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tv   Squawk on the Street  CNBC  December 6, 2013 9:00am-12:01pm EST

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remember this is an asymmetric economy and we have keep our eyes on the bottom half. >> it suggests the economy is doing better, even in the face of headwinds and moves us closer to the fed's threshold number. we may get there quicker than we expect. >> thank you for joining us. it's time for "squawk on the street." >> 203,000 jobs added in november. a jobs report headed in the right direction. i'm carl quintanilla with jim cramer. david faber is off. the 10-year yield within about 10 basis points or so of that 3% at least earlier this morning and europe is worth watching as well. looking at the jobs number, as we said, 203,000 non-farm jobs
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added last month, forecasts calling for about a gain of 180,000. the unemployment rate down 0.3% to 7%, the lowest level in exactly five years. the question is whether or not the fed will scale back its bond purchasing program when the central bank meets later this month. jim, whether it was u-6, the workers, the wages, there's not a lot to quibble with in this one. >> i was most concerned about an even bigger number. this is kind of good. it wasn't so great that the rates had to skyrocket. >> so it's not a december taper number in your view. we just had plosser on saying don't make too much of one month. >> that's right. there were three articles on how we got a big gdp number and they
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all said the same thing, which is it's not going to last. that plus the fact that this was not 250,000 jobs i think makes it so that people want to say yellen will take some time, she'll make a determination. if interest rates creep up a little higher from here, it's not so bad. it is cinderella. >> it's nice to have a cinderella number from time to time. so the pain threshold in your mind is still around 3, maybe higher than 3? >> you know we talk about these algorithms and programs, i think there are funds that when it gets to 3 they sell. oh, people at home would think how could they be so machine-like. >> absolute. >> but it does work like that. i've seen it happen in real life. >> in terms of the brolder macro internals here, u-6, 13.2 from 13.8. still a high number in terms of number of unemployed.
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>> we still need the manufacturing numbers. who is difficult to be employed? you saw all these jobs go overseas. when you see manufacturing come back -- if you take a look at some of these key industries we had, we used to be a huge maker of apparel. we don't do that anymore. those people lost their jobs and they weren't qualified to go to work at goldman sachs. those were people who can, like, if they didn't get to college, they got good jobs, high wages, i like it. >> 20 to 24-year-olds, 11.6% down from 12.5. >> isn't that great? i think that's terrific. i'm sure there are some people who say benefits got cut back. more people had to find work. there are people who are finding jobs and i think that's terrific. i've really been studying all morning. >> for those who have been weighing whether to add to the
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market, subtract from the market, get in at all incrementally based around this number, what's the takeaway? >> you know how i don't like these up numbers. we've had a swoon almost every afternoon between the 11 a.m. and 2. i watch the s&p. i like to chart it by hand. and i know that it worth it to wait for that. maybe it doesn't happen but it's been worth it to wait for that lunch swoon. that would be when i think you might want to do it if there's people over the weekend and they worry so they sell some. this was a number that said those five days we just had selloff, maybe only three of them should have been sold and the last two shouldn't have gone down. >> interesting. december has been not good so far. a lot of those gains historically come in the latter part of the month. >> you said over and over again -- you were talking about how the months do, november and december. and you look at me and say it's certainly not good yet. how does it get good? after an event that is very
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worry assume. now you look. the talk is positive about a budget deal. washington off the front page for a little while so then we look at earnings and some away from retail are quite good. >> let's get to that. real quickly if you did guess the jobs number, our nail the numbers contest. we asked to you tweet the payroll and the winner will win the bit of cnbc nostalgia, a piece of our old set that cramer and everybody signed yesterday. we'll announce the winner later in our program. we had some guesses, jim, even just eyeballing it that were right on the money. >> i was mostly concerned about really high. >> if you take the 3.5 out of the equation, everything that's got great equation is bad. people are like maybe i shouldn't go buy a house. anything that's gradual the market it calls handle. we just can't handle high
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velocity changes. >> need time to digest. sears has filed with the s.e.c. to spin off its lands end business. sears has been selling and spinning off assets in the past few months and weeks. eddie lampert -- people love to gloat at eddie's not lack of success at sears. diwork with him at goldman. haven't soon him lately but i'm disclosing that. you're talking about almost 70% of the float being controlled. that's within of the reasons why people don't think it falls as much as it should. you've got willing buyers. is there intrinsic value to sears? i think that these kinds of moves are the kinds of moves
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that say, listen, we really don't have anything special but what we do have we're going to highlight and take out. >> and the last two spinoffs of sears have not done well. >> no. >> would you want -- wouldn't you be a little bit leary of taking shares of a spinoff? >> let's say that j. crew comes public and lands end comes public, i go long j. crew and short lands end. >> and jcpenney said it received a letter of inquiry in october. the letter asks for information about liquidity, cash, debt, equity financing. and it got hit by kyle bass saying he got out of the financing. >> david's been right about a lot of people getting into this this evening not knowing retail. this is i think a reaction to the fact that on day one ceo says -- michael ullman says
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everything's fine and day two they do a surprise secondary. i hope ceos understand that when you say something really positive and then you issue stock, that doesn't sit well with the regulators. they don't like that. you say you don't need to issue stock and then you issue stock, no. they're going to grill you. remember, the s.e.c. is civil, i'm sure they'll come done. i think they're really trying to make an example of doesn't do that. don't say things are fine day one and day two raise stocks and say things aren't fine. >> other names, comps out of gap, a little better than expected, banana, navy and gap making up for it. >> jeffrey's been the big bull there and they decide this is really about as good as it's going to get. that concerns me when someone is a big bull goes buy to hold. don't want to see that. >> big lots misses by 8 cents.
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>> you have to buy five below. that was very conservative, they didn't have a good thursday/friday. that stock is done 4 5rkwn 4, 5 it. >> shares of dow component intel on the rise, citi pointing to increasing evidence of stabilization in corporate demand for pcs. we keep coming back to what meg whitman told us. >> exactly right, carl. that's what this is about. someone the other day said do we buy intel, it's a 4% yield. i've been waiting for pcs to stabilize so intel could travel from say 24 to 26, microsoft has traveled all the way. i'm waiting for the mobile
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strategy and i feel like that intel just talk about great people and i used to do a lot of work with intel. i keep hoping it's their time but they're still too pc oriented. >> there have been a few upgrades lately, not all to buy necessarily. but they have been mostly about the promise of mobile at intel. this is a little more concrete in. >> it is. if you believe in this upgrade, go by hewlett packard because it's the hewlett packard business that might be driving it or the enterprise, that's a fancy word that analysts use to say companies are liking it. >> even afters year hb has had -- >> yes, you want to own it. boom. you want to own it. >> talk about leadership all year long. >> you mentioned big lots, they don't execute that well, meg whitman at hewlett packard executing really well, intel executing really well but selling a product people don't want, the personal computer,
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unless david was saying look what we got in front of us. if companies have to do a refresh and buy a lot of equipment, they may use hewlett packard. >> and in the news, nelson mandela passed away at the age of 95 after a long illness. the president among those paying tribute to mandela yesterday. >> let us pause and give thanks to the fact that nelson mandela lived and a man who took history in his hands and bent of arc of history toward justice.
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>> i never got to meet him. i got to spend a weekend with bishop tutu, who is very prominently involved with this and he explained to me there should have been a revolution, there should have been a terrible bloodshed, just absolutely what we regard to be the greatest conflagration. didn't happen. they did a truth and reconciliation. that was designed to make it to say, listen, the whites did bad but we're moving forward. it's funny, you don't really understand. if it didn't happen, if there wasn't a civil war -- he prevented a civil war. martin luther king may have prevented a civil war in our country. you go back to the days when that happened, you cannot believe there were not huge riots. people were talking about concentration camps.
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no. mandela didn't let it happen. >> his grace, his ability to let go of resentment, almost super human. >> you tweeted this morning was a fabulous tweet, carl. >> resentment is like drinking poison and expecting it to kill your enemies. >> i was watching -- they had a quote about this man. i often hesitate to talk about anything beyond stocks because i don't have that expertise but i remember bishop tutu saying why don't americans focus more about this good because it's what leadership can mean. >> of course there's a big celebration in johannesburg and the official state funeral will be on december 15th. when we come back, we'll talk to jas jason furman, president of the
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economic council. live from the nyse when we come back. americans take care of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach.
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dash" ahead of the open. ata is one you've loved to talk about all year long. >> it created by the managers. tougher than expected sales
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environment, heightened promotional environment. these are actually quotes from the conference call. over and over again. the other side is that herb greenberg writes saying wait a second, what really happened is the ceo came in, and turned around and said maybe things aren't so great. so people might say this stock is down 20 and have i to buy it. typically a down 20 stock is down again the next day. >> someone called it a welcome reversal from overwrought optimism. right? >> yeah. go to the ulta web site.
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the buon did well, this was a very specialized business. what was most daunting was that we basically felt how could ulta ever miss? compare that with canness, a texas-based retailers that sells mat interestses and everyone felt like they could roll them out forever. when you see this, carl, understand this is the fire you play with when you're in retail that is supposed to have no glitches. this story was not supposed to have a glitch and people are basically saying i didn't even know they were that price sensitive. they were doing a lot of promotion at the end. it's a very instructional conference call to go listen to because you basically got the sense they didn't know how bad things really were. >> interesting. that's going to be one to watch. linkedin. >> they used the word. when the duck comes done. they mention china. they're going to china.
