations Largest Store is about to roll out results with just over two weeks until black friday. Are they ready for the holiday rush . The rally rolls on. Now that the jobs report is out of the way, what will investors focus on next . Will the health of the consumer drive markets higher . And more problems on the road. The second hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Andrew Ross Sorkin and michelle carusocabrera. Becky is off today. And a blast of arctic weather for the northern part of the country this morning. South dakota, minnesota, northern wisconsin, michigan all getting the seasons first significant snowfall. The snowy weather is expected to head south. Were going to have more on this expanding storm later this half hour. Topping todays business headlines, General Motors said they ordered parts two months before the recalls. Also in auto news, nissan recalling more than 52,000 vehicles that have faulty passenger side air bags made by that japanese supplier. Now at least famous even infamous takata. The nissan recalls are a total of 8 million from ten different automakers. The worlds biggest retail day is not black friday but singles day in china. Alibaba is expected to smash records on the shopping holiday. It was created by the chinese to lament being single. But it has turned into a 24hour Online Shopping bonanza. Last year alibaba took in nearly 6 billion in transactions. Thats in one day. That blows away the nearly 2 billion sold on cyber monday here in the United States. Tomorrow you dont want to miss david fabers interview with chairman jack ma. Thats tomorrow at 10 00 a. M. Eastern time. Hes going to join us from china during the 8 00 a. M. Hour. Here at home, gas prices dropping in the last two weeks. Now the average price for a gallon of regular look at this. Below 3. Average price 2. 94. Thats the cheapest level in nearly four years. Under 2. 80 on the way in. Thats because were in new jersey. Are we . Yes. Thank you. Gas prices are generally much cheaper here than other places. Heres the price of oil which is at 79. 51. Below 80 bucks a barrel. Weve got a big week for retail ahead. A number of retail giants reporting numbers throughout the week including jcpenney, nordstrom. Especially given what you just talked about, gasoline prices. Joining us now is the senior retailing analyst at jpmorgan chase. Good morning. Help us through this a little bit. Who are the winners and losers . Its a tough dynamic. Third quarter i think is going to be a quarter that most retailers especially anybody who sells apparel, its going to be a quarter people would like to forget. Then you have gas prices under 3. First time in four years, our math, thats 500 per consumer. I think thats really the forward look. You also have easier compares. We had such terrible weather last year, i think its a terrible time versus forward looking. I think hard lines as well as some of the lower end gas beneficiaries is the way to play. Lets talk about names. Jcpenney, its a question mark for everybody. Where do you put whats happening with them now . I think the most interesting thing across the Department Store space in apparel right now is the lines are getting blurred. What you have here, you have macys whos a promotional Department Store. You have a gamechanging branded cycle thats happened at off price. You have nordstrom whos gone more promotional over the past month. The clearance sale. What do we make of that . I think what you have is its a sign of the times. Its reminds me of abercrombie moving back to promotions. Thats usually a bad sign. I cant think i mean, the question i was thinking over the weekend, have we seen a retailer thats been able to change its zrieps from a promotional standpoint . I cant think of any. What you have here is a number of guys getting squeezed in the middle. Whether its the kohls model. I think you have to have brands and have to be able to sell them at a value. Thats really what i think people are struggling with. Where are you on macys . They are our only overweight rating in the Department Stores. Its worth noting what nordstrom are doing. But i think what macys has going for it, the brands bend over backwards to get more Square Footage growth at macys. I dont think anything structurally has changed. I think the weather has certainly hurt them the Third Quarter. Is the model changing or is this is a shift and what does it do to the brand if they want to go back . I think this is a model change. I think this is something worth thinking about. This is a Service Model. I think whats happening is they spent the money to move online. The question is the Service Model is online more of a commodity. I think you have gamechanging fast fashion online. A lot more competition. And so i think nordstrom is reacting here. And in terms of going back, look, i think free shipping, free returns which they initiated two years ago is now followed by clearance sales in a more promotional model. I think this is the goal forward. You cover abercrombie and fitch still . Yeah. We cover the specialty space as well. Whats your view of that company . The logos are coming off this season. Right. The question there is what impact does that have on the International Consumer. I think that could have been something that might have been misjudged here in terms of the International Consumer comes overseas. Theyre looking for western brand affinity, the logo off. The question is was that something that was more near term cited. And from a longer term perspective the question being was it the right move. So are you overweight any of the specialty retailers . So we have overweight ratings on nike, vf corp. We like limited brands. Were looking for unique models, Market Opportunities such as a burlington in the offprice spectrum. I think thats really the way that you want to win. In the Department Stores, we do have an overweight rating on macys. I think they are the one that stands above. They are the longterm winner here. And at ten times earnings, i think there is money to be made. Since you seem so anxious about the space, is there anyone you should distinctly stay away from . Forget about being overweight or neutral, who are you saying stay away . We came out with a piece this morning talking about the competitive dynamics. I think the one that is squeezed is dillards. Those who are underinvested is dangerous. Both of which fits the mold. I think then as you think about the midtier it does go back to your question on jcpenney. I think both are in a pretty tough textbook stuck in the middle case here between more promotional macys model and that offprice sector. Thank you for joining us this morning helping us through the beginning of what may look like the holiday season. Thanks for having me. Among other things were waiting on key Economic Data that will highlight the health of the consumer this week including a handful of results. Here to break it down for us, head of equity and quantitative strategy at bank of america and a complete grinch this morning. Youre sticking with your 2000 target on the s p. We are. News flash. Its at 2,031. Thanks for letting me know. Youre negative . I think there are balanced risks and rewards at this point. I think theres a lot of investors that are betting on this yearend catchup rally because hedge funds and active managers are underperforming. That actually never, ever works. So this is one of these, like kind of myths that have been propagated. Where they will do a hail mary trade at e end of the year. Never shows up in the numbers. Thats reason one i dont think the market is going to do much. Is the santa claus himself a myth . What are you saying here . Theres no santa claus rallies either . I think Fourth Quarter trends are seasonally strong. But i think were at a point where a couple of key things are happening. One, the fed is finally done with tapering. I dont think that happens with everything working out just fine. If you remember the taper tantrum we had, it had volatility around that initial phase of rising Interest Rates. So i think thats kind of what we could see over the near term. Im bullish on equities for the longterm. U. S. Equities in particular are probably the best game in town in a world that looks fairly the response so far has been very positive. Plus weve got everybody else is picking up the slack. Japan and the eu might do qe. And supposedly we were able to taper we were i believe a end qe because the economys getting better. I think thats true. And i think there are pockets of the s p that could do well going forward. You like some weird things. You like oil stocks. Why . You know why i like oil . Because i think so some of the larger Cap Oil Stocks