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tv   Squawk on the Street  CNBC  September 23, 2016 9:00am-11:01am EDT

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weaker all morning. but look at this, we've paired tho losses, s&p off by 3.5, nasdaq down by 4 and don't forget it closed at an all-time high again yesterday. oil prices as we were just talking with jim are down slightly 17 cents, but still at $46.15 which is a big gain over the course of the week. want to thank tyler and mike, it's been a pleasure. >> great to be here. >> thank you for having me. >> folks, join us on monday. right now it's time for "squawk on the street." ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. markets taking a pause after three days of gains and the best week for stocks since the middle of july. we're going to get some fed speak today as officials begin to make their first comments since wednesday's rate decision. europe and asia down modestly overnight. oil's up four days in a row as speculation builds about a possible deal next week in
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algie algiers. all right. we're going to start off with breaking news this morning. twitter has received expressions of interest from a number of technology companies that are considering whether to make a bid for the social media company. and its board of directors is said to be largely desierous ofa deal according to people close to the situation. no sale is eminent and while twitter may receive a formal bid shortly, it's thus engaged with suitors examining a possibility of a deal and twitter's willingness to engage on that possibility. those suitors are believed to include salesforce and google amongst other technology companies. while there's no assurance a deal will materialize, one person close to the conversations told me they are picking up momentum and could result in a deal before year end. twitter has been struggling, of course, to generate top line growth. only today the stock has been do downgraded by mark mahaney on concerns to attract new users and gain traction amongst
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advertisers. also including of course concerns that its ebitda equals its stock-based compensation and a talent train at the company. but it does appear at this point that those concerns are not at least getting in the way of the interest of potential suitors said to be interested as much in the data that twitter generates as its place as a media company. again, not imminent, but certainly wanted to get that out there after completing my reporting at this point. not hearing anything from twitter at this point. no real comments from the other companies. >> you know that i have felt that this should happen. and it's the data side. it's not the current view. and it should be salesforce. it's the way to be able to get a seamless customer relations management among big customers who want to be in touch 24/7 360 with their -- >> you mean like a giant consumer help desk? >> i'm saying like j.p. morgan. i'm saying like j.p. morgan.
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>> you know, jim, i've tried to understand the many conversations i've had -- >> you're not with me on this? >> no, exactly what the data is that twitter generates that's not publicly available that would be of great use to a salesforce or a google. i'm still not completely clear on it, but it does appear that's certainly part of the case. again, i want to stress while nothing may be imminent, there have been a number of expressions of interest made. and it's not just technology companies potentially here, you could also include media companies as well. >> yes, disney. >> have interest in it as a platform. as we know it is a huge social media platform that has not had a great opportunity it seems in terms of attracting the advertisers that perhaps it wants and the robust fashion it wants. >> right, but this is great reporting. and the reason why i haven't said it should be a company like a salesforce, is that twitter knows where you are. twitter knows about you. twitter knows about your habits. >> right. >> if you are a company that is
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working with other companies to try to figure out a strategy of where to reach you, and you owned an e-mail company. >> yeah. >> like exact target, which is what salesforce bought, you would say, hold it, does that fit in? what a great extension to your platform. it would be twitter. >> right. >> now, i also think alphabet is looking for a way -- look, i think this is a company -- been saying this. the way the company is run now is not worth enough. the way the company could be run -- look, i was like texting adam -- i was tweeting adam bain last night. >> an interesting juxtaposition because the fundamentals of the company, certainly a company people consider a growth company, have not been strong at all. >> no. >> at the same time based on my reporting there does seem to be interest amongst a group of potential suitors who are in fact and somewhat surprisingly, i must say, willing to pay a premium on where the stock price was before our report. >> this is a tough price. didn't want to pay north of $20.
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>> where did it come public? $26? does that sound right? >> yeah. in the fall of 2013? yeah. >> but these people -- >> how do you sell for less than your ipo price? >> how? >> yeah. >> well, i think that's one of the problems about the deal, which is where they live is just too high. but the companies that want to buy this company are not looking at it the way we do. they're not looking as a way to be able to talk this game is so boring, sorry, adam bain, that's not, that's small time. they're thinking, you're in mexico and trying to tell j.p. morgan you're in mexico and it's your credit card, call customer service or directly to. >> hbc downgrades it today on a survey of ad buyers, more ad buyers saying they're going to spend less on the platform than more. 30% don't spend at all on the platform, versus 25 in february. >> yeah, that was ill advised.
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>> but those are all facts that are very well to be true. >> but they're not of interest in alphabet. >> suffer from of course -- >> you have to remember this board of directors also considering those very same things and seeing perhaps that there is and there have been expressions of interests willing to engage on that as a result of the fact that this company's not going to be able to put up the top line growth they would have hoped for. and i pointed this out in previous reports as well, you can't rule out the idea that this board is well aware that an activist could have shown up and made life more difficult for them, too. so when i have people quoted as saying there is momentum and that the board is largely desirous at this point of a transaction and willing to encourage -- or is encouraging that in part may be a result of what mr. mahaney's seeing and surveying. >> fabulous reporting. there was a total shutdown. i could not find anything about after the board met. nothing. there was no leak whatsoever. so this is fantastic reporting. but it just makes too much sense. in the same way when linkedin was down, linkedin was viewed as
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being something else to microsoft. because linkedin as it is wasn't worth what they pay. twitter as it is is not worth -- twitter is what it could be -- so tell me about salesforce in particular. you know that company very well. >> i'm using it as an analogy. >> more than any other company they have made no secret in a way in some conversations that there is at least broad interest. >> well, because they're looking at trying to figure out where the customer is at all times. they want to know the customer because they are -- i'll be out of dream force, and one of the things they're trying to do is figure out where that customer is and what that customer's thinking. i've got to tell you, twitter is not doing that. they are not trying to figure out what you're thinking. they're presenting a football game. and you can comment that you think belichick's the greatest coach ever. and then you can disagree with me. that's just banter. but how about trying to sit back and think, well, what cramer likes, obviously he likes eagles, he likes this, he likes
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that, he watches "breaking bad," he thinks "narcos" is good. i can go and say here's his profile. we put an algorithm together. remember they came up with einstein, artificial intelligence, if i like narcos and eagles, then i may like -- >> i don't know. >> i'm not einstein. don't look at me. >> i know the things you like so i could add. >> so you can scale -- also by the way twitter the most hard thing to onboard. do you think they would figure out a way to onboard? >> people have been talking about that for years. >> well, do you think that microsoft and google don't know how to onboard? need the current version of ios 10 to be able to get involved with this to be able to put in that and your video, it does not support it -- >> get rid of the scaffolding. >> and can be watched on the network. and it's a bad game because it's thursday. and it was, remember, two tired
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night football. >> again, let me just conclude at least by saying my reporting at this point nothing imminent. >> the people who sold today's 17 is demise imminent for their p & l, people got in early on that downgrade. was that well timed? what would you regard that as? >> ill advised and suboptimal. >> does bring us to a discussion of video views and click rates. facebook is down in the premarket. the social network says it overestimated average viewing time for video ads on its platform for two years. facebook told ad agency publicist it led to overestimating viewing time by up to 80%. facebook has since changed that method, but people are saying imagine if this had been neilsen in that world, what would that have looked like? >> here's my take, there are many metrics that have entice d
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marketers. this was only one of the metrics. it's obvious this is not a situation facebook want to find itself in. you're talking about ad revenue $6.2 billion, up 63% year over year, how much will go away from that? where is it going? where is it going to go to? how are you going to reach these people? you got another way? you know, have a banter at the end on the hamptons beach saying use tide? i mean, it's the only game in town and i think sheryl sandberg who speaks directly to advertisers says we screwed up. when you listen to the conference call they have more than just this stat. it's disappointing. it's embarrassing. >> right. is it actually a blow in any way to their business? earlier on "squawk box" anthony declementi said about $2 billion in revenues from ads and it's growing quickly. as to whether of that is in question or the growth rate is in question certainly doesn't
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seem to be to your point, where else are you going to go? >> look, it's embarrassment. and it does call into question many forms of advertising. we don't really know. there are times when you read that you have one viewer. there's a great deal of subjectivity. this is probably really embarrassing to facebook. i wish they would come on and really try to qualify -- >> for those who say it's a test of bulletproof, if it can get through this unscathed, would that be true? >> it's numbers less than 30 times earnings on next year. someone's going to come out and say, listen, i don't want to pay the same price. it's not as good a stock yesterday twitter which was better stock than it was earlier this morning. >> yes. unless they fail completely to sell themselves. in which case it would be a worse stock. >> one thing, between facebook and the metrics, yahoo and this
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two-year-old hack, mylan -- >> it's a bad week. >> trust eroded all week long. >> that's why the nasdaq hit an all-time high. because nothing makes sense. this guy rosengren, he should be more like belichick. he's a boston guy, right? belichick shuts out, does he talk? >> cats and dogs living together. the world is crazy. when we come back, lululemon's founder has been an outspoken critic of the company's management but the ceo making his case for his growth strategy. we'll hear what he told jim last night on "mad money." valvoline slo gan going 150 years under the hood. going for four days in a row on the upside, first time since july and we'll watch twitter on david's report up 17%, back in a minute.
