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tv   Squawk on the Street  CNBC  November 25, 2015 9:00am-11:01am EST

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for the safety we have in the count country. >> hopefully that continues. >> yeah. >> we worry about that. but, you know what? when you worry, maybe you take the right precautions. >> happy thanksgiving. hope you have is a wonderful holiday with your family. we'll see you back here on friday. right now time for "squawk on the street." good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. jim cramer is off today. day before thanksgiving, pre-market solid on the back of a couple things. a torrent of macro data, and tensions between russia and turkey that have subsided somewhat overnight. europe has managed to gain in their early session. bonds reacting from everything from durables to claims.
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our road map begins like this. stocks set to open in the green despite continued tension overseas between russia and turkey. >> hp stocks are moving in opposite directions. meg whitman joins us. and get ready for thanksgiving. where people are traveling and avoiding this holiday season. >> busy economic calendar. consumer spending up in october by 0.1% for a second straight month. as americans boosted their savings to a near three-year high. durables up more than expected, up 3%. jobless claims fell more than expected, down 12,000 in a developing story, one of the russian pilots who ejected from that fighter jet shot down has been confirmed alive and well. russian foreign minister lavrov calling the incident a planned provocation, president putin said russia will be forced to respond to future incidents after the downing of the jet. russia saying they are open to
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some sort of agreement with nato regarding accident prevention in the future. it didn't get worse overnight. you could argue that. >> yeah. certainly european stocks are holding steady. they're rising this morning after the knee-jerk sell reaction to global tensions yesterday on the economic data. everyone is watching that ahead of the jobs report. the big fed meeting in december. i looked at the fed fund futures rate, the probability that the market puts on the fed raising rates in december. little movement after the economic data, which tells you it was good enough. there's more than a 70% chance that the federal reserve raises rates. durable goods were particularly strong with the 3% raise. if you dig into the numbers, it was across the board spending on big ticket items, commercial aircrafts led the surge. new orders for noncapital goods, excluding aircraft, up 1.3% in october. that was strong. and it was something that had been languishing. it had been weak over the last
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year or so on lower oil prices, on the strong dollar. perhaps this is a sign of confidence and the fact that business spending may have bottomed. we'll see. >> we will see. we will see. strong dollar doesn't help. >> strong dollar is getting stronger. the dollar index above back the key 100 level. euro back in 1.05 territory. it's about the strong u.s. data versus what's happening abroad. draghi dovish again overnight. they may expand qe. >> the savings rate jumps to 5.6. up strongly this year on the spending and the income number. and we'll see. we have more to come. consumer sentiment at the top of the hour. new home sales, oil inventories. yesterday's consumer sentiment was no good. >> disappointing. we'll see if this measure holds up. >> the confidence levels are volatile. new home sales will be
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interesting. in september we got that double digit decline, 11.4%. we're watching retail and travel. day before thanksgiving, one of the busiest travel days of the year. aaa forecasting almost 47 million americans will journey 50 miles or more from home during this thanksgiving holiday period. millions who are taking to the skies for thanksgiving travel are set to face more intense screening. longer security lines at airports in the wake of the paris terror attacks. i think they're telling people to arrive two hours early for domestic travel. three hours for international. >> story in the "washington post" about people traveling through heathrow yesterday said you couldn't get a tube of chapstick through tsa. it's become tight over there. still 47 million will travel this year. that's the most since 2007. 25 million will fly. 1.99 gas average doesn't hurt.
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>> if you're driving, not so bad. with more than half of u.s. gas stations charging $2 a gallon. >> really? >> maybe it pays to drive this holiday season. >> traffic can have an impact on your psyche. you arrive for thanksgiving. i'm not going anywhere. i'm just doing dishes, for maybe days. let's get to one of the top stories from late yesterday. shares of hp in the red. hp enterprise, that stock is up more than 4%. that's after hewlett-packard reported results yesterday for the last time as a combined company. with earnings per share and revenue falling short of most of the expectations of at analysts who follow the combined company. earlier this month the company did split into two separate entities. hp inc, the computer business,
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and hp enterprise with hardware, software and servicing the needs of large companies. here to break down the quarter is meg whitman, the ceo of hewlett-packard enterprise and chairman of hp inc. some are saying a mixed bag when they look at the overall quarter. given you're the ceo, i'll start there. i'll start with the overriding question that many investors have. simply in an era of cloud computing and the services that run that service, so to speak, or the hardware that runs that service, many say you are not as well positioned as you could be not selling enough into that growth area what do you say? >> it's a great question. the market is in a lot of -- undergoing a lot of change. i'm very excited about our cloud
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strategy. what customers want, they want to know where they should put their different applications. for example, customers say i got 1500 applications what should be in the private cloud? which gives you control on your own premises. wl what should be in a managed private cloud or virtual private cloud, and what applications should be in the public cloud? by the way, how do i orchestrate and organize all of this. our strategy is, we're the leader in private cloud. among the leaders in virtual private cloud and managed cloud. yesterday we announced we were partnering with microsoft azure to provide the public cloud. we have a great cloud system automation that helps you orchestrate your clouds in your data center. if you think about where the money is spent, about 85% of the spend in traditional i.t.
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most people don't understand that. the next biggest segment is private cloud. the next after that is public cloud. private and public cloud are growing at about the same rate. we are going right to the heart of what our customers are asking. i feel really good about our strategy and excited about the partnership we announced yesterday with microsoft azure. >> when will we learn more about that. >> next week in discover in london, we will go into depth about the nature of the relationship and how customers can interact, accelerate their journey to a hybrid cloud. >> as i said at the outset, hp inc, perhaps the focus of more negative focus. hpe, those results being applauded to a certain extent by investors. enterprise services in particular, people looking at saying that was better than anticipated. give us a sense as to what your
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expectations are. i know still revenues were down year over year. nonetheless, it is seen as a positive by many in terms of the overall direction. >> sure. overall hewlett-packard enterprises off to a good start. and remember, what we said, we have to have growth in enterprise group with modest margin expansion. we need to stabilize revenues in enterprise services with quite significant margin expansion. the analysts saw we are delivering on that plan. just negative 2% growth in constant currency, that's not what we aspire to because business in decline for a number of years. and 8.2% operating profit, the highest operating profit in four years. i think the turnaround is working in enterprise services and investors are seeing that it's taken longer than enterprise group but that's a long lead time business. these are long-term contracts. the people we are talking to today at enterprise service we may not ink a deal for a year.
