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

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posting better than expected results. a cautious forecast has the stock under pressure. and priceline's ceo darren houston will join "squawk on the street" at 10:00 eastern. andrew, huge thank you. >> you're welcome. >> kayla, thank you. >> thank you. >> "squawk on the street" begins right now. ♪ >> good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. six weeks of gains for the market, first time that's happened all year. q4 shaping up to be the strongest quarter in at least a couple years. pre-markets soft ahead of a light week. china up overnight despite disappointing trade data. we will watch the ten-year trade
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today. our road map begins with priceline. shares falling what is driving the stock down? >> an $8.5 billion deal creating a timber giant. and are big changes ahead at yahoo!? stocks make it a lucky seven. the three major indices in the midst of a winning streak. small caps posted strong gains last week with the russell up 3.25 percent. jim, exports down 6.9 in china, double the estimate. >> the consumer, this is what we're focused on. we've got singles day coming up. i think that will be the biggest day ever. there's a propensity to recognize that maybe the government did the right thing by focusing on the consumer.
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the bulk rate shouwed you nothig will happen there. they're spending. wage rates have gone up dramatically the last few years. well above mexico. >> in china you're saying. >> twice of what mexico is. >> they talk about 270 million people in the middle class, they're going 540 million people over the next ten years. the numberses are incredible when you think about it in terms of where they've come from in gdp, even though it's slowing. growth is dramatic. as you say, wages, net worth, per capita income. all those things. >> very important. >> meantime, s&p is trading at 23, trailing 12 month. that's higher than the 20 we were at in september. everyone wants to know if we're back in expensive territory. >> i think we are. i think the fed will raise rates. i think they'll raise rates hard. these numbers are exactly what they needed. there's not a lot of turmoil overseas. there's not a case against rate
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raise except the fact that the dollar could get strong and manufacturing america may not be great. when i looked at that employment number t wasn't like manufacturing was that bad. manufacturing in this country, the actual making of things is pretty strong. the export of things is weak. you have to adjust accordingly and recognize many of these money managers are way off base in terms of exposure to the financials. they feel like they missed the jpmorgan move from 62 to 68. they will turn out. they are way too long healthcare. the democrats are going to create problems with healthcare every time they talk. the republicans, the y don't sem to have any pro drug stance. let's say banks are the place to be. they are the only part of the s&p other than the fastest growing companies that do well. >> banks are the only places that have not caught up -- >> exactly. bank numbers are way too low.
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you get a series of rate hikes, you'll find that a morgan stanley sis at 45? >> yeah. really, morgan stanley. you can't expect banks return on equity to be anything like it was or approaching what it was prior to the crisis. >> they have big credit. >> the capital they have to hold on their balance sheets so much more than in the past. >> true. >> net interest margin. i would have expected you to say wells fargo, not morgan stanley benefiting -- >> i happened to listen to james gorman and the dream fest -- >> dealbook. >> he said we had a bad quarter, but look at our stock. i'm looking at the stock and says that goes higher. that goes higher. using that as an example. look at goldman sachs. that stock is up 20 bucks from the disappointing quarter. wells can go up dramatically, jpmorgan can go up dramatically.
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>> jamie dimon will say we had a record year. >> until now. healthcare, sold to you. look, i think that -- >> let me ask you -- >> valeant. big. >> key to this market not long ago. conference call tomorrow at 8:00 a.m. >> will be four hours like ackman's? >> i hope not. mike pearson in this case. >> it's hard to imagine the company, it was not an 80 billion dollar company, but can't they be more creative. there was an article today, a hedge fund -- she owned a lot of this. why do they own so much valeant. >> because it had the earnings per share growth versus merck. you get behind ackman, you buy
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valeant. it should have been valeant/ackman corp. >> interestingly, as we said, it was value-act -- >> value-ackman. you have the young group. >> the cornerstone of that company that benefited the most from the run-up. it's amazing how many hedge funds own this group. come on, man. how many thousands of stocks are there? this is all they can come up with. >> ackman loved it. people got behind ackman and listened to pearson, raising numbers, raising numbers. did anybody look how? you cut the r & d, nobody cared about that. suddenly hillary clinton tweets that you should short valeant. that was not exactly the tweet. but that is what people did. we played a song coming in here. you said it was about plum creek timber. i said it was about the eagles win it was actually about valeant it was called "timber."
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♪ you better sell, you better short ♪ did you know those words? pit bull said you ought to short. kesha said you better sell. you know how you spell kesha's name? with a dollar sign. "bad blood." >> that's a different group. >> this had ackman, pit bull, kesha, swift -- >> taylor swift. >> fast falling swift, kesha with the dollar sign. >> i got it. >> pit bull is what the bears are doing to it. where is andrew left today? he's not allowed -- andrew left. >> he can't talk. >> he said his peace. >> valeant is looking up today. >> of course! >> we'll see what happens with
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that stock. what developments from here. the latest was -- pearson was forced to sell. given a loan he had -- >> that was prudent. did margie call? >> no. he is not one who sells stocks. you get loans against some of it, you can use that to finance whatever you want to be doing, buying a house. all those things. then eventually if it falls enough -- >> unfortunate. that day when they had the big volume, wasn't that intimidating? down big. cash flows, david. >> we'll see. we will see. >> i have horizon pharma tonight. >> far from over on that. >> taking great pains to distinguish themselves from valeant. they use specialty pharmas. but the valeant conference call may be the key to this week. if they can't stop the decline in the drug stocks and you have all the money going into the wrong place there. everybody is trying to make a stand on healthcare stocks. all people should be doing it
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look at zion's. zion. zion's bank. we'll watch priceline as well. beat the street with third quarter numbers held by record bookings in the accommodation business. shares down because of guidance in the current quarter. we will talk with ceo darren houston in the next hour. short of 12.42. talking weak euro, weak pound, versus the dollar. >> they -- they speak softly but they carry a big stick. they've done exactly what they did 15 times the last 15 times. four of the last 15, the stock was down a week later. they always play this scam, everybody fall forces for it. stock goes down 90, we start listening. last time down 2%. look there are reasons sometimes why stocks go down. this is a priceline game.
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the priceline game says buy priceline according to history. 4 out of 15 down. 11 up. interesting. >> that is interesting. >> it's a secular look like expedia. can't beat these things. using the internet to be able to get cheap tickets. it's a secular trend. >> finally, that deal with the timber music at the top. 2.2 billion dollars. weyerhauser looking to sell a couple things. all stock deal, but they will initiate a $2.5 billion buyback once it has been completed. plum creek owners will own 35% of the combined company -- yeah. 35% of the combined company at close. you e-mailed me yesterday. you seemed excited about this. >> i was very excited. this is a great acquisition. you create a tremendous amount of land. housing has been decent.