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keeping an eye on twitter. close to 20% gain on david's report a few moments ago that the company's moving closer to a sale. receiving expressions of interest although no sale, david says, is imminent. suitors appear to be salesforce and google.
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cracking that $20 level that's been very tough resistance. >> fabulous reporting. it's been in the air. i had felt that when the stock had gone back up to $19 that there would be an issue with what -- it would crater the acquirer of the stock. you would have to come up with such a very quick view of customer care and what it can mean. when the stock was at $15, reminded me of linkedin. but you know what, david, your reporting indicates to me that this is not as big an obstacle. >> it's interesting because linkedin of course also had a very large portion of its ebitda equal to its stock base compensation. a lot of people believe that would be an impediment to a potential sale here similarly, but again doesn't appear to be something that is standing in the way of suitors' interest. >> what you hear, again, it's not like these features of a thursday night football. it's not these little additions. it's about the notion of knowing
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the customer. >> yes. >> and how failed -- i mean, in my meetings -- look, anthony -- look, i've been a businessman all my life. of which i now play a businessman on tv. but you get together with these guys say why don't you do this, why don't you do this, there are many people that come to them with ideas and they're nice guys, good guys, listen, you got to do this for the concierge service, like this, they continue to do the incremental thing. but, you know, the problem is that if there isn't a deal, the stock is too high. >> well, we'll be on it now as will of course all of our competitors. >> yes. >> if it's based on what they're doing, it's incremental -- look, it's great, it's fun to be on twitter last night. until the game was a blowout. it's fun. it's fun. but it's just not getting new users like it should. >> right. >> because it's not being used correctly. >> that's going to be key. yeah, i mean, user growth flat lined for six quarters waiting
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for a change in that department. >> that's why it's so hard to go out and say, listen, get a bid because then you're suddenly like i can't recommend a stock on bad fundamentals. shares of lululemon are up almost 52% over the past two years, but that hasn't stopped founder chip wilson being critical of management. last night on "mad money" the ceo responded by telling jim the company's growth strategy is paying off. >> two years ago you had an organization that had grown exponentially fast with investments really lagging behind the growth. so the past two years, i mean, we've build behind structures that we can support successful business. we had no digital strategy. we had no international strategy. and we really evolved from being a founder led culture to a high performance culture. >> on what? >> that back and forth between wilson and potdevin. >> i think he's doing everything right. the undercurrent there about what's wrong with lululemon is that block that we did the interview on, it's just
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athleisure, athleisure, athleisure. what he's saying is please do not pigeon us to athleisure. it's more lifestyle, more a way the millennials think. and he used a term before my daughter's clued me into life, it's about mindfulness. when you mention mindfulness among a group of people who are in their 50s and 6 0z, people say are you kidding me, mindfulness per share. but when you think about what he's building, which is this a total part of your life of which he wants to be a part and how he got guys from nike, the guy from nike is really -- >> i'm trying to understand what mindfulness is. i don't know. >> you wouldn't. >> what does that mean? >> okay. i'll try. >> why don't you do some reading? >> give me a list. i'll get on it. >> i don't know. i can give you a list of books this big about mindfulness. >> on being nothingness? any of that? >> what are you like -- get out of your existential debacle. mindfulness is what you do when
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you're thinking about thinking. >> oh, that helps me. >> bound by the four walls. >> do you practice active restful mindfulness at night? do you do ten minutes of deep breathing and all that? >> no one will believe it, but i do. >> nobody believes it. >> no one does. >> i don't care. like sam gerard, i don't care. yes, to go back to lulu, what he's saying is people who think about their life more wholistically, that my clothes are my life, what i wear, what i do, going to yoga, spin, i know you're a spin guy, what you do when you think, when you meditate, it sounds a little whimsical, right? but it's working. >> okay. >> it's working. don't patronize. >> no i'm not. working is key.
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if it's working, it's working. >> you like it? >> yeah. >> thank you. >> we'll get cramer's mad dash, look at the premarket on this friday after a busy week and getting busier. back after a break. e that, a moment turns romantic. so why pause to take a pill? and when you're having fun why stop to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours.
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>> i don't think it's the biggest story of the year. >> then talking about lulu why i think lulu is worth more because of mindfulness, and you're skeptical of me. i'm totally a believer of you with your reporting on twitter. >> thank you. >> and i am telling you that there's more to lulu than just clothes. >> i understand. i listen and i believe. >> thank you. >> where are we headed on the mad dash? >> david, a confluence of things going right for a company called imperva. ibm make a bid for them, they protect the company's business critical data and application. here we have yahoo. that's moving up all the cyber security plays, of which by the way fortnet would be the one, i like fort net much more than fire eye. but imperva is a great differentiated product offering and ibm should step up to the plate. i've said it over and over again, i'll reiterate i think this company is indeed much sought after by people but doesn't have any desire to sell.
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>> bloomberg story yesterday, i believe, cisco, ibm -- >> i think chuck robins is not going to overpay. he's doing an unbelievable job at cisco security. ibm hasn't been able to step up and do big acquisitions but they've done a ton of acquisitions. this would be good fit for ibm, not as good fit as cisco. >> okay. >> this is different from my twitter story i'm in there noodling in a sustainable mindful way. >> you've been talking quite some time about why it would be interesting to people who might not have anticipated the interest of those who are like salesforce. >> i have meditated on what twitter can do versus my friends adam bain and -- >> very mindful. we have a lot more to cover here including that huge breach at yahoo. i'll have some insight on that. valvoline ipo coming up all after this.
