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tv   Squawk on the Street  CNBC  October 22, 2012 9:00am-12:00pm EDT

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israel, would do anything for both country, would do anything and he'll do anything to lead the economic recovery. >> thank you for being here. we learned a lot. join us tomorrow. "squawk on the street" begins right now. busted! ♪ >> single busiest week of earning season begins today along with the fed meeting, the final presidential debate tonight. good monday morning. welcome to "squawk on the street." i'm carlcarl, jim cramer here. earnings are mixed after warning from caterpillar. earnings are up in spain after regional elections over the weekend. our road map will go like this, with the markets back to critical levels after friday's drubbing. the percentage of companies beating on revenue, 42%.
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county bulls regroup here? >> caterpillar posts a record quarter. >> michael soft launches windows 8 this week and so far the reviews kind of tough. it's been called baffling and confusing. google's new laptop gets glowing reviews. >> and bp is selling 50% stake in russian oil producer tnk to rasneft. how will it change the market landscape? >> the dow and the s&p closed below their 50-day moving averages friday. all three major indices suffering worst day in about four months. a lot of discussion about the percentage of companies beating on the top line. it's the minority. it's the minority report. >> we finely got there there, to
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a point where companies -- we always thought it would happen. we always thought during the slowdown we would finally have the triple whammy. europe not be good, asia not be good, united states not delivering. we're seeing it. look, it's not -- verizon didn't feel it, chipotle didn't feel it, parker hannafan says it was a disaster. mixed has been nearly stocky in the sense it's not -- i can't come up and say, you know, that was the execution of parker. it wasn't. they're in too many different businesses. obviously, you can't be thrilled here. you can't be thrilled. >> even today, to your point, you have a mixed bag. caterpillar on one side disappointing, freeport, peabody that looks a little better. how are investors to say all the noise and figure out what the signal is? >> peabody has been so down on its luck and so low that can bounce heavily short because india and japan ramping up a lot
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of coal production. japan has to because of nuclear. freeport trading down after frading up. there's a gloomy prism. so many people are saying, revenues aren't that great. we're picking apart everything we used to say. vf corp being the example. i'm looking, that looks good. i had eric weisman on, and this was better than i was looking for. the stock was down 7%. did people finish reading? t i'm sorry fog doing a lot of homework. that was stupid. >> weisman is on this morning at 11:00 on "squawk on the street" and we'll talk to him about north face and 4q slowdown -- >> now you'll hear people say, the expectations got too high. weisman said they would do "x."
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we're getting so granular that the -- it's not enough of an upside surprise. >> it's hard to -- we looked at friday at google and then a host of tech are coming in, things are not that good. sevener, where you see the enterprise willing to spend money and it doesn't seem to be there. >> the thing that's most frustrating to investors, a sense no one can figure out where we are in the cycle. equities versus credit. friday, you had a huge breakdown in equities and but credit held up well. the credit boom may surpass what we saw in the middle, so where are we? at the end of the crop cycle? the business cycle? the fundamental uncertainty seems to be part of the problem. >> that's a great point. if you go listen to dave cody, he says things are slowing down. we're hitting it out of the park. wait until you see when things are better. then you're on google, you know,
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i had -- i took the google quarter home and didn't read it during various halftimes. i actually stopped -- >> between your appearances on espn. >> exactly. google was other-worldly. it's okay to say it wasn't a great quarter. there's no harm in saying it. it's not going to make your stock go down more than when you hear the disingenuous great quarter, great quarter, great quarter. >> but 34% is not a bad quarter. >> how about that, we had a not bad quarter. i'll go for that. >> yahoo! tomorrow, marissa myers first call and we'll see what she says cause for click and things like that. fun fact. stocks that beat over the next five days, up 1.7%. stocks that miss over the next five days, down almost 4%. people want to punish the losers here. >> we took out chipotle, we have chipotle on tonight.
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i have to tell you, there's a lot of what i regard re-analysis of what we've been seeing. chipotle had a halo. gone. doing hl a halo. gone. >> with chipotle, momentum of investors behind it and stopped growing at the rate we anticipating, it's not like we see that story. >> now they make burritos. for years they weren't making intelligent food -- >> that was the halo. >> yes. it's a burrito factory. >> still delicious, obviously. >> i like it, too, but i had panera, took six kids out -- my daughter's parents weekend and it's panera, we're going to panera. they had the one plus one. >> earnings tomorrow. >> six years ago, it's funny, i wrote a piece about chipotle had
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done a good job of maintaining same store sales growth. does panera have the same factor? maybe it does. >> you have same growth. it's always been a mystery what the chipotle moldable should be because people care that much about organic? now, panera has a good touch and feel but chipotle has gone out of its way to say, listen, we will not sell stuff the other guys sell. but it's expensive. >> shop house, the asian initiative, is that going to work out for chipotle? will it have as much traction as people did as the famed burrito when it was first rolled out. >> when i went to chop house, there was tremendous confusion. maybe they worked that out. i went to chop house and it was like, guys, what's that dish? they were like -- >> i'm getting hungry, so let's
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move on to tractors. which will maybe stem my appetite. caterpillar reporting earnings of $2.54 a share, exceeding wall street. last hour on "squawk box" caterpillar ceo was asked what he's more worried about, krin th china or europe? >> we see china recovering a little bit in 2013 but europe we see it struggling along like it's been. i don't predict a recession anywhere in the world in 2013 but there's so many unknowns to know how that will end up. i'm optimistic about china. >> interesting on a number of counts. europe, basket case, it continues. you spent a lot of your time there, or close to it. >> exactly. >> china, that's an important call. >> i thought so. >> wednesday, china flashed pmi.
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when you talk to people about what's going on in shanghai, they get a sense maybe this bottomed out when pmi did in august and now maybe positive momentum, pick up in m-1, m-2 variables. if you take that out and it's below 50, that could -- jpmorgan coming out saying as the focus shifts, the u.s., which has been the stronger player, looks weaker and other parts of the worlds already have weakness priced in. >> honeywell saying we're going to be okay in china. clause klein feld -- yes, i like saying his name. >> it's more rewartding. he's saying this was the last bad quarter. >> you mean for china at large? >> for china. how about the stakes raised
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tonight, is romney now bad for american companies trying to do business in china? >> this is a point. >> and he had caterpillar ceo saying it's your typical election year bashing. if it's not, cat has a lot bigger things to worry about. >> is this big? >> i assume but talks with afghanistan and benghazi -- we thought this was going to be about the economy all the way to the end. it's taken a hard right turn. >> tonight's the intellectual debate. ge obviously doesn't want anything bad said about china. >> no. >> we heard the same thing from caterpillar ceo, he thinks this is about political rhetoric. last week strategists said which candidate might be more market
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friendly. some believe romney with the sabre rattling could be more upsetting to markets. >> which you get a cold war between countries, you can see the chinese, communist parties, no toyota -- i don't know how to say that. >> we export a lot more to us than us to them. >> general motors, chinese shuts down general motors and he dumps all the gm stock like that. >> what about apple? >> i don't know. >> you don't know. it's worth saying. we've mentioned it several times, the relationship with china is complex, and it's interesting to watch how we handle it. >> exports to china did pick up a little bit. so it may not be purely a sort of -- it may not be purely a phenomenal none related to -- >> japanese exports to china.
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>> yes. >> cars -- >> basically when their own obama ambassador is make sure you're not seen in public talking japanese because people have been attacked in restaurants. the situation is volatile. if we see it show up in data is -- >> that's a great point. i'm focused on u.s. companies where china has been -- free degree port, where china has been the momentum -driver so you want to buy -- gm was breaking out last week. i'm thinking, wow, maybe gm is taking share in china. maybe it's just people saying, stock's beat down. >> closer to home this morning, microsoft under scrutiny as the company gets ready to launch windows 8 later this week. many changes are drawn skepticism from analysts and customers, including the removal of the traditional "start" button. one using complaining in "the times" saying, it made me feel like the biggest amateur computer userer.
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we've heard from the likes of everybody who covers the company saying there is some risk when you change a product so dramatically, as they are with 8, jim, you'll alienate some people who are comfortable with it. >> i've used it. i think it's an exciting product. i alleges fi i always find when i'm with younger people they laugh. microsoft? you know, it's like, wow. i'm sorry, i don't to want date myself, yeah, i used microsoft, yeah, i watched black and white tv. it's too much for me. the screen got small. it's a implogloria swanson thin. this could be sunset seattle boulevard. >> steven desmond, is that what you're saying? >> oh, yes, i like that. look, i think it's exciting product but at the same time, -- look, i had a total shutdown of my hewlett-packard this weekend, bug got in it, total freeze.
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immediately i call all the i.t. guys i know and they say, if you used apple, if you used apple. i want to know -- the start button, i mean, i need a button that says, we're way better than apple. >> apple doesn't have a start button. >> right. and he hated that. remember, he hated that. >> the street today reviews the google laptop in saying it's built by -- chrome, built by samsung, a.r.m. technology, as quiet as a smartphone or attack let, no fan pushing out hot air, and they say apple and microsoft have reason to worry. >> one reason that drew me to the mac book air, it was light, didn't emit a lot of heat but it's so expensive. it's an expensive investment. if google can come in and undercut the user for that -- >> yeah. >> overseas, google's got a lot more momentum. samsung has more momentum yoef
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seas than here. when i go into costco, carl, when i go into costco, david, and walmart, david -- >> we're all associated by our documentaries. >> if i come in and i see a google pc for $189, costco will come underneath, walmart $159, maybe i'll switch. that's what you need to see at costco. >> best buy, $66 billion, that's a lot of cash, a big cushion. >> that's what caterpillar sees in revenue for the full year, $66. >> that's how much spain has to raise between here and year end. >> that's exactly right. they can invest at 6%, 7%, not bad. >> why not? >> yeah. >> i thought apple was already in for that. didn't they commit to that? >> apple owns all the five and
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ten-year. it's the two-year paper microsoft wants. >> promissory note. the internet and fashion coming together. meet the ceos of a company you would call netflix apparel. interview of eric wiseman, talk about the quarter they had. let's get a look at futures. moderate weakness. we'll see what the opening bell brings in about 14 minutes.
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breaking news out of fedex. company plans to hire 20,000 seasonal workers, the same in 2011. expects december 10th to be busiest day ever, driven of course largely by e-commerce. we've seen a lot of the big delivery services. amazon.com, retailers announcing seasonal plans. most have been, i don't know, low single digits above last year, not flat. >> right. the disparity between fedex and u.p.s. is -- fedex is taking the kitchen sink. everything is bad but we're going to sepend a lot of money. u.p.s. being brought down by
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politics. every time u.p.s. talks it's a referendum on politics. i think that fedex and -- fedex is trying to take a lot of share from u.p.s. >> u.p.s., trying to acquire the big dutch competitor tnt. that actual acquisition, there are questions about it. so as it figures on you to take on fedex globally, that's another piece to keep in mind. >> two great companies. u.p.s. on yield basis. fedex, classic where you talk about disappointed, disappoint 1k3d now the stocks up. >> buy it on disappointment, sell it on outperforming is how to broach it. >> that's right. >> you buy it after the rg3 touchdown, before the victor cruz ruined by fantasy weekend. >> oh, wasn't that clutch or what? >> cruz missile is the headline in "the post" today. microsoft's window 8 is
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making some users feel like amateurs. many familiar features are gone, like the start button that's helped users get to all kinds of programs. newly released software goes on sale friday. what should the slogan for windows 8 be? tweet us @squawkstreet and we'll get your snarky responses throughout the morning. >> are you sure they'll be snarky? >> yes. >> last week you heard cramer talk about the best ways to invest in america. after the selloff it's all about opportunities. cramer's mad dash up next. and doug lebda, we'll get his take on the housing industry. te numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions.