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they got timber. i think that this is a great deal. you know, weyerhauser has done nothing for a long time. >> yeah. >> they needed a catalyst. >> ceo of plum creek, rick holly, will become nonexecutive chairman. been running the company for 16 years. best performer in pure timber. way way weyerhaeuser has been cutting costs. >> doing the right thing again. plum creek is not valeant. it's about trees. you know, trees. what was that? it was -- >> in fact, jim, 13 million acres of trees. >> a lot of trees. >> 13 million of the most
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productive and diverse timberland in these united states of america. >> lord of the rings -- which one was it with the trees? kind of like that. lord of the rings 3? if you get the wrong one -- >> you'll be corrected. no doubt. >> trees were in a lot of them. >> they were. but that was a great move by plum creek. that plus the apache rumor. don't you love that? the apache rumor. >> loved it. >> that's your style of journalism. hey, someone contacted apache. >> big piece on amgen, all these rumors. >> you continually let the facts get in the way of the story. that's why you are the best there is. just refuse to just go out there and say the white knight will be anadarko and it's $77. specificity -- it's anadarko. it is like a horse race. anadarko, in the seventh, put down 75.
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>> or clue. >> or clue. >> right. >> mr. mustard, $77, for apache. >> in the dining room with the candlestic candlestick. >> when we come back, some big changes may be on the way at yahoo!. we'll talk about that. shares of norwegian cruise lines up more than 50% in 12 months. the company's ceo will tell us how he plans to keep that momentum going. another look at the pre-market. quarter to date, s&p up 9. year to date, s&p up 2.
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always enjoy and protect our marine habitats. yahoo! has reportedly hired mckenzie to help with its reorganization. mckinsey will decide which units to shutter, which to sell and invest more in. executives have left in the past month or so. >> yeah. wow. i think that's one where, you know, you back out alibaba, back
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out yahoo! japan, you get nothing. that's not changed. i would have thought with tumblr, i would have thought with some of the yahoo! search, with -- help me here, will you? that they have -- other things. yahoo! finance, yahoo! finance. >> yahoo! finance. >> our partner. >> lives on as an incredibly strong brand in that area. tumblr is another name. >> tumblr. >> yes. >> but, of course, there have been recent management changes that carl mentioned. we come back to this a number of times, jim. you complete the alibaba spinoff, 384 million shares. they call the abico spinoff. you're left with not much. you're left with a relatively small company run, of course, by ms. myer and then the question is what is the strategy there? what is going to be done to
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really move the needle? still have the stake in yahoo! japan. you take that out, it's even smaller to your point, you made many times, you're not paying much for that core business in terms of a multiple ebita. maybe you shouldn't be. >> i was hoping maybe they would use that cash to buy something like -- like a zillow which had a good quarter then ebita was disappointing for q4. maybe get a subscription business. maybe get one of these -- all of these different food delivery businesses. i don't know. grub hub has come down a lot. maybe roll that up. they've got to have a strategy that has something. i don't see anything yet. nothing is materialized yet that makes you say, you know what? i have to own yahoo! because of x. >> not to say she hasn't spent money on going after at least named talent. acquisitions of talent. >> yes. that's why i kept thinking
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yahoo! finance could be the ultimate. look at aol with verizon. >> it will be interesting to watch whether she comes under pressure at all. what the board of directors there decides over time if they're not seeing things move in the direction they'd like. she has returned a lot of capital to shareholders. she made good decisions when it came to not selling as much of alibaba. >> fantastic. >> at certain times. given the pullback in the stock, others said maybe they could have sold it all. they couldn't have they were locked up. a lot of cash. we'll see. that said, it's been four years, right? >> look, she did -- in terms of preservation and capital, there's a lot of companies in that area. if you look at the stocks, other than, you know, the king stocks, facebook and amazon, google, they're all bad. all the internet companies,
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link link linkedin has been good. you look at yelp. yelp. grub hub. grub hub. zillow. no valuation creation lately. >> she joined in july of '12. in july of '16, of course, it will be four years. that's their annual meeting around then. >> maybe they can buy trip adviser. that would be good to own. >> talk to the ceo of trip adviser later this week. >> really? >> i will be. >> it will be interesting to see. that expedia tie up -- expedia is on the move. they are. >> very good company. the homeaway decision, listened to that interview. geez, they can really be a force. even against airbnb. that was another one that was right there for the asking. she could have bought homeaway. brian sharpe built a fantastic company. just about to break out. what happens? expedia merges with them.
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there's so much within homeaway. b bedandbreakfast.com. >> very excited about that, aren't you? >> yeah. >> yeah. >> i am. >> i think it's great. >> thank you. >> we'll get cramer's mad dash and count down to the opening bell. another look at the premarket. more "squawk on the street" in a minute. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
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(friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! ♪ all right. we have a little research here that will move stocks some. we'll get to that on the mad dash. about six minutes or so before the opening bell.
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>> first data, david, came public to a muted reception. now we have nine firms coming out and saying you should buy. nine buys. it's kind of interesting to have nine buys. not many companies that would merit nine buys. because -- especially ones that nobody wanted when it came public. but, any way, here it goes. various reasons why. well, it's terrific. it's great. you want to love it. first data the best ever. little penguin on the other side. >> that's the typical -- it's a typical if underwriters come out after a month, i guess, and say we don't like it. >> yeah. >> that's when we do -- >> one thing i would say, it's not -- it is expensive versus the rest of the group. i don't blame them. it's like synchrony, which was priced low and worked. this incident start off well. >> no.
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but they brought it back nicely. >> they loved it. a lot of people would say it's like the panthers. it's the panthers. cam newton. just using a football analogy. >> got it. retail. moving ton retail. >> jpmorgan did exactly what i feared. macy's, dillards, nordstrom, kohl's, saying they have too mu much cold weather inventory. a lot of people walking around in shores this weekend. not looking for gaberdine pants and wool jackets. that's not the core audience the companies need. north face, no. about-face, t-shirts. >> it's really that easy? >> yes. >> it will get cold. >> they will report this week. >> how do you know? are you pro keystone? >> everybody's going out to the
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mall. >> no one is at mall. have you been to the mall? >> no. you were at costco. >> i was at costco and homegoods. holy cow. we're having thanksgiving at my house. out of thanksgiving stuff. aisle after aisle of other holidays. ho homegoods, tjx, costco, jam, jam. a lot of the stuff now natural organic. >> how about taste? we have the opening bell.
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you're watching cnbc's "squawk on the street," live from the financial capital of the world. the opening bell in about 40 seconds. earnings season finally coming to an end. about 444 of the s&p already reporting this week, cisco, nordstrom, macy's. >> these retailers. maybe it gets cold between now and when they report. it's going to be raining. not working. >> longest winning streak of the year on a weekly basis despite
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the fact that the dollar is the highest since april. remember when the dollar was a problem? >> look at caterpillars, and cummins. they're starting to roll over. they're rolling over again. >> there's the opening bell. at the big board this morning, veterans on wall street. the bob woodruff foundation highlighting their upcoming employer symposium. over at the nasdaq, arc best, a logistics services company. haven't gotten dupont on the record yet. ed breen, ceo, after serving on an interim basis. >> stock has had a major tear since that not so good report and maybe recognition that things are more dire. people love breen. he brought so much value previously. >> that's quite a move from the bott
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bottom. >> what a move. >> i don't think any of us are surprised he was made permanent ceo of the company. the other gentleman on the board may have wanted the job. >> don't you find it interesting that ellen kullman did put on people who were brudis. >> et tu brutae. >> i do think that continued to her demise. >> trojan horse. it's been good for trian. give than move in that stock and ge. hello, ge. >> did ge go through 30? >> that's a key psychological point. not quite there. >> no, but it will i think it goes through. ge the right place to be when they finish this deal. >> 52-week high.
