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tv   Squawk on the Street  CNBC  November 2, 2015 9:00am-11:01am EST

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fanduel guys. hey! high five with the fanduel stuff, doesn't he? >> yeah. >> the driver just smart there with pepper spray. >> it kind of looks like our producer, matt, with the hat on backwards like that. greco? make sure you join us tomorrow. "squawk on the street" begins right now. ♪ congratulations to the kansas city royals on winning their first world series in 30 years. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. first trading day of november, the markets set up for a mild open. we're going to get busy with earnings from facebook, tesla, disney later in the week. auto sales tomorrow a jobs number on friday. china's pmi was a miss and remains in contraction. the ten-year around 2.17.
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our road map begins with a trio of deals in biotech, personal care and food. >> hp ink and hewlett-packard enterprise began trading as separate companies today. we will speak with meg whitman a bit later on in the show. >> and visa shares lower after reporting a mixed quarter, a buy back and a purchase of visa europe. a lot for investors to digest. a lot of deals in the spotlight, including treehouse foods agreeing to buy conagra's private brands business. results from likes of a facebook, tesla, media players like disney, cvs, fox. the nasdaq the biggest gainer. the question now, jim, whether october has had not good but great gains, almost every year this decade. is it going to rob some of november's seasonal strength?
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>> i don't know. i think earnings season is still on. i listen to what you're saying. let's mention treehouse. treehouse is a very good company. they're going to be able to take that private label nonsense from conagra and turn it into lemonade. treehouse is the best at this private label. on the same day, clorox, the most ultimate branded of what is a commodity, bleach, reports amazing numbers. every time i think they had to have -- everyone knew about treehouse, everyone knew about conagra, yet they still go higher. i don't know. this has a nice destiny feel to it. >> yeah. the multiple on treehouse -- >> isn't that high? >> pretty high. what conagra is getting. >> people think it might be under 2 billion. >> a lot of participation from private equity.
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multiple bids at least showing up at the auction. resulting in a very decent price for them that they have to be happy with. >> yeah. this is on top of that -- i know it wasn't a big deal, i thought it important that snyder's, the snyder deal where they bought diamond foods. kellogg's will report. these stocks are amazing. i only mention them because this is a sign -- this is where a bull market is in consumer package goods. a lot of it unsong, we doeung. >> estee lauder, a name that is discretionary, exposed to emerging markets. >> and had a bad last quarter. that's one of the most consistent players. can they get it wrong twice? the answer was no. it will be interesting. we have a lot of companies this week that reported not so great quarters, including what did you
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call it? mediagetin? >> mediagetin. >> cheap shot. cheap shot. >> why was that a cheap shot? >> yeah. got it. met. >> that's why my voice -- i was the guy probably screaming in my sleep. >> weren't we all. >> screaming at the tv is good. you were at the game. >> it's hard to have five outs go in one game two outs in another, three in another, have a lead in all of those games and lose all three. i did not see this. thanks for showing me. left the stadium just before i had to witness that. what a team. great team. >> destiny team. >> listen so what you said about treehouse, private equity. this comes back to so much money sloshing around. >> there is. >> the media companies, are they next to consolidate?
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media, i think -- >> has been talk about that as a possibility. we have not seen the deals. time warner/fox would have been the major consolidation if it had taken place. it didn't. a lot of discussion about smaller players, can they successfully -- survive in this evolving landscape, if you will? we'll see. >> here's the ft on the m & a market, worst october in 20 years. a number of smaller deals not there. >> ipos were bad. deals might have dropped off a little. i think we'll be right back. i would not be surprised to see ipos. >> we have the shire deal to acquire die dyax. $6 billion deal. >> nothing -- not nothing. they have great -- >> one key drug. went through phase one. one of these rare diseases a genetic disease that sounds terrible in terms of swelling. but they have 37 patients in a
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trial 167 trial. 100% effective on those 37 patients, that's enough for shire to say we'll pay you a premium. they came out die dyax pretty hard. not clear there was an auction, they made clear they were the buyer. they wanted to be. they have a similar or at least -- they already operate or have a drug in this area to try to treat this disease known as hee. it's another deal, jim, where like giliead, they are buying this long before the drug gets to market. we're three years out at best. >> these are companies. we talk about this in terms of an election year. i think that a hillary clinton will put this kind of company front and center. should they get as much? this was all started by the democrats and congress saying we need to have companies get
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protection for these smaller drugs. no one will do it. >> no one will do it. >> it's amazing how much they're worth. but is it right? a lot of times they come under what it would cost for a united health care. >> it's an interesting question. this will be a multi -- potentially more than a billion dollar drug. >> but for how many -- >> i know. for a very small patient population. so it will be very expensive. there is also a contingent value right associated with this deal if they get it to market sooner. another 4 bucks. a big premium. >> we have deals, earnings. cardinal health, i was worried about cardinal health after the turmoil last week in the middle area of cardinal. middlemen in health care. cardinal health with great numbers. you start off with the wind at your back is what i'm saying. the wind is at your back. also -- >> you mean the market -- the market going into november stocks? >> yeah. wind at your back.
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i didn't expect it. >> there's visa, quarterly earnings just shy of estimates. the dow component announcing a $5 billion stock buy back plan, plans to buy visa europe that could be worth more than $23 billion. cfo will be a guest on "closing bell" this afternoon at 4:00 p.m. this is interesting. >> need more information. someone was asking me this morning what i thought of the deal. i was looking for a clean quarter for visa. i don't know how to evaluate this. >> european deal. >> yeah. >> they did for the first time put debt on their balance sheet which a lot of people are applauding. this company operated with virtually no leverage. the idea of consolidating in europe has not been foreign to any of their investor base. they wanted it for a long time. the stock moved up a lot in anticipation. they telegraphed this deem. >> that's what it is. this is a well run company. mastercard had a clean beat and the stock went up.
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i'm trying to figure out if it's a clean beat, red hot stock at 52-week high and you didn't get buyback and no 5:qacquisition. quarter was okay. you needed an unbelievable run. charlie sharf saying okay, that's good i need better. there's charlie. >> it has run in anticipation that they get this visa europe deal done, which they announced with the numbers. we have drug companies. i don't know if you guys saw avi. they reported this fantastic number after getting killed because of a hep c problem. they have so much else in the pipeline. i will reference value. today is a valeant-free -- >> you mean the goldman downgrade? >> yeah.