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i'm a huge fan of this company. people thought the last quarter was weak, i felt it was terrific because they're spending a lot to dominate the world. moving into china is a gigantic game changer with them. you have tens of millions of people on linked in. china could be very important. >> in the spectrum, we're getting another hold rating on twitter today. >> twitter came back to where it opened and facebook is the 45. twitter going from 49 to 45 and then going to 41 really sent a whole group of stocks down in a tizzy. a lot of the cloud-based stocks. there's a company i really, really like. you're going to see it, it's called veeva. this does pharmaceutical, cloud based -- it's a
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taking hoonl amount of businesses away from oracle. so the cloud-based companies, the linked in, the return of twitter to 45, the facebook to 49 adds up to that group going to outperform tonight. is it the small are companies we're just getting to know? or is it google? >> google is not a high multiple stocks wday didn't go up because of the funk around its cloud. i can't believe how good google is. i wake up and it like google must be -- if you went to -- >> you sound like druckenmiller.
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>> some of our companies are so good. if i were in china, why can't we be more like google. america istorying why can't we calling of the party. >> google. we got alibaba. come on, i want. >> if you go back to 1934, 1935, chicago reporters were afraid to keep their journalists there and they were surprised the writin mae ma i'm just saying the
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with think or swim from td ameritrade. the net a winner. some have called it unbig usely good. i don't know if i would call it that. >> we can sustain this. there was a funny piece that came out this morning. i italian government climbed to a seven week high after the european central bank draghi said it would prevent -- this would have sent the panel down a hundred pients. now if we even bother to read
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it -- jeff said the market today is giving their permission to taper. is that true? >> i like that. he says it not going to be the end of the world. >> there is the opening bell. you will see a fair amount green as we look at the of your screen. the s&p has not had a negative since 2007. goldman sachs sachs management celebrating today. and scott does that at last clear the decks to get us through the next few weeks?
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>> i kept thinking of hugh are you going to get that data. i guess you get it like this. i don't want to be too dplib. the retall thin has continued to puzzle me. it makes feel some of the american retailers are more promotional. some of them are prok promming a but about when you have this many companies say it's promotional, maybe the big dogs have said we've got to teak big share, let's -- >> it may not be as as too many maybe it that the
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targets and the wall marts have said we're not losing any more share of anybody. we're going to cut price. we're coming back and maybe we can't beat tjx or cost co at its game but we can crush these other guys. mabb that the come of when they need to report somethings that really bad, they talk about something that's really good. i always like the ceos that come out and say, man, we really blew it. made me mike like teenage air peril stock notre dame even the
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o as gal mid 0s does a good job. i was saying to a terrific bank and some them have just gaffe gated this period as well. up can't get a pain bow that's the place to go today. you want to know what to go, you guy some mowing. ivm. r end. cloud hufrts thembut the cloud less mess money. if you have build your gross
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margins and key metric not do well. i think ibm warmed up to where it is because of warren buffett. >> if you believe the jobs number is a real tell about where we're going in the next few months, there are specific micromicrothings you follow, names you buy as a follow on that? is it an adp? >> paychecks was donegraded talking about that $8 million in gm. gchl e's got a big pension liability. loolk that and that's one of my
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charitable trusts updwraded. >> you've been pu. the government then decided that jpmorgan was the poster boy. they're going to do quite well in this krirn. ffrm. >> i remember you saying you expected jpm to get a faster premium than -- >> i think they'll do better in this american. bank of america, no one really cares. brian moynihan, is he doing a good job? yes. he's doing a good job and i was critical of his regime and i'm not anymore. michael corbet is quietly doing
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a good job. >> you love to talk about the oils. >> lumber -- schlumberger is doing good. apple being down 2 with their cash hoard -- they're going to be able to make money off their cash. apple is now down one if you net it from when they got the china
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mobile deal. buy apple. watch these cloud stocks. if veeva is right, will break down off its high. all of the veeva system is balanced on salenumber the unemployment rate drop jason furman is the chairman of the president's counsel of economic advisers. it's great to you have back. >> thanks for having me. >> your early take on these numbers. >> it's certainly good news for the economy. we're continuing to create jobs at a solid pace, continuing to bring our unemployment rate down. but we definitely have a lot more work to do. we saw decline in unemployment entirely short term unemployed finding jobs. just as many long-term
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unemployed as ever. that's why it's so important to be extending unemployment insurance. >> do you think there are some people who may be able to say politically different from you is because we've been cutting back benefits, cutting back the actual amount that you get? do you think there is any validity to that? >> strongly disagree with that. i think unemployment is good for the families that get it. it would hurt their families, it would hurt their purchasing power and you have to be looking for a job. you have to be trying to find a job to get it. it keeps people in the labor force, motivated, looking and helps them get back on their feet. >> i've been interviewing ceos
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in east texas and louisiana. can you help them get the workers they need to help them build this expansion. is there a way that you can tell the president, look, we've got this imbalance in scertain area, this is not a handout program. can you help those companies get employees? they need to fire. we one of the ways you do change that is mobility. i'd like to see more on that. >> nice comeback.
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what's behind the increase? do you think it's sustaining? >> i don't look a lot at changes in the household survey from month to month. if you step back and look at the participation rate, most of why it's come down, it a demographic trend. whatever the unemployment rate is elevated, you're going to have some fewer people participating in the labor force. as the unemployment rate continues could to come down, that will bring some of these people back into the labor force. even with that we'll still have the demographic be able to create a program, almost like a marshall plan, to be able to get it so that a lot of people who lost jobs in the last few years, get these people retrained to be able to handle some of the more
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difficult knew blue collar job be been. >> and also if we invested more in infrastructure, that woo create jobs for people with these types of skills rngs too. we need to be doing all of that. >> are you going to push for a decline? sales to encome tax and then have a bank where you have a bank and put in $3 trillion, $4 trillion? you know can you do that if you push for it. >> i wouldn't doing repatriation holiday. i'd reform our tax code, bring the down, wut the loopholes
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whuch do that, you get some transition revenue. you can put that in a grand barg en kb. >> wool see youneck month. >> good morning, everybody. happy friday. what a rally we've got going here. whatever happened to fierce of tapering? we got cyclical groups, the telecomes, health care, defensive groups. we're up right across the board, folks. it's been a very strong rally right at the open but not strong inform a mr. one guy said it
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threads the needle perfectly. people putting together a list of what the skmik news looks like this week. here's a look for the bulls, gdp numbers very strong overall. auto sales, over 16 million, the highest in six years here. october home sales were the highest since june 2008. highest in manufacturing, highest in two and a half years and cyber sales were up 20% on monday. >> we talked about the lower, disappointing numbers this week. earlier home sales reports were disappointing. retail reports have been generally disappointing this week. it's not unequivocal. if you throw in a budget deal, you can make the argument that
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the more defensive names have been the lagard group so far on the month. the market is suggesting there is that this rily is so strong at the hope that there's not a lot of ep side room right now. and you trickle down throughout the day and end up only 20 points. i'm not saying we're going to move down but there is a down side risk to trickle down throughout the day. as for the retailers, the bottom loon is it has not been a very good week for the retailers at all. if you looked at it, the guidance is what matters. now five below raised theirets.
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all the numbers have generally been below guidance and i think that's the rekey trend. traffic up about with you 50 poors, if. stock coming back, boeing coming back, drug stocks, people have been short the drug stocks. the food stocks doing well because people were betting against them. the hj fund is trying to cover the shorts and the industrial companies that clearly do better in this environment are flying. >> let's get to rick santelli, he's had a busy morning already in the bond pit. hey, rick. >> lots of volatility, that's for sure. if you look at an intra day at
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10-year, a couple of things should jump out at at you. it looks like 293, 2.92 is the high yield. we said last week a pij under 2 ununemployment rate is ticking down. but the yield serve gives us the biggest signed pu. >> you can see several basis points flattening.
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if you look at when the dust settled about four points flattening. the fed is going to have to deal with expectations of concrete rates sooner rather than later. the dollar index over within month is mirroring the flattening of the yield curve. carl, back to you. >> rick, thank you so much. coming up this morning, an exclusive. take a look at the markets. didn't look up opens there's the companies that will do well and the banks, the -- they continue
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to go up 40. they all may increase the chance of heart attack or stroke, which can lead to death. this chance increases if you have heart disease or risk factors such as high blood pressure or when nsaids are taken for long periods. nsaids, like celebrex, increase the chance of serious skin or allergic reactions, or stomach and intestine problems, such as bleeding and ulcers, which can occur without warning and may cause death. patients also taking aspirin and the elderly are at increased risk for stomach bleeding and ulcers.