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29.95. >> best performing industrial. the one where all the money is being funneled. people don't want to own the ones levered more towards china. it's interesting. they do have china and oil at 19% of the company. the rest is doing quite well. berkshire hathaway had a lot of energy. berkshire hathaway, railroad was good and energy good. >> the core insurance business the only fly in the ointment. you mentioned retail. jpmorgan cutting lb. city cutting their targets on macy's and kohl's. the weather, elevated inventory. what kors and lauren said about the channel. >> i went to macy's. you walk in, the warm weather stuff is right there. it's just very, very difficult. macy's, i remember a time when that stock was trading at 72. it's at 48. what are the activists saying?
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did they become passivispassivi? >> no, they haven't. i think there's still some hope there will be some sort of a transaction involving their real estate. i said hope. i don't know that it will be reality. they are reviewing it as we know at macy's. in the meantime since starwood first announced the position, the plan, how much value could be created, that stock has done nothing but go down. >> the fundamentals were something that people didn't talk about. one thing that the activists were famous for is that they got involved with companies that would do well any way. this one did not do well. >> not yet. >> not yet. valeant hasn't yet. >> you were a big fan. >> of macy's? >> of course. >> the weather is weather. >> you think well of their coe, for good reason. >> cfo, too but in the end, this is a play on weather. and amazon is everywhere.
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people know their size. i buy a lot of things at macy's. i think macy's prices are terrific. now when i go online i see that same problem. you can get it on amazon. everything i can see in macy's i can get on amazon. amazon delivers. has no no-cost thing. i'm on amazon almost daily. they seem to know what i like. >> they do. they have a computer that tells them. >> they do. i bought one book -- >> they have a good algorithm. they know basically you will buy everything. >> you know that people who bought this one book then bought another. >> you must have a lot of closets. >> ridei read a lot of books. not caught up on "homeland" " n "banshee" and "narcos" because of this book reading and fantasy. i apologize to the wife who says you watch too much tv. yesterday was incredible. i missed that morning game at
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wembley, whatever. >> aside from that you caught every game. >> i did catch every game. i caught every single game. some of it i snuck while shopping. i caught every game. there was not a game i missed. >> that was heck of a win for your birds last night. >> amazing. i stayed up. still had to get up at 4:00 to work out. >> what is their record? >> .500. giants are still winning. giants had an ugly win but a win is a win. >> best start since '06. >> it doesn't matter. panthers are oh my. green bay ran into a buzz saw. did you see that video of rodgers throwing his surface tablet. >> cooler heads must prevail there. i don't like to see that cool team be so troubled on the sideline. >> yes. >> troubled. get that under control. >> it's going to be a busy week for food. mcdonald's investor day.
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today buffalo wild and pizza. >> those have been killed. a lot of people feel the labor issues are -- the minimum wage. apropos of what happened last friday when secretary perez was on. people getting jobs. mcdonald's is interesting. i hope to meet mr. easterbrook. he's a force. he's turning mcdonald's around no matter what. i don't know if you've been to mcdonald's lately. david, it's better. >> haven't been. >> i think it's about thor. faster. >> qualcomm, cut to neutral. we talked about that a lot last week. >> geez. i don't know. the problem is, again, they make product, they're not being paid. which is historically been a negative. >> well -- the licensing business does have a disproportionate impact on their bottom line. and that was soft because of
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china. the licensing agreements are there. the chip business did all right. >> yes. they have a lot of cash. they're resourceful. they're absolutely resourceful company. i don't know. if i had a catalyst, if you knew that the chinese were suddenly going to start paying, you would wish to be in that stock. >> how do you know when the chinese are willing to start paying? >> china is china, they do whatever this want. last time i looked, chinas s o doesn't listen to anybody, except trump. trump, very spokesman-like on "saturday night live." >> best ratings since the 2012 cycle. >> is that true? >> 6.6 household rating, even though the reviews of the show haven't been stellar. speaking of china and qualcomm, apple today at 121. ipad pro will be available wednesday online and apple stores. >> i'll get one. >> you think so? >> i have to start watching some of these programs without the wife seeing it.
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you can watch it on the ipad pro. she doesn't know the difference. she's in there doing that mini crossword puzzle. have you tried that? you can finish it in a minute. >> did get my cardboard box yesterday. >> so did i. did you use it. >> my son was using it. >> have you downloaded the app? >> yeah. he downloaded it. >> shoot, got it. >> going to tokyo, jerusalem. >> "times" doing a lot of interesting things. a lot of interesting things. >> time warner shares, i wasn't here friday. you guys were digesting disney. didn't seem to do a lot for time warner. when i was talking about time warner and the fall since that fateful conference call. i do want to clarify. i said it wouldn't be worth 85 now. when you adjust it for fox's decline in the stock price, you're talking more in the mid 70s which is important to note. not that that is coming back. not saying that at all.
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saying value is a way to look at it. >> what if you were to add back that foreign currency? what would that number be? >> better. >> i'm saying that because viacom reports this week. that's mr. over the top. what viacom programming that i have to watch that i can't get on my apple pro? >> great question. >> they don't have baseball. >> nope. >> the guy who runs time warner versus the guy who runs viacom, i don't know. one is -- >> yeah. >> one is -- >> great american. >> he really is. >> great american. >> completely great american. the doubt that i had is sinful. he'll be back. bigger than ever. that's my view. >> viacom down 32%. we will be watching to see earnings, as jim said. >> they have -- do they have cash? i shouldn't say a lot of cash. they used to buy back stock. >> they have some. >> xwrshcbs, where do you come
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there? >> better. >> content king? >> coined by the man who returns both of those companies, sumner redstone. >> cbs never recovered from the 10:30 a.m. lower the bombshell. >> bombshell. >> wasn't mediagetton. >> i parsed the disney number. geez, they really just forget the idea that seven people cut the cord and talk about big things. big, big, big. espn doing so well. espn doing so well. espn, bristol connecticut, they got -- >> i know it. i know it. you know hearst owns 20%. >> do we know that? >> i think it's 20. >> oh, god. >> i said once it's more. i think it's not. how did you remember? he remembers everything. >> i have to tell you, i thought
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disney's conference call -- >> nothing goes in that head that doesn't -- >> it was like a good movie. it was a good movie. wasn't bond. >> wasn't michael clayton. >> still made $76 million. >> didn't get well reviewed, though. not really. >> daniel craig is cool. he's great. >> very cool. >> yes, he is. >> speaking of disney, that's leading the dow, but not helping much. down about 92 points. let's get to bob pisani on the floor. >> good morning. happy monday. modestly to the down side. remember, this has been a great run in the fourth quarter. six weeks in a row now the major indiceses have been up. it's been a broad rally. nasdaq, dow industrials, s&p 500, russell 2000. when you get all of them up 9%, essentially in five or six weeks, that's a pretty broad wally. the one obvious loser is dow utilities. rough week last week. interest rates -- treasury yields rose. that's never good news for
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interest rate sensitive vehicles like dow utilities or reits. broad rally. as far as sectors, i see treasury yields up a bit. continuing that move they had. the big move on friday. i see the banks again up. they had a great week on friday. zion's. all the regionals and the big monster banks like bank of america fractionally on the upside. oil started weaker. saudi arabia was talking about continuing to defend it's market share and keep production levels high. i think that hurt west texas immediate a bit. it's now gone into positive territory. all the energy stocks that were negative early on are split. i would say 50/50 on the energy stocks. apache did receive a takeover offer, but they did not identify who it was. did not confirm it from the company. still out there. apache up close to 10%. the mining stocks are down a bit.