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because the ultimate expression of power, is control. this is the pursuit of perfection. you're watching cnbc's "squawk on the street" live from the financial capital of the
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world. the opening bell in just over a minute. a busy end of the week as we get some fed speak around lunchtime. oil continues its run ahead of what some suspect may be a deal in algiers next week. twitter is on pace for what could be the best single day for the stock in over two years. >> wow. >> on david's report that they are moving closer. >> reporting, you make calls and you broke that story. the oil story, i think, once again is a way to get oil up for short-term profits for the likes of venezuela and saudi arabia and russia. this algiers -- you know, this meeting next week, i think it s is -- i don't think anything will come of it. they have to fill in immediately. >> oil's on track for its best week in august. speaking of oil, valvoline's going to go public here at the
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exchange today, as we said at the nyse, the provider of motor oil and automotive lubricants celebrating its ipo. talk with the ceo when the stock opens. over at the nasdaq celebrating its ipo, a provider of cloud based management software apptio. busiest week for new listings since june of last year. about ten u.s. ipos, valvoline just the latest. >> ben sana works with me on "mad money," there had been a series, i'd say the last ten, nine have been really great. now, some are too small to talk about on our show, but money's being made. they're pricing these deals to make money to get people back in. i think that's very smart. don't forget twilio and acacia
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get back in. e.l.f. was an interesting deal. these deals are interesting. >> yeah, interesting is -- >> one of the top five of the year in terms of first day performance. although it's giving back about 3% today. >> true, but remember, this changed cosmetics. if you go speak to estee lauder, marvin ellison at jc penney which has great deal with sephora, cosmetics people will pay up for great cosmetics. david, if you steal someone's lipstick these days, that's like stealing their iphone. >> really? >> lipstick is incredibly important. >> okay. i didn't know that. how would i know that? i don't use lipstick, contrary to the rumors out there. i don't. let's talk about yahoo a bit, guys. it's down about 1.6% right now, this after the company revealed that in 2014 it was the victim of a hack that may have seen as much as 500 million accounts lose or have their password and
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user name taken by what yahoo is calling a state-sponsored actor. let me give you a little background here after some conversations i've been able to have. we all know of course hacks happen all the time. constantly. all these companies are constantly getting hit with trying to hit their fire walls and get through their systems. in this case it appears that after the verizon deal was announced, yahoo received an incoming call saying that we have hacked your system. yahoo then embarked on an investigation to see whether in fact that was the case. and having brought in the experts who do these forensic analysis, they actually determined, no, doesn't appear that that was. but they found that in 2014 there were some database files that were copied. and it did appear that in fact that included encrypted passwords and user names, of again, this half a billion accounts. now, this is not really seem to have found its way into the
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public market for this kind of information hence perhaps the belief it is a state-sponsored actor who really was looking for particular accounts that it essentially could spy on people. unclear, but interesting to note at the end of the press release. i think they said only 10,000 people had been told to change their passwords. so while half a billion may be impacted in some fashion, only 10,000 have been told by the company to actually change their password. the other question here of course is, is it a material adverse change in any way under the merger agreement? or i should say the sale of its core business, the agreement with verizon, that does not appear to be the case at this point. if for some reason yahoo's business should fall off a cliff, perhaps this will be revisited. verizon found out about it from yahoo only a couple of days ago. i'm told though things remain strong between both companies. and, you know, we'll see. this is something that will be developing, but it does not appear to be something that is endangering the deal, at least
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at this point. >> but this one did get -- there had been a period where we were muired to these, this one did hit the radar screen as being, wow, i got to stop giving people my information. >> yeah. yeah. >> white house hack yesterday. colin powell's e-mail last week. i mean, they're coming fast and furious. >> when you speak to cyber ark -- actually, these companies all come on "mad money." palo alto, we just have been specialized in this, and it's been going on all the time, but things have kind of morphed into more ransom kind of cyber security. >> right. >> which was -- and that's individual bad guys hacking, getting information and saying you pay us and we will not reveal the information. this is quite different. this is back to the old style home depot target. >> potentially. >> and that's what fire eye used to speciali izize in. >> though those were criminals just looking to steal things. >> right. >> this apparently state-sponsored actor is not as
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interested in stealing people's pass words to get into their bank account in some fashion or get in the back end. >> but fortnet has defended these before. some of these are very -- fortnet is the more likely one that you should buy here. >> the other question of course is what took them so long. two years and this simply seems to be the volume of attacks that took place and determining what is or isn't or has or hasn't gotten through is difficult. and, again, having gone back, they saw this 2014 breach. but only having gone back very recently as a result of another threat they had received. by the way, i'm told yahoo has improved since '14 its security a great deal. >> it's interesting you say that. this is another week, carl brought up, about bad week for business. i mean, why was wells fargo so bad for people? because it had been going on for a long time. why was the epipen so bad? until the going on and then it wasn't until people complained. it's kind of like, listen, we're doing things and we're kind of
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long-term doing the wrong thing. i think that's part of what people really hated about this. >> got some research this morning. barclays initiates some food retailers. walmart they take to an overweight, but overall they're saying q-3's going to be the most challenging in a decade as they look at deflation on deflation last year. >> i think they were -- i think kroger is down to the point where it gets interesting. but walmart viewed as a disrupter. it's been so long. i'm a big doug mcmillan fan. i just think he has got a very forward looking view. jet.com, look, they want to disrupt the industry and they have the balance sheet to do so and they have the shareholder base to do so. and that's really important. the shareholder base is allowing walmart to take risks that nobody else can. >> well, yeah, that shareholder base includes one large shareholder, the walton family as a whole. >> they're thinking big. >> yeah. willing to take time. >> what you have to do. they came after the dollar
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stores. take a look at those stocks. they never came back. dollar stores have been a nightmare. >> nightmare. >> because walmart came in under their price for a lot of goods. >> barclays says the reemergence of walmart as a disrupter and take costco to equal weight. >> costco went up a great deal when they switched cards and left american express and went to visa. the next thing you know in the end it's still a retailer. and i think costco's a great retailer. remember they had the card and the card is differentiator, but amazon's got the card. i said last night that amazon should just set up a stock market. you know, if you like fed rate hike, you should sell. but if you like no hike, you should buy twilio and you can beat the algo guys. people who like twilio also like acacia, david. >> wow. i'm looking at a tweet from the chief digital officer at salesforce. this is a verified account
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courtesy of our peter shacknow who said why twitter, one, personal learning network, two, the best time real context rich news, three, democratized intelligence and, four, great place to promote others. that is the chief digital officer of salesforce just tweeting. >> masquerading -- >> no. >> this is what i'm talking. this is what i've been saying to you. >> worst performer on the s&p right now. >> nice trial to see what happens to its stock. >> we're going to bring that up in a graphic for people as well. thanks both to steve and peter. >> this is what i'm talking about. when you combine it with einstein, with artificial intelligence, you will know more about your customer. and how could you not hire them? >> that is a very surprising thing for someone to do in a public way at this point. almost a little bit of its own bear hug. let me break away from m&a strategy, but that is interesting. there it is. >> oh, it's vala. >> yeah. >> he's fabulous. >> oh, really? >> oh, i'm back and forth with
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him every minute. this guy knows the space. he is brilliant. i mean, i commented he's brilliant like every day. he is just brilliant. >> there it is. best realtime context -- >> he is fabulous. do you follow vala? >> i do not. >> you got to follow him. he is always inspirational. >> he's just got -- >> is he mindful? >> well, yes. he's a dpie -- i don't know if you guys follow him. he has more knowledge than anyone -- i showed my wife him, said, no there's got to be five valas. no, he actually went to the beach a couple weeks ago. actually took a vacation. he was thinking on the vacation. this guy is it. >> by the way, google has $73 billion in cash, salesforce has 1.3 in cash. >> you have a common stock and i guess that's why the stock is going down. cisco has a lot of money, but i don't think chuck robins is -- >> fascinating. now we actually have people using twitter to explain and put
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pressure on, i would argue, a company that they very well may want to buy. you can see salesforce shares down about 3.7%. >> for instance, vala earlier today why earth is the best planet, it's just a fantastic tweet. i know it's not as relevant as -- >> no, i'm going to follow him immediately. >> you've got to follow vala. he's unbelievable. if you don't -- i want everyone to follow this man. he of course just told the truth about twitter. but i think there's nobody like him. like i said, there's got to be a lot of valas, but turns out to be there's only one vala. and he is salesforce personal learning network, yes, best realtime context, rich news, just amazing. >> the fact he said that on twitter of course not lost on anyone. >> no. >> and look underneath the world's biggest employers -- he does a lot of different -- he's a general knowledge man. >> it's already happened. i'm following him.
