Transcripts For CNBC Squawk On The Street 20161125

That in mind as we give you a look here at futures. We are looking for an up open at the open. European markets have been open and well give you a quick look there in terms of performance. You can see mixed bag with germanys dak down ever so slightly. Theres the 10year 2. 37, the story since the election. Theres a look at crude and brent as well. Lets get to our road map this morning. Black friday is upon us, but is it actually worth going shopping today . Were going to get you up to speed. And speaking of retail, well talk to the ceo of target, that companys plan to accommodate shoppers in store and online during the busiest time of the year. And president elect donald trump couldnt quite resist tweeting on thanksgiving day. His plans to keep that carrier airconditioning plant in the United States. That is the latest on his Transition Team all coming up. Ceos of major retail chains weighing in already on black friday. Heres what macys Terry Lundgren said earlier on squawk box. On a value day like today theyre going to buy. Theyre not going to wonder and wait, will it be there tomorrow, will it be there when i buy it online the next day. So here its clearly an urgent response and reaction. So thats why theyre here buying. But that combination of using technology and the experience of being inside the store is the way consumers are shopping today and will continue to be so in the future. Were going to have a live interview later this morning with targets Ceo Brian Cornell. That will be towards the end of this hour. Of course you may see a lot of the target pageantry and signage behind us. Theyre sponsoring a little bit of a holiday spectacular right here at the nyse this morning. Yeah, hell be ringing the bell. The mood is upbeat, wouldnt you say . We saw that in the Consumer Confidence numbers that we got in the end of i guess we got it on wednesday before the holiday. And theres High Expectations for consumers to come out and spend. Whether its the election being behind us or this feeling that were getting in the stock market that we are on the brink of a lift in the overall economy, the mood is more cheerful. Thats why the anecdotal reports are so important that we take you to all the malls across the country and look at the Online Shopping action. Certainly the stocks have told that story. Department stores, which have been so hammered. Had a nice move. One of the top three best performing sub sectors in the s p in the last month since the election. You have to leave that for santoli to talk about. I was trying to set him up. The s p index since close on election day is up 12 . Kohls, macys up more than 20 a piece. Best buy has also been a leader. So i think everything about this postelection rally you have to connect to the context of where we were going into it, which was relatively down beat mood, people not being sure they were going to be coming out shopping. And then we see october data was okay. And now the optimism that in fact we get a little bit of pentup demand released into the economy. I wonder how much is spending and how much, david, is the fact they could see lower Corporate Tax rates, they pay high taxes, like a lot of corporations. The fact that consumers will spend more and weighing that against what you could see more tariffs if donald trump, president elect, follows through with some of his threats he made on the campaign trail. Particularly as it relates to china. Although, sara, theres plenty of articles today when you pick the newspaper up about the deals having already been in place for black friday for some time, the sales started early and seems to be an expectation that traffic in the actual stores may not equal what weve seen in the past. Certainly so much more gets done online, not just on what we like to call or they like to call cyber monday, but as early today. When you look at target, for example, well talk to them later, their Digital Sales up 26 last quarter. One would expect that kind of a trend to continue. Right. Because they have to get the chunk of Digital Sales versus overall sales much higher. Its still less than 5 of their total sales. Right. Growing fast off a small base. Thats what they have to keep doing. Thats why weve seen such aggressive moves from walmart and target online. Thats going to be the interesting story, whether theyre able to make a dent in what has been amazons very dominant market share when it comes to Online Shopping. Yeah. All right, well, lets get back to brick and mortar here. For more on the action today lets go to Courtney Reagan, shes live from dayton, ohio. Good morning, courtney. Reporter hi, good morning to you, david. Welcome to black friday. Its my favorite day of the year though if im honest it really did start yesterday. So those thanksgiving hours and Online Shopping has really changed the cadence of the Holiday Shopping weekend. You cant necessarily see in person what goes on online like you can in the stores, but let me tell you the early signs are bullish. Still jll which is a shopping manager says ten of its Shopping Centers around the country that have been Holding Thanksgiving hours say that the traffic is moderate to strong. 90 of them are seeing that either on par with last year, if not a little bit stronger. And 60 of those jll managed Shopping Centers say sales are on par with last thanksgiving. Now, the traffic rush at the Big Box Stores like target really does come on thanksgiving night. You can see here the difference at the target store in jersey city between last night and then just an hour ago. Still Ceo Brian Cornell is calling what he saw strong and also target. Com recorded a record day. In fact, its best day ever online. Walmart also said that thanksgiving day is one of its biggest Online Shopping days again this year. And amazon says that so far on black friday items ordered are already on track to beat what amazon did on this day last year. So the alexa devices and amazon tv fire 6 are among the best selling products, but so too are things like a certain crock pot as well as that hasbro pie face game and some headphones. So really a wide array of products there. And adobe says that for the entire day on thanksgiving sales are expected to hit about 2 billion online. And thats even with really deep discounts on products, much deeper even than last year in some cases. Tablets, for instance, are on average 25 off. Thats double the discounthat tablets saw last year. So retailers must be selling more volume to make up the sales difference. Adobe also expects that online sales will hit 3 billion today on black friday for the first time. And if that happens, that will be an 11 increase over last year. David, back to you. All right. Thank you very much, Courtney Reagan. Did want to also move of course back to politics. The transition continuing for president elect trump who kept things quite busy, it would seem, even as the thanksgiving holiday carried on. One thing in particular as you take a look at some pictures was an update that the president elect gave us via tweet on his efforts to try to keep the Carrier Corporation in indiana in terms of a factory there. You may recall this was a big issue on the campaign trail. This factory to be moving to mexico. He tweeted, im working hard even on thanksgiving trying to get carrier a. C. Company to stay in the u. S. Making progress. Will know soon. Were talking about 1,400 jobs. I can give you a little more insight after speaking to people close to the situation. It does appear the two sides are making progress as the president elect tweeted. And moving towards a deal. It doesnt mean a deal is going to be done. It is not yet done. But you can imagine from the perspective of United Technology, which owns carrier, not wanting to start off with the president in a particularly bad place. And so with this much pressure being brought to bare and the profile being given to these 1,400 jobs, the question is can you negotiate something that will give president elect trump a socalled win at the same time not really bringing too much problem for utx. The financial ramifications of this, mike, are not really that large when you think about the overall totality of the relationship between an enormous company like utx and the u. S. Government. Yeah, so essentially what youre talking about youre not talking about the federal government or executive branch being able to grant tax relief, anything on the ground tangible thats going to make it less expensive to operate this factory in indiana. Its really just about job owning. But when youre the president and not a candidate, job owning presumably takes on more power. Hes not even the president. Hes already making deals before he takes office. Hes trying to make a deal. Well see if he can make one. I should add while president elect trump is tweeting negotiations im told really being handled by Vice President elect pence, you might imagine that is the case given he was the governor of indiana where this plant is based. I want to bring in phil lebeau for a little more on where things stand here. Reporter david, whats interesting is im listening to your reporting is the question of what nuts and bolts. Lets get down to the dollars and cents in terms of what might change for United Technologies to keep that carrier plant in indianapolis. Because at the end of the day theyve made it very clear that in order to stay competitive with other manufacturers of furnaces and air conditioners, they need to be lower on their labor costs. Well, you cant do that if youre staying in indianapolis. So what could be offered to carrier . Again, we dont know for sure but a couple possibilities out there is the Trump Administration saying, look, if you keep those jobs and you keep that plant in indianapolis, were going to make it more competitive because those who are importing, lets say industrial size airconditioning units, were going to make it more expensive for them. Now, thats just a possibility. A conjecture on my part. Do you throw out a tariff as a possibility for United Technology saying if you keep that plant there, if you keep manufacturing in the u. S. , your competitors are going to have a tougher time being able to bring in their products at the prices that theyre bringing them in right now. Because as you guys also mentioned, in terms of tax relief, if youre able to weigh on the state of indiana or indianapolis, youre really going to have to involve those governments and whether or not the white house can bring enough pressure on them to offer some kind of sweeteners to keep utc in indianapolis. Certainly theres that possibility. But i think the most interesting thing is does this possibility of tariffs coming into the discussion