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it's a bit slower to turn that business around. but we're feeling good about where enterprise services is, especially as we turn to these four growth transformation areas that we know customers are looking for. >> the impact of the strong dollar is felt at your company perhaps as much as any other out there. by that i'm referring to the old hp, including hp inc, which is competing against japanese competitors which benefit from a lower yen. how is the company positioned? we will constantly see results from you that say results were down, but in constant currency they weren't down. eventually we have to deal with reality. either it's down or it's up. and maybe the dollar will stay strong. >> our belief is the dollar will stay strong. we have to continue to improve the productivity, reduce costs, make sure that we are fit to compete in what i would call the new normal from a currency perspective. most american companies for the last decade had a great wind at
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their back because the currency was working in our favor. i think the next decade is going to be a bit more problematic, in that the dollar will remain strong. we have -- it cannot be these companies are just less valuable because of a different currency rate. so we're working under the assumption this is the new normal. you heard dion wexler yesterday talking about taking more costs out and being more competitive. he has a double edge sword in that the euro is weakening versus the dollar. so is the yen. so the japanese, as you point out, can price aggressively. he's got to take out costs so he can be in fighting shape in the new world order of a different currency level. that's the way we're approaching it. >> given you're chairman of that company, let me ask a question on that front. printing down 14%, personal systems group revenues down 14%. to those who say and have said many times it's the end of the era. there's a seminal change in the way people use or don't use pcs,
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they're not going to buy as many. forget this talk of cycles. what is the response from your view as chair of the company? >> yeah. it was a tough pc market. hp inc performed well. gained share in virtually every category. had the highest all-time share in the commercial pc segment for a long time. and microsoft windows 10 has not yet provided the capitalist to pc upgrades that everyone anticipates. it's still getting great reviews, but there's nearly 450 million pcs out there that are older than 4 1/2 years. at some point people will upgrade those pcs and hp inc is well positioned when that happens. >> do we have a sence as to how many will be upgraded or how many will say i'm happy with the phone or device or whatever
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they're using? >> it's hard to know, but many people still do real work and productivity, not just surfing the web. if you have to do real work, it's part of your existence, you will end up upgrading that pc. that business is a cyclical business, always has. and my view is, i think dion's view is that will rebound over the next year or year and a h f half. so tough market, but hp inc has done a good job in competing in a down market. >> since you took over as ceo of the overall hewlett-packard, 59,000 jobs -- that ends up being the total number, now there's another 30,000 potentially that you're looking to cut as well over the next two years, i guess from this point. is that correct? is that sort of the number you're still working with? >> yeah. that's the number we are still working with. we have to get our cost structure in line with the revenue of the company and we
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have to be in fighting shape to compete in what is a remarkably competitive industry. you can see the results of that in enterprise group. great performance in our enterprise group, great performance in es now, even software had a good quarter, flat growth, which is an improvement. so we have to be cost competitive. what's happening now in this next round is that we will reduce the work force, but then we have to hire in lower cost locations. so we have to rebalance this work force to remain competitive, because so many competitors have more of their work force in off-shore locations. we need to do that. we'll consol laid into five major offshore centers. it will make us more competitive. what's amazing about this is that we have taken the work force down by the amount that we have, you cited 59,000, and yet in enterprise services, the net promoter score, that measure of customer loyalty is the highest in the industry today.
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54. that's higher than ibm, higher than atos, higher than accenture, that's an important advantage for us because customers want low cost but high quality because they're entrusting whether it's desk top services or i.t.o., they're entrusting it to hp. >> finally, you mentioned it, turning the corner. many investors have been waiting for that day for a long time. i don't want to take away from the fact that you had revenue growth and constant currency. nevertheless you're talking about a company whose market revenue is half of that, so many believe you're not fully turning the corner in the sense of real growth what gives them or gives you the confidence that phrase that you used is going to be true? >> yeah. well, for hewlett-packard enterprise, this is the second consecutive quarter of growth in constant currency.
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we have two quarters under our belt. we need to continue to deliver. we have every confidence that we will grow revenues in 2016 in constant currency. you saw what we did in enterprise services. we have a lot of confidence we'll be able to grow in constant currency. people are saying you have two quarters under your belt, let's deliver a couple more. that's what we intend to do. >> meg whitman, appreciate you joining us. meg whitman, ceo of hewlett-packard enterprises, chair of hp inc. happy thanksgiving to her as well. >> with the currency forecast, nice. >> you liked that. >> in so far in 2015, investors in retail stocks have had big reasons to be thankful. the sector outperforming the s&p. when we come back, we'll look at what to expect from some names you know. eight big macro reports
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throughout the course of the day. and volumes on the day before thanksgiving are usually good. more "squawk on the street" from post nine in a minute. to stir up the holidays, before earning 1% cash back everywhere, every time and 2% back at the grocery store, even before they got 3% back on gas, all with no hoops to jump through, daniel, vandi, and sarah decided to use their bank americard cash rewards credit card to sweeten the holiday season. that's the spirit of rewarding connections. apply online or at a bank of america near you.
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♪ your ticket to a better night's sleep ♪ opening bell in just over ten minutes. let's get to art cashin,
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director of floor operations with ubs who joins us here at post nine, who joins us with his thanksgiving tie. it's a doozy. >> can you get it? >> always has the best ties. >> very nice. what are -- what's the seasonality like around thanksgiving? >> the week has an upward bias, close to 70%. not enormous, usually in advance of 1%, 1.5% for the week overall. there was some concern since we had such a marvelous week last week, that we may have eaten our turkey a little early. we're balanced out. geopolitical tensions, a lot less than they were at this time yesterday. i think a key factor could be the surviving pilot what is his testimony? what are his claims? but i think putin realizes there's no benefit in going head
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to head here. the common enemy is isis. that's where they want to go. that's what the market senses. that's what they sensed yesterday afternoon. >> i'm looking at oil prices here, art, crude oil back to its weakening ways. down about 1.5%. brent down as well. yesterday a stand-out in the session. was that significant? both for stocks and potentially some sort of turning point for oil? >> well, on friday oil looked like death warmed over. it looked that way monday also in the morning. then it reversed. and to have yesterday's rally, many of the oil traders were hoping it was a definitive reversal, and that we could begin to make progress. we'll watch it closely today. if they give back all of yesterday's gains that will be a worrisome thing. >> it is a little perverse that so many have been calling for some relief in crude, but this is the way -- it's not the way you want to get it. >> no. you want to see some definitive
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production changes. they haven't come up yet. we had that false alarm on monday. in which supposedly saudi arabia said they might want to stabilize things. there's been no follow-through on that. >> reuters this morning says the debate is seemingly settled on fed funds. you agree? >> no. i make it 55% to 60% chance. the numbers are not that good. they weren't shockingly bad today but they're not really that good. i think the payroll number coming up before the fed decision will be weaker than people believe. >> how do volumes look? we have a holiday shortened trading week. you said a positive bias. market has not lost ground on thanksgiving week since back in
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2011. >> unfortunately if we put up the charts, you'll see that today, the current market is a good deal like the market of 2011. so, we'll help not. >> art, happy thanksgiving. >> you, too. >> art cashin this morning. >> still to come, a look at the biggest movers of the morning including deere. we have a lot of economic data to digest coming up. more "squawk on the street" straight from the new york stock exchange straight ahead.
