Lot of movement there. Oil still in many ways, im going to say it, key to the market. Yes, yes. He agrees. Totally true. Im glad i i wasnt sure you would agree. There we are. Crude at 76, brent around 80. Big meeting this week. Big meeting this week as well. Our road map this morning and it starts with markets. S p looking to its 46th, 46th record close this year. The dow looking for its 29th. The nasdaq looks about 7 off an alltime closing high from march 2000. Yeah, i remember that. Gas prices fall fog fouryear low. Opec preparing to meet this week. Raymond james weighs in on chevron, exxon, hess, occidental. United technologies announced the chairman and ceo is retiring, effective immediately. Ill tell you whats next for the company, who the new ceo is and ask questions. Not sure we have a lot of the answers. Lets get to the markets. For a sixth consecutive week of gains. The 45th record close of the year, the dow its 28th, nasdaq, as we told you, new 14 1 2 year high, 6 out of 10 sectors at multiyear highs. I hear all of that and i say, oh, oh a little scared. Well hearing all of that. Are the earnings there, i dont know. Decent valuations. Byron is the key for valuations, says were okay. I do think that this is a rally that wasnt supposed to happen. Its a rally where the second leg of it is about Interest Rates in europe. And about their weaken being our strength. Pulling huge amount of money, i think, worldwide. When italian tenyear, remember at 7 in yeah. About to fall apart. Now 2179. Spain. 1947. Part of the p. I. I. G. S, failed countries. Theres no way you can keep your money there. Got to keep it here. Doesnt matter if the feds not buying bonds. Suddenly youve got a situation where you really are looking for yield. Theres a lot of companies that yield better than the tenyear. And i think that basically what youre up against, no other game in town. No. And of course the japanese doing anything and everything they can. Buying anything thats not nailed down, trying to create inflation. Youve got draghi, ill do whatever it takes. Theres trying to do something, though as you pointed out, its merkel who wears the hoover pantsuit. Yes. People push back at me and say shes prostimulus. You know, maybe im old, but thats a stupid she isnt. I mean, shes very much of a balance budget person. Germanys the big beneficiary of the European Union. You can write all you want or criticize, i dont give a damn, but what matters to me whats going on here, he, draghis, doing everything he can to prevent germany from take down the euro from the European Union. And what he also wants is not to have a right wing country spring up. I mean, like nazi germany did because of this kind of thing. Right. Thats what he cares about, theyre historically oriented. The asset buy, i misjudged it, there are billions of dollars at stake that he can buy. Ive seen european banks do quite well. Im not im saying hes doing a darn good job and has to counteract her. And those who defend her are on the wrong side of history. All right and back to our market, as we move into the last six or so weeks of the year. What should i be thinking about, what should i be looking at . You mentioned, of course we both did, oil the key to the market. Hanging in around 76 level but not good across the board. Good for the consumer. Consumerrelated economy. If you look at companies involved, where they want people to spend, i mean, i think youre going to have a very good Holiday Season. Right about now we sbee the ne york times write a story how bad the Holiday Season will be. You put that story out. Do we have ta story yet . Someone gin up that story. Its hard to think it wont be a much better christmas when you have 2. 50, you have better employment, house up in value, numbers from home depot. You saw target do a good job. Walmart, what you know better than anyone, doing better. Concodowngraded by conviction. Of course. About given in a consumerrelated economy, if the 13 of the s p related to oil going higher, thats a lot of the s p that is related to it going lower . Is. Some companies, dow, dupont, input is gas, to a certain extend but price output on oil. So theyre not in a great position. No. I did a piece this morning for real money for the street. Com about andrew libras and frank mitch is saying, didnt put it in the piece, saying they shouldnt be that correlated. If oil bounces, dow goes to 55, thats what happens. Andrew saying, listen, onefifth of the biusiness should be related to that. Historically a negative correlation, undeniable. Lets talk more about it. Ahead of the thanksgiving travel weekend, u. S. Gas prices falling to a fouryear low. 2. 48 a gallon, that is 88 cents below the peak of the year which came in may. Raymond james downgrades exxon mobil. Sakes chevron down as well. Had been a strong buy. Getting downgrades on the stocks. These are important. Exxon has historically traded the opposite of oil. One that people has always reached for when oil goes down. This is a upgrade of oxy, leavered to the price of oil, particularly american oil. This could be a very significant switch because theyre calling the bottom up. I think that opec is in big trouble here, and i say that because when you look at venezuela with 2. 2, nigeria with 2, these are countries where we imported a huge amount of oil from. Im predicting that we will be producing enough oil we wont need opec 18 months from now. Opec has to think of countries when you say we wont need opec,s that a strong statement 18 months from now. What do you mean . Wont need them . Were importing, let me get my numbers. Still are. Yes. Importing were at 30year low of what were importing 2. 9 million barrels. We are pumping 9 million a day. If you add up the percentage of the big majors and the independents what theyre saying they can grow production, it would mean we should be at 11 million years 18 months from now. So thats very lit that were getting close to nothing from them. Right. If you add 2 million barrels, importing only 900,000 barrels from opec. Remember, canadas a big importer. So were not fully energy independent. Ahead of when most people thought weed be continentally independent. These numbers say, opec, we do not need your oil and no place to put. Chinas not using oil. They can do all they want to try to maintain the price but we dont need it. They have to cut back production dramatically in order to help these ailing nations. And saudi arabia may there could be a rebellion against saudi arabia. Right. Its an interesting point, one we certainly done have the time nor perhaps expertise to get in fully. Geopolitical ramifications of falling oil, whether russia, iran, different areas of the world are quite significant. Yes. And i think that, again, this rally, you started out with an important point if we moved up, when you hear nasdaq up to those levels and think, wait a second, is it gilead that should be this high . Are we right to take Sky Works Solutions up this high . There was low multiples coming in for technology, i dont like multiple expansion, i want earning expansion. When you have a stock like target or walmart theyre downgraded as they go higher, what people have to do is come back to them because these companies havent had good years in many years. Theyll because of the way that people have more money, theyre going to have very good years. Yeah. Let get to the United Technologies, which jim and i talking about offcamera, curious, it would seem at least. How do you pronounce his last name . Retire eing as chairman immediately. Gregory hayes named ceo. Edward kankis nonexecutive chairman. In the job six years. Average ceo tenure is not far off from that. Right around seven years thats not as unusual as you might think. But 100 billion company of this time, theres Succession Plan in place but more typically than not, you get the announcement, transition, anointed successor, some heads up here. This is a the company, only thing ive seen i havent had an opportunity to get any sense here on my own phone calls, a spokesman saying nothing to do with Financial Performance to another reporter who reported on it this morning. My Charitable Trust owns United Technologies, its a d disappointment versus honey well. Dave cody of honey well, parliame far outperformed. Ge has better growth. It doesnt mater. Shame on them for not putting out anything else. Do they think were this stupid . Were going to say, thats fine. Youre curious, right word, but you cant put this out and say, we dont have to explain what we do. Your big publicly traded company. This man is not supposed to be stepping down node and Gregory Hayes come in. They think were a private company. Something out of another era. Weve remarked on the fact with ceos youve started to get straight change from companies saying he was fired. Right. Or whatever it may be. How about give us having an affair. Any number of things. By the way, not saying any of that is at play. It does raise questions. If i were the s. E. C. I would call and say, you guys mind putting out a release . Wheres the obligatory spend more time with his family, its thanksgiving, that would work. Its the immediacy come on. Its out. They obviously had a plan, you assume, in place. But i am curious, im hoping perhaps to speak to people close to see if theres another story here. Many wonder whether thats the case. I dont know what hes go on to do at 57. Thats young. They did the buyback, talking about