has that been approached in these discussions yet . Yeah, well, im told that there may be sort of broad outlines for a deal, phil. I dont know that we have the specifics or that they are there yet in terms of the specifics that you sort of bring up. Reporter right. Interesting to note, Vice President elect of course was replaced by another republican as governor. One would anticipate theres a strong line of communication there, to your point, that at least would enable them to get involved on the state level if necessary. Reporter yeah. Yeah. And the other thing is, david, United Technologies has received tax benefits, as all large corporations do, over time with their facilities in different areas, municipalities. So there have been some incentives, some sweeteners put in to United Technologies over time with that plant in indianapolis. But at the end of the day it comes down to those labor costs. And i think thats going to be the real interesting thing to see what comes out of this. Yeah. And well be watching. And of course bring you any updates as certainly as we get them. Thank you, phil. I want to bring in eamon javers as well whos in philadelphia of course, bring us uptodate on other moves in the transition that continues. Eamon. Reporter thats right, david. As im listening to your reporting on carrier, i think mike makes a really good point there, which is that any president doesnt really have particular powers that they can use to force carrier to stay in the United States. They dont have a dial in the oval office that turns companies in and out of the United States. All he has really is the power of persuasion here in what they used to call the bully pulpit. And now theyve got the bully twitter account, which donald trump has been using to great effect here. So the question is whether or not this company and then other companies down the line will decide that they cant take the pain, the sting of that twitter account, and decide that its worth suffering some financial hit in order to get out of the political cross hairs here. That seems to be the calculus that carriers going to make. And you wonder what the implication then is for other companies that donald trump has gone after over the past year or so out on the campaign trail, im particularly thinking about amazon here. Thats a company that donald trump said would have some difficulties if he was elected president. Well see whether he wields that twitter account to put pressure on individual companies as we go along here. Carrier may just be the first one in line. And Steve Liesman asked a good question in the last hour, is there any precedent for this . Have we seen companies sort of badgered by the federal government before . I cant really think of an exact analog to this, but i do recall during the financial crisis all those big banks being brought in and told that they had to take t. A. R. P. Money whether they wanted it or not. That was for the good of the economy and going to have to take some financial pain or a deal they didnt like in order to help the overall u. S. Economy. Maybe a similar deal here, david, in terms of carrier, youre going to have to take this financial pain in order to help the u. S. Economy because the president wants you to. Interesting, we were looking at some video there, eamon. Number one i guess for commerce, which would sort of fall into this general area as well. Reporter yeah, thats right. The question is what would his agenda be as he comes in. The president here is going to have a lot of leeway. Companies havent seen this before and they havent seen this sort of very pointed tweeting by a president elect or a president of the United States. This is a new world. Were going to see how it unfolds. Yeah, the bully twitter pulpit. I like that, eamon, thank you. Reporter you bet. Another one were going to be watching is apple, that relationship. We know tim cook and president elect did talk. He did go after apple for not having as much jobs and manufacturing in the u. S. Thats the biggest of all. It is. When we come back, who better to talk about black friday and the Holiday Shopping season than targets Ceo Brian Cornell. Hell be joining us live here at post nine after he rings the opening bell. And taking another look here at the futures market, looks like were going to open strong. Keep in mind stocks close early today 1 00 p. M. Eastern, but we could be looking at more record highs. Much more squawk on the street live from post nine at the nyse when we come right back. The infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. 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And are offering discounts that are deeper than last year. And as we know the consumer is addicted to the deal. Whether that will continue into december and retailers will be able to capitalize on the typical lull that we see post events like this, that of course remains to be seen. So is that going to be a big pressure on margins, or is it just taking back market share and growing sales all that matters . So the good news is inventories across the sector whether in specialty that we cover or Department Stores look very tightly managed. And there is a margin, a recapture opportunity this fourth quarter. Weve had a couple of really terrible Holiday Seasons in a row for this sector. So we are looking forward to actually some of that margin recapture. Susan, what about you . Do you also have an optimistic take at this point in the season . Im not quite as optimistic. I agree that we are seeing promotions earlier. Were actually calling black friday black month now as we continue to see these earlier promotions dilute black friday. About 75 of our coverage were seeing with higher promotions. So even though inventorys lean, i think retailers are feeling the need to promote earlier and more in order to grab that share, which i think could eat away at the margin people are expecting. Susan, as retailers emphasize, the early phase of the Holiday Shopping period, its interesting thanksgiving was at least relatively early this year. Youre going to have five saturdays before christmas. Can the length of this stretch of Holiday Shopping bail them out at all . Yes, that should be helpful definitely. Its longer than last year. One of the longest stretches than weve seen in quite some time. So that should help for sales overall. But the concerning part is the depth and the level of promotions that weve seen so far, which could eat away at the margin a little bit. Anna, youre heading out to the malls later today. What do you look for in addition to obviously just how many people are there, what else sort of draws your eye and helps you ascertain whether things are going well or not . So thus far its been a pretty warm season that weve had this fall, so of course the cold weather and outer wear investment that some of the retailers have made is something that we will be watching. Promotional activity we discussed, yes, appears to be deeper across the board. But we do think its interesting to watch whether theres finally some pent up demand in apparel. Some retailers have been calling out better trends within apparel. And of course as we know its been a while since the consumer converted into any of those categories. Susan, based on what consumers are buying right now, whats your top stock pick for the Holiday Season . Yeah, really over thanksgiving and black friday it seemed like Athletic Apparel was not as strong as wed seen over the past couple years. I think it was skewing more towards fashion apparel. Once again outer wear did not seem as strong as you guys probably know its been still warmer here on the east coast. So were really sticking with the childrens retailers, carters and childrens place. Their space has rationalized much better than other spaces such as the teen space. Were seeing about flat promotions. And theyre not as susceptible to fast fashion. All right. Weve got to leave it there ahead of the bell. Thank you, susan, anna, i know you like l brands and coach, which i thought i would mention as well. Well, that opening bell is just five minutes away. Were going to talk with target Ceo Brian Cornell. Hell be ringing the bell at the big board this morning. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade youre watching cnbc squawk on the street. Were live from the Financial Capital of the world. The opening bells going to be ringing about a minute and a half from now. Mike, im going to give you an opportunity here. Usually at this time i turn to my colleague cramer and ask him what the key to this market is. Yeah. But i think youre in a position to share similar insights. I may not have been building up a head of steam as much as jim by the time in this hour, but i think the yield story continues to dominate. So you have this upward trend in u. S. Treasury yields completely diverging from the rest of the world. But at the same time here its where the market has been strong. So its been these incredibly strong runs in specific pockets that im very focused on small caps versus large caps. Small cap stocks up double digits, Something Like 12 since the election. The s p 500 as a whole up 3 . So to me the question is just where exactly can we take it from this point on. If you look at that ratio of small versus large, it has gone vertical and all about domestic, all about strong dollar, all about maybe some trade policies. But, again, the market has kind of repriced so suddenly in all of these areas before we really know what has changed. The russell 2000 has been up for 14 sessions in a row straight. And if we get 15 today, that will be the longest winning streak for the russell since back in 1996. We should note its also friday and all the major averages are up for the week. The dows up a little more than 1 . So is the s p, the nasdaq is up 1 as well. And the russell to your point is up 2 so far this week. As we get started to trade here, we should remind you it is a shortened day of trading. The close will be at 1 00 p. M. Eastern. As you hear that opening bell, take a look back at our realtime exchange at hq looks like youll have more green on that board. The s p did indicate enough open. Here at the big board you just heard it target celebrating black friday. Were going to speak of course with Brian Cornell, the ceo of that retailer in just a few minutes. Over at the nasdaq new York City Small Business Services celebrating Small Business saturday. Go out and patronize for Small Businesses tomorrow as well. You know, just on a market wide basis, a couple things to your point about friday tending to be strong after thanksgiving. Strong novembers you would think maybe kind of steal some of the year end rally tends not to be the case. Strong novembers typically followed