Transcripts For CNBC Squawk On The Street 20141119

Years data breach. Lowes and staples out. Tesla shares off in the premarket. A cautious note for Morgan Stanley. As we said, faber live at liberty investor day. An exclusive with john malone. First up, targets Third Quarter operating profit of 54 cents did beat forecasts. Comps up. Courtney reagan will have an exclusive interview with target Ceo Brian Cornell. Ive gotten to know the company pretty well since the change. I can tell you that brian is definitely an underpromiser and over deliverer. This is much faster a turn than i expected. The glaring issue here is that canada had been a disaster. Now its on the mend. They opened 125 stores in a year and it was a disaster. That looks like its behind them. The fact is that the merchandise has been reinvigorated. The online presentation, which was a disaster, obviously jump started by some Free Shipping. I dont want to say target is back because hell not like it if i say that. Hes a conservative man who comes from sams club and pepsi co. Ill tell you the run in target has now been justified. You can say, well, why didnt you put me into it. Cornell is a positive force. To say, listen, this was the term, would have not been in keeping with what he was trying to tell you. Weve talked for a while about the Free Shipping, being aggressive on taking back the share they had lost. Natural and organic. Lets fix that. Clothes, lets give it a little pizzazz again. Lets make the stores look better. Lets do better on seasonal merchandise. Target had been a very poorly managed company under its predecessor. He came in and hes going to a ton of canadian stores. I got to tell you, after listening to nordstrom opening one in calgary and thinking, you know what, we got it right, the canadian turn could be shocking. And this man is visiting store after store after store. Hes a very hard worker. Were in an environment where all the retail downgrades arent a comment on the business, theyre a comment on the valuation. No. Theyre a comment on how bad the analysts are. Honest to god. We have do you know it was 32 degrees in every state in the Union Yesterday . It is freezing in every state today. You know what that does to inventory . It blows it right through whether it be vf corp. , columbia sportswear. This is what weve been waiting for. Weve had horrible weather every year the wrong time. Weve had store closings, too much warmth. Suddenly it just clicks. Right when it needs to be cold, i want to be in retail right now. I want to open up a popup store and sell coldweather gear. Youre talking apparel specifically. Yes. The analysts forget what it was like when the limited used to go up and up, when target used to go up and up. The home depot call, when i saw the stock, i said, listen, i have to go over line by line. What a blowout. People said it went up a lot. But look at lowes. Lowes is good too. Lets get to lowes. Disposable income. Cold weather. Beat the streets. Comps up 5. 1. Company raises guidance for the full year. Also, staples, by the way, better than expected earnings and revenue. Closing up bad stores. 4 drop in comps. But on lowes, 5. 1 is getting into depot territory. I have been critical of him at times. There are times when hes fallen behind home depot. Lowes was always better than home depot. You know, the change at the top at home depot is terrific. Now theyve changed again. This lowes quarter shows you theres room for two. Maybe this is taking share from sears, from the mom and pops. The big box retailers, which had been the worst place to be in the market for ages, are back. Meantime, people are not blind to that. This news out of petsmart today. Kkr and clayden and maybe the return of a clubtype deal. You know, i spent a lot of time at petsmart. They got it right. They even got their online offering fixed. I Hope Management is involved. My hat is off to petsmart. They had a bad offering. They had terrible online. They made some acquisitions. They really fixed it. Just when theyve really fixed it with the wind at their back, of course these guys want to come in and take it over. Now that the hard works been done, my congratulations, petsmart, i had been very skeptical. Again, skeptical of target because these companies were poorly run. You dont believe they can reinvent themselves. That is a mistake in view of capitalism. Finally on staples, we mentioned the seventh quarter of declining sales. Is amazon just taking the Office Products . The merger of office depot and office max has definitely cut competition. The fact they closed 127 stores in north america mine closed. I always felt when i was in there, wow, i got a store to myself. I could see a Bowling Alley here, maybe a changing room over here. Staples has gotten rid of all those stores that have nobody. Theyve kept the winning stores. They have 700 million in Free Cash Flow year to date. Rebuilding momentum. There is a resurgence in retail. And people forget that stocks just dont always go up two and down two in retail. They can have major runs, and theyre having it. That macys downgrade, that is wrong. Everywhere theres a macys, its 32 degrees. Why do i say that . Because macys is in america. Yes. An echo of what youve said about nike and a bunch of other names. Look at this columbia sportswear. These warm boots. You cant keep them in stock. Go pro cant be kept in stock. Warm boots cant be kept in stock. Carl, my daughter is down there in new orleans. She said its freezing, dad, send warm clothes. Its awfully cold. Not to mention cotton prices are coming down. And the stores. It has been so long since iner have story has been manageable. If youre at vf corp. , youre saying, i want those plants offering 25 hours a week. 25 hours a day. Give me a fifth hour. Give me some leap year. Lets get that north face into the stores. You cant keep it on the shelves. This is a few phenomenon. The analysts are so beaten down. They dont believe you can have a run here. Theyre wrong. Were going to talk more about retail. I cut my teeth on retail from when i was 7 years old. This is the season to end all seasons. Lets get up town. Liberty media investor day where david faber just spoke exclusively with john malone. Hey, david. Good morning, guys. In fact, malone and i had one of our shorter conversations. It was only about 45 minutes long. Were going to be sharing excerpts from that conversation with john malone throughout the rest of this day and certainly later on squawk on the street. But i did ask, as you might expect, initially about the possibility of a new set of regulations for peoples broadband connections. Socalled Net Neutrality debate being enter into by the Obama Administration last year. The president giving at least, well, throwing his support to a certain extent behind the idea of title two regulation. That from the 1932 telecommunications act. As you might imagine, many people in the industry are a bit concerned if that actually should come to pass. Tom wheeler, the fcc chairman, has not seemed to be wanting to go down a title two road when it comes to ensuring Net Neutrality and how to regulate highspeed connections to the internet. I did ask mr. Malone what his thoughts were on the matter. Its a bit of a race condition. It would be unfortunate if the government intervened too heavily. Really, letting this Capital Marketplace play out will see multiple terrestrial providers, at least two, since the telephone industry has pretty much committed to build out and upgrade their network. Of course, that build out, for example, by fios is not necessarily nationwide. As you well know, our Parent Company comcast is in the process of trying to akwcquire time warner. Well see how this all plays out. As you heard from malone, he certainly doesnt think it would be a good thing necessarily to see title two. Although, again, its all within the parameters of what actually would be the regulation and how it would be implemented. But its an important debate, one that continues at this point. We got a lot more from malone that were going to be sharing throughout the day and also talking to the ceo of trip adviser, which of course liberty owns a significant stake in. Sirius satellite, which they control with what is a 57 stake. On and on. Qvc, well be talking to charter ceo. A lot going on here from midtown. David, in the conversation, we talk about cable, we talk about verizon. When is it time that we Start Talking about google . When we Start Talking about facebook. These companies are so well capitalized. There are people saying, listen, you could go buy dish. I know that jpmorgan has a positive note about global starts today. Thats a reach. But they talked about partnering. When do we Start Talking about these other nontelco players that have so much more capital than the telco players . You just did Start Talking about it. In fact, others have been for a while now as well. Certainly google. I dont hear facebook as often. Google has made that effort in certain cities. Kansas city, for example. Parts of texas. To actually wire things up. We also know about their project with those balloons to try to offer wifi. And theres this continued question as to whether they really would get in deeper with a large acquisition of some type. So certainly google enters that conversation. In fact, malone and i did talk about google as one of those potential interests. He says a race condition. Well, the Cable Companies are well ahead in that race. Theyve invested enormous amounts of money. They have the plant in place. Theyre upgrading things to a certain extent regularly. You do need a competitor that has enormous amounts of money. Some telephone companies, obviously verizon and at t, but also a google or facebook have the wherewithal should they choose to do that to actually compete on the broadband front. Well sooe whether, in fact, that happens. By the way, on that entire dish thing, jim, i know youve noticed that stock moving up. These auctions that have been going on, the aws auctions, well above many peoples expectations. Theyre moving into round 15, i think it is, today. Theyve already exceeded the reserve amounts. Theyve already exceeded many people believe what will be the total amount that the government takes in from those sale. Thats good for dish because of course it holds a lot of other spectrum. Hes also bidding in the auction. Were not quite sure where or how. We can assume hes in there as well. But i did want to mention that because thats a story to keep an eye on also. Im so glad you did. Jpmorgan out with a potentially explosive note about Wireless Telecom services, saying its very negative for the os, but it could be good for dish. Its shocking. The prices that are being paid, we got to talk about this. This is very meaningful and certainly well above already well above what i thought was possible. Maybe double what i thought it was going to be already. Yeah, i mean, people are looking at 1 or 1. 