doing a better job, the stock was starting to catch up. And then hes gone . Hes just gone. Like, hey, you know, heres your hat, dont let the door hit you on the way out. Dont know a great deal about the cfo. Gregory hayes. Yi. Gregory hayes. Strong name. Like bob hayes was very fast. Of the hayes people. Rutherford b. Hayes. So so president. We know more about him than we thought. He was the cfo. See that . Look what weve done in just in terms of like three minutes time. Incredible. Analysis, insight. Context, amazing. Lets talk tesla. Appears teslas emon musk talking partnership. The stocks getting a lift on the news. Sara eisen going to talk we call him a titan hes a king, titan, Jeffrey Gundlach. Lets start putting this stuff in context. This guys worth listening to. Nine straight months of inflows, every time he goes on tv, i bet those flows heat up. Were back after this. Music. The getaway vehicle for all the confidence you need. Td ameritrade. You got this. The New York Times reporting that defense secretary hagel is going to be stepping down under what the times cites as pressure as he will be stepping down, of course, as defense secretary. Perhaps as soon as today, expected appearance later today by president obama, expected to announce mr. Hagels resignation. Recall hes only been on the job, i think, less than two years. Yeah. Certainly during the second term, of course, of the president. Times saying the president s decision to remove mr. Hagel as a recognition the threat from the islamic state, that being icy, would require a different kind of skills than mr. Hagel was brought on to em employ. Recall hes a republican, obviously military experience had been a senator, skeptical about the iraq war. And now were talking about afghanistan, keeping troops there. But most particularly the continued and perhaps what will be increased fight against isis. Clearly. If you have to rebuild the u. S. Troop presence in iraq, i mean, youre back to back to a wartime. Unclear who is going to be nominated to replace him. A couple of names here, former undersecretary of defense, senator jack reed, democrat of rhode island and ashton carter, former secretary defense. All according to the New York Times. Wow. Lets move on to tesla. Wow. Ceo elon musk saying his companys in talks with bmw over a potential alliance in batteries and lightweight parts. Musk describing bmws carbon fiber car body parts as interesting and relatively cost efficient. Bmw is supposed to destroy tesla. Teslas got nine lives this is recognition of teslas technology. I keep thinking of the decline in what we thought was the projection of tesla, Morgan Stanley last week. So im not as gung ho about tesla because i think a number of cuts means you should walk away from the stock. Im sure people will say this is the endorsement were looking for, bmw is not coming in, smart people saw bmw electric car models and thought it was the car of the future. If theyre adopting tesla, then theyre not the car of future testing. With full knowledge people dont buy tesla as their primary reason because they dont want to be filling up with gasoline. Does the falling gas prices impact sales at margin . There i think it absolutely does. Weve seen according to the ceo of marathon, big they have all of the stores, right . Huge number of stores, actually gas stations, that they are the numbers are up very big for gas guzzlers because the American Consumer likes a good gas guzzler. F150 doesnt have as much, new one gives you two more miles to the gallon. Now youre selling this stuff again back on the Great American dream of owning a big car. A big car. Cafe standards are coming up, continuing to come up. Right. Thats a good story. Interesting story today as well about solar power and wind power competing now in a real way. I thought that that was a lead story for me, because when you get that, what it says is that youre going to put a panel on your house and these Utility Companies are not set up for this distributed power system. Right. I think that david crane at nrg would tell you that, hes a terrific guy who really recognizes that its really, its its armageddon if everybody decides to have for if we can have brings us back to elon musk and his other company. Its very difficult to be able to imagine a utility where they have to take your power all over the country. Theres 50 million roofs in the country. Yep. I look, its not a shortterm consideration theyre all fine. Longer term, if the price comes down, its bad for the utilities, not good. Next, cramers mad dash as we count down toward the opening bell. A live interview with twitter cofounder, biz stone, the social media landscape. Take a look at futures here. We are looking for an applied higher open, more squawk on the street after this. Location. Location. 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. All right. Seven minutes before the opening bell. Time for mad dash. Rbc raises dish, target from 69 to 81. This has been a phenomenal stock, talking about spectrum, spectrums worth more. People are worried about verizon and how much verizon has to spend. And at t. When you watch the numbers in the auction of spectrum, rise well beyond what many people anticipated. David, what i want to know is, is dish in the cat birds seat . Chatter seems. Value of the Spectrum Holdings going up as a result of what at t, verizon, perhaps another bidder, maybe dish, buying some. But what theyre willing to pay for the up and down link. That being said, the question becomes, when will they be able to some way realize the value 0 of the spectrum . What transaction do they do that can do that . Charlie ergan may have one number in mind but it doesnt mean someone may buy it from him the Balance Sheet constraints of those that would do is almost impossible, unless something out of the box. Soft bank . Ooh softbank i dont think so. Sprint you cant discount what you cannot discount is dish and sprint getting together. Right. Or dish and tmo. But we dont know what hes got coming. It all goes in his favor, though, again, some people saying, all right, but now youve its getting overheated. But down here you have always been malone, you know, you got ergen, shes guys are largen than life figures, right . Big think guys who create a lot of value. No doubt about it. Weve got to get to eamon javers in d. C. Sure. More on secretary hagel and the reports that hell be stepping down. Yeah, thats right. Nbc news confirmed that secretary chuck hagel, secretary of defense, stepping down, under pressure here. Expecting an announcement possibly from the president later on today. The question here is, what is the impetus behind the decision for chuck hagel to step down . Obviously a republican senator who built a rapport with the president when he was in the United States senate, then brought on by the president as secretary of defense to manage the drawdown of troops in iraq and afghanistan. But with the rise of isis and regiggering of forces in iraq and afghanistan, the decision late on friday to extent the u. S. Presence in afghanistan, all of that sort of changing the way the pentagon is going to be focused over the next couple of years, clearly the president deciding now to make a change. Chuck hagel will be stepping down as defense secretary. No word on who his successor might be. Well be working on that throughout the day, guys. Thank you. As he just said, well be following. Opening bell, four minutes away. Stay with us on squawk on the street. Oh what fun it is to ride. Get the mercedesbenz on your wish list at the winter event going on now but hurry, the offer ends soon. [ho, ho, ho ] lease the 2015 c300 4matic for 419 a month at your local mercedesbenz dealer. 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. Youre watching cnbc squawk on the street. Live from the Financial Capital of the world. Opening bell ringing 50 seconds from now. I feel awful about the United Technologies story. People have to understand, news like this happens. I respect that man, who has departed, mr. Chenevert, who is doing a pretty good job. And hes gone. And you know, the thing that they dont they dont need to put out a release why or what. Im flabbergasted. Still it bothers you . Yes it bothers me. This is a Great American company. A guy leaves and were sitting here trying to scramble about what happened . The old days where were r rarly got an we assume hes fired. In the boardroom, were seeing things weve never seen before, boards of directors, getting a level of clarity about whats happened. This is a throwback. Without a throwback jersey. Its a throwback, that release. Maybe those guys who are wearing right now throwback outfits to the 50s, before there was disclosure, thin ties. United technologies stock not doing badly, down over 1 . You heard the opening bell at big board. Who rang it . Lennar. There you go. Talk to the ceo. Over at nasdaq, saxo bank did the honors. A look at hq, realtime exchange. Good deal more green than red. We have to be careful about monday morning openings without mergers. This is an air of good feeling week. Weve seen this happen so often. Its thanksgiving time, and drift up. But there are positive notes. Research is positive today. I saw a note this morning about cisco and maintaining the margins. A lot of people suspicious about how cisco continues to go higher. Rbc says it can. Kate spade to buy merrill. Thats the new winner in the handbag business, not coach or michael kors. Positive notes saying, listen, let it run. Have you seen walmart, david . 