are super cheap. Theyve sold off on this correction in crude. Which you think a short lived . Why . Why do you think oil doesnt deserve to be here . Thats a call that our Commodities Team is making. I think what theyre looking at is theres a structural supply right now. There are some arguments that Oil Prices Settle at a higher level. Even if they stay low, look at some of the majors in the oil sector. Some of the biggest. Theyre doing better on the downstream. They had great earnings. A surprise to everyone in a quarter where you thought Energy Stocks would do very badly. And theyre much less exposed to price volatility. Also the reason i hate them is theyre some of the most hated names in the s p. Carries about 30 underweight in the sector and its the big cap names there are underweight. So it would be a you dont think people should do this. But energy by consumers. So thats you think no. Heres why i dont think that works. First of all, you need what we found is the best relationship between oil prices and Consumer Spending happens with a pretty long leg. Consumers start spending a quarter or two after their spend less to heat their homes or to fill up their cars. So i dont think this is going to show up in the numbers immediately. Anyone who is expecting this to show up in sales immediately might be disappointed. I also think consumer stocks are your classic leadership. They work well when the fed wants you to borrow and spend. But they tend to do okay but not necessarily lead at a point where, you know, the feds done, the economy is okay, and, you know, the baton kind of shifts from fed spendi ining corporati. You think next year the bull market continues but we had people on at 6 00, 8 to 10 . Youre not overly you dont think it will be as positive as recently. I dont think were going to get another 30 year, but like i said before, i think equities might be the best game in town. In particular in the u. S. You might think theyre getting a quality premium here. Theyve got some exposure to em and dm. So its kind of a nice diversified global set of stocks. Not too risky, healthy dividend yield. The reason i really like the s p 500 is it might be the best Income Growth story out there. Okay. But one point here is that the payout ratio of the s p 500 right now is at almost a hundredyear low. So companies are paying out the lowest percentage of earnings they have paid out over time. And i think that, you know, baby boomers, yield seeking investors that dont go away but probably gain some steam over the next 20 years are going to seek out growing yield rather than high yield. And santa claus rally is a myth but santa claus is real. I do believe in santa claus. All right. Good. Because i was worried. I was worried there a second with my belief system. Im not that grumpy. All right. Thank you. You might get grumpy over the weather. The northern part of the country is getting hit with the most significant snowfall of the season. Lets get to reynolds wolf. Hes in rapid city, south dakota, this morning. Holy cow. I havent seen him in a long time. It doesnt matter what you call it, the story is cold. As you and america is watching, you see the snow flakes moving across the screen. The big issue is not the snow which is going to taper off by 5 00. Maybe two to four inches of snow. The big kicker is going to be the polar air thats going to come in later tonight, next couple of days. Average high is 50 degrees this time of the year for rapid city. Were in the 20s now. Were going to be in single digits, below zero possibly over the next several nights. By next saturday, our highs only in the 20s. Were in for the deep freeze for quite a while. If you look over here, you see andrew johnson. Theyve got statues of president s all over the city. Look at his shoulders. You see a lot of ice out there. Theres a glaze of ice on all the overpasses, streets, cars. Thats going to cause a lot of problems for a lot of people. What weve been seeing so far this morning right here at the intersection of st. Joseph street and 6th street, seen a lot of salt trucks and scrapers. Trying to stay ahead of this thing. Affecting from montana over to minnesota. Affected by the colder air and the snowfall. It will eventually affect millions of americans pulling into the ohio valley, parts of texas, even the deep south. Back to you. That would definitely make my grumpy. Thanks, reynolds. Coming up, much more about the action in crude and currencies this morning. And check out shares of mcdonalds. Getting red i do roll out monthly sales. Well get those numbers at 8 00 a. M. Eastern time. Squawk box returns in just a moment. Will that be all, sir . Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Welcome back to squawk box this morning. It is beginning to look like christmas. The tree is up and its being decorated on the plaza there on 30 rockefeller center. I think the date what is it . November what is the do we know the date they light the lights . December 25th is christmas. December 25th. The confusing one is new years. He was asking about the day of the tree lighting. Oh im sorry. Which is a big nbc event. We do it live. Usually have big stars singing. Need to avoid that area of the city like the plague. Or go. Go in person. My god, no. Separately if youre thinking about ditching your iphone, this story is for you. A long time people who went to an Android Device complained about getting texts from iphone users. They can deregister their phone number with the company. They made it easier. Ive had so many glitches. Half my Text Messages dont go through. Its been a disaster. Youre on the new iphone. Not on the new phone, just the the operating system. I dont know. How about you . You dont even know theres a new operating system, do you . Operating what . Honestly, ive tried to do the upgrade. And im not hooked up to the cloud or something. Yes. If it cant find it, its a pain in the neck. Ive not backed up i mean, the phone gets mad at me just about every day that i havent been backed up to the cloud for, like, eight months. Nothings been backed up. I have to increase my space on the cloud, apparently. How much room is there . Theres a lot. You just got to pay for it. Okay. Coming up, real heroes at the box office. Also, man, there were a couple of moments. The Seattle Seahawks took care of the giants yesterday. When you have two great fumbles and dont get either one, you know its not your night. Well show you what we mean after this break. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say, organic food stocks, schwab can help. With a trading specialist just a tap away. Whats on your mind, lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move, wherever you are. And start working on your next big idea. And start working on your next big idea. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box. In case you missed sunday night football on nbc, heres a quick recap. Packers quarterback Aaron Rodgers took care of the Chicago Bears throwing six tds in the first half. That ties a record and they went on to win 5514. Some pregame interviews from a couple of bears said this is the beginning of our winning streak. We know were 35. We need to start right now and were going to. Aaron rodgers is great. He is great. Yeah. He really is. You watch him, right . Yeah. No. You said something earlier. I saw part of the giants game. With the seahawks. My husband was watching it. The guy that went to stanford had a big move. They scored a goal. There was one part with Richard Sherman that guy, right. Unfortunately the giant guy had to stop him from getting elis pass in the end zone. They turned a score from the giants and then scored. They i thought they were going to win. I knew it was a manning playing. I was proud of myself. You knew it wasnt archie manning, right . No. I know theres eli and peyton. Thats it. Okay. You just got your seat at the seattle game and little did you know the mascot would be landing on your head. Better the mascot than something from the mascot. The hawk shaking things up become kickoff. He decided to land on a fan and watch the game from the stands. That is cool. The hawk usually flies around Centurylink Field before the game and then it returns to its handler. And they were later reunited. But thatll get your attention. Those claws can you take your eyes for granted. They are so beautiful when they fly. They arent beautiful to rats and other vermin. I dont know if it was the same bird, but i did a story about paul allen years ago and i was on the field. I know they score home runs there and held that bird. That one. That one. Yeah. I dont know if that was that impact bird. I went with taiman. I dont know. When we come back, big