by strong decembers. I think one of the issues is almost everyone now seems to be expecting that. If you looked at the survey data that came out yesterday of small investors, the American Association of individual investors, you shot up from 23 bullish three weeks ago to 50 bullish right now, more than twice as many bulls as bears. Basically this stock rally has sort of whether they thought it was going to happen or not has convinced people that the markets in a good place. Dont want to get too bullish and money flowing into stock this week, so people like the idea, the question is have they been so negative before this that theres room to go in terms of warming up to this market. Im looking at energy the worst performing sector opening red while most of the market is green here. And oil is declining. Oil prices are still up a little more than 4 for the week. Wti and brent. But we are going into a major event risk. That opec meeting is on wednesday in vienna where theres increasing chatter and speculation of some sort of production deal to get oil prices moving. But, mike, theyre moving downright now. And theyre near the lows of the session. Its been such a suggestible market, right . You have this data out there of november 30th. And everybody along the way knowing that oils in this range but volatile within the range, its hints of indications all rumors, right . Who knows really how the market would even react to whatever opec comes out with. So something we were talking about a great deal on wednesday of course was the strong dollar. Oh, yeah. Hitting new i think 13year or 14year highs. Going up to 14year highs yesterday in the trade. On wednesdays trade. Thursday. Oh, yes. The impact on multinationals is always apparent, although investors sometimes choose to focus on it and other times simply seem to not worry about it. Well, if its going up for the right reason, which is the domestic economy is poised to gain steam and strength and fiscal stimulus and higher rates for a good reason and inflation, that is considered overall net positive versus the effect of the strong dollar which youre going to see on multinationals. But its another reason mike was pointing out small caps much more domestically focused. They dont get hit by the strong dollar. Not to mention any possibility of a trade war and tariffs and other things that may at least be in the offering with a Trump Presidency. Its just whats going on with emerging markets, right . Emerging market debt money flowing out of that area. It does put stress on the rest of the world if the dollar is too strong. Its interesting, its 14year highs in the dollar index, but not that much up because you had that huge rally almost a year ago. So i wonder if theres more room before it does much damage. The emerging markets, currencies are getting hit. Its a reminder this move in stocks is really u. S. Focused. Europes not participating as much and emerging markets are going the other way. Turkey raised Interest Rates to try to counter some of the weakness theyre seeing in the currency, and emerging markets are braced for potential tough talk on trade from donald trump, which is why your carrier story is interesting. Because if he can negotiate these kind of deals, you wonder whether he will tone down the rhetoric in some of the threats of tariffs that he said on the campaign trail. He softened his tone on other factors like water boarding and hillary clinton. At least at this point. Some would say it depends who hes last spoke to. On utx we should take a look at that as of course sara referenced our reporting on it. Talks between the Incoming Administration and carrier, which is owned by United Technologies continue. Sources close to them indicate to me they are moving towards some sort of a deal that would end upke keeping a workforce in indiana where that factory is currently based. Remember it was a focus during the campaign for president elect trump, the 1,400 workers there who are scheduled to lose their jobs as they move production to mexico. Unclear exactly what that deal will look like. Not done yet. Doesnt mean theyre going to get there, but they are apparently making progress. The president elect tweeting that as well. Mike pence, his Vice President , is actually the one leading the negotiations from the administrations side, im told. Which makes sense given hes the former governor of indiana. And so certainly is familiar with the issue itself. From utxs perspective of course they may not want to start life with the new administration on a bad foot. Theyve got a lot of other businesses that do business with the u. S. Government as well some of them. And you can imagine theres an ability there to potentially negotiate something that looks good for the president elect and really is not that big a financial burden for United Technologies. Guys, wanted to mention disney, which has been a focus for me. They did come out with their 10k, which they always do, came out wednesday night, so good reading for everybody on thanksgiving. Espn lost 2 million subs last year. Down 15. 6 for fiscal year 16. And thats off a high in 2010 of 100 million subs. And that obviously is a lot lower now than it was then in terms of where they stand. Its the lowest sub base since 2005, 2 million subs lost over the last year. That had been a focus, but interestingly the last Conference Call we got after earnings from bob iger, he spoke much more positively about the future and espn and that seemed to give some confidence. Yeah, theres definitely not a sense that the annual run rate of losses they expect to continue at 2 or 3 or whatever its going to be in the latest year. And the stock seems to reflect that too, right . Remember, its down from 120 a little over a year ago. Its down in the 98s right now, but up from around 90. So i think people have kind of warmed to this idea that whatever the skinny bundles are going to be they may have an answer for that or at least participate in some of that so that its not going to be ongoing the core focus of everybody exactly how many sub losses per month. Rogue one tickets go on sale monday, sara. I know youll be in line. Rogue one . Disney, i think december 16th is the opening. Are you going to see it . I would assume i may end up watching it, i may. Are your children maybe maybe ill be in line for something else. The hatchables ob something. Your kids are too old for hatchables. Thats the hot holiday gift this season. Is it . Hatchamals, the animals that hatch after massaging them. I cant be showing on air what might happen. I just wanted to point out some of the groups that have been beaten down lately post election or actually on top today, the consumer staples, telecom and utilities. We mentioned earlier this was an all inclusive rally post donald trump win and those are the sectors that have been hammered on higher Interest Rates. Those are the rate sensitive stocks. Really does feel a little bit more, david, like a stock pickers or at least sector pickers market as things start to distinguish themselves as we focus on domestic policy and what comes next. Yeah, of course when it comes to stock picking let me quickly end here with certainly also focus on continue takeover activity. I want to point out actilion shares, swiss based pharmaceutical company, bloomberg reporting that j j has expressed some interest there and stock is up over 12 . I would note however that under swiss listing rules, i believe that they will need to tell us something in the fairly near term if in fact there are talks going on with j j. So something to keep in mind as we continue to see of course deal making potentially certainly in the drug industry broadly speaking. All right. Dom chu is on the floor with a lot more on what is moving this morning. So you mentioned johnson johnson. It does trade here at post five, however i can tell you it was the biggest drag on wednesday for the Dow Jones Industrial average overall. Still, if you take a look at the picture sara just mentioned major indices moving to the upside here albeit fractionally. Its going to be a light day, we know this. Half day trading light volume. Check out sectors put it just in perspective for you. Those utilities, consumer staples, they are the one leading the way higher today. Utilities, rate sensitive sectors, financials and energy two of the big winners since the trump rally kind of coming off a little bit today albeit just fractionally speaking. Two sectors to keep an eye on this holiday shortened trading day, look at Consumer Discretionary and industrial sectors, both of those hitting record highs and trading on wednesday. Well keep an eye and see if those things do well again in todays trade as we head towards the all important holiday santa claus rally season. If youre looking for some stock standouts over the past medium term, our data partners took a look at the s p 100 up almost 100 of the time between thanksgiving and christmas, 75 of the time trades positive, up 1. 3 . If you look at cisco, con agra and tobacco stocks, guys tend to do well this time of year. Back over to you. Dom, thank you. We continue to see treasury yields near multimonth and multiyear highs. Lelts head over to the bond pits. Rick santelli at the cme group in chicago as always. Good morning, rick. Good morning, sara. Yeah, the dollar index and the treasury rates seem to be in the top of the closing ranges for the most part, staying very tight, very few retracements. That is significant. If you look at an intraday of 10s, you can clearly see that weve come off just a little bit. But the monthtodates a great chart to really show you how top of the range it is. And if you want to see where we may have the next bus stop on rates, open it up to the summer of 2014, because right around mid september of 14, you see it on the far left, the highest closing yield on that chart, 2. 62. You want to remember that level should we start to close much above 2. 41 to 2. 43 below the market huge pivotal zone at 2. 37 to 2. 30. Lets look at euro versus dollar, 105, i dont need to say more. Thats a huge level. Monthtodate of the dollar index, pay attention, 101. 50 is what technicians are looking at on a closing basis for the week. David, back to you. Okay, thank you very much. Up next, targets game plan for the Holiday Shopping season and beyond. A live interview with Ceo Brian Cornell right here at post nine. Squawk on the street will be right back. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. 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So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Target ringing the opening bell here at the nyse during one of the busiest shopping days of the year. Joining us now on black friday, the ceo of target Brian Cornell. Nice to have you here. Great to be here. Traffic of course is a key, and it was for you last quarter when you did much better than expected and the stock went up. But, you know, analysts and many who follow the Company Still saying, all right, traffic was down 1. 