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take a look at the dow 30
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heat map. looks like they're all in the green for now. google led a fresh record high. a lot going on. if you're just joining us, today's employment number, 203,000 for the month on november, 7% unemployment. the question is did you nail the number? this week we asked to you tweet us your predictions for november payroll. the lucky winner will win a piece of our old set saw t, autographed to the "squawk on the street" gang. we'll announce the winner later in the program. you said over. technically you were right. >> i feared north of 250. two groups people should be focused on, the insurers do very well, their assets go up a bit and then the housing stocks because people were betting against the housing stocks,
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betting mortgage rates were going to rise. take a look. home depot. whirlpool is starting to go up again. co keep those groups in mind. >> are you surprised at housing start strength? >> i don't know the number that those incred numbers carts keep e on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.
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. welcome back to "squawk on the street." the preliminary read on michigan is 82.5. i'm going to have to pull a sanford on that. that is a big number, way more than we were looking for. remember, it is a preliminary read. 85.1 in the july was the best since july of '07. obviously we're snugging up to these levels again. 82.5, it speaks for itself. will it be revived? i can't tell you.
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today is a two-for, very good news. carl, thank you very much. >> six with 60s with him right now. >> celgene is a buy here. >> liked asian ear, though. >> well, pell low. this is a. 's been on bele this is a very exciting thing. >> goldman conviction buy on dollar -- >> you know what's selling more? i hate to say this, the
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cigarettes. >> a lot of people thought the optical business might not be well for teleco. look out. the stock will be up more than this. >> you brought a lot of ideas to "mad" this week. what's on tonight? my first michael power washed myself. they make a lot ennui have the breaks in strategy. but next motors. >> steered name. we'll see you tonight. good luck against detroit this weekend. >> i'm so nervous, carl. and i've got fantasy, too, the playoffs. great show of.
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. welcome back to "squawk on the street." we'll tell you what it means for the economy and the prospect of a fed taper. >> and an ice storm is bearing done on the midwest. the national weather service issuing storm and ice warnings for several different states. >> and seattle celebrating the one-year anniversary of marijuana legalization by throwing a giant pot party in the shadow of the space needle. we'll talk to the organizer of that event in just a few minutes.
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>> steve liesman has the report. >> reporter: they call them dismal scientists for a reason. they looked for the dismal scientists and just couldn't find it. the hours worked um and opponents up 025.morgan stanley writes the economy is undergoing an upward inflexion. manufacturing up 27,000,
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construction 17, retail 22, temporary help up 16. and even the government, after a string of declines back up in the positive there, up 7,000. the last remarkable part of the report is the market's reaction. the fed may find that the market is well prepared for tape and there's some greater possibility of it having in december or january. he's going to tell you december is not the preferred possibility but it is a possibility. >> so you dow is up now 132 on the back of that november jobs report. let's bring in the director at oppenheimer and also, michelle, let's go to you.
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job growth averaging 195,000 each month on average for the last 12 months. >> the last 12 months, last 24 monies, last 36 months practically. the trend is moving up very, very gradually. the pace of job growth is not. a lot of nice gains in manufacturing and construction. i certainly think this puts us on track for q 1. i think march is more likely than january. >> let's stick with the positive aspect of this, which is the figures. manufacturing up 27,000,
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construction up 20,000, retail doing well. weep expect the fast food restaurants and drnging places to take on staff and that's always been the case but this is mu much broader. one of the benefits is the household wealth effect, equity effect coming up. >> for some. a lot of people at the bottom don't -- >> that's the biggest taper argument that the fed is sending a signal they ten to stimulate the equity market forever. >> that's very, very interesting. it was yesterday or the day before that obama decided to relaunch do you think that janet yelleni
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yellening. >> any type of a taper is not going to have that bad of an economic impact led but it will be have and that will vantual put pressure on relative valuation. so bond yields 3.25, 3.30. >> michelle, this u-6 number is an improvement. what do you make of that and what do you make of the confidence number. we just got? >> i have to be honest. the household survey data are awful suspicious at the moment just given the volatility associated with the government shutdown. i do think the message is
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similar to what we've seen. you're getting continual declines in the unemployment rate. anyway, you're absolutely right. we've recouped all the losses because of the government shutdown. that's great news in the middle of the holiday shopping season. >> andrew, you're not a stocks guy, you're an economist. let me ask you, jim imof can. probably wouldn'tinfchbl u.s.
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consumer and small cap consumers have been very well. >> do you find thome eat the moment? >> specific areas would be technical calling. >> would you be bringing some of can can can we're here talking about the fed is going to do it. ecb is probably uneased longer than the fed at this point. >> guys, we'll leave it there. thapg you very much. hp f.
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-- let bring in scott wapner for more on this back at hq. scottie? >> we learned late yesterday afternoon that the s.e.c. was requesting information from jcpenney regarding its lick idity position and certainly left an impression of those in the room that the company had no plans to raise capital as rye it will of koufrs the beg developed hundred fg.
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. >> this news is interesting in and of the fact that the belief was mike ullman did not have a plan to raise capital immediately only to turn around the following day and actually do the equity raise. again, we talked to two people who were in that room, representatives of some of the hedge funds that had position in that stock or at least were there for an informational purpose. then we learned that the company raised the capital anyway. the sext wants to know what the whole situation is about on the balance sheet. carl? >> we were discussing this with
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jim in the 9:00 a.m. maybe the s.e.c. is -- >> there were people who were convinced that jcpenney had no plans to raise capital -- >> i think the discussion was they didn't need to raise capital -- >> i think the word from the ceo that morning and i went back to look at the actual report that we did on september 25th, mike ullman telling the folks in that room "we don't see conditions for the rest of the year where we'd need to ras the, however many dozens of people were in the room listening to mike ullman left convince that
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jcpenneyy would raise money any too many soon. a lot of people were surprised and cried foul because of they were going to raise trade in an area they didn't need to do. >> thanks, scott. if you live in the midwest, you probably already know this. a nasty storm is blanketing a big part of the country. a macive ice storm dlaming in isolations. we'll give you all the latest after a short break. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate.
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shares of ulta salon reporting missed estimates and quarter sales will fall short of expectations. it was a negative trifecta.
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tiger management had 3% of its portfolio. he was on closing bell talking about how much he loved ulta. >> i don't see any particular sweet spot, but i do see sweet stocks and i really love and like and think i going to do well. a company called ulta and it has just beautiful beauty salons all over the country and it sells all the great products. >> one of robertson's proteges is one of the biggest stockholder. and patrick mccormick also a shareholder there as well. back over to you. >> thank you for that. today the world is mourning the death of the great nelson
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mandela. the anti-apartheid leader spent 27 years in prison. our michelle caruso-cabrera joins us here at post nine with more on the life of mandela and what a life it was. >> so many people are focusing on history mendous legacy. natural for us to folks on his economic legacy. he admits when he emerged from prison he was a leninist, a marxist. this was part of a speech in 2003. "it is not a question any longer about whether the world embrace as free market economy. the globalized world in which we live in has made it imperative we open our markets both internally and to the outside world. the free market is not merely an american export, it is the acknowledged route for economies
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all over the world." >> we had robert johnson on earlier today, did some fund-raising for the amc, i think he did a beautiful job of wrapping up the import of nelson mandela's effect on the south african economy as well. >> from an economic standpoint, he understood that you simply couldn't confiscate all the white africans' assets and turn it over to blacks, which many people felt he should do, including people in south africa, but he recognized that south africa was going to be both a democracy and free market economy. that's the unique nature of his
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leadership. >> i'm not trying to paint mandela as a neocon but certainly moved far away from the leftist position. >> follows that he was a pragmatist. >> focused on things that worked. >> brokaw told a story last night saying that when he got out, one of the first things he looked for was trash pick up. >> the average black worker earns one-sixth of what a white worker gets. does it tumble back into racial division, iconoclast warfare? this is the hot button issue now
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surely. >> there are still younger members in the party who would like to move to the left. you're right. they have a big current account deficit. if and when we see a beg effect on tapering, we may see them suffer. >> violence with the mines. this is a nation that has a lot of questions open. >> absolutely. he didn't solve everything but certainly i think things could have been far worse. >> and also the metamorphosis just as gorbachev was changing the world as well. >> he shifted in four years. the castro bothers, 50 years, they still haven't. >> it's nice seeing you down here. >> you, too. >> as massive ice storm is moving across the country bringing freezing rain, snow,
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sleet and jim cantore joins us. >> reporter: thank you very much. normally in the east the sun comes back up and it warms up and everything melts. unfortunately it's only going to get colder. this morning we started out at 30 degrees and now it's all frozen and the same this evening is happening on the road. you'll notice the cake and the glaze, you have to pry this off. the salt and sand trucks are dealing with the main there owe fair -- thoroughfares. but mass transit, about a thousand fights in and out of dallas fort worth have been cancelled today. that's a huge disruption.
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now we have about 2350,000 peope alone without power, a major ice storm coming. >> rough times for people in that part of the country. our thanks to you. meanwhile, seattle is about to go up in smoke. not literally, but celebrating the year anniversary of legalizing marijuana. the dow is up 145.
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is caused by people looking fore traffic parking.y that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge.