85. 84. Yeah. In the 70s forever. Target these things have been stuck in the mud. Once they start to move, they really take your breath away. Boeing breaking out here. Honeywell breaking out. A broad panos pli. Happy days are here again. Happy days have been here a while on apple. Well talk about it in mad dash. Talking about apple having a good Holiday Season, iphone 6. The beginning of the chatter how apple resurrected itself. Apple turned out to be smart about one thing they bought a lot of the stock when people doubted the iphone 6 would be a big launch. Tim cook does not seek celebration, does not seek ill give it to him. Great job. Capital allocation, when it comes to buying back stock and or issuing debt to fund those buybacks, theyve done very well in hitting the market at low Interest Rates and or lower stock prices but people will come back to 170 billion in cash and go this is a case study, how to deal with Capital Allocation in a world where we have the worst Corporate Tax system that everyone says is going to be fixed and no one is fixing it. Thats true. Take a look here. Technology, more broadly speaking, jim, nothing nothing particular. Alibaba up to 112. Yahoo above 51. People should be looking at micron. Weve got micron goldman raising numbers. Micron will break out, plain and simple. Demand is too strong. Theres been a lid on the number of new fabs coming in. Land research, positive note. Thats also because theres a shortage, i lad lamb on mad money a shortage of foundries, shortage of chips. We do not have that. The shorts are all over micron. Theyve said, cramer, you dont know what youre talking about. And i say, well, the proof is in the pudding, gentleman, the stock is raking that in. Weve talked about dish earlier but its important to focus on verizon and at t as well. Yes. Citi does downgrade both of them this morning. The idea simply being, theyre spend ago good deal of money at the auctions that weve talked a good deal about of late. We assume theyre spending a lot of money. And that will stress their Balance Sheets. Its not just buying spectrum, then youve got to spend to build it out. Theyve have enormous networks already but its going to take a while too put the spectrum to use for data. Given where it is, in terms of its frequency, its not actually great going through buildings. Its going to take them a while. And youve got tmobile out there still cutting prices. I know. Look, this business these are great cash flow generators but obviously the competitions heating up. I like the arms merchants. I like american tower. Tower stocks, right. Cc Crown Holdings and sbac. These companies, by the way, have been in bull market mode for so long and they quietly go up. Only thing you ever saw about this group was there was a slam put on by american tower. Im not going to mention the firm. Its not worth mentioning. The ceo came on, i dont know what theyre talking about. A great opportunity to buy the stock. When he came on, why are they doing this . Our business is strong. It was a headscratcher. Yeah. What a diplomat ive become. Weve talked, energy, exxon downgrade today. I notice anadarko is up. Theres continued theme of, are we going to see consolidation . You amongst the big guys, the majors. Doesnt exxon do something . Or not . I dont know if a Lower Oil Price environment is the is the time that they do that. They have a longterm exxons company thought to have 50year plan. Anadarko always thought to be for sale. I dont know. As soon as lawsuits were cleaned up, people felt this is the one to go. A lot of people thought whiting would go. I think at this prices people are figuring out drilling budgets first and then acquisitions. Yeah. On that note, of course, last monday we saw two enormous deals, Baker Hughes Halliburton and actavis. Brent saunders did a great job. I had mr. Likes, a guy giving it all shes got, never enough. Never enough for hedge fund. Remarkable company. Spin off of pfizer. It doesnt matter. Theres a man who is a very good analyst about what theyve done. They are the research leader. But that doesnt matter. Allergan was a research leader, that doesnt matter. They never go after pfizer, never go after lilly. They go after winning companies. We should never feel sad for ceos who are wellpaid. But i also feel theres a lot of pride. Do you go after belichick . Shouldnt you go after tom koffman . Im using that analogy. Why arent you going after underperformers . No company that is immune, many spend a lot of time preparing for activist campaigns that never even come. Right. But theres a lot of management distraction, even from anticipating the possibility and then, of course, if one does come, youre spending 25 , 30 of the time if youre the ceo on it. Mr. Liberse. Theyve avoided a proxy fight. Plenty of people happy to see what a proxy fight might have unearthed what we might have learned as investors. What do you learn . Other than the best performing chemical stock. Capital allocation could have been a lot better. You think . Ppg up 13 , dupont up 11, west lake up 16. Huntsman and Eastman Chemical up 8. And how has dow done . Dows up 18. Better than the average, up 30 yearoveryear. Done a great job. Some argue hes been in there for quite some time, lobe. It was a while ago he wrote in his investor letter about it and the stocks up in part because people anticipating the very fight that didnt come. Okay. Look, i i am offering two things. One, is the price up because of lobe . Yes. Im not going to say maybe yes. Has liberus done a terrible job as ridiculed by a threeminute video genuine mudsling thats been removed, you cant see it . The video said that he breaks his promises, yes, he did have to slash dividend after saying on the morning he wouldnt but that was the dark day of 2009. But if you looked at that video, it said lib russ, like mo, larry, curly, schempp . Does he deserve to be schempp . You know . I dont know if he does. I dont think hes schempp. I they hes did a good job. Harpo, groucho. Those guys were smart. Zeppo. Always an underperformer. Those guys were smart. Not that the three stooges werent. Actavis up again. Theres a guy, brent saunders. No stooge. Hes groucho. Mary thompson more on what happens moving. Aspe expected, dow off the bt levels of the day. The mergeer. News, of course, hoping to put a bid into the market. Good news on german Business Confidence as well today. The s p and the dow, of course, last week, finishing up five straight weeks of gains, closing at record highs with the dow, transports, going into this time of year, seasonally favorable for markets. Add in Central Banks around the world continue easing money policy. There arent a lot of alternatives for investors. Theres a bullish bid to the market. It continues today. Though youre starting to hear a bit of chatter about valuation. Nevertheless, there seems to be a firm bid. Looking ahead, i think, today traders expecting quiet session. Economic data later in the week that could influence the markets. As we mentioned, there are deals to tell you about. Renaissance reacquiring plats number underwriters for 1. 9 billion. Biomarin buying the Dutch Company prosensa, 17. 75 a share and additionals, if there is some Drug Development by prosensa as well. Dow components in the news as well today. You heard david and jim talking about verizon and exxon mobil earlier on analysts downgrades there United Technologies up 1 on the news the companys ceo Louis Chenevert is stepping down, replaced by the cfo. And intel gets positive comments in barrons over the weekend, expecting the stock to rise 30 over the next two years. Were also keeping watch on retailers, of course, this is start of the Christmas Shopping season. We have black friday. But also with gas prices close to fouryear lows, theres a bit of interest in retailers today. Friday was a tough day for them because a number of them came out with disappointing forecasts. But today seeing a bit of a rebound. Bhp billiton. The companys. Increasing its plan for cost cutting to 4 billion by june of next year, up from 3. 