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tv   Squawk on the Street  CNBC  December 16, 2013 9:00am-12:01pm EST

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well, keep his head down and work hard. >> fair enough. thank you for being here. this is great. happy holidays. doing anything fun? >> i'm going to go south. i have my home in florida. we are going to spend time there. >> you have one there too. >> and new brof nick. >> who is using new brovnik. >> actually, my vineyard manager. >> we have to run. thank you for being here. >> "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. a big week is taking shape. a flurry of merger activity, potentially the final fed meeting of the bernanke era. if the fed tapers along with the supplies of two, fives, and
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seventh. some strong pmis on the continent. our road map begins with the week to watch for 2014. the market is looking to turn around a two-week losing streak ahead of the final fed meeting of the year that could set the tone for the taper insurance giant, aig, announcing the sale of their last business, aircraft leasing for $5.4 billion in stock. avago picking up lsi, $6.6 billion and more rumors that sprint is mulling a move for e t-mobile. with the dow and the s&p coming off of two consecutive weeks of losses, investors are turning their attention to the final fed meeting of the year. set to kick off tomorrow. the watch is on to see if they will scale back their bond-buying program. a new "associated press" poll finds that most americans see the market flat or lower by the end of next year. only 14% believe the market will
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rise. 5% think it will crash. the poll suggests the general public is less optimistic than investment professionals. a lot of the targets we have seen, 2015, 2000 on the s&p. we know great years are followed by pretty great years. >> this number must bother the bears. they want to see much more bullish. after such a run, the public is saying, now, i'm in. they don't come in until the top. they are still not coming in. as long as they are not, the wise guy bears are in trouble. >> it's an interesting point. unfortunate for the retail investor in some ways, if, in fact, it proofs to be the case. >> well, i'm looking at deals this morning again. i'm thinking, ways to win. i am thinking, they do not signify a taper. all that could have been for nothing. the only thing i see on the horizon that worries me is that it now is pretty clear that
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there is no ceiling deal. the ceiling is going to be a battleground. that means you are going to drop 5% at some point as we get closer to the ceiling. >> the ceiling is what really freaks people out. >> because we have to switch to bitcoin