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bi billiton had a significant mining accident in brazil over the weekend. that stock trading down. was down more because of trades in australia. in china and hong kong, despite the fact that chinese exports in october fell for the fourth consecutive month, the shanghai was up. this is the highest level since going back to the end of august. all those troubles they had in june, july, august. things have stabilized considerably since then. in fact, i'll tell you one of the big things that's happened over the weekend. signs of stability, they had an ipo. china international capital corp, this is the oldest investment bank, a state-owned bank. they successfully raised $811 million in hong kong. the stock trading up 11% on its first date. even though it's state owned and
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cornerstone investors put in for the ipo, they were themselves state-owned companies. this is the first time we saw an ipo thaw going on in china. there you see it trading in hong kong dollars. my inbox was jammed over the weekend with speculation on whether the fed would raise in december or not. people were arguing they shouldn't raise in december. they can't raise next year. i think s&p capital iq, my friendses over there, looked at this. the fed does raise in december. the argument they wouldn't do it is wrong. they raised five times in december. 65, 68, 1980, 2004 and 2005. people argued they would be stuck to raise next year at all because of a presidential year. that theory is wrong. they have raised five times in the third quarter, that's next year, in '65, '68, '80, 2004 and
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2005. the bottom line is the fed and can will raise into december and can and will raise in election years. the dow down 111 points. sitting at the lows for the session. >> thank you very much, bob. let's check in with rick santelli in the bond pits on this monday. good morning. >> good morning, carl. listen, bob's right. fed has done things during election years and in decembers. traders down here don't talk about whether they have or not. they talk about whether it is a terrific idea or not. on the electielection, what tra are concerned about is there's volatility with normalization. oh la la, look at rates, okay? if that's the case, in financing and short-term issues which is already a big deal, they call it the turn at end of the year, just questioning the wisdom of it all. if you look at a two-day chart of tens, you can clearly see the dynamic in action.
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we could argue that this is in response to better data, but it's specifically the data that the fed seems to put at the top of the list. nobody that i see on this or talk to on this trading floor would say that the global outlook for economics is improving. it isn't. but the jobs, take it on its face value, take the fed on face value, normalizations, bumpy has begun. if we look at yield curve and start out first looking at what a generic five year. look at it since october 1st. consider we know fed influences on the short end. but it's everywhere. it's bigger on the long end. look at tens to twos. okay? look at tens to fives. you see a difference? look at 30s to five. see that same similarity? why? because it's the five year that seems to be the darling and the long on the street. boy is that changing quickly. if we look at what's going on with tens minus bunds, i talked about this a lot. notice something has changed?
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of course. it's getting wider. what is going on there is our ten-year normalization. now the bund gets to feel what it's like to be a passenger on a roller coaster ride. finally year to date on the dollar index. once it went through 98 on a technical basis, off to the races. there's more to the story but you can keep it simple sometimes. carl, back to you. >> thank. when we come back, priceline down on guidance. but the travel website also taking aim at airbnb. we will talk to ceo darren houston. and also ahead, take two's strauss zelnick. we will hear what he has to say about activision buying the candy crushmaker. can a business have a mind?
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a subconscious. a knack for predicting the future.
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reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? alibaba is gearing up for this wednesday, singles day, the biggest online shopping day of the year in the world. singles day could generate $12 billion worth of sales for alibaba. last year they reported $3.9
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billion of sales on singles day. total u.s. sales for cybermonday, $2.7 billion. a year ago i was there to witness that. that was also the high for the stock around this time of year a year ago. alibaba shares have fallen dramatically i think is a fair way to say it. almost 120 bucks. but the numbers will go up. seems to be no doubt about that. mr. peck at 12 billion in one day. that's a big number right there. should they reach that number, he says, it will represent 29 gmv growth, in line with the growth they saw last quarter. all of this impacts yahoo! which we spoke about earlier in the show which is getting closer to spinning off its 15% stake in alibaba into a separate company. >> i think that singles day will be huge. consumer spending big there. middle class number that you came up with is the most important thing for baba. the long-term trend. >> the long-term trend.
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that's the way -- it is the key way to play the growth of the middle class consumer in china as they do continue to try to change the mix over there. >> yes. >> from exports to consumption. there is the man, executive chairman jack ma. he will join us live on wednesday. >> really? >> singles day. he'll be there for a first on cnbc interview, we hope here. >> when we come back, we'll get stop trading with jim. dow down 131.
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bob dylan. to improve my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? do be bop. be bop do. do be do be do. do do do be do.
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dow down 126, being dragged lower mostly by ibm among others. dow is once again negative for the year after closing above that watermark on friday with the jobs number. time for cramer and stop trading. >> i wish i mentioned buffett reaffirming ibm, you would think it would be up not down. people will want to be in the financials in the worst way. beth moony has put together a good banking key. deutsche bank does not like first niagara. they cut it from buy to hold. i think beth does a good job.
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>> you're thesis today is they are the group that is still room to buy. >> i think there will be multiple rate hikes. i think the cash balances will do well and it will surprise how quickly the fed must raise. >> all right. what's on "mad" tonight. >> the company, horizon -- hcmb. this is a company, so you know, that's been desperate to show it's not valeant. the stock sup huis up huge. they say we're not valeant, we're not valeant. we're not valeant. blackhawk is that group when you go into a store and you see that wall of cards that you can buy, that's blackhawk. and cyberark. everybody was very upset about fireeye. cyberark had a good quarter. >> long week ahead. >> yeah. very big week. retail is the tale of the tape. >> i know. >> retail and cisco. >> i have to tell you, i know
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that -- someone was saying, jim, in arizona it's sunny all the time and retail does work. my father sold gaberdine pants for gimbel's. if you got warm, you didn't have any food at the table. except tang. that was pre-tang it was that del monte syrup fruit cocktail. you know what that is? fruit cocktail? >> high fructose corn syrup. >> three diamond, three diamond tuna. >> we'll see you tonight. "mad money," 6:00 p.m. priceline's houston after the break.