pharmas push to save your liver. Were back in a moment. Ing u. S. Is now voya. Changing the way you think of retirement. Its in this spirit that ingu u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. Welcome back to squawk box this morning. Filing for chapter 11 bankruptcy today at dendreon. Also american airlines, flight attendants rejecting a contract by a narrow margin. And General Motors reportedly ordered half a million replacement ignition switches two months before its recall of a million vehicles. It cited emails. Two movies topping is it you . I thought you said michelle. It is. Just a beautiful shot of joe. They showed me focused on working. Hes focused on whats on the screen. Very closely. Actually i was looking at dendreon. Maybe ill talk to cramer about it. Theyre gone. At least theyre filed for chapter 11. Thats what i was i think they wanted to catch a realistic shot. You were doing investigative work. Its like this. Considering. Go ahead. All right. Two movies topping the 15 million market mark this weekend. There could only be one winner though. Disneys big hero 6. In second place, interstellar. Two big movies. That doesnt happen very often. Joe . Michael cain. I love him. Hes great. Matthew mcconaughey. Also great. Some of the worlds biggest drug makers converging for a conference. Presenting new data. Meg tirrell joins us with more from boston. People dont realize, meg. I guess when you think about it, you had hepatitis a and b. It used to be nona, nonb. Now its hepatitis c. There are those who made their market caps based on treating hepatitis c more effectively. Thats right. This meeting here has become a Battle Ground in recent years. A lot of folk who is have hepatitis c is heading towards cirrhosis. Which can lead to the need for a transplant. We were talking with merck and they told us as many as a Million People in the United States are expected to be affected by hcvrelated cirrhosis by 2020. That means a lot of folks are potentially headed toward liver failure. Gilead has been in the lead with their drugs. So theyve got a combo pill approved. But also competing is merck. We see stocks moving this morning where theyre looking to shorten duration times to four weeks. That didnt quite hit the mark. We did an experiment to look at four weeks and six weeks and eight weeks. As it turns out, the fourweek duration might be too short. Thats much of an improvement compared to 12 to 24 weeks. Now, there are two other liver diseases on investors radar screens here. Those are hepatitis b and n. A. S. H. Bringing you interviews with some companies as well as updates from the meeting all throughout the day. Thank you. Well be looking forward to that. Thanks. Time for todays trading block. Were going to focus on oil and currencies. The dollar up 9 this year with the gains made in the past three months. Oil prices bounding back a bit after a deep slide the past few weeks. Demand expected to get a blast expected to blanket a good chunk of the country. Joining us is bk Asset Management and rbc capital markets. Good to see you, ladies. Ladies. Can the winter that were seeing really help oil prices at this point . One of the reasons is weve had had better numbers out of china. 18 growth year on year. So youve got to be watching for the demand numbers. I think expectations are starting to be built in. If we do not get an opec cut, it will drag it down a leg. The narrative ive heard is this. Even if opec has an agreement, we know that nearly everybody in opec is incentivized to cheat so it would be meaningless. It would be on saudi arabia, kuwait. I think they have to cut later on in the year if we dont get a price pickup. But now the expectation is there. All right. Kathy, lets talk about the dollar which has been so strong. One of the reasons why oil has moved lower. Huge runup in the last few weeks in particular. I think theres a correction in the dollar this week. First and foremost, even after fridays report, you still see significant demand for u. S. Treasuries. I think for this relatively light data week, weve got nothing going on in l the retail sales report to the relatively low level of u. S. Rates. On top of that, the weakness of certain currencies thats caused by the strength of the dollar is becoming a big headache for Oil Producing central banks. So we can hear more about the countries that support the currencies. And then finally the story of positioning is a relatively big one. According to the cftc data, were seeing short positions at the highest levels since july of 2012. The story here is because weve had a light data week, this is a good time for speculators to take profits there. So you ask me how do you play this . On the short term, a correction on the dollar or as an investor you can look at this as an opportunity to come in at lower levels. You follow the ruble at all . I do. So this morning the head of the Central Bank Going further than on friday saying we are just not going to do any intervention whatsoever. And Vladimir Putin, youll be happy to hear said the decline in the ruble which has been catastrophic has nothing to do with fundamentals. Is he right . Well, i think theres certainly a fundamental factor impacted by the decline in oil prices as well as the strength in the dollar. But of course the geopolitical issues around ukraine and russia are still having a big influence on those in the currency. So they dont want to see the currency fall too much. Theres a fine line that the banks have to walk. While on the one hand we do see the weakness of the currency hopefully helping the export sector and its not necessarily beneficial. Thats an understatement. Just so you know the finance minister said her decision to abandon the ruble corridor came a bit late. Well see how long she lasts at this point. Helima, whats your forecast for the rest of the year . Weve got prices at 94 and then the following year 2016 we see 97 and wti 97 as well. Why . We think demand is not falling off the cliff. Look at Something Like spare capacity. You would think were sitting on 7. 5 Million Barrels of spare capacity. Were at probably 3. 5 million. You still have challenged oil producers. We think the market fundamentals are better than many participants think right now. All right, ladies, good to see you this morning. Kathy and helima joining us on the trading block. Wasnt that cool, joe . Unbelievable. Awesome. Three women. I could go even further. Whats that . Three different minority groups. Okay. Thats cool. Thats right. Youre including . Im considered hispanic, yes. Thats the box i check. Justlike Elizabeth Warren being native american. Okay. Okay. This is all you. This is all you, andrew. Im were going come back in just a moment. Its time for a shave. This is going to be more manly. Harrys joining us during this movember. How theyre trying to cut off a piece of this market. Were not doing mustaches, right . And as we head to a break, check out the futures. Were back in a moment. vo rush hour around here starts at 6 30 a. M. On the nose. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Its in this spirit that ingu u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. Welcome back to squawk box. If you only knew. Lets take a look at the futures right now. Some really nice bonding here on the set. Seven points on the dow. Up a little bit over a point and a half on the s p. And five and a half points on the nasdaq. Making headlines, a small town in massachusetts is taking steps this week to actually put an end to tobacco. Westminsters board of health. I assume its board of health will hear public could be board of help. Its a typo. It helps people by helping with their health. Comment on proposed regulation. If passed the town will become the nations first to ban sales of all Tobacco Products which im sure mr. Nanny thinks is a great idea. You should pioneer that. Board of help. I think its not a bad idea. We do in most liberal cities. Happy movember. Shaving company harrys is part of the movember market. Giving Companies Like gillette and schick a run for their money. It bought its own factory in germany this year. Joins us now. And apparently we just discovered former camp mate of mine. Thats cool too. Both of these your mustache we can see. And thats literally a week old. Yeah. Since november 1st. Youre still working on it. Yeah. Its lovely as my wife told me this morning, i look great. You havent shaved for a week. I have not. And thats what you get . Thats what i got. Thats cute. How do you get involved in the movember project . We met the members before meeting harrys. They raised over 500 million to support mens health issues. So they were great guys. As a shaving company we wanted