5 billion, this, of course, as we see weakness in metals prices. Gold right now is higher, up 40 cents. The only area of weakness in early trade seems to be the energy sector. Drugs turning lower. Energy down as crude oil is weaker, ahead of the opec meeting thursday. Once again, dow off its highs of the day, up 33 points. Back to you. Thank you, mary thompson. To the bond pits now. We join Rick Santelli at cme group in chicago. Rick . Good morning, david. We see that all maturities are a few basis points higher in yield. And if you look at intraday of tens it paints a picture of moving up and yield down in price. Pair it with fridays action, it negates that notion. And 18 under the belt. Today is session 19. Where it looks like we have potential closing that same range of 230 to 238. Started on the 28th of october, as you see on the last chart. However, however, the 30year has broken away from this. Am i making too much out of one basis point . As you look at a chart starting on the 23rd for 30year bonds, we had 22 sessions, it was closing between 303 and 310. We closed at 302 on friday. Maybe its going to expand that range. However, the compact range stands alone and it was broken, lets continue to monitor that dynamics, which heres the foreign exchange. If you look at dollar index, hovering at best levels since june 2010. We are, what, fourplus years in on this rally. Lets look at the components that make the biggest difference. Of course, its usually the euro. The yen in percentage terms continues to skyrocket in the wrong direction, the downside. Early august, 2007, thats the last time we were hovering at these levels but many say 120 is a breaker. So far, theyve actually been correct, consolidation, but still losing ground. And the last chart, euro versus the dollar. Hey, i dont know whats in draghis mind. Foreign Exchange Markets trying to figure it out. Were hoovering over two manufactureyear lows on the euro versus the greenback. Back to you. Shares of lennar up more than 35 in the last 12 months what happen is next for the home builder with its ceo stewart miller. Also ahead, sara eisens interview with Jeffrey Gundlach, his outlook for bonds as well as take on certain stocks, including apple. You never know where gundlachs going to go but its always worth listening. Well be right back. Alookin good close it up got it. And then, santas helpers boarded the train, and off they went. And thats how we got it. Wowww. You guys mustve been really good this year. The magic of the season is here, at the lexus december to remember sales event. This is the pursuit of perfection. Right now, you can get a single line with 3 gigs for 65 a month. 3 gigs. Is that a lot . Thats about. 100 app downloads, 45 hours of streaming music, and 6 hours of video playing. singing and five golden rings ha, i see what you did. singing four calling birds. Three french hens. the guys starts to fizzle out two. Turtle. Doves. I really went for it there ya you did. You really, really did now get 3 gigs of data on one line for 65 a month. 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With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Companies, and the only home builder ive been recommending for years, lennar ringing the opening bell at new york stock exchange. The Company Celebrates its 60th anniversary. I remember the company from those early years. Joining us, first on cnbc, lennar ceo, stewart miller. Great to be here. 60 years for the company, back in the day you were an investment banker in your goldman years. Your dad was just an amazing man and had a vision and never fallered during a period where you and i both know, a boombust industry but he was secular growth. This market, youve got a beat on. Im going to quote something that blew me away. Before this downturn, anything below 1 million Housing Starts in a year considered almost a housing depression. This recoverys just getting us back to levels of starts. What the heck is happening . Building homes like we have 150 Million People in the country instead of 317 million. Tell me whats go on . Its been amazing. This recovery has been very slow, very steady, a low slope. It is governed by production deficit at the bottom, but Mortgage Finance impairment at the top. We cant get mortgages approved and thats really governing demand. So its keeping the range of improvement of the market c constrained into a marrow band. The statement i made in the Third Quarter is exactly the statement, 1 million Housing Starts a year, used to define a depression. This recovery getting back to the 1 million start level. Back to the notion of the difficulty for credit. Banks are saying, were lending. Fannie mae has said, were helping things. So, i who is at fault . Look, at the end of the day we went through a treacherous downturn. Right. It was defined by mortgage exce excess. The Mortgage Market has reconstituted itself in a very limiting way. High down payments, very tight credit box, and a regulatory overlay that really has the banks rethinking whether they want to be involved in the mortgage business. So you hear about the banking overlay on what fannie, freddie, fha, va have as their standards and its a limiting factor. Incredible. A time when you have been able to take advantage. You sold high. Its a degree come true. You sold land high, bought land low. What does it mean for lennar. Its driven our gross margin, as youve seen. Over the past couple of years we bought land at bottom of the market and its held us in good stead. We continue to be held in good stead as we look to our future. Now the Market Overview housing supply, fantastic chart that you have, this should have led to a really tremendous, quick burst in housing prices. There have been. But you talk about affordability being pretty good. Affordability is strong. Housing supply is limited. The demand demand part of the market is constrained. Its that mortgage overlay that has constrained demand. So what it really means is, as you look out ahead, were likely to see a sustained upward cycle for many years to come. We think, and look at our business as we have a lot of runway out ahead of us. When you talk about this mortgage overlay, which is keeping a lid on demand, do you view it as a good thing or a bad thing . We think its a bad thing. And at the end of the day, if you think about it, the people that need mortgages, the lower middle class people who want to get into Home Ownership are being relegated to rental housing which means, their monthly costs are changing every year. And the rental market, because of all of this demand that has been spilled into the rental market is driving rental rates higher, that rental market is thriving but its really its really making working class families feel that theyre losing disposable income. To those who would say, we had an art officially high level prior to the crisis, 70 . We are better off being closer to 60 . And we are becoming more of a rental economy. Theres a seminal change going on as people are considered renting as opposed to buying. Think about that. Every 1 of Home Ownership lost translates into 1. 3 million American Families going into a rental pool. That means that that 1. 3 million for each 1 lost measures up to 300,000, 400,000 new rentals coming on the market. You have a demand supply imbalance. We trend toward 60 , we are going to see rental rates keep going up, and thats not going to work well for the working class families. Nothing to show for it for the american dream. Stuart miller, fantastic job. Congratulations. Thank you. Thanks for joining us. We told you earlier about United Technologies ceo Louis Chenevert resigning, to be replaced immediately by cfo gregory heys. The Company Tells cnbc cheneverts retirement is unrelated to Financial Performance, which remains on track to achieve previously stated goals. It says Succession Plan has been in place for several years. This is the same comment theyve been giving others. It doesnt tell us anything. Mr. Hayes better be focus. Here today, gone tomorrow at United Technologies. Every company has a Succession Plan, as you expect, a board should demand it of 100 billion market cap company. Jim and i have been saying its more typical that you see a planned announcement of a ceos retirement to be followed by the announced successor and a period of overlap. Doesnt happen in one day with no heads up. Im going to take United Technologies face value and say, thats pretty good, i guys in one day, gone the next day. Thats the way it should be, no explanation. There, i did it. I backed you guys at United Technologies. Youre much better now. Up next, stop trading with jim. Squawk on the streets back after this. T, 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. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. 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. Time for stop trading. A bone to pick with Goldman Sachs. Buy from hole, hold to choke up. A fabulous ceo, this is my bone to pick, when you quoun grade from buy to hold you should not increase price target, 122 to 132. Mary billen is billing a multiyear term in tall and its a great opportunity. Previous management people felt they were doing things that boosted earnings short term. Mary dylan has a longterm plan, remarkable ceo. She is, i think, delivering and delivering, delivering on a very, very consistent fashion. Goldman sachs should not have downgraded this. Mad tonight . Big secret, im talking about actavis. Really. Some of the things that we buzzed about during the break. People who want to listen during the break, good luck. Were into the going do that. Well talk about it in a similar fashion that you did. I will be tuning in, as usual . Spirit airline shareholders have had a lot to smile about. Well talk about it with ceo ben baldonza. Sara eisners interview with Jeffrey Gundlach. This is a burrito made with chocolate, soybeans, and apricots. 