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♪ let's get the mad dash about six minutes before the opening bell. before we get to any stocks, you had an eventful weekend watching football and in some ways participating in america's experience of football. do we have this picture? there we go. jim cramer with chris burman? >> 12 screens, every game. boomer is there, jaws is there, everybody. this was heaven up. get to watch every game. they know so much more than we do. i say berman said, i'm the
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stockuami. berman asked me about stocks? i said amazon could be the next one card off the field. >> he said on the punt list? >> you're a lucky man. >> oh, my, i'm a lucky man. >> have you a candidate for worst industrial -- >> air products. now we know, and david knows this, because we talked about this. now we know why they needed to buy air gas. this is incredible. listen to this quarter. unlike google it starts out big say, listen, we're bad. we're bad. local company for me. wow, we're doing bad. >> credit suisse on wendy's. >> starts with neutral. could be burger wars. for the largest coffee i paid $1.06 this weekend.
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wen wendy's has the baconater. you must take it with lipitor. i mean, this thing is just one of the most -- you know, these prices are coming down for burgers. >> yeah. >> they're coming down. and the calories are going up. i don't know if that's working. >> you go long with wendy's and merck, fast food play? >> pfizer -- yes, a tandem play. it's like how -- you know, when isaac redman goes down at the same time mendenhall goes down, have you to have a third guy, yes. i want handcuffs on wendy's, as we say in fantasy game. >> new logo. rotten month for apple but will a smaller ipad help the company and a four-week losing streak. we'll get a closer look at the correction. can dow shake off cat and their look? ouncer ] you are a business pro.
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he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.
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opening bell about to ring at the new york stock exchange. kicking off the single most active week of earning season. some big names coming this week. tomorrow facebook, later on boeing, at&t, lily, bristol-myers, apple, and four central banks meeting during the course of the week. here at the board, seadrill celebrating it's recent ipo. at nasdaq, water keeper alliance dedicated to preserving water from polluters. >> i think proctor will be the tale. kimberly is hanging it. johnson & johnson, that was a terrific quarter. you know how much i love that company. proctor, this is a make or break quarter for mcdonald. this is it. this is it. >> this is it.
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>>e on johnson & johnson until they replaced the ceo. you're taking mcdonald off the wall -- >> i think he's real. this is a quarter to see if he makes the playoffs or -- i think he makes the mrafoffs. >> big turn-around. >> why is it so critical? >> well, because of the sabre raltling, right, because of m k mcnerny turns on him. i see them going up and, up, up. this guy will have home field advantage going forward if he delivers on that cost cut. >> yes. vf corp leading losers this morning, jim, on the s&p. we'll see how some of of these stocks have that reported decent
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quarters are punished. hasbro coming in in line, also down 2.5%. girls' toys revenue up 2%, boys' toys revenues down 7%. >> vf corp sneaking back ever so slightly versus being slammed in the early market. the toy story is very interesting. this is was an unimportant quarter and yet everyone is making such huge decisions on it. i think mattel is the winner between hazmat -- >> did you see "the times'" coverage on which is peek and drilling and the jeffrey's chair -- >> i think one of the things in june, between june 23 rd and june 26th last year the new york times ran a series saying there was going to be a shortage in natural gas. aubrey mcclenen was pumping up his reserves.
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now, what, 15 months later, there's going to be a glut and aubrey is overstated -- understating his reserves. listen, "the times" called the bottom last year. "the times" calling the bottom again. i want to buy nat gas. i really feel the nat gas -- look at the charts. >> there's been a significant rally here. that's one of the reasons peabody did so well, rotating out of coal into natural gas out of that run-up. >> 354 is that break-even, particularly with western coal -- >> peabody up almost 10%. >> you got to be kidding me? oh, please. india is burning coal left and right. the countries not key yoet thyo are laughing at us. >> are we part of the kyoto accords --
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>> we not ratified it. >> we're one of of the biggest polluters in the world. >> bp. real quickly on gas prices, they're saying they could come down 50 cents in the next 30 days. >> they put up that refinery fires. >> that's gasoline we're talking about. >> i mean, missouri is going to crack $3. >> in the midwest i saw dramatically lower prices because, obviously, there's a big glut. the refinery business has to be the most dangerous -- is there any any business that still has that level of hazard? i mean, fire, flare, but if they get california open, then i think you will see a decline. not in time for election. >> also, mexico, remember, just near the u.s. border has announced it's opening refineries. there's been so much pressure, increasing refinery pressure in the u.s. hasn't been able to happen but if you have that capacity coming online in mexico or that region, it will be another source of downward pressure on prices. >> we've become -- untold story.
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one candidate, wake up, huge exporter of refined products. this is a disaster because we have jones act doesn't let us take ships up to the east. we don't have the pipeline capacity. so we're shipping frantically refined product. >> that's one of the reasons the consumer here in the u.s. hasn't seen so much relief. so much of the product is being exported. it's interesting the way consumer sentiment held up, despite the fact gasoline has been making new monthly fresh highs. if that continues going into the holiday season, you see the forecast going up 4%, they don't look too stretched. >> we talk about the refi, quote/unquote, boone in this country. >> those stocks have held up, except for costco, which had the big surprise coming down. williams-sonoma holds up, urban outfitters holds up -- >> how do you square that with wendy's, mcdonald's, there's so much price sensitivity for consumers, if they are talking
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about price war between those -- >> is that why the dollar store being so -- macy's at the crux because people say jp penny's is the gift that keeps giving. >> which may have had a role in vf's successful. good question for wiseman. >> whenever we go -- >> i mean, ross stores? >> i used to go to ross stories all the time growing up because you could walk in, all of a sudden, everything is so affordable. coming from various plarural pl country and you -- >> name a store -- >> elk's. >> belts, peebles. >> peebles? >> yes.
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>> what? >> he has his own chain. >> let's get to bob pisani on the floor. >> good monday morning. where are we in the earning cycle? it's hard to call. i've been a glass half full but you can make an argument in the other direction. 122 companies reporting. earnings growth flat, zero. revenues up 0.3%. hard to get a lot of bottom line growth with revenues at 0.3%, even if you're cost cutting. doug obserfrom caterpillar on o program earlier. on china he says, seems to be on the edge of some kind of recovery but we haven't really seen it yet. the two trends we talked about are continuing. number one, consumer in the u.s. holding up well. number two, global companies are reporting delays in orders.
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we've seen that. caterpillar said that, quote, delays and cancellation of orders for mining products. that's one of the reasons doug was talking about 2013 sales flat. so, there's -- what side of this divide are you on? will we get any trough or not? i was encouraged looking at peabody and freeport mack maran. iron ore is off the bottom and coal is off. peabody beat quite handily. gave up guidance for 2012. talked about u.s. gas to coal switching, stabilizing. increasing china infrastructure we anticipate will help us out. i don't know anybody that's been arguing for going long positions in coal recently. this might be an interesting
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time to consider a bottom in coal. freeport beat quarter, lower iron ore grades in indonesia. a fairly overall good port. talk about a tough time, imagine being mital, largest coal producer, is thinking of selling a big chunk of canadian iron ore company. no one knows how to value it. i saw $80 at one point, $150 one point. 100% spread in iron ore in one year and you're trying to sell your business? that's a tough one to call. i couldn't imagine how to figure out the pricing. i wouldn't want to be them and potentially selling at the bottom. tough time for them. >> obviously, romney, his middle name is peabody, so big deal. he's staked out his coal plane, right?
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let's go to sharon epperson. >> we're looking at brent crude prices above $110 a barrel. rourke over the weekend in "the new york times" about u.s. and iran having direct talks. both countryings have denied claims bilateral talks are occurring. some more skeptical say, hey, iran has done this in the past just to buy time. so, we are looking at strength in the brent market. wti hoffing around the november numbers, and traders waiting for trans-canada keystone pipeline which was shut down on wednesday. we're watching the gold market, with gold prices above $1725 an ounce. rbc capital market says this is a wait and see situation here before the two-day fed meeting. we're also, of course, looking at what has happened from commitment of traders to money managers' long positions in gold and those have been reduced significantly over the last
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week. so, there is a great deal of concern that, perhaps, we won't see much more upside momentum with more monetary easing. that that's already been priced in. they're waiting for the next big catalyst in the gold market. david, back to you. >> thanks very much, sharon epperson. not the easiest time of late for so-called event-driven managers. the risk has been in risk arbitrage lately. the latest case, out of canada involving a natural gas deal in which malaysia's petronis was expected to conclude and buy progress out of canada. news that just hit ten minutes ago. when you look at progress it was going to be down sharply. it is down because late friday we got work from investment canada it was not going to accept the current application from the company or approve the current deal. about ten minutes ago we heard from petronas announcing they're
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meeting with industry officials. and they are talking about extending for up to 30 days -- or, i should say, having up to 30 days as part of the usual process to mutually agree to any additional things they can do to make canada happy, to get approval. this is seen as a positive, not just for those who are invested in progress energy shares, you see them there, but also in shares of nexin, involving a chinese acquirer, cnooc. those shares are down sharply, even before we got this positive update on the negotiations that will take place between petronas and investment canada. the belief amongst most this deal will still happen regardless of what happened with
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petronas. >> nexen will happen? >> let me show you the sentiments of most people. they expect it will close. most assets are not in canada. that's important. of course, there are some in the u.s. in the gulf of mectionco. they say cnooc is a publicly traded company. a lot of concern with state-owned enterprise in terms of investment canada and so-called net benefit is needs to approve a deal. cn cnooc has been proactive. maximum amount of oil and gas that can be sold from nexen into canada, no communist parties on the board. we'll see, but a bit of upset in risk arb in part due to that unexpected, unexpected delay or -- well, let's call it a delay right now and see on the part of petronas and progress. by the way, when it comes to risk arb they've been taking it
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on pcs which went down sharply, potential overbid from sprint went away for the most part with the soft bank deal. not even the liking of dgt, dollar thrifty group down because in terms of the ftc review of the deal with hertz. >> this is making people question whether canada is really open for investment and what it means. if you look at the way the canadian dollar is trading. deals whether vovings lows or exxon with canadian targets, there is a sense that canadians who are being proactive when they say we're going to take a slow and steady approach instead of blank-checking and checking off the box for anyone who wants to come in here. if anything the cnooc/nexen deal is important, so if they block something here, they might have to say, we let this go through so people don't broadly step away and say, what's going on in
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canada? >> no doubt in important, more so than petronas. it might be the net benefit, maybe thag trying to figure out what is net benefit. maybe they weren't quite ready and they have another 30 days. expectations they'll get it done. >> or is a unocal -- >> i don't think -- >> hotpash would have gone through. if you were an acquirer, you might have been wringing your hands of canada then but maybe you turn around and say, maybe we dodged a bullet. >> not if you're a shareholder. >> well, not of p-- >> gop challenger gearing up for tonight's financial presidential debate. what you need to know with the elections only two weeks away
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from tomorrow. what should microsoft's slogan be for windows 8 as we count down to the big launch? tweet us @squawkstreet. your answers coming up. take a look at this morning's early moves. bob...