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before the thanksgiving day holiday. santa is in the house. only question is whether his rally is close behind. we'll talk about that when the opening bell rings. announcer: if you'd give thanks for a better night's sleep... [barks] sleep train has just the ticket. [train horn blares] through thanksgiving weekend at sleep train get three free gifts with selected mattress sets! save up to $300 on beautyrest, posturepedic, serta,
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you're watching "squawk on the street." live from the financial capital of the world. the opening bell in just about a minute. as the street gets set to put one last session on the books before thanksgiving with a lot of news subsiding tensions between russia and turkey. the macro menu is about as full as you see these days. everything from claims to durables to income. later on home sales and consumer sentiment. for the most part, as cashin said, not barn burners. >> one bright spot, income, that went up.
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sort of negative or cautious news on that is that the savings rate went up, not the spending rate. more americans are putting that money away to save, perhaps wary of the future. >> there's the opening bell and s&p at the bottom of the screen. at the big board, you might know that guy on the right, santa and ma macy's celebrating the 89th macy's day parade. musician chris daugtry up there. and at the nasdaq, stupid cancer, focusing on adult cancer through advocacy, research and support. there will be a few movers to watch. deere is one, beat 75 cents, revenue light and more bearish news about equipment sales in fiscal '16. >> the story with deere is that expectations were so low, it is getting a nice bounce, perhaps reporting news that wasn't as bad as feared.
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sam allen in his outlook did say the outlook represents a level of performance that's actually better than deere that experienced in previous downturns, even though they're calling for a lower forecast in the year ahead. next year's sales to drop about 7%. the environment for deere is tough with agricultural prices down. that hurts farmer incomes. of course that hurts the spending they'll pay for those john deere contractors and other heavy machinery. >> no move in caterpillar. sometimes those two do move into unison. this is spaced specifically on deere's expectations, guidance. >> looks like they're the top gainer early. hewlett-packard enterprises up there as well. >> yes, hp, we spoke to meg whitman. they did have a better than expected, i guess, quarter than you might have thought. don't forget, we have seen these two stocks since the split
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earlier this month move in opposite directions. interestingly hp inc, the pc and printing business was up. up sharply. hp was down. today you will see a reversal of that. hp being weak. down 14% of the top line in terms of psg and revenues. we did speak to meg whitman who is the chair of hewlett-packard inc, and she can speak to its business. that's in more focus this morning rather than hpe given the declines there. is it a seminal change in the way people buy or don't buy pcs or is it simply a cycle? i asked that question.
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had the highest all-time share in the commercial pc segment for a long time. and microsoft windows 10 has not yet provided the capitalist to pc upgrades that everyone anticipates. it's still getting great reviews, but there's nearly 450 million pcs out there that are older than 4 1/2 years. at some point people will upgrade those pcs and hp inc is well positioned when that happens. >> that, of course, is a cycle, if, in fact, this business is still cycling. don't forget, 2014 was a good year. so -- >> look at that. hp inc down 11%. >> it's getting hit. the stock had been up. both companies are trying to establish different shareholder bases. it's going to take time for that to happen. you have hp inc returning most capital in the form of dividends, buybacks. the other is positioned more as a growth company.
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hpe. the company that meg runs. >> speaking of establishing a new shareholder base, hormel is a big gainer, announcing this morning that the board approved a 2 for 1 stock split. hormel makes spam meat and jenny-o turkeys. they just reported a decent quarter and they've been doing well this stock up 38% so far this year. it's been doing well on signs that americans want more protein. they're buying more processed meat despite that warning from the world health organization that processed meat may not be good for you and may cause cancer. a lot of folks expected that to hurt hormel, but this stock is a monster. it goes up basically no matter what and no matter how bad the headlines are, whether it's avian flu or warnings about spam. >> comes on the heels of nike's two for one as well. meg whitman did talk about the strong dollar being the new normal, expecting that to remain
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the case in '16. dollar index today 109. the highest level since march 16th. the euro falls below 1.06, 1.0576. the lowest since april 15th. i don't know. i saw a poll the other day asking whether they thought the dollar index would be higher or lower next year. >> higher, no? this is becoming a crowded trade. if you look at the weekly position data, there's a $42 billion bet in the future market that the dollar would strengthen. that's near the highest of the year. it's one of those trades where you have stark policy divergence coming into play with the ecb due december 3rd. perhaps set to ease further, hinting at it. the fed set to raise interest rates. that's the mother of all currency trades there. >> pandora today, you saw adele on the "today" show, pandora confirming you will be able to hear "25" on that platform even
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though she continues to shun some streaming services like apple music. pandora has a 5% move after having a miserable quarter not long ago. losing 30% of its value on that day. trying to recover a bit on the news about adele. >> we were there when she was doing that thing with jimmy fallon. i didn't realize she was in that room. sara and i were in 30 rock. the sixth floor is where they film "the tonight show" and it was opposite our studio where adele was in there with the band doing that thing. >> i have to say, this celebrity attracted the most crowds in terms of employees and people watching. you missed it. >> i didn't really know -- i didn't see her in there. it was such a little room. >> even faber likes adele. >> i had to go do some work. it was already 4:00. it was late. by the way, speaking of work, even on weekends, pfizer, of
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course, a few days out now of having announced that historic deal to acquire allergan, though, again, technically allergan is being the acquirer. we all know it's pfizer really. stock is up again. just wanted to point that out. after what was not a particularly good start there in terms of how they were a articulating the benefits of the deal beyond simply pfizer's ability to access overseas cash. they had a couple of decent days now as allergan also gains on that. do want to keep an eye on the spread. which will give you a sense as to the risk people see there that something will be done to stop this. it's unclear what can be done by treasury in this case. many hoping perhaps this will lead to the larger question of true tax reform across the board for corporations and the like. valeant, always come to that one, is down today after a nice
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run. of course bill ackman -- every day, those percentage moves are significant for pershing square giving his size in the company at roughly 10% ownership of valeant. >> another one, did you see yahoo was cut. >> chevron and exxon among the worst performers at the dow. mary thompson is on the floor for us today. >> as you mentioned, fairly flat open in the wake of what was some decent data, personal income, durable goods side and spending was weak. now investors await data at 10:00 which includes new home sales as well as a final reading on university of michigan consumer confidence. we're seeing broad based modest gains. a bit of a lag in utilities,
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energy stocks and the vix losing steams, suggesting geopolitical issues may start to weigh a bit more. let's look and see how europe is performing. the modest gains we're seeing here in the u.s. comes on the heels of strong performance in the european markets. sara was mentioning the focus is on expectations for additional stimulus by the ecb when it meets next week. this as the u.s. prepares for what could be its first interest rate hike in almost a decade. look at energy stocks. these, of course, were the stocks that led the markets higher yesterday. oil moved higher. after the bell we saw an inventory build as reported by the api. later this morning we will get the inventory data from the d.o.e. we are seeing a pull back in crude, 41.99. corresponding decline in energy stocks today. mentioned the strength we were
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seeing in the dollar. that against the euro and the yen. in pre-market trading we were seeing weakness in the miners. deere came out with earnings that were ahead of expectations. revenue dropped 25%. its forecast for the coming year, decline of 7% in revenue was as expected. it's giving a lift to the stock. not having an impact on the dow component, caterpillar off a half percent. hormel splitting two for one. a quick check of that stock, up 40% over the year. yahoo! as was mentioned earlier, s&p cutting its outlook to negative. the rating remained a double bb plus. yahoo! stock, which has been under pressure recently is higher in the wake of that outlook being cut to negative because of the company's performance recently. the dow is up 3 points. sarah, back to you. >> s&p just slightly negative. with that super strong
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dollar in focus, let's head over to the bond pits and rick santelli in chicago. good morning. yes, the dollar is super strong because people think the fed will be super active. but today -- today it's more about the euro being weak. thank you, mario draghi. that's the theme for the first several charts. negative rates throughout europe. i'm not hitting them all, just few that i think are worth watching based on the charts. year to date of the european two-year. it's more negative than 40 basis points. they're negative throughout the curve up to seven year. there was a point not long ago where nine-year and eight-year rates had negative aspects creep into them. let's look at what's going on in france. their two-year is negative as well. they're actually -- i'm sorry, that's italy. this is the first time that they have been negative. france, negative out to the four-year. here's the two-year chart. these are all year to dates.