2 . They want to see it reverse. Do you think today is going to be better than it was last year when it comes to traffic . Well, were seeing great trends. Yesterday from a digital standpoint turned out to be the biggest day in our company history. So from an online standpoint lots of visits to our site, great traffic, we saw double digit increases in sales. And we expect that to translate into a really positive Holiday Season. So its day one. Were off and running. But first day indicates weve got a really good plan in place and the guests, our shoppers, reacting to it. Its interesting you mention digital so quickly of course when we talk about traffic. Its off a small base but grown quickly. Is that growth rate going to continue to increase . Well, we want to continue to drive sales both online and in store. So for us the magic is really making sure we provide a great experience no matter how you want to shop. So whether its in one of our stores and weve got to create a great experience there. If youre shopping online, its got to be really easy, it has to work. We also want to make sure we make it easy for you to order online and come by any one of our 1,800 stores and pick up your order when you want to. We think the combination of being able to shop our great stores, having great online experience, but also having the opportunity to order online and pick up in stores that combination is important to our future. A lot of your stores are shipping as well, arent they . They are. We have over 1,000 stores now where we pack and work with fed ex to deliver that last mile. So it allows us to make sure were right there in the local neighborhood and we can get that last Mile Delivery to our guest in a really, really quick period of time. David mentioned the 26 e commerce growth last quarter. That was really the bright spot. Beyond that theres still some underlying softness in your sales growth. Whats happening with market share right now . Sara, overall yeartodate our comps have been flat. Our eps is up over 10 . So were seeing really good margin mix, and thats been driven by what we call our signature categories. So we saw very strong growth in the last quarter in apparel, in home, in baby and kids. Those are critically important categories for us. And from a market share standpoint weve been growing market share and apparel for seven straight quarters now. So those categories where weve doubled down where we think its really important for us to win apparel, home, beauty, baby and kids, were seeing really strong underlying performance. You didnt mention grocery chrks i know is a big part of your strategy and you formerly worked at pepsico, is this a food deflation story hurting grocery . Or is part of it that walmart is so big when it comes to the competition . Were all battling food deflation, but weve got to make sure we continue to improve our assortment, the presentation of food. Were focusing really hard on improving the quality of our produce. And we think over time while youre shopping target, youll spend more and more time buying convenient foods from us while youre in our store. Brian, you know, the traditional retailers have often fallen back on this line of reasoning that says, well, look, online is growing so fast as a category, but its only 10 , so 90 of sales, whatever the number is happened in stores. The bulls on amazon use the same data point. They say, hey, onlines only 10 , its growing faster, these guys dominate the fast growing section of it. Can you get to a point where at target youre truly agnostic as to how somebody shops . Mike, i would tell you were at that point today. I want to make sure our guest feels comfortable shopping any way they want. We want them in our stores. Thats critically important. We want to make sure theyre comfortable shopping online. More and more theyre shopping online and they come into our stores to pick up. So we want to make sure no matter how the guest wants to shop we make it really easy. We make it a great experience. We provide the right level of inspiration and value. But all three of those variables they have to Work Together. Its got to be a combination of instore and online because we know, i know most of our guests start their Shopping Experience with a smartphone. So whether theyre coming into our store or theyre shopping online, mobile play is a really important role. So weve got to make sure its really easy for our guests to shop target any way they want. You mentioned earlier of course sales flat but profits up, so margins obviously have improved. A lot of talk that this seasons going to be very promotional. Is that your expectation . And if so, are you going to see some erosion . David, holidays are always promotional. Values critically important. Were playing to win. We feel like weve got a great combination of unique product, newness really counts. Weve worked with our vendors to make sure theres unique products in our store. A category like toys really important in the holidays. 1,800 . Who has 1,800 new items in toys . When you work with mattel and hasbro and our partners at disney, theres lots of unique items theyre bringing our way. So its a combination of great value. Our merchandise experience has got to be superb. Weve got to make sure weve got unique items at a great value. But we think our strength is bringing guests to our site, to our store, shopping both for those big value items but also making sure theyre buying appar apparel, theyre buying home, theyre buying for baby and kids. Thats where the margin is. Thats where the margin is. When you get those elements to Work Together as we did in the Third Quarter for our shareholders, we deliver really good result. Are they buying Consumer Electronics . I remember you called that out as a weak spot a few quarters ago. Yeah, sara, last night and yesterday we saw a big surge in Consumer Electronics. And we got some value on what type of products . Tvs are selling at unbelievable rate. We had a 50 inch 4k tv for under 450 attracts great attention. New Gaming Systems from xbox and nintendo, lots of interest there. So it was a combination of electronics. We saw Great Results in toys yesterday. Whats your sense of the consumer then . I mean, you mentioned i think meaningful improvement at apple. You just said that as well. Whats your sense are they willing to spend more than perhaps a few weeks ago . As i look at the state of the consumer, ill start with i think its a great time to be a consumer in the United States. Interest rates are still low, were seeing positive employment trends, fuel prices are extremely low. And we talked about food deflation. So if youre a u. S. Consumer right now, you should feel really good. I think were going to see an optimistic consumer throughout the Holiday Season. All right. I know part of your growth right now is in smaller format stores. It sure is. If you look out a few years do you think total Square Footage of retail selling space in target is going to be up, down, flat, moving around . I think its going to be up but in a surgical fashion. I actually believe we can open up hundreds of these Smaller Stores. Mike, the results were seeing here in tri beck ka, we opened two new stores in downtown philadelphia in Washington Square and ritter house in boston, in chicago, on college campuses. Everywhere we open these Smaller Stores were seeing a great response. Theyre neighborhood stores. We tailor the assortment, market by market really neighborhood by neighborhood. And the response were seeing is sensational. The market is looking forward to some of president elect Donald Trumps policies on the economy. Are you . And if so, which ones are most important to you . Well, were going to be watching it very carefully. Obviously his focus on stimulating job growth is very beneficial for us. So, again, if its a positive consumer, you know, we feel like well win. And as he continues to focus on health care, puts together his program to drive jobs in america, were going to be watching that very carefully. But, again, sara, i think its a very opportunistic time for the consumer. A trump bump, thats a real thing . I think it is. So we certainly expect to see some of that during the Holiday Season. And we think were well positioned to capture it. And finally, on employment itself, i mean clearly you have to go into the labor market often to hire. We dpo. Is it tight . Is it easy . Do people line up for job sns. Well, we have a great reputation. People want to work for target. So they are lining up for our jobs. Weve been hiring thousands and thousands of people as we prepare for the Holiday Season. And we think if we provide a Great Workplace environment, which we do, weve had a great culture of people enjoy working for target, theres a lot of pride in the brand. So weve got to make sure were staffing appropriately. But were ready for the Holiday Season. And were excited about it. All right. And so are we. And very happy to have had you with us, brian. Great to be back. Thank you. Have a good holiday. Thank you, you too. Enjoy your thanksgiving dinner tonight. I will. He doesnt get to do it on thursday nights. Brian cornell, ceo of target. Hes a little busy. Were staying on top of another busy day for the markets. Holiday shortened trading day, but weve got the dow, s p and russell 2000 hitting record highs. Its a quadfecta. Squawk on the street will be right back. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. All major stock averages are again in record territory. We have seen record highs on the s p, the dow, the nasdaq and even the russell 2000, which is off just a touch right now. Well see how the rest of the morning shapes up. Remember, stocks close at 1 00 p. M. Still to come on the show, ron johnson, the former head of apple retail and onetime jc penney ceo, get his take on the Holiday Shopping season. Dont go anywhere. The dow is up 50 points. And well be right back. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. [and her new business i do, to jeanetgo. Jeanette was excellent at marrying people. But had trouble getting paid. Not a good time, jeanette. Even worse. Now im uncomfortable. But heres the good news, jeanette got quickbooks. Send that invoice, jeanette. Looks like they viewed it. And, tada paid twice as fast. Oh, shes an efficient officiant. Way to grow, jeanette. Get paid twice as fast. Visit quickbooksdotcom. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential good morning and welcome back to squawk on the street. Im sara eisen along with david faber and mike santoli. We are live here at post nine at the new york stock exchange. Carl has the day off. Lets take a look at where we are on the markets. Another record day for the major averages. The dow is up a quarter of a percent or 50 points, which means a record high. S p 500 up 0. 2 and the nasdaq little changed. Wti crude though off about 1. 25 . 47. 36 ahead of the big opec meeting next wednesday. Lets get to our road map this morning, and it starts with, well, where else of course, Holiday Retail and the pulse of black friday. Were going to take you around the country and as well to retailers bottom line. Plus, markets in the trump rally, the dow and s p as i just mentioned making alltime highs. Sectors and stocks to watch for the rest of the year. And speaking of the president elect, a transition day for commerce and a fight to keep a carrier plant in indiana comments, well have more on those negotiations. But we start with retail. Many stores already opened yesterday on thanksgiving day, but the National Retail federation says the bulk of its traffic will be today on black friday. Joining us for the entire hour onset cnbc contributor and Retail Consultant jim niffant, treat to have you here. Its a pleasure to be here. But first, well check in with Courtney Reagan at the mall in Fairfield Commons in dayton, ohio. A checkup on traffic from the heartland, courtney. Reporter hi. Good morning to you again, sara. So you know Online Shopping of course is changing the cadence of the holiday weekend. Adobe says thanksgiving day online sales are on track to hit 2 billion, black friday could hit 3 billion for the first time. But that doesnt mean everyones online or online exclusively. We talked to a number of shoppers that just arent interested in shopping in that channel. I dont actually shop on cyber monday. I like to go out and have fun. A little bit, just because its easier and sometimes cheaper. I dont do a whole lot of Online Shopping. Reporter now, retail ceos including macys Terry Lundgren and target Ceo Brian Cornell have really been sounding some bullish tones here on cnbc this morning, but a number of retail analysts ive spoken to in just the last hour are seeing more mixed signals. Keybanc particularly at walmart is better than ever but mall traffic seems lighter to him than what hes seen at black friday ever before. Deutsche banks paul trus sell and his team are somewhat unimpressed. He says it seems shoppers are in less of a rush to get out there and spend, but at the same time he does think target and jc penney had strong openings. Also says kohls best hour might have been at 10 00 when things actually got better as the night wore on. Now, deutsche banks paul and mkm Roxanne Meyer also impressed by some specialty players, victorias secret, bath body works, those l brand names are seeing better traffic than last year on black friday, but thats in part due to deeper discounts. So profitability may come into question a little bit there. And well have to know more from the company when they begin to share that with us. And traffic at malls may be lighter but mk and partners Roxanne Meyer says she spoke to some mall managers and they actually say sales are up year over year. So sometimes its a little hard to tell whats going on below the surface. And remember many of these retailers are logging some nice gains on record days online as well. Back to you in new york. All right, courtney, thank you for the update. So how is traditional retail doing versus those new digital only companies this black friday . Joining us now in a cnbc exclusive is ron johnson, he is the ceo and cofounder of enjoy. Com. Of course formerly the ceo of jc penney and before that led apple retail. Welcome, ron, good to see you. Nice to see you, sara. So well talk a little bit more about your startup specifically in a moment, but just generally what is your sense of Consumer Spending this year and retail in general . Oh, i think its going to be a Great Holiday for the retail industry. The stock markets at alltime high, were post election where theres a lot of anxiety, people want to move forward. Stores are very aggressive. They realize to compete now you have to be sharp on price, sharp on content. Youve got to be agnostic where people buy. I think its going to be a very exciting time for the consumer and that will translate into great sales for the retailers and manufacturers. But do you have to distinguish between those retailers that have an online strategy that really seems to be working and growing double digits . I mean, what happens to traffic if the dollars are shifting online . Well, theres no doubt that traffic is slowly coming out of stores as online takes a larger share of the pie. And increasingly retailers are forecasting what their sales are in advance. So we knew about the black friday promotions as early as three weeks ago. Even Brian Cornells been saying that monday and tuesday will be 15 off the entire target store. So people are planning their purchases much more in advance than they used to and knew i had to be there friday at the opening to get the best value. So, ron, that seems to be a picture though of really just managed decline for the traditional retailers, is it not . I mean, we havent really done anything about the fact that it does seem as if there are too many stores out there even if they can manage inventories and get a few more people back in with some of the values. We are clearly in a period of managed decline. In the country over the next decade or two the number of stores is going to shrink dramatically as malls close, and i think the large mall owners will invest in the better centers. So people will still shop in stores, but when they go to a mall theyll drive a little further, theyll spend a little more time. The simon center near where i live, stanford shopping center, has gone through a massive renovation over the past couple of years. And you cant park there, but the people at the mall are coming from further as they close malls that are less productive. Ron, its david faber. We spent a good amount of time on this show a number of years ago discussing your very difficult and relatively short tenure at jc penney. But i wonder, what lessons did you take from that very difficult time, if any, that you are now applying to your new role and your new effort . Oh, thats a great question, david. Thank you for asking. You know, i live here in the Silicon Valley where things move at a really fast pace. People love to innovate. You know, when i went down to texas with jc penney, i didnt recognize that the pace of change at certain companies, Certain Industries has just got to be a lot slower. So we went way too fast at jc penney. And i take responsibility for that. You know, we changed the Pricing Strategy literally overnight. We started to move the content around. It was too fast for our employees, for our customers. And that made it more painful than it needed to be. And so as i launch enjoy, i go back to recognize that nothing good happens overnight. You got to take your time. Youre going to build a business on fundamentals. And so were going at a relatively measured pace, but we are already in eight cities and doing very well. What about apple, ron . Have the apple stores innovated enough since your departure from that company . Yeah, well, i think angelas a great leader. And she just like Brian Cornell talked about is trying to manage the omni channel experience for apple. And they want a customer to be able to go online to get help, to go online to buy, to come to a store. You want to put the customer in charge, so shes working really hard to integrate the experience. And i think angelas a great leader and doing a very nice job. So what youre doing now sort of to me sounds like a genius bar for Consumer Electronics online. Not just apple products, other products as well. Talk a little bit about where you see a Market Opportunity here and what exactly youre trying to do. Yeah. Sara, i think its a much bigger idea than that. You know, were in the very early days of Electronic Commerce. Its been 20 years since amazon started selling books online. Theres a great store for apple in london that the same landlord has leased the space for 1,000 years. So retails been around a long time. In the early days of Electronic Commerce its all been about digital convenience. Amazon especially has made it very easy to order and have a box delivered to your door. What were trying to do in a mobile world is to deliver people with a product to deliver personal service when you start online. So we pick Consumer Electronics as a category, not unlike amazon picked books, which we think is really geared for our model. So you can order a new apple iphone, pick a time as soon as four hours, let us know exactly where you want us to come and one of our trained experts will show up on time, no delivery window, and provide as much help as you need. Well help you pick your plan, well help you activate your phone, well sync it to your life. And its providing service to the digital sphere. Thats what enjoy is about, were a Digital Commerce platform whereas others are electronic platform. So youre trying to disrupt best buy or radio shack or amazon and Department Stores . Were not going after anyone in particular. But were trying to deliver service for customers in new and exciting ways. Thats what i was most proud to do at apple. You know, we kind of no one thought it made sense to open stores, but look at how popular the apple stores are. And most of the people are getting help in the back. Well, we want to move help to where you use a product, not where you buy a product. And in the beginning of this mobile revolution were all driving uber, getting delivery from post mates, food is companying, were picking up groceries or sent to our house, we think its time people want to work mobilely so we can deliver a person faster and cheaper than you can execute a store. So we think its a really exciting business model. Got it, ron. Good to talk to you on this black friday. Thank you for joining us. Thank you. Have a great day. Happy thanksgiving weekend. Ron johnson. Jan, it is interesting when you think about ecommerce, maybe you cant put it all under that basket anymore. Theres mobile commerce and then this Personalized Service economy developing. Theres just commerce. And when you talk about that personal service side, one of the things were trying to do with technology is to get the customer to do more work but to like it better, right . We want them to go through the store, pick the stuff off of the shelf, scan it, put it in the basket and leave. They like it because they get away. We like it because they do all the work. So