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oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.
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microsoft's windows 8 dichd the start button, which other features making users feel like the biggest amateurs ever, according to the new york times. what should the slogan be for windows 8? vincent writers, windows 8, a start button short and a little late. neil writes, windows 8, maybe you'll figure out to you howe to use it by the time we write 9. windows 8, starts and stops here. scott writes f you didn't hate us before, you will now. people love their technology, jim, and people don't like change. >> at the same time, if they
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didn't evolve everyone would be accusing microsoft of being too stuck in the past. can you toggle to the start button still, if you don't like -- >> which you know because you've been through this. >> microsoft needed to do something. it got them buzz. the thing is gorgeous, by the way. not enough talk about -- it reads like a great book. >> consumers have already expressed a preference for using that kind of technology. it's just whether they can extend across -- >> the analyst from demora who follows this company, he's positive on it. >> maybe microsoft needs to change -- they out to call it -- open a separate company, mm corp, and write and issue this, not microsoft corp. and say, dhaets a division. >> but, well-being speaking of trying to change a behavior, one of the things that has struck me being in london is the lack of kind of the retail investor presence in london and in
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europe, generally speaking. there's not the same sense the average guy is paying attention to the market or trying to invest in it. anyway, i've decided this could be a huge opportunity for jim cramer here, with the "mad money" empire. jim, there's a problem because "mad money," you think of the bull. in london, there isn't really this -- the bull isn't there. it's not as -- the bull is a wall street phenomenon. >> how about wimpy's. you like witchy mpy -- >> i don't want you to be afraid, in europe -- >> i'm very afraid. >> it's all about the bear. it's the bear, jim. >> that's that post world war ii funk. >> so i brought you a harrod's bear. >> thank you. this would be a change of pace. you know what -- >> look, i know the bear isn't your -- you might not be very
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comfortable having the bear on set, but if can you embrace the bear, jim, the bear can complement your bull and i think you can take on london and europe. you can take on the world. >> first of all, i want to thank you. this is terrific. second, this is an eye-opener. this is my way to go. >> you like the bag. you take the bear and i'll take the bag. >> it was a paddington bear or harrod's bear. >> maybe i be the bear or maybe i choke the bear. choke -- >> hi a feeling that was coming. >> look at this, david. this is actually -- and do that thing they do -- >> i hope there's no children watching. >> in two seconds, he's gone. >> thank you very much. >> yes, you're welcome. the bear might need some protection with jim around. when we come back from product launches by apple and microsoft to earnings and facebook and apple, a big week for tech. we'll find out when our panel lists think. first --
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coming up, the weekend is over. it's time to get focused. there's no better way than six stocks in 60 seconds and cramer has them when "squawk on the street" continues. [ horn honks ] hey, it's sandra -- from accounting.
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♪ good morning. in the next hour of "squawk on the street" we'll have a look at caterpillar stock. we should be buying, according to one analyst, up 60%. and we'll look at the technical damage as we head toward 600. plenty of upside according to analysts on the show and lending tree ceo will be with us. much more to come. "six stocks in 60 seconds." >> when they downgrade them i want to be long not short, peabody. >> manitak, i want to split them into heavy machinery. goldman is losing way too soon. >> jim beam. >> going down, down, down, i think this is the catch at the
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bottom. i want to own it. >> come on, flash is king. >> generon, big company with ch may be hurt because of rumors of fda, they split up the drug. rumors so far untrue but it's helping. >> and iff. >> iff is the company that allows to you make better tasting food without loading it up with calories. the wendy's baconater, they need to talk to iff, without all the calories. >> who goes that way? we're trying to lose weight, not gain weight. >> tell me about it. what's on "mad" tonight. >> b&g foods, not a health food company but great quarter. jeff hartung.
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. and we have to do work on how consumer companies are doing, polaris. >> thanks, jim. when we come back, vf corp, missing. we'll talk exclusively with the ceo. the ceos of a company you might call high-end apparel. [ engine revving ] ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive but feel alive. the new c-class is no exception. it's a mercedes-benz, through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
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welcome back. let's get the road map for the next hour. caterpillar is sending up a red flare as they expect tough times to last through 2013 but the stock up more than a percent. is dow component still with your money? >> mitt romney taking on president obama in the final debate. we'll talk to national secretary for the obama campaign and see what he's expecting kicking off this evening. >> apple trading in and out of correction territory. should this level be a warning for investors? we'll consult the charts. >> housing hits a four-year high in september. mortgage rates remain near
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all-time lows but a runaway housing recovery might be hampered by the banks. we'll talk to the founder and ceo of lending tree why lenders remain so hesitant to issue mortgages. meantime, caterpillar missing on revenue today due to decline in sales and a weaker global economic outlook. but earlier on "squawk box" on cnbc, caterpillar ceo doug oberhelman said there are still positive signs. >> there is a bright spot. we're past the bottom. i meet with contractors all the time. every once in a while we're hear about a new subdivision here, new subdivision there. it's coming. we need a lot more -- we need that housing start number to double, to start to move the economy. it's going to be a while before that happens. >> joining us now, machinery analyst with jpmorgan, with an overweight rating on the stock, $109 price target. substantially higher. 30% higher than where we are at the moment. welcome to the program, ann, good morning. >> good morning. >> if you watch, and i'm sure
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did you watch the ceo on "squawk box" today, there was a lot of hope in what the man was saying. there was hope we bottomed in china. there was hope there wouldn't be a recession anywhere in the world next year. and hope again on where we are with housing in the united states. still the projection is for flat sales basically in 2013. what do you make of the stock? are you at which titempted to b the target? >> my product is for 2013, so i'm looking at more than 12 months of $109 price target. are you right the caterpillar stock is highly dependent on the global macro environment. it's a call on the macro environment getting better once we get past the elections in the u.s., once china gets through its transition from the government, and brazil we know is stimulating its economy. so, all of those things put together does suggest that the global economic environment will
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get better in 2013 relative to 2012. >> we should note, of course, the management team has doubled down on exposure to china and to materials. it's absolutely a play on world growth. what we see at the moment, though, isn't a world that is accelerating in its growth. it is slowing down. it is decelerating. why, then, if caterpillar is a play on that decelerating world growth, will its stock rise 30% over the next year? >> well, in our view, decelerating growth is still positive growth. as long as the global economy grows positively, even if it's a slower growth rate. and demand for things like hard commodities will continue to rise. yes, we're facing headwind right now with u.s. coal, with iron ore, but demand for many hard commodities continues to decelerate. if we get acceleration in some growth, even slower rate, it
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sets us up for a good 2014. i think as long as global growth is positive, caterpillar, particularly at current valuations, is a great buy. >> there's talk the u.s. ism figures next out could show a return to the sub50 level that could raise concerns about the industrial cycle and caterpillar shares usually track closely that. is that not a risk in the next week or so? >> in the very near term but we're looking out over a year with our call on caterpillar. absolutely, caterpillar is taking $2 billion plus out of their vin vener to. as that flows down dlu the supply chain, as we saw in parker hanafin last week, and likely to show up in next orders this month but that's short term. >> before we let you go, is caterpillar your best pick at the moment? the most obvious way for people to make money, in your universe?
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>> if you believe the global economy going to reaccelerate next year, yes. it is the one that's underperformed the most over the summer. in our view at this current valuation and global economy perhaps excaccelerating next ye yes, it will be one of our top picks. >> underperformance of 20% from the s&p so far this year. good to see you. thank you for kicking off your week on cnbc. thank you. if companies blame uncertainty when they cut guidance, shouldn't they stop giving guidance all together in herb greenberg thinks so. >> the answer on that, by the way, to that is absolutely yes. they should stop giving guidance. as i tweeted out this morning, i said, you know, when a company uses uncertainty in conjunction with guidance, they should stop giving guidance in conjunction with outlook, rather. they should stop giving any sort of guidance. the reality is, they're telling you they don't know. i mean, take a look at
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caterpillar. you take a look at guidance for next year. you can drive a truck through that 5% up or 5% down revenue guidance. when you look at what they said, if you go through the press release, they talk about uncertainty and the uncertainty they talk about is global, global, global. so, you know, look, i've been a critic of guidance for a long time. there are companies out there, whether it's google or berkshire, expediters international. >> i'm surprised someone who's a champion as you are for the small investor that you would advocate less information given to people at home than more. saying, there's no guidance at all. they will, behind closed doors analyst day, when they go and meet selective journalists, they'll give them the information. they'll tell them honestly about how they feel.