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that could be with a watershed. >> on valeant. >> you downgrade now? >> 16% on friday. >> their statement was we thought the stock would respond better last week. >> responding on your downgrade. i know you expect big things from me that are negative, but i don't have more things. >> my lawyer told me -- that's what it said. >> amazing story, this rambling -- don't know if anyone listened to the whole four hours -- i want four hours of my life back -- the ackman call. >> you didn't listen. >> no, i had things do. my wife's call. a birthday. >> i hope you didn't at all. >> was looking for the cliff notes. synopsis there. >> i'll give it to you. >> part where people complained about the temperature, people
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took bathroom breaks. >> i'm cold. someone love me. >> meg whitman knows how to put on a show. you mentioned meg whitman. it's a new era for hewlett-packard. 76 years after the technology company was founded, today is the day that hp and hewlett-packard enterprise will begin trading at two separate entities. hp inc will consist of the computers business and printers. it will trade under hpq. hewlett-packard enterprise will be a corporate hardware tech services company, it will trade under hpe. meg whitman will be the ceo of hpe and will join us shortly after she rings the opening bell. there's shrinking to grow. my lord what they have had to go through to get here. the amount of complexity involved in supplieding these two companies into two large companies is nothing short of a miracle. they'll go out now and try to sell their expertise on how you do splits. >> i saw that.
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i said that's kind of -- >> all system ises, all the things that have to go on. all of that said, the question remains, will hpe start to see some growth? >> right. that's -- throughout this whole arc of hp for years now, it's when could they see growth? you have companies that are social mobile cloud, connectivity, artificial intelligence. they have all the momentum. you have companies that are hardware, software no momentum. maybe this will help. >> it will be interesting to see the response from others. the pressure on the other cals, ibms and microsofts to put cash to work. >> ibm in particular. i think -- i know the watson initiative, health care, that's important. but the numbers are not there yet. numbers for ibm are not there. >> when you say the numbers what do you mean? >> the idea of fast grow social
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mobile cloud, artificial intelligence going up faster than the lead off of the old co. this is a constant theme. emc had the same problems. you have companies with so much growth, they don't know what do with it. i believe if you go back to google, they have so many things working well. are they even thinking, we should just go buy the nfl rights to europe? which, by the way, the nfl rights to europe, 9:30 gam is about asia. those are asian -- you get the rights to that. you sell football in asia. google -- a lot of people are saying do you think google is focused on that? i keep coming back saying google has so many ways of making money right now they're the polar opposite of a hewlett or ibm. wow, let's make money in this. we can make more money in that. make money in this.
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abundance of riches. >> hewlett-packard? abundance. >> of. >> you tell me. >> we'll ask meg. >> when we come back, we'll talk to meg whitman about hp enterprise and concerns about an e. coli outbreak weighing on their shares of chipotle. down almost 5%. looking at the pre-marketed to, a down day would mean three straight, something we didn't do at all in october. this is the p. this is the p. ♪ ♪ their beard salve is made from ♪ ♪ sustainable tea tree oil and kale... you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing, you see what's coming next. you see opportunity. that's what a type e* does. and so it begins. with e*trade's investing insights center, you can spot trends before they become trendy. e*trade. opportunity is everywhere.
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chipotle is down in the premarket. the company says in an abundance of caution it closed restaurants in seattle and portland, oregon because of an e. coli outbreak. about 20 cases of e. coli were reported from customers who ate at six restaurants in those cities two states, 23 reported cases. 43 closed. lines will be shorter today. >> yeah. just kind of like so jobe like thing for them. last quarter wasn't very good. same-store sales like mi mcdonald's. these things are hard to put behind them. now, they will.
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i think at a certain point, you will want to own this. remember, we had fast food last week with mcdonald's and that number subpar from buffalo wild wings. i said chipotle could go to 600. this was before an e. coli scare. you have to give it some time. people won't understand this company is doing an abundance of caution. they'll spend more time in the penalty box than normal. >> mcdonald's, new yorker piece about the company and fast food in general trying to shift with america's changing tastes. at 1.12. does that reflect what they tried do? >> they'll be much more technology orientsed. they were well behind in technology, in the notion that howard schultz preached, that it's all about throughput. it's a boring concept. how many people you can get through a store. that's why starbucks' mobile order is so important.
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mcdonald's does a kiosk thing where they can get you in and out. there's far fewer mistakes. boost the throughput will you see better numbers even though that food may not be what people want. or what's good for people. look at all these package food companies. a lot of them don't sell what's good for you, they're doing well. cut costs. wholefoods reports this week. this is a backlash, kind of good tasting, doing better than -- >> than organic and good for you? >> right now. that's short-term, though. i think organic and good for you still has it. a lot of people i talk to still are digesting the processed food cancer story does it or does it not? >> if you look at the -- >> you want to get that. >> i was going ask you about quinoa. >> not sure who this is.
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>> how much quinoa do you eat? >> quite a bit. >> huge amount. >> it's like -- pass me -- shirt, cardboard, quinoa. you put enough stuff on quinoa, it tastes like something. >> put your kale on your quinoa. >> a lot of people have a yale shirt, she has a shirt that says kale. >> i've seen that shirt. >> when we come back, cramer's mad dash and meg whitman. can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management.
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>> all right. time for our mad dash. why you holding that? >> 5% volume growth in this division. this is the cleaning division of clorox. in terms of lifestyle and how things have changed. before i touch my keyboard, i wipe things down. this is just a ritual out of nowhere. the rituals reflect some of clorox's numbers, as is burt's bees, natural personal care, water filtration. kingsford looks like it had a good summer. they don't have much international versus everybody else. david, this is a remarkable story. it's a story of reinvention of a company that people kind of just said, eh, maybe would be better if they were acquired by someone else. now they can do the stalking. >> they made us all very much worried about germs and benefitted from that. >> i think we should be. >> i think i'm getting more colds than ever since we started wiping everything down.
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>> that could be. that may be a small antidotal sample versus this. >> it may be. >> i had john on previously, he said this kills everything. no organism survives this. not even cockroaches. >> not even staph e or mrsa. >> you don't want to compare this to chipotle this is not the antidote. this company took prosaic businesses and turned them into turbo charged businesses. it's working. the stock, remember when they told carl icahn, we're worth more, give us a chance. give clorox a chance it was right. >> it was right. it was. everybody was happy there. >> everybody was -- it's a kansas city kind of thing. >> i need one of those wipes. i'll wipe you down again. we have to wipe him entirely. we disinfect him. >> so much information. we have a lot more coming up on "squawk on the street."
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meg whitman, she'll be ringing the opening bell and joining us on set to talk about the huge split that is taking place today of hewlett-packard. my name is rene guerrero. i'm a senior field technician for pg&e here in san jose. pg&e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. raising a family here in the city of san jose has been a wonderful experience. my oldest son now works for pg&e. when i do get a chance, an opportunity to work with him, it's always a pleasure. i love my job and i care about the work i do. i know how hard our crews work for our customers. i want them to know that they do have a safe and reliable system. together, we're building a better california.