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what could get higher than the iconic space needle? how about a party memorializing the legalizing of marijuana. it is byob, bring your own bud. with us is the organizer behind the city's pot party. ben, good to have you with us. >> good morning, carl. thanks for having me. >> how hard it was to get the license? >> it was not easy. initially when i approached the seattle center, they were clear about the fact that this could not happen, that it was illegal. and so i involved other city officials. i contacted city attorney's office, the mayor's office and got them involved in the conversation and, given, it took over three months to get the permit. >> i'm sure that's not an easy sell. what's going to happen? how many people do you expect to
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show up? >> we're permitted for 999 people. we resubmitted our permits and increased our occupancy yesterday. we'll have around a thousand people inside the party, imbibing in cannabis. >> it's forecast to be 17 degrees there tonight, i believe in seattle. that's minus 8 celsius. that's not going to be much fun, is it? i get the impression this is more of political statement than actually a party party. >> well, it's both. and we're going to have some heat. i wouldn't be too concerned. there's going to be an indoor area that is heated, as well as an outdoor smoking area. so there's multiple places for people, including folks who want to stay warm. i advise people to stay warm. it's winter. wear your winter fashions.
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>> you can't help when the anniversary is. ben, legalization can't happen without some form of credibility. clearly the cannabis lobby has built some credibility in various states around the country. does this event actually help you build on that credibility or does it paint you as the caricature that some people see smokers as being. >> my hope is it builds some reputation for us. >> last year once we legalize cannabis to immediately go out and smoke it in public view might not be the best idea. so the solution was to wrap the party in privacy fencing. my goal was to reduce the harm,
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which was the public view portion of it, which is one of the last remaining law that you're not supposed to do. >> how would you argue it has changed the washington economy, for better i assume? >> currently we don't have retail stores. we'll have licensed shops and grows in about six months. so the economy hasn't greatly changed that much at this point. but it will. the state predicts we'll have at least $250 million coming in from tax revenues from this. so most of that is going to be going to health care and early learning, things like that. >> it will significantly change the economy in the next six months. >> you got the seahawks going for you and this. dress warm. >> exactly. >> thanks, ben. >> thank you.
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>> during the middle of that interview, somebody said with great authority when you're stoned, you don't feel the cold. i don't know if that helps at all. >> the u.s. economy added 203,000 jobs in the month of november. are we moving closer to the fed taper? chief economist jan hatzius is here after this quick break. [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.
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. sears has been trying to shed assets to turn the country around which reported a loss of over $500 million last month. and spotify is planning a free ad-supported version of its streaming services after
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previously charging. >> and tesla said a customer bought the car using bitcoin. >> i want to welcome kelly evans to the set. joining us whenever she feels like it apparently now. >> i had to crash in for the jan hatzius job discussion. >> joining us is the aforementioned jan hatzius, chief economist for goldman sachs. your report on the number? >> good report, not a blockbuster. the household survey was more mixed. household employment hasn't been great for three to six months.
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overall it was pretty good. >> is this the sort of report we can expect? >> i think so. if we get to a stronger gdp rate, i do think there will be some acceleration. >> 7% was supposed to be the magic number for the unemployment rate back in the charlie evans talk. we're at 7% now. how does the fed explain that language to say what the new targets are. >> i do not expect tapering at the december meeting. i don't think that they want to be as pro active as that in tapering so i think it's still going to take them to the first quarter of next year, more li
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likely march than january in my view. in terms of the target on the unemployment rate or guidance on that, i think the jury is still out. i don't think they're going to give us very ironclad guidance, at least in the near term. >> sounds very scientific, the policy you think they're pursuing, look sticking a pin in the calendar. >> i would be a little more charitable. there is the unemployment rate and the unemployment rate is important. there are also other indicators. you also will want to look out what happened to inflation. not just price inflation, which of course was very low, only 1.1% in the core numbers but also the wage inflation numbers, which continued to be only 2% in nominal terms. and it does indicate i think still even with a 7% head line unemployment rate.
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>> somebody in the wake of obama relaunching his kevins in public about what the bottom of society has at the moment. and that qe has really benefited asset prices and therefore those at the top of the income structure or the wealth structure and therefore there may be an increased sensitivity at the fed ng is of course going to benefit those people who buy assets. >> from a distributionist, in general it benefits people who have assets, probably more stocks than fixed income of
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course. on the other hand, as far assin come distribution, if you're having any positive effect on economic activity, that's probably going to been fit people more toward the bottom of income distribution. they're the ones whose job opportunities are more sensitive to broad labor market strength. it's a complicated issue and unfortunately not one that learned itself very well to sound bites. >> people on gdp, a little payback in q4, right? >> yes. >> are we going to continue to see that kind of progress overall? >> from quarter to quarter these numbers are pretty noisy. i would focus on the if a we're at 2% or a touch above that. and next year i think we're going to be well above that, 3 to 3.5% would be my expectation.
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quarter to quarter it's still going to be a lot of up and down but i do think the trend is going to improve as the fiscal drag diminishes. >> 3% to 3.5% would be a big improvement if it were sustained over anything you've seen. you say we would have to see that rate, even for a taper in march. how much of sly splooi and demand look in 2014, if the fed doesn't taper, they are in fact oo ooze. >> i think they still want them to be easy. at the moment they're still pretty comfortable at easing. bus i also agree as you go
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through 2014 and if you pick up on that kind of -- >> would they not be effectively, you know, would policy not be getting easier next year if they do nothing right now? >> if you take the way that they've analyzed quantitative easing and the sort of tools they've presented, they would be saying that as long as they're. >> you can debate and that the confidence in that strict view of qe has diminished. at the moment if you ask them straight out, they would say we are easing policy at the moment. >> good seeing you, jan. >> you can find all our 2014 outlook coverage on twitter by searching harbor tunnelquad 24
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the there. goolle is up now 50% this year, worth $355 billion, simon, the third most valuable public company in america. back over to you. >> thank you very much, dom. is this going to be an sy pad christmas. it was a big seller over the holiday weekend. will that continue? 't just make r a living i take pride in them. so when my moderate to severe chronic plaque psoriasis was also on display, i'd had it. i finally had a serious talk with my dermatologist. this time, he prescribed humira-adalimumab. humira helps to clear the surface of my skin by actually working inside my body.
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[ male announcer ] here's a question for you: if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year. take the energy quiz. energy lives here. you can fill that box and pay one flat rate. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship
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at the lexus december to remember sales event. some of the best offers of the year. this is the pursuit of perfection. one week since black friday and it's beginning to look like an ipad christmas. ipad trade-ins are up 175%
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compared to a year ago. welcome to our guest. the ipad hasn't been around so long, now might be the year you want to trade in. >> absolutely. we're seeing tremendous growth in the ipad category. we're surveyed our customers and nearly 40% of consumer want to get an ipad for the holidays and it sounds like they are getting their ipads. these are great products. >> this is apple's ipads, not tablets in general? >> we're seeing a lot of tablets getting traded in but predominantly second and third generation ipads, ipads mini coming in. the growth that we saw over the weekend was 74% for the site and was much higher for ipads.
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we're clearly seeing ipads and tablets as a new growth area for us. >> and what about samsung? >> we continue to see a really nice growth overall in smartphones, samsung especially is growing fast. the growth rate in the system sung category over the weekend was 177%, so very similar to the ipad. but the holiday is very different for us at gazelle. it's much different than people trading in to trade up, it's more about gift givers looking to monday and then after the holidays, we're seeing a loot so it's a very nice, new dynamic in
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our business. >> i wonder if you look at something like the samsung mobile phone trade-in, to be up more so than what you've seen for ipads in terms of early growth, does that indicate people are getting rid of their samsung phone because they want something else? is there any way to tell whether you might trade in one old sy is. >> it's tough for us to tell but if i had to get was, again that's a really good product introduction from apple a couple months ago, i'd be surprised if we're not seeing the mieg grags from slacks oo. >> you've also done a survey of
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what people are likely to give and what they're likely to receive in general across consumer electronics. the reem standout to me is that 27% either a laptop or desktop. this comes on a day when if i -- this is good news, isn't it? >> i think overall when new products come to the market, seeing innovation, people buying new, trading in their old devices. we haven't seen the kind of growth rate in the last fun month months -- and as people buy new
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lapses ap lap ing new laptops, 33% saying they would gift it. >> the latest on the trade-ins in consumer electronics. thank you. >> big news out of illinois. governor pat quinn signing legislation to fund the massively underfunded pension system. will this help get the state on the right track? we'll hear from governor quinn in just a minute. >> fi share. >> hundred day
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welcome back to "squawk on the street," and the last edition of the "santelli exchange" for the week, what a week it's been, what a day it's been. listen, when i look at today's report, i come up with generic issues. overall, definitely a decent report. as a matter of fact, it's more than decent. now, let's look at the 7% unemployment rate. that is a good thing, because a good chunk of that drop didn't
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have to do with shrinkage or scotty beaming the unemployed to another universe. it occurred with the label force participation rate moving up a bit, albeit from very low levels. but it's a start. the other thing i really liked was we were up 4 cents in hourly wages on a year-to-date basis, up 2%. not bad. not bad. but i have to say the one then that makes me a little cautious, and many of our guests have talked about it, is the volatility of household survey. yin and yang, and, of course, the furlough, dropping them out, bringing them back, and huge revisions at s beginning of ne year. and the real impact. what does it mean for the markets and the yield curve? i tell you what, that's the big story, because we've always talked about how the curve steepening, because short rates are anchored, and long rates are like the 10 and 30-year are giving you a market view. so those yields move up faster. but a strange thing happened
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after the number today. what we saw was selling moving down the curve towards the short end. so the knee-jerk reaction was whether you look to 2s versus 10s, 2s versus 5s, 5s versus 10s, 5s versus 30s, there was flattening. steve asked me today, how can i handicap what the markets are thinking about, when the fed might taper, but when they would actually start tightening, well, the flattening nix reaction tells us it's coming closer and closer, but it's dissipated a bit. now, the last topic i want to talk about, mr. matthews' recent interview with the president, one of the topics was the republicans always talking about big government and the problems with the obama care rollout. and if we can put it on the screen, here was his answer. and the challenge, i think, we have going forward is not so much my personal management style or particular issues around white house organization. it actually has to do with what i refer to earlier is, we have some of the big agencies, some
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of which are outdated, some of which are not designed properly. wow! that's the greatest news of the week. he's saying big government is like an old de soto at a time when we want to drive efficient sports cars. the only question i have is, isn't obama care just another one of those? back to you. >> all right, rick, thank you so much. rick santelli in chicago. nobody puts baby in the corner without an -- without an ipad. [ laughter ] stay tuned for this, the latest in toddler technology in just a moment. hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.?