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why shouldn't they tell everybody how they feel? >> when we have this whole concept of a number and a target, whether it causes companies to pull levers to meet that target or effectively gets us to a game, a game of beating the street, meeting the street or missing the street. over and over we see that as something that can't be sustained. so, again, i go back and look at some of the companies that have said, no mass. and i think the analysts -- you could argue that that actually levels the playing field, having no guidance. >> we have to leave it there. herb, thanks. back to bertha coombs with the market flash. >> thanks much. a tale of different folks in the automotive area. mixed gear for trucks and heavy equipment being bought out by toyota for $65 a share cash, 18% premium to where it closed last friday. meantime, advanced auto parts
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reporting disappointing results, cutting 2012 forecast. second auto parts retailer behind auto zone. it says higher costs, higher labor costs and slower business are the reason why. simon? >> it's all about the revenue. thank you for that. ahead on the program, president obama and mitt romney going head to head for one final time. the presidential debate tonight on cnbc. we'll go live to the debate site in florida for a preview. plus, the national press secretary for obama campaign will give us his view of how the president will hope to perform tonight. apple has been on steady decline since iphone 5 hit the stores. can the ipad mini save the stock tomorrow? more "squawk on the street" after the break. just driving a, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else,
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president obama and mitt romney preparing for third and final presidential debate. john harwood is live in boca raton with a look at what we can expect tonight. good morning. >> reporter: good morning, carl. you know, we can expect a debate that is nominally on foreign policy, but you can bet with an audience of tens of millions of people watching, both mitt romney and barack obama are going to find ways to tie it back to the home front and the domestic economy, which is the most important issue in the campaign. that could be china, where they have a disagreement over approaches for cracking down on china. it could be the president's
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reiteration that we need to stop nation-building abroad and build up the country back here at home. he has a new ad hitting romney on that, suggesting romney would keep troops in iran and afghanistan longer than he would. you can expect him to tie that back. one of the back drops for this is a new nbc/wall street journal poll that shows mitt romney and barack obama deadlocked at 47% among likely voters. two principle elements to mitt romney's rise to a tie. he had been down by three points in our last poll among likely voters. one is he's regained his edge in terms of who can best handle the economy. it was tied in mid-september. now 46-47%. he's had a rise in assessments of ability to serve as commander in chief. that could be as a result of his strong performance in the first debate, in particular. perhaps some fallout from what
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happened to president obama, the hit he's taken on leadership over the libya situation. right now mitt romney only trails 44-41 on who would be a better commander in chief. that suggests he enters this debate tonight at some level of parity on that. >> parity seems to be the operative word on many fronts. long day for you and me. for more on the debate, we're joined by ben laport, press secretary for obama campaign. good morning. >> good morning. >> front page of "the washington post" talks about when we knew this final debate would be about foreign policy, it seemed like a mismatch. the president would be heavily faifd, commander eer in chief. now everything is a little closer. do you agree? >> the president will make the case he promised american in 2008 he would end the war in
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iraq in a responsible way, refocus on al qaeda, that he'd move us toward ending the war in afghanistan and restore alliances around the world. he's done those things. i think you'll see a contrast with mitt romney, somebody whose foreign policy i describe as blunder and bluster. he alienated our closest ally on foreign trip. he called russia not al qaeda our greatest foe. he said he would be tragic to get our troops home from iraq. the president believes we shouldn't be in endless wars. we've been in wars for decades. it's time to bring our troops home and focus on nation-building at home. >> so many unanswered questions, ben. benghazi got some play in the last debate. but over the weekend, the new york times front pages, the idea, notion of potential talks with iran. the assume the president -- it's almost like a one-man president with bob schieffer asking all the questions. how do you not turn this into a
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q&a with the president? >> this is two different visions. americans know the president's foreign policy. they've seen him restore alliances around the world, iran, and crippling sax sanctions to i rab but and i think governor romney will be exposed. you hear chest thumping but he hasn't outlined any plan for any region in the world. >> is the president going to respond driblgtly to the idea of talks with iran? is he going to move that ball forward? >> you saw the white house address this over the weekend. no one-on-one talks have been scheduled. but the president made clear since the last campaign that we should work through the diplomatic process here. diplomacy should come first in ensuring that we prevent iran from getting a nuclear weapon.
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all options are on the table but obviously a diplomatic solution is preferred, if possible. >> difficult quarter out of caterpillar, not too far from where you are. the ceo on one of our morning programs today said they hope all of this talk about china, tough talk on china, is election year bluster. would you -- is there any element to it that is exactly that? well, the president has a record on this. you've heard governor romney's tough talk on the issue but he's done nothing but invest in china and profit from china. you've seen the president's record on this. he stood up for american workers and businesses. brought nine trade cases against china to ensure they were playing by the rules and that there's an even playing field for american workers and businesses. we've had a lot of success. you saw we had success at the wto just last week on the currency front, publicly and privately, he's pressed china to appreciate its currency. that's had an impact as well.
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>> finally tonight, ben, you know this, the debate is up against major league baseball, monday night football, and homeland. if you weren't watching the debate, which i know you will be, what would you watch? >> well, i may -- i'm a big "homeland" fan. >> that's my answer, too. >> i watched it last night so i hope folks will tune into the debate tonight. >> ben, good to see you. thanks again. ben laport joining us from chicago. tune in at 11 a.m. and we'll hear from republican congressman peter king. our debate with maria bartiromo and "the kudlow" report. we'll tell you how to position your portfolio for the week ahead. and the ceo and founder of lending tree.
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last thursday when supervalue reported they said they were talking to potential buyers. analysts on the debt side at yp morgan say they see an lbl buy out, about a 50% chance of one now. markets are trying to find traction following the drop friday. let's bring in david spika with the westwood funds. good morning to you both. >> good morning. jack, let's start with you. you say the real problem for the market is that we hit your year-end price target in september. >> we hit a 1450 target on the s&p this year and we're holding to it. we're not raising our bar just because we hit it early. we are staying in the market based on positive momentum, although given guidance and earnings direction, you know, we're starting to see some weakening here. >> and you argue the market overran fundamentals. so, what do the fundamentals point to and does it matter if the fed's in there with a bid
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under equities? >> certainly does matter the fed is in there with aed by. in fact, if you look at the vix, the price of protecting a portfolio to the downside, i think investors are more or less saying, why protect my portfolio when we have -- when bernanke has my back. if you look at pes, forward pes, it will give you a false sense of security because i think earnings projections are still really high. we're looking at double-digit earnings growth in two of the three quarters going out over the next four quarters. and i think given that sales are expected to be in the low single digits, it's going to be tough to squeeze out double digit earnings gains with those kind of sales numbers. >> david, do you then steer clear of equities until you feel forward investments have fallen enough? >> i don't thunk steer clear. i think there's a chance the market could trade in a range until we solve key issues around some things, the election, the fiscal cliff.
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in terms of the fed, there's a tremendous amount of liquidity out there. it's just looking for a home. one thing preventing it from pushing the market higher or getting corporations to spend more is uncertainty. when we get to the point where the uncertainty is cleared up or we have a better feel for the fiscal cliff, the election, europe, et cetera, i think you'll see economic data catch up with the market. >> david, goldman has an interesting piece suggesting we might be overplaying this political uncertainty here in the united states. and actually what you're seeing is, a, a function of what's happening in europe and also housing bubble, and the ramifications are much longer lasting. his conclusion is we have yet perhaps to feel the uncertainty we will get once the election is over. actually, we have still to bite on that. could you argue that that might be true? >> so, you're asking me
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something? >> i was actually asking david. forgive me. >> yeah, i don't think -- again, that sounds like a fairly bearish argument to me. we're of the belief that you cannot fight the fed. that's a trite statement that's been around for a long time but the fed is doing everything they can to prop up the housing market n turn propping up the consumer. if we get to a point where we reduce uncertainty, really the fiscal cliff, people have put europe on the back burner by virtue of what the ecb has done. is that right? wrong? not sure. today the real issue is the fiscal cliff and earnings. if we can get the fiscal cliff resolved, we'll get certainty we need to increase corporate spending, get consumer confidence where it needs to be. i think that will drive economic growth that can drive the market higher. >> jack, just before we lose you, can i ask you another question? >> sure. >> obviously, we corrected on friday, and over the weekend there was a huge amount written about the fact that two-thirds of companies are missing their sales estimates.
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not coming through with revenue we perhaps thought. does that matter to me as an investor really? what the revenue of a company? aren't i just interested in buying future profit streams? isn't that the point? >> well, i think revenue is the key, simon. the reason is, i look back at price to sales ratios all the way back. the problem with earnings, as we know in concern companies, they're managed. you know, you have to go back to 1998 to find the first quarter where companies have not -- have failed to -- the majority of companies have failed to beat earnings estimate. it's all managed. revenue is the cleanest number that really can't be massaged. and i think i prefer to look at revenue and then let the earnings go from there. >> interesting. >> that's where your caterpillar forecast of 2.5% global gdp next year might offer pause. thank you both very much. apple having a rough october but coming back a little bit today. up almost 2%. the stock sinking about 7%, bouncing in and out of
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correction territory. should investors be split by these levels or are we looking at the ultimate buying opportunity? re at a ford dealer with a little q&a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.
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10:30 on wall street. good morning if you just joined us. advanced microdevices falling to fresh lows. chip maker down 60% this year. ancestry.com agreeing to be acquired for $1.6 billion, or $32 a share in cash. the vix giving up gains after hitting 6 1/2 week highs earlier in the session. now hovering around 17. america's favorite stock, apple, trading higher after being down four four straight weeks in a row. it had been trading below the 50 day for the past ten sessions. mark newton is the ab list for gray wolf execution partners joining us here. welcome back. >> thank you. >> sounds like you still think it's vulnerable in the near term? >> i do. shows a lot of downside momentum in the last few weeks and volume has picked up since it peaked out. my targets are near 575 to 585.
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i think it could have another 5% on the downside. >> even when it was doing well in september, and leading the market in a big way. volume to you was an issue back then, right? >> that's correct. if you look at the rally that started this past spring, until september highs compared to the last rally from november until may, there were a lot of big differences in terms of how volume started to lessen on that move up and momentum was lighter on the upside. people said, we need to look at dollar volume which is, yes, important, but the stock at same level, and in august and september it was relatively half of what it was in april. those are two concerns. the stock forming a short-term head and shoulders pattern, technical pattern people look at from august to september when it cracked 647. volume picked up. the stock has been in a down trend ever since. however, if you look at the last couple earning cycles, this has been traditional for apple, down 8% to 10% before it rallied
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post-earnings. that's what i expect heading down, i think we'll sell off into earnings and rally thereafter. >> is your 575 target, is that a -- when does that happen? >> well, i think in the next one to two weeks. i think the stock was down almost 4% on friday, but it still has a lot of downside momentum near term. it's not a stretch to think it could get down there. broke trend lines from may and really the stock has been under a lot of pressure. it's not oversold. that's a kit cal thing. a daily, weekly, monthly thing, we're not in oversold territory. it's down 13% but technology overall has been under a lot of pressure over the last month. the worst performing sector over the last month. >> cyclically we're in a time of year you would be long tech? >> that's correct. my thinking is this is still just a short-term correction for apple as part of an overall you havetrend. the stock, even though it's selling off, its not oversold.