50 a pop, so to speak. Basically unit of population, what youre paying to get access to them. Were now above what many think will be 2. 50. So a big, big number there. Worthy of watching them. The reason why dish was up almost 4 yesterday. Big day over there, david. Well check in with you in a little bit. When we come back this morning, a tough morning for tesla. A call from Morgan Stanley weighing on stock. Well give you all the details. Take another look at the premarket. S p up ten. Dow is up 9 of 11. The nasdaq within 300 points of 5,000. 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. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Shares of tesla falling in the premarket. Morgan stanley slashing its 2015 earnings estimates for the automaker at 245 a share. They are reiterating theyre overweight, keeping their 320 price target. They just think model x has some execution risk. Yeah, i thought this was q z quizzic quizzical. When you get this kind of number cut, why not just say, listen, this is not nearly as good as we thought. Now, Morgan Stanley is a devout follower of tesla. I say, this is a reason once again to recognize this is a colds stock. What happens in a cold stock . Guy slashes numbers gigantically and says buy it anyway. That says this one doesnt have to play by the rules. We can take our numbers anywhere, and we still love it. Youre saying the analysis is wrong or not . Cut your price target if you cut your earnings. I dont ever want to see a dramatic cut in earnings and feel exactly the same about a company. To me, execution risk is meaningful. This is cutting deliveries to 5,000 from 15,000. Geez, this is just a major change. I cant be as bullish when you reduce expectations by 44 . Reduce your target. And the x delivery takes down almost twothirds essentially. The whole reason you want to own this thing is you believe in the out years youre going to get big numbers, not smaller numbers. I found this quizzical. That said, in october bottomed out around 220. Has gotten almost close to 260. Youre saying the believers believe and thats in a cold stock you know, i covered colds and followed colds for a long time, both in real life and stock life. They dont respond to fundamentals. This is a very big estimate cut from a guy i believe it. I believe in him. He seems to believe less in the thesis, even though he says buy. He cuts the numbers. It makes me less even more skeptical because to cut numbers this big do we cut numbers to zero . Its a little counterintuitive. Meantime, a lot of news involving netflix today. The Company Announcing it will launch its service in australia and new zealand in march. Also, neilson will begin measuring viewership on netflix beginning next month. And netflix pulling the plug on a bill cosby special scheduled to debut later this month. Thats in the wake of Sexual Assault allegations surrounding the actor. Not sure which is the bigger story. Neilson measuring long term could be interesting. Im always confused here. You kind of actually know. If youre looking, say, at cookies, google knows how many people are tuning in. Netflix is really a case of subscribers. Suddenly to say, listen, you know, neilson is going to get involved, i dont know. We kind of have better numbers that nielsen could ever give us. I think if Reed Hastings were to say, welcome aboard, but heres the real numbers, he could do that. Netflix, again a cold stock, but at least it trades off subscriptions. Australia, not a lot of people. When they start getting into when theyre going to get down into you know, i get nervous. I get nervous when they start getting smaller and smaller in the countries. The european expansion continues to be an evolving story. Yes, yes. The rights to content dont mirror exactly what they are in this country. No, but people love netflix. I think the bill cosby thing is interesting because remember, what you have was you want more and more programming. Someone might say, listen, this is the beginning of the backfire of programming. I think the cosby story is alleged story, is somewhat shocking. I can understand why youdme wa to back away. Theyre a programming company. And theyre a subscription company. Not necessarily a nielsen company. Good point. When we come back, cramers mad dash. Well count down to the opening bell. One last look at the premarket on a wednesday. Squawk on the street is coming right back. [ breathing deeply ] [ inhales deeply ] [ sighs ] [ inhales ] [ male announcer ] at cvs health, we took a deep breath. [ inhales, exhales ] [ male announcer ] and made the decision to quit selling cigarettes in our cvs pharmacies. Now we invite smokers to quit, too, with our comprehensive program. We just want to help everyone, everywhere, breathe a little easier. Introducing cvs health. Because health is everything. Introducing cvs health. 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. Just about 6 1 2 minutes before the bell. Lets get cramers mad dash. Talk some jack in the box. This has been a wellexecuted story. Theyve been doing good on the hamburger business, but its qudoba. Theyre talking about 8 to 10 samestore sales growth. Thats an acceleration. Qudoba happens to be a good company. There are implications for pollo loco. Definitely a must buy off of this. Why would jack and chipotle be in the same school . Qudoba has been something theyve struggled with. It was kind of an after thought. I think they raeealized, you kn what, we did the remodeling of jack in the box. Lets focus on qudoba. I happen to like qudoba. I think the vegetarian burrito is real good. I mention that only because at qudoba interesting. By the way, jacks comps up. Nice in this environment. If you break out qudoba, you have a home run. Interesting call on blackberry today. This is Morgan Stanley saying, wait a second, weve been too optimistic. The targets being put out are not what they seem. They cant this is a downgrade to a sell. Blackberry has been a stealth rallier. People like new management. Talking about hitting targets. I say this is a very interesting cautionary note. Now youre back in that world which youre betting on a takeover. If theyre too optimistic, i dont like to recommend a stock based on when i see estimates being too high. Hence, tesla. When estimates get cut, i want to back away. I dont rush toward that, betting there could be a takeout, betting theres more excitement on the rise. I thought this was a very interesting cautionary note. Proxy for other names in the smartphone space . I dont know. Theres a lot of chatter today about at t and verizon doing very well. Verizons got a lot of a data usage. I remember we did talk about the notion of spectrum costs going up. Not good for verizon. You know what i like to do . I like to play the towers. I want an American Tower. These are the winners. Amt was the subject of a brutal raid, American Tower. The ceo came on the show saying, look, i dont understand for a minute whats going on with the rates. It was one of the great calls. So American Tower might be a great way to play this whole thing. A lot more still to come. Opening bell a few moments away. My name is bret hembree. I am an electric crew foreman out of the cupertino service center. I was born and raised in the cupertino area. Its a fantastic area to work. The new technology that we are installing out in the field is important for the customers because system reliability i believe is number one. Pg e is always trying to plan for the future and we are always trying to build something stronger and bigger and more reliable. I love living here and i love the community i serve. Nobody wants to be without power. I dont want my family to be without power. Its much more personal to me for that reason. I dont think theres any place i really would rather be. 