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i'm very excited. >> this guy's the real deal. this is why twitter -- i told twitter to identify the people who really you want to learn from. and this guy who just confirmed, i think, your reporting, also will help you be more mindful and expand your horizon. >> point out by the way -- yeah, okay, i will. >> twitter's already traded over 30 million shares. 30-day average is 24 million, so we're already above that. dow's down 32. although we're still on pace for the best week since the middle of july. let's get to bob pisani, i believe, on the floor. hey, bob. >> that's right, carl. s&p up 1.5% for the week. been good overall. down day today, 3-to-1 declining to advancing stocks. you kind of expect that though day after the -- two days after the fed meeting. take a look at the sectors, everything modestly to the downside. big story about energy is energy just turned positive. oil at $46 trading back towards
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the high end of the range. tech modestly weak but that's the big leadership group this month. banks have been underperforming. but on the flat side today. where are we right now? remember, nasdaq's at a new high. s&p 500, 2190 was the new high, august 15th or so. so we are 18 points, 19 points from an historic high in the s&p 500. so where are we right now now that we've got the fed out of the way? let's take a look at the markets. number one, the bull market, my opinion bull market very much intact. pullbacks we've seen in the market have been very shallow for a while now. the breadth, advancing. we've seen the advance/decline line near historic highs and been supportive in the last couple weeks. rotation's been healthy. talked about tech being the big leadership group, banks underperforming inability to get interest rates up. the fed is out of the way now everybody down here is talking about the presidential election. what if anything will it mean. goldman had a note out and i think they're right, their point
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was it's already common topic of conversation with clients, it does not seem to be affecting investment decisions. i do not see that either, but i think that's going to change. one thing everybody seems to agree on, no matter who win the election is that austerity is going to be over, particularly in congress. and you're going to see some action. so the important thing is monetary policy will be out and fiscal policy will be in, if you look at the presidential election and what's going to be going on after that. put up the next full screen there. so if you accept that fact that no matter who wins there's going to be more spending, fiscal policy will be in, industrials, materials, everyone believes would be benefitted goes to their exposure to infrastructure. and aerospace and defense stocks will also benefit because of the emphasis on defense that's going on. a lot of debate elsewhere, but you're going to hear more about the impact on the markets no matter who wins right now. take a look at the ipo market here. i want to just turn around and bring in valvoline here because the indications are pretty good on valvoline here. this is going to be the fourth
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biggest ipo of the year $22 to $25. remember, 30 million shares priced at $22. the price talk was $20 to $23. so that's right towards the high end of the range, not outside of the range. but still pretty good overall. sam mitchell, the ceo right over there in the crowd, he'll be on with us in just a little while. we're waiting for apptio to open at the nasdaq. that will be in about 45 minutes or so. apptio of course a technology business management company. and they price above the range. another one priced above the range $16 the price talk $13 to $15 overall. so the ipo performances this week have been spectacular. we haven't seen outperformance like this in a long time. novan, a biotech company up 92% on the week. e.l.f. beauty up 55%. trade desk up 60%. we haven't seen this kind of outperformance in ipos in a long time. you have to conclude the ipo market, finally been saying this for two months, is actually heating up a little right now. we've had the most active week.
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eight ipos this week, that's the most active week of the year. september, if the calendar holds, is going to be the most active month for ipos in general. we saw apptio, e.l.f. beauty, trade desk and a chinese software company all price above the range. haven't seen that in a long, long time. looks like valvoline is about ready to go. probably about a minute away here. let me just stand here and watch it here. 22 to 25. it's going to price somewhere in there. probably somewhere around $23. again, sam mitchell, the ceo, standing in that crowd right behind me. and he'll be on with us just shortly here. right now the dow down 42 points. this is going to open in about two minutes, guys. i'll get right back to you with the price. >> we'll be back to you, bob pisani. to the bond pits in the meantime. rick santelli at the cme. >> happy friday, carl. a two-day chart of 2-year kind of pancakish after fed statement kind of flat.
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but if you look at a two-day of 10s and maybe we're exaggerating just a bit, you'll see it's a bit lower, underscores yield curve movement post fed but also underscores the short end will have a hard time moving it all. no tightening the last meeting, probably not in november. but the possibility of december is definitely putting a crimp in the volatility at the short end. look at some august 1st starts, shall we? keep in mind we're unchanged on 10s on the day, but we are down 7 on the week. look at the 10-year, we keep testing 1.60 from the top down. august was all about the 1.50s. you really want to very carefully watch at 1.60 level. many traders talking about getting back in that range. look at the bunds from 8/1, they are already in that range. pay attention there, they definitely saw some buying pushing their yields back into negative territory rather aggressively. now japan. look at the jgb 10.
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this chart is from july 1st. now, you see the high water mark, the high yield on this chart? is charts of the dollar index. carl, back to you. >> all right. thank you so much, rick santelli. when we come back, a lot more on today's news surrounding twitter. once again, a tweet from a
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salesforce executive saying why twitter, personal learning network, best realtime context rich news, democratized intelligence, great place to promote others. salesforce the worst performer on the s&p and dow down 49. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. to growing businesses cdw broacross the city,tration increasing productivity like never before, which is amazing,
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unless you're a barista. cdw implemented dell poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me. so nobody wants coffee?! hey, can i get a couple copies? enhanced mobility by dell. i.t. orchestration by cdw. now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce. this man creates software, to protect this customer, who lives here and flies to hong kong,
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to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. it's what the national debt could do to our economy. if we don't solve our debt problem 19 trillion and growing money for programs like education will shrink. in just 8 years, interest on the debt will be our third largest federal program. bad news for small businesses. the good news? there's still time for a solution. ask the candidates for a plan to secure our future.
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♪ aren't you curious about where it came from? >> i'm going to get you home and away from whatever's after you. i love you too. >> watch out! now's a good time to take charge. >> let go, i can see better than you. hey, get back in there. >> i touched his eye. >> that is the trailer for monster trucks, a yet-to-be released movie weighing on viacom. paramount announcing the $115 impairment charge, analysts quickly zeroed in on monster
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trucks, about a teenager who discovers his pickup with special powers. not given a minority stake in paramount. we talked about that charge yesterday. a lot of snark this morning about adam goodman and the fact this idea apparently came from his kid and look where it led a company that's in dire straights. >> yeah, dire straights, i don't know. but certainly difficulty, carl, to say the very least. and not the least of which, i mean, the studio in one way, but also the networks themselves. and this evolving world we've talked about so often that is only coming more quickly, which is the proliferation of different opportunities for you as a viewer to choose how you want to do things on an over the top platform with a group of channels, skinny bundle provided by cable provider, but the question of course is will viacom's networks be part of any of those? and can they be, not to mention the difficulties they've had at the studio itself. >> meanwhile, credit ratings remain a concern for some,
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getting awfully close to levels they do not want to see. >> no. again, you know what we talked about you don't buy twitter in 22. viacom went to the mid 40s people thought cbs was going to buy them they lost a lot of money. >> although nothing says the cbs deal is nothing that will happen at some point. >> are you breaking news again? >> no, i'm not. >> you're breaking news. >> no, you've got to continue -- nothing i'm saying is different from what i've been saying. you have to consider that a possibility. a real possibility for the future. >> we're going to get stop trading with jim in a minute. dow's down 43. don't go away. when it comes to healthcare, seconds can mean the difference between life and death. for partners in health, time is life. we have 18,000 people around the world. the microsoft cloud helps our entire staff stay connected and work together in real time to help those that need it.
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time for cramer and stop trading. >> this shoe business, it has really heated up, carl. this morning finish line was up a dollar and reversed because they said the cadence of numbers has actually been not so great. i point this out because nike reports september 27. a piece talking about high risk. i am not seeing -- i have not seen people talk about competitive pressure against nike in a long time. but you add up finish line with the piece and it says be
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careful, nike, i love nike as a company but adidas has come on. no doubt about it. adidas is back. and that has made it difficult. i like foot locker. >> got valvoline open by the way. was indicated $22 to $25. now $24.16. so we'll watch that, talk to the ceo in the next hour on a busy week for ipos, but more than anything a busy week for david. >> yeah, remember penzoil? congratulations on the twitter. i don't know how to be so proud -- so to speak. >> i appreciate it. i really do. >> what's on mad tonight, jim? >> i wasn't kidding there. i was being heartfelt. >> my father -- did you guys really like each other? okay, we're going bab to the well. with lulu. it was i think a very important interview. i typically am bound by the comparable stores sales and i think it's not a good read on lulu. and we're going to talk about that. >> good luck against pittsburgh. we won't talk about it.
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>> you know they're going all the way. that's the problem, they're super bowl bound. >> okay, good. >> although the broncos, the defense actually got better. how is that possible? >> we're just glad osweiler had a rough night. when we come back, a lot more on the story of the day twitter up 20% on david's report. we're back after a break. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away.