to do anything to help them support their cause. The regular mustache is lame now. You cant go with regular jex fox worthy. Im just experimenting. You could think im out of style. Nobody has a regular mustache. Not even alex trebek has a regular mustache anymore. He has nothing. He does have something. That might be a fu manchu. That might be a full beard. I dont know what youre going for there. Gentlemen, tell us about for those people in the audience who are still using a gillette or schick, tell us about this company and how you created it and what the difference is between what theyre doing and what youre doing. Harrys was born out of a frustration of overpaying for razor blades. Theyre so expensive. We develop high quality products, sell it at a fraction of the price direct on our website. What are we talking . If you buy a razor blade at a drugstore youre spending 4 a cartridge. Ours is 2. Four o for five blades . S that thats an arms race. I was saying ive now tested out the few gillette fusion electric vibrating everything. Hue do you think that compares . I think what were trying to do is get people a better experience from start to finish. Better purchase experience, shaving experience. And a better price. They just show up if you subscri subscribe . You can. Its an easier experience, half the price. We offer subscription as a service, but we dont force it. Some guys like to replace whenever they want. We want to make sure if they do, they have that opportunity. But we also offer a Subscription Service if theyd like. You going to do a girl version in pink or teal . Actually been blown away by how many women like to use harrys. We have lots of female customers and theyre happy with it right now. I bet they would like pink. You want to tell us about the new product . Sure. We released foamy gel and aftershave recently. The really great thing about our business is we have this direct relationship with the customers. We started creating the products we thought they would like. Both tend not to be great skincare products for you. So we created products that not only sort of work in a way the traditional product dos but also moisturize your skin. We packed them with Natural Ingredients so you feel good. Your face is smooth and nourished. Whos manufacturing it for you . We actually manufacture our own razor blades. We were working with the factory and its so hard to make quality blades that we decided to buy the factory. We do everything from grind steal to sell direct to customers. We feel its a powerful model. Wheres that . Its in germany. Are you selling in europe . No. Are you selling under a different brand . The factory has customers in europe. But for us harrys is in the u. S. And canada today. We will eventually sell there in the future. Whos manufacturing this for you . We work with really good labs in the u. S. That sort of help us make the shaving cream. We have a whole team in house that really works on sort of formulations and making sure that we are able to deliver the functional benefits to customers we want. And then we work with chemistry partners to develop formulations, test them, and then bring them to market. Let me ask you a different question which is youre a warby man. That was to be online direct only. Then they decided to do stores because people liked to try the stuff on. You have a couple of retail relationships, but do you see this ever me being able to walk in and buy these blades . The way we think about retail is we want to deliver products to the customers in the most comfortable way possible. People were literally coming to our office to try on glasses and we said theres a demand for this. We said we want to go where our customers are. At harrys one of the things we realized when andy went to the drugstore early on, one was that razors are locked up in the store. So its not really a pleasurable experience for them to buy products that way. And so thats not really exciting to us to sell them that way. If we were going to retail, wed want to do it in a way that was pleasurable to customers and delivered them the experience wed want. What about selling these in warby parker. I think they tend to go there to buy glasses. We sell at j. Crewe. We Just Launched in barneys. And retail environments where we think people love to shop and have a great experience, we enjoy finding partners. Weve got to go, but is the vibration thing real . I want to know. I honestly want to know. I meant in the or his mind is in the gutter. No vibration. Thats our perspective on the matter. Im sorry, andrew. I was not thinking like that. I wasnt either. Im a 15yearold inside, what do you want . Men are constantly getting a better shave. How you can get a decent shave with only five blades, i dont know. Can you revolutionize the electric razor, by the way . Traditional razor blades provide a better shaving experience. Jeff, andy, go camp cedar. Thank you. Thanks. Appreciate it. Coming up, it was one a highflying biotech stock. So why are they filing for bankruptcy today . And why trouble at one port in california could ruin christmas for the retail industry. Squawk box will be stop it will be right back. receptionist Gunderman Group. Gunderman group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Welcome back to squawk box. We want to bring your attention to a worthy cause. Were auctioning off a chance to come to our set. You could hang out with us, watch squawk box live, take a tour of cnbc and have breakfast with us. If you actually want to do that. It is all to benefit the lulu and leo fund. It is a very cool organization. Check out the auction and interyour bid, charity buzz. Com lulu leo. Way to sell it. If anyone would want to have breakfast with us. Of course they do. Were talking to people that want to have breakfast. He was trying to be selfdeprecating. Oh, you were . Doesnt fit you. They would. Itd be great. And we can sit right over here. Well everyone throw you on camera for a second. Ooh. Youre offering on screen . Ill do that. I mean, im not going to i dont know if ill sign anything that says that. But can we swing that, mack . Easily, right . We want to show someone whos here, we show them on camera. Okay. Done. No problem. If you bid it up, you get on screen. I mean, if youre presentable. Lets take a look at some stocks to watch this morning. Dendreon filing for chapter 11 bankruptcy production. Already striking an agreement to restructure. And transocean Beat Estimates on the top and bottom line. Related to a drop in day rates for its oil rigs. And white waves earnings topped estimates by a penny. Helped strong american performance. Greg engles willing joining us. Coming up next, did mcdonalds get any of its mojo back . Find out after the break. Squawk box returns in just a moment. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin with joe kernen and michelle carusocabrera. Lets start with the polar invasion. Large parts of the country bracing for freezing temperatures and heavy snow today. The great lakes could see up to 18 inches by tomorrow. President obamas in china today meeting with World Leaders. He says they have made Good Progress in finishing what he called a historic trade agreement. And in Corporate News this morning, bad news on the General Motors front. Ordered half a million replacement ignition switches two months before the recall of millions of vehicles. Citing emails between gm and its supplier. Mcdonalds is going to help the dow off the bat here. 95. 10 is the close. The bid is now 95. 50. And the numbers are negative but not nearly as negative as the street was looking for. They were looking for global comp stores for october to fall 2. 5 . And, in fact, it only decreased a half a percent. For the u. S. Which is obviously a big market. The actual number was down 1 . According to the street account was down 2. 3 . Down just 1 . Europe, the estimate was for down 2. 3 , and so i have that one . I dont have that one yet. But asia pacific was down 4. 2 . And thats right in line. Down 4. 