when he talks about it, hes taken it one step further. Its personal service in your home because were all ledites and cant get anything to work. So hes solving that problem. It is something youre going to see a lot more of, but Online Technology is taking over. And the people that are winning today are going to be omni channel retailers, not just online retailers, except of course for amazon who is winning today and is right now really an online retailer. Even though theyre trying to be an omni channel retailer as fast as they can get there. All right. Wanted to move onto the transition of president ial power. Apparently a fairly busy thanksgiving day for the president elect including a focus on something that came up a great deal on the campaign trail, namely that move by United Technologies which owns the Carrier Corporation to move a factory key factory out of indiana and to mexico with some 1,400 jobs at stake. Yesterday donald trump tweeted the following. Im working hard, even on thanksgiving, trying to get carrier a. C. Company to stay in the u. S. Making progress. Will know soon. Always likes to end with those exclamation points. I noticed. I like it. Its a personal touch. It is a personal touch. Its worked very well for him. What we can tell you at this point is though that in fact those negotiations continue. And people close to them indicate to me that they are moving closer to a deal that would end up protecting jobs in indiana, although its not clear exactly at this point whether they will get there and what the finer details of that deal will be. Looking at a picture of greg hayes, of course the ceo of United Technologies, apparently dealing with this largely with the Vice President elect pence, former governor of indiana, the state in which the carrier plant is. And the perspective im told at least to a certain extent in the utx you might imagine at least do we really want to have a fight very early in this presidency with the Trump Administration, or is it worth trying to figure out and get to some Common Ground that really would not represent a huge financial problem for us. Namely keeping those jobs there. Although as phil lebeau pointed out earlier, you do wonder whether there have to be some concessions on some side here to make it at least somewhat palatable for a utx to keep the jobs there. Well have more on it as we get it. But certainly does appear they are, again, moving towards some sort of a deal. For more on the president ial transition, lets bring in eamon javers. And he has the latest for us from philadelphia. Eamon. Reporter yeah, good morning, david. Youre talking about this carrier fight. We saw the tweet from donald trump yesterday that you just read, but look at this tweet from congressman justin amash, a republican from michigan, politico flagged this tweet this morning. He tweeted it last night. This might give you a sense of where some Republican Opposition to donald trump might come from, he said not the president elects job. We live in a constitutional republic, not an autocracy. Business specific meddling shouldnt be normalized. Thats an important point because so many republicans on capitol hill have spent their entire careers opposing government interference in private business. Well see how they deal with this donald trump move now to negotiate directly with carrier over where its factory is going to be. Thats something that in the past has given republicans heart pal paations. Maybe theyll come around on it, meanwhile were watching this Trump Administration start to take shape. Take a look at what we know of so far in terms of the Incoming Administration. Still big question marks in the department of state, the department of treasury, the department of defense. But attorney general we know the pick there will be jeff sessions. The u. N. Ambassador pick nikki haley, betsy devos, cia director pompeo and National Secretary advisor flynn. Thats been the question of whether or not that goes to mitt romney or rudy giuliani, and youve seen some really interesting behind the scenes in fighting between trump loyalists and sort of mainstream republicans. The Mainstream Group there favoring mitt romney, the trump loyalists favoring rudy giuliani. That still to be decided. One possibility thats been thrown out is that maybe mitt romney might have to apologize to donald trump for some of his comments opposing trump on the campaign trail if hes to get the secretary of state job. Well see whether that lands. Its very political, but also very personal, guys. All right. Thank you, eamon. Eamon javers reporting from philadelphia. Coming up on the show, more on retail of course. An optimistic tone from retailers and analysts. Will it hold throughout the season . Plus, stocks are making alltime highs. The postelection rally rolls on. And then the founder of gilt group knows something about online retail. Alexis maybank will join us to break down state of ecommerce and mobile commerce. Dont go anywhere. Commodity prices moving watching oil in particular where theres some weakness. Jackie deangelis has more at the nymex. Crude oil prices seeing a little pressure, but holding over that critical 47 a barrel mark. Of course its going to be a muted session, lower volumes. We do close a little bit early today, but is this the calm before the storm . Analysts are telling me definitely. Next weeks opec meeting back in focus, thats on wednesday in vienna. And symbolically if we do get a cut here, its very important. Because, remember, the saudis are in charge of opec. It shows them flexing their muscles and having some influence. Weve always looked to them to be the worlds greatest producers, theyre breaking down here. This has been a twoyear game of chicken between International Players and specifically the u. S. Here with the shale revolution. And it may appear that the saudis and opec are feeling the pinch of these prices. And they want to move them higher. So a bit of a watershed moment potentially next week. But remember, this is an equation about supply and demand. So what we get out of the meeting in vienna, this cut, freeze, whatever it ends up being, it needs to be significant for people to really feel its going to help eat into the supply glut thats plaguing the market right now. Trading range between 47 and 50 ahead of the meeting. Probably very likely. And keep an eye on that dollar because as the dollar index has creeped up, its certainly muted some of the gains that weve seen from the opec job owning, guys, back to you. Jackie, thank you. A lot to look for into next week. When we come back, more on amazon and the growth of ecommerce this Holiday Season. Plus, the White House Christmas tree is getting delivered this morning. There is a live look at the delivery in washington, d. C. We will be right back. Come on, wake up come on, why ya sleepin . Come on what time is it . Its go time. Come on. Lets go, lets go, lets go. Woooo hoooo yeah i feel like i went to bed an hour ago. Ill make the cocoa. Get a great offer on the car of your grownup dreams at the mercedesbenz winter event. Its the look on their faces that make it all worthwhile. Thank you santa now lease the 2017 c300 for 389 a month at your local mercedesbenz dealer. On this black friday morning lets go back to the mall and get a check in on one retailers strategy for the big day. Morgan brennan is in garden city, new york, at jc penney. You must be at Roosevelt Field mall, is that right . Reporter i am. Ill tell you jc penney and the broader mall situation have been very busy since weve been here. Weve been here since the wee hours of the morning. This is one of nearly 1,100 jc penney locations thats been open since 3 00 p. M. Yesterday afternoon. The earliest start time of the major retailers on thanksgiving. Now, one thing you want to focus on jc penney has been rolling out appliance showrooms in 500 of its locations including this one, betting on the housing recovery as a key part of its turnaround strategy under Ceo Marvin Ellison who came over here from home depot in 2015. Now the retailers also expanding partnership with sephora bringing makeup boutique into more of its Department Stores. Here in this long island location theres been weve seen a lot of foot traffic in both of those areas, steadfast foot traffic. And as you can see behind me some really long lines at the cashiers around this store. So what is luring shoppers . We got over here by like 5 00 and we started shopping and now weve been at it for almost three, three and a half hours. And we wanted to hit up the stores that opened earliest the first and try to hit the best sales. Every year i come here i wait until the morning and i come early before i go to work and i always get what i want. 7. 99 for the sheets, towels, practically things are free in here. Reporter and thats really going to be key because even foot traffic has turned out to have increased this year at what cost for jc penney and other brick and mortar retailers as well, how much discounting has had to happen to get these consumers in the door and what has that meant for margins, sara. Good question. We will find out. Morgan, thank you. For more on the pulse of the consumer and retailers, especially online joining us here at post nine, gilt Group Founder alexis maybank, founder of social shopping, a whole new world well get to in a moment. But mobile shopping is turning out to be a huge theme. You guys really figured this out at gilt group. Yes. How is it different than Online Shopping on desktops . Well, we started seeing a shift about four years in at our history at gilt where the store had really moved to the pocket is how id like to think about it. And what that meant was that consumers are saying we want to be able to access your products, your goods, anywhere any time we want them to be available to us. So with that in mind, gilt very quickly shifted nearly 50 plus of its goods being sold online about four years in. So with that very much informed how i looked at mobile shopping when it came to project september, my Current Business. Especially young consumers. They want to be able to in breaks during the day, multitasking while sitting on a couch is perpetually shopping all the time and entertainment as much as anything else. So with that woe shaped our Current Business around what that meant when your goods have to be available mobilely all time. But dont consumers spend less money when theyre shopping on their phones than on Desktop Computers . We found it was a twopart process. So the discovery and the research and discovering what you would want to buy happened first on mobile. They would put the item on the basket and then might return later to purchase it through the desktop later. But it always started on mobile. It