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♪ this is how we do it ♪ ♪ it's friday night good friday morning, welcome to "squawk on the street." i'm carl quintanilla with sarah eisen, david faber at post nine of the new york stock exchange. markets taking a pause from three days of gains, but of course the big news, twitter moving closer to a sale. we're going to talk about that. oil getting speculation continuing about a possible deal in algiers next week. >> and our road map begins with that breaking news carl just mentioned on twitter. our very own david faber reporting the social media company received expressions of interest from several tech companies and may receive a formal bid shortly. we have all the details for you. facebook's in the hot seat. shares under pressure on news the company exaggerated a key video metric. how much did that miscalculation
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boost the company's bottom line? plus, valvoline getting ready to start -- just started trading here at the new york stock exchange. shares pricing on the higher end of the range $22. we speak with the ceo first on cnbc. all right. let's get to that twitter news we first brought you at 9:00. the company has received expressions of interests from a number of technology companies that are considering whether to make a bid for the social media company. and its board of directors said to be largely desirous of a deal. that according to people close to the situation. no sale is imminent. while twitter may receive a formal bid shortly it has thus far engaged in conversations with potential suitors who are examining the possibility of a deal. and twitter's willingness to engage on that possibility. one term, kicking the tires, so to speak. those suitors believed to be salesforce and google amongst others. there's no assurance a deal will materialize, one person close to the conversations tell me they are picking up momentum and could result in a deal before the end of the year.
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this morning after i reported this news, salesforce's chief digital evangelist, vala afshar tweeted from a verified account, why twitter, personal learning network, best realtime, context rich news, democratize intelligence, great way place to promote others. value to a potential acquirer it would seem such as salesforce of course a company where he is a senior executive. twitter itself has been struggling of course to generate top line growth. only today the stock was downgraded by mark mahaney on concerns about its ability to attract new users and at the same time continue to gain traction amongst advertisers. survey showing that does not appear to be the case. but none of that appears to be giving potential suitors pause who are said to be interested as much in the data twitter generates as a place as a paid ya company. last week giving more fodder to the idea jack dorsey is certainly busy with something in
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san francisco, he canceled a couple appearances including one at an ad conference in cologne, germany, according to advertising tie tant martin sorrell. >> i suddenly got an e-mail from jack to say after one year of planning he was unable to to be with us. so i got down on my knees and begged for him to come, but unfortunately for reasons unknown to you in the room and to me, but known to him, he had to stay in san francisco. >> now dorsey did join via live stream. and sir martin did ask him about a possible sale. take a listen. >> there's obviously been talk about apple's interest, facebook's interest, potential interest. google's interest. do you think twitter will develop -- continue to develop on its own?
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or do you think it would be better served by being aligned or part of another organization? >> we have great partnerships with all those companies as you mentioned. there's always been a lot of interest and passion around what we do for the past ten years. and we've always had a lot of speculation around what twitter could become and what twitter -- where twitter would go. but we have a really strong plan ahead of us. >> right now the stock, guys, up 21%. >> which would make it its best single day since going public in november of 2013. let's bring in jon fortt and kayla tausche who join us here at post nine to talk about dorsey's comments last week. williams comments a couple weeks ago. david's report today. all building to something. >> to something, but the question is what. when i look at this i wonder is it more of a consumer leaning company, kind of advertising
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justification, or an enterprise company for which twitter makes the most sense? because it's got to be somebody that's not looking to buy growth. because twitter doesn't really have growth. i think on the facebook side of things it would be more about scale. now, facebook in particular doesn't really need scale. but others trying to compete with facebook, the likes of google perhaps would. and then on the enterprise side you have the likes of salesforce. their justification would be likely to be more like microsoft's justification for buying linkedin, being able to put a couple of different data sources together, being able to get more intelligence about what customers might actually want, being able to sell that database in essence over to customers. but it's a tricky one. >> yeah, by the way, this is not my reporting in the sense of ibm has been also kind of speculated given watson and what they could conceivably do with the data. i don't know that they are one of those technology companies in addition to google and salesforce, but, jon, they come into the fray as well.
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>> absolutely. >> if you consider the value from that perspective. >> you look at ibm's purchase of weather company assets sort of similar twitter in essence is forecasting, taking a look at the weather when it comes to public opinion, when it comes to news and topics trending. so it would fit in that same bucket. but that's a lot of money for ibm, a company that has been making more of an anti-scale play in a way. it's been kind of slicing off somewhat of what we've seen from hp enterprise. for them to pick up something as expensive as twitter with their profit focus lately versus raw scale, that'd be a hard story to tell. >> what about google? or alphabet, i should say, have relationships with twitter? that was, kayla, widely speculated as a potential buyer when it comes to search and building on google's search business. >> but i think it comes down, sarah, to what you would do with twitter and how you would integrate it into a potential company. it's no secret that salesforce was bidding and bidding very highly for linkedin.
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perhaps they have cash to burn, but as jon mentioned more of an enterprise play. google if they were to potentially acquire this company, speculation is more of a consumer play. how does that change the valuation of a company? what type of company is it? what are its comparables in the market? what sort of valuation would it command? right now even up 21%, still well below its ipo price of $26 a share. think about the board, there is a staggered board. they have added some board members in the last year. but, david, i'm wondering to whatti icextent. you were reporting something could happen by the end of the year. is there a desire to get something done by proxy season so you don't have an activist coming in to try to completely shake up the board and have its own way with twitter? >> yes. the conversations i've had for some time in fact i've been reporting this for a number of weeks i think there was an awareness on the board of directors, kayla, the window of said nominees opens february 1 or the end of january. and it is not unknown to them the possibility at least that you get an activist in there how
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distracting that can become particularly because the top line growth of the company is so difficult to come by. and so that does appear to be one reason why, as i reported, the board is largely desirous of a potential transaction, there's momentum and they may be in fact encouraging that route when you do get those expressions of interests from potential suitors. >> it's fascinating the way the character of the company would change depending on the buyer. a consumer play at google. i mean, having twitter be an enterprise tool is so far from the origin nal mission of the company which was a lot about self-expression, moving democracies, trying to get this in the hands of users all around the world for reasons that have nothing to do with crm. >> absolutely, carl. and that comes to the question of culture. if you're an enterprise company embracing twitter, i mean, enterprise companies tend to have a certain kind of orderly culture. twitter from the board level on down has not had an orderly life. so what kind of corporate
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culture, what sort of executive is going to be willing to take on that sort of a precocious teenager? >> and how does it make money? rbc note mark mahaney took a poll of more than 1,000 advertisers and had them rank which the best return on investment was. twitter came in worse than yahoo and aol. i think it came in number seven. so there are serious concerns about where that growth in sales comes from with the advertiser seemingly not too pleased. >> this is the case where the whole would have to be somehow worth more than the sum of its parts. somebody has to have a data set that gets more valuable by adding twitter's data set to it or an advertising strategy that similarly gets more valuable. >> carl, when you think about the culture of a company, i mean, this is probably a textbook example of how the culture of a company changes once you do go public. you think about the change in tone from these ceos in interviews over the last few years. ceos of twitter, yahoo and now pandora, too, have said they would stick to the strategy. they don't need a poison pill.