3 was the estimate. Theres european. Down. 7 . Thats wait better than expected. So things are whenever you do these, you also have to remember that you have to look at the environment last year and how whether it was a friendly or a tough comp based on what they were going last year. Obviously you want it to go up. If they had great numbers last year and only down half a percent, its not as bad as it possibly looks. There we have the stock trading up 54 cents. Like to see the dow futures up maybe up double digits now based on the dough futures. Not yet. Tomorrow marks singles day in china. A day of celebration for people who are single. Its also becoming the largest Online Shopping day in the world. And alibaba has turned it into a huge event. Companys expected to smash the single Online Shopping day sales. And i assume david is there for alibaba. David, its you know, clear this up. Tomorrow hell be speaking exclusively to jack ma. I know theres how many people and figure half are guys. But youre not there for singles day are you . No. Im not. Im not. As you well know, joe, i am not single. But you can buy yourself a gift. I think theyre encouraging everybody to do so so even if theyre not single, they took a day that sort of existed as a celebration of being single in 2009 at alibaba and turned it into a day of commerce. And that resulted in increased sales for the last three years to the point where it is by far the largest single day on the planet. 5. 8 billion worth of gross Merchandise Sales last year. This year expected to do well in excess of that. 158 million packages resulted in being sent last year from those orders. They did 15,000 transactions. I believe it was every payment every second. Some unbelievable numbers. All expected to go up, as i said, for a day that has been tr mpled into a day to buy yourself a gift with enormous discounts being offered by merchants to participate. Talked to one handbag merchant who said 20 of their online sales will take place on this one day. 20 . Kind of amazing when you think about what theyve been able to accomplish. Theyre not able to bring it globally at alibaba. Not just here in china. And well see how successful they are in doing that. And what the ultimate number is in terms of sales, packages that result from those sales. In results of transactions. But clearly they are increasingly making a big day of this. Including of course in this auditorium right here. Then we get to watch the numbers roll in, joe. David, what is going on behind you . Theres this video that is very funny to watch almost distracting. What are they doing . You know, you can see it, i cant. I cant actually see it unless i turn around. There it is. I really have no idea. They were dancing before. David theres a lot of festivity here as you know. Theres charactering all over. A lot of cats. Theres a correlation there. So one my camera man shaking his head before. 1. 4 billion people. Half are female. So lets call that 700 million and then how many are single . Im going to have to find that one out, too, joe. Quite a few. 307 million active users on the alibaba platform. We got those numbers just last week when they reported their first quarterly numbers. And theyre all sing snls. How many single people there are, i dont know. Youre wearing a band around your wrist. Is that a security thing . Are you going to a rave later . What is that . Thats a club. Thats a singles club. I have been up more or less i dont know how long at this point. But, no. Its just so i can get in and out of this place. Theyve got hundreds and hundreds of press here. So they want to make sure we can get around and dont get stopped. The campus is actually quite large encompassing a lot of different buildings. Were going to look at a lot of it and talk live to jack ma, the founder of alibaba, tomorrow morning eastern time 10 00 a. M. Itll be 11 00 p. M. Here. So singles day will just about be wrapping up. We should have a good count on how many things they sold on what is a day that swamps cyber monday. It equals cyber monday week in terms of sales. We cant wait. Going to be bragreat. Is jack ma single . Are you guys hanging . Theres a need to know here. Im going to need to know. Just a coincidence that its alibaba and singles. Jacks not single. Im not single. Youre not single. Youre a long way from here, faber. Thats my point. Lets just leave it there, joe. Okay. Hes on the other side of the world. Theres not a court in the land thats going to anyway. Jenny, im sorry. Im kidding. Theyre monetizing a holiday. Thats a Great American tradition. Got to hand it to them. Stocks on a winning streak. Dom chu joins us with bellwether names. I dont think any of us are single. Any of us on the show right now. No, were not. Its not going to be that way. So lets talk about these stocks that are a leading indicator with the overall economy. There may be signs of bullishness. Lets take a look at one of them to start. Its one we always associate with global commerce. Thats caterpillar. Because they make the dozers and dump trucks that build things like roads, like highways, like bridges. That sort of thing. Its up 7 over the course of the last month. Not too shabby. In honor of singles day, lets talk about global commerce. When you sell that much stuff, youve got to ship it all over the place. Fedex up 9 over the course of the last month. As people start to anticipate more commerce and more things getting shipped around both from the suppliers side and consumer side, fedex is one of the companies that benefits and they are rewarding them over the course of the last month. And im going to take a license with this one. Louis vuitton, lvmh one of the biggest Luxury Brands in the world, its paris traded primarily, but youve got huge brands that are up about 6 over the last month. So guys, maybe these are some of the leading indicators for more bullishness coming down in the economy. Back to you. Thank you. Appreciate it. Theres a lot today taking center stage. All week long, walmart, jcpenney, kohls, and may sis. Check out this stat. 80 of Companies Reported so far have beaten estimates, but only 60 have actually beat sales expectations. Joining us now is Richard Bernstein of richard f. Bernstein advisers. And our guest host for the hour charles cantor. Hes a managing director. We havent spoken to you in maybe three or four weeks and were out. Were done. But then japan did it. And we think euro will too. Did any of this factor into your thinking about whether the market continues to go higher . I think were more in the camp that the example is beginning to go on its own nap it doesnt need qe as would the economy in any other midcycle environment. Why did it stall in recent years . Why did we have those swoons . And when you have specifics this time around, it seems there would be reasons to have another swoon. Were kicking into a higher gear. But theres always something out there. Why is it different this time and we dont we arent disappointed again . Monetary policy is geared to stimulate credit sensitive sectors. Where was the bubble you know ending in 2008 . It was in credit sensitive sectors. So the idea that a Monetary Policy was going to be overly stimlative or that it would be impotent relative to history i just think was misguided a bit. Any attempt to resimulate a bubble, it shows youre not going to be successful. In the amount of stimulus, the length of time, everything one could think of, it had to be bigger and longer. But i think were finally do the point where one could say that the economy is beginning to go on its own. I mean, look at Consumer Confidence. I mean, Consumer Confidence last month came out at a cycle high and is actually now above average relative to the longterm history. So somethings clearly happening here that didnt happen two years ago or three years ago. And youve pointed out, rich just talked about how well corporations have been doing for a few years. Are we finally seeing consumers do a little bit better as well . I think thats whats been missing. The high end has lots to spend and the low end remains challenged. But the story for the last month has just been amazing amount of corporate earnings that have come through. When you started the cycle, you thought youd get 4 . Thats been impressive. And while rich expresses an optimistic value, what isnt exuberant is the soft market in total. So his optimism isnt expressed in the way asset values are being priced today. So were not expensive here . No. What is your number for next year . What do you say were trading at . I think as values, the market will go with earnings. And if you get 6 to 8 Earnings Growth, youll get equity values and most people didnt believe that a year ago and probably dont believe it now. So multiples dont contract as Interest Rates go up. I dont think they necessarily have to contract. I would say look. The question is why would Interest Rates go up. Interest rates go up because the nominal economy is getting stronger. Thats the only reason rates go up. We can have all these views of why rates are going to go up. And the world is shedding treasuries like crazy. I think thats apocalyptic. Rates are going up, whats happening to earnings . Earnings are nominal too. Earnings will improve. Yes, the multiple would impress. The question is whether the ratio is coming down or going up. If you think Interest Rates are going