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good monday morning. welcome back to "squawk on the street," i'm carl quintanilla with simon hobbs and david faber. tough start to the week. dow down 133. biggest drop since october 14th. s&p biggest drop since october 13th. some of that goodwill from friday's job number is in the rearview mirror. >> shares of priceline falling
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thanks to a weak outlook. but the company is looking to take on better airbnb. plus norwegian cruise lines looking ahead to its next chapter as it christians its newest ship in miami in a moment. we'll go there live to talk to the company's ceo. stocks falling today but still on for a six-week winning streak. the fourth quarter looking to be the strongest quarter in the last two years. find out how you should be playing the markets. >> coming up later, perrigo urging shareholders to reject the offer from mylan. the ceo will be live at post nine for an exclusive interview in a half hour. >> the ceo of priceline is calling out airbnb for the first time publishing figures to demonstrate it built up as many as three times apartments and villas to rent and all instantly bookable online. priceline stock is lower on downbeat guidance from the current quarter on lower bookings in this country, albeit
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with better than expected earnings and revenue figures for the quarter that just passed. joining us live is ceo darren houston. welcome back to the program what do you think about the quarter? >> well, simon, i think we had a fantastic quarter. we beat 5% on the bottom line. we had 12% bookings growth. but, in fact, in cost and currency it was 29%. we continue to face currency headwinds. we hope those will abate going into 2016. overall, i feel great about the quarter. >> it's inevitable doing the job that you do, that every quarter people will wonder whether or not the company is slowing down. if you look at the rate at which you're physically booking hotels, it's still up 22%. but it's a deceleration from the 26%. people are worried. you are a conservative guider anywhere. people are clearly worried about what you're saying on this
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quarter. should they be? >> i don't think so, simon. our guidance tends to be conservative. there's a lot of factors we don't control. we had a strong q3. we started off with a strong q4. we do face some headwinds in the market. there was a greek crisis in q3. the issue in egypt. overall we're a welledy vee divd business. over 1 billion guests have stayed on booking.com. the room nights we're printing which are double the nearest competitor growth rates are always difficult. but year after year we seem to be able to find ways to keep that up. i'm optimistic about the future. >> the law of large numbers is what people worry about when they have companies your size. how much of this is to do with bookings in this country? your strength, your profit center is booking.com in europe,
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of course. i ask the question because you broke ranks with your rivals at expedia and listed your inventory or said you would three weeks ago on trip adviser. that did huge things for trip adviser's stocks. is that in the belief that a sale is a sale? let's just go with it? >> well, no, not at all. one reason we didn't participate in trip assist for over 12 months is we wanted to make sure we got the product right. we wanted to make sure we had a product well branded, we had a chance to market to guests. we feel like we're there with trip adviser. we'll be launching on trip assist in the coming weeks. we're quite optimistic this will be as good an advertising product as when we buy google search or anywhere else. we didn't do it as an act of desperation, we're just happy with the economics and business deal we've done. >> you're a deliberate organization.
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not just the conservative guidance. you're careful what you say in public. when you decide to break out the numbers as you have done saying we have 6.6 million vacation apartments and villas, igloos and treehouses, whatever it is, that people can very easily book and book instantly online three times as many as airbnb or people will notice it's three times as many as airbnb, what are you trying to do here? what gap are you trying to close? what are you trying to say to chessky at airbnb? >> simon, one of our biggest challenges is we have a fantastic business. as i said, over 1 billion guests stayed. three times the inventory in this non-hotel space than any of the nearest competitors. we have taehave a tendency -- wo do, talk about it later, not talk about it and do it. this is a chance to speak to people that we have a wonderful product for those people looking
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for something unusual to stay in. anywhere around the world. we have a great business and a differentiated product from airbnb. our product charges no fees to consumer. it's instantly verifiable. there's no back and forth or e-mail with the host. we hope to show americans who many may not know the brand booking.com that there's a fantastic off their many may not have discovered yet. >> it's different. you have built up a lot of -- we spoke about this privately and publicly. a lot of these businesses you got online through foot lever. thousands of people going out and knocking on doors to try to get them to come to you as a business. that's very different from airbnb which, for want of a better expression have a zeitgeist. with you all your revenues, 69 billion to $70 billion.
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how do y you close that gap? i guess just keep telling our story. we're a money making business. we built this business to be the world's largest accommodation platform. we have open table, the largest player in the restaurant space. that's about to see the its 1 billi billi billionth, we have to deliver every quarter. we always built the priceline group on premium brands, now our objective is to make sure everybody knows about it. you can only imagine how big we can get if people actually know our brands. >> do you regret the fact that you're a public company and you have to be punished quarter by quart fer you're ner if you're s fast as people think shoo you s? >> ultimately we have to make
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money. we always had that philosophy as a business. i have no stress or pressure being a public company. priceline is one of the best performing stocks in the s&p 500 over the last ten years this year, despite today's fluctuation or tomorrow's, we're up for the year. and we'll continue to press forward and continue to deliver for shareholders. >> and that is without doubt. darren, one last question is on open table, which you raise a senior member of the industry on friday said i will interview darren houston on monday, what should i ask him? he said ask him about open table. darren knows where people are traveling and staying around the world. millions and millions of people. why do they not use that information better to target the restaurants local to them? why so slow on that? >> you know, part of it has been when we acquired open table we have a dream of making that a global business. and when we bought it, a lot of
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the systems issues, we knew when we were going in. we had our eyes wide open. we've been doing a lot of replatforming. we've been expanding open table to more markets. it's not a global product yet. americans can go in any big city and use open table at any high-end restaurant. if you go beyond london and the united states, we are still rolling out the open table product. ultimately, you're right. we can connect diners and travelers easily. we're taking it a disciplined step by step basis so we build a platform that is rigorous for the long-term and not rush into it in the short-term. we're happy that that business continues to grow. >> i know you have to address the staff in 20 minutes time. we'll let you go. thank you for spending the time to talk to us. darren houston, the ceo of priceline. when we come back, why wall street paychecks are expected to drop for the first time since 2011. and the continue visit
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surrounding ben carson and his personal history. a check on the markets. down 155. s&p down 18. that's the biggest drop now since september 28th. back in just a moment.
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republican presidential candidate ben carson coming under fire after questions arise about his personal history. our chief washington correspondent john harwood has more on that in d.c. john? >> reporter: simon, ben carson is learning all about the scrutiny that becomes when you back presidential front-runner. he's faced questions about his credibility since our cnbc debate a couple weeks ago when carl asked about his well documented relationship with a controversial firm manatec. he denied having a relationship with them. this weekend the scrutiny is about elements of his story as a young person a college student and the question of whether he actually received an offer of appointment to westpoint, which he has talked about in his book. but it appears he never went through the selection process. here's a nip pet from a contentious press conference he had on friday night. >> something has happened with the words, a scholarship was offered is a big deal.
