Transcripts For CNBC Squawk On The Street 20141201 : vimarsa

CNBC Squawk On The Street December 1, 2014

Low in the middle of november. Oil is slumping around five year lows. As a new month begins for the rest of the markets spending drops double digits this back friday. But online spendsing alone jumps more than 20 . Target, best buy, home depot, others go after tally target alibaba. L chinas official pmi slipped to 50. 3. Thats below forecast. The dow and the s p each finished the month up 2. 5 . Nasdaq up 3. 5 . Nasdaq, jim, within almost 5 of an alltime closing high. Can energy at 8, 9 of the index drag down the markets . Its funny you mention that because first of all i think friday was very exaggerated. Just kind of got to really take that whole black friday for oil with a grain of salt. I think it was really an anything but oil move on friday. Its like, look, just get me out of anadarko. I dont care. Get me out of some of these consho. Corrigo, get me out. What happens . What do we put it in . It never seems to go to cash. Lets just put it in land research. Lets go to kale. It was like, okay, im going to park it in tech. Ill park it in sanders. I know that sounds odd. Or target or whole foods. Whole foods, the new whole foods, that they had finally been there for thanksgiving. We always have a whole foods thanksgivi thanksgiving. Whole foods has a whole foods tavern approach. People like it. Yes, i think there was a lot of money out of oil into whatever else wasnt oil. That was the rally. When you look at a stock like continental, which we mentioned, which was 80 a share lets call it the beginning of september. Right. And is now 40, over done or i mean from a 30 billion market cap to a 15 . I mean, i think first of all, yes, overdone. More importantly harold hamm famously came on cnbc and took the hedges off. Oil was at 85. November 5th i believe it was. He believed that oil was done going down. I had on mad money i had him on. Right after i had sharif suki. Lets go to the 60s. One guys says 100, one guy says 60. Obviously one was right. Taking off those hedges is something that is almost suicidal because the companies that kept the hedges on are ones that are still of interest to me. So now everybodys tossing around the 40 number. I mean, are you still a directional bearish bet on texas . You really have to believe that china is just going to go off line like europe. There is going to be no i was looking at the rig count, which is what i like to do. The u. S. Rig count from november 26th from baker hughes, 1517. Ive been saying the finding costs all in, i know that Brian Sullivan is up in the bakken, when youre in the eagle, they make too much money. Theyre not going to stop. They want market share. All we hear about are the saudis want to preserve the market share. The Real Companies are the anadarkos and the marathons. You have said and ive heard others say it as well, low 40s they can still make money or thats sort of break even, somewhere in that range. Remember, theyre pumping. Once you drill, youre pumping. The cost of a well thats open is almost nil, and if you drill in the permean, we know that oil is there. The price all in is really very fungible. The reason why i say this, if you dont drill any dry holes, your price is really lower. In the old days we used to drill a lot of dry holes. That was a mistake. We spent a lot there are no dry holes in the permean. Theres just oil or lots of oil. Which is the way it should go. When im looking at the totality of things as an investor or somebody trying to figure out the u. S. Economy, the importance of oil and gas in terms of capital spending, in terms of drilling new wells, then against the lower price of oil, hence, the lower price of gasoline and consumer spending, how do i balance this out as i try to figure out what may happen . 85 of the s p does better, raises numbers. The 15 goes down. 15 states directly impact it with lower gdp. Unemployment. Theres 50. In each case its the consumer versus oil. Now we started getting the reverberation, the rales. 3 of what rail traffic is is oil and people are just looking to shoot anything. Whereas merrill, merrill upgrades american. They downgrade delta because they hedged. I think the answer is its still the law of how many people benefit versus how many people go down. Beneficiaries are humongous. Gasoline 2. 55 by christmas. I paid 2. 65. Thats all a rouse. Who uses prepare zblum. Why . Thats a roux. My father told me this. What are you doing, prepare zblum now whats important just so we know, this dispute over online sales versus mall. I think the newspapers did a little disservice. Theres two outfits i monitor for online, com score whom i dont know and channel advisor whom i know well. Channel advisor, theyre the keeper of the numbers. They came up with incredibly strong numbers. Lets back up for those who might have missed it. Signs in a change of the black friday shopping. Sales did fall 11 over the thanksgiving weekend compared with a year ago. This as early promotions and a rise in Online Shopping lowered sales in brick and mortar stores. Today is cyber monday. Later on squawk in the street Courtney Reagan will have a conversation with neil ashe. National Retail Federation polls consumers, others poll the retailers themselves. This would be like if youre watching if youre looking at the cable company. They know what stations are being watched versus neilson who samples. There are real numbers when it comes to the internet and theyre real numbers. Then theres polling. Polling is irrelevant versus