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. you're watching cnbc's "squawk on the street." the opening dell in just about two minutes on this monday, the first trading day of november. after october was the best month in about four years. we'll get through a lot of data this week. auto sales tomorrow. adp. we'll get productivity on thursday. friday, jim, the big one. >> yeah. i think we're in that situation where the fed gave you your marching orders. two strong numbers of employment. i read that to mean we'll tighten. a lot of people feel china has -- commodityies not good, bt people doing better. you can't use the overseas as a reason not to tighten. manufacturing in america is not strong. but the rest of the economy,
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autos and housing, we'll hear. autos so good. go over that norfolk southern conference call, it's interesting. energy turned down, coal turned down. autos, housing. wow. these businesses are very strong in our country. you had me still focused on that industrial recession that you mentioned last week. >> that was from steve liesman. i can't take credit for it. >> now we're blaming steve liesman? come on. >> an earnings recession, right? two quarters -- >> yes. >> he didn't say there is one fblg but you said there could be. sandy eaton and their lines all done. all of them. you can argue aerospace wasn't bad. that's holding in. aerospace, auto and housing are the best. he says it's time to raise rates. get it over with. he said it. >> we'll find out. we'll get things started in a
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few moments a look at the s&p at the bottom of the screen. and down here at the big boards today, hewlett-packard enterprise celebrating the first day of trading separate from the hewlett-packard company. we'll talk to ceo meg whitman in a few moments. banner corporation, a bank holding company celebrating its 20th listing anniversary. we got to a lot of names here. one not making news is -- on its own today is amazon, which does, though, join netflix as the only other s&p name to officially double for the year. number three is activision and blizzard. nowhere close to that. >> amazon, incredible. on "mad money," it will be an amazon/target christmas. target had some display for holiday. pretty good halloween.
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costco, amazon, target doing well. macy's seem to have bottomed here. i'm looking for a thesis there. amazon, geez, taking things in house. the u.p.s. number may have been hurt by them? i don't know. >> it's amazing. >> it is. >> a lot of it, amazon web services. we'll talk to meg whitman about that. that's the part of the business they are not going after. >> right. >> in terms of -- >> public cloud. >> they have a deal with sales force for cloud. >> amazon is almost a $300 billion market value. a handful of billions off. that's a staggering number. >> it is. it's worked. it's worked, i say as i order amazon during every break. one reason why netflix has been coming back, the charge card thing. that's right. >> very other few merchants seem to discuss it.
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you didn't change your number. i don't understand why you would have needed to change your account. >> there was a credit card glitch for a number of companies. anybody that you gave the credit card to and you re-up, you'll see that. reid hastings was the first to talk about it. you'll be surprised. >> we have some revenue numbers, down 28 1/2 or so. >> david had an interview with jim murin, the real estate investment trusts. people hailing this as brilliant. everybody tells me this is the way -- if you think wynn is good, murin made it so mgm is the way to play. >> you like it. >> smart guy. >> is different than other reits where it's not being split off
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as a separate company. mgm will control this real estate investment trust. it will be an ipo that takes place next year, likely in the first quarter and contain ten properties. jim, he indicated a willingness to sell the crystal palace mall or 50% of city center that they own, at least during the interview. so investors were encouraged by the willingness to consider everything. >> it's funny. you have the contrast. you have steve wynn, who comes off as crotchy, but one of the great businessmen of our time. crotchy, because the communist party said i don't want you gaming as much. you have to build up nice stores. they don't make money on stores. they make money on the tables. there you have steve wynn saying we'll open some places and sell sweaters. then you have murin saying, by any means necessary, we'll raise the value of this company. good interview. >> thank you. thank you.
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>> you're welcome. >> visa is a laggard this morning. is that about the penny miss? is that it? >> if charlie scarf, this company went in to this quarter, didn't deliver perfect. but i think this consolidation is good. this may be an opportunity. this company has not had a lot of disappointment. >> can't end any of our quicker than usual look at stocks without looking at valeant, given what's going on with that company. down almost 50% over a handful of weeks. stocks up a goldman sachs downgraded it from a neutral to a buy. they continue to believe that longer term its fundamentals could justify a higher evaluation, but risk/reward in the stock is less clear. there was an interesting story in the "new york times" dealing
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broadly with the idea of nongap earnings, but making a specific reference to valiant as well and its use of them. >> surprised how many companies use this -- this -- it's not controversial because so many use it. yet from the work you've done over the years, it should be viewed as scant every time you see it. i don't want to own the stock. >> let's get to bob pisani and see what's moving on the floor. >> good morning. modestly positive open which is a nice surprise given how poor china was. china down, shanghai was down, nikkei down. the markets, the manufacturing numbers in china showed contraction. this did not flow over into europe, because their manufacturing, the eurozone manufacturing, pmi in europe came in better than expected. germany was pretty good. europe trading to the upside. we were talking last week about the m & a activity. electrolux trying to buy ge's
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appliance business. apparently talks with the u.s. government broke down. electrolux trading down over in europe now. the doj is arguing it would hurt competition. that will go to trial in the next week or so. we'll keep an eye on that electrolux down about 6% in europe. clorox, you guys were talking about it. i would add the positive comments, they beat on the top and bottom line. but this is mostly a u.s. company. about 80% of revenues in the u.s. jim is right to point that out. across the board, cleaning, lifestyle segment, food products, household, a lot of it across the board was excellent. this is one of the reasons. they're consistent earnings grower. 17% this year we are at historic highs. cooper tire also beat on the top and bottom line. they had good numbers. they have a deal with china that's being undone here. very good numbers for them
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overall. as for november, a strong month for november. it's a stronger month when october is really big. october was huge this recent month. up 8.3%. this was the fifth best october since 1950. we asked our friends, among the top ten octobers what happened in the following month? the s&p 500 was positive 78% of the time in november. and median return, 2.2%. finally just want to note, the ipo market for 2015 is closing fast. only a few weeks, three or four, left in the year. we have a lot of holidays coming up. big names trying to get through the door. match.com, square, ballast point brewery, mimecast. we will talk who might make it through and who might not and what kind of year it's been for ipos. >> let's get over to the bond pits and check in with rick santelli at the cme. good morning. >> good morning, carl.
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a lot of people talking about how much rates have moved up. maybe that is true considering that we were at one point flirting with 2%, now flirting with 2.20. look at a two-day chart. where are the highs? 2.17. where are we now? around 2.17. where did we close last year? 2.17. you get an "a" for that answer. hovering at unchanged. the rest of the curve from year to date perspective. we settle tus at 66, up basis points on the year long end of the curve, 30-year bond, up 20 basis points. 2.95. one reason why we've seen volatility, was it the fact that foreign investors bought into the media hype regarding a government closure? i can't tell you that. but it doesn't change the fact
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that ten minus bunds is above 1 1.60. look at the year to date of the dollar index. this is fascinating. you can see 98 roughly the top of the range. it is 90.25. no matter how you slice it, it may not be going up hugely lately but up on the year. when we come back, the hp split in effect. a live interview with meg whitman, the ceo of hewlett-packard enterprise with the dow up about 62 points. back in just a moment. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought.