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. Youre watching cnbc squawk on the street live from the Financial Capital of the world. The opening bell in just about 60 seconds. Busy day with a lot of retail earnings. We will get fed minutes later on today. That does bring to mind, jim, you know, ppi ran a little bit warm. Home Builder Sentiment was warm. Building permits today were a big beat. People say the fed is running out of reasons not to hike soon. One of the things we have to start getting used to is good news is good news. The rest of the world is fighting deflation. You get up and listen to whats going on in japan and europe, theyre frantically trying to keep their economies up. Weve got one thats kind of heated up, but they can pull us down. Now, only 85 of our Companies Really are purely domestic. But i got to tell you, i like what i hear. The fed can raise shortly if they want to. I think they dont want to because our trading partners are falling apart. You hear more of that. Were worried about other parts of the globe. We should be. Other than mexico, i dont see any growth. Mexico, ppg said that last time on the show. Obviously a big disappointment from japan this week. Europe is a story we all know well. Theres the s p at the top of your screen. At the big board this morning, chinese Car Rental Service celebrating its ipo. Happened yesterday. Over at the nasdaq, advanced energy industries. You were looking at transcanada this morning. Yes, i think transcanada, a lot of people, wait a second, lets get away from that stock because of the defeat of the keystone. Credit swiss with a very good note out today. They talk about plentiful pipeline, a potential upgrade. I have to tell you, when youre against transcanada, youre betting against two of the best companies in the world. Not Pipeline Companies but best run. When i have them on mad money, im incredibly sensitive to the idea that the growth of just shifting where oil is to where it needs to be, where natural gas is to where it needs to be, is just going to be a business that has multi years of positive momentum. So dont sell those stocks on it. Just to put some closure, at least for now, on keystone, likely boehner is going to bring it up next year, but ramifications for rail car companies, for buffett, for anything else . Look, a pipeline from there to where the oil the american refiners really felt this was never going to be an issue. They never thought nebraska they never thought the president would get in the way. So they built all of these refineries to take a lot of the bad oil and make it into good. Thats what the refining structure is. Now they have all our better oil, which is the light oil. They really need this match. Theyre ready to refine it. When we read the stories of how they get the shale out of the ground, if youre an oil environmentalist, youre horrified. Thats kind of what happened. Now it either goes to china or us. I am not trying to get in the crosshairs of the environmentalists. I like to think ive been a good one and this is a personal issue. The fact is that 800,000 barrels a day is going to be really impactful for the united states. The 40,000 jobs, i hear theyre temporary. I got news for people. All jobs are temporary in this country. Thats right. Everybodys job is temporary. Thats why its big changes. Its a temporary job. If its temporary in two years, that aint temporary. There are only nine people who have permanent jobs. Theyre on the supreme court. Yes, well, i think. They did that packing thing in 33. Of the top five gainers, almost all of them are retailers. Petsmart, staples, target, lowes. They should be. People were thinking maybe its over. This is the maybe its over trade thats driving me crazy. If you go over what home depot says, as soon as you start seeing spending on your home being greater than the gdp, thats the beginning of the cycle. As soon as you start seeing target getting it right, target could get it right for years. It had a horrible breach. It had tremendous drain in canada. Cornell has come, and those of us who like cornell are like, wait a second, your charm offensive, why didnt you tell us it was going so well . Well hear from him at 12 15 p. M. Eastern today. Delightful guy. Ive been taken in by a stock that went from 60 to 70. We havent touched on zoetis. Big news yesterday. Its one of those companies. Theres the zoetis thats doing everything right. Ive had this company on many times. They do so many things right. Theyre the world leader. Then theres the zoetis that ackman is targeting. This is another thing that these hedge funds go after. I dont know how to make zoetis a better company. I went to zoetis when there was a poor sign diarrhea problem, to get really graphic. They said, jim, have faith. Well develop the vaccine. Bingo, they develop it. Theyre the best there is. Thats never good enough anymore. Were in some weird moment where the best companies are under fire for doing their job. Its really kind of embarrassing when you think about it. Zoetis people have done a fantastic job since the spinoff of pfizer. It just aint good enough for the hedge fund world. You can say that about a lot of names that come to mind. So many. Never feel bad for ceos. Theyre very well paid. But i do think that there is something to be said about a ceo who does a good job and it doesnt matter to the hedge funds. I talked to Howard Schultz about this a lot. If youre running your Company Really well, why do the hedge funds come in and say, listen, youre doing a crummy job . Who are they to be the arbiters . Who are they . The answer is they have so much capital they have to attack Good Companies with the tail wind because they dont have enough they have too much money. They cant go and take over argentina. They cant take over bolivia. They cant do a hostile for brazil. But thats the kind of size they have. After a week in which we got lowes, we got hd. Layzboy up better than 4 . We got home Builder Sentiment numbers. Some of the Single Family numbers with instarts today were pretty good. People are spending on their homes again. We have been waiting for this and waiting for this. Ive been watching best buy kind of creep up. Costco has a big play on spending. Costco is the best of all. Thats the one that just quietly goes up. I cant even look at the stock. A lot of people were saying but it had gotten expensive. Its absolutely expensive, but its a place that a lot of the things that were selling well at home depot are sold at costco. And remember, theyre always willing to lose money on something. Theyre willing to lose money on tvs. They got like 178inch tvs now. You can turn your house into a big screen, like drivein theater. It works. You know because you have one. My wife wont let me. My screen is big enough to watch nfl teams hurt teams i like. We know which ones those are. I do have a bigscreen tv in that box, dont i, carl . Which box is that . The link. Yes, yes. Im proud of that. Sorry i dropped that. I know that was bad. We do joke that its a bigscreen tv. Ford is going to be a loser today. This air bag story is turning into something a little more serious. Regulators looking to have the japanese air bag company recall 30 million vehicles, not 8 million. Were talking ten automakers. Everybody from bmw to ford. The New York Times has been i dont know how many barrels making gm seem like the worst theres an interesting article today about their coverage of gm and how they broke the story. I dont know. I think this is far worse and theyve gotten app free ride from the press. If the press were to write about this the way that did about gm, i think we feel quite differently and would be very enraged. Keep our eye on that. Meanti meantime, the dow is down almost 40 points. Bob posani is on the floor this morning. Good morning, guys. We have an important ipo. The biggest one ever north of 2 billion. This is in terms of the amount of money theyre raising. Thats paramount group, which is behind me here. They priced at 17. 50. Right now its looking to go above that. 17. 75. Let me get the new indication. 17. 75 to 18. 75 is the new indication. Remember, we had another pricing yesterday. Getting a little flurry. These 12 ipos this week, thats a big number. Thats because its the week before thanksgiving. Theyre trying to get a lot of stuff out the door in the next couple weeks. Meantime, were on the upside here on Consumer Discretionary and consumer stocks. Weve had a great day so far in europe. In fact, europes far outperforming us this week. Up about 0. 5 in the u. S. Look whats going on over in europe here. Italy, spain, germany. Im rounding off the numbers here, but in the u. S. Were up half a percent. Even russia is up. Russia is a fiveyear low, but even thats doing well here. We had a little bit of better news this week overall. S p did have very negative comments out on the potential for the ecbs buying program. Theyre going to have to expand that dramatically. Thats going to get a lot of political blowback from the germans at this point. Lets talk about the retailers because thats really whats moving things. Carls absolutely right. Its very important. I think, jim, you mentioned this, to show that lowes is slowly closing the gap in terms of samestore sales. Up 5. 1 with home depot up 5. 8 . Lowes has been a laggard for many, many years on this. Its interesting to see them starting to close the gap over there. Earnings a penny above estimates. They raised their fullyear guidance here. Ill tell you the problem i have with lowes. Its expensive. Were essentially at a historic high for lowes. Thats now 22 times forward earnings. Thats really on the high ends of where these retailers would typically trade at. I think thats probably going to be a little bit of a head wind for them. Target also good numbers here. 54 cents. The guidance well above what they provided. Samestore sales, 1. 2 up. That was above guidance. Canada is small, but thats all improving. Implied guidance, 1. 22 to 1. 32 for q4. A little disappointing but overall still a very good name. Remember, a good number. Kourtncour courtney will have an interview with ceo. Staples, 37 cents, a penny short. 12 decline. Staples is continuing to have problems. Theyre continuing to close samestore sales. This has been a fairly poor performer for a long time. Comparable store sales down 4 for them. Finally, layzboy. Earnings 36 cents a share, 2 cents above estimates. They raised their dividend by 33 . Thats good news here. Earnings up 13 . Sales up 3. 8 . Also a fairly decent number. Pretty good numbers from the retailers overall. Right now paramount group, were looking at 17. 75 to 18. 