up, you have to say the e is going to be coming up. Thats healthy that used to be called a earnings driven market. Its the middle initial that you have anointed me with. You say it like its a bad thing. Never had one. Its like in the wizard of 0s. Getting a heart or a brain. If i only had a middle name. Well, you do. Charles, so, i dont know. 6 to 8 . Can i add dividends in at least . I dont think you need to. Whats surprising about this environment is people still remain skeptical about equity values. And almost non believing. Because you have skepticism. I think you can get a Reasonable Risk adjustment return from your equity value. As it relates to high Interest Rates should they show up is what that does to all causes and whether you have have a smooth transition as the fed withdraws astonishing amounts of liquidity. All right. Gentlemen, rich, charles, thanks. Well have more with charles throughout the hour. Hell be back soon. Im sure. Well see him soon. Effins a cool name. Like soda or seven. Coming up, mcdonalds serving up sales. Were going to sift through the companys information with an analyst. And later the nations largest shipping container port seeing a bigtime slowdown. A look at how it could delay your presents from reaching their destinations if a problem is not resolved. Squawk box will be right back. Of experience. H for access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Its the most wonderful time of the year with the kids jingle belling and everyone telling you be of good cheer on december 3rd. Its lit. Thats the day to avoid midtown. Live on nbc. Stay home and watch it on tv. You should. Do you know whos booked yet . I do not know whos booked yet. Always huge stars. It was beyonce one year. Taylor swift would be good. Welcome to new york. Shes the ambassador for new york city now. I might be able to arrange that. Should i make some calls . Definitely work on that. I would like to see her perform. Great. Mcdonalds reporting falling october sales both globally and in all its individual regions. But all those drops were smaller than expected. Morningstar joins us. For those who didnt see the numbers, they expected a decline worse than reality. Does this mean their issues are solved here . Weve been fretting so much about their potential for future growth. I dont know if thats necessarily the case here. Looking like a better than expected results out of october. Certainly compared to september where we had the negative 4. 1 comps in the u. S. And down in europe as well. The big question coming out of the results this morning is whether or not this is the case where Industry Trends which have been positive the last couple months have been more of the driver here or if its companyspecific things. I tend to think its more industry related. The company didnt point to anything driving results this morning other than saying it still needs to work on a number of initiatives that it called out recently. Giving authority to more of a level. Dont think the company is out of the woods yet. Menu authority. I love that phrase. Theres a consensus out there that mcdonalds has a problem. Its a big one. Young kids these days think theyre going to go for places like chi poepotle. I think thats one of the issues. Dwunt offer as healthy or organic or naturally raises products in its food. Thats something theyre looking to address. Their latest marketing campaigns, thats at the forefront there. The fact remains its not going to stop the consumer minds. This is going to take time to change and change the perceptions about the food quality there. I also think its going to take some new menu innovations. I think thats where some of the idea of making customizable products and going in to be able to customize what you put on a burger, i think thats a good start and helping to change consumers perceptions. Cant you do that already . I can walk in and say dont. Ketchup or mustard on that. Yeah. But i think theyre talking about ingredients youve never seen on the menu before. Its not something thats going to change overnight. Theyre in the test phase with this effort. I see you nodding your head, charles. You like mcdonalds . Not necessarily. I think they have a perception problem as well. Not to mention execution problem. When youve got 35,000 locations in a hundred countries, turning that is really difficult. And youre going to spend a lot of time this week talking about retailing. And retailers need traffic drivers and they need a lot of value. Mcdonalds is caught up with not enough innovation, a ton of competition in the sandwich category, in the burger category. And so you got to get customers in the door. When youre not connecting with them, its hard to do that. But arent they still doing 2. 5 million per restaurant here with margins of 31 when the ru rest of the industry isnt that how were stating it . I think that is. And the company is doing reasonably well. Its just the numbers have been struggling. Thats going to lead to deleverage. On the backs of franchisees. They get a little bit more concerned. I think thats an issue that, you know, at the end of the day its something that is i think there are some real concerns here. For the longterm holder here, mcdonalds is one of those names that you think in phi years are we going to look at this moment and think how stupid were we to be worried about the future of mcdonalds or is it going to be one of those my gosh that was the beginning of the secular decline. I think you always want to think where the pucks going, not where the pucks been. 3. 5 dividend yield, youre getting paid to wait. But youre in a value trap. And there is the tussle. As an equity, you want growth. All those numbers while better than expected were all still negative. When youre in the Public Markets and youre in equity, youve got to grow. From the bond side, its really interesting. You get 3. 5 to 4 dividend yield. Probably traded at a lower yield than that surprisingly and you have the hope it can grow. So from the way we would think about it, for income orientated investors, if you want total returns closer to what i thought about earlier, find something that can actually grow. All right. R. J. , good to have you on this morning. Appreciate it. Thank you. Coming up, shutter stock going up thanks to more people using their pictures. But up knicks its the great bed race in miami and one rapper loving every minute of it. Find out what were talking about after the break. You, my friend are a master of diversification. Who would have thought three cheese lasagna would go with chocolate cake and ceviche . The same guy who thought that small caps and bond funds would go with a merging markets. Its a masterpiece. Thanks. Clearly you are type e. You made it phil. Welcome home. Now whats our strategy with the fondue . Diversifying your portfolio . E trade gives you the tools and resources to get it right. Are you type e . Theres a fun event which earned money over the weekend. The sixth annual great bed race. Drew teams of racers decked out in decorated themed beds and colorful costumes. Each assigned money to the little smiles of florida charity. The teams competed for cash prizes in several categories including best decor, engineering, and crowd favorite. Vanilla ice says its an event he looks forward to every year. You got a crazy bed race going on. Youve got people dressed up like Ninja Turtles coming down the street. Theyve got balloons and cows and bears coming in here. You never know whoo what to expect. I didnt know he was still around. I loved vanilla ice. Coming up next, what economists are saying about the prospects for u. S. Growth following the latest jobs report. Were back in a moment. Financial noise financial noise financial noise financial noise welcome back to squawk box. Heres whats making headlines this morning. Gas prices continue to fall. The latest lundberg survey shows it at 2. 