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. Monday morning, good morning, welcome back to squawk on the street. Im simon hobbs along with taye la tausche and david faber. Carl is off today. Sara eisen is in los angeles with jeff gundlach. Shell join us 11 00 eastern. Kayla, we opened up into record territory, subsequently falling back. Yes, of course the rate cut in china over the weekend. That has been settling into the markets. But we have a lot of other news to get to today. Road map starting with ceo stepping down. United technologies announcing its chairman and ceo is retiring. Effective immediately. Find out whats next for the company and what you should be doing with that stock. Also ahead, fedex and u. P. S. Ready for the Holiday Season . How much the companies have to gain or lose in the next couple of months. And the ceo of Spirit Airlines waering s weighing in bag fees at jetblue. A big storm coming ahead. Close to 18,000 on the dow, not quite there yet. Lets get analysis where were likely to trade to the end of the year. Chief Global Investment strategy with Charles Schaub and Portfolio Manager with aerial investment. Jeff, we opened at another record. Where do we go from mere . Probably higher. So much policy coming in to up. Up the marks whether Monetary Policy from japan, china. Seeing it from europe as well. Joined by fiscal policy. Remember, japan delayed tax increases, were seeing the budget battles in europe subside. More stimulus from china. Stocks go higher. But listen, theres greater risk as we look to 2015, particularly europe, the a weekend at bernies situation. I understand, jeff, why the market rallies, i suspect it rallies more on the ceo buy backs of their own stock of youve had major Central Banks increasingly desperate to keep economies going in the right direction. Its true of japan, the eurozone. We can argue where we are on china. The backdrop to the easing is not its not a oneway bet for investors, is it . As you alluded to at the end of your answer. Well said. With a lot of central bank action, it may look like the eurozone economies alive but in closer inspection the heart stopped beating a while ago. Thats the weekend at bernies reference to the movie. Impediments to growth are still there. And the nearterm, stimulus likely to continue to lift stock but was there are risks in 2015, as theres only so much stimulus can do. Whats a frozen economic environment particularly europe. So, charlie there are two sides of the argument laid out by jeff. Am i okay to buy the market, to be long of this market, as i might have been right throughout the year and the knowledge that if the bad stuff happens, ill see it telegraphed well and be able to get out or cut those positions substantially . Im smiling because the answers obviously, no. You never get a warning, you never get a bell. When you get that bell, the market moves down and you dont get a chance to get out. Were in a range of reasonableness in term of valuation. Starting to get to the high end of that range. Were kind of, i would call on a scale of one to ten, tens a bubble and one is dirt cheap, id say were moving towards a seven. And particularly stocks that are overvalued are yield sensitive stocks like reits and utilities. The short answer is, no, youre not going to get a warning. But nothing else to put your money in. Bonds overpriced, cash unattractive, thats why the market keeps going up. This is historically a bullish season, thanksgiving week itself, 70 bullish bias. But we have the expected volatility with opec and the uncertainty around how that will affect the Energy Market and how that will trickle through to corporates in that space as well. How do you position yourself ahead of the volatility given so many other variables at work. Great point. Energy, one area of the market actually, where the stocks do seem reasonably priced, are Energy Stocks because everybody is nervous about the direction of oil. As you point out, opec usually cuts prode s production when oi sell but saudis dont want to help iran so they havent been cutting production. We think oil stocks and energy is an attractive part of the market but its volatile short term. Interesting. Jeff, what do you like . What part of the market do you like for next year . The emerging markets make the most sense. All of this liquidity created by the world Central Banks tends to benefit emerging market stocks and the economic backdrop is a lot better. The hearts still beating, some may be on life support. Barbelling your portfolio in 2015, keeping core exposure in the u. S. , but overlooking a lot of the developed world of markets and really focusing on emerging markets makes sense. Jeff, when the fed raises rates, as they eventually do, emerging markets could be in a serious situation, couldnt they . Are have we worked our way through that . I think we worked largely through it. Well see volatility but things are very different than they were even two years ago when there were hints about the taper tantrum hard to say for me and we saw them work through a lot of that. I dont think theyre as dependent on the liquidity as they were at the time. Thank you for kicking off your week with us. Thank you both. Keeping an eye on shares of United Technologies, this after the Company Announced the abrupt retirement of ceo Louis Chenevert today, effective immediately. Hes been replaced by the chief financial officer, Gregory Hayes. The company telling cnbc that change is, quote, entirely unrelated to the financial perform of the company. Joining us now on the phone, managing director, Senior Research analyst at cowen and company. This morning weve been trying to puzzle this out. Its not often you see a company this size announce something in this way with absolutely no no heads up to the market, if you will. Whats your take . I agree with that totally. Theres been no heads up to do this in front of their december 11th investor day. Is it a surprise, you know, i think the stock is trading off because investors dont really know. Theres also not a lot of explanation as to the reason, is it personal reasons . Is it Something Else . I think, you know, investors dont like uncertainty. On the plus side, the guy taking over, greg hayes, been cfo, hes been the voice of utc, hes been the guy doing the public appearances. They have a strong operating group. So you know, i think theyre in good hands. But the fundamental issue is that, you know, i think chinas imimporta important to them. They have a transition coming to this new engine. Right. And obviously, reference residential building in china with the elevators of otis. But you have a favorable impression of hayes . I guess youve been dealing with him on the conference calls, for example. Give our viewers some sense because its not as though, again, to the point that there was any expectation that this was going to occur, certainly not in a rapid fashion. Yeah, no, hes basically an experienced guy. Hes been the cfo for a number of years. As i said, he really is the voice of utc. They have strong operating execs, i think, at the divisions. Its not like theres a vacuum of expertise. So, you know, i think thats fine. But certainly the circumstances of this happening as quickly as it did, and when it did, why didnt it happen after their investor day . You know, i think thats bothering investors. Yeah. Although the stock, for its part, is lets call it almost flat to up. But i know, 57yearold ceo on the job for about six years, no explanation given retiring immediately setting off alarm bells. Not due to Financial Performance. Any guesses what might be going on here . No. I mean, there could be a lot of reasons. One doesnt know. He did a good job, i think, in getting geared to orders but hes the history here has been the ceo is the spokesman, his predecessor, george david, did all of the big meetings. Hes not been doing that. So thats a little bit funny. Normally this company goes with an operating guy as a ceo. So to go with the cfo is a little bit of a change. And i think, you know, there could have been a lot of reasons, but, you know, unclear to say which one it is. Whats your overall take fundamentally on the company at this point . Well, i downgraded it in august because of concerns about china and otis and whats happening at the residence market. And because of this difficult transition at pratt, i felt wed be looking at ive been out talking, mid single digit growth which is going to lag a couple of their peers. You know, its unclear what were going to be looking national 2016. So you know, weve been neutral for a while here. Thanks for your insights. Appreciate it. Cai von rumohr. Ferguson, missouri, sitting in limbo on a decision whether to charge Police Officer wilson on the shooting death of michael brown. Scott cohn is live with latest there. Reporter hi, kayla. If the reports are correct, the grand jury is convening right now to continue their deliberations. That would likely be taking place in clayton, missouri, 12 miles from here. This is west fluorescent, thats sams meat market. As you can see, its a typical monday morning except theyre boarded up, they are open theres the iconic hands up, dont shoot sign. You see this in business after business around this area. Theyve boarded up, theyre bracing themselves, including one doctor who says that all he wants, if there are protests, is a little respect. I have an office here, i take care of people who are sick. So the respect is to let me continue to do that and whatever the decision could be, that people can protest, yes, they can but they dont have to burn up our businesses. Tear up businesses, break the windows, that disrupts business. Reporter imagine, theyve been on edge like this for the better part of the month. They originally told there might be a decision early november, later told by the end of the month. We really dont know if the grand jury is going to earn a decision today and at that point, how soon we will know what that decision is. So ferguson and this whole area remains on edge. Tenuous situation, scott cohn in ferguson, missouri. Shares of ebay up 7 in the last month but one analyst just cut the stock to sell. Ever core joins us live why hes bearish on ebay when squawk on the street comes back. How could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the Aerospace Industry 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. Then all the parts. Come together, and there it is. Our new car so, thats how santa fits it in his sleigh. Wow. Wow. The magic of the season is here, at the lexus december to remember sales event. This is the pursuit of perfection. 