75. Guys, back to you. Bob, thanks a lot. Lets get to the bond pits and check in with Rick Santelli this morning. Good morning, carl. Maybe things are changing. Although, we have to wait and see. What am i referring to . Today is day 17 that we have a significant probability to close in the very tight range of 230 to 238. Were at 235. We were four basis points lower, three basis points lower. The data, many didnt think that the data on starts and permits was that good. But parts of it were. Singlefamily homes. That really is the backbone of much of the housing culture in america. It was at the best level since november 13th. Just shy of 30,000. That was a good number. Look at a one day and twoday chart of tens. Clearly we are extending a bit. But maybe its also trades coming off in front of the minutes. Could be the effect of europe. Well get to that in a moment. It could be a lot of things. Weve had a lot of corporate issuance. Sometimes when the hedging process of rate locks comes off, you see a little selling. Open the chart up, you can see your 17 trading days there starting on october 28th. Look at boon yields. Mid80s doesnt seem like a lot. Whats going on there . Look at the equity markets. Extending sevenweek highs. If you look at italy and greece in particular, theyre having some pretty big sessions. Is the economy better . I cant tell you that on one day to the next, but the equity markets certainly are better. Open that chart up, you can see were having some of the highest yields, believe it or not, in the mid80s since the first several days of november. Foreign exchange, you see that same dynamic. Well stick with europe. Look at a twoday chart of the euro versus the dollar. Its not huge, but were hovering at twoweek highs on that euro versus the greenback. Now, one other point we want to get to. When it comes to whats going on in the u. S. At this point in time, many traders think that the compression in the range is digesting that big move from october 15th. Well, if thats true, we shouldnt take out this 2. 38, 2. 39. Thats the area to Pay Attention to. Carl, back to you. When we come back, more than two weeks after that earnings miss is the worst over for trip adviser. Davids live and exclusive interview with the ceo is up next. S p, get a load of this, down just four points. The worst drop since october 22nd. Oh, man. Dont cry for me, bulls. 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And with over 300 locations, and 3. 7 million square feet available, theres a place that is is right for your business. See if startupny can work for you. Go to startup. Ny. Gov. 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 on the street. Im david faber at the liberty investor day in midtown manhattan. Of course, liberty controls stakes in a variety of companies, including our next guest. Hes the ceo of trip adviser, but malone always likes to have control. You, i should point out, are the ceo of trip advisor. February of 2000. Thats a long time for a founder to hang around. Why are you still doing the job . Its a great job. Are you kidding . This is a Global Company now. Number of different businesses, all travel related. But we get to help so many people. The scale at which we operate, it was clocked in at over 300 million visitors in a given month. So the impact that i feel i can have on peoples vacations is tremendous. Theres been an evolution, as there always is, of course, of the service. Most recently the introduction of instant booking, if you will. Which i think you said rolled out in the second quarter. When i think about that and i think about the companies you worked with, expedia, which you used to be a part of, or priceline, which are your partners in some ways, arent you now their competitor . Not particularly. Were all interested from day one, i guess we were a competitor because we all wanted the traveler to come to our respective sites. But trip advisor is really known for the breadth and depth of the research in so many languages in so many parts of the world. Were simply extending what weve always done well, to help plan the trip, taking it downstream to help people find the best price. Now to actually finish the booking on trip advisor. Its still expedia or priceline or a hotel chain or individual property that we hope to power the transaction. Its still those folks that are sending the confirmation email. Youre still talking to them for customer service. We want to make the experience just that much better. Be it on your phone or the desk top. I dont need to leave your app or your site, so to speak, in order to get it all done at one time. Thats right. The last quarter you guys did not at least meet some of the expectations of the investors who follow your company. Do you believe that those expectations were misplaced or are you on the road perhaps to ameliorating whatever it was that conceivably hurt people in particularly your guidance . At trip advisor we dont pay a bunch of attention to the quarterly expectations. We dont provide a lot of information to help people come up with really good models or analysis. And were not shy about just saying, thats not what we do. Why not . Why isnt that what you do . Were building a company. Were helping travelers. Were helping our hotel and air and attraction and restaurant clients build their businesses. Were helping the 300 million travelers have a great trip, figure out where theyre going to go, what theyre going to do, what theyre going to eat. All the great stuff that makes for a great equation. We make some money in the middle, but when we look at it, we say, all right, whats it going to look like two years out . Whats it going to look like four years out . How many more people can we help . If thats a bumpy road between here and there, that doesnt faze us. It does seem to have been a bumpy road, at least. You talked in your last quarter in terms of the conference call, your cfo mentioned recent data suggesting seasonality is reduced. You talked about a greater seasonal decline in your click per shopper metric than in comparable periods of 13. Should people who follow the company be concerned . No, i think they should be looking at all of the things weve been doing in the quarter. I did get a bunch of questions on seasonality. Kind of besides the point, lets take a look at our acquisition of the the Global Leader in tours and attractions. Why does somebody go on a vacation . They dont go because they want to stay in the best possible hotel. They want to go to have a great vacation, a great trip, memories, friends, family, whatever the purpose of the trip is. Its what youre doing in that city. And if in that city youre going to take a tour, youre going to go hike the grand canyon, youre going to go to something, you might, in fact, want to read all the reviews on trip advisor about those activities. With this acquisition, were now able to help you finish that process by actually booking those tours. What i hear you saying is im not that concerned about the quarterbyquarter results of my company. You heard me correctly. Is that because you have a Controlling Shareholder in liberty that doesnt care about it either . I dont actually know life not having had a Controlling Shareholder, so i look at it as a tremendous asset to the company that all of the operators in the company, all of the Management Team can focus on our longterm growth. That truly is the best way to build a company. Ignoring not ignoring but not paying close attention to whats happening quarter to quarter. We see the numbers. We know what the model what our internal model looks like. We think were doing just fine and expanding in a bunch of really interesting areas. We asked the Investor Community to look at where were going. Do you believe in the bets that were taking in attractions, in restaurants, in vacation rent s rentals, in china, in our Business Listing Service . And look at the core travel audience that we reach. And you agree with us on the bet on instant booking, helping travelers finish the actual transaction on trip advisor, albeit powered by others. Before i let you go, whats your sense of the environment right now in terms of people being willing to take trips . Europes economy is not particularly strong. Japans in recession. You mentioned china. Obviously a growing consumer class. Growth is slowing. I think 75 of your bookings come from outside the u. S. Or your traffic. Thats right. Wouldnt seem the picture is that great right now. For travel planning, sometimes its a more expensive trip. Other times its a more local trip. But youre still generally taking the vacation. As long as youre taking the vacation, you want to have a good one, so youre coming to trip advisor to research. Theres a reasonable amount of stability that people at the moment arent fearing a crash tomorrow so its safe to be able to take that vacation. It may not be growing as robustly as everyone would like in europe, but theres a certain amount of, okay, this is the new normal. So its okay to take the vacation. Steve, we have to leave it there. Thank you for your time. Appreciate it. Ceo of trip advisor. Back to you guys. Wow. Some refreshing candor there, david. What an interview. Thanks a lot. Thank you. We are getting breaking news from our john harwood who is confirming with a source that the president will announce an immigration order on friday in las vegas. The immigration announcement may also serve, john says, as the unofficial launch of reids 2016 reelection campaign. So not a surprise. Not a complete surprise, but the timing news is new. No, and remember, immigration is the key to the next level of housing. If you did give amnesty, these are people who then get documented loans. They were principle in the 2005, 2006 runup because they were getting loans. You could say maybe they paid too much. Doesnt matter. This will be a whole new class of buyers. Thats the way you look at this. Im not going to look at it politically. Theres 317 million others that are going to look at it. Im looking at how our viewers can profit off of it. This is about housing and a return to growth. With all of that, well get stop trading with jim in a moment. Get ready for some german engineered holiday excitement. At the volkswagen signthendrive event. Right now, for practically st your signature, you could drive home for the holidays in a new volkswagen. Like the sporty, advanced new jetta and the precisely engineered passat tdi. Ah, the gift of clean diesel. For the new volkswagen on your list this year, just about all you need, is a pen. Festive, isnt it . Hurry in and get 0 due at signing, 0 down, 0 deposit, and 0 first months payment on select new volkswagen models. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple, unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Female announcer are ending soon at sleep train we challenged the manufacturers to offer even lower prices. Now its posturepedic vs. Beautyrest with big savings of up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Plus, free same day delivery, setup, and removal of your old set. When brands compete, you save mattress price wars ends soon at sleep train. Your ticket to a better nights sleep were for an opens you internet for all. Sing. Were for creating more innovation and competition. Were for Net Neutrality protection. Now, heres some news you may find even more surprising. Were comcast. The only isp legally bound by full Net Neutrality rules. Time for cramer and stop trading. One thats been absolutely my favorite. Agios pharmaceutical. News out last night. Rate for attacking the metabolism of cancer advanced leukemia, really remarkable numbers. The ceo has done a remarkable job. Agios going much higher. Whats on mad tonight . Salesforce. Com. Theyre going to be reporting. We have marc benioff. And tom pike. Theyre leading in the testing for ebola. But this agios, wonder situation. Take it from me. Interesting. See you tonight, jim. 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. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. 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. Im Carl Quintanilla at post nine of the new york stock exchange. David faber is at the Liberty Media investor day in new york city. Hes going to join us live a little later on. Meantime, moderate losses here. S p down seven, back to 2044. Got a lot of retail earnings out today. The fed minutes not too long from now. Our road map begins with retail. Lowes and target up sharply after their results. Well find out what we should be doing with those stocks today. Thus, the keystone bill dying in the senate for now. Well talk to the ceo of American Petroleum institute. And well talk to sweet greens ceo. First up, target shares getting a nice boost after beating thirdquarter estimates thanks to a jump in sales. Courtney reagan is live in minneapolis. Good morning. Thats right. Target surprising the streete and analysts, reporting earnings per share of 54 cents, topping their own estimates as well as consensus on revenues of 17. 73 billion. Samestore sales up. 0. 6 of that came from digital sales. 0. 6 of that came from instore sales. Back to school was strong. The strength continued through september. October slowed a bit, according to the company, but then picked up strength again as halloween. Store traffic down 0. 4 . That is the eighth straight quarter of negative traffic, but it is an improvement. Traffic was down as much as 1. 4 earlier in the year. The strongest categories for target in the Third Quarter were health and beauty. Apparel down slightly. And softness in kids and baby. If we look at the Free Shipping offer, the cfo said the Free Shipping target began offering online with no threshold has increased conversion. Volume is up. The number one reason that consumers abandoned their purchases in cart has to do with uncertain shipping charges. So that seems to be good news for an early Holiday Initiative for target. Target canada still a problem. Still losing money, but it is improving. All of this means we have a lot to talk about when we sit down with target Ceo Brian Cornell for an exclusive interview on the fast money halftime report. Simon, back to you. Thank you very much. Looking forward to it. In the meantime, lets check where we are on the markets. So far this month, youve had eight records on the s p. 43 now for the year overall. Although in a relative tight range. It doesnt make much in the present environment. Just a small move. Joining us now, steven wood, the chief Market Strategist at russell investments. Good morning. Good morning. The big event today is at 2 00 eastern when we get the minutes of the last meeting of the fomc where they were notably more hawkish in the statement. Do you think today could be the day that we start reevaluating their Interest Rate policy . I really dont think so. I think the fed has been very clear. They proceeded with the taper. They are looking around mid2015, maybe the Third Quarter, to assess a rate hike. I think what that really does is signals that weve gone from these extraordinary emergency room measures into more normal environments. Oh, come on, steve. Were not in a normal environment. They still have Interest Rates down at zero. There are those that suggest that actually the market is willi willfully ignoring what is under way at the fed. Janet yellen has explicitly warned there will be volatility in the market. This is a process. The evolution of a message. I come back to you again today. Could be a very important day. I think it could be an important day, but i dont think it will be an important day. I think theyre going to be right down center pin. I think theyre going to stick with their forward guidance. Janet yellen is one of the intellectual architects of forward guidance. Thats going to be the dominant tool theyre going to use. If anything, they dont want to surprise the market. They want consistency. What i was alluding to mid next year, to the extent the fed thinks the economy, labor markets are moving into a more normal environment compared to 2009, 2010. They want to signal theyre moving from qe into an Interest Rate regime. Why is the main takeaway from the notes you have given our researcher the environment for stocks remains modestly positive . Yeah, i think if we look at it from three factors, if you look at the economy, valuations and sentiment, the economy is not doing bad. Its not going gangbusters, but its not bad. When we look at sentiment, that tends to be positive. As you mentioned, the numbers of highs were getting not only in small cap but largecap space year to date. Stocks are holding up well. But valuations look fairly valued. So we need to look at that mix. For us, the environment in a lowinflation, lowrate environment, we think that as the Federal Reserve holds down cash, this becomes less of a beta, more of an alpha game stock security picking selection, multiasset global strategy. What happens to the Retail Investor next year . What did we learn about this year . Now that weve seen, i dont know, Something Like 40 record highs on the s p 500. Is it enough to get them back in full in 2015 . Every single year we think this is year. It would be. Thats what it takes for the Retail Investor. I think unfortunately history has shown us that the Retail Investors tend to be contrarian. They tend to buy higher and sell lower than more disciplined money could be. But in this environment, i think this is one of the better bull markets since world war ii. Its been a 5 1 2 year run. Valuations look fairly valued. That tends to signal something of an Entrance Point for retail money. But we advise clients, whether institutional or retail, look global, look multiasset. Be very, very disciplined. We think security selection and active management is going to drive more of portfolio return in the upcoming environment. And we think it becomes a top line game. Companies that can demonstrate that they can hit topline numbers in a challenging but improving environment, we think, should command a premium. To that point, weve got data out. American port, 34 billion of foreign shares in september. 40 billion of foreign bonds in september, which i believe is a record. Well leave it there. Thank you very much. Steve wood joining us there. Meantime, lowes bumping up its outlook after reporting a strong earnings beat. A rise in samestore sales had the ceo cautiously optimistic. That was his quote. Over steady improvement in the Housing Market. Those shares up nicely, 5 right now. Lets bring in Key Private Bank Senior Analyst rob plaza, who owns shares of lowes and home depot. Joining us on the phone with commentary. You agree with jim cramers take that theres room for two at the top in terms of good executers . Well, i wish we owned lowes. We just own home depot. I do agree, this is a twostore oligopoly. Plenty of room for both those names. Lowes had underperformed home depot for 20 quarters straight. This means theyre really starting to close the gap. Yeah, that was probably the most impressive part of the report. They closed the Comp Store Sales gap to 70 basis points. Thats down from about 200 over the last year. And theres still plenty of room to gain on depot. We look at the quarter for both in the last few days, 5 samestore sales growth, is this more about the strength in the Housing Market and americans appetite for Home Improvement spending . Or is this about both Companies Just executing and firing on all cylinders . I think its both. I mean, the housing recovery, its kind of slowed from the big rebound that we had off the lows. But as long as youre comfortable in your home and youre confident that the price is going to stay where its at, then youre willing to invest and pay for those remodeling efforts. And theres also from the company side merchandising efforts, productivity initiatives, and initiatives to bring customers into the store and pay for those bigticket items that both stores were able to sell during the last quarter. Is it obvious that the two are feeding off of the increasingly dire situation at sears . Yeah, sears is a share giver in this situation. Go back just a couple years and they were the largest appliance seller in the country. And missteps, you know, welldocumented missteps by that company is giving ground to both depot and lowes. Even best buy in the appliance sector. Rob, are you getting Strong Enough signals from the Housing Market . We learned today Housing Starts were lower but Building Permits went up. Is it the right environment for the Housing Market . Yeah, all these two stores need is a normal housing environment. Thats where were at. Lowes singledigit gains, people confident in the value of their homes. And maybe a little bit more of a pickup in the number of units sold. But the environment is fine for both these two to do well. All right. Thanks very much. We are seeing the shares jump as we speak. Joining us by phone, robert plaza, who owns shares in home depot. When we come back, its been a rough year for General Motors. Millions of recalls, controversy over the ignition switch defect putting pressure on the stock. The president of gm north america will join us from the l. A. Auto show when squawk on the street comes back. Ice. Teacher of the unteachable. You lower handicaps. And raise hopes. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. pro nice drive. vo well played, business pro. Well played. 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The Company Looking to narrow its focus to five iron ore mines in michigan and minnesota as prices fall. That stock is currently trading down at 14. 5 . Back to you. Thanks, morgan. Opponents of the keystone xl pipeline scored a victory on capitol hill last night. Despite nine previous house votes approving of the pipeline, Senate Supporters fell short by just one vote. All of the no votes came from democrats. They included all of the Senate Democratic leadership. Joining us this morning, the president and ceo of the american me tlpetroleum institu. Good to see you. Did you have hopes this was going to happen . We were hopeful wed get to the 60. I would remind folks we got to 59, which was all the republicans and 14 democrats. It was a strong bipartisan showing. We just missed the agreed upon earlier vote by one. But when the new congress convenes, well have four more votes for keystone. The math gets easier beginning next year. Any idea who magic number 60 was . Well, you know, there are a lot of people in play as they like to say in washington. Whats unfortunate is a lot of the rhetoric and the misinformation that surrounded the debate. The president s held this off for six years now, which we find inexcusab inexcusable. I think its finally time to put it on his desk, get back to it the reality of what this means for American Energy and Energy Security in north america and hopefully get those 42,000 jobs created. Yeah. Whats the likelihood you gain some traction in addition to the math and end up making this veto proof . Well, i think theres a possibility there. My guess is that it will more likely become part of a larger package as part of a negotiation with the white house on a variety of issues where theres a little bit of give and take on both sides. I think theres a lot of sensitivity on the part of these elections officials, that over 73 million americans support the pipeline. I think theyre looking over their shoulder now saying, you know what, we got to get this one done. We got to get it off the table. Lets put our people to work and kind of let this issue move forward. As you know, the southern portion has already been built, the 500 miles. Its kind of working within this country. Again last night you heard the democrats call it the keystone export pipeline, echoing what the president said, that its purpose would be to bring thicktar oil from canada so they can export it through this country and it wouldnt Lower Energy Prices here. How do you respond to that in particular . I think theres a couple ways to respond. The first one is transcanada reported just last week that based on those that are moving the product, their full intent is to use every drop right here domestically. But let me turn and talk about it more generally. And that is that the president himself has said we should try to increase trade exports in it the united states. And it seems to be a bit of a contradiction hes saying i want trade improved and increased, i just dont want energy trade improved and increased. We dont think thats good policy. We think energy could be a major contributor. But the keystone xl pipeline is designed for domestic consumption, not for global consumption. But as you well know, the more supply we put in that global marketplace, thats whats putting the downward pressure on this price thats benefitting all consumers at the gas pump. You know, sir, people will say we always have a glut of oil, which is why youve seen the prices fall so steeply. The environmentalists would say, why this this environment when oil prices are falling as a matter of Public Policy would you construct a pipeline that would make it more economic essentially to exploit what are tar sands, this very lowquality oil, which has to be heated in order to extract it. And therefore commits, i believe, about 20 more to emissions. You dont see the canadians looking to build pipelines from the east or to the west. Why should it come through this country . Well, i think a couple things there. First, you do see the canadians looking to build the pipelines from east to west. In fact, whats happening today is the market has adjusted for this indecision on keystone and most all of that product is moving by rail, up to 700,000 barrels a day. The one thing that hasnt been pointed out, its more expensive to move it by rail. So the indecision on the part of the president is actually increasing costs to american consumers. But jack, forgive me, sir, the point im making is exactly that. Why would you build a project that effectively makes it cheaper to be extract something that probably we shouldnt be extracting, we should have a better environmental solution elsewhere. Why would you encourage the extraction of this oil, which is very heavy, which is very low quality and requires to be heated, which increases emissions by 17 . Thats the case against you. Thats why it failed arguably last night. I dont think thats why it failed last night, number one. Number two, the market will determine where that oil should or should not be extracted. If its the highest cost production oil, eventually the market will decide if its Cost Effective to bring that to the marketpla marketplace. To your point of carbon emissions, theres been a 26 reduction in the amount of carbon emitted as a result of producing oil sands in canada. So as technology improves, were getting far more efficient. Were becoming even better every day at how we produce that oil. At some point through Technology Expansion just like were seeing in the shale play here in the united states, that may become more efficient production than its ever been. So let the market decide those questions. Lets not get the government into picking and choosing winners or losers. If we had done that, we wouldnt be experiencing the American Energy renaissance were seeing today. Jack, well talk some price next time. Good to see you. Good to see you guys. Joining us from the American Petroleum institute. Lets send it over to phil lebeau, who has a special guest. Thank you, simon. Im joined by the global chief for Product Development for General Motors. Were fortunate to have you here in the states for a few days to talk about the new cadillac atsb. High performance but an entrylevel model. It is. Weve had sort of the tweener car in the old ctsv. Its about 20 stiffer than anything out there. Thats great, but the power tran we got in there is no longer big v8s but a sophisticated twin turbo v6 that makes 455 horsepower. Itll go from 0 to 60 in under four seconds and a top speed of 189 miles an hour. Weve got 10,000 track miles on this. Were out here to win. How do you feel about the strength of sales for General Motors overall as you head into 2015 . I feel pretty good about it. Weve got some issues that were still dealing with from a brand standpoint in some cases. Cadillac is one. We have a product line and every sense of the word is winning. The legacy, we havent been doing that that long. The legacy of in and out of cadillac for General Motors is frankly, i think, taken it off the consideration list for some people. Weve got to do some different things. We have a great new team in there. Were going to go hard at it to bring it back to where it should be. Youre in the process of sending out 850,000 new recall notices to people who have vehicles that have not been repaired for the faulty ignition switches, people youve been unable to reach or move, reregistered the car, whatever it may be. But you believe you are turning that corner in terms of this crisis that has just dragged you down this last year. I do. It was a huge opportunity for us to take weve fixed a lot of things in the company post bankruptcy. The way we fundamentally design and engineer our cars, i think weve taken a page out of some of the defense and zero defect operations around the world. But has the culture truly changed . It doesnt happen overnight, but this is a burning platform. If we dont take advantage of this, shame on us. And i believe we are. I tell you, people inside the company are so ready to be excellent around this culture of what we produce and what we give our customers. Thats a huge opportunity for us. Last question. Takada air bag recall. Some of these are gm vehicles, but its not all of them. Number of automakers involved here. But the general feeling is this is a mess. This is a company, takada, that doesnt have a total handle in terms of whats going on. For you as an automaker, do you look at this and say, this recall process, not just with air bags, but overall we have got to change it. One of the things that i think is really important for people to understand is that theres a recall process, but theres enough flexibility within these recall processes. Believe me, after the last year, we know this process inside and out. But i can tell you that every one of the recalls you see out there is different. And so the flexibility within the process has got to be able to being agile enough to handle this. And they dont have the root cause yet. Theyre trying to get the root cause. We got to get the root cause. Takada has to get that. They are. Theyre working hard on it. Thats what we really have to do. Mark royce, the head of Product Development worldwide for General Motors joining us here from the l. A. Auto show. All right, phil. Thanks very much for bringing us that conversation. Look forward to a lot more from you throughout the day. Coming up, Liberty Media chairman billionaire john malone in an exclusive interview with our david faber. Well be right back on squawk on the street. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. 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. Well, knowing gives you confidence. Start building your confident retirement today. Health can change in a minute. So cvs health is changing healthcare. Making it more accessible and affordable, with over 900 locations for walkin medical care. And more on the way. Minuteclinic. Another innovation from cvs health. Because health is everything. Which means its time for the volkswagen signthendrive event. For practically just your signature, you could drive home for the holidays in a germanengineered volkswagen. Like the sporty, advanced new jetta. And the 2015 motor trend car of the year allnew golf. If youre wishing for a new volkswagen this season. Just about all you need is a finely tuned. Pen. Hurry in and get zero due at signing, zero down, zero deposit, and zero first months payment on select new volkswagen models. Chocolate, soybeans, thisand apricots. Made with what kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Straight ahead on the show, an exclusive interview with Liberty Medias john malone live from Liberty Medias investor day. Find out what he has to say about Net Neutrality when we come back. 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. 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. Welcome back to squawk on the street. Im Jackie Deangelis reporting. The weekly crude inventory report just out moments ago. We have a build of 2. 6 million barrels. Estimates all over the range here. Traders looking for 2 million barrels. Likes like were in the middle of the range. This was bearish for prices. Were selling off from here. 74. 54 is where we are, down right now about 6, 7 cents at this point. One trader telling me he thinkings we could see 73. 25 by friday. In terms of supplies, we are really well stocked. The eia reporting we are 5 above the fiveyear average in terms of total stocks as of last week. So this market is probably going to go lower from here. Very significant that were under the 75 level. We closed under this yesterday. Again, this thing looks like it could go lower from here. David faber, back to you. Okay. Thanks very much, Jackie Deangelis. Were in midtown manhattan at libertys annual investor meeting. Earlier today i was able to speak with chairman of the liberty, john malone. Er liberty so many different stakes. One of the key concerns out there generally speaking right now, particularly for Cable Companies like our parent comcast and for charter, of which liberty owns 27 , is what will a new Regulatory Regime look like if there is any when it comes to highspeed connections to the internet . Namely talking broadband and how it is going to be regulated. Last week president obama came out fairly strongly in favor of title two regulation, a potentially more stringent set of regulations than many would like to see, including it would seem tom wheeler, the man who runs the fcc. Heres what malone had to say. I suspect that wheeler doesnt really want to go there. He wants to go to some kind of negotiated solution that will suffice until there is competition, more competition. And effectively allow the comcast deal to go forward on some negotiated connectivity basis, which could then be superseded if, in fact, title two or Something Like title two is pursued. That will be a big court challenge. We wont know the answer to that for probably a couple years. Do the economics of a comcast acquisition of time warner change dramatically if we were in a title two environment . It depends on what type of regulatory intervention. It could be very light, which would really just be a nondiscriminatory. I mean, the bottom line of this is that as speeds on the internet and the amount of data on the internet, the consumers use of the internet continues to explode. Somebody has to pay for the capacity that it takes to do this connectivity. Its either going to be the people who have a relationship with the consumer indirectly through the transport of the internet, or its going to be the Internet Companies themselves, comcast charging for volume at the consumer end. But this capacity is not cheap. You think comcast Time Warner Cable is going to happen . I give it an 80 . Is that lower than you started out with . I probably would have said 90 when it was announced. I think this new theory that highspeed connectivity is a market unto itself, you know, it bothers me a lot that theory is being proposed. Why does that bother you . Its like saying cadillac has a monopoly over the sale of cadilla cadillacs. Of cars, you mean. Its parsing theres no barrier to entry in high speed. Its a question of spending capital. The cable guys who have gone forth and upgraded their networks have a time lead, an edge over some other purveyors who havent yet spent the money. But theres no barrier to entry. In those kinds of situations, the fact that one industry through its investment has an edge for a period of time over another, thats capitalism, to me. Thats not antitrust. It becomes antitrust if theres barriers to entry and there never is or couldnt be. Some would say a barrier to entry is simply the enormous amount of capital im going to have to spend to wire up the streets. Although, verizon has done it. Look, these phone companies are not tiny. They have massive amounts of capital. Really, if its david and goliath in this situation, the cable industry is definitely david. Charter also is in a position, it would seem, perhaps more than any other company to actually create more and more scale over the next few years. Do you agree . Yes, charter, because of its structure, its history, and its Management Team is probably in the best position to consolidate smaller operators efficiently. And also do the kind of restructuring of ownership thats necessary to make the whole industry efficient in the u. S. Do you think thats going to happen . Obviously it starts with the swaps and the subs that are taken on if and when the comcast time warner deal closes. Theres brighthouse, theres sudden link, theres cable vision. I think its highly likely that charter will be the Gravitational Center of consolidation because comcast, if this deal is approved, is pretty much maxed out in terms of the u. S. So consolidation scaleefficient consolidation will probably move to charter, is my guess. My argument is this now needs to go from domestic to global. Its funny. When i hear you saying continuing to talk about global, comcast being tapped out, it makes me wonder, are you one day going to sell Liberty Global to brian . Or maybe Liberty Global will buy brian. Would Liberty Global be large enough to buy comcast . You never know, do you . No, you dont. Do you see it i mean, that would imply a longterm view here, which i know you have. But that would be a while, i would think, down the road. Well, in terms of footprint, Liberty Global is bigger than comcast. In terms of vertical integration, Liberty Global has never vertically integrated yet. So if libber t eerty global wer start vertically integrating, for instance, which is possible, you know, the two would look very similar in mix and in size. So a lot of people thought when Liberty Global took a stake in itb, for instance, that they might be going in that direction. Right. Well, yo u seem to be implying its a real possibility. Everything is a possibility, david. You know, you have to follow your nose basically on opportunity. In the case of Liberty Global, they still have a pretty good runway ahead. The u. S. Market is more mature in video, digital, and so on. The European Market still has a lot of Growth Opportunity embedded in it. I think for the moment, Liberty Global is going to stick to their knitting for the most part. And vertical integration is more theoretical than real in the short run. I mean, comcast obviously is the only distributor, so to speak, that has chosen to go back to the i mean, we used to have a lot of them. Time warner chose to go the other way. Do you think its worked out for comcast . I think pardon the expression. I think brian took the pants off ge when he bought nbc universal. It was a brilliant move for brian. It was well timed. And its a great asset. And it gives brian enormous flexibility in developing his u. S. Business. So, yeah, i think it was a brilliant move. You do . But when you think about Liberty Global, which you control, you dont necessarily think about it the same way. Well, there are no big vertical assets that are in the kind of distress. I mean, brian took advantage of distress in ge. And of the cycle and a lot of others. And the cycle and the structure he put together was brilliant. You know, obviously time warner divested their cable business and went separated into two. Personally, having a history in the business, i never would have done that. I got an idea for Liberty Global. Why not time warner . Its global, its content. Just buy that one. Stranger things have happened. Of course, when it comes to time warner, we also had a discussion to a certain extent about foxs aborted attempt to acquire that company. Murdoch excuse me, malone admitting he was a bit surprised that Rupert Murdoch had chosen to stand pat and not continue that fight there. Well have more from that part of the interview as well and more on cnbc. Com as we go along. Send it back to you guys. David, can i just ask you a question . Whats the upshot of that, that they might buy theoretically content providers within europe . Is that what hes saying . Yes, thats right. Hes talking about the vertical integration model being one he certainly looks at positively. He did say he believes they have more room to grow, simply with distributing television or video product throughout europe. So they dont feel they have to go there, that theyve run out of room, so to speak, the same way our Parent Company comcast may have run out of room once it has completed the time warner deal. He does seem to believe that is a route that makes a lot of sense. Although, as we said during the conversation, any number of companies, including time warner, perhaps most well known amongst them, have decided to separate out the distribution from the content. Certainly provocative, david. Great stuff. David faber at Liberty Media investor day today. When we come back, two titans of new york city real estate. Responsible for some of the most recognizable real estate in the market. Squawk on the street continues in a moment. Dow is down 62. [ male announcer ] some come here to build something smarter. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. But its always about the very thing we do best. Mheres our new trainer ensure active heart health. Heart im going to focus on the heart. I minimize my sodium and fat. Gotta keep it lean and mean. Pear uhoh. Heart i maximize good stuff like my potassium. And phytosterols, which may help lower cholesterol. Major im feeling energized already. Avo new delicious ensure active heart Health Supports your heart and body, so you stay active and strong. Ensure. Take life in. And youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. And the free help you need to make sure your investments fit your goals and what youre really investing for. Tap into the full power of your fidelity green line. Call today and well make it easy to move that old 401 k to a fidelity rollover ira. Have a look at the technology sector. Deep in the red today. One of the worst performers in the s p 500. Morgan brennan back at hq with more on why. Hi, sarah. The Information Technology sector is one of the weakest performers in the s p today. For the year it is still the third best. So leading the way lower, yahoo salesforce. Com, which is out with earnings after the bell, verisign, and ebay. Overall, a tough day for i. T. Thanks so much, morgan. Lets get to our own diana olick. She joins us from midtown. Hi, carl. Youre right. Heavy hitters is putting it mildly. Manhattans skyline is changing as we speak. Two of the Major Developers behind that, heavy hitters. Thanks so much for joining us. We can talk about froth and overheating in the residential market. 432 park avenue, the tallest residential tower in the western hemisphere. What i want to know is what is driving your buyer to put down 10, 20, 90 million on one of your properties . 432 has a tremendous appeal to new yorkers, to i think more than 50 of our buyers who are actually domestic. But the location, the architecture, and interior finishes of the building are found by the market to be extremely attractive. Weve only had favorable architectural comments. The building in its form is absolutely pure. A square and so high, 1400 feet. Certainly not to be missed. It has changed the skyline, the buyers, and the buyer groups that are interested in the building are actually even if they cant afford it or if it doesnt work for them, they are very supportive. So from the tallest to the priciest, you are listing at 520 park avenue. A penthouse for 130 million. Thats a record. What type of buyer is going to buy that property . Well, well find out next year. But based on our past success like 15 central park west, roughly threequarters of our buyers are domestic, 25 overseas. Im hoping one of those groups will be buying it next year. You two are competitors. You have a lot of competition. We talk about billionaires row, towers going up across from hudson yards to the u. N. Do you feel that there is any overheating whatsoever or do you think theres still considerable price move up . Well, the pricing is always a question of supply and demand. Its interesting that you view us as competitors. Were actually colleagues. Weve been friends, our family, for many years. But why were not competitors, diana, is that we cant sell you an apartment, in fact, that you dont want to buy. If youve looked at his apartment and you looked at ours and you and your family are going to make a qualified judgment as to which is the best, youre going to cull the market as with any real estate. But its interesting, you told me it was not the international buyer. We talk about china, russia, south america fueling all of the u. S. Market, not to mention new york city. You say thats not so. No. 80 of the new york city market is driven by the new york city economy. The new york city economy is a world class economy. Were attracting jobs from around the world. And the building boom, were just following the trends of the marketplace. And the tech boom in new york is helping as well. Big help. Okay. Thank you so much. Were short on time. A pleasure. Back to you, simon. It is a busy day, diana. Thank you very much. Great guests. Up next on the program, washington, d. C. , based sweet green landing an 18. 5 million funding round with the likes of steve case, danny mayer, as they plan to expand on the west coast. Well talk to one of the founders and cocos of sweet green after the break. 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. Which means its time for the volkswagen signthendrive event. For practically just your signature, you could drive home for the holidays in a germanengineered volkswagen. Like the sporty, advanced new jetta. And the 2015 motor trend car of the year allnew golf. If youre wishing for a new volkswagen this season. Just about all you need is a finely tuned. Pen. Hurry in and get zero due at signing, zero down, zero deposit, and zero first months payment on select new volkswagen models. Were for an opens you internet for all. Sing. Were for creating more innovation and competition. Were for Net Neutrality protection. Now, heres some news you may find even more surprising. Were comcast. The only isp legally bound by full Net Neutrality rules. One solid startup is turning leafy greens into a lot of green. 18. 5 million additional funding this morning. The business of Healthy Eating. Jonathan is the cofounder and coceo of sweet green. I know it. I eat it. But if you are not on the east coast a lot of people are unfamiliar. Lets talk how you get started. Its a competitor to chopped kind of. We started about 7 and a half years ago. Students at george town and with a problem we had. Nowhere healthy to eat. A healthy place still affordable, still accessible and in line with our values so we decided to create it ourselves. Our first shop was 500 square feet off campus and weve been growing ever since. All over d. C. Only a few in new york city. 18 and a half Million Dollars here. What are you going to do with the money . A. Few things. This round is for one expansion. The big thing is were going to california. Very exciting. My hometown. Were expanding to l. A. Were continuing to invest in people. Its a core foundation. So investing at every level of the business. The third thing is technology. Really investing in technology and things you can elevate and enhance the experience. So by the end of this year were rolling outlet our mobile ordering to all of our stores. Its piloting right now in one store here in new york. And the fourth thing is sweet green in schools. We made a huge commitment to educating kids about Healthy Eating in schools. We teach three thousand kids right now and we hope to expand that across the country. And lastly it is our seasonal supply chain. We work a hundred local farms and as we expand where do the recipes come from . Thats what i think really separates sweet green from a lot of options. I dont like salad but i do like what you have. We call it unique combinations that inspire. Itss combine nutrition taste, texture color. I hope you succeed. I hope anybody in the space does. But one of the issues with a business is the lack of a mote. Anybody can move in can copy you. In the space doesnt the future belong to whoever is the volume producer of the Fresh Produce can can bring the cost down . Isnt that the person thats going to win the day. We actually use the term mote in our business too. For us its the idea of the sweet life. That is the lifestyle component. The product is one thing. And i has to be great. It is a restaurant and the food is delicious. But the emotional connection we create with the customers and everything we do from the design to music, to service to the education. That is the mote. It is this idea it is getting a little crowded. Everybody and their mother is getting into this healthy fast casual space. So how do you deal with increasing competition. The point im making is whoever comes in with the lowest cost of supply will make the most profit and can do the most. That is the point im making the supply chain. That is important. But for us i think the elevated experience is what people want. Chipotle versus baja pressure or qdo qdoba. What wins the quality experience. What won hasnt been price. How do you get the first meeting with case. How do you get danny meyer to Pay Attention. A lot of nos. Weve been doing this for this has not been in any way an overnight success. Its been almost eight years. Steven was a personal investors first through a friend who worked for him and then came on as a larger partner. Danny was someone who my partner nick interned for when he was in college. Nice when that works out. Yeah. My favorite are johnny nemo looking like a rock star on nbc. Thanks for coming jonathan knee niemaoo niemann coceo of sweet green. Were going to give you and the rest of the viewers plenty to talk about. Even the latest on twitter by ashton kutcher. And nielson is going to take streaming into account including netflix. And Walt Mossberg joins us on an oldment apple product thats new again. K4r7 a simple question in retirement, will you have enough 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. 8 00 a. M. At netflix. 11 00 a. M. Here on wall street. Squawk alley is live