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. hewlett-packard split into two companies with hewlett-packard enterprise making its debut today. hp inc will consist of printers, and hpe will focus on servers, networking, data storage and many other key products to keep
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the technology up to speed at corporations. this comes after hp said last month it would wind down its public cloud computing offering by the end of january. dropping out of competition with the likes of amazon's aws service. here to give us details on the plan for the future is meg whitman, chairman of hp inc. very nice to have you. congrats. >> it's a thrill to be here. >> 13 months in the making. let me start off asking you a question from something in your press release announcing this this morning. you say we have a unique vision for the future of technology. what is that vision? >> so, every company, whether it is a small company, big company is having to take their legacy i.t. system and transform themselves so that i.t. can be a competitive advantage. how do you turn an idea into
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reality in warp speed? we are uniquely positioned to help companies do that, we have hardware, software and services and are focusing around a small number of problems that are important for customers. it's about time to value and speed to market. you talked about speed to market and the changing marketplace as a reason why you pursued the split after years of discusses the benefits of the two companies being together. it's interesting to note that dell and emc are getting togeth together, while you're splitting apart. what is the rif arendifferentia? >> they're two diametrically opposed strategies. we are trying to get smaller, lean into our new networking, servers, software business. dell has chosen to get much bigger, lever up, and
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consolidate and make a cost play around older technology. so, we looked at the market. we looked at hewlett-packard's strengths and said being smaller and more nimble in this market is a huge advantage with not much debt. so hewlett-packard enterprise will have $5.5 billion of cash on the operating company, which is a completely different capital structure. two different strategies. we have confidence our strategy will be right but it will be interesting to follow over the next several years. i called it correctly. >> that deal long from getting closed, but was a big headline for us. you mentioned the products you're offering. one of them will not be public cloud, when i talk about aws, tony sa tony sakanagi said a big part of the market is moving in a single direction, use of the cloud, and hp doesn't have offerings to cater to those customers.
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>> your thoughts? >> our view is the world will be a hybrid cloud, some will be on a private cloud, some will be on a virtual private cloud on their premises or ours or another service provider. some apps will be in the public cloud. my view is most companies, it will be some -- >> why abandon the effort and allow that part of the market -- >> it is a big and growing part of the market. but private cloud where we lead against all others is a bigger percentage of the total market today and growing just as fast. we decided to double down on what we had a leadership position in. we knew we could win. amazon and ager a way out in front in the public cloud. is there a way to partner with them while we provide the
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hybrid? we decided we had a better chance of being a leader in private cloud and virtual private cloud and managed private cloud and our cloud system automation that helps you orchestrate your cloud in a multi cloud environment. >> when i look over hewlett-packard enterprises, m & a will be key. the credit suisse piece was very good today. the recommendation. it says you have 11.5 billion of gross catch, 5.5 billion of net cash and you can make a series of acquisitions. will i see a company, hewlett-packard enterprise next year that doesn't look like hewlett-packard enterprise now. >> i think we'll look quite similar. when you look back at the best acquisitions for our company, think about 3par, our storage company, 3com, our network iing
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company, these are complimentary technology that leverage our go to market strength. we paid for those products but it wasn't remarkable multiples of 90, 100, 150 times of revenue or earnings. how do you get people to realize the bad acquisitions were not done by you? >> yeah. listen. i think people understand that the company has been run differently in the last four years. we have not made a big transformational acquisition, what i call throwing the bong ball. aruba, i think everybody thinks that was a smart acquisition, it's off to a great start. >> it's interesting we're talking about consolidation, despite your size on the top line, 53 billion in revenues, and your employee base, 250,000, you only have a $26 billion market value. >> yeah. yeah. >> you're not that big anymore. i wonder whether hpe, given the
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consolidation going on, just by point of comparison, the emc deal, 65 billion. does hpe get in the sights of another large technology company? >> you never know what will happen. we live in an incredibly dynamic market. our job is to deliver for customers. if we do that will you see our market cap grow. we have confidence in the products we offer, our four new customer solution areas are well received. so, listen, i have a lot of confidence. you never know what will happen. this is a dynamic environment which is one of the reasons we thought it was important to be smaller so we could be more agile in an environment that requires that. >> still with a quarter million people working for the company. did you announce significant job cuts about a month or so ago, maybe six weeks when you gave us more details. will that be it for hp? >> should be it. that will allow us to right size our enterprise services business to get the right
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onshore/offshore mix, to make sure we have the right amount of labor people coming in. that's an important part of the future of the company it should be the last we see. this will take another couple years. then we should be done. >> how about the outlook for pcs, the hole in the doughnut today. hope? >> yeah. i'm excited about the prospect for hp inc. dion wei dion weislev a tremendous executive. the p, c b c business has been it's been down. next year will bode to be another improving year. we'll see. but dion has done what most companies need to do, that's in a down market gain share. he's done that. you can't argue with how he's run the company. just the market is tough now. >> meg, your regular appearances here almost quarter after
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quarter after you first took the job. i would ask you when will you see growth. you never got there with the combined company. so i'll ask the question now for the much smaller hpe. when will you see top line year over year growth, i'll give you the currency. >> thank you for that. yeah. you should see that in 2016. and actually if you look in q3, if you separate out hewlett-packard enterprise, hewlett-packard enterprise grew in constant currency. q4 we're in a quiet period. i can't comment. you will see growth in constant currency for hewlett-packard enterprise in 2016. >> i had rick amato on last week from avnet. >> yeah. >> and listened on the intel call. both wanted to come this close to say pcs have bottomed. no one wants to do it. will you join that? could be? >> it feels better to me, right? it feels better.
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if dion was here, he would probably say he's seeing some green chutes. windows ten has been downloaded, you know, millions of times. now people are starting to buy new devices with windows 10. i could be wrong, but it's feeling much better out there. >> we asked you a couple questions about the pc business. how do you see yourself dividing your time? there's only so much of it, i know you're working most of those hours. this will be probably 90% hewlett-packard enterprise but i'll be chairman of hp inc. because i've been a ceo for so many year, i know the role of the chairman and how it's different than the role of the ceo. the chairman is not there to run the company. the chairman is to help the board be productive, help the ceo be successful. we have a job do for both companies, we had to hire 12 new board members, boards have cultures just like companies. so we have to get the culture of
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these two boards direct and on point. the first meeting is actually next week. so -- for both companies. most of my times will be on hewlett-packard enterprises. >> you have gone through so much here. you will start selling your services to other companies that want to consider doing what you did, right? >> yes. any company doing m & a and divesti divestiture to should hire us. >> i got a sales pitch in there. >> thank you. we'll get "stop trading" with jim in a moment. can tap global insights. active management can seek to outperform. that's the power of active management.