99 per gallon. A new system says black friday is not the day to get the best deals on holiday gifts. According to adobe shoppers who bought gifts on the day before thanksgiving actually got the best prices. And garth brooks is launching his own music Download Store featuring some 10 million songs including his own. The site is called ghosttunes. Going to go live tomorrow. He has never before allowed his music to be sold digitally. Ive got friends in low places, thats a big hit. And middle east going around itunes. Right. I like it. The largest container hub, the long shore and Warehouse Union not seeing aye to eye with management at west coast port. Halle jackson joins us live with more. Tell us about this, hallie. Sure thing. Good morning to you. Theyve been in talk since the summer but now the Maritime Association is accusing the union of an essential slowdown to get more leverage in these contract talks. Take a look at the long line of trucks waiting to handle cargo in l. A. Management says it is refusing to dispatch hundreds of qualified users here and at other ports in the west coast, but they blame the congestion on management. Listen. Theres a lot of growing frustration from workers who feel like they arent being heard, they arent getting a fair hearing from the employers. Employer who is are doing well financially and are really causing a lot of problems that have plagued the docks for months. The big concern here, the possibility of a shutdown. If the ports close here like they did in 2002, that could be devastating to businesses in the auto, agriculture, retail, manufacturing industries. Even though several economists say how bad it would be for the economy, a fiveday shutdown this year could cost 10 billion. Thats why the nrf and the coalition of businesses want president obama to name a federal mediator. The fact that were now six months in and havent seen any progress, you know, its time for the parties to really sit down, roll up the sleeves, and get a deal done. If that involves using outside third party, we fully support that and think others should as well. Federal mediators tell cnbc theyre monitoring the situation here but have no other comment. And the stakes are high. Remember that about half of all merchandise coming in through the u. S. Come in through west coast ports which are a key gateway to asia. Think about the timing here. Stores trying to stock those shelves for the holidays. Thank you for that report. Looks beautiful there. Looks very early in the morning. Because it is. It is early in the morning. Issue up at 5 30. But a great shot. Thank you for that, hallie. In the meantime, lets get to steve leisman. Hes been looking at the jobs report and studying what economists are taking away from the data all weekend long. Steve . It was very exciting. What im seeing is set for better job growth. That remains a forecast. Saying consistent job gains are pushing down all measures of labor markets at an encouragingly rapid clip. The trend in real gdp growth appears to have moved up to 3 . And if Current Trends persist, labor Market Conditions will have met the minimum standard for a rate hike within a matter of month ifs they havent done so already. But they havent met it on the invasion side. Whats going on with labor slack . Unemployment is falling. The broader Unemployment Rate which takes into account discouraged workers, thats also falling. Parttime economic reasons. Three months in a row of a decline. 700,000 overall you would think makes sense. People working parttime for economic reasons would be the first people absorbed. If things are getting better, this is what youd expect to see. Then look at the feds dilemma here which is easy to see. This is where we are relative to where we were. Were at 6. 9 million down from a peak of 9. 1 million. But the normal was 4. 4 million. So youre still 2. 5 million over. That still remains considerable. One thing we want to show you is the fed funds rate. Were at 52 basis points for december 2015. So whatever the fed is saying, whatever people believe about whats going on, the market is still counting on just 50 basis points right now for the end of next year. Which i think is a success for the fed in convincing the markets that they will remain low for long. But i think theyre going to have to make some adjustments in the upcoming december forecast both bumping up the Unemployment Rate bumping down the Unemployment Rate and bumping up the amount of Market Expectations for tightening. Winning the conversation today measured by the futures curves. Its just astonishing to us how low the rates are on a global basis. And more and more i think Global Investors are looking saying i can double my yield and own a dollar currency. When we look at the feds fund race. Explain that. Investors say i can convert from my currency buy dollars and a u. S. Yielding instrument. Easiest to say is germany versus the u. S. On a tenyear basis. You worry is my currency going to appreciate versus the dollar. Now theyre winning twice. I think when you look at the bond markets more broadly, look at it through the lens of its not normal and the global bond markets are much more liquid and much more global than our equity markets. I have a problem figuring it out. There are people making the case that the Interest Rates we assume are normal. By that having been in the business, i remember coming down to 6 and 8 . Is it possible that the late 70s truly was once in a i mean, even a historically unprecedented. Do we stay down here forever . Thats the new normal. Was that an aberration earlier . There is definitely first of all, i want a buck for every guy whos called the end to the global bond market rally. Theres been a bunch of people who have called that and theyve been dead wrong. But even now in the recent cycle. I think thats a good point. The 70s was this aberration. Youve had this long before that it was 3 and 4 , wasnt it . For long periods of time . Theres a 200year according to gregory clark, economic historian at university of clark davis the longterm average return is 3 to 4 . On what . On your money. And bonds would pay i would just say that the beauty about the fixed income markets is a mathematical low. And the ability to get Capital Appreciation is low and you dont have a lot of income. It doesnt mean it cant work out that way. But it certainly suggests that your margin of safety and fixed income, i would suggest, is more. In the old days when rates moved when yields moved up, you got your coupon back quickly because youre starting at a 6 or 7 level. Now rates move quickly, all of this charles is talking about means the fed is in no hurry. Theres no push on the inflation side. The fed has to go late. Because of all the money on the table already. M cog up next, looking to add a bit of character to your website . Maybe a photo or two to brighten up your business home page . Shutterstock may have the picture perfect answer. The companys ceo is going to join us next. Meantime, futures this morning. Theyre suggesting an ever so slightly positive open. Squawk box is coming right back. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. You can bring back from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. Beautiful shot of our nations capital. Usually get that as a stock shock. Shutterstock is a place for royalty images and videos. And the stock is up more than 20 in the last month. Joining us now is the founder and ceo of shutterstock. Good morning. Do you have shots of the capital . We have every shot of every capitol. You have every shot of every capitol. So explain this business to us. I think most people dont appreciate what your company does in terms of what these how these images are made, created, distributed, and how you make money doing that. So we provide the ingredients for creatives around the world to create everything they need for their business. We have 60,000 contributors around the world that upload video and images to us every day. We have a million customers that download this stuff. Use it in print, online, billboards, websites, email blasts. Everything they do in their everyday businesses. Do they pay for them . Yeah. So we sell subscriptions and image packs and video on a clipbyclip basis. So in terms of the gloet part of this basis, is it the images or the video . Its both. But the video side is growing faster than the overall business. In the past year, devices that we carry around with us every day can stream video. And so the demand for video has accelerated over the past few years. Were seeing our stuff get used in everything from websites, advertisements, to major motion pictures. How did you convince people to pay for stuff where everybody wants everything free on the internet . Our images have model releases and property releases with them. If you want to use them in advertisements you have to grab something off the web. If you do it, it can be embarrassing. But you can use some of the stuff for free. On shutterstock, everything you have to pay for. Getting images recently made a decision. Getty images said if youre using it for personal use on a blog or something of that sort, that you dont have to pay. Yeah. What do you make of that . Vast majority of our business is to businesses that want to use our images to make money with them. There are always going to be people out there that want to use images on personal blogs. We decided to just keep pushing the direction were going in to sell it to businesses that want to use them