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the bouncy seat is getting a tech makeover. fisher price has upgraded it with a holder for an ipad. the newborn-to-toddler activity seat for ipad lets tikes interact with the ipad without dribble and drool. should parents start toddlers on tech before they can walk? jon fortt who knows about tech and children, joining us at post 9. >> of course, this had to happen. of course. it's right in our demo, so we love this. there's the activity seat for 80 bucks. this is to join your ipoddy, if you happen to have bought
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this -- >> the what? >> the ipoddy. this is only 40 bucks, but the kid, while potty training can use the ipad. there are bacterial concerns you can work out yourself as you're deciding whether to buy either one of these. a number of parents raising concerns online. the ipad is certainly a screen, and pediatricians, no ipad between before 2 years old. in moments of weakness, there you go. >> you need five minutes, it is an amazing tool. >> for youtube, it's quite useful, because they can watch daddy at work. >> oh. >> i could use one of these myself. you know, just a little bigger. >> this is effectively what the living room looks like, i think, in some apartments. >> yeah, office chair with -- >> here are the comments. babies under 6 months of age should not be strapped in and forced to look at a screen.
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it encourages irresponsible parenting. >> i think no one should be strapped in and forced to look at pulsing -- it -- >> well, unless we choose to do it on our own. >> yeah, look at us here. >> fisher price, they have released a statement saying you can remove the bar, the arm, or you can put a mirror in there. >> that's what i was going to say, put a mirror in there. >> to raise narcissistic -- >> yeah, exactly. stare into the water. >> jon, thanks for covering that. jon fortt. if you're just joining us, here's what you missed earlier on. >> announcer: welcome to "squawk on the street." here's what's happened so far -- >> it came to the review, you know it would be very expensive lunch, because he was always trying to get money off the rich to give to the poor. he felt that this was with the great leaders. >> i don't need advertising. i need millions.
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so he was a fund-raiser, and he had that kind of sense of humor that almost made it impossible to say no to him. >> the jobs rate, it was 203,000 jobs, 203,000 jobs, the unemployment rate dropping to 7%, and that's a huge surprise. >> not a lot to quibble with in this one. >> we're done with the big data event, on to the next. that's what the markets say. >> right. >> so you don't see -- it's not a december taper number in your view? >> no. [ bell sounds ] >> there's the opening bell. >> 82.5. all right. i'm going to have to pull a sanford on that. that is a big number, way more than we're looking for. >> next year, i think we're going to be well above that, you know, 3% to 3.5% would be my expectation. you know, quarter to quarter, it's still going to be a lot of up-and-down. but i do think the trend is going to improve. >> announcer: the "squawk on the street" countdown to christmas is in full swing. ho ho ho!
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♪ jingle bells jingle bell rock ♪ ♪ jingle bells swing >> good friday morning, we're live here at post 9 at the new york stock exchange. what a morning it has been. the jobs number, of course, not much to complain about there, and the markets will battle it out right around 1,800. the s&p is right around the ten-day average of 1,799. the dow, of course, has been triple-digit gainer for most of the day. it's off the highs. intel is the biggest dow gainer, up almost 3%. if you missed it earlier, citi upgraded them from buy to neutral, citing evidence that corporate pc demand has stabilized. the 10-note yield, got up to 2.92 earlier, and that's come off. kelly, one of the more interesting things is the market's acceptance of the yield that high, gotta go back to september to get a number that high. >> that's true. we've seen stocks hold up roughly triple-digit levels, whether it was the ten year at 29.92 level, or if it's drifted back. so far, the unemployment report
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has been what the doctor ordered. we'll explain how to capitalize on the rally. a big step towards tackling a pension crisis in the land of lincoln. illinois governor pat lincoln has signed sweeping pension reform into law. and an exclusive interview is ahead. so much has been made of amazon's drones. we'll talk to the man who brought robotics to amazon, coming up. but first, we start with the market, as mentioned, the dow up triple digits here, ending a long stretch of losses, at least for the start of the month. the market rallying on a better-than-expected jobs report. let's bring in david kelley, chief global strategist with jpmorgan funds, and jack oleman, and, guys, good morning. >> good morning. >> good morning. >> david, i see here you think this report takes us one step closer to the fed tapering. what is the timing for that move, do you think? >> i think it's a 50/50 as to whether they taper in december.
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i mean, most people will say they'll wait until january. but when i look at it, if you look at what bernanke said back in june, everything that he said in june would suggest that he should taper now in december. and i know they can -- they can maybe come up with some other excuse for delays, but if you're going to depend on forward guidance, your words need to mean something. the truth is, the economy is stronger, the stock market is higher, the unemployment rate is lower. the labor market is tighter than back in june, and the fed needs to begin to back away from qe, and i think they could do it in december. >> jack, there's some rhetoric this morning saying what if the fed tapered and nobody cared, because the market, if you look at these levels, on though we have a nice pop here, some of the other gauges are more or less unchanged from before that number hit today. >> well, it's interesting, you know, it seems like the jobs number was a big surprise to equity investors, and it should have been. if you look at the bond market, it seemed like there was a ho-hum response, so i looked at the fed's purchase calendar for
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their qe, and i notice that it spiked -- they have a $5 billion purchase set for today. my sense is, the fed probably went in and started buying to keep those interest rates in line, and so, my sense is that they're just holding off the inevitable. i think interest rates are rising. you know, whether they taper in december, january, you know, i don't spend a heck of a lot of time worrying about, but i do think -- and i do agree -- that we are going to try to move away from taper and more toward an emphasis on forward guidance. >> david, we continue to discuss the pain threshold for the market when if comes to the 10-year, and then people add on top of that the argument of, well, it might be a certain number, it might be a different number if it happens gradually over time. where are you? >> well, i think the 10-year yields will rise in 2014 much like they have risen in 2013. i think they'll go up somewhere between 50 and 100 basis points. i don't think they'll go up faster than that, because the
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fed will retain the threat of more qe if rates rise too fast. and also remember other central banks, the boj, the boe, the ecb, they're very easy, still. there's a lot of liquidity around the world to keep the long rates going up too fast. but i do think both stock prices and long-term interest rates will go up in 2014. >> jack, is it too simplistic to exit from housing names -- the first, too simplistic to go back into banks and insurers first? >> no, i don't think so. i do think that eventually, the qe will steepen the yield curve. and if it's associated with this reacceleration in the economy that we're seeing, then we create huge net interest margins for the banks. the fed keeps beating them into a corner, just lend, lend, lend, get out of this other stuff and lend. and i think given that there are very few other options for a lot of banks to do, they're going to go out there and beat the drum for lending. so i do think that the financials will probably have a
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pretty good year next year, as this yield curve steepens. >> david, finally, what is your view, we just heard jan seeing growth 3%, 3.5% for 2014. do you think the same thing, and what do you expect the inflation picture to do over that period of time, as well? >> i think fourth quarter 2013 and fourth quarter 2014, we'll see 3%-plus growth, the% time since 2005. inflation, i think, will be stable over the next year. i'm looking for core cpi, 1.5%, 2%, so no real inflation threat yet, but there will be inflation down the line if the federal reserve does not back off more aggressively from this qe, because i think it's important to get back to monetary neutrality as the economy comes back to neutral. >> it's always just around the corner, isn't it? >> yes. >> david kelley, thank you this morning. jack, great to see you, as well. appreciate it. >> until it's not anymore, right? that's for sure. meantime, apple retail stores across the nation will be
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changing the ibeacons today as they roll out low-powered bluetooth that will offer location aware services to shoppers' phones. let's bring in jon fortt to talk more about this on a day when apple is the most valuable name in the s&p, surpassing exxon again. >> yes, indeed. on a bit of a run lately. it's an interesting technology. bluetooth low energy that can basically push messages to you based on where you are in the store. how close you are to a transmitter. not the best indoor location technology i've seen. there's a company called indoor atlas that uses magnetic fields to actually locate you within a building. but what's interesting about this is that it allows you -- it allows them to sort of steer your buying behavior. that's particularly important for apple, because the retail stores did $5.5 billion in revenue last quarter, nearly $6.5 billion last holiday quarter, and could easily do $7 billion this holiday quarter. that's a lot of revenue. the more efficiently they can run their stores, the better. >> yeah.