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you can see this dynamic coming in. it might be what central planners think will bring inflation, but most likely more negative rates and headaches for anybody in the banking system, that's for sure. let's look look at intraday, it spiked on pretty good data but it's melting, especially the long end. you can see the range we've been in, since the beginning of november with the employment report. in terms of the euro and dollar, we're all comping back to march, i get it. but let's go back to 2003 and look at euro versus the dollar. only small comps from march are separating us from what ultimately will be a dozen-year perspective. carl, back to you. >> rick, we'll see you in a bit. u.s. crude down more than a buck ahead of inventories this morning. jackie is at the nymex. >> we're trading well under $42. negative pressure was anticipated after the api came out with a 2.6 million barrel
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build. traders were looking for a couple hundred thousand. the department of energy will be out with that number at 10:30. we'll see if it confirms the build. the dollar index at an eight-month high, bearish for crude prices. gasoline, also in negative territory. aaa saying the national average for a gallon of regular, $2.06 heading into thanksgiving. they don't expect to see travel dampened by the concern over global terror threats. consumers will get out and take advantage of those gas prices. nat gas also lower today. we hit a new record of total stocks over 4 trillion. we'll get that number out today at noon. that's because of the thanksgiving day holiday. a lot of data points to watch today and perhaps a little volatility as we head into turkey day. back to you. >> thank you very much, jackie. when we come back, with millions expected to fly during the thanksgiving travel period and security concerns, we'll find out how airlines are planning to
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today will be one of the busiest travel days of the year. how are airlines handling the start of the travel season? let's go to phil lebeau in chicago. hey, phil. >> hey, carl, they'll handle over 4700 flights here in the operation center today. you see that map? that's generally good news. nothing major, you mentioned earlier this is one of the busiest days of the year in terms of airline travel. people think this is the busiest day. that is not the case. it's one of the busiest. when you look at the thanksgiving travel season, it comes down to this. thursday, thanksgiving, probably the best time to fly. the lightest in terms of number of people on flights and the schedule that's the most open. the busiest is sunday.
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that's the busiest day of the year for airline travel in the united states. almost everybody wanting to get back. because of the increased demand, the airlines in the united states are adding more flights, bookings are up. overall they're in better position to handle the thanksgiving rush this year than in previous years. >> the airlines are very well positioned. we have about 13,000 more employees, we have been taking on new aircraft a day. we have a 98% completion factor, newer equipment, more employees, investments in automation, about $12 billion worth this year. signs are pointing to a smooth holiday. >> internationally, about 10% of the people flying for thanksgiving will be going oversees. there's a lot of concerns about what's happening in europe and whether or not there's a slowdown in the number of people flying. there's been some people who have delayed or canceled trips. overall united says most flights
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going over to europe are still relatively full. airline bookings for this thanksgiving season up 3% compared to a year ago. as you look at shares of united, down fractionally today. it was down yesterday on the concern of decreased bookings to europe, but over the last three months the stock is up 8% in large part because of jet fuel prices moving lower. >> we heard a lot about the tsa taking extra precautionary measu measures, how you should arrive early, and that state department warning yesterday. any idea on what they're doing? >> they don't like to tell people what they're doing. the tsa is clear when they add security very rarely will they say specifically what they're doing differently. they will say there's going to be increased presence or increased screening. as a result people are always told to go early, but you see a rush of people because they don't go early enough.
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that's why we are seeing long lines as we do every wednesday before thanksgiving. >> we'll talk to an aviation expert on security later on in the show. coming up, as we count you down to black friday, a look at how brands like nike, under armour and go pro are likely to fair this holiday season. the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it.
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holiday spending kicking off with black friday this week. some retailers and lifestyle brands are hoping for a boost to their bottom line. aaron murphy joins us from houston this morning. welcome, aaron. >> thank you. thanks for having me on the show. >> the last time i saw you was in portland for nike's investor day. so far since then the stock has been on a roll, splitting the stock, returning cash to shareholders. hitting a record high in today's session. is there more room for this stock to run into the holiday season? >> we think there is. we like nike as we head into the holiday season and next year. we think about a brand with tremendous innovation, a lot of pricing power against that innovation. next year we have the olympics coming up, we like the setup in the near and long-term. not a lot of innovation in
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apparel now. we think athletic led by nike is the way to play that. >> you guys have done a holiday season survey at piper jaffray. what have you found in terms of consumers attitudes and behaviors? spending, promotions online versus brick-and-mortar. >> we just published a survey yesterday. we poll ed 1,000 consumers domestically. the amount of consumes who completed their holiday shopping is lower this year than last year. 14% of consumers have completed their holiday shopping thus far. secondly, the spending intention to spend more on apparel and holiday overall has desecelerat. and the last piece, this is more to speak to the business model and how consumer behavior is changing, we are seeing more consumers off to spend online.
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34% of u.s. consumers are choosing to shop online this holiday season. just a year ago it was 31%. so we're seeing that shift. we think that's structural and here to stay. >> erinn, years ago analysts would go to the mall on this weekend and literally count people. they would look for foot traffic and try to put together proprietary models. is that even useful anymore or has online rendered that irrelevant? >> that's a great question. i still will be in the malls. i'll be in the malls starting thursday evening, friday morning. we think it's important to understand the context and how that's changing. but having been in malls for years, you are seeing a lot more traffic being spread over the weekend versus right at the front with the door busters kicking down at 6:00 p.m. tomorrow night. i think it is important to still have that context, but we are looking both across what's happening on amazon's platform, that's what happening on e-commerce and in the stores.