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they're confident in their ability to turn around the company. and now the line is, well, we have to deliver value to shareholders. and they've started saying that out loud on the record very vocally. and it's almost as if they are facing their fate in a way. >> and not to forget to your point about an activist, of course, given his dual role as ceo of two public companies, that would be a difficult battle as well to fight when you get the proxy advisors coming in talking about their view on being the ceo of two different companies. that could be yet another reason why they don't want to fight that battle at twitter. >> and we have nothing on price. now with shares trading up 22% based on your reporting. >> price sometimes is the final thing you get to. the only thing i did share with people is the idea that while there was questions from some about all the things we've talked about, in addition to stock base comp being equal to ebitda, there was an expectation it would be a premium certainly over the price inhabited prior to our reporting. >> all right. wait to hear from you for more. >> okay. >> in the meantime we'll watch
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shares soar. and, guys, we'll see you next hour. i have a feeling there will be a lot more discussion of twitter now up 20%. also coming up, the get tough approach. wells fargo putting the justice department to the test. we will speak with pulitzer prize winning "new york times" columnist jim stewart about his latest column on that. plus, valvoline starting trading here at the new york stock exchange. a strong debut up more than 10%. we'll speak with the ceo. much more ahead on "squawk on the street" with the dow down about 50 points. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires
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democratic presidential candidate hillary clinton has updated her tax plan with the proposal for a higher estate tax. our john harwood joins us with more. this is becoming one of the more philosophical differences between the clinton/trump tax plan, john. >> it's a rather large difference. let's take a look at what she's doing. first of all, hillary clinton was trying to figure out revenue sources to pay for the spending including a small businessin centive plan that she announced a few weeks ago. here's where she gets $225 billion, from the estate tax. two elements of it. one is a higher rate going up from the 45% she previously proposed to a top rate of 65% for the largest estates. and secondly, ending the so-called stepup basis in which someone can pass investments onto their heirs and the capital gains that accrued in the lifetime of the original investor are simply assumed and
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not taxed for the heir. now, when you lay out where we are with respect to current law and what hillary clinton and donald trump are proposing. here's what it looks like. under current law you have a top -- the only estate tax rate is 40%. that's for estates more than $5.45 billion for singles, $10.9 for couples. with the clinton plan, you have rates ranging from 45, she would go up from five for everyone to 65% for the largest estates $500 million for singles, $1 billion for couples. that's a tiny number of people. and donald trump would take the estate tax to zero, end it. that is a stark philosophic contrast and you can expect to hear that come up at the debate on monday night, guys. all right, thank you very much, john harwood. long criticized for accepting large settlements in lieu of punishing corporate executives, the justice department under new guidelines in the last year now
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focusing efforts to target those executives involved in corporate fraud, white collar crime and other wrongdoing. our next guest says wells fargo may be a perfect test case. he of course is pulitzer prize winning "new york times" columnist and cnbc contributor jim stewart. happy friday. >> happy friday to you. >> always good to see you in part because i know it's friday. but also just to see you, jim. >> thank you. >> this was captivating of course watching that testimony earlier this week. >> yeah, wow. >> and you bring up an interesting point. explain to us why it may be even more salient. >> i don't think wells fargo has figured out they are caught between two powerful trends. one is public outrage no individuals were held accountable for financial crime and the justice department which last year put out these tough new guidelines saying, look, corporations don't commit crimes, individuals do. we're not going to go along with this fine the corporation let everyone go on like life as usual. because it isn't stopping anything. how many times has ubs been
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fined? i lost count. and they do it over again. so you're going to have to fine some viindividuals and hold the feet to the fire. then we get wells fargo. top management says we didn't tell -- but then create situations where they impose incredibly aggressive sales targets saying if you don't meet the target, you're going to lose your job. okay, i'm the employee, i'm saying there's some kind of ethical thing i'm not supposed to do this, but if i don't get this number i'm going to be fired. so of course you do the wrong thing. they've got over 5,000 people caught doing this. you can't say this is a rogue employee. there is something systemic going on there. the argument will be top management knew or should have known that those guidelines would have resulted in this kind of behavior. so i think this is a great test case. i went down the guidelines, newly toughened guidelines. unless they start moving fast to hold some senior management accountable, to fire some people, to clawback, i think it's got to go to the top. he's got to give up some money
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at the very least, maybe more. the justice department is not going to be impressed by what they've done. >> are you talking about a criminal indictment? >> well, there are two kinds of things here. i mean, we're basically looking at fraud. first of all, a corporation is strictly liable for any crime committed by an employee in the line of their work. so on the face of it, wells fargo is liable for this criminal activity. i don't think there's any doubt that it's criminal fraud. so the question is then will they use discretion and let them off the hook, partly that is can they find senior executives to hold accountable. they can go two ways, they can go civil fraud and civil penalties, or they could go all the way to crime. i think we need to see what the evidence is. you know, what was going on inside the bank. we haven't even heard from them like who set these targets? who was responsible if that are? who came up with this idea? what kind of memos were going back and forth? by the way, they've known about this for years. so when the first case of this happened, how did they respond?
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who responded? how far up the chain did it go? we need to find out all of that. but they had the discretion to go either criminal actually try to put somebody in jail or keep civil fraud level where they go for financial penalties. >> stumpf said on the hill this week he's known about it for a couple years. are you saying he needs to go specifically? or would middle level management satisfy regulators? >> one thing they say in the guidelines we want to look at middle managers, what they're really saying is we're going to squeeze the middle managers to see what they can tell us up the chain. they always run into roadblocks where they get a few low level people and then the walls come down, the cone of silence is down, nobody talks. they don't get any farther. so i think they definitely need to look at middle management people responsible, but then say did you go to your superiors? did you tell them about this? did you say something? you know, carrie tollstead has been overseen on this, we haven't heard from her. >> we will on thursday. there's a house -- >> yeah, the house is going to have her. i'd love to ask her questions.
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for all we know she was trying to stop this and blow the whistle and higher ups are saying let's not rock the boat. >> what rises to the level of fr fraud, seems higherups always have plausible deniability here. >> we do. >> not unless you find an e-mail that says keep doing what you're doing even though it's wrong. >> no, inference, remember the ar thur anderson case? >> yes, of course. >> they said this is our document retention policy. all they said is we want to remind you of our document retention policy and then went and destroyed the documents which were evidence in the case. jurors drew the inference that when you reminded them of that, what you were really saying was wink-wink, go do something about this. so here if you've got people saying, you know, you had better hit these targets or else, you could infer -- you can expect employees to then start cutting corners to put it mildly. and once you know some of them did it, but you don't then do
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immediate remedial action to stop it and to change those targets, again, you have even a higher inference they should have known. >> civil more likely than criminal though, right? >> it sort of cuts civil to me. >> beyond a reasonable doubt might be tough. >> i think you need to put somebody in jail here. again, i'd have to see a lot more evidence before i want to say that. >> they don't have a good track record of doing that. >> no, they have a terrible track record. that's why they've changed this policy to get tough. i think especially in the waning years of the obama administration they would love to come in with a scalp to show we did something. what people are outraged about high ranking executives responsible, the ceo got over $100 million in pay during this period. the woman who oversaw the mission quote/unquote retires and had a package of over $100 million. this is what blows people's minds. i don't know they want to see somebody go to jail but some meaningful accountability for this when thousands and
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thousands of low level customers and low level employees were hurt. >> that's not even counting making good on some of the things -- the effects those accounts had on people's credit and everything else. >> exactly. >> jim, thank you. jim stewart of "new york times." wells fargo flat by the way after a tough few sessions. when we return, valvoline started trading here at the new york stock exchange. that's just in the last half hour or so. shares are up about 10% in a down market. we're going to talk to the ceo straight ahead. stay with us. you're watching "squawk on the street."
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valvoline up about 9% this morning making its public day view under ticker vvv. we'll watch this closely on a busy week already. joining us is the ceo of valvoline, sam mitchell is with us here at post nine. congratulations. >> good morning. thank you. >> you've caught us in a bit of a sweet spot here. >> that's right. >> is that by design or being lucky better than smart? >> we'll take lucky too. >> how does it change the character of a company that's been around for so long that people know so well?