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The Nbc Universal news group, our parent, owns a Minority Stake in kensho which has aint partnership with cnbc. We saw the fruits of that last week. Lets talk about ebay, downgraded at evercore isi, the firm giving online retailer a sell rating on payments concerns, saying increased competitive risks outweigh potential rewards for paypal unit. With the shopping season under way, what impact could mobile payments have . Joining us now, managing director and head of Internet Equity Research at evercore isi. A 32major report, very dense. Walk through every single corner of the fragmented payment industry and you ultimately conclude that paypals Business Model is at risk. Why is that . I think a lot of speculation with the new announcements around payments theres a risk of payments business for paypal. And i think we just wanted to make sure that we were doing our work there to understand where would the risk come from. While theres bigname announcements in terms of apple pay obviously, the real risk comes down to the fact that demand channels, include social in that, you can include search, marketplace players getting closer to sellers. In doing so, youre seeing levels of Data Integration and collaboration you didnt see before. The convenience for the consumers or the authentication provided to merchant in terms of making sure they have a user that they think they have, thats done by demand channels now. The question, what value does paypal provide to the merchant or consumer . The question is it needs to be attractive payment source, you want to choose to use paypal if youre a consumer because youre getting loyalty and rewards. Unfortunately in that respect youre not getting those things to the degree we think you need to. When we look at paypals position from a scales sfintd we dont see it positioned scale wise enough to compete there. It is a bit of a concern, i think investors need to be aware of it and make sure we were as detailed as possible. Which emerging platform or product has been the most responsible for taking away some of pal pals market share or what was previously its innovative edge . They bought brain tree. The banks havent been able to roll out a product that emulate what brain tree does. Apple pay does Something Different to what paypals core business is. Where do you think the exact competition is coming from. If you break paypal into two components you have the network, provide the convenience and authentication. Paypal as a payment source. I think the thing that has made it harder for, i think, issuers to want to come into the space where paypal has competed they do have that greater convenience and the ability to authenticate. And that scale was needed to do so. But now whether its apple pay, providing it from the os layer or google in terms of integrating with merchants on back end how buying key words and search traffic for marketplace players say, one click you can buy and here are store payment credentials, they have a number of changes how to integrate the solution. Brain tree is one of them. Notice that brain tree doesnt provide a lot of branding in terms of what the consumer sees. It not a question of whether or not brain tree owns the consumer, its the demand chan that owns it. People are puzzled when all is said and done you pull the sell rating on unusually but took the price target down from 52 to 49. Ebays not an expensive stock in a lot of metrics. Were not trying to say this is going to happen tomorrow. But i do think that this represents about 10 downside to where the shares currently trade. Theres a lot of catalysts out there now where people are getting, you know, enthused to say somethings going to happen whether its activism or other. I think that folks should have a clear understanding what is changing in the space and the fact that the Value Proposition that paypal has historically brought to the table, it is becoming questioned, i think both on the side of the merchant and consumer. Youre left with, what does paypal provide as a payment source . Thats where paypal makes most of its money and review it as being uncompetitive. You say paypal could be able to surprise us through innovation. Trying to move into Small Business lending, trying to got a foothold in the brick and mortar space. Are you seeing anything out of the company right now that you think is truly innovative . Right. No, to be honest. I think there are things that theyre providing in terms of one touch, either looking at areas around lending. And i would say, for the most part, a lot of those things seem to be competitive in moving paypal in a direction where they have more competitors as opposed to doing something completely new at this point. That is where youre right, it boils down to, can paypal take its current base, merchant penetration . We dont think thats the case. Up next on the program, newly discovered super spy wear attacking computer for years. One of most sophisticated pieces of Malicious Software ever seen. All of the details on that after this break. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. New computer virus discovered but its one of most sophisticated pieces malware ever seen. Used to spy on private companies and governments, they say, since 2008. Eamon javers more live from d. C. Astounding that it takes six years to discover these things. Thats right, simon. This is a new white paper put out by sim mymantecs, floating around on the internet, calling it reagan and say its been targeting specific, targeted, narrow areas of penetration. A lot of Computers Systems in russia and saudi arabia hit by this. What symantec is saying this is sophisticated that it must have been developed by a nation state. Theyre not saying which nation state but say, in their white paper, they suspect it might be an english language speaking state which narrows field, because english language words discovers in the computer code that developed this. Also saying that this was designed to stay undetected inside Computer Systems for years, because of the level of effort that went into keeping this piece of malware very stealthy, and theyre comparing it to the famous cybersecurity trojan that went after the iranian centrifuges a couple of years back that exposed a great fanfare. More detailed to be learned and theyll update us with they have. Interesting development in the world of mail wear. Back to you. Im fascinated who would be an enemy state that would be speaking english . Well, thats interesting, because one of the things that symantec has said in the white paper is that there are certain areas that have not seen hits by this virus. Someone is the United States. Another is china. So, from that you can work around the motives who would have an interest in creating piece of malware go after computers in countries that are no the United States or china. The United States, then . At least one possibility. Of course in the world of espionage, theres always a double reverse fake. You create malware that look likes it point to the United States as a culprit but developed somewhere else. Sourcing these things is very, very difficult because theres a lot of back and forth here. Technical technically, very, very complicated system according to symantec. We appreciate your time this morning. Its officially Holiday Travel season and a storm could cause big problems for travelers. Straight ahead, the ceo of Spirit Airlines about that. Plus, new bag fees from the likes of jetblue. Squawk on the street will be right back. Pm pain reliever that dares to work all the way until. The am. New aleve pm the only one to combine a safe sleep aid plus the 12 hour strength of aleve. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain. The house tried to keep out all the water, but water got inside and ruined everybodys everythings. The house thought she let the family down. They just didnt think it could happen. They told the house they would take better care of her. Always. Announcer protect what matters. Get flood insurance. You are gonna need a wingman. And my cash back keeps the party going. But my Airline Miles take it worldwide. [ male announcer ] it shouldnt be this hard. With creditcards. Com, its easy to search hundreds of cards and apply online. Creditcards. Com. Shares of fedex and u. P. S. Surging in what promises to be another recordbreaking ecommerce Holiday Season. Fdx up almost 16 in the past 3 months. Our next guest spend time with both management teams. David ross, managing director in Global Transportation and logistic analyst at stifel. Good morning. The price of fuel is helping but i imagine you get a seasonal effect on the stocks anyway, do you . Sorry i couldnt hear you. Theres noise in the background. His this about the price of oil. No, the a seasonal effect from the Holiday Shopping season. Demand for service dramatically increases in months of november and december. So the trading in the stocks typically takes off after labor day through the end of the year. Seasonal benefit from fuel is a double benefit this year because of the lower fuel prices have a positive impact on consumer spending, we think, this Holiday Season. The big news, last year, u. P. S. Was unable to cope with the surging demand they had. Made much of the investments with peak capacity. Do you think both will be able to cope this year . Well see. It will be interesting. I think, you know, fedex had a more disciplined approach around it, they have taken top 30 ki customers and given them caps, theyre able to promise them in terms of shipment volumes. U. P. S. Has not been aggressive placing caps, trying to hire more people, handle it all using advantages technology, routing to avoid any issues like they had last season. We think that, you know, if all goes according to their plans Holiday Season will go off without a hitch. However, any tooil you plan around a forecast, ecommerce sales pop up 30 , 40 on a given day unexpectedly, not much you can do to avoid congestion. To highlight the difference, as you laid them out between the two management teams and what theyre doing, fedex saying if you give us more Business Year round well give you extra capacity through the Holiday Season, the message to retailers . Correct. And the retailers, too, have taken a different approach going online last few days. Ive noticed theyre trying to spread out the Holiday Season a little bit. Not, you know, cramming everything in on black friday, for example, but a few days around black friday. Also promising, you know, threeday Free Shipping rather than next day or twoday Free Shipping. I think on the etailer side and carrier side theyre trying to make this a more pleasant experience for the holiday shopper. Whats the margin story going for . Oil and gas prices are near fouryear lows at this point. Also we have price increases loom, both at u. P. S. And fedex. But interestingly fedexs increases dont start until january. Im wondering if you think theres margin play between these two Logistics Companies given that . Margin play just in the Fourth Quarter or in general over the next 12 months plus . In the Fourth Quarter starting, because one school of thought would say fedex rates cheaper for that last week of december, maybe theyll get added business but then again u. P. S. Will make more money. So do you think theres any sort of effect or will it be largely negligible . We think its going to be largely negligible. The amount of packages shipped in the last week or few days where it would have an impact arent going to sway the court one way or the other. Also prices that they have in place with their largest customers during the Holiday Season have contracts in place that arent going to affect the rate increase. It affects the normal dropin pizza. Bottom line it for us, two very different companies, fedex more internationally, u. P. S. Heavily unionized, larger on the ground for the Holiday Season. Which stock do you prefer, should investors chase them through the seasonal bounce . Most of the season bounce happened. Were not chasing either stock at this point. You have to ask yourself, whats your risk tolerance . If you think the economys going to continue to grow and can afford risk and chasing Earnings Growth i go with fedex. Your on the safety side, previous a dividend and solid free cash flow, i go with ums. Were not recommending either stock at this point. David ross on u. P. S. And fedex. In the reason time, people across the country gearing up for Holiday Travel. Consumer reports for 2014 as published its naughty and nice list out. And our next guest made the naughty list for tacking on 2 bag holiday sur charge for travelers. Joining us, ben baldanza, ceo of Spirit Airlines. Good morning to you. Youre not going to be appall g appall gettic, are you, raising the price of the first checked bag . We think its plus for consumers, were raising the price of bags a little bit but not raising fares as much as other airlines are raising them. Total price is awesome on spirit in comparison. So the first bag is 49, the second bag is 59. People may, however, say that youre still nickel and diming. Arent you, according to Morgan Stanley likely to be the most Profitable Airline in the world next year, anyway . You know, we are a Profitable Airline but we also have the lowest total price in the industry. If you look at our fares, theyre about over 40 less than our competitors fares and total price that customers pay after they buy the bags is about 35 . Its hard to say you nickel and dime when average fare is 85 and customers are paying 130 total. What we do is put the power of pricing in the consumers hands and they decide to pay for what they value and save on what they dont value. Im told that you talked to investors about ryanair in the European Union which has grown substantially, to i think 10 market share and potentially you could do the same from a lower base, four or five times as big in this country. Isnt there a really important lesson from what Michael Oleary did at ryanair, had to apologize for unnecessarily pissing people off . It hes had to do a uturn, isnt there a lesson there. Theres a lesson but its a lesson weve learned and learned it earlier in our life. Ryanair is over 300 planes now. Were 60 airplanes. We understand that early on in the evolution of spirit and growth story. You know the number one thing customers say they want when they pick an airline to have a low fare and we to that great. We dont lose man y bags at all. We have among the lowest cancellation rate of any airline. We do a great job for customers. We see whats happening with ryan and the southwest and u. S. As carriers have gotten larger theyve had to appeal to a larger mass of customers. And so were fixing those things now when were small so we wont have those problems when were those airlines size. Much made of the falling prices for jet fuel, down 17 from last year, why isnt that making air fares lower . Walk us through your pricing model and whether there could be potentially beneficial impact for the consumer given where jet fuel prices are. Well, i think as you would expect, that prices in the Airline Industry like most prices of everything we buy are demand based, not so much cost base. So what i think youll see lower fuel prices do is probably create lower prices and better values for customers in low demand times, but in peak demand times, theres never really been a correlation to price and input cost price, which is fuel is our largest input cost. In a lower fuel price environment if thats going to stay through 2015, which obviously would be nice for the industry if that were true, what youll see, you will see lower fares in weaker demand peers of times. But Strong Demand periods of times all Companies Price to the demand reality. Are you the weak link in the chain of the Airline Industry now . One of the reasons everybodys profitable people have restricted capacity, revenues can rise, profits can rise, margins can rise. Youve got 21 planes coming online over the next quarter and year. Thats potentially 40 or 60 new routes because of the way youre able to use them and utilize them so well. Could you upset the industry . Could you add capacity where nobody wants it . No, i dont think thats the case at all because you know, theres a little bit of a small number problem here. Right, we are adding 20, 21 planes, growing 30 next year over this year. This year was 18 growth rate over last year. But thats talking about going from 60 to 80 kind of airplanes. When you look at airlines like southwest and delta and american, those, you know, 800, 1,000 planes kind of things. Adding another 20 doesnt show up. Its a rounding air in the nas capacity but what it does is, because theres less capacity around in the industry, fares have gotten really high, what it does it creates low price option in a lot of new places. So were excited about that growth. And i think customers will really appreciate the fact that while they dont see low fares in their cities anymore, once spirit cops to town they have that option for a low fare again. Certainly the stock price has done well. Good to see you. Thank you for joining us. Ben baldanza, ceo of Spirit Airlines. Great to see you. For the First Time Since the dramatic exit of bill gross from pimco, double lines jeffrey gurp gundlach going on the record. Sara eisen joins us from los angeles with a preview of what we can expect. This will be a news making interview. Thank you very much. Good morning, kayla and simon from los angeles, on the floor of the doubleline trading floor. Doubleline and Jeffrey Gundlach having a moment. The forbes article, glory to the new bond king, and flows are backing it up. 2. 