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on a monthly basis it's 26% above locker term up-trend line. if you look at how the stock traded over the last few years, it could easily get down to an area of 575, 580, with extreme near 540 and still be in an uptrend. >> is the 50-day no longer a reliable pivot point for those who are in and out of the stock? >> i don't tend to use moving averages in my work to be reliable support. the 200 day is near 583 on apple and that has historically been good over the last couple years but it's more the slope of the moving average than using the average in and of itself. >> let's be very, very clear here. you are bullish of this stock. you believe that by the end of the year it will bounce to 750, 760. >> that's correct. >> you're talking about short-term weakness but you think from here, by the end of the year, first quarter next year, 25% upside. >> that's right. >> is that my main takeaway or should i --
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>> no, that's main takeaway. i think it's overall short term weakness and those that like to trade the stock we could move further to the downside. >> what if volume is disappointing as it rebounds off 580, 575, would that lead to you the same concerns you have right now? >> i think on any bounce attempt after earnings, it could get down. if it goes down under 575, we would have a move down to 535, 540 but that's extreme. technology in my view, relative of the s&p is close to showing signs of bottoming out. that fits in with seasonal cycles suggesting the market should carry higher between now and year end and actually next march and april. i'm still long-term bullish. short-term bear. although i have good news coming toward. >> thanks. lending tree helps the way people simplify getting loans online. founder and ceo of lending tree will join us after the break and
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mortgage rates are at or near all-time low. incomplete and vague lending regulations still being formulated, making it somewhat difficult for homeowners to access all that cheap money. we're joined by doug lebda, lending tree founder and ceo, or said another way, founder and ceo of lending tree. and lendingtree.com. good to see you. >> thank you. >> we talk so often about housing. it's coming back. it seems clear, i want to get your opinion on that. first, it's really hard to get a mortgage. why? >> well, there are many reasons. it's a complex question. the biggest reason is lenders fear what is called loan buybacks in the industry. when a loan gets originated, a
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broker, or lender originates it, sells it to a bank, turns around and gets insurance from fannie or freddie. when that goes bad and borrower defaults everybody looks for the person to blame. any immaterial defect that that file causes it to get pushed back. people put very strict guidelines, even stricter than fannie and freddie. >> what about dodd/frank to the extent we don't have full regulations in terms of what's required to banks when it comes to mortgages. is that also playing a role here? >> it definitely is when you think about qualified mortgage exemption or qm. qm is going to dictate weather a borrower can sue their lender if the lender did not underwrite that loan and make sure that the borrower could repay that loan. there's a debate about whether lentders will get what's known as a safe harbor so they won't have that exposure. they won't buy it with that
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lenders could just sue their borrower and walk away from the mortgage. >> there's been some disagreement once these rules are elucidated, what is your opinion? >> you don't want originators originating and not sure they have some future legal exposure. >> trying to ameliorate the sins of the past we're putting a little stop -- preventing perhaps more fullsome recovery in house? >> we absolutely are. you're seeing lenders are keeping guidelines tight and not hiring. employment is down 50% from peaks in mortgage industry and that's keeping rates artificially high. you would have rates quarter points lower, $50 a month, if you had lenders hiring and expanding. >> which is fascinating. one of the reasons -- this is a classic scenario of the boom/bust cycle here in mortgages where you are
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overcapacity, got slashed and now not enough capacity in the system. >> absolutely. mortgages, believe it or not, price on capacity when you look at their spread above treasuries, it's purely dictated on whether or not you have enough people, manpower and loans to get through the pipeline. >> all that said, housing is, i would assume you agree, showing real signs it's not just stabilized but starting to grow. are you seeing signs in lending tree's business? >> absolutely, we are. we're certainly seeing applications up. but an interesting thing i was looking at this morning is that homeownership is actually at record lows. we're seeing the lowest homeownership in 15 years. >> percentagewise. >> percentagewise. you're seeing a lot of housing being bought now is being bought by corporations, by people sort of bulk buying up foreclosed properties. >> which is not traditional mortgage demand. >> it's not. consumers want to be in the market but it's tough to get a mortgage. >> isn't it fundamentally important if the housing market isn't going to decline anymore,
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it's biblical in implications. people say, i'm not going to make a loss, this house price won't fall and you can put resources back in. over time, that has phenomenal implications, does it not? >> i think it does. the fact you're seeing investors come in first and say, listen, i'm calling the bottom, i'll buy 500 homes, buy 6,000 homes is a very good indication -- >> you're referring to an interesting trend. large investors buying all these single-family homes, figuring out how to make that work. i don't know how you pay all the guys to mow the lawn but that's what you're seeing in terms of activity. >> right. >> that means more renters and fewer mortgagees than in the past. >> homeownership is 50% -- >> question got to 70 plus percent which is too much. what do you think is the right level? >> it really -- it actually depends on incomes.
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the right level is if you can afford it. if it's the right percentage of your income, so it depends on the underlying economy. >> relative to the interest rate. >> it is. you look at -- >> interest rates are so low the affordability shot up. >> right now it's affordable but if you had incomes go up, you could have rates go up a little bit and have the same affordability. it depends. if you have a strong economy, strong housing market. >> this morning, the head of caterpillar says to get housing contribute to the economy, you want to double to these current levels. would that be too much? >> you can only have housing starts double if you had people to buy them and afford it. i don't see that happening yet. >> if i go to lending tree, because i want to buy a property and i want to have lenders compete for my business. then i choose one. then i can't go through the underwriting process. i end up being really frustrated and not happy. does that happen a lot?
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>> it does happen. it does happen. what we try to do in that situation is we tell you exactly why, the credit, appraisal, whatever it is, and then you in the database and tell you as things improve so that we can get you back. but we want to be honest with you and give you the honest assessment of where the market is. >> for those trying to decide this morning whether or not to lock for the next 60 days, would you do it? >> you know, it's funny. i've been saying this for about 100 bases points but i think, yeah, i would. >> something we should know, carl? >> just curious. just curious. >> various opinions. >> doug, as always, appreciate it zoom great to be here. >> ceo of lending tree. ahead, goldman sachs telling book that didn't tell that much. greg smith's "why i left goldman sachs" is out. later peter king, chairman of homeland security committee, will tell us what he wants to hear in the final debate tonight.
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welcome back to "squawk on the street." a new abi research technology barometer study says 1 in 5 online users thinks online video will be replacing pay tv, at least for them. take a look at netflix. it's a little higher, ahead of earnings tomorrow. big number folks will be watching for, the growth in their streaming subscribers. over to you. >> lovely. meantime, yahoo! earnings are out tonight after the bell. rumors are already swirling ahead of the ceo marissa myers first conference call. julia is live in l.a. with what people are talking about this morning. good morning. >> good morning to you. this isn't just the first conference call, this is the first time speaking publicly since taking the helm at yahoo! three months ago. she's shaken up management ranks, hired a new cfo and coo so wall street wants to hear what her vision is for the
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company. we do expect her to continue to focus on product and technology as opposed to focusing on content, which is what some of her predecessors did. because of her person at google, she was hired for her expertise on product. now, to that end, there have been some reports buy reuters she's potentially interested in buying a company like open table or ad tech company like millenial media, tools to get people to engage more and generate more additional revenue. we'll be waiting to see if she makes any comments about acquisitions, particularly in that earnings call. the other topic that's definitely going to be in focus today is mobile. obviously on the heels of google's earnings, an idea that the shift to mobile is resulting in lower margins, we'll have to see how yahoo! plans to make money in the mobile space because it's apps for smartph e smartphones and tablets are not as engaging or robust as competitors and will be going
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head-to-head with google and others in that mobile space. >> thanks for that. we'll keep an eye out later today. smith's book, why i left goldman sachs, a wall street story hits shelves today. mary thompson has read the book and joins us with the highlights. >> hey, kelly. the cast of characters is what you might expect. an earnest protagonist and others who served as mentors and role models along with colleagues who get ahead by bending rules. greg smith says he followed closely. what the book doesn't have is a gotcha moment. an account of behavior so evil and unexpected at goldman sachs makes it a must read, a topic of water cooler conversation. still, for those unfamiliar with wall street, it's a well-written account of a young man's growing disillusionment with an investment bank he thought was better than he came to see it as being. he says he has no problem with making money, just with how goldman was making money. >> it shifted from one servicing clients to one where you were
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taking advantage of clients and reached a point where my values and the values i was seeing around me were not matching, and the hypocrisy was great. >> he writes goldman preying on what they call simple clients. he alleges goldman sells complicated products not because of the client's interest, because because they generate big fees for the firm. he writes the list circulated of the bank of top clients ranked by the fees they generated. he writes, " there's something highly disconcerting about seeing a global charity or teachers pension fund in the top 25 of the firm's clients." now, keep in mind, these are sophisticated investors, but smith says they're easily duped. one trader charged over $1.5 million with approval of his boss. while being a problem he says he has not only with goldman sachs but with all of wall street. >> i would like goldman and the rest of wall street to actually address the issues. are clients being ripped off?
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is the bank betting against clients with their own money? and what i'd like people to know and what i write about in the book is since the crisis, none of these problems have been fixed. there are less banks and they're even bigger. posing an even greater danger to society. >> you can hear more from mr. smith, cnbc's guest tomorrow when he speaks to maria bartiromo on the "closing bell." that's 4:30 p.m. on tuesday. >> yeah, 4:30 a.m. is a different show, hosted by somebody else here. >> worldwide exchange i think it's called. >> he'll have difficulty keeping his message clean when you read jim stewart over the weekend in the times and in the book he referred to interns that didn't exist in his particular class and this off the record pushback when he was looking for a raise at a time wall street was laying off people. >> i think in the "60 minutes" interview he did with anderson cooper might be disappointed. maybe maria could get back to that.
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goldman has been on the offensive. they've been releasing an internal review they did in the wake of the op-ed piece saying they looked for references to muppets, something made famous by the op-ed. and i think for the audience that smith might be targeting, those, again, who aren't that familiar with wall street who do have some kind of anger, this kind of narrative that he weaves certainly doesn't put goldman in the best light. >> he was selling derivatives, is that right, mary? >> trading derivatives. >> so i think the biggest take away, actually, for everybody is the fact that you need to get greater transparency on derivatives so clients are not overcharged. and there has been a move in this country, of course, to get derivatives on to exchanges, to get transparency in, and a big pushback from wall street. i don't know where we are on capitol hill with that discussion at the moment. that's the bigger take away. >> well, that's interesting because, of course, a lot of what the -- what he described with the client being overcharged happened in london.
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and of course, the derivatives have a global reach to it. we'll see how the european regulators respond to what the u.s. has laid down as kind of first shot in rewriting the rules on derivatives. >> all right, mary, thanks a lot. going to get interesting as his media tour continues. when we come back, why aig's ceo is asking for a thank you from the fed. plus, it is tweet time. microsoft's newest version of the software said to be making some consumers feel like the biggest amateur computer users ever. that's according to "the times" today. many familiar features are gone like the start button. so help us help the company, what should the slogan be for windows 8? that's our twitter question @squawkstreet, your ideas are next. with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor,
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squawk on the tweet on monday morning. windows 8 is ditching the start button making early users feel like the biggest amateurs to ever use a computer is what "the times" says today. brings us to our question. what should the new slogan for windows 8 be? kevin writes, windows 8, almost as good as our super creative logo. better 8 than never.
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jesse writes windows 8n't your mother's windows. just before we leave you, the aig bailout was obviously one for the history books. now he is giving his two cents on the firm's treatment from the fed. in this weekend's "new york" magazine, the outspoken ceo says the feds failed to say thank you after his company repaid what amounted to be the largest government bailout in history. bermosche said they did not think we were going to i pay the money back and we did. we deserve a pat on the back. >> which candidate gives it to him in tonight's debate. >> really? >> neither one. >> really? >> interesting there. can i mention, go back to earnings season. does this not seem to be the theme that's emerging. the companies in not all cases beating, but the guidance we're seeing is lower. john malloy, 4-1, a negative
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positive ratio when it comes to preannouncements and one of the worst we've seen in over a decade. >> not to mention a lot of these companies that are warning for the quarter to come already talked negatively about the quarter in recent weeks. caterpillar saying tough stuff about china. >> that's why people say why isn't it worse given all that? well, it isn't exactly a surprise. when you start to talk about the negative -- >> which is why some say caterpillar in the green today, it's been priced in. there are sort of soft warning signals over the past few weeks. >> 20% underperformance from the s&p so far this year. >> yeah, which is one big reason the dow's not doing worse than it is. we'll see you tomorrow. >> yes. >> thanks for coming in. >> good to be here. >> david and simon, see you in a few. if you missed us this morning, here's what you missed earlier on. >> welcome to hour three of "squawk on the street." here's what's happening so far.