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>> i'm sure cows about your thoughts on gopro. it's down 57% in the last three months. last year it was the must-have holiday present. what does it look like this year? is it still a problem that the average price for the gopro cameras has come down? >> yeah. it's a great question. we do have an underweight on gopro. it's a stock we're concerned on. i would say simply stated, there's not a lot of newness to drive consumer demand. last year we had three new products coming into the market, to your point it was the must-have product. this season, there's a lack of innovation. we still believe in the brand, but right now what we're seeing is a lot of pricing pressure going on with several other key platforms including the hero 4, which was just being marked down in some retail outlets. we're taking a cautious stance. we think it will take some time until that stock stabilizes. erinn murphy, thanks for joining us. when we are come back, we'll
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get breaking news on consumer sentiment. also new home sales. plus a former tsa administrator talks travel security on this getaway day for millions of americans.
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♪ hello from the other side ♪ i must have called a thousand times ♪ >> good wednesday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. simon is off today. look at the markets. relatively muted action the day before thanksgiving. volume expected to be healthy. a lot of macro data on the calendar. rick santelli has more. rick? >> yes a litany of data. 91.3 is our final read for university of michigan sentiment. we were all comping it to 93.1. it's a bit of a drop. but 93.1 was the mid month number. the actual number to compare it
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to is 90. 90 was the final read for october. even though it was a disappointment, less than the middle, it is still higher than our last final read. now, let's go to october in terms of new home sales. 495,000. this is a bit of a miss. we're looking for a five handle is maybe splitting hairs. looking for five or below at 495 last month, 468 ramps up just a bit to -- i'm sorry, it goes down to 447,000. so, how does that shape up? 495,000 fits in nicely. if you consider several months ago we were at 469. the high water mark was 545. nobody knows housing like diana olick. we'll head east and she'll dig down deeper into the numbers. >> rick, i'm looking at the reversions. the reason we're seeing a 10.7% monthly jump is because september's numbers were revised
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down significantly. as you said, we were expecting 500,000. 495 not terrible. month supplies is coming down to 5.5 month supply. i'm interested in prices. median price of a newly built home sold in october was 281,500. that is down from a year ago. the price in october of 2014 was 299,400. we had seen builders raising prices, now prices are coming down a bit which is a welcome site especially as mortgage rates inch up. these are contracts signed in october. not closings. these are people out shopping in october. rates were lower at the beginning of the month, moved up towards the end of the month. again, it's a good sign to see we're seeing traffic coming in builder sentiment had fallen in october. better to see the sales now and prices coming down. >> spending on it is up. home depot and lowe's hitting
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record highs. >> sarah has more on the holiday travel. >> whether you're traveling by plane, train or automobile, today of this holiday weekend is going to be one of the busiest days for travel. let's talk about the overall numbers. just under 50 million people expected to travel at least 50 miles from home this holiday weekend. that's up 300,000 people from last year. the most it's been since 2007. there is good news here. gas prices at the lowest point since 2008. nationwide average of $2.15. here at this gas station we have seen the prices drop 6 cents this morning alone from 2.05 to 1.99, making drivers very happy. airfares also expected to decrease about 10%. however, hotels and rental cars, we are seeing some minor
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increases in those prices. as for travel, today is one of the busiest days. it will pick up as people get off of work or cut out early. getting there is only half the battle. you have to come home. sunday is expected to be busy, especially during the afternoon and early evening hours as we attempt to get the most out of this holiday weekend as possible. back to you. >> thank you very much. security remains a top concern amid new travel warnings from the state department. for more we are joined by john pistole, president of anderson university in indiana good morning. good to have you with us. >> good morning. >> does the caution from the state department warning translate into caution even traveling domestically, do you think? >> it could, but it's much more
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focused internationally. there's a sensitivity and alertness in the united states that we haven't seen for a while because of the activities around the world. >> if you knew someone planning a european vacation in the next 60 days, would you advise them to go, not to go? >> you have to be smart about what your plans are, where you're going. yes, i would encourage people to be vigilant in what they do, but go ahead with their plans. that's one thing that terrorists hope to do is get people to change plans, have an economic impact on the global economy. so, you know, if you look back to several years ago when they had a plot to put bombs on cargo planes coming to the u.s., they were able to get those bombs on planes from yemen, and even though the bombs didn't go off, they claimed victory because of the economic impact on the global supply. so, that was something that was
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significant even though there was no human casualties. that's something people have to assess and make informed decisions on. just be aware of what the state department is saying and others say. >> we know the tsa is taking more precautionary measures, and they don't discuss what that is what can they do to beef up security protocols. >> for a refresher, tsa provides security at 450 airports in the u.s. but not overseas what tsa can do is work with the international carriers, the airports, 275 points of departure that fly from the u.s. to set the standards. in the u.s., travelers can expect to see increased lines, because of the record number traveling this weekend. also with increased security protocols they may see things
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such as increased law enforcement officer patrols. they may see random canine patrols by dogs. they may experience swabbing of the hands and looking into carry-on bags. things like that can take longer. it is something that is part of the balance between good security and efficiency trying to get people through to the destinations. >> when you think back over the past 15 years, the way in which tsa has tightened security on cockpit access, then fluids, shoes. where would you prefer to see them focused? is it about crew? is it about airport perimeters? is it about airport personnel? >> well, that's the challenge. any time you focus on one particular area, if you don't focus on another, that's what terrorists try to exploit as they have done since 9/11.
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clearly the insider threat which is the cause of the sharm el sheikh -- the russian metrojet explosion, that insider threat is always of concern. the most significant, if it's on a passenger, such as the underwear bomber, the nonmetallic ied, which a person can walk through a metal detector and never set off the alarm. the catering that's provided to the airlines, the cargo that goes on virtually every passenger jet, those are all things that could be assessed, you have to have some type of layers of security to try to make sure to limit those vulnerabilities. all those areas that you mentioned are a concern. that's what tsa and law enforcement authorities focus on every day. >> to zero in on that point further. is that the tsa's responsibility
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to secure departure gates and the roads into airports and all the places around the airport beyond just the passenger screening? is enough being done there to keep it safe? >> yeah. that in partnership with the airport police, at l.a.x. where the airport police provide random stops of vehicles coming into the nine terminals there. the perimeter security which can be miles, 15, 18 miles of perimeter around some of the largest airports. that is why the airport authority in concert with the tsa and local police, the airport has that responsibility that tsa out dates and inspects to make sure there's no vulnerabilities, such as tree limbs growing over fences where people could climb up the tree and hop over like what happened in a couple airports, charlotte
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some years ago with a 17-year-old stowaway. that part of the challenge, there's still many points of egress that have to be addressed. tsa has the primary responsibility at the checkpoint and for all the checked bags and the cargo. that's done in partnership with private companies. >> john, appreciate your guidance. thank you very much ahead of an important weekend. >> happy thanksgiving. >> same to you. when we come back, hewlett-packard out with results for the combined company. both stocks moving big today in opposite directions. ceo meg whitman talking with us exclusively. and a look behind the scenes of the macy's thanksgiving day parade and what is being done this year to ramp up security.