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but president of the united states, his academic record is not -- tell me how -- tell me how -- tell me how there's a equivalency there. doesn't matter where it is. >> it's in the book. >> that's silly argument. >> a silly argument. >> you see ben carson was turning the issue back on the media and on president obama. and his records in the past. he continued that conversation with chris jansing on "meet the press" yesterday and indicated that he wasn't yet prepared to acknowledge the legitimacy of this particular line of inquiry. >> you said this 20 years ago, this didn't exist. i have not seen that with anyone else. if you can show me where that's happened with someone else, i will take that statement back. >> now, of course, this comes in a republican race that is very unusual by historical standards. you have ben carson and donald trump, both commanding, together, about half of the republican vote. but very few republican
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strategists actually believe that either of those men will be the nominee of the party, which is why the betting markets say marco rubio is the favorite for the nomination. that's based simply on historical precedent, not on current evidence. very unpredictable race. we'll keep watching. >> what about the central accusation that he makes that others are not under the scrutiny, this is ben carson, they're not under the scrutiny he's under. trump. would you say that trump is under the same scrutiny as carson at this stage? >> yes. anybody who goes to the top of a presidential nomination race is going to get heavy scrutiny of their background. i recognize some conservatives say president obama was not vetted in the nomination. that's really belied by the evidence that say his association with his minister in chicago, became a huge controversy. his association with william
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ayers became a huge controversy. this comes with the territory. >> thank you. for the first time in years wall street bracing for lower bonuses. mary thompson has that back at hq. good morning. >> that is according to a presentation being made today by the well known compensation consulting firm johnson and association. behind the expected delcline a choppy market. certain segments will see increases. hardest hit is fixed income traders. bonuses falling between 10% to 20% from last year. hindered by the uncertainty of global interest rates. bankers focused on underwriting will see a 5% to 15% decline. asset managers seeing a 5% decline. wealth management also down 5%.
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johnson & associates expecting bonuses to be down 15% or more among hedge funds. equity has been a bright spot for big banks. traders there can bonuses to match or exceed last year. m&a seeing big payouts. alan johnson, ceo of johnson associates says uncertain market conditions are likely to continue into 2016, he's thinking big bank also have to cut staff next year. >> we're already seeing it from the europeans. coming up, norwegian cruise lines unveiling the newest addition to their fleet, complete with a water park and a craft brewery. we will talk with the ceo of norwegian cruise line when
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norwegian may be the smallest of the big three publicly quoted cruise operators, but under it's new ceo, they have outperformed. the stock gaining 55% over the past 12 months. this morning norwegian unveils its newest, biggest ship "the escape." joining us live from miami is norwegian's co, frank del rio. a first on the show. nice to see you. >> good morning, simon, how are you? >> i'm good. people who cruise love new ships because it gives them an idea of where they would like to go next. investors love new ships because they command far higher margins. why is this one different? >> well, it's not different. it is an incredible vessel.
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it's the largest vessel in norwegian's flight. one of the five largest ships in the world. the largest and fastest aqua spark at sea, a three stories ropes course. the largest haven suite, it's an incredibly beautiful courtyard. 16 restaurants. a margaritaville, first at sea. two restaurants by iron chef jose garces. this is why you go on vacation to have the freedom and flexibility you want to get away from the stress of every day life. this ship delivers on that promise. >> the skill in your industry is to fill what is essentially a fixed supply of cabins at the highest price you can. i don't know why you think your stock is up 55% over the last year. arguably some money has come out of the lodging stocks and gone into cruising. it seems to me the difference that you do make is that you would say that you would market to fill those ships. not really price or discount to
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fill them. talk me through how that works. >> look, first of all, the stock has performed very well because i think astute investors recognize the growth story of norwegian cruise line holdings with the acquisition of the prestige brands, regent seven seas, the addition of four more vessels just like this one. it's a heck of a growth story. i think the marketplace understands that. but our market to fill strategy is different than the usual strategies employed by most other cruise lines. that is that we spend marketing dollars to stimulate demand when demand is soft as opposed to just dropping prices to stimulate demand. we think that's a losing proposition in the long run and established that market to fill strategy works beautifully at my two other brands, that we have managed over the last 13 years. we have begun to weave those strategies into the norwegian
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cruise line brand, by far the largest brand of the three that make up the norwegian cruise line holdings. it's working very, very well. yields are up. a record high. they will continue to increase next year. >> if you look at the commentary, some newspapers will talk about your attention to detail. others will talk about the fact that you are anxious to spend money on the ships to bring them up to a higher level. i wonder what the value is in taking 14 ships into dry dock over the next two years. that's way more than half your fleet. when they're not sailing, they're not earning money. will share holders take a hit? >> i don't think so. ships have to dry dock twice every five years. now that the combined fleets have 24 vessels between nor region, ocean and regent, on average you will dry dock seven or eight ships a year. dry docking 14 vessels over a
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two-year period is no different than any other cruise line. attention to detail is important. this is a people business. we have to invest money to keep these vessels in tip top shape if we expect to command top dollar. we win our game not by being the low-cost provider, being the smallest of the three major cruise lines it's difficult to win and outperform based on low coast. we are showing and demonstrating quarter after quarter that we can beat at the top line. that's what we intend to do. >> i know you want to talk about china. you discovered china like everybody else. in the last question i want to ask you about cuba. i believe you're of cuban dissent, you want to get in there. you are frustrated that actually carnival is probably going to achieve this before the rest of you? it thought up the fathom brand with all these kids that are going to do good when they arrive in cuba help educate the people. do you wish you had thought up fathom and that you got to cuba
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first? >> well, the race isn't over. others might have announced specific plans to go. i think everyone acknowledges we're still awaiting cuban government clearance. we have all received u.s. government clearance. so, i've not given up on that race. i still hope to be first. it will be an emotional homecoming for me. i left the island when i was ser seven in 1961. can't wait to get back. >> i hope we're there that day when it happens. frank del rio joining us. ceo of norwegian cruise lines. when we come back, stocks on a six-week twinning streak. major indices seeing 10% gains at that time. as you can see, we're in the red. dow down 181.
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good morning. here's your cnbc news update. two americans are dead following a shooting spree in amman, jordan. the attack happened at a u.s.-funded jordanian police training facility. defense officials tell nbc news the gunman was a former local police officer. the world anti-doping agency releasing a critical report on russia. the report says that the country's top track and field athletes are part of a widespread doping program that goes to the russian government.