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>> well, valvoline with 150-year history probably the world's first 150-year ipo, took a while, but we built a great business and we're really creating two new great companies. >> talk about the state of the business both here, exposure to the consumer on a retail front, international, what's the mix? >> that's one of the things that makes our business really strong. we've got strong channels of distribution with diy consumer business. and that's been doing really well for us. but of course those people that have their oil changed in other places, car serviced at independent installers. we have a strong quick lube business too, had ten straight jeers of same store sales improvements. we're looking to invest and grow that business. and international business has excellent potential too. we have relatively small market share but strong teams and capabilities around the world. >> that 150-year history is something you tout a lot. i looked through the pros
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prospe prospectus. jiffy lube is the other big competitor. how would you characterize the market? >> it is a competitive market. it's interesting because valvoline is an independent automotive service and lubricant company. a lot of our companies, some of the other companies are part of big integrated oil companies. we see that as our advantage. we call it hands on expertise and attitude to move faster and work closely with our trade partners. >> we're in a period now where people are questioning car ownership over the next several decades, right? looking at the utilization rates of cars. somebody called them -- they're not driving machines, they're parking machines because they spend so much time in the garage. does that have an impact long term on the business if people decide i will ride share over own? >> we're not sure yet. it's something we have to keep an eye on any trends there and certainly see more ride sharing in the cities. but there are 280 million plus
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cars and trucks on the road and they're still growing in number. valvoline's going to be needed for many, many years. and we're going to grow with the market, grow our market share. >> do you have a window into where we are in the auto cycle? there are a lot of questions right now about whether there's been peak buying in autos. it's been very strong over the last few years. how correlated is your business to that? and what do you see out into the future? >> you know, it's really not strongly correlated to the auto purchasing cycle because people have to take care of their vehicles whether they're buying a new vehicle or if the economy slows and they need to maintain that vehicle. you know, lubricant demand stays very stable in that regard. so our strategy and our plan is to grow our market share by continuing to invest in our brand. >> one last thing, when i first started driving, i changed the oil all the time it seemed like. and now synthetic oil says i can't remember the last time i changed my oil. why is that? >> well, synthetic oils today are better than ever before, and there is a strong trend toward
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synthetics. a lot of the newer cars require the synthetic oils. so we're in a good margin on those synthetic oils, which is nice, but there's not as dramatic difference as you might think. whereas people used to have the oil changed in the 3,000 to 5,000 mile interval, it's more 5,000 to 6,000 even with synthetic oil. has more to do with how you drive the car then how frequently -- >> maybe you're not driving in new york city. >> that's probably right. sam, good to have you. congratulations. >> thanks so much. special day for us. >> yes. valvoline, vvv here at the nyse. >> another example of a strong ipo, strong demand for makeup and apparently for lubricant and oil changes. coming up, stuck on the sidelines, wall street's biggest donors are actually holding off writing checks this presidential race. we'll have the details for you on that. plus, take a look at where stocks are trading at this hour. the dow is down about 40 points. s&p 500 is down 0.25%. the nasdaq coming off that record high down more than 0.3%. much more "squawk on the street"
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built for business. good morning everyone. i'm sue herera. here is your cnbc news update this hour. a third night of protests in charlotte, north carolina, following the fatal shooting of keith scott. police issuing a midnight curfew under a state of emergency. protesters want police to release the video of the shooting, something that the police chief has rejected while the case is under investigation. egypt says a total of 148 bodies have been pulled out of the waters off the egyptian coast three days after hundreds of migrants heading to europe drowned. about 450 people were packed on the boat which capsized. 150 people though have been rescued. a syrian bombing campaign in rebel-held districts of aleppo
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intensified today. a syrian military official says that the strikes might continue for an extended period and will include a ground offensive. this after diplomatic efforts failed to salvage a cease-fire which only lasted one week. here at home, massive flooding in northern iowa forcing residents to quickly evacuate their homes. a storm system dumping anywhere from 3 to 14 inches over the area causing the cedar river to swell. it is the worst flooding in that region in nearly ten years. you're up to date. i'll see you again in an hour. that's the cnbc news update. back down to you, david nc. thank you very much, sue herera. i wanted to update our story related to it of course around 9:02 we reported expressions of interests had been received by twitter from a number of suitors believed to include salesforce and google amongst others interested in purchasing the social media company. at 9:28 a gentleman named vala ashfar, chief digital
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evangelist at salesforce, tweeted the following. again, 26 minutes after our report, why twitter, personal learning network, best realtime, context rich news, democratized intelligence, great place to promote others. he had taken that tweet on twitter to say wow timing of that is very interesting that he would actually come out so publicly and explain why salesforce perhaps might be interested. he followed that up though, we should add, by a tweet just a few minutes ago saying, i've tweeted my personal views regarding why twitter numerous times over the last couple of years. i simply love twitter. >> had nothing to do with your report. >> yeah, right, the timing was just completely had nothing to do wit. but we did want to share that follow-up from, again, val vala afshar. >> all right. we'll watch that. continue to watch that account. meantime as hillary clinton and donald trump prepare to defend their economic plans in the first presidential debate on monday night, our next guest says neither candidate has a
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plan to reduce the debt. and one plan would carry a much higher economic cost. a report from the committee for a responsible federal budget finds that clinton's plans would increase the debt by $200 billion over the next decade to roughly 86% of gdp, whereas trump's plans while improved since june would still increase the debt by $5.3 trillion to about 105% of gdp. joining us this morning is the president of the committee for a responsible federal budget. maya, good morning, great to have you. >> good morning, thank you for having me. >> what's most important for people to know both about their plans to handle the debt and what they're likely to say about it on monday night? >> so i think the most important thing is a starting point is that the state of the debt is already quite bad. the debt is at near record levels. it's the highest it's been as a share of the economy since world war ii. deficit is growing and the debt is projected to grow faster than the economy forever. and yet what we have is two candidates neither of whom so
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far has put forth a plan that would actually put a single penny towards slowing the growth of that national debt. which is really important for growing the economy, helping economic security, the next generation, preparing for the next recession. in so many ways it's kind of the foundation of the economy. so what we're hoping is that we'll start to move towards hearing from the candidates that this is not only an important priority but that they would put forth the plan that would actually have policies to reduce the debt gradually and in thought out ways, but as part of an economic growth strategy. so far we haven't heard that. >> what's been the most promising germ of a promise in that direction? i mean, is it trump's penny plan? on either side what's been the most constructive argument you've heard? >> so i think what has been useful is that on hillary clinton's side she has been very, very focused on paying for her new initiatives. so if you're in a hole, the first rule, stop digging. she wouldn't make the situation worse, but she wouldn't make it
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better. i would say both candidates have focused on the importance of growing the economy, but they haven't recognized getting the debt under control is a huge piece of growing the economy. and we need to have realistic understanding that our growth expectations we need to do better than we're currently doing. but we have a lot of challenges because we have the aging of the population. demographics are working against us. productivity is slow. and we can't rely on overly exuberant promises of growth. that's something that we have heard from the trump campaign which recognizes deficits and debt matter, but i think is exaggerating the effects of how they'll be able to grow the economy. we need to have more realistic promises on terms of that. >> i'm not even sure, maya, that i'm getting a message of growth from both campaigns. i know you're careful because you're a bipartisan organization. >> yeah. >> trump's growth plan, lower taxes, fewer regulations, better trade deals. what's the hillary clinton growth message? what is the narrative there? >> so it's very interesting. so i think donald trump's growth plan is about tax reform,
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regulatory reform, i would say the problem with his promises of growth is that higher debt and changes in immigration and trade might not help the economy. so on net we don't know what the growth effects would be. the clinton campaign focuses much, much more on using the government to promote growth. so they have initiatives and infrastructure, for instance, but it's more of a growth proposal that government could help. and i don't think either of them has a comprehensive growth strategy, which again, i would say has to include a sensible fiscal policy that people really can feel confident will grow the economy. so i hope we'll hear more realistic promises about the various pieces of what would be necessary across the board. and, again, we have to be realistic. we did not reform entitlements, baby boomers are moving into retirement. and so we have more challenges on growth than we did a decade or two ago. >> but, maya, back to the headline numbers. $200 billion versus $5.3 trillion, there's no real comparison there.