real numbers. Real numbers, you have the actual numbers. Amazon average up 32 . Thats not polling, this is a very good piece. Thats up 32 . Hey, listen, its up 20 , its up 40, its up 32. Thats what i care about. Howard schultz, ceo of as far bucks has been saying, this turn against the malls is happening much faster than people realize. These numbers showed you that this was the nonmall christmas. I know elle brands would disagree. Elle brands, Victoria Secret and bath and body works, theyve done very well. Yes. Theyve somehow figured something out. Yes. Ross stores. Tjx. But these are not in the mall. The classic mall did quite weve talked about that for quite some time already in terms of the decline of the mall. There are people on both sides of that debate, jim. Some say, listen, it can still be a place where people come to gather, you can make it exciting, interesting for people, for them to want to be there. They all say that and yet the aggregate numbers say that thats not true. Remember, there are Shopping Centers and there are malls. Malls, maybe they have the flying wallendas. Each mall may have something, a santa. You cant sit on santas lap in amazon. I mean, just graphically its a horrible idea. No, doesnt work. Doesnt work. Santanography. Maybe as zuckerberg keeps working on that technology, put that on and the next thing the whole gram santa. Meanwhile though, remember walmarts guidance going into the Holiday Season wasnt all that hot. Isnt it looking better now . Yes. They were one for one. You go on twitter, is there no price i cant pay for walmart . Were finding that there is a price. I know brian kornell, target, having a good christmas. These were factoring in an unbelievable christmas. Thats difficult. Some of the Apparel Companies are having unbelievable christmass. Walmart is a straight shot up from 77 to 87 in a few weeks. I think thats overdone. I just think that that doesnt make sense. Doesnt make sense . No. I think that has to pull back. All right. Were going to talk a lot more with retail for the next 24 days. Amazon knows the feeling. Alibaba being targeted by traditional retailers in an ad. Well show you that after the break. John skulleys perspective on the iphone. Talk about numbers up. The smartphone numbers heating up. Take one more look at the premarket with the dow, the s p and the nas up for six consecutive weeks. More squawk on the street from post 9 in a minute. Stamps. Com is the best. 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. Light that thing up soon, i think. Wednesday. Wednesday night. Traditional retailers are taking aim at alibaba. Target, best buy and home depot has produced an ad granting states more authority to collect Internet Sales taxes. Take a look. Alibaba is chinas Largest Online retailer. Their ipo was the biggest in wall streets history, now theyre coming to america. Thanks to the online sales tax loophole, this Chinese Company will decimate our local retailers unless Congress Ends special tax treatment for alibaba and other online giants, main street will never look the same. Tell congress. Close the online tax loophole before it closes main street. Alibabas denouncing the ad insisting it pays taxes according to the laws in the countries in which it does business. Of course, amazon itself faced the same backlash after it started housing all of its Distribution Centers in different states. It benefitted from not paying the state sales tax in different places. For its part its funny having spent some time at alibaba, very hard to macon clugss, but i think while there is an enormous amount of runway in china, given their dominant position, it is hard to imagine they will not be successful there. It becomes a much different construct for them when they come here. Their site is looks a lot like amazon. 90 off shying sexy lingerie, www. Gear lover. Com. Well is that where you went at the first place . I hit a button. Thats what came up. That was probably a mistake. How about mens shoes . I can contact the supplier. It looks good. Geez. Corporate i. T. Guys already know. You can use sales tax or not. As a consumer to buy things there, but they are going to try to become more aggressive here although thats long term. They own 80 in china with more and more people getting online every day. It doesnt matter. No brick and mortar there. Here, really amazon just going to roll over . Any way it works for americans is that you can order things to be built and its cheaper to have them built. Alibaba. Com. That was sort of empowering Small Business to use suppliers over in china. Mens pants. You can make mens pants. You can make hoodies. Bar chairs. I priced those out. Absolutely true. I know. Absolutely true. Amazing what an effect taxes are. Alibaba, just like the rest of the long line with amazon, you price compete. I mean, the price discovery now worldwide is embarrassing for retail. Its like, holy cow, thats how much they marked it up . Speaking of mark downs, amazon is going to cut the prices of the fire tv from 99 to 69. I mean, were back in this mode where they are giving away the store in the near term. At least theyre not paying you to take it. Its really just who knows if thats next. The phone, they are paying you to take the phone with the subsidies and amazon prime, i think theyre paying you to take the phone. Nobody wants that phone. No. Some devices you just dont need. Zoom, right . That was microsofts music player, right . There is no gain on zoom. Nice reference. Wow. Still a great one. When we come back, its cramers mad dash. Well count down to the opening bell. A lot more squawk on the street from the nyc in just a minute. 