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time for cramer and stop trading. >> we're seeing something interesting this earnings quarter. companies profit taking, bouncing right back. t-mobile saying now is the time. it's right to start buying t-mobile right now. these comebacks after good quarters, i predict visa will have it, too. >> what's on "mad money" tonight? >> we have been trying to book a company forever, which is dusty mccoy's brunswick, mike polk has
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done amazing things at newellrubbermaid. and i'll ask him about the wife's comments, we can't get enough rubbermaid. we are a rubbermaid house. we don't throw anything away. waste not want not. >> jim, we'll see you tonight. >> okay. >> "mad money" 6:00 p.m. eastern time. when we come back, breaking news on ism, construction spending. hello, ken jennings. i haven't seen you since that tv quiz show. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement.
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and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that.
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welcome back to "squawk on the street" for a monday. i'm carl quintanilla, along with sara eisen, simon hobbs, dow getting close, almost back to break even for the year. jobs friday later in the week, adp claims, auto sales and a lot of earnings from facebook, tesla and media companies. let's get to rick santelli with breaking news on ism and construction spending. >> let's start with all this in
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terms of september construction spending. up 0.6. last month's up 0.7 is unrevised. the weaker read for the year was the first, 0.1 in january. this comes back to the next lowest level to july, up 0.4. let's go to the steak and potatoes. looking at the october read for ism, 50.1. this is interesting. it now makes a new low of the year. prior to this, the weakest month was 50.2. when was that? that was in the rearview mirror. now we have go back to 2012 where the last read was 50, on the screws. if you wanted to get a weaker number, it's predecessor was the last time we were under 50 at 48.9. let's go to some internals.
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the employment index, fell below 50. 47.6 versus 50.5. new orders, a little good news there 52.9 versus 50.1. carl, simon, gang, back to you. >> the jobs number is interesting there. the market gaining on the first trading day of november adding to the more than 8% surge that the s&p 500 staged last month. the best gain in four years. but perhaps as importantly that powerful rally coming to a skreec screeching halt as the fed put a december rate hike on the table. bob dole and maury harris join us. bob what did that rally, that strong, powerful rally through earnings season, all sectors gaining, what did that teach us? >> i think what we learned, simon s that china did not fall into the sea. that the u.s. economy, particularly the consumer, is
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doing okay. the fed may have raised rates, verifying the fact that the economy is entering a more normal zone. the whole beginning of the normalization process. the world didn't end after the august declines is what we're learning here. the rise in the market was faster than a lot of us thought. >> where does that take us? in essence, have we stolen the rally from november/december or is this the healing of what happened in august? >> i'm going to talk out of both sides of my mouth. some of both. the 1867 low on the s&p 500 has held. we think that was the low. we talked about the high end of a trading range, 2050 to 2100, we're in the middle of that. some healing, but also taking some of the year-end rally in advance. >> maury, one thing we have to struggle with, if the fed is sincere in it's desire to put a rate hike on the table or the
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possibility for six weeks time, presumably they will talk up that possibility, maybe starting on wednesday when dudley and fisher take the floor what do you think is going on there? what advice are you telling people about where the fed is taking us? >> i think the fed themselves is not quite sure about where the economy is headed here in the fourth quarter. this is why in the last fomc statement they said that what they do will be data dependent. i think the data will generally look okay for the month of october and november. and then in those circumstances the fed probably does do the first hike at the december meeting. >> you see, bob, many people in the market will struggle with that. they will really struggle with the idea that the fed -- the economists will be fine but the people trading may have some great difficulty with the idea that the fed will hike. >> i think we'll get to the day after the fed hikes and the sun
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will rise in the east as it normally does. and the markets probably will be okay. we know the history after the early fed rate increases in the cycle, the market tends to do okay. >> hang on, bob. i know that's a great thing, to trot that line out and to tell people that the market will rise. but every time that the fed has raised rates in the past, you had a clear cyclical upturn. we don't necessarily have that this time around, do we? >> no, but we didn't start from zero before. we're talking about the fed last i checked going from zero to 25 basis points. it's not like they're going from 2 to 3. rates will still be in the basement somewhere. that's why the fed needs to get started and maybe are behind the curve. >> the jobs report for october and november will factor into the december meeting at the federal reserve. do you expect the weakness we
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saw in august and september in job creation to reverse? what you are looking for in terms of friday's number? >> friday we have the payrolls up 185,000. we think the unemployment rate fell from 5.1 to 5.0%. throughout all this period, when there's been worries about an economic slowdown, let's keep in mind that your unemployment claims, layoffs remain low this is telling me that the labor market is still doing okay. okay enough probably for the fed to raise rates at that december meeting. by the way, in terms of the markets reaction, a lot will depend on how the fed packages it. they will package this, if they raise rates, as something that is much slower than normal in terms of a tightening path, that will continue to be data dependent. the fed's statement could take some of the sting off a rate hike in december. >> nonetheless, how low do you think the bar is? mark zandi is suggesting 150,000 on payrolls and still they could
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hike. >> i would -- i think 150,000 on average for the two months of october and november is probably a pretty good benchmark. >> okay. bob, let me ask you about the sectors that will do well to year end. consumer discretionary has been on a total tear. is that sustainable in this environment? >> probably not pace we had, but when we look at earnings, the best have come from consumer discretionary, health care, and technology. those are the three sectors that have the most positive surprises. i wouldn't be surprised to see them be the ones to lead the way. >> let's hope so. guys, thank you for kicking your week off with us. bob dole and maury harris. the news flow on valeant continues as we get a new report from citron. >> we have the report in our hands now. citron, remember, had dialed back a bit about the tweet they put out friday last week.
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they basically said that -- valiant has a better chance of going zero than herbalife ever will. they dialed back some of those tweets and now they have put out a report saying we are not dialing back on our warning on valeant but are dialing back on the focus on citron to investigate and report the vast spectrum of claims piling up against valeant. they go on to also say that for those of you expecting a kill shot, you can stop reading this report here. while citron that been at the nexus of information on the story, we will not be releasing new allegations against valeant in this piece. they also say we believe that it is not our responsibility to be at the judge, jury and execution of the company's deeds, rather we are passing all new information to the mainstream media, whose legal teams are far deeper than those at citron. again, their report -- we're parsing through the details. they are saying they will dial back a little bit on the focus
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on them. again, we want to pay attention to this story because coming up today on the half time report, citron's andrew left will be a guest of scott wapner, a cnbc exclusive here. tune in at noon to hear what citron says could be wrong, the allegations against valeant. an interview you don't want to miss. when we come back, visa announces plans to buy visa europe for $23 billion. you will hear what visa's ceo has to say about that.