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>> no, there's not any real comparison. the trump campaign has a plan that would under any realistic growth scenarios balloon the debt quite dramatically. i will say it's much better than the plan they've had before, they've scaled back tax cuts, that's a step in the right direction. hope to see more of that. but would still increase debt significantly whereas the clinton campaign wouldn't make it better, wouldn't make it worse. they have a lot of spending initiatives, but they're paid for. kind of a pay as you go mentality, but certainly the right first step is not make it worse, which she would not. >> finally, maya, we're coming off a week where we talked potential interest rate hikes, and although no one believes t rates are going much higher any too many soon, i wonder if you could remind viewers what effect that would have on our ability to pay the debt back. >> it's a great point because we've heard so much if interest rates are low almost this free lunch argument don't worry about any of this. the u.s. is in a relatively
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vulnerable position because we have borrowed so much and we have structural borrowing. if and when interest rates go up, say they go up by one percentage point over the ten-year period that would add $1.3 trillion to the interest payments on the debt. this is a huge vulnerability we have when debt rates go up, debt payments will go. i don't care conservative or liberal, spending more money on interest payments means less for tax cuts or spending increases or getting a handle on the debt. that's something we don't want to be so vulnerable to those increasing rates, which are certainly likely to happen at some point. >> wow. viewers should definitely take a look at your work. maya, it's great to have you. thanks again. >> thanks so much. >> maya macguineas. final note, one topic discussed during the special debate coverage. monday 9:00 eastern time. sticking with money and politics here, some of wall
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street's biggest political donors are writing off the presidential race. our kate kelly joins us with more. kate, what have you found? >> sarah, a year of stunning avoidance on the part of some megadonors and donald trump seems to be taking the biggest hit so far. key figures who normally give millions to presidential candidates have dialed back contributions dramatically or focusing solely on the house and senate. this phenomenon seems to be happening a little more with conservative donors than liberal ones given those guys seem to be showing up in force for hillary clinton. casino magnate sheldon aid elson and his wife were nearly $100 million in overall contributions. tens of millions of that went to mitt romney's pac. but despite a may editorial in which adelson endorsed donald trump, he has given the candidate nothing so far, a scenario that may change based on reports this week but that we haven't seen evidence of change yet. hedge fund managers paul singer and ken griffin the fourth and
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14th biggest donors this year. they've focused instead on house and senate candidates as well as the issues they care about. singer a never-trump advocate during the primary season said in june that the candidate's economic policies could spark a global depression. griffin has been more mum on the subject. and peter thiel, the silicon valley billionaire one of 2012's biggest donors overall and endorsed donald trump very prominently at this summer's republican convention has not yet given trump a penny. a thiel spokesman said in august he had no plans to do so. and when i called him and e-mailed him today, he hasn't elaborated on the topic yet. he's focusing instead on congressional candidates like arizona sheriff and on the california state republican party among other things, guys. so very interesting dynamics there. >> kate, good stuff. kate kelly in new york city. thanks so much. as we go to break, take a look at shares of facebook on a move this morning on news the company overestimated the average viewing time for some
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video ads for as long as two years. disclosed on its advertiser help center the metric was artificially inflated because it only took into account video views of more than three seconds. the company says it's introducing a new metric to fix that problem. shares are down of course about 1.5%. the dow's down 48. don't go away. e new glasses? they are. do i look smarter? yeah, a little you' ming money now, are you investing? ll, i've been doing someesrch. let me introdu you to our broker. how much does he charge? i don't know. okay. uh, do you get your fees back if yore not happy? (dad laughs) wo you're laughing. well, the world's changi. the world works. are you asking enough estions about the way your wealth isanaged? wealth management, at charles swab. dramatically increasing orchesprint security with enrprise printers by h which is great, unless you're a corporate spy. unsecured printing makes your network vulnerable. enterise printers by hp help prevent costly security breach
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tensions escalating between the u.s. and russia over syria. our jeff cutmore is live from russia at the moscow financial forum and joins us with some news making conversations about that, jeff, also about the price of oil and russia's economy. >> yeah, let's start with the issue of oil first here because i think this is a critical message for those who are bullish on crude from here. and i think it may have taken some of the momentum out of the price recently. i sat down with the russian finance minister and asked him whether he thought russia was
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interested in being part of an opec freeze. his message that he didn't say there would be much opportunity to see prices higher even if a freeze was implemented. which appears to suggest that the russians are actually quite cool on participating in this deal. let's just hear what he had to say. >> translator: therefore a freeze on the part of several countries when the opportunities for a growth in the tempo of economies as a whole are on the decline, will not produce the effect that some people are anticipating. which could lead to a rise in oil prices. therefore, in our plans, in our budget plans, we are making decisions on the basis of a conservative approach when planning prices. we are basing our plans for the next three years on $40 a barrel. >> and of course that price is critical because the russian economy has been in recession for the last two years.
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it is finally starting to show a little bit of growth traction. the economists are forecasting they may get growth back in 2017, but clearly reducing oil revenues in an economy that is incredibly dependent on oil, 40% of government revenues come from the crude and gas prices. that would be a very difficult story to sell the russian people. and that really takes us into the area of politics here because the russians would really like the sanctions to come off. they are concerned that continued poor relations with washington mean it's difficult to remove those sanctions. but they were encouraged by comments from vice president joe biden within the last 48 hours suggesting that if ukraine didn't embrace reforms, maybe it would be time to start unwinding the sanctions on russia. back to you. >> all right. we'll watch that story along with that big oil producer meeting next week in algeria.
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goeff cutmore, thank you. barry sternlicht sounding optimistic about one of his areas of expertise during last week's delivering alpha conference. >> the underbelly of this economy, the part that's missed the that's missed this recovery that's roaring ahead and people aren't paying attention to is the residential sector, which has been part of every recovery in history and has not participated in this recovery. the residential markets are really good. >> to hear the entire talk which also included marc lasry, head to cnbc.com. modest losses for stocks finishing what looks to be a strong week for equity averages. we call it rk data. 80% is invisibleto. we call it the ibm cloud has tools that canelsee darkdatand pu. hello, my name is watson. working with watson in the ibm cloud, we can help an eney compan predt pipeline corrosion.
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our previous program, i don't know. they're going to have a tough time here. let's start with the facts, okay? if you look at a year to date of the nikkei, what you need to know is since february, look at this chart, nikkei is going nowhere fast. it's in a tight range. okay? so, a, we all realize that the bank of japan and ministry of finance ka rhoda, abe, they've put a lot of buying power behind things like etfs, much more aggressive than the u.s. this is the payoff they have for the nikkei, nothing great. if you look at dollar/yen and so many guests, including mark alston, the previous fed governor, saying it's all about weakening their currency. that's a dollar/yen chart. see the direction? the dollar is basically going down. there is some noise on far right side but not enough. anybody can see the overall trend is if your goal is to weak. your currency, try harder, right? and finally, i want to get to the money ball of all of it, okay? if you look at two-year note
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yields, and i know there was a closer here, but we'll keep it going anywhere, if you look at it from last friday on two-year note yields, they were minus 25 basis points. if you look at them now they're minus 20 basis points. that means these rates have gone up, right? if you look at the ten-year that they're targeting -- and first of all, they haven't seen zero very often in the last several months -- they were last week at minus 4. right now, minus 4. where i read it, this is called flattening, not steepening. so the point of the matter is i'm sure they're going to do operations to try to get this to zero. but all things being equal, the lesson to be learned about what's going on in japan is no matter how many kitchen sinks they throw at it, no matter how big and how many thumbs are on the scale, these markets aren't cooperating. and that's really the seeds that have been planted on discrediting some of these policies. keep an eye on the market. even in its current state, it
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seems to be winning over the bank of japan. sara, back to you. >> all right, rick. ank you very much. all fired up after a double dose of central bank meetings this week. let's check the price of twitter, which is going against the overall market, up sharply, 19%. it was set, david, to open down this morning in the premarket on the back of that rbc downgrade from mark mahaney, then you reported serious interest in a buyout. we've talked a lot about this. one of the tells was after the last quarter you didn't see a lot of insider selling, which is something you usually see in a company like twitter. a lot of the hedge funds were looking at that pattern thinking maybe this is for real. >> yeah. that was one of many things that people had been speculating about. of course we can now put that speculation to rest with the facts we have at this point, no deal imminent, at least according to my reporting at this point. >> we'll have a lot more from you coming up in "squawk alley." we've give an lot to talk to them about. we send it to john foreman with
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what else may be coming up on the show. >> we'll dig into that and the strategic landscape around twitter. plus, facebook has been inflating a certain metric that matters a lot to advertisers and video creators. we'll see why that matters and why that might not matter as much as we think. we'll have two top analysts weighing in on those stories and more. these goofy glasses.
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good morning. it is 8:00 a.m. at twitter headquarters in san francisco. it's 11:00 a.m. on wall street. and "squawk alley" is live. ♪itis getting near dark when lights close their tired eyes ♪ ♪ i'll soon be with you my love ♪ >> welcome to "squawk alley" for a friday morning. i'm carl quintanilla with jon fortt and kayla. dow's down 53. our big story this

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