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Tell your doctor if you have a history of heart or blood vessel problems, or develop new or worse symptoms. Get medical help right away if you have symptoms of a heart attack or stroke. Decrease alcohol use while taking chantix. Use caution when driving or operating machinery. Common side effects include nausea, trouble sleeping and unusual dreams. I love myself as a nonsmoker. Ask your doctor if chantix is right for you. 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. I see that clock, paris, i think euro. Then i think maybe its time for a trip. I dont know. Wouldnt you like that . Yeah. Just get away. Some people talking about parity. Parity. Well, i dont know. You can go to jcpenney where the trends are improving or go to harrods. The pound is strong. Were going to paris, david, you and me. Well take a long weekend. I am there. Where are we starting . Deere. Going to sell the whole. Pricing in the negative. Jpmorgan, sell or hold. Now, look, one of things that is interesting i thought commodities were collapsing. If thats the case, you want to sell deere. I think that people think the crop for deere has been had. This stock is coming back. If you feel that way, you should look at agco which is dirt cheap. On the subject of commodities it is notable that copper is coming down. Not just oil, weve had a number of them. Is there a bigger message being sent . China, china, china. Still more primitive, nonsubstitutable. Iron is a price war. There is no talk about the kindle, the fire, whatever . I mean, iron has come down and it just doesnt stop. If i were cliffs resources id be concerned. Theyll tell me not to be concerned. Dont be concerned from their point of view, but iron is just sinking like an anvil. All right. All right. Now apple makes a lot of stuff in china. Now ubs says the smart watch will be big. Barclays raised it 120, 140. Were in one of those periods between here and year end you can raise your price target because its been over run. Apple is even better than we thought. Its going to be an apple christmas. I6 selling well. The annuals are way behind this number because they always wanted to trade it, they never wanted to own it. Our mantra is to own apple, not trade it. Should you be concerned when those that follow the company have come up with different metrics by which to justify their new price targets . Thats precisely when you have to be concerned. What i dont like is this multiple expansion period. Meaning were paying too much for the same earnings. There was a note today saying that micron and sandus, people are going to start paying more for their earnings be. Thats not what you want, not solid fundamentals. The earnings are going up and youre paying the same amount except for a higher amount of earnings. Thats a real bull market. Okay. Any thoughts we should have as we start december here for stock thats already up over 49 and a Broader Market . Just be aware that we did it for real money on the street. The winners keep getting bought. The battleground will be rales. They have been huge winners. People feel because they do fracking, sand, oil theyll be hurt. Watch the rales as they tell about whether the end of the year is going to include anything other than soft goods, Consumer Product goods to benefit. The rales and the battleground here. Well be watching the rales and a lot of other stocks when the opening bell rings in six plus minutes from now. Were back with squawk on the street right after this. 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. We kick off the month of december. Jim passes along a note from Morgan Stanley saying maybe add a little more to your portfolio above the benchmark. Yeah, i liked a guy who had it as a market weight. Selling it is most gravitas. Its time. This group has come down a lot. I do go back to that friday. It just was some of these declines, 30 declines in a single day are not warranted from some of the ind pen debts so i think this makes sense adding 2 to slumber j. , 1 to oxy. Thats the new stock that spun off of oxy. Lets not be too positive. We havent seen the downward revisions of the oils. You have a onetwo punch. First the stocks go down and then people explain why they went down. You have to do that before you hit the bottom. It echos what s p is saying. When the relative strength of energy is this far below the overall market, energy tends to outperform over the long term. Talking 12 to 24 months. If you look at the contango, what oil will be worth, youll see a 75 price. Its interesting you raise that. Theyre fairly highly leveraged and some are public, some are not. Are they in trouble . Their silence is a little dpaunting. Magnum hunter came on. Gnat gaz has not been bad. The other way to look at it, when gnat gas collapsed, you would think there was a shut in. Natural gas, the production exploded. Any chance that Oil Goes Back . Almost impossible. New england uses oil which is why theyre building so many pipe lines up to new england. No, you dont switch. There is some more use of oil. There is some demand that spurred as oil goes down. We know that from marathon pete which talked about one of the largest gas Station Companies but the change in and there is a spike in the number of bigger gas guzzlers, but remember the cafe standards have changed things dramatically. Right. Those arent reversing any time soon. No, doesnt mean were not

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