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. visa going through with a long expected purchase of visa europe. mary thompson has more on that. >> at over $23 billion, it's visa's biggest acquisition ever. one changing its footprint. visa had no presence in europe. visa gains access to 38 countries representing over 3 trillion in payments volume. here is ceo charlie scharf on the call. >> the transaction is good for both parties. the first full year of the combination. >> visa is paying for visa
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europe owned by a consortium of stocks. visa is funding the cash portion through 15 billion to $16 billion of dollar denominated debt which will may start selling as soon as december. the firm also emphasizing it will buy back stock aimed at offsetting the diluted earnings of those shares. visa shares among the dow's best performers this year, down in early trading. rev flew was in line in what visa called an uneven global environment where the strong dollar continued to temper results. for the current fiscal year, the strong dollar is seen impacting revenue growth which is forecast in the low double digit rain and earnings growth in the low end of the mid teens range. sara, back to you. >> you look at visa at the bottom of the dow right now. is it that the deal size was bigger? was this already factored in? >> i think the deal size is a
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bit bigger. there are some concerns about how the transaction and the integration will go and whether or not visa will be able to benefit and get the yield on the visa europe business a bit higher. there are some questions about that also a bit of a question about the fiscal 2016 outlook. some incentives will be higher than the first half of the year. >> mary thompson, thank you very much. let's talk to one of those analysts now, should you be buying visa stock? gil luria, thanks for joining us. >> thanks for having me. >> mary says they'll get 38 countries, ceo says it will be great for earnings and also for cost savings. why do you think investors don't seem impressed today? >> visa paid more than expected. $24 billion total price tag is higher than the 20 billion or 21 billion people were expecting. the outlook for earnings growth, single digit earnings growth is a disappoint.
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considering visa just have a costco ramp ahead of them, cross-border growth was mid single digits. on the one hand, visa's growth is slowing down, but that's the reason they bought visa europe is that now with visa europe they can get more on the top line growth and more in terms of earnings growth as they make visa europe more efficient. >> what does it mean for mastercard? the smaller competitor that already operates in the continent. >> this is good for mastercard. one of the things visa will do in europe is raise prices. as they raise prices that will make life much easier for mastercard in terms of retaining it's business, keep prices high, even as european regulation comes in to limit interchange. visa is busy with the transition of visa europe and getting those synergies, mastercard has free rein to keep prices, maybe raise
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them and compete with the distracted competitor. >> gil, what happens to those banks that obviously own visa and -- are they locked in now? can they churn out plastic? >> a big part of that $24 billion they will only get in five years if visa's net revenue hits the targets which means those bank also need to continue to issue visas and process on visa's networks for five years. what happens after that is more of a free-for-all. in the short-term over the next five years they do need to continue to issue visa cards and they will have an incentive to follow through with visa and maintain the agreement. >> the stock is already up 25% from last year, 15% so far this
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year. one of the dow's good performers what is the outlook on the payments industry and you should be a buyer of visa stock? >> visa and mastercard are terrific stock. they are well managed companies with great secular tren trends. to the extent there's a big pullback on either one of them when something like this happens and then there's a bit of a dislocation, they've been good long-term investments and should continue to be so. >> in contrast to american express down 20% so far this year. gil, we'll leave it there. gil luria from wedbush securities. when we come back, an update on a pair of deals in the works. it's more than a network and the cloud. it's reliable uptime.
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we're less than 11 days away from the end of an epic takeover battle between perigot and mylan. perigot has a chance to render shares into mylan and mylan if they get 50% of shares could own the company. the latest i have on this -- it appears to be close at this point. always difficult to tell how various shareholder also go. so you some of the institutions, index funds. but right now a tight battle. perrigo trying to get share holders in line to not tender. mylan is trying to tell those same investors who have concerns, for example, about governance -- the schticking, remember the continuous director provision that allows the ceo or the chairman of pilen, rob cory
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to appoint new directors if some are booted out by shareholders? they're trying to tell people, we'll take care of those. we'll get rid of them if you reward us by tendering more of your shares. mylan would really like perrigo to go to the negotiating table to hammer out an overall agreement under contract. it's unclear whether they will be successful in that effort or convincing at all to convince enough perrigo shareholders to say yes. this morning they got a bit of a bump from bernstein who weighs in saying the chances mylan will prevail has gone up. why? news involving the epi-pen. there was a competitor from san santa fe who was pushed off the
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market, and a competitor from teva, no longer the case. that's helping the stock price and according to bernstein the overall chances that mylan has of getting a deal with perrigo. we'll see. governance remains an important component of this overall fight. many people don't seem to believe robert cory the, the careman, when he says i will get rid of the schticking. let's move on to update a story we brought you last week, starwood's talks with hyatt. a lot of people have been asking, that deal at least a week away. we may see it a week from today. the two sides continue to negotiate. when it comes to price, you need to include what is the time share business and the sale of that business which will go north of 7 bucks a share to
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starwood shareholders. if you were to get a $90 price and it was minus 7, we it would 83. the reading from people familiar with the situation is don't expect a large premium. you can use that to help your calculations. simon, they are still talking. no sign of the chinese as of yet on this one it does appear hyatt moving in and closer to a potential deal. >> starwood appears to be quite embattled. it didn't say a lot on the earnings call which was all about the spinoff. unless i got it horribly wrong there was no discussion about the earnings, and they didn't take questions on it, other than saying the time share spinoff. coming up, october seeing big gains. will the same continue for this month? art cashin will weigh in.
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good morning, i'm sue herera, here is your cnbc news update. the remains of the victims of the russian plane crash in egypt over the weekend were flown back to st. petersburg, russia. the opener of the plane, metrojet said an external impact brought down that plane. the u.s. intelligence does not have direct evidence yet of a terror involvement. secretary of state john kerry is in kazakhstan.
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secretary of defense ashton carter in south korea on a two-day meeting, saying there should not be further mill tarization of the south china sea. and china unveiling its first domestically produced passenger jet. it is china's answer to the a-320 and the boeing 747. more than 400 dignitaries gathering for the aircraft's unveiling. sara, back to you. >> thank you very much. watching the markets, gains are building this monday morning. the dow is up triple digits, now 109 on the first trading day of the month. health care is the group leading the s&p higher. art cashin joins us on set. we have a lot of information to digest this week when it comes to corporate earnings, economic
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data, punctuated by a jobs job. what does the setup look like? >> first, you have a salon full of fed speakers coming up. probably something like 12 different speeches. so, we'll see if there's any detail out of that. we'll start at noon with san francisco's fed. >> doesn't the economic data trump the fed speak? >> depends on how obliquely they speak. you had a curveball from draghi over the weekend. dean interview and sounded more hesitant about whether he was going to increase qe in december. watney also on the ecb board said it looked like inflation was not coming in where they wanted. ultimately we have to get down to the central bankers one more time. we're pushing right up against some resistance in the s&p, 2092 to 2096. >> right here. >> we'll see how they do with
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that. >> what about ten-year treasury yield which continues to push higher and crude oil which continues to move lower? >> crude oil is improving so far this morning. it was a good deal lower earlier. i think the yields are up probably because of that hesitancy on behalf of draghi. if they were going to expand qe, it would make it much tougher for the fed to go for that december hike. this way it eases the path a bit so you notch up the yields a basis point or two. >> you were resolute all the way through that they wouldn't raise rates this year. they're clearly trying to put that back on the agenda. i think wednesday is the big day. yellen speaks, but she's more about bank regulation. clearly we'll await what she says further down the line. do you think they'll raise rates in december? contrary to your lebelief and my in the market, are you ready to change that assumption?