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irrespective who's in the white house next year, at least as far as the eye can see. >> we absolutely believe that the republican candidate represents more free market kind of environments and would be good for everybody from an economic standpoint as well as everything else. >> which of these candidates might be most market friendly? some of them do express concern that a romney presidency could be more upsetting to markets on the foreign policy front. >> the way they shut down japan. did you see the exports to china down 14%. when you get a cold war between countries, you can see the chinese, the communist party says no toyota. >> berman wants to be the stock swami, maybe i choke the bear. >> i had a feeling that was coming. >> the president believes we shouldn't be in endless wars.
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we've been at war for a decade, it's time to bring our troops home and focus on nation building at home. >> a lot of the housing being bought now is being bought by corporations by people sort of bulk buying up foreclosed properties. >> not traditional mortgage demand. >> it's not. it's not. consumers want to be in the market, but it's tough to get a mortgage. >> good monday morning, live here at post 9 of the new york stock exchange, hope you had a great weekend. let's get a check on the markets as we kick off the busiest week of earnings season. not to mention a two-day fed meeting at a presidential debate tonight. dow's hanging on to modest losses here. down about 14, the nasdaq actually for the first day in four days is outpacing both the s&p and the dow. caterpillar one of the winners on the dow today, the construction equipment maker higher despite third quarter revenue coming in below estimates this morning. ceo telling cnbc earlier today that although there are many uncertainties in 2013, he does not foresee a recession anywhere. and fedex says it's going to
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hire 20,000 seasonal workers for the holidays. shipper is forecasting volume this holiday season to be 13% greater than last year. it says december 10th will be the busiest day in history. let's get to the road map this morning. tonight is the final debate before the presidential election, we spoke to someone from the obama campaign in the last hour and this hour, republican congressman peter king will get a preview of mitt romney's strategy. shares of vf corp. under pressure after third quarter revenue came in light this morning. tim berland, north face, wrangler. and squawk on the verge of fashion, the co-founders of rent the runway will join us. plus, it's a major tech showdown this week. product announcements expected from apple, google, microsoft. which company will steal the spotlight? our tech insiders will weigh in. tonight, as president obama's and mitt romney's final chance to confront each other before the election.
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in foreign policy, the topic for tonight debate. both candidates face fiscal realities. joining us from outside the debate hall is romney supporter new york congressman peter king. good to have you with us. good morning. >> good to be with you. thank you very much. >> what is the strategy for the governor going into tonight? obviously we know he's narrowed his lead nationally, certainly in swing states, as well. but for an election that we all thought was going to be about the economy, how does he leverage that new-found strength when it comes to foreign policy? >> main thing is to show that foreign policy requires leadership and just as we need leadership to bring back the economy, so too we need leadership for the u.s. to prevail on the world. and the president's lack of leadership in many respects is causing his foreign policy. unless the economy comes back strong, we cannot project ourselves as an international power. we want the resources to back it up. leadership as far as the economy means leadership on the world. we can't be apologizing for america and leaving a vacuum out
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there. because we leave a vacuum, the bad guys fill that vacuum and works against us. >> people have a close eye on what he's saying regarding defense, right? we know he wants to build more submarines, big piece on the times over the weekend about connecticut and how even they are wondering, okay, it'd be great having new business, but can the country afford it? how does the governor balance that leading not from behind so to speak but also keeping the fiscal realities in mind? >> well, we have to find ways to do it. and by bringing the economy back, reducing unnecessary government spending, by allowing the american economy to expand to grow to break loose, if you will, by taking away unnecessary regulations, reducing marginal tax rates, that's the way governor romney's going to do it. just as ronald reagan did during the 1980s. as the economy grows, that provides the resources, revenues you need to complete the military build-up. we can't just isolate ourselves
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and say we're going to do this at home and not abroad or abroad and not at home, it depends on a strong american economy and a strong american presence overseas. coming from new york, i saw what happened when both parties for that matter looked the other way when it came to islamic terrorism. and we saw the terrible attack, which was a drastic, dramatic, horrible loss of human life, also had a devastating impact on our economy. >> would you expect, i assume this notion of direct talks with iran is going to come up. we'll see where bob schieffer takes it. but is that something that the governor would rule out automatically up front? >> no, that's going to be up to how governor romney wants to handle it. but having said that, this is another example of selective leaking by the administration. it's almost embarrassing, the day before the foreign policy debate, a top secret -- supposed top secret leak about talks with iran is leaked to the "new york times." that's shameful. and this is what's gone on throughout this administration. they leak for political
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purposes, and i have no reason to believe these talks are any more significant. we always have back-channel talks with our adversaries. and to leak it the day before the debate just shows how desperate they are. no, governor romney, the last thing he wants is war. the last thing he wants to do is to resort to war. but we can never take, you know, the military option off the table because that only increases the possibilities of war. governor romney will do whatever is necessary to make sure that iran does not get a nuclear weapon, to make sure the middle east is stable. he'll take no option off the table. but the last option he wants to use is war. but he will not avoid the military option if that's what it takes. also, it's very, i think, troubling that with these supposed back room talks going on that israel is not part of them, israel does not support them. i don't know how we prevail in the middle east unless we have a close, working, and trusted relationship with israel and the prime minister of israel benjamin netanyahu. >> yeah. then, of course, there's the
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issue of libya. you've already called for susan rice's resignation as ambassador. are we going to have a second discussion here about what the president meant when he used the words act of terror? or terror act in that rose garden interview? >> it's a tragedy for those being killed, it's also a metaphor for the failure of this administration to directly confront terrorism. this administration calls the ft. hood murders workplace violence rather than act of terrorism. they used to call terrorism a manmade disaster. and for the president to stretch the interpretation of that statement, that was the morning after the terrible acts in benghazi, 4 1/2 minutes into the statement he used the word terror and followed his discussion of september 11th, 2001. he's trying to rewrite history and doing it at the expense of four american heroes that were murdered. >> you are certain when he used those words he was not modifying benghazi in particular? >> well, if he was serious about
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benghazi being a terrorist act, he wouldn't have waited four minutes to talk about it. he was talking about benghazi, then went to talk about september 11th and then mentioned act of terror. to me, if you thought this was a terrorist attack, you would lead in by saying last night was a horrible terrorist attack against benghazi. instead, talking about pornographic videos, demonstrations, none of which turned out to be true. >> a hot issue tonight. >> peter king joining us this morning from boca raton. and stay with cnbc for full coverage of the debate. maria bartiromo and i will be co-anchoring beginning at 4:00 p.m. eastern time. gary is taking a cue from it says wayne gretzky, gary, what could that mean? >> wayne gretzky was asked, how are you a great hockey player? he says, i skate to where the puck is. i'll get to that in a second. i want to play a tape of october
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10th, at that day we were talking about apple. let's take a listen to that sound. >> and what does it mean now? it means they're there and they're market weighted. and his interpretation, the guy who sits around and scrubs these numbers was to me that this means that now they are actively managing the position. and therefore, having seen the 10% correction that we've seen since earlier in the month, they will now try to reduce decisions in the strain because the relative underperformance is costing the other side. the tale of two cities, it's the worst thing that could happen when active managers try to closet index. >> you try to skate to where the puck is going. that's how you're successful in investing and closet indexing as we pointed out that day, the closet index that all essentially got market weighting positions in apple. look at what happened last week in google. same thing, if you look at the mutual funds, the guy who tracked looked at it. google was the same thing. market weighted. why do you need to know about
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this? because when you get the closet index owning essentially the market weighting, where is the incremental buying coming from? you saw that in apple and google. he mentions to me, the gentleman who tracks this stuff, he says this is where the puck is going. take a look, we put a list together about where the closet indexes who are essentially trying to track certain indexes are underweight. china, financials, indonesia, bhp and select energy names. this is how when you track the closet indexes, you're able to take advantage of where they are and where they are not. and if you look at apple and google over the last say three weeks and one week, you can see where they're weighted and where they're underweighted. >> yeah. that's great stuff, gary. i guess the only question is, how early on are we in that process of trying to bring things like china and hard assets up to weight? >> well, remember, the data that's tracked. and nobody really does this better than the gentleman i know who does it is based on quarterly filings. a lot of this information, carl,
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great question, comes from the september 30th filings. you don't know what's happened in the last three weeks. the point is that you try to get caught up by the end of the next quarter. so i think you can anticipate whatever the overall macro environment is, these are the areas they'll be trying to get caught up between now and the end of the year. >> great, great stuff, and you were dead on with apple a few weeks ago. >> thanks to the gentleman who follows us. he was dead on. >> okay. >> see you in a bit. let's get a market flash at the ag sector. >> hey, carl, the canadian fertilizer company is going to double its dividend to $2 and move to a quarterly dividend payout. it is also going to buy back shares up to 9 1/2 million shares and expects to reduce its float by about 6%. that's a little fertile for some shareholders there. >> all right. thanks a lot, bertha. vice presidential candidate paul ryan's been wearing northface gear during the presidential campaign. can it translate into an
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earnings boost? we've got the cfo of vf corp. the parent of north face and a bunch of other brands. getting the pulse of corporate america. dozens of s&p 500 companies reporting this week. we'll tell you what the numbers mean for your portfolio right here on "squawk on the street."
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brands like north face, timberland, out with fourth quarter earnings, revenue just shy of estimates. shares of vf corp. down about 3% this morning. but up nearly 30% so far this year as you probably know. on the news line for cnbc exclusive is eric wiseman, eric, great to talk to you this morning, welcome back. >> nice to talk to you, as well. >> it's been said given all the challenges retailers have around the globe, maybe nobody has managed risk as well as you guys have. can you walk me -- how would you characterize the guidance for the fourth quarter? once we account for any fx adjustments. >> well, we reported a really strong third quarter with our revenues up 14%, 17% on a constant currency basis and organic growth of 6%, and the year is going to come in pretty much exactly as we called it back in february, actually, with revenues of $10.9 billion and 8% constant currency growth rate. we've seen -- we knew all along
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there were going to be some ups and downs during the course of the year. but we're going to have a great year. what changed since the beginning of the year is we've increased our earnings guidance from $9.30 back in february to $9.60 now. >> europe for the quarter, 3%, but you're looking for fourth quarter 10%? how concerned should we be about europe? >> europe has been a success story for us all year. we grew double digits in the first quarter and in the second quarter. we knew coming into the year the third quarter was going to be a dip for us, and the reason for that, carl, is when you think about our business, particularly in our north face outerwear business, our business overall is 80% wholesale and 20% retail. so the wholesale number has been our challenge in the third quarter. and the reason for that, there's two reasons. one is there was inventory overhang, meaning there were some black down jackets that didn't sell through last winter in the warmest winter in 100 years.