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at the same time, you have to wonder, if this is just going to be something that people start to use in an apple store, or whether it becomes part of the shopping mall experience, more generally. >> a number of retailers are looking into this. baypal, actually, ebay's unit, is looking into bluetooth low energy within retailers, but it looks like it might be rocky to start. brian marshall of isi tried this in an apple retail store. said the experience wasn't that great. he kept on go eting repeated invites to upgrade his iphone. but not really any messages that were valuable walking by the mac area in the store. so they got some tweaks to make. >> does it reflect angela's first moves as the retail chief, or predating her? >> predating her. she's not joining until early next year. and she's probably going to take some time, from what i'm hearing, getting the lay of the land before really making her mark there. i'd expect to see her next holiday season having more of an impact. >> what would be an example of how this product works ideally for apple? i can't imagine what the user experience -- just apple store's
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big, but they're not that big. you kind of know where things are. what is the point? what is it telling you? how will that turn into more transactions? >> apple is trying to get people in and out of the store as happy as possible, and as quickly as possible. last holiday season, they started this program where you can go in with your phone, scan a bar code on an accessory, buy it, pay for it with your itunes account and walk out without talking to a single salesperson. seemed crazy at the time, but also the fact that they've got a table out there where you can pick up things you've ordered online already. it's all about getting in and out fast, and this ibeacon, it's supposed to steer you around the store, let you know what's going on, without having to flag down a salesperson who might be busy selling an iphone to somebody else. >> you'll. -- wow. >> we are becoming "minority report." when he goes into the gap. "welcome back." >> that movie was only ten years ago. >> could have been toddlers in there, ipotties, with the ipads, that would have been crazy.
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>> dow is hanging object tonto the 140-point. >> "minority report." i have to think back about that. jeffries beginning with a buy rating and a $480 price target. it's been a volatile week for isrg shares, earlier it fell after announcing it would recall the da vinci surgical robots, so, yes, earlier bad news, but coverage upgraded for the stock. back over to you. >> dom, thank you very much. signs congressional negotiators are making progress in their budget talks. coming up, a live report from washington. also ahead, rick santelli who will have an interview you won't want to miss. rick? >> yes, governor pat quinn, the honorable pat quinn, and trying to do what was deemed the impossib impossible, trying to tackle illinois' huge underfunded liabilities. he signed something yesterday.
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in ten minutes, we'll talk about what he signed, and where it will end up, and how it may be changed. you don't want to miss this. thrusters at 30%! i can't get her to warp. losing thrusters. i need more power. give me more power! [ mainframe ] located. ge deep-sea fuel technology. a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ brilliant. let's get out of here. warp speed. ♪
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our chief washington correspondent john harwood is in the nation's capital with the latest on that. john, good morning. >> reporter: good morning. >> what can they get done before they go home for the weekend? >> reporter: they're not likely to get anything done before they go home this weekend. remember, the senate's not in. the house has been. it appears this is not going to get resolved until early next week. and you can't emphasize enough what a baby step this deal is. you're talking about $90 billion in a budget reshuffle, essentially substituting one set of cuts for another set of cuts. there is little long-term deficit reduction in this at all. it does make a government shutdown much less likely, so that's positive news. that's one reason why markets like it. still have a sticking point on unemployment benefits, which democrats say they want. republicans say, well, show us a proposal, and i talked to one house republican leadership aide this morning who thinks the white house is not exactly serious on unemployment benef s benefits, because they've waited
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until late in the process to put that on the table. the cost of those benefits would be $25 billion, which is nearly one-third the size of the entire deal, and given how small a deal this is to begin with, that would be a major addition to it. but most people do expect, carl, they'll get a deal early next week. house and senate will pass it by the time they go home, and that would give everybody some reason to celebrate and perhaps markets to celebrate, as well. >> john, just curious, what is the main point of the talks? aside from the pressure that another shutdown looms or the debt ceiling, is it to replace and take some of the sting out of the sequester? or is that now about different things? >> reporter: no, it is exactly about that, kelly. it's about lifting the sequester caps from both defense and discretionary by about $45 billion, and substituting other cuts, which members of both parties think are less onerous, less harmful to their priorities, whether it's the pentagon or whether it's domestic spending.
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they think they can do that, have a little bit of deficit reduction on top of that. but again, they're not doing the hard things, the hard things involving long-term reductions in medicare and social security, hard things like raising taxes, closing tax loopholes in order to achieve those goals. >> right. >> but given how dysfunctional this congress is, doing anything peacefully that can signal that they can do business and not shut down the government is going to be taken as a positive. >> yeah. and just in time for the holiday season. john, thank you very much. john harwood in washington for us this morning. up next, live and exclusive interview with illinois governor pat quinn, fresh from signing sweeping pension reform legislation into law. stay with us right here, "squawk on the street" will be right back.
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♪ you say chi city chi city
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♪ comin' home again a live shot of chicago this morning as illinois governor pat quinn is signing a landmark bill that would overhaul the state's troubled pension system. what's he going to do now? head to the cme, of course, to talk to our very own rick santelli. rick? >> thanks, kelly. of course, thank the honorable pat quinn for the second interview on this great trading floor which is in your state. >> we're very proud of it. i was here a few months ago, fighting hard to get the pension reform. i signed it into law yesterday. it was a bipartisan measure. all of our legislative leaders were there. it was really important, i think, for our state to erase the pension liability. we did it in a proper manner, and on we go with our economy. it's the best thing we can do for jobs in illinois. >> rahm emanuel had issue, and he held the line. then a giant strike. next thing you know, the small pay raises jumped up over 17%. that isn't what you did, and
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what you signed yesterday. tell us the difference. >> well, we had a pension liability of $100 billion in our three major pension funds. and we have to erase that, obviously, and we passed a law, a bipartisan measure, both parties worked on it, and we got it done to erase that liability, to put illinois in a much better path with respect to pension issues. >> so about the increases? >> well, with respect to increases in -- >> pay, teachers, union -- >> we want to make sure people get decent pay, decent benefits. what we had to do in our state, no one is losing their retirement check in any way. the cost of living adjustments in the future will be modified. but the bottom line is, we did this for the common good. and we have, i think, going to have more resources for important thing like education and public safety. >> okay. in the "chicago tribune" an op ed written by governor scott walker of wisconsin. >> who? who? >> yeah, the guy sending me
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letters, everybody is welcome heading north. the long and short of it is, he didn't direct what you signed directly yesterday. but what he did underscore is that collective bargaining is no longer part of wisconsin based on act ten they passed, and at the time they passed it, the unemployment was both over 9% in wisconsin and illinois. it's good we slipped under, but wisconsin is 6.5, and they've turned into a slight surplus. you don't have an act ten. you didn't ban collective bargaining. >> no. >> are you going to have similar results, though? >> i believe in collective bargaining. we've created far more jobs than wisconsin. we created about 270,000 jobs. he promised 250,000 jobs. he's created 90,000 jobs in wisconsin. people don't go to sheboygan or, you know, places like that. they come to chicago and illinois. i think it's very important economy, that we work together in the midwest. i don't kick other states in the midwest in the shins, we're all in this together. i think it's important that we do that. we are the great lakes region,
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and we can do great things, especially in manufacturing. our state is growing manufacturing. we have ford. we have chrysler. we have mitsubishi. we have caterpillar and john deere. these are mighty companies. and we want to keep them going strong. >> oh, i would definitely agree with that. now, we're going to go to what i think is the most salient feature, and that is what you have done -- and let's show it on the screen -- may go against something in the illinois state constitution. and the issue is very similar to what arizona is going through, and i'm sure our viewers on the screen are reading it. here's the point. detroit had a bankruptcy issue. so the issue of their state constitution, at least at this point before it goes to a higher court, was state in favor of the bankruptcy and the contracts being allowed to be broken. in illinois, this isn't a bankruptcy issue. >> no, not at all. >> and there'd probably be a challenge similar to arizona. the problem is, arizona is two and a half years into this with no decision.