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the agency is calling for the athletes to be banned from competition. the university of missouri's governing board will hold a meeting at the top of the hour to address growing unrest. black students say the school failed to address racially motivated incidents. and diners at a mississippi ihop may have gotten a bad case of indigestion after finding their cars in a sinkhole. 15 vehicles, you can see there, swallowed up by the massive 50-foot hole. not a good way to start your day. that's the cnbc news update. back to you. >> we think we have it rough. >> exactly. awful. >> thank you very much. stocks are coming off six weeks of gains, even though major indices are in the red. for more let's bring in david leibovitz and mark vitner. guys, good morning to you. good to see you both. >> good morning. >> david, sounds like you're in the december camp or you think
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the economy is in a position now where it could withstand a hike in december. why? >> absolutely. i think the economy has been able to withstand a rate hike for quite some time. the most important thing that's putting me more towards a hike in december has do with last friday's payroll report. there was skepticism around the health of the economy following what we saw in august and september, and with robust job creation with the continued decline in the unemployment rate in october i think december is firmly back on the table. >> people starting to string together auto sales, nfp, servic services, ism. wages. will we have the conversation about whether they're late? >> i don't think they're late. i don't think they're late quite yet. what i would say is i think inflation presents more of a risk than people appreciate based on some of our models. i'm looking for about 2% inflation march of next year. the fed by going in december is
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not too late. but further kicking of the can may put them behind the curve. >> mark, is it that simple? are they threading this needle as they speak? >> they always have to thread the needle. they only move waits at their meetings, they only meet eight times a year. there's a lot that can change between the monthly employment report and when the fed gets around to make a decision to raise rates or not. i think december looks like it's likely to happen. i wouldn't say it's a slam dunk. it's probably going -- probably going to raise rates then. that's when we had it in our forecast. we have gone from this idea that the fed will keep rates lower for longer to suddenly it's going to be -- they'll raise them faster than you think. faster and higher. i don't think things have changed that much. >> yeah. there is a lot of discussion about that. goldman today points out if they move on the 16th of december, it's seven years to the day that we went to zero.
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all this discussion about consumer, retail being weak. put together the warmer weather with elevated inventories. gas prices not going down for the first time in a long time. is the consumer hold up in the holidays? >> i think the consumer will hold up for the holidays. the consumer has been the most robust part of this recovery over the past few years. to your point about inventories, we are already seeing that inventory drag. consumption hanging around. with a bit of wage growth, which may be beginning to materialize, no reason why the consumer would hibernate this winter. >> mark, is the source of concern then the dollar? what may or may not happen to exports? where are you worried going into the winter? >> i think that the clear source of concern is what's going on overseas. we saw a weak china exports number. and clearly the global economic picture is a mess. things are not improving overseas. the u.s. and the uk are islands
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of stability in a world where growth is hard to come by. i think that the linkage is back to the u.s. if the dollar strengthens further on the expectation that the fed will raise rates sooner and take them ultimately higher than thought previously, that comes back to hit or manufacturing sector which in the employment data and the ism last week looked better. i'm not completely sold that it offsets the weaker reports we've seen in prior months. not yet. >> david, it does bring us back to valuations here. today notwithstandingi inwe've corrected that august massacre. people suggest because equities in their view may or may not be inflated here, why don't you go to europe and take a gamble that strength in the u.s. is going to have ancillary effects on their economies and stocks? >> i think that makes sense. when we think about the dynamics that support equity markets in
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the developed world, weakness in the currency supported equity markets. with the ecb looking like they'll do more before the end of 2015 or announce more before the end of 2015, we think europe is a good place to be from an equity standpoint. we still like the u.s., too. the u.s. equity market is of high quality. if we see earnings growth come back in 2016, that makes the case for 7% to 10% of a year out of u.s. equities. >> you're waiting on u.s. versus europe? >> on emerging markets, still hesitant. i think the currencies in those economies have further to correct before we see, you know, higher equity reforms. in terms of u.s. versus europe, europe is in the fourth or fifth inning, u.s. in the seventh or eighth inning, still gains to be had, but more return potential across the pond in europe. >> finally, mark, we talked about wages a lot on friday. some of the charts, they're not -- as you say, they don't
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sell you immediately, but they are encouraging. i wonder if you think the jobs reports to come will show people continue to make more money. >> we do think the wage picture will look a bit better in the coming months. we also have the minimum wage going up a lot of places. a lot of that will kick in at the start of the year. so i think we're likely to see better numbers there. they still don't look great. they just look better. and that's been one of the issues. inflation numbers have been so low. so little pricing power by companies both large and small that they can't grant a whole lot of pay increases. a lot of ways they're boosting compensation is something one off. maybe it's one off contribution to benefits or a one off type of bonus payment. but it hasn't really flown through to actual hourly wages. >> that will be one to watch for sure after taking us by surprise on friday. good to see you both.
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>> thanks. coming up on the program, perrigo urging shareholders to reject the offer from mylan. the ceo will sit down wifor an exclusive interview here at post nine.on to the fast. and to help you accelerate, we've created a new company... one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward. accelerating innovation. accelerating transformation. accelerating next. hewlett packard enterprise.
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welcome back. i'm sue herera with this news alert concerning volkswagen. volkswagen will be offering a goodwill package to those people who have bought their cars. current owners and leasees of the vehicles affected by the emissions issue that has been plaguing volkswagen will be eligible for the following items. one a $500 volkswagen prepaid
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loyalty card. two, a $500 volkswagen dealership card, and free 24-hour roadside assistance for three years. you can get more details on that at the following website, www.dieselinfo.com. we'll keep you posted on reaction from either consumers or the company. but that is the latest, a three-part goodwill package. back with more in just a moment. it's hard to find time to keep up on my shows.