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and the economy in europe is pretty tough. but even with that in the third quarter, in the americas we were up high single digits. europe, which has both the weather challenge from last year and the economic challenge was down mid single digits. asia which really doesn't have either was up over 60% in the quarter. so we knew we were going to have a sell-in issue, for us now it comes down to sell through. and we're confident in our ability to sell through on the fourth quarter. >> so north face goes -- this was sequentially from q-2, goes from 16 to 8 in this recent quarter, but you still see q-4, 13 to 15. it's almost as if you think the third quarter is really going to be a blip in the course of the year. >> it is a blip, and it all gets down to the fact that we had retailers last winter who did not sell through the outerwear, northern boots because it was such a warm winter. rather than give them away and discount them, they packed them away for this winter. so that reduced our sell in for fall. we expect strong sell through and we expect a good fourth quarter, and yes, you're right, we expect it in that low to
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mid-teens area for the north face globally. >> eric, to what degree was jc penney a factor for you guys this quarter? >> well, jc penney is going through an enormous transformation. and we're a part of that transformation, and our results have been slightly better than the results that they've reported. but we're down year-on-year there. we're hanging in there with jc penney. they're an important partner with us. and we have plans to be a part of their go-forward strategy, we're working hard to make them successful. >> it must be hard to give guidance for the full year we're in. but already, obviously companies are being pressured to give us some clarity on 13. our calendar '13. you got a sense of how differently 2013's going to look from 2012? >> i appreciate the question, but we don't talk about 2013 yet, carl. we do that in february when we give our year-end guidance and the plan for the coming year. sorry about that.
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>> that's okay. you can't blame me for trying. >> i don't blame you for trying. >> stocks under pressure today, eric, as you know, but coming back a little bit as you've been speaking to us. appreciate your time very much. >> we appreciate your interest. thanks so much. >> eric wiseman of vf corp. tech news in full force this week. all reaching for the microphone with company news. who is going to be the one to shine? we've got a panel of tech insiders to get their take. and the early reviews of windows 8 coming in. some expressing concern the windows start button is gone. what should the slogan for windows 8 be? tweet us @squawkstreet. [ male announcer ] you are a business pro. governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go.
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the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪ stocks are a bit calmer today. but there's a slew of earnings on top that will affect your portfolio one way or the other. art hogan joins us from boston.
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good morning to you. >> good morning, carl. how are you, sir? >> you make the point, art, that google was the thing that started selling in earnest last week. and i wonder when you have caterpillar this morning with more lowered guidance but the stock higher, is this the beginning of the repairing process? >> feels like it. you know, we've started the earnings season off on the wrong foot to begin with. because the predictions for the earnings season were certainly dire. we talked about the first quarter and 11 quarters we were going to see negative earnings growth and how bad that was going to get. kick things off with alcoa two weeks ago and got into the heat of things last week. and we seem to be able to stomach some of the bad reports. you beat earnings, but missed on revenues, guidance was lackluster and the market was moving along okay and a lot of that had to do with the macro. you look at the macro set-up. our concerns over europe, china demand story receded a bit. and we started focusing on the micro. and we got that jarring awakening by google that things weren't looking so good. it was another technology name that everybody recognized that sort of set the ball in motion.
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>> so what do you do with the remainder of the balance of this year? if you've already participated at least somewhat, art, in the rally, why would you take a gander on any remaining potential weakness? why would you be buying at these lower levels? >> yeah. and that's a great call. when you think about where we were in june and how far we've come. so from the bottom in june to the peak in september, you know, the s&p put on about 15%. we've only given about 2.25% of that back. we're in a good stead. there are a lot of professional managers that would like to end their year right now and call it a day. there are others, though, unfortunately, that have to chase that performance because they've underperformed their benchmark. you're going to have a tug of war. and i think as investors, you know, out there thinking about what they should do from now until the end of the year, understand, you've got several things that are going to cause volatility coming at the end of the year. certainly got the election and post election conversations about the fiscal cliff will cause a great deal of uncertainty in the marketplace. i think we come out in a better place, but going through will be
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a tough ride. >> so are you net defensive for the next few weeks here? next few months? >> i think it makes a great deal of sense to be a bit defensive coming in certainly through the election cycle. now it's a race that's too close to call, but what happens has to be dealt with immediately afterwards is how we deal with a fiscal cliff. impossible to predict how that happens until we know the results of the election. once we figure out how to deal with a fiscal cliff, we can figure out what a multiple looks like for '13, probably a better entry point. but right now, you want to work your way through this election cycle and kind of know what the end result's going to look like. >> and in addition to earnings, we've got to work our way through four central banks, one of them being our own. i can't imagine expectations are that great for the fed given what they said. is there any potential color that could come when the statement comes out on wednesday? >> this is going to be an interesting one, carl. this will be the first time we get a statement where we already know what the action is. we've got unlimited quantitative easing. we don't expect anything new. and if the sort of end date on
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that is the expiration date on quantitative easing is out some time in '14, it's very hard for them to sort of move the needle, i think, with the variations in the statement. i'd be very curious to see if they could make any variations in the statement that make a difference in the marketplace. >> yeah. >> we'll probably keep a closer eye on the rest of the world. >> plenty of excitement already. we don't need too much. finally, art, people are saying good things about the consumer, the journal has a nice chart about the amount of income that is after tax, you know, what's left. what they have after food, energy, financial obligations. they call it a license to spend. you've got gas prices in some parts of the country that are going to fall below $3 and probably going down a lot more in the next few weeks. >> yeah, i think one of the important things to look at as far as the retail goes is the first thing is back to school was more robust than had been anticipated. the correlation between back to school and holiday shopping is as good of a correlation as we get. it's a 90% run rate. holidays probably better than
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expected. the national association of retail federation came out with their survey a couple of weeks ago and talked about, you know, low single digits. i think that's great. and what's happening right now is a lot of the specialty apparel retailers are reinventing themselves. so i think you've got a great opportunity here to look at the consumer discretionary names and pick up bargains. >> all right. good advice, talk to you later 6789. meantime, a car bombing igniting new fears. and we'll get the closing bell with simon. i'm a conservative investor. i invest in what i know. i turned 65 last week. i'm getting married. planning a life. there are risks, sure. but, there's no reward without it. i want to be prepared for the long haul. i see a world bursting with opportunities. india, china, brazil, ishares, small-caps, large-caps, ishares.
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welcome to the world leader in derivatives. welcome to superderivatives.
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got a little red here after a weekend full of regional elections in spain. simon's here to walk us through it. >> yeah, look at that map. do have a look at greece on the bottom right hand corner. see it's jumped 2.6%. a member of angela merkel's rooting coalition is suggesting that greece will get an extension on its bailout. we keep going through this. it's very much a holding pattern in europe at the moment. notably, of course, we are in negative territory. i guess the biggest thing that comes out of europe in the last 24 hours was news that prime minister's ruling party in spain, the people's party won the regional election. that's important, because there was a feeling they couldn't ask for a bailout until they got
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through that election for fear that the conditions that will come with an eu bailout, for example, pension reform would mean they lost that election. so that's good news for those that are looking for them to ask for the bailout and then, of course, the ecb to come through and buy the bonds. there is a problem politically, electorally with what's happening in the north of europe or in the north of spain with the region, but let's leave that to one side for a moment. it's interesting after we saw the profit-taking on friday that some of the banks that bore the brunt of that have come back today. you see commerce bank, unit credit over in italy slightly higher. again, we've sold into that. we have tracked lower through the european session. and a couple of corporates before i leave you. phillips came through, phillips, of course, is the electronics giant is basically restructuring itself in a major way, cutting about $1 billion in overhead at the head office today. it came through with a solid set of results as far as many investors are concerned. it's up 7%. it's interesting, the ceo is warning that the world environment is getting worse because of europe, because of china and uncertainty with what
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is happening here in the united states. and the other corporate that we should mention, of course, is bp, british petroleum, and still, of course, restructuring itself after we had the oil leak in the gulf of mexico. the big news overnight there is that they have done a deal with effectively the kremlin for lack of a better expression, with the state-owned oil giant in moscow. they're essentially giving up their operation there, their part of that joint venture in return for 18% of rosneft. the prime minister has to sign off of it and $12 billion in cash freed up for obvious reasons in the wake of that spill two years ago. back to you, carl. >> interesting joint venture there. breaking news on allied. >> hey, good morning, carl. nearing a deal to sell the
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canadian operations to royal bank of canada for more than $4 billion, according to people familiar with the matter. i'm told an announcement on the deal could come as soon as today, but rbc has been bidding against toronto dominion or td bank which is still in the auction process, though unclear whether td will come in with a topping bid. the former financing arm of gm has $15.3 billion in assets in canada, though the net income there has been deteriorating. ally will use the proceeds lumped together with $865 million from the sale of its mexican insurance business last week and the forthcoming sales of the business in europe and latin america to continue buying back the treasury department's 74% stake in the company. allied announced in may that it would sell those businesses as part of that effort. could not be reached for immediate comment. the situation could change, but where we stand right now, carl, rbc near a $4 billion deal for canada. >> thank you so much, kayla,
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kayla tausche back at headquarters this morning. time for another capital markets op-ed. a lot of investors doing their best to read this release as well as we can. >> it is always fascinating. the market report puts together a great piece. the best i've seen with the correlations between expectations of elections, polling, and market reaction. i'll get to what the expectations are first. but he brings up great points. you may know this, a bet a number do not. you hear the polls constantly doing by telephonic robots essentially trying to get to the people based on the type of polling years ago where it was actually humans asking the questions. to the first thing is that are the robots even getting the right people to answer the questions that they think they are? so that's the first thing. number two, remember that a lot of people don't have land lines and so you're essentially by having these robots contact all these land lines are omitting all the people that don't have land lines in terms of doing the
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polling. and with a 10% response rate, that's what the polls are hoping for. a lot of people think there may be a landslide here that romney will have a reagan-like landsli landslide. they say forget any of the polls because the polling data isn't being done in the most effective way. but what i found fascinating here is if you look at the actual correlation between what the polling has been saying, the polling has been saying in market reaction, mcclellan points out that the correction we saw in april or may was right on schedule based on a first-term president going into a follow-up election. he says the rally off the june 4th low if you go back historically again the same. he says now in the next week or so getting into the election, we could see a down market with another upsurge after the election. i don't want to really go through this entire report. i believe you can get it on their website free. but it's face nating stuff if you're trying to figure out what to expect in the next two weeks as it relates to the election.
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back to you, but -- by the way, before i let you go, we want to talk about the closet indexing earlier. i do want to point out that the gentleman that tracks this stuff. and he does, again, a phenomenal job as pointed out, as well, if you look at what happened with apple, be mindful of the fact that both qualcomm and amazon, if you look at, again, the mutual funds that are theoretically stock picks, but nothing more than closet indexes, fully weighted in both of those, as well. you'll see earnings out of them shortly, be very careful, closet indexes fully weighted in both of the names going into the earnings. >> amazon thursday night. good stuff, gary. >> see you in a bit. new concerns about unrest in the middle east are growing as you may know. sharon epperson at the nymex with the potential impact of the energy market. >> hey, carl, the big question here, the global supply list we're seeing versus diminishing demand globally for crude oil. and that is what is what the market is taking into effect. we are looking at spreading violence, though, when you look at what happened over the weekend in lebanon with the car
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bombing which has been blamed on syria. also violence erupting in jordan and, of course, the skirmishes that have continued for weeks between syria and turkey. all of this has led traders to focus not only on the possible disruption to production, but the oil transportation routes there. particularly going through syria to turkey and exported out there by the port of sehan. we're looking at the ct this could have on brent crude. it supported prices above that $110 a barrel mark, we are looking at crude falling below that level and more of an impact on what is happening here in the u.s. market spilling over into the brent crude market. in the u.s. here, we are continuing to watch for the restart of the keystone pipeline. we've just spoken to transcanada, that is supposed to happen some time today. it had been pushed back from the re-start of saturday. and, of course, it's been down since wednesday. this is 590,000 barrels per day.