often gets completed on mobile as payment catches up and becomes easier. But always starts on mobile, so you have to be there. I think that gap is going to shift condense more and more over time. Isnt a lot of this as just window shopping anyway . So the conversion might be lower but theyre just playing on the machine and suddenly theyre buying . Yeah, but i think conversion is coming up year on year. When you can check out with your fingerprint, its getting a lot easier. You can think of it as shopping, i think of it as were in the entertainment business. So at first when it comes to exciting the consumer and getting in front of him or her, really it starts mobilely. And you got to do a great job there first as theyre entertaining, as theyre doing other things simultaneously. But that is part of the process of shopping now that leads to conversion. Dont you think all this move to mobile the desktops . My philosophy is the stores already moved to the pocket for the young consumer, so you need to think that way first before you think about website, store front, through anything else. Because thats where the whole world can connect to you at any time at any moment. Ease of use and ease of payment is one thing, but its still a really small screen. Id rather look at it on this or this if i would on this if im going to make a purchase of some substance. Its an age thing. Is it an age thing . Maybe you get the iphone 6. But i think with the younger consumers thats a screen we all grew up with. I mean, its not we didnt first, you know, tv is now on the ipad. So youre just telling me im old. A nice way of telling me generationally its passed me by. Youre old and you dont shop, so youre not the demographic. Thanks. Thank you for that. When you talk about discovery and kind of weaving it into the social experience, its interesting to me because weve been talking about all these big retailers kind of having early sales and running these door 2k4r doorbusters and the presumption is the shopper knows what they want, looking for the best deal and make sure the retailer has it in stock. You seem to be catering to people wlo dont necessarily know what they want, youre trying to get in front of them to have them figure it out. Well, one thing you said i fully believe, by the time you get to retailer or ecommerce side, 79 of those consumers know what they want. If you want to try to influence that, if you want to be part of the excitement of the entertainment behind fashion and shopping and whatever it might be, youve got to start a lot earlier than that. And increasingly you have to start on social media where its in the hands of millions point of view connecting specifically with audiences. So for me when you ask just about the retailer calendar in general, i sort of take screen shots this week because i was starting to get so confused as a consumer. Black friday and i love these retailers, black friday for target now starts on a wednesday. My Cyber Monday Deals at walmart are now coming on friday. And the list goes on and on. So what is happening is essentially i think we all as an industry need to rethink what that calendar looks like, lets make it clearer because how do you keep track of this as a consumer anymore . Friday isnt even friday any longer. Hottest trend . Whats the biggest seller . Well, i have to say we on project september, you know, and we saw this at gilt, its the accessorys that are always a big seller. But if you want the biggest consumer audience online, nothing attracts the eye like the color red. So red skirts, red shoes, whatever it might be, that is where the eyeball goes quickly. I think Steve Liesman was wearing a red jacket this morning on squawk. He was. Alexis, thank you. Thank you for having me. Cofounder of gilt group. Up next, trump rally continues, new alltime highs rally in stocks. And take a live look at a mall in dayton, ohio. Kind of thin crowds. Well have more inside some winning and losing stocks and retail and what were seeing across the country next. Oh car. So corporate put you up in a roadside motel. But with directv from at t, you can download then binge watch your dvrd shows from anywhere. That makes you more powerful than whatever it is you just stepped in. Or that friendly dumpster diver outside. I wouldnt sit there. Its your tv, take it with you. Now you can watch your dvr anywhere, at no extra cost, with directv from at t. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats 10 times faster than slow internet from the phone company. Say hello to internet speeds up to 150 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Im seema mody. And here is your cnbc news update at this hour. It appears that authorities have foiled a terror plot which could have unfolded in france as early as next week. A paris prosecutor announcing today five men were arrested last sunday in connection with the plot. The suspects say they were receiving orders from an Islamic State group member based in iraq or syria. Wildfires tearing across central and northern israel today forcing tens of thousands of residents to flee the city of hyfa. Israeli leaders blaming arsonists for some of the blazes. The fires, which have been burning for three days, have damaged or detroyed hundreds of homes but no deaths or serious injuries have been reported. Europes Largest Airline saying today its canceled 850 flights due to a pilot strike. A decision affecting 100,000 passengers. The strike, which is being held by the german pilots cockpit union, is over wages. Florence henderson has died from heart failure. Her agent says it happened last night at a california hospital. Florence henderson was 82 years old. And thats your cnbc news update for this hour. Back to you, mike. Thank you very much, seema. Appreciate it. Well, markets continuing to rally since Donald Trumps Election Night win going further into record territory today in all four indexes actually. Lets bring in bill smeed, ceo and chief Investment Officer at smead capital management, and jack ablin. Gentlemen, thanks for being here this morning on the day after thanksgiving. Jack, if i could start with you, if we look at the all the Asset Classes you track, the response in the last two, two and a half weeks have been very pronounced, right . Youve gone from big stocks to little stocks, safe ones to risky ones and also selling everything thats linked to yields. Have we gone as far as we can go in this kind of rotation . At what point for example do these higher yields start to pinch equity valuations . I mean, thats really there are really two things that i puzzle over, mike. One is certainly Interest Rates, how high they go and eventually, you know, that was really the key leg of the stool for bulls saying that the market was cheap. Well, now if Interest Rates have gone up you know 50 basis points, a half a percent in the last couple weeks, that leg has gotten pretty weak. The other issue is the dollar. What ultimately happens to the dollar . Because my sense is if the dollar doesnt rally as much as investors think, then perhaps foreign markets end up doing better than u. S. Thats interesting, jack, because the implications of a stronger dollar cut across multiple fronts. I guess obviously you have the earnings effect, but then you also have the effect on overseas markets, the emerging markets getting a bit relatively cheaper as you say. But are you afraid that the strong dollar can get too strong and maybe break something in that process . Thats my concern. And a lot of it is really pinned on the fed. The fact is that youve got probably Perfect Timing for the fed where now we have the prospect of fiscal stimulus, roll back in regulations and a growth rally. And so now the fed can either be more aggressive with fed funds or i suspect continue to drag their feet and keep that real rate, keep rates relative to inflation very low. And that could actually keep the dollar relatively weak. Yeah. And, bill, as a stock picker, what has this environment meant for you in terms of being able to find new ideas or seeing things kind of run too far perhaps at this point . Yeah. We wrote a piece right before the election call ed, sell, joy and buy misery. And miserys had a pretty good two and a half weeks. But the misery thats had the best two and a half weeks we think is mistaken. The Cyclical Energy space, the basic materials, the heavy industrials, people feel like theyre going to be touched by the wand of god here. And were in a commodity long term bear market. So the Long Duration investor like us wants nothing to do with that space. Secondly, for nine years people hated bank stocks and had the United States government hating them the most. And theyre starting a secular bull market. And so their spring off this low is not a shock. In both cases if history is any kind, the euphoria around reagan getting elected lasted until inauguration day. Then we went into a bear market. And the sentiment surrounding everythings fine is shifting very bullish very quickly. And to us that says the short duration person should be very nervous and the Long Duration person that owns undervalued deeply undervalued stocks for the long haul is just fine. One of those shifts picking up on that point, the whole issue with the bear market under reagan was directly related relate ed to volcker and directly related to these trump policies is going to hold keys to a lot of interesting things in the market. On that note, i just want to bring in jan because retail has been one of the more notable shifts in terms of sentiment in stocks. The Department Stores as a sub sector up 22 so far this month. This is on this idea that trump rally is this a tax thing . Right. I think retailers are all maximum taxpayers. If we get a reduction in rates because we have not just trump, we have a Republican House and senate, so if were really going to get a tax bill, its going to be now. If thats the case, we could see a 10 percentage point reduction or more. What if we go down to 20 or something . All that money falls to the bottom line on retailers. And they dont really have any place to put it. So theyre going to buy back stock with it or pay out di dividends, so investors are looking at windfall and dont think the negative side is going to hit them because nobody in the business thinks wooe going to see big tariffs on apparel we sell to people making 50,000 a year. Those people also may get a tax break so they can buy more of that apparel. All right. There you go. So in other words theyre getting benefits of the good trump potential policies and maybe none of the bad on the retail side. Thats what we think right now. Thats what the market seems to be suggesting. Thats what the market thinks. Jan, thanks very much. Also our thanks to bill