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>> i still don't feel they'll raise rates this year. if they are data dependent, the data doesn't look like it's moving their way. if anything, it looks as think to things are less robust than -- >> what if they move in the face of opinion like yours? which is mirrored around them -- lots of people believe that and we see that in the feds fund futures. if they do hike, what happens to markets? >> that's great risk on their behalf. markets can easily get de-stabilized. if they were coming in today and taking a look, the fed funds rate is looking at merely a coin toss. slightly less than 50% they'll hike. i think if they -- if you get in there and it is 50% or less in other markets, there's a potential for spillover. and it's not just here in new york. we're playing in a globally interconnected marketplace. so there's a great deal of risk. that's why i think they won't
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raise rates. >> somebody said overnight it was more important than the ecb or the boj, because if you think of free floating exchange rates, the fed would anchor everybody else relative to what it is doing. it trumps everything in many senses. >> it will. apparently they're going opposite the way everyone else is going. that's another risk and consideration there. i'm still of the opinion that the data won't help them and they won't be able to move. >> when october is this strong, does it mean november is less strong? >> absolutely. there are studies of that. i think sam stovall over at smp capital put out a thing about stealing some of santa claus's thrust. when october is up over 7%, the result for the next two months, the santa claus rally is tut in half. >> cut in half? >> yeah. instead of up 3% 3 1/2%, you will be up 1.5%. this year fits that pattern?
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>> so far. we'll see what happens. >> art, thanks for joining us on a monday morning. shares of chipotle falling more than 2% this morning. the company says in an abundance of cautions it closed restaurants in seattle and portland, oregon after an e. coli outbreak. health officials are investigating about 20 cases of e. coli from customers who ate at six restaurants in those cities. shares down 16% for the past three months. joining us on the phone is star of restaurant start up, chef tim love. when something like this happens. 43 restaurants. they have 1700. you are worried about the impact from those 43 or should we expect changes in the national traffic trends? >> i think, you know, when you look at chipotle who, i feel like is one of the most responsible fast food outlet there's are, fast casual, however you want to say it luke at their responsibility and say we have a problem here. we'll make sure that we take
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care of the problem. so, you know, they see things happen in six restaurants, they close down 43, they say we'll fix the problem. fix it quickly, and you have to have confidence in us. >> aside from -- i don't know, how do you fix it? a marketing push? is that -- does that create a huge distraction for a division that was trying to emphasize throughput, a second make line off-premise ordering, all of that? >> i have to tell you, it is a bit scary to think that you want go back to a store that somebody had e. coli in. it's something that is easily cleaned up. easily understood. they just have to find the source and find it quickly. if they don't, you will start to see the stock fall. that's why i feel like they're closing so many stores to say wait a second, we'll fix this and fix it fast. >> i wonder what psychological impact is on consumers, for a company that sold itself on the
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integrity of its ingredients, gmo-free, cage-free, chipotle has talked about this nonstop. do you think there will be lasting consumer change in terms of the mindset? >> i think you'll see something in the short-term for sure when people look at it to the point of exactly what you're saying. here's a company that told us over and over and over again how good they are at sourcing their ingredients. yet, here we go. we have an e. coli outbreak in a place. it does put a scare in peoples minds. when you boast yourself to be so good at something and you return and do the opposite, it makes consumers second guess what you're doing. >> tim, just help us out here from the industry. is e. coli kind of -- this is a symptom of using less processed products? is this something they might suffer from more than a miklaszewsmic mcdonald's, could they argue that or is it about hygiene? >> e. coli is around us all the
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time. it's a matter of how much it affects us. you go out and you go to the farm and you pet a cow, you come back, you don't wash your hands, it's right there. you touch your face, now you have e. coli all over you. that's very simple portion of that. clearly what happened in the supply chain, there's a bit of a sanitary issue, i would guess. like i said. it's one of those things, it's more abundant that people realize. it's a sanitary thing that's simply solved. >> every time you go to a restaurant bathroom, employees must wash hands, right? >> that's right. >> we've all seen that sign. they got a huge issue. no one is excited about that, but it seems like how could this go wrong? >>to 43 restaurants, not just one. >> i don't think it's at 43 restaurants. they feel like the source that
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must be supplying those 43 restaurants. that's my speculation, of course. but if it's found in six restaurants what they said is we have a supply that came from this certain area, it went to these 43 restaurants, we'll shut them all down, take the product out. basically trace back. that's the only responsible way you can do it so people will be nervous about it coming back. it's one of those things that is going to put a smear on the face of the brand for a bit especially because they're so boasting about what they do with their ingredients. >> tim, good to get your insight on it. we'll watch the story closely. thanks again. >> yes, sir, thank you. >> tim love. up next, october might have been great for stocks in general, but many hedge funds ended the month with double digit losses. some even now issuing apologies to investors. details on which ones lost the most when "squawk on the street" comes right back.
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and ca"super food?" is that recommend sya real thing?cedar? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab. advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton. vo: know that together you can establish
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a meaningful legacy. with the guidance and support of your dedicated pnc wealth management team. strong gains for october. s&p 500 rising 8% for the month but very little of those gains seem to translate to hedge funds. kate kelly has the story. >> the early performance numbers are flowing in and it's not pretty so far. look at some of the heaviest hitters in long short i investing. glean light capital up 0.7%, but down 16.3% year to date. pershing square, down 3.8% through october 27th. down 16% on the year. glenview capital down 7.3% through october 26th, down 20% year to date. and third point off shore up
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4.7% for october and flat year to date. it's so bad that some of these managers including greenlight's have issued apologies in resent investor letters andsis and strategies. bill ackman held a conference call on friday. goldman sachs tracks the most popular hedge fund names at a given time while some of the most popular like valeant have done badly, but hedgies have missed out on some. look at the market stand-outs here. of the five best performing names for october, only one of them, microsoft, was in the goldman hedge fund vip basket. managers i've talked to say it's ban while since there was such a disparity between the stock market's broad performance and the way that hedge funds fared,
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and investor dissatisfaction could create a bigger chasm. >> aren't hedge funds meant to perform when things are not so good? is this just an unusual period in the markets where you have an 8% surge in the s&p so hedge fund bets are off? >> i think it's a bit unusual. we've seen a number of records. this is the best month for the s&p and the dow in four years. hedge funds having an unusually bad period. they lost more assets last month than they had in seven years. but, you know this is a perennial criticism of hedge funds. they charge a good deal of money 2% for expenses, 20% of any upside. and they often underperform the market. in bad times they may do less badly than the broad market. in good times they do less well. it's a source of frustration to people. defenders say, look, they're known as an alternative asset
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class. the reason for that is they hedge an overall investment basket but they're not the end all be all of where you should put your money. >> kate, thank you very much. let's send it out to chicago and rick santelli. >> thanks, simon. i would like to welcome my first guest of the week, andy brenner. always fun to have you, andy. even when it's not november, you always like to talk turkey. let's start. unchanged on the year. to me, as a technician, unchanged on the year is significant what key markets are unchanged? ten-year note rates. the dow jones is within a half point of unchanged. the dax is within a percent of unchanged as is the s&p. do you find that significant? i find it significant in the sense that people were looking for much lower rates in treasuries, some looking higher, but we're right where we closed last year. i don't see us moving out of a
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1.90 or 2.30 range in the ten-year. as far as equities, people were positive about equities over the summer, then all of a sudden they got clocked in august and september, now we're back to unchanged. when people lean one way strongly or the other, you have to counter trade that. that's what we learned in trading 101. >> market logistics matter. it's not only the fundamentals or the fed, it's which side of the trading card a lot of traders are on. of course there seems to be reversals periodically. okay. 14 fed speakers. when i hear 14 fed speakers, i think we'll get 28 different opinions, and the clear transparency continues to be quite muddy. your thoughts? >> rick, 14 fed speakers, they really tried harder in october to move it to 50/50. i just don't see where there's a way that they can raise rates in december. you have two central banks that are, you know, in easing mode,
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both the ecb, even though draghi backed away from that over the weekend in the chinese and the japanese will go full throttle in november. i find it difficult. the real thing people are not talking about is the fact you are going to make your first rate rise in 9 1/2 years two weeks before a year-end when bank balance sheets and repo balance sheets and -- >> andy, yes. they're talking as if they are. but let's take a step back. you and i agree on one premise along with most traders on this floor. that the federal reserve may have a high degree of intelligence on certain issues, but understanding markets, the turn at end of the year, all the hiccups that can occur when you have china tinkering so much with the lending and borrowing rate, i'm with you. your final comment, whether the level of rates is correct or not, the timing of when you move them is significant. you finish it up. >> absolutely, rick. i don't see them going.