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stocks are mixed on this last full trading day of the week. a half day on friday. investors are focused on a number of economic data reports. for more is steve wood from russell investments and michael gapen from barclays. michael, we'll start with you on this data dump what stands out? it looks like everything is good enough so the fed can proceed as
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planned with an interest rate hike in december. would you agree? >> i would agree. inflationary report was softer than many had expected. that's not new news. again, it's just further softness and in core goods prices being weighed down by a stronger dollar. there's likely to be concern over the strength of personal spending, which was weaker than expected. if you drill down into that -- into the sub goirs, what happened was spending on utilities was down about 8% on the month. that was 0.2% of spending and accounts for most of the miss. that's not a bad story, if we're spending less in utilities, it will show up in consumption somewhere else, just not in october. i agree. the bulk of the data flow suggests that a december liftoff is likely, we will get that final nail in the coffin with the employment data next week. >> steve, it looks like equity
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investors are okay with that. speaking of spending, consumer discretionary leading us higher today as it has all year. up 13%. expected to remain a leader even though the economic data on consumer spending is mixed. >> kind of mixed and we're still in the school that this will be a flattish 2.5% gdp environment. it seems like we're there, going into the same range next year. if i can play off something the other gentlemen said, if you look at the back ended benefits of the oil price drop, we knew the losses would be recognized in the first half of the year. the benefits of lower energy prices would hit the consumer in the u.s. towards the end of the year going into 2016 it looks okay. i think the likelihood that the fed will achieve liftoff is very, very real in the middle of next month. so, that would put the fed in 2016 in a normal policy environment, qe, put to bed last october. they would have a positive fed
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funds rate. so going into next year, from the fed's institutional perspective, all the policy tools would be at their disposal. >> michael, we have almost all the s&p reporting for 3q now. everybody is talking about the back-to-back declines. first since '09. q4 looks to be a decline on year two. doesn't the juxtaposition of a fed hike and slowdown in corporate profits seem odd? >> it does seem a little odd. again what we're seeing with the corporate profit data is that it reflects the splits in the domestic economy. if you shake out for example -- if you take some energy sector profits out of that and you take out profits from the rest of the world and you focus on, say, domestic related profits that is not bad, it's slowed about 10% year on year. the drags are coming from the energy sector, from related to activity abroad where global softness is. certainly we see that in the
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u.s. economy. consumption and housing and nonenergy business investment are getting us something closer to three. but it's really trade and manufacturing that's weighing things down and keeping it closer to 2 1/2. we see the profit data as reflecting the broader split in economic activity. >> beyond earnings and the economy, investors are focused on geopolitical risks. we learned this week they have the potential to move markets, not just oil. it feels like there's an accumulation of risk factors building. how as an investor should you protector hedge yourself from that? how should you think about it? >> first off, the awful attacks in paris last week, that -- my heart goes out to them and thoughts, but also the markets almost instantly shrugged off those event events. so geopolitics are important but maybe not as impactful in the near-term as historically.
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investors need to have that discipline that gets them through these unexpected events. from an energy perspective in the middle east, that has become decreasingly important as the united states becomes energy independent. so the geopolitics is important. but historically i think it might be reduced relative to what it will be going forward. >> oil back under pressure again today. steve wood, michael gapen, thank you. >> thank you. when we return, more on hp. both stocks moving. faber's interview with meg whitman after the break. here at the td ameritrade trader group, they work all the time.
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earnings for the last time as a combined company for the quarter that ended october 31st. at the beginning of this month hewlett-packard split into two. hp inc., namely pcs, computers of all types and its printing business. hpe, the enterprise businesses, servers, and everything they sell to corporations for technology needs. earlier today we had an opportunity to speak with meg whitman, chairman of hp inc. and ceo of hpe. the stock is moving in opposite directions after the companies reported those earnings after the bell last night. it has been particularly bad t
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would seem, for hp inc. overall, hewlett-packard like many multinationals in the company has been dealing with a stronger dollar. stronger even today. i did ask ms. whitman is that a world that we're going to be living with for the foreseeable future? >> our belief is the dollar will stay strong. we have to continue to improve the productivity, reduce costs, make sure that we are fit to compete in what i would call the new normal from a currency perspective. most american companies for the last decade had a great wind at their back because the currency was working in our favor. i think the next decade is going to be a bit more problematic, in that the dollar will remain strong. we have -- it cannot be these companies are just less valuable because of a different currency rate. >> i don't remember that many earnings report where they reported constant currency revenue declines when the dollar
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was weaker. >> she gave away the dirty little secret that these american companies have been benefiting over the years. they never say thank to weaker u.s. dollar. >> you do see it now consistently in terms of what revenues would have been in constant currency. the story of the morning may be that hp inc.'s earnings are getting. they were not particularly strong. the guidance more or less staying the same, but the 14% revenue decline in personal systems and printing is giving some investors pause. this had been the better performing of the two stocks until today. i did ask ms. whitman, chairman of hp inc., whether there is going to be a turn, a cyclical turn, upturn in a very competitive, combative and deeply depressed pc market. >> it was a tough pc market. hp inc performed well. and microsoft windows 10 has not yet provided the capitalist to
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pc upgrades that everyone anticipates. it's still getting great reviews. but the interesting fact is there's nearly 450 million pcs out there that are older than 4 1/2 years. at some point people will upgrade those pcs. >> hpq, the symbol for hp inc. was down as much as 15%. you can see it's still suffering a significant decline on those numbers. and fears, of course, this time it is different. there's not going to be -- 450 million, yeah, but how many will be replaced by pcs. >> and tablets. >> exactly. >> what's interesting, you talked to her before and talked to hp before about the competitor and dell bulking up, going in the opposite direction and breaking apart which is what hp is doing, now there are shareholder concerns about that one. the jury is out on which strategy will work when it comes to these two legacy companies. >> given the pace of change and
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how quickly things are moving in terms of technology needs of companies, we may get an answer sooner than you might expect. meg whitman made a point on the day when they listed both companies, that we're going in opposite directions. they're getting bigger, leveraging up the balance sheet, we're getting smaller and de-lev de-lev de-leveraging our balance sheet. >> you're watching cnbc.
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good morning, everyone. i'm sue herera. here is your cnbc news update. hundreds of protesters took to the streets of chicago overnight after video of a 2014 shooting death of a black teen was released by police. the graphic dash cam footage shows the teen being shot 16 times by a police officer. that police officer has been charged with first degree murder. russells is trying to return to normal after a four-day lockdown. the metro system reopened as well as schools and shopping malls. officials issued that state of emergency citing imminent terror threats. the u.s. military is calling a strike on an afghan hospital run by doctors without borders a tragic mistake.