smead and jack. Gentlemen, thank you. A potential terror attack foiled in paris, according to french authorities today. Nbcs matt bradley is in london with the latest on this developing story. Matt. Reporter good morning, sara. As you mentioned, five people were arrested last sunday, four of them in the eastern city of strasbu strasburg. Four of these people arrested in strasburg were actually french citizens and the fifth one was a moroccan national. Now the hunt is on for the coordinator, sort of the puppet master in this. One thing that clued in the French Police were the Communications Going on between these five in france and this coordinator who they believe was in the sort of syria, iraq area around Islamic State. And french prosecutors do indeed believe that this was Islamic State who was coordinating these potential attacks. While this attack was supposed to happen on december 1st, but there hasnt been any indication of what exactly the target was or the manner of attack would be. But French Police were able to uncover a cachet of weapons and cash. Now, the cash and the weapons had been delivered with coordination from this sort of puppet master or isis leader based in iraq and syria. And he had been able to communicate with them by using identical detailed instructions that he had sent over encrypted Text Messages using online apps to these five people. Now, the four based in strasburg as we know had actually known each other for years and coordinating with each other through a closed dedicated phone line. And they had no communication with the fifth moroccan man based in marseilles. Back to you, sara. All right, matt, thank you. Matt bradley out of london with the latest details on that foiled terror plot. Target moving slightly higher right now on an update for the overall market. The dows up 51. S p up 0. 25. Well have target Ceo Brian Cornells take on the retail environment and the socalled trump boost when we come right back. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Welcome back to squawk on the street on this holiday shortened session for all markets. And id like to welcome my special guest peter tur. Peter, thanks for taking the time. Thanks for having me, rick. All right, id like to read some of your insights into the marketplace and of course your specialty is credit. You talk today that you think 10year rates have moved too fast and too far. Explain. You know, we are at 1. 60 just back in july and august. Were now about 2. 35 on the 10year, thats a very, very large move. And i think its starting to do a few things that are possibly incorrect. I think its giving too much credit to, you know, president elect trump and their ability to create inflation and issue debt. So i think thats part of the problem. Then at the other end part of what pushed yields higher was europe pulling back from qe. I think europes not going to pull back from qe as quickly as possible in direct response to this. And even the feds going to have to be cautious because the 10year treasury rate sets Mortgage Rates and as Mortgage Rates have been getting higher thats going to cause concern for people about the economy. Look for a bit of a pullback more to 2. 25, 2. 15 area on the 10year. You know, peter, im going to push back a little bit. Okay. I agree that maybe too much credit is being given to the new administration coming in for some of the market moves, but i think the overlooked issue is we are coming off a twoterm administration that has not been business friendly. I think thats part of it as well and with regard to europe i couldnt agree more. The big issue with europe in my opinion is how the distortions and the widening spreads between their qe market rates and potentially a second tightening fed and treasury rates, how that coalesces together. Any thoughts on the latter . Yeah, and i think that is the issue. Its a lot of this has been about positioning. And, again, earlier this summer everyone kind of bottom this whole argument we had no potential growth, no potential inflation, every central bank was, you know, very Monetary Policy friendly. And that shifted and thats kind of dented us. I think its going to take time. I would ultimately like to see them deliver with less regulation, more business friendly. The Central Banks pull back from influencing the economy and then, yeah, maybe we get the 10year up to 3 . But right now i think everyones going to be nervous to let the status quo break too quickly. But people are positioned for that. Its been this weak positioning thats caused a lot of the pain. I think if people had been positioned properly coming into the possibility of a trump election, we wouldnt be this high. So people are just digesting all this new information. No, i think many agree with you. Down here they call it a third a third a third. Many traders down here think a third of the movement in the markets is because of trump, a third because of the past Administration Stance on many businesses and a third for the senate. Nobody talks about the senate. That was the surprise. Thank you for coming in this short friday. Now were going to return to david faber. Okay. Thank you very much mr. Santelli. Now lets send it over to jon fortt whos going to give us a look at whats coming up on squawk alley at the top of the hour. Good morning, david. You know its black friday if weve got bulls eye the target dog on the floor of the stock exchange. Were going to continue to track black friday sales both in physical stores and ecommerce. Also, donald trump still trying to keep carrier in the United States. The president elects efforts well bring you an update during squawk alley so tune in. Were coming right up. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Target is emphasizing online deals this black friday and the Company Reported good numbers last week. We spoke to Ceo Brian Cornell earlier on the show and asked him for an update on the electronics derision and of course an overall sales forecast. Last night and yesterday, we saw a big surge in Consumer Electronics. We got some great value on what type of products . Tvs were selling at an unbelievable rate. We had a 50inch tv for under 250, it attracts a lot of attention. But we saw Great Results with apple yesterday with both ipads and watches. The new Gaming Systems from xbox and nintendo, lots of interest there. We also asked him what a Trump Presidency he thinks will mean for target. Take a listen. Obviously, his focus on stimulating job growth is very beneficial for us, so again, if its a positive consumer, you know, we feel like well win, and as he continues to focus on health care, put together his program to drive jobs in america, were going to be watching that very carefully. But again, sara, i think its a very opportunistic time for the consumer. Target shares particularly after that move last week after earnings have had a fairly good year up about 8 . Right in line with the s p, actually, at this appointment. It is. Also up 8. 15 . Still a few Percentage Points below its high but not much. I mean, these retailers like target, kohls, macys have made up a tremendous amount of ground. They were really kind of beaten up, neglected, heavenly shorted stocks a few months ago. You look at some of their quarters and the apparel problems and the retail problems persist. Look what happened to urban outfitters, jan, on wednesday or tuesday after earnings. These stocks have started to underperform now. Right. What weve seen is i wont call it a rotation but weve seen the companies that were pretty beat up because people thought they were going to leave Department Stores dead in the road have recognized there is some value there, theyre doing a good job with their retailing. Macys is doing all kinds of transactions in real estate will which will fall to the bottom line. But recently people have reacted to the fact that this lower tax rate could fall through to the bottom line as well and companies that are healthy, macys, could pay that out to the shoulders where if youre highly levered you dont have that opportunity. I think weve seen those kind of stocks react more. But we have seen things like urban rise because, as i said a while ago, i think at leisure is slowing and so the kind of product that they sell has been more popular. So you see that work into their business and the enthusiasm maybe got a little overdone, but thats why it rose so quickly. Victorias secrets a whole other story, when you were talking about el brands, because the advent of the bralet has hurt them a lot because the average unit retail on that was a loot lower than things they were selling. So theyve had to fight that battle as well as going through management transition. Well leave it there on the bralet. I learn something every day here. Its great. Great having you for the hour, jan, our retail expert. The s p is up a quarter of a percentage point and the dow up about 55 points. Squawk alley is next. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Shoppers spent more than 16 billion last year for Small Business saturday. Our kate rogers has that story. Kate . Hey, there, david. Prepping for Small Business saturday this year is going to be a bit different for alicia shafers three bird nest out in california. She started selling hand made headbands a few years ago and she decided to take the plunge and open her first brick and mohr tar store. Its like our following that we kind of listened to them and say, you know what, were going to take the plunge and go against the grain again and really everyone is going online. Were like, no, were going to open up a brickandmortar store and deliver our customers an amazing custom Shopping Experience they wont find anywhere else. Back here at tons of toys in bernardsville, new jersey, the owner, anthony, hopes his emphasis on Customer Service will help to set him apart from big box competitors. He doesnt even sell online. We absolutely pride ourselves on our service. Tons of toys is all about, you know, we do the free wrap, hold free delivery for local people. So we go and beyond for the service. And i think that theres a really strong push and theres a Grassroots Movement for shop small, and when its picked up by an organization like am exit becomes, you know, just ma much stronger. Definitely people are getting behind it. You said it, david. 16 billion spent last year by more than 95 million customers across the country so, small retailers like this one hoping for big numbers again this year. Back over the you. Thank you, kate. That does it for us on squawk on the street. Lets send it over the squawk alley. Thank you, david. Good morning. It is 8 00 a. M. At Amazon Headquarters in seattle, washington, 11 00 a. M. Here on wall street, and squawk alley is live