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i will give them, if they have two good employment numbers between now and year-end, maybe i'll change my mind. right now they're not going. >> i got you, andy. lately you have to add two together to get a good one on employment. david faber, back to you. thank you, andy brenner. >> thank you, rick. this morning, of course a historic day for hewlett-packard, it's no longer hewlett-packard. it has split into two companies. a split over 13 months in the making during which the company has gone through virtually every single part of its business figuring out what goes where, splitting systems, trying to understand from a cost basis what it was spending on various things. real opportunity to do zero base cost analysis. it's now two companies, hewlett-packard enterprises and hp inc which comprises the printing and pc business.
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much of the old compaq, if you will. meg whitman, the ceo of hewlett-packard enterprises, chairman of hp inc joined us earlier. i made the point to her while she has presided over a company that is getting smaller, if you will, others in the industry, dell, for example, seem to be bent on meeting customer needs by getting larger. >> it's quite interesting that we have chosen to delever our balance sheet to get smaller, to be more nimble and lean into new technology like our 3par all flash storage array, the next generation of networking, servers, our software business, dell has chosen to get much bigger, lever way up and really consolidate and make a cost play around older technology. >> as we are like to say here, time will tell which strategy will have proven to be the better one to have followed. one other strategy followed at hp is to avoid battling with
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amazon. they're not trying to offer a public cloud offering, if you will, to cooperarporate clients choosing to stick to the private cloud. i asked whitman why. >> private cloud is a bigger percentage of the total market today and growing just as fast. we decided to double down on what we had a leadership position in, where we knew we could win. amazon and ager a way out in front in the public cloud. our view was is there a way to partner with them while we provide the hybrid environment. >> after difficult year for the combined company stock price, both are up at least today on their first days as public companies, both in the fortune 50. enormous split. >> hp inc having a much bigger split. up next, citizens financial having a rough few months following 6% since august. will that change now that it's
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officially independent of rbs? the ceo will be joining us live when we come right back. sure, tv has evolved over the years.
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it sold the remainder of its shares in the firm. now completely independent and looking at new strategies going forward. joining us is the ceo of citizens financial group. it's good to see you again. i remember seeing you here at post nine. it was one of the biggest ipos of 2014. >> that's right, that was a mere 13 months ago. we're very pleased we're able to execute the exit 14 months ahead of schedule. >> so what does this new chapter mean for citizens? what is a citizens independent of rbs allow you to do? >> i don't think there's a significant change in strategy. one of the things that we're seeing is we have a greater ability to attract top flight talent from around the industry. we'll brought in a new cfo from citiba citibank. john bankin just came in to run wealth.
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so that's one of the initial dividends we're seeing as we move on this path to separation. >> bank m & a is finally in the headlines. we're starting to see deals in your sector. wanted to ask about how you're thinking about that and how you view some other deals. in light of the recent negative share price reaction that we saw to key corp buying first niagara last week. >> sure, well, from our standpoint, we have plenty of opportunity right in front of us in terms of organic growth from running the bank better. so we're going to continue on with our turnaround plan and don't see the need to do m & a for the foreseeable future. i don't want to be distracted. we are seeing more deals in the environment, which i think is reflective of the tough condition that we find ourselves in. you know, people are looking for expense saves, revenue growth opportunities. i think at the end of the day, the reaction to the deals announced last week is really
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about, you know, the structure of the transactions, the pricing of the transactions and maybe some execution risks. i do think from a strategic standpoint, both make sense, but the market is going to wait and see on the execution. >> you're going to get notoriety across the country because you're in a new area. they want to get the iphone apple upgrade where they pay $32 a month and then get a new iphone at the end of the year are being asked to apply effectively with you guys online. you got the deal with apple. how big do you think it will be? can you give us some color on what's actually happening? do you own the phones? >> this is a terrific opportunity for us that we've been able to partner with an iconic company like apple. and we understand the apple experience and what their high requirements are. so far, we've done a great job in terms of meeting those expectations and giving people
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good in store experiences. i think at the initial rollout, this was really just an in store offer. soon apple is going to move to online. and that will really ramp it up. we're ready for that. we have already made over 150,000 loans. we have over 125 million balances. we see this as a nice potential to add some unsecured credit. this is actually unsecured installment credit to the borrowers. >> never enough time. bruce, thanks for joining us. the ceo of citizens financial. >> speaking of apple, technology, let's check out what's happening today. >> you've got some news there on the 150,000 loans for the iphone upgrade program. also, latest on the square ipo, hewlett-packard split in two and instagram versus snap chat and twitter. all that and more coming up on
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good morning. it is 8:00 a.m. at hm headquarters in california. it is 11:00 a.m. on wall street. squawk alley is live.
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welcome to squawk alley for the first dmonday of november. as we get a not bad start to the markets as we kick off november. first up though, we'll get some new details on square and its upcoming ipo. >> for all the talk of a slowdown or a stalling in the ipo market, carl, square is one company that is going to brave these water also in the next couple of weeks. sources tell me the road show where square goes and meets its

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