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x1 from xfinity will change the way you experience tv. less than five days from now, share holders of perrigo will decide whether their company is sold to mylan which has a tender off forefor $75 million in cash and 2.3 mylan shares for each share in perrigo. the tender closes on friday, 8:00 a.m. this friday the 13th. unlike a shareholder vote which has a record date share holders may hold a stock before voting, no such thing exists in a tender that makes it difficult to determine whether a sale of perrigo will take place. joining me now, a man who stands firmly opposed to that sale, perrigo joe papa this is unique in a way, joe. $25 billion company potentially,
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you are at mercy, so to speak, of your shareholders. the spread in the deal, the difference between the actual value and the stock of perrigo right now it's fairly wide. it's widening today. some would say that's a good sign for you. others would say, no, it's a bad sign. i could buy the stock right now and capture that spread and make money. which is it. >> we think it's clearly that this is a bad deal, david. as we talked to shareholders, they agree, this is a bad deal for the perrigo shareholders for a lot of reasons. as we look at that situation in terms of the spread, we think that if this was going to happen would have seen that spread narrow. the fact it has not narrowed today indicates the perrigo shareholders believe this is a bad deal and will not tender. >> now, when i speak to some of those same shareholders, it depends who you talk to. some say listen 19 times ebita,
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which is where roughly mylan says the deal is, to put it mildly, healthcare stocks to a certain extent seem out of favor. why is that not a multiple you believe is a fair one for the company you run? >> three things. if you look at this transaction, if shareholders were go forward with it, number one, it would be diluted to mylan's earnings for at least three years. that's a problem for anybody who would tender. the actual amount of growth rate that the perrigo company has experienced and will experience would be diluted and reduced if they went forward with this. number three, while there is a premium here, it's a small premium to what we have normally experienced. we've built our business very consistently to be a consumer facing business, consumer facing companies usually have traded around a 20 times pe multiple. for that reason we don't think this is a significant premium. we believe it's one of the lowest premiums offered in the
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bio pharma space in the last five years. >> 19 times ebita, 20 times earnings are two different things. >> understood. classically we do not believe that this pe multiple that mylan is talking about is any significant increase versus where we trade without it. our commentary to shareholders is given what we have talked about for our 2016 numbers, we believe we can achieve much of what they've suggested without the risk of the merger which we believe is sizable. you have to believe that mylan will achieve $800 million of synergies in order for this deal to work. everything that we looked at, we think that's a very aggressive number. >> others will say shg, listen, this doesn't happen, your stock prices will go down. it's trading at a premium to where it would otherwise be based on the potential likelihood that they get 50.1 of your shareholders to tender. do you not believe that's the
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case? >> i heard that case but also the alternate case. the alternate case is if we decouple ourselves from mylan, once that occurs after friday, november 13th we will then trade very consistently where we've traded in the past, and based on our 2016 expected earnin$2016 e $9.30 and the incremental 15 cents we'll get from a share repurchase, we think that you take $9.45 earnings per share, put anything close to our historical multiple we'll trade right through this. may be some noise the first couple of days but we think the long-term shareholders will come back into the stock based on everything we heard from them. >> mylan saying we think we're paying so much, we're concerned about the future of a biogen drug that you get a royalty stream from. you pay very low tax rate on that it's an important component of your earnings. it has run into issues lately in terms of the broadening they hoped in biogen for the label and there may be competition
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from roche. what do you say a key product that you get royalties from is in danger. >> we look at it as an important position for the use in ms. that's category that there's a significant amount of medical need. and the drug occupies a unique position as being a very effective, highly effective medication. we feel good about biogen, our partner. i heard those comments. we feel good about the long-term progress of the drug in a category that has significant unmet medical needs. for that reason, we feel very good about the future. >> you have four days to go. what will you be doing over the next four days as shareholders decide the fate of your company. >> we've been active the last seven months, meeting with all the long-term shareholders, meeting with hedge funds. over 80% of the long-term shareholders will not tender.
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we believe that from the hedge fund probably closer to 50/50. we'll continue to go out, meet our investors, talk to them, tell them 50.is, that's all it's going to take to take control. >> we've communicated the method. as i said, the shareholders, about 50% our shares, will not attend based on their comments. from the hedge fund community, we think it's about 50/50. >> you think that map works in
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your favor? >> we do. we do believe as we sit here today from that survey information, from other information, we believe our shareholders believe this is a bad deal. >> time's running out. i mean, oftentimes, we'll see somebody say let's try and get a negotiated settlement. that doesn't seem to be in the cards here anymore, is that true? >> the deal offered here today is a final offer. we believe the right thing to do is a stand-alone company. look at continuing to grow our business by 5% to 10% organically. supplement that with new products. and of course look at inorganic opportunities to supplement just like we've done in the past. that we think is going to continue to generate more value. >> you psychologically prepared for the idea? this is a rather abrupt thing. you're going to know friday morning whether you still run
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this company or not. >> i'm very confident the shareholders are smart rational individuals and they're not going to tender their shares. >> we appreciate you joining us. let me send it now to washington. >> we're getting some tape playback, president obama meeting with israeli prime minister netanyahu at the white house. obviously, this is a meeting between the u.s. and israeli leadership that comes at a time of really fraught riches between the united states and israel and the two leaders of the respective countries. the president sitting in the oval office making comments. this is tape from a few moments ago. the president addressed a number of issues in the middle east, starting with the attack this monday in jordan that killed two americans at a police training facility. it is taking the attack very seriously. an investigation is under way.
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the president says israel's security is one of his top priorities and that he and netanyahu will discuss syria and how to blunt activities of the islamic state and hezbollah. also according to this report we've gotten from the white house pool, obama says he wants to get a head start on a new military aid package for israel. the israelis would like more cash from the united states in terms of military defense spending. that's one of the reasons we see prime minister netanyahu there sitting alongside barack obama. also of course a whole range of issues in the middle east for these two leaders to talk about today. remember, this comes after we saw netanyahu come to washington to argue against the iran nuclear deal that the president of the united states supported so strongly. these two leaders have a very fraught personal relationship as well, guys. >> forgiveness, it's a key part of the tour.
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all right, let's get to rick santelli with the santelli exchange. >> like to welcome my first guest of the week, charles beaterman. beaterman, beaterman. thanks for taking the time, charles. >> good to be with you. >> all right. let's just ask the simple question that many that aren't on trading floors with interest rate futures may be asking. charles, why do you think rates have gone up so quickly in the last several weeks? >> because people think the fed is going to raise. and if the fed does raise, it will kick the stock market into low gear or take it down a lot, and it will also slow the economy and put it into recession, next year being an election year. we'll start next year with the stock prices -- >> let me stop you there. i have a lot of ground to cover. let me get it straight. the fed is the catalyst for what's going on and potentially that's damaging to stocks. so then on the other side of this mountain, after the dust settles, we should see rates
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coming down. paying attention to the negatives you just brought up. would that fit? >> yes, that's what i see happening. >> all right. so the real issue is how much of a dislocation due to normalization exists in treasuries, how wild a ride it's going to be and where will it go when the other side of the mountain's prevalent? any just general guesses? many are looking at the low 60s. any thoughts? >> when interest rates go up, costs business goes up. we're having an economy that's barely growing at all that has to slow the economy. higher interest rates create higher costs in real estate, create higher cost in the automobile industry for financing all these things. that will slow the economy. higher cost of money or making it more -- look, huge amounts of
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money have gone in. companies are buying other companies for cash. where are they getting the money? from the junk bond market. higher interest rates could hurt that game. >> let me stop you. the buybacks and the leverage that exists in takeovers and buy backs is, in part, maybe a big part fueled by zero interest rate policy. is p as that ends, that's where your dark side of stocks and junk bonds comes in that will be the leveller for rates. finish up your argument in the last 30 seconds. >> well, remember, when qe -- since qe ended, the stock market is barely -- is pretty much unchanged. despite $800 billion of announced flow. half of that from -- record amount of cash takeovers. a huge amount of stock buybacks. companies do huge cash takeovers when they can't grow any other way. if the money costs nothing, let's buy our competitors to
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grow profits if it doesn't cost us anything to buy them. if that game ends -- >> thank you, charles. >> -- there goes the economy. >> listen, i totally get it. what i hear you saying in simple form is keep your seat belts buckled, it's going to be a wild ride. >> monday morning on cnbc, let's see what's up on deck for the first alley of the week. >> we've got our guest talk a big ipo coming up and more. also the ceo of take two feeling pretty good at least about the virtual season. and carol swisher's going to join us on yahoo!. some changes afoot perhaps about that embattled internet property. all that and more coming up.
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at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping.
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good morning. it is 8:00 a.m. at yahoo! headquarters in california. it's 11:00 a.m. on wall street. and "squawk alley" is live.

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