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how does that uncertainty affect the good legislation you signed into law yesterday in. >> i don't think arizona law will affect our law. >> no, but the challenge is going to be the same. >> we have a constitutional provision that we have adhered to. i believe that when the courts look at our proposal, that i signed into law, they will uphold it. it was done, again, in a bipartisan way by the legislature. i'm in the executive branch. i signed it into law. we'll put the best foot forward in court and we'll win the day. >> now, election's coming up. many think that this compromise, the fact it was bipartisan, is going to give you an edge for a second term. with our final 40 seconds here, can you give us an idea of some of the issues you're going to be underscoring as you make a run for a second term? >> you need governors that take on hard issues like pension reform, and like making sure we have marriage equality in our state. i signed that law a couple of weeks ago. that's what governors should do. i don't worry about politics. i worry about policy. i inherited terrible problems
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from rob blagojevich. we cleaned up the ethics, and we reformed the pension system which needed fundamental reform. >> now, with regard to chicago, which you can't speak for directly, obviously -- >> i live in chicago. >> no, i understand that. it seems like rahm emanuel is going to have issues regarding property taxes and raising property taxes, because they have a pretty big gaping deficit hole. do you have any advice or any issues that you think we can learn from on how you negotiate on a state level with respect to rahm emanuel on a city level? >> i think it is important to negotiate, to sit down with everyone, and we did. ultima ultimately, you put together a solution, and sometimes folks don't agree, but it has to be done for the common good, the everyday taxpayer, the person that gets up, raising kids, we want to make sure they come first. >> i tell you what. i recently governored the governors estate, my daughter had big shows, and always like in the haunted mansion, where
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the pictures are hung, the paint's a different color. we've had so many governors from otto to ryan to blagojevich, where they're taking these and leaving the mark. governor, i'm sure your picture will stand for a long time. >> all right. thank you. >> let's get to dominic chu. >> look at barnes & noble, because there's reports now that the s.e.c. is investigating the accounting practices over at barnes & noble. this according to dow jones right now. so again, we're watching the shares down about 6%, spiking sharply lower, carl. this is certainly a story we'll want to see develop as the afternoon progresses. back over to you, carl. >> all right. thank you very much, dom. a few minutes left in europe's trading day. we'll see if we can hold our gains as europe closes. how did stocks across the continental react to the jobs number here? that's after the break.
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>> announcer: the european markets are closing now. >> welcome back. simon hbos with a look at the session. some green, but we've been seeing red previously this week. >> absolutely. for once in our live, good news is good news, and the european markets have rallied quite strongly on the jobs data we got here on this side of the atlantic. bear in mind, this has been a bad week for european equities, still down 2.6%. whereas you can see the s&p 500 is basically flat overall. it's interesting at the helm of that surge on the equities today is the u.k. house builders. berkley actually came out with
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some really good set of figures today. there is concern there's a housing bubble, as you may be aware in the united kingdom, partly because the government has its own help-to-buy program, where it guarantees 15% of loans there. but these guys are absolutely rocking. intrigue on nestle, the espresso maker, sold out its 10% stake in the giant flavor, for $1.2 billion. the big prize is what will it do with the stake in l'oreal when that lockup expires in april? and the debate is whether this make it is more or less likely they will sell that stake. you know we've had bad weather here in the midwest. they've got bad weather in europe, as well. let me take you to london where the thames barrier was actually closed last night. this is the barrier that protects london from tidal surges. they were predicting the biggest tidal surge there in over 30 years. i thought we could see the thames barrier. what a shame. but the bad weather is coming p up, the north sea, germany, the
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netherlands, also being really quite badly hit, and thousands of people have had to be evacuated from the southeast coast. >> weather's a big story all around the world. >> yes. absolutely. >> bob pisani has the dow holding the gains there. >> my biggest fear, up almost 140 points, this was the upside for the whole day, and we'd slowly drift lower. put up the dow. you don't want the dow to up 140 and close up 20. that's anti-climactic, and the michigan numbers we got at 10:00 really helped hold the market up. right now, we're sitting near the highs for the day. this is about a perfect rally. one trader said threading the needle perfectly. strong enough to indicate strength on the jobs report, but not so strong we'll immediately be talking about taper in december. nobody thinks that's on the table now. looking at the sectors. broad rally. cyclical groups like industrials moving and defensive names like health care moving.
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this is what i mean. it's threading the needle perfectly here. even interest rate sensitive stock, which we have noted all week under pressure, the ten-year has moved up, doing better. the homebuilders, emerging markets are under a lot of pressure, utilities, even gold miners up, the etf on the bottom there, up earlier this week, not today. the retailers still have problems. all this week, we've been talking about people lowering the guidance, happening with big lots, american eagle, five below, below consensus. and you can see what's going on four retail. this is what the stocks have been doing this week. so it's been a very, very ugly week for certain retailers out there. let's look at where we stand in terms of the economy. good numbers on the jobs report. q3 gdp was better than expected. some of it was inventory building. auto sales were pretty good. highest in six years. home sales in october best since 2008. the ism manufacturing is the best in two years and cyber monday up 20%. but there are balancing issues here. ism services were a
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disappointment. the september home sales were disappointing and we talked about how the retail sales reports have been somewhat disappointing. all in all, guys, the bottom line is, slow improvement in the economy offset by some disappointments, like what's going on in retail. enough to argue, however, slow, slow improvement and the stock market is reflecting that right now. guys, back to you. >> all right, bob, thank you so much. earlier this week, we saw the first video of amazon's delivery drones. that seems like a month ago, but it really wasn't that long ago. we'll talk next to the man who helped bring robotic to amazon. a lot more "squawk on the street" is back in a minute. tion is going to grow by over 90 million people, and almost all that growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems, access to jobs and multiple transportation modes
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energy lives here. coming up on the "halftime report," is good news finally good news for stocks? the market seems to certainly like today's jobs number. is it actually safe no to taper? we're talking to an investor up more than 30% this year about where he's investing next year. plus, the call of the day is on linkedin. we have the analyst who made it. the stock is up 100% this year, but can it now go even higher? it's straight ahead on "the half," carl. we'll see you in about 20. >> all right, thanks. amazon is preparing to launch its amazon prime air delivery service that would deliver packages to customers in under 30 minutes via drones. and while that implementation is a few years away, we want to look at some of the robots
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roaming the halls of the shipping giant. a.j. is with bing capital ventures, and he was an investor and board member at keva systems, which amazon uses to automate its distribution systems, and jon fortt joins us, as well. a.j., great to have you. >> it's great to be here. >> what was your thinking when you saw amazon roll it out the way they did? >> you know, i thought, first of all, what a brilliant publicity stunt, you know, the eve before cyber monday, you know, to have 15 minutes on national tv on "60 minutes" to promote amazon, i thought it was classic bezos brilliance. >> i wonder, though, beyond that, you know, what are we talking about in terms of the likelihood of this sort of thing ever happening? >> you know, i think it was a little bit of a head fake. i think that commercial drones for the purpose of package delivery is probably at least a decade away. and i actually think that amazon's real game plan is to use good old-fashioned trucks,
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and you think about the grocery delivery that's already being piloted in seattle and in los angeles now, and the idea that they're going to have trucks delivering groceries -- fresh groceries to families and be driving up and down your street every day, every week, imagine those trucks now delivering amazon packages, taking back returns. i think that's the future, and i think the drones are a distraction. i don't think that's the game plan. >> so robotics are an interesting area, clearly you have experience there. but you're also looking at other areas that make the ecommerce experience better, particularly in this age of mobile where we're seeing more commerce shift there. what do you think are the big problems that have to be solved going forward? >> well, i think as it relates to ecommerce, there are two interesting problems yet to be solved. the first one, as you think about the brick and mortar retailers, they're now piloting programs such as pickup from stores, ship from store, and am glon is trying to build 500
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distribution centers so they can be closer to the u.s. population. but you think about target, you think about walmart. they already have locations that are within five miles of 80% of the u.s. population. and so, how do you take advantage of all of the inventory that's sitting there close to consumers so you can deliver package, same day or next day, for the same price or less than they're delivering today? i think that's a huge opportunity. it's going to require massive amounts of software technology and process change in order to make that happen. but i think that's how brick and mortar frogs leap frog what amazon is doing and provide an experience better, faster, and cheaper. >> to the extent drones are used, are they more limited in capacity than people think? i mean, bezos talks about five pounds, says that's the lion's share of what they sell. is that actually true? >> well, you know, i think there's probably some calculation you could do to say that, you know, 80% of the items in amazon's catalog are less
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than five pounds, but the other piece bezos didn't mention in the interview is also just the actual size of the item. you have many items less than five pounds that are a variety of shapes and sizes. most consumers don't just order one item. they order a collection. so in terms of the drones, in terms of the delivery, it will be low weight, high value, where the urgency is to receive. the most case is medical field, prescription delivery. that would be the case of, i need the medicine, i need the medicine now. let me use a drone. you're seeing drones used in parts of africa and asia for very similar kinds of use cases of delivering medical supplies. that's the most interesting use case. >> how many employees do you think amazon will have in a decade? >> that's a great question. it's going to be a lot. you know, i think there's no
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short-term end in sight to amazon's march forward. i think the addition of grocery, you know, nationally over the next five years represents a significant growth opportunity that's going to propel them north of $100 billion in revenue. so i think there's no end in sight for amazon. >> thanks, a.j. hey, i dare to you send a drone up into the 'hood, right? >> that's right. >> like maybe single family homes in the suburb, but come on, apartment deliveries -- >> yeah, exactly. >> right? >> absolutely. no, it's -- it's a great vision. >> a whole other ball game. a.j., thank you so much for joining us this morning, as we continue to think through some of the wacky segments we've been covering with regard to robots and technology. appreciate it. >> that's right. no, thank you, guys. great to be here. >> have a great weekend. some are calling it ice friday. a deep freeze is moving across the country from texas to kentucky bringing rain, snow, sleet, and freezing temperatures. the weather channel's jim cantore is live in dallas with more on that. jim, it does not look like