6 billion into doubleline in the month of october. The ninth month in a row. Well talk to jeffrey about that. Whether its coming from pimco and what his calls are for 2015. Remember, the biggie for 2014, they are up 6 so far, was that treasury still had room to run. Totally against the consensus. Nobody on wall street expected this. Turned out to be right. Well talk to him about his call for the Federal Reserve and for treasury prices in the new year. Hes also had other good hits including strong dollar. He also had a hit about oil, oil going down to 70 ahead of the key opec meeting this week. Some misses as well, especially when it comes to stock picking. He told us that apple was a sell, that turned out to be at wrong call. He had a short on Home Builders, as were seeing new highs for some Home Builders today. Well cover the globe. Well talk stocks, talk treasuries. And of course, well talk about that megacall on dollar yen, he told me 200. It is quite a bold call. Already that has been the most dramatic trade, i would say, of the last year. Be sure a lot of currency talk as well. In the meantime, i believe you were spotted at american muse ache waic awards last nigh. Anything to report . We did stop by the American Music awards since we were in l. A. Theres a big business story going on with taylor swift pulling from spotify. Interesting to hear artists. Than my first time on the red carpet. I prefer here to be with the bond rock star any day. Wow. A busy weekend, nonetheless. You are packing it all in. Stay tuned for your interview with Jeffrey Gundlach later on next hour. Twitter cofounder biz stone out with a new app. Shell join squawk alley live to talk about that. Plus, what he thinks about the state of social media, Silicon Valley and what is happening at twitter which he cofounded. Squawk on the street, though, will be right back. What are you guys doing . Yoga, its supposed to make us more productive. Better mind and body keeps us efficient. You guys have misread the memo. This is the new lenovo yoga with the intel core i5 vpro processor. It combines the productivity of an ultra book with the touch benefits of a tablet. And its custom configured by cdw. So we can stop doing this . My head hurts. [painful grunts] take a look at s p telecom sector, falling sharply, down more than 1 in a mixed trade. Dom chu with more on what is moving in telecoms. Look at it, by far and away, telecom the weakest sector in the s p 500 today. Verizon one of the biggest lag ards after cut from a neutral to prior buy on higher than expects values in ongoing spec trumg option, implying higher separating costs from mobile operators. At t, frontier, wind stream losing ground. Look at at t and verizon, those citi analysts said that verizon the concern is possibly slowing wireless growth. Those Big Telecom Stocks ones to watch in todays trade. 34 billion apparently. Thank you, dom. Over to Rick Santelli for the santelli exchange. Life in chicago. Hi, simon. Id like to welcome Professor John cochran, university of chicago. One of the opeds hes penned recently, whos afraid of a little deflation. Several days after it was written somebody wrote back in to comment, me and my friends wait many months because we suspect that big 55inch tv may fall a half of 1 in the next year. Sounds ridiculous framed that way. Why are bankers making a big deal about a bit of deflation, certainly not a spriiral . The argument you mentioned is one of the ones we hear a lot. When you think about it, its no different with deflation than inflation. You get 5 interest on money in the bank and inflations only 1 , you have the same incentive to save until tomorrow. And whats wrong with people saving a little bit . Weve been spending and borrowing like crazy. I dont buy that particular argument or most of the other ones on how a little bit of deflations going to cause us some horrible thing to happen. Why do central bankers make it the cornerstone of, you know, pretty much every white paper, every press conference, every statement, whether its japan or the European Union or the United States, really has that has at centerpiece bogeyman . Because they want to continue to bring forth policies that address that . Whats the reason . Why isnt there more research as to whether a small amount of deflation is as harmful as central bankers make it appear to be . Yeah, well, central bankers love being in the news, so whatevers going on theyre out there saving us from the great problem of the day. I think theres a lot of fuzzy thinking about this, why i wrote the oped. A fear if we get a little bit of deflation, it will spiral away into something terrible. But if you look, you know, big deflation, yeah, thats a problem. 20, 30 some big catastrophe, that could be a problem and a symptom of other things going on. A little bit of 1 , 2 deflation is fine. The economy works well with 1 or 2 deflation. It did in late 19th century. There were problems here and there but it didnt spiral out of control. It didnt cause all sorts of big problems. A little bit of deflation and your money keeps its value, as Millen Friedman called that the optimum quantity of money, and maybe we should just welcome it. With the final 30 seconds, i tried to form my own theories. These are very smart people that work at Central Banks, from a book learning standpoint. Is it because theres so much debt in all of the developed economies and a little disinflation has an impact on debt, its bettor have a bit of inflation, final answer . Is that the main driver, you think . Well, there is an agenda for a lot of inflation a way of def debts and deflation means that people have to pay back in a little bit more valuable curn spin that would be a problem for a 20 deflation but a change to 1 or 2 deflation and get to roll over your debts at lower Interest Rates i dont see that being a big problem at all. Thank you so much for your time, professor. Its all yours. Back to you. Thanks so much, Rick Santelli in chicago. When we come back the industry that needs thousands of workers can demand a salary of six figures or more and lets their employees set their schedule. Its not in Silicon Valley and not too good to be true. We will tell you what it is when we come back. How could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. 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. Zapped it, right to our house. And thats how they got it here. So, santa has a transporter . For the big stuff. And its a teleporter. Cool. The magic of the season is here, at the lexus december to remember sales event. This is the pursuit of perfection. 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 on the street. Choppy trade on news that the casino operator received a notice of de fault from umb bank last week relating to Senior Secured Notes of debt it has outstanding. It called the notice of default meritless saying it doesnt believe any kind of a default has occurred. Caesars shares down by about a half percent. Its been a choppy trade for an interesting story with a casino thats maybe or maybe not defaulting on its debt. Back over to you guys. Thanks so much, dominic chu back at headquarters. An industry with thousands of job openings, the potential for sixfigure salaries and the ability to set your own schedule. It might sound too good to be true but according to our jane wells this is for real. Jane is in l. A. With all of the details and luckily for us jane has not quit her day job yet. But im thinking about it. What if you could make over 100,000 and skip paying for a fouryear degree. America is suffering from a crisis in Court Reporters. Not just in court. The fcc is expanding closed captioning demand like this program. The Industry Needs 5500 new reporters in 3 to 5 years. Its a hard job. As the centers for Disease Control appears to be scrambling to figure out how it to handle ebola in the United States. Hiring a Court Reporter through her paces at West Valley College in the bay area. Takes two to three years to become a reporter but a lot less than a college degree. You have to be able to type over 200 words a minute while at least two people are talking. 70 of our current field are estimated to be retiring in the next five to ten years. There is a current job opening permanent job opening for a Court Reporter in the San Francisco courts and it is starting salary is over 100,000. Plus benefits . Plus benefits. All right. Katherine schilling graduated from Smith College with a japanese degree. Thats her on the left. Gabriela woodson both training to be Court Reporters seeing money to be made. The school says 100 of grads have gotten jobs but you need to love words, grammar and playing piano helps. I love to type, i love to write and im good at being quiet. Thats perfect for me. I know im going to be starting off at least 65,000 is my goal when i get out and its just going to go up from there because i can work as much as i want or little as i want. When does siri replace them . Court reporters have been hearing talk of doom begins the invasion of the tape recorder. Siri cannot discern between two or three voices and she cannot strike a side bar conversation from the record. Back to you. You see,jane, if you live long enough everything comes back. The typist is back, effectively. Yes. Well because the human component still makes a difference. Technology has not replaced us completely yet, no matter what elon musks fears may be. Weve not mentioned the artist, the sketch in court, we got to go. Nice to see you. Jane wells there with the openings for Court Reporters. It is now almost time for squawk alley on cnbc. Lets see whats on the deck with jon fortt. Hey, simon. Quite a bit. Jeffe jeffery gun lack coming up with where he went wrong with the apple call. Biz stone is joining us, the new app and twitter where it heads next and finally half of 25 to 34yearolds are in line while theyre shopping on their phones buying other stuff. Well look at that and other trends in Online Shopping coming up on squawk alley. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Good morning. 8 00 a. M. Atpel headquarters and 11 00 a. M. On wall street and squawk alley is live. Welcome to squawk alley on this monday morning. Twitter cofounder biz stone will join us