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and that is something the traders are most focused on. and a big reason why wtis near the lows of the session. >> before i let you go, some investors may see some headlines today suggesting that gas prices are going to fall 50 cents in the next 30 days. should they believe them? >> well, they should definitely believe the gas prices look to be coming down considerably. we were talking last week about look at what's happened in ohio over the last week or so. and prices already down more than 25 cents there for the statewide average. there are certain pockets of this country going to see much lower prices and this, of course, is going to be key coming right ahead of election season. >> all right, sharon, thank you so much. no curve ball you can't handle. sharon epperson at the nymex. bob pisani is here on post 9. >> important thing, just off the lows for the day, a lot of momentum and talk around caterpillar. huge volume today. and remember, they basically lowered expectations. they're talking about 2013 revenue on the flat side. well, way it a minute, the stock is not down on that.
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so the street is now saying we're not surprised by this. i think that's a very positive side for caterpillar. this is one of the great big stocks in the world. the reason is people watch it because the way it's distributed around the world. let me show you the revenues. you rarely get a company distributed so beautifully like this. north america 35%, europe, africa, middle east, 25, asia pacific 25%, and latin america 15%. that doesn't happen very often. it's a simple company, it's construction and mining equipment and all the parts that go with it. now, take a look at what's happened since the beginning of the year. caterpillar was the first company that went out and telegraphed the global slowdown. down 30% from february while the stock market was still going up, caterpillar was going down by march, that's the telegraph, that's why people like to watch caterpillar. it's been basing at $80. the fact we have a big data point today it's $80 and it's holding up at $84 and change on the bottom, that's a good sign overall here. remember, they move down on the
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slowing global concerns, the fact it's not dropping anymore is the big positive here. meantime, if you take a look at coal stocks today. other kinds of companies out there, peabody came off the bottom here, numbers much better than expected. they're talking about china perhaps turning around. the conversion of coal to natural gas is bottoming out, as well. so some of the coal stocks that nobody has liked for the longest time are doing better. finally, let me put up some of the material names and all of those are doing a little bit better today on basically some of the coal commentary. but steel companies, aluminum, billiton, rio tinto all to the upside. are we in any kind of bottom globally is the question. >> thanks a lot, bob. when we come back, microsoft, apple, google, and yahoo all have big news on tap this week. which company will steel that spotlight? two tech insiders will weigh in when we come back.
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oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race.
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no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. on banners. coming up on the "halftime report," 90% of companies are lowering the bar for earnings guidance. can the melt-up continue? when the outlook is so poor? and can the old technology guard compete with the new? plus, is china a game-changer for the election? we're going to trade the race for the white house at the top of the hour. did i pronounce it wrong? >> well, i say like oscar-mayer,
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to each his own. tech giants prepare to face off over the next several days. tomorrow, apple is expected to unveil the ipad mini, windows 8 goes on sale friday. and a week from today, google's got its own surprise the same day microsoft is set to launch the windows phone. guys, good morning to both of you. >> good morning. >> hi. >> paul, let's start with apple. i mean, the expectations are so high, i'm so afraid to imagine a scenario in which they don't announce the ipad mini. how much is on the line? >> look, this is huge, right? they -- it seems at this point a forgone conclusion that it is an ipad mini. and it makes so much sense. just like the ipod, they need to extend their lines to keep milking the market and extend the pie and grow their share. they have to do a really good job. there might be some surprises,
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we keep hearing about other things with other refreshers to different products, but a lot's on the line. as always, apple will get a huge amount of attention. there's been some worry of late, but, you know, clearly a lot's on the line. but a lot on earnings later in the week and how the iphone's selling. >> yeah, they're talking potentially 16 different versions, price points from $250 to $650. what's the over/under in terms of what impresses the market at this stage? >> apple, it's got to hit the price point, i think $250 is probably the minimum or the maximum it could be and interest people. i'm going to be paying a little bit more attention to the reception of microsoft surface tablet later in the week. i think the -- as paul said, the ipad mini is something apple has to announce in order to address an increasingly important part of the market. windows 8 and to the lesser extent the surface are kind of their do or die attempt to
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bridge the gap from the pc world into the tablet world. and i really think that's the big story of the week. >> yeah, and that do or die is a nice concise way of putting it, paul. i wonder whether or not mr. softy needs to be worried about some of these reviews. the story in the times today obviously hones in on users for whom this is really a new experience and they don't seem to like it. but is that going to be the broad reception? >> yeah, look, microsoft has a big job ahead of it. obviously it's the underdog here and it has to convince consumers this is worth learning, right? people sort of know the ipad already and that's what they're going up against. if the ipad price is above $300, they're in trouble. but that aside, the surface is hugely important, big bet, microsoft has to, you know, convince consumers that it's worth learning and they have to convince them they have enough content, right? ipad is this rich system with all these apps and all this content built in, and to get people to start using a tablet, which is essentially what it is,
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it's going to be a real challenge. >> it's not a totally different experience. windows 8 can still run all your old windows applications, and the interface isn't that rally different. yes, it takes a little getting used to in the touch type interface, but basically, you have the entire installed base of windows applications that you can still run. microsoft has done this kind of transition before when they went from dos to windows. they did the same basic thing, they released a version of dos that had windows running on top of it. they know how to manage this transition. yeah, it's a risk for them, but i think they know what they're doing. >> paul, i mean, last point on that. we've had long time microsoft bulls come onset, and they will learn to adapt and they are going to need those long standing applications like outlook. isn't that a reasonable thesis for microsoft long-term strength? >> absolutely. that's where microsoft has
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dominated and that's what they need to continue to keep doing. i think they're going to have a challenge with communication and, you know, the coolness factor in getting consumers to really jump on. >> yeah. that's always been the challenge for those guys as we know. dylan, paul, thanks show much for your time. going to be a heck of a week. >> looking forward to it. when we come back, we've got the co-founders of a company called the netflix of high fashion. rent the runway aims to bring celebrity styles to the masses. e our schools... ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
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do you have a glitzy event to attend? rent the runway will deliver that cinderella experience you always dreamed of. now you can wear the designer dress without draining your wallet. sort clothes through sizes and see how they look on real women before you rent it. it's like the netflix of couture. >> another concept introduced on the pages of the "new york times" yesterday. joining me here this morning, the co-founders and ceos of rent the runway. ladies, welcome, good to have both of you here. >> thank you. >> another great idea out of harvard business school. is this where this all started? >> yeah, we founded the company about three years ago. and it's taken off since then. just last week, we launched that new concept called our runway, which gives our customers the ability to shop by other
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user-generated photos. >> jenny, what was the catalyst that got all this going? it stemmed from a personal experience, right? >> yeah, so actually, jen's sister initially had a closet full of clothes, but nothing to wear moment and through observing that, we decided we should offer women away to rent dresses so they can frequently turn over their wardrobes. but more recently, we found that our consumers were actually sending in photos of them in the dresses and how wonderful it would be if others could shop via those photos. >> 2 1/2 million members? >> yeah, close to 3 now. >> how do you go from zero to 3 million? and how did you get -- you've gotten financing from some of the big dogs in d.c., how did that come about? >> well, primarily we've grown so much because of the concept. most vendors have been acquired through word of mouth and social channels and that's because women are having these cinderella experience when they rent. they go to a party or a wedding, they feel amazing about themselves. and when someone comes up to
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them and gives them a compliment, they say they rented the runway. and that's self-confidence that's inspired this new technical product which allows you to shop by those very photos that our customers have submitted. >> has social -- thinking about how social metrics tend to lean women in some cases. pinterest, largely women, have you been able to ride that wave? >> we definitely have. one thing we noticed early on is that facebook kills outfits. meaning that people wear an outfit, post the photo on facebook and then feel like they can never wear that outfit again. it's dead to the world. >> right. >> so because of that, they had the need to really rent the runway more again and again. and the new product we launched is also fueled by social media because people are sharing photos of their special night out and others saying i wish i could look that good and saying i want that same smiling happy moment. >> we always ask founders of new companies this, but what's the end game? is it going public? getting bought by a big fashion house? have you thought that far ahead?
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>> well, i think that the goal is really to create a disruptive retail platform which democratizes luxury around the united states and then around the world. we want people to have access to the products that they dream about. and fashion was the first foray into that, but you'll see lots of categories from rent the runway over time. >> have you heard feedback? you've got 175 designers, i think at last count. are they fans of this concept? does it hurt their sales through their traditional, you know, distribution channels? >> it's actually one of the most powerful marketing channels that a designer can access. because most of our 3 million members are between 15 and 45 years old. so they're experiencing these brands for the first time and creating memories in them. so when you wear a brand to your wedding or to your prom, you develop a memory and you want to own that. >> customer for life in some cases. >> yeah. >> well, disruptive is truly the word for it. congratulations on the coverage over the weekend and thanks for
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coming in. the book that was expected to expose the secrets of goldman sachs may be coming up short. a former goldman vice president making the media rounds to promote his new memoir. details next. [ male announcer ] do you have the legal protection you need?
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i would like goldman and the rest of wall street to address the issues. are clients being ripped off? is the bank betting against clients with their own money? and what i'd like people to know and what i write about in the book is since the crisis, none of these problems have been fixed. there are less banks and even bigger. so posing an even greater danger to society. >> former goldman sachs employee greg smith this morning on the "today" show talking about his new book. gary, we talked about his media tour to come on friday. >> here we go. that's the op-ed. that's what i think of greg smith, you know. this is the point, carl. what he said, no one disagrees with what he just said. >> no. >> right, there are fewer banks, right? >> the banks are bigger, everybody wants the banks to do great things. here's the point. nobody's asked him this question yet. why did every 360 review he ever did and that's the opportunity where you get to review your
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peers, review anybody else at the company. he never mentioned any of this. as far as any credibility, any real institutional industry credibility, this guy's got zero. he's a loser. the fact is, he's got -- he sold out to the "new york times." they made a terrible mistake running this op-ed. and hopefully after this media tour, this will be the end of greg smith because he doesn't speak for the firm and doesn't speak for the industry. >> even with his credibility, arguably tarnished, gary, does he have no valuable message to bring to the street at all? >> well, listen, everybody in the business is aware of this. he's not saying anything that anybody else doesn't know. i don't know why a book company would pay him, a publisher $1.5 million to give that message. the point here, it was nothing new and at the end of the day, carl, he cannot explain why the reviews never had any of this in it. if he could answer that, maybe he'd have some credibility. >> yeah. good points and, of course, he's not done. going to appear with maria i think later on today. thanks a lot, gary. >> you got

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