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dallas from where we're sitting. >> it really doesn't. i feel like i'm in burlington, vermont. you know, if you look north here, this is an area we call the high 5, and this is where a lot of traffic rolls up and down to intersect, 635, 35, and there's not much on it today, number one, and the ones that are on it are moving quite gingerly, given the fact it is completely sleet-packed. we've had about three inches of sleet here, a quarter to a half inch of ice. on top of that. and then, the big problem is, a lot of the trees still have the leaves on them, and so they're catching all of this ice. you can almost hear it through my microphone. can you hear it crackling there? so on the windward side of the branches, it is catching all of the ice, and we've unfortunately had about 300,000 now, people, that have reported power outages in the dallas-ft. worth area. that's a lot of people. guys, it is not going to get above freezing, and barely just
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that, until sunday. so tonight and sunday morning, it will be in the teens and low 20s, and for people without power, that's going to be a couple of tough, tough nights at home. people that did go to work this morning, which weren't many, mind you, because there were about a thousand school cancellations, now they'll have to go home to this caked on the roads. the main thoroughfares, interstates look good. they are constantly being salted by the texas department of transportation, but it's the secondary and side roads that will be an absolute mess. sidewalks caked on now. icicles just about everywhere you go, and the airports are a mess. between lovefield and dallas-ft. worth, we've had over 1,000 flights cancelled going in and going out of these airports today. dallas-ft. worth alone? about 1,800 flights a day. that's well over half of what they would normally see in terms of their traffic. so big issues here for the big d, guys, a lot of big events that will go on this weekend. the marathon on sunday. they're going to have men's and women's basketball at jerry's
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house, so that's going to be huge, cowboys stadium. the big unfortunate event, which people really look forward to this time of year, is the children's medical center parade. that was cancelled tomorrow. they've just thought, you know what, we don't want people coming out and risking their lives to get to a parade on this ice. because as i mentioned, guys, it will be 17 degrees tomorrow morning. problems far from over here for the big "d," and remember this is one area dealing with the ice. it stretches all the way up to ohio. >> obviously, be careful on the bridges and ramps, you said it. jim cantore from the weather channel in dallas. speaking of the weather, our sharon epperson has a "market flash." >> the weather and the power outages that jim was talking about is affecting the permian basin, the gas and oil production, and that's why we're looking at natural gas futures up 1% today, and have hit the $4.20 level. keep in mind, this is a six-month high for natural gas,
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which it had already been on a tear after the much bigger expected decline in natural gas storage supplies that we saw in the government report yesterday. now, if we continue to see this kind of weather, the other concern that floor traders have mentioned is freezing of natural gas pipelines, and that also could impact production and cause a future rally in these prices, so we'll be watching the weather very, very carefully. that's going to make or break where natural gas prices go from here. back to you. >> and it'll show up in heating bills soon enough, i should say, sharon. thank you very much this morning. coming up, the u.s. economy adding 203,000 jobs. did you nail that number? if you did, you'll be joining carl next to talk about it. we'll bring you today's nail the number winner when "squawk on the street" continues. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the put of perfection.
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we do have a winner. this month's winner nailed the number on the head, a guess of 203,000. joining us this morning, brad kinegie joins us on the cnbc news line. congratulations. good to have you with us. >> thank you very much. >> part of it is getting the number right, which you obviously did, but also being first. how did you come up with the number? and when did you make your guess? >> i made my guess on -- i believe it was thursday after the ism report. >> did you go back -- did you go back and look at the employment component, or what led you to 203? >> i took four data points from the last bls report and two data
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points from the recent ism report and came up with the high estimate and the low estimate, and then just took the average of those two, and that got me to the 203. >> did it feel to you like you would come in too hot or too cold? a lot of these -- i mean, the consensus was lower than where you came in, but people were talking 250. i saw three handle guesses. >> yeah, i figured probably around 200,000, that's what it's been the last couple of months, so i figured it would be somewhere close to there. >> i want you to know, the competition that you beat out, brad. none other than boone pickens @boone pipickens made h guess at 202. that must feel pretty good, brad. >> yes, i actually saw his tweet. >> you do writing on stocks, as well. you actually have a couple of just picks on equities that you like. you like boeing.
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you like continental resources. have you been in those names this year? >> no, i have not, and i'm waiting for a month or multiweek pullback, and probably enter after that. >> yeah. what's your general sense on, you know, a lot of the consensus for 2014 is that the economy gets to an above-trend rate? are you optimistic on the next 12 months? >> yes, i believe the economy will pick up over the next 12 months. >> and then, finally, as we look at this bit of plexiglas from our old set that cramer is signing, i signed, kelly, the whole gang, what are you going to do with it? >> i don't know. i'll probably -- probably put it on my desk or something like that, or on our mantel. >> it's a piece of history, man. so congratulations to you on that. i'm not sure -- it's about 20 pounds. make sure when you pick up the box that you use your legs. >> yeah. >> brad, thank you so much for your time. congratulations.
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>> all right, thank you very much. >> brad kenagy of oregon, nailing the number with 203. and that did it. the dow is up at 156. let's get a "market flash" with dominic chu. >> i did not nail the number. congratulations to brad. check out philips 66 for a stock. it's approving a $2 billion stock buyback plan. since the third quarter of last year, they have authorized a total of $5 billion in share repurchases and raised the quarterly dividends, so the px shareholders could be a little happier about that return of capital. >> all right. thanks a lot, dom. who would you like to arrange your pictures in one photo book in ten minutes? today's squad breakthrough can tell you how after a short break. (announcer) at scottrade, our clients trade and invest
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taking a look at the dow. close to session high, up about 150. the 10-day average for the s&p right around 1,799, so that is the battleground today as some institutions try to cover some shorts and maybe some new long plays get in after the jobs number earlier this morning. while many in silicon valley are looking to digitize every facet of daily life, one company
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is producing a printed product in addition to its technology. mixed book and mosaic allow users to upload and arrange digital pictures and order highly customized photo album. joining us is the co-founder andrew bethune. people ask if there's room for physical photos. i guess you say there is. >> there is. in the last couple of years, there's been a huge explosion in photos being captured, because most cameras aren't a nikon, but it's an iphone. it's right in the pocket. in the last three years we've taken more photos than the entirety of history. >> i talked to shutterfly about this a bunch, and the big challenge is people start photo books but have trouble moving it around. shutterfly has its own software out there that's supposed to arrange the photos for you.
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what's your secret sauce? is it you pull in photos from various networks? >> that's a great question. if you want to set the context, only 10% of the people in the u.s. have made a photobook. it's an early market. the reason for that is it takes too long. it takes on average ten hours to make one of the books. that's the problem we've been about solving. that's why we created the mobile app mosaic, and recently a new product that lets you make it extremely fast. it's what we've done, taking the deep technology of research that we've created and using it to make a book that looks like it took 15 hours to make but, in fact, only took you five minutes. >> where does the time saving come from? what do you do that the user no longer has to? >> if you think about the process of creating a photo book, the difficult part is taking all of the photos you have, say, of a vacation, or a family year in review, or of the newborn baby, i created a photo book of my 2-month-old daughter, for instance. >> congratulations. >> i already have 5,000 photos offer had. >> and you're just getting
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started. >> you're exactly right. and the problem is, how do you create that into a story? so we've created algorithms that allows us to tell the story without you doing much work. you can do a couple of tweaks to finish it off, but you get an amazing book. >> how do you ratchet up the average selling price of what you're delivering? that's another challenge, getting the price that people are paying up high enough. you're at 20 bucks now, right, i think for 20 photos in an album. you really want the 40 and $60 orders, though. how do you do that? >> i think what we think about actually right now is, hour do you get the 90% of people who have never bought a photo book to buy? the problem is the market is 90% women. it's 90% women customers these days. >> why is that a problem? >> the problem is if guys aren't making photo books, we won't get the market penetration we want to see, and candidly, we're company started by guys. we wanted to create a photo book that we'd want to make, and 40% of our customers are guys. >> interesting. a degree from berkley, started
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your first company when you were 15 years old. the ipos of twitter. are they emboldening you to come public in some form or fashion? >> it's great to see the public markets are receptive to companies in the internet space. we've been building this company for years. we're looking to be around for the long run, and we're building the company in such a way we could go public should we decide to do that. >> you didn't wear a hoodie today. so maybe you're getting ready, i don't know. >> well, the demographic issue, the female thing, the pinterest demographic you speak to is a key one to watch. andrew, great to have you in. thank you. >> thank you. >> joining us from mixbook. jon, stay with me for a second. tech continues to be a large winner. google new record high. a 50% gain for the year. as we see, we had twitter making its way back from earlier declines. >> twitter, workday has been trying to come back, viva systems had a good quarter.
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it's interesting that microsoft and intel have proven to do so well, given the pc projections aren't great and neither one has had great traction in mobile. there are other factors. we'll see in 2014 whether the hopes -- >> citi sees enough to upgrade. let's get back to headquarters and scott wapner and "halftime." >> all right, gentlemen, here's what we're following. 2014 playbook, an investor who's up more than 30% this year gives the xs and os on where your money should work next year. call of the day. upgrade for linkedin sends that stock surging. the analyst who gave the bump gives you the reasons why. we begin with the highlight of the today's first half of trading day. no doubt, a great jobs report and the big market reaction afterwards. stocks are soaring on the better-than-expected new, on track to reverse the five-day slide. certainly raises the question of whether stocks are finally ready to accept good news. it is


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