to make money. What do you do when people steal your images . All of our images are water marked. You have to purchase a subscription before you can get the image without the water mark on it. And when you find somebody doing it, what do you do . Yeah. We contact them and ask them to take it down. Then we try to get them into a subscription to upsell them into the product. Because generally theyre probably using images every day and need our stuff. When you think about for the company, what are the three to five key messages you try to communicate into the country and the environment where things change so quickly and extern externally . The messages that we did you as the ceo of the company. Were in an area where people are creating things every day. And we provide the ingredients for creatives all around the world to use our stuff to drive their sales. So what were doing is were trying to just continue to get people to use our images and to increase sales. Let me ask you a crowdsourcing, how do people make money for you . We have 60,000 contributors around the world. They upload images to us every day. Mostly professional photographers . Theyre not yeah. They vary. So its everyone from someone shooting an image on their mobile device to the professional photographer that has extra shots from their shoots throughout the day that ept the upload to our site. How do you compete against the other image companies, the gettys of the world . So weve been doing this for 11 years and we have an easy product. We listen to our customers. We have a subscription thats 249 a month for basically everything. Do you think of yourselves in the same exact business . Getty is our competitor. But you dont do as much editorial work. We dont today. You can upload editorial images. We have plenty of stuff. But today we mostly exist in the commercial space. For businesses that want to use commercially released images to sell things. You know, its funny. In the news business, the print business, the print stuff gets ripped off all the time. Images will always sort of have a market. Yeah. For editorial use, its a little bit different of a market because you dont need the model releases and the property releases. Its a little different. Were in that area too but we mostly sell commercial image zbl. Thanks for joining us today. Congratulations on the success. A company posting a smaller than expected loss. Thats also a surprise for the current quarter. The company was hurt by slowing demand and higher milk prices. But you can see up about 10 today. Up next, it is cramer time. Find out what jim will be watching when stocks start trading. After three super bowl rings are stolen, a former patriots star takes to twitter to help try to find them. Well be right back. Tomorrow on squawk box, the stars of the mostwatched tv show ever. I had. This is elmo from sesame street. Elmo and grover talk business and 45 years of Emmy Award WinningTelevision Programming for children. Sesame street comes to squawk box. Squawk box has been brought to you by the letters c n b c. Financial noise financial noise financial noise financial noise im just looking over the company bills. Up . Is that what we pay for internet . Yup. Dsl is about 90 bucks a month. Thats funny, for that price with comcast business, i think you get like 50 megabits. Wow thats fast. Personally, i prefer a slow internet. There is something about the sweet meditative glow of a loading website. Dont listen to the naysayer. Switch to comcast Business Today and get 50 megabits per second for 89. 95. Comcast business. Built for business. Threetime super bowl champ taking to twitter over the weekend to announce his rings had been stolen. Houston texans linebacker choecoach mike grable who earned the rings with the patriots had his home broken into, and tweeted to the houston area pawn shops, three super bowl rings headed your way courtesy of the mf who smashed in our back door. A third round pick of the Pittsburgh Steelers in 1997 everybody played 14 seasons in the nfl for the steelers, patriots and kansas city chiefs. Down to the new york stock exchange, firstplace Philadelphia Eagles taking on the panthers. Is it in philly . Yes, it is. This is a big game, if only because youve got to stay ahead of the cowboys. Cowboys are still good, around they . Yeah. Its fun watching. Things like the jets happen, like out of nowhere. I was look, that was one of the shocking games. Sitting there saying, okay, big ben is so hot, vick is so cold, and it just, you know, comes together. Crazy. Jim, you i dont remember what happened with proven, it cost too much . Theyre done. Yeah. I remember being critical of it at the time, it had become a cold stock. Everyone said this was the particular medicine and it just kind of didnt pan out. Didnt work that well . Im sure people were angry when you Say Something bad. But it didnt pan out. Theres so many call them the dendreonites. Back then chat rooms, we didnt have twitter. Quaint, chat rooms. Where they would just vent. And i had said it was the equivalent of provasic. Big attack on me, because it was from the fugitive the one dr. Richard kimble knew was phony. Incredible. Are you the, the drug was this turned out to be one of those stories that you and i have had to deal with over the years, joe, where people it caught the fancy of the Retail Investor but it did not fool the institutional investor. Were still trying i think it hooks something up to your own immune system. Still trying to do that. Side effects. Some things work but too expensive, didnt work well enough. Yeah, look, you always want to cheer for these medicines but sometimes the stocks dont work. All right. Jim, see you in a couple of minutes, thanks. Coming up, why led zeppelins robert plant ripped up an 800 million and what Sir Richard Branson has to do with it. All of that when we return. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. The living founding members of led zeppelin close to signing 800 Million Contract to play reunion tour. The New York Post reports Sir Richard Branson offered month ty to play 35 tour dates. Page and jones signed on and jason bonham would have played drums but robert plant tore up. Contract in front of the concert promoter. No word why. Hes notoriously its a difficult guy his voice, some would say, who is most important jimmy page or robert plant . Robbery robert plant. Eternal question. They did i was surprised they played in 2007, most recently. Hadnt played together since then. Always the lead singer who is difficult, right . The front man, at times. Stix, van halen. Its cool, 800 million, how is it going to change his life, hes 66. Sure hes not hurting. Maybe hes a man of principal. Which everybody else would do it. I love them when i was young but theyve been a little bit overplayed for me. Looking for 6, you know, stairway to heaven. Didnt you play that at 10 00 every party when you went to when you were a teenager. Makeout time. Heard a lot. They were great. I mean ever listen to stairway to heaven . Years ago, yes. Familiar with the piece. You never it was more you heard that he wore a glove . And a red jacket . Absolutely. Michael jackson was his thing. Greatest selling album ever. You cant be michael jackson. Guest host for the last hour he used to wear a white glove. What is the longterm average for Interest Rates, longterm Interest Rates with the debate about what the new normal might be when it comes to i, i, tenyearold yield . I dont know, its impossible to say at this moment. I mean, i think the consensus this year was tenyear yields would go higher and they went lower. Consensus for 15 years . I think over the next five years my view, not necessarily our firms view, my view would be the risk reward in things tied to rates looks not great. It doesnt mean it wont work out. But just the risk reward doesnt feel great. When starting with low yields, youre not getting income and you probably wont get capital preeviation. Good to have you on. One down, four to go this week. Mondays gone, right. Is that how you look at it . Its a pleasure being here. I look at it as an honor and a privilege every day. Happy monday. Thank you. Chan thanks, charles. Join us tomorrow. Squawk on the street is next. Good monday morning. Welcome to squawk on the streept im Carl Quintanilla with jim cramer and david faber is in china, where he will talk to alibaba executive chairman jack ma tomorrow. Well check in with david in a bit. We kick off the week with markets at record highs, the s p and dow, best threeweek performance in three years. Futures up as we prep for a big week of retail earnings. Tenyear yields down to 2. 37 crude oil trying to make a climb back to 80. Nat gas up