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in a briefing this morning from the pentagon, the military said the deadly october bombing was an avoidable accident caused by human error. the a.p. obtaining new development of an extensive network of tunnels built by isis in the iraqi city of sinjar. they were discovered when the town was retaken by kurdish forces earlier this month. sara, back to you. >> sue herera, thank you very much. crude oil prices just below $42 a barrel. we have breaking news on energy inventories. >> we just got the department of energy number on those inventories. a build of 961,000 barrels. just under 1 million barrels. that was a bit less than the api, but more than expectations of 200,000. prices stabilizing, still lower on the day, just around the $42 barrel mark. i don't think this number will move the needle much. if it was higher than what the api said, we had the chance of
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seeing more down side pressure. but again, what's going to be in focus is this dollar index now. traders are worried about it you guys have been discussing it all morning whether see the dollar index stronger next year. that's the concern now if we don't see a change in supply and demand which we haven't at this point. watching crude oil prices. we'll keep you posted. a developing story this morning. one of the russian pilots shot down near the syria/turkey border has been confirmed alive and well after a 12-hour rescue operation. hadley gamble has more on that. good morning. >> reporter: good morning to you. so, a war of words continuing here 24 hours later after this plane was downed. essentially what we heard from this rescued pilot, he's telling russian media, he had no warning from turkish authorities.
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this contradicts what turkish authorities have said. they said that they warned the russian military as much as ten times to stay out of their airspace. so the tit-for-tat on that continuing. also whether or not this plane was actually flying over syria or if it was flying in turkish airspace. no word yet in terms of who is right on that. we heard multiple reports. the turks claiming one thing, the russians another. tit-for-tat on that as well. russian president, vladimir putin, war of words with the president of turkey. he said this was not something that they did to escalate tensions, but it's difficult to believe when you're blowing another country's aircraft out of the sky that there's another word for it. tensions running high in turkey as well. the russian consulate is on high alert. they decided to beef up air defense systems at the russian air base in syria. we're here on the banks, where east meets west, what's happened
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over the last 24 hours could have major implications for this country because turkey has a $25 billion a year gas import bill from russia. ruining that relationship could be bad for these two countries. it remains to be seen if egos will trump economics. >> that's a story we will watch through the holiday weekend. thank you very much. looking ahead to black friday and retail stocks, considering the retail sector's wild wiswings over the past few months, should retailers be worried? let's bring in scott tui. >> good morning. thanks for having me. >> we have the xrt up for four days, that hasn't happened for more than a month. have we put that apparel freak out behind us? >> we're expecting holiday season to be good, not great. we do think santa claus will come. on the apparel side i'm concerned about the level of inventory in the channel. i think it's going to be a great time to be a consumer but i'm
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not sure that's going to be so great for earnings, particularly in the apparel space. i think there will be some pockets of strengths in a few areas. particularly in the off-price channels, companies like tjx. these companies can benefit from the inventory overhangs that we've seen and the value that they offer the consumers. >> the weather story is well understood by now. and everybody has come out with 3q numbers and talked about what they'll have to do to clear that inventory out. any more surprises in store. >> i think q4 will play out. i think the big department stores have seen this movie before, know how it will play out. i think holiday will be challenged. i think we'll see some potentially positive tailwinds coming into 2016. i think that could be positive. one of the big things that will happen in 2016, we have an easy comparison in the first half
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compared to the first half of 2015. as your viewers may recall, we had a lot of issues on the west coast ports with the port strikes. that was disruptive, particularly for apparel companies looking to get seasonal goods into the store. these game late. there were extra costs bringing the goods to market. with that situation settled, that's something that could be looking good when we get to springtime. >> it's so hard to talk about retail and consumer stocks, they tell such different stories. if you're selling autos, home furnishings, this is a different recovery than if you're in retail. are those dynamics going to be changing? >> i think you're right. i think the home story has been a good one. you know, we've seen great numbers come out of home depot, lowe's this year. we've seen -- seen increases in home prices which is positive.
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at the end of the day, if the consumer feels their home is an investment not an expense, they'll be willing to spend. there's lags on the home recovery next year. however, i do find it hard to see home accelerating to the upside in what's likely to be a rising rate environment next year. >> we asked again and again various analysts, who benefits from macy's troubles, is it penney? not everyone is willing to go there. what do you think? >> i think pennnys -- we're a rating agency. penneys is the only department store that we have a positive view on in rating. penneys is much better positioned this holiday season than last year. the home business is now back to what their traditional customers are expecting to see. they had one of the better comps out in q3. i think they got that core customer back. one of the businesses that's done great for penneys is
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sephora, which they have been rolling out. particularly as a gift giving occasion, that fits jcpenneys well. >> the stronger dollar reaching eight-month highs versus the euro and other current sis. this is a big deal in retail, you've seen it from american eagle, express, some more domestically focused retailers are doing better. is that where to focus into the holiday season and next year? these international brands, kors, tiffany we saw yesterday, they get hurt from tourism and overseas sales. >> i think in the short run there will be an impact from the dollar. actually i think some of that challenge will extend into 2016. a lot of companies had hedges in place for 2015. these will begin to roll off. that said in the long run you probably need to be international. at the end of the day, the u.s. is a mature market. growth opportunities are
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overseas. if you're a global brand like tiffany, people will find you, whether that chinese customer is coming to japan, the u.s., you're capturing that company, that's important. you compare that to macy's, which is a domestic retailer, they do see the impact on lower tourist traffic at herald square and they don't have any other way to get that customer back. >> yeah. tiffany was happy to have japan this time. >> very much. >> scott, thanks a lot. >> thanks for having me. >> scott tuhy. up next, inside the macie y thanksgiving day parade and some of the precautions being taken this year. the dow is up 32 points. s&p 500 flattish, consumer discretionary leading the way higher. those new glasses?
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welcome back to "squawk on the street." the overall market showing fractional gains. healthcare stocks leading the s&p 500 higher. the best performing sector so far today. the third best performing sector on a year to date basis behind consumer discretionary and technology. powering today's gains, names like pfizer, allergan, mylan, all up between 1% and 3%. half percent gains good enough to lead the market today. back over to you. it's time to go to the cme group. rick santelli has the santelli exchange as always. rick? >> good morning. good morning to my guest, matt maley. good morning, matt. happy thanksgiving to you and your family. >> same to you, rick.
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we had a litany of data reported this morning. was there anything that jumped out at you that changed your view of the world or cemented it? >> not really. i think the fed has kind of made their decision on what they'll do. none of these numbers were really that much out of the picture. one thing people are making a lot of durable goods number. maybe i'm old school, when i started this business and henry kauffman was the dean of the economists, he wouldn't even estimate that number. he called it a dart board number. it's a difficult number to nail down. i don't pay a lot of attention to it. >> now, there's a proxy for business spending and their orders, not in defense x aircraft that looked pretty good. steve liesman aptly brought up it's plays catch up because it has not looked good.
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add in that volatility, durable goods, things that last three years or longer, it wasn't a bad set of data points. what i find interesting with the earnings behind us, there was a great interview with mary jo white in the "journal" the other day. one of the issues was third quarter earnings on a non-gaap basis, were down 1%. on a gaap basis they were down a quarter percent. >> it shows the gamesmanship going on with -- in the -- with these companies and their earnings. people are talking about we don't have to worry about valuations and thing like that because interest rates are low. the problem is that earnings have been coming down for a couple quarters. operating earnings down 14% last quarter. in the second quarter down as well. i follow the gaap earnings and
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look at the s&p website, they were slightly down in the first quarter. we're getting way ahead of ourselves in the market. with interest rates poised to move higher, those valuation levels will be harder to justify as we move forward. >> matt, my sentiments exactly. i'm not sure if the one big employment number left could change the direction that many priced in. happy healthy thanksgiving. carl, back to you. >> rick, thank you very much. the macy's thanksgiving day parade is tomorrow. security is obviously a top concern. our own courtney reagan is uptown on the parade route with the extra precautions being taken. >> reporter: good morning to you, carl. more than 3 million spectators are expected to line the streets of new york city, more than 4,000 will be participating in the 89th macy's thanksgiving day parade. the retailer says as it does every year it works together with law enforcement for a comprehensive security plan.
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this year is no different. the retailer tells cnbc in part as with any public event in new york city, security elements are extensive. from the very visible presence of law enforcement officers to wide-ranging behind the scenes security operations. the safety of all parties pants and spectators is the op priority for us and our agency partners. the nypd is the lead security agency for the parade. commissioner bill bratton says the force of officers trained to deal with situations has increased from around 100 personnel a few years ago to more than 500 now. that number ramps up further with a special event like a parade. while the u.s. government has warned americans to "avoid large crowds" bratton says that new york city is a special case. >> in new york we're encouraging come down and join the crowd. be one of the 3 million who will have a great time on thanksgiving.
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it's how new york city works. >> a statement from the office of mayor bill deblasio says new yorkers and visitors should attend the thanksgiving day parade, go about their regular routines and continue to enjoy the greatest city in the world. after t after -- back to you. >> thank you, courtney. reporting live behind the scenes of the thanksgiving day parade. up next, has the death of american shopping malls been overstated? we'll ask the ceo of brookstone what he's seeing for black friday.
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a torrent of economic data released today ahead of the
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schedule. our senior economics correspondent steve leisman with a look at whether consumers are financially fit for the holidays. >> thanks. data this morning shows consumers they have the money, they have the jobs to spend robustly for the holiday season, but there is a major question of whether they have the desire. take a look here. jobless claims falli ining 12,0o 260,000. durables up 3% with a good number for business spending. a note this has been a weakness. it's a bit of a bounceback. it's not time to say durables are good yet. personal income up .4%. that's pretty decent. with consumer spending, that up just 0.1%. what's important, the savings rate rising to 5.6%. and the key there is people are making more money, but they're stashing it away. so the fall in spending, the rise in the savings rate. together with yesterday's
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unexpected decline in consumer confidence, it raises the prospect of a potentially troubling christmas for some. several economists lowering down consumer spending in the fourth quarter and growth forecast. but there's an optimist out there. they said with more money in the bank, more money in their wallets, consumers are financially fit to spend and they will do so. pantheon writes it consumers are well placed for holiday spending. at oxford they believe households are well positioned ahead of the holiday season. take a look at private wages here looking specifically at them. they bounced back in october from a soft september. they've been reasonably healthy this year sporting a rise. that's pretty good news, but it's going to be up to consumers to see if they want to spend the money in their wallets. >> all right. steve leisman, good overview there. we're going to talk more about the desire to spend now as we're looking towards black friday.
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brookstone is looking to bring more quickly. with us from new hampshire is tom bia. tom, welcome. >> good morning. thank you. >> tell us a little bit about this new idea. you're going to indiegogo to crowd source electronics to sell electronics? how does it work? >> that's right. he work with the indiegogo team to talk directly to inventors. we provide the opportunity to manufacture and sell and distribute their product zblps have you got any good ideas from it yet? >> you know, we actually do. three of our top ten holiday gifts have come through this ind indiegogo pipe line with one being the cat ear headphones. this is from two women who were
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uc berkeley graduates. they had an idea. and they presold over 20,000 pieces and raised $3.4 million. but they needed a manufacturing and retail partner. and brookstone was in the right place at the right time. >> it is interesting this idea of coming up with new products that you cannot find on amazon. or you cannot find at best buy. is that part of the strategy here? i don't kn i know brookstone has been trying to come back in a era where we buy a lot of electronics online. >> that's exactly right. one of our strategies is to find products that is new and never seen before. so this indiegogo relationship gives us that pipe line to inventors so we can form those partnerships and have the opportunity to bring that product to brookestone. that does protect us from retail competition as any level.
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>> how are sales doing? you have almost 300 locations. isn't mall traffic down across the board? talk to us about what's happening in the malls and with your own sales. >> sure. mall traffic is inconsistent. we have some malls in the u.s. that are performing well. we have some malls in the u.s. that are performing poorly. overall our business is about mal flat on malls. which is probably where we'll end. airport traffic is up and brookstone's performing quite nicely there. but the crown jewel for this christmas is going to be our online sales. >> do people still buy massage chairs, tom? >> yes, they do. our massage chair business is up over 50% this year. we've added a brand new program in partnership with a japanese manufacturer called anata. they're a premium massage chair retailer. we're now stretching into the upper end.
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our $3500 massage chair is nicely ahead of last year. not only are the chairs doing well, but there's a significant trend in massage and shiatsu. >> who knew. thank you, tom. the ceo of brookstone. getting some word from the white house this morning that the president's going to speak at 11:40 a.m. eastern time delivering a statement in the roosevelt room following a meeting with his national security team. that's starting right about now. of course the president made reference to plans he was making with his advisers regarding a u.s. response of some kind to the paris attacks. maybe we'll get some specifics when the president talks at 20 minutes to noon this morning. >> now over to jon fortt to look at what else is coming up. >> you mean besides massage chairs? there are other things we expect to be hot in electronics this holiday season including toys,
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tvs. we'll break that down for you. also adele dropped a hint this morning on her outlook on streaming. also ahead, the microsoft studios will talk xbox. all that and more coming up on "squawk alley." but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?
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good morning. it's 8:00 a.m. at hp headquarters in palo alto, california. it's 11:00 a.m. on wall street. and "squawk alley" is live. ♪ ♪ welcome to "squawk alley" for a wednesday morning ahead of thanksgiving. with us as always jon fortt and kayla tausche. let's bring in jessica lesson as well. a cnbc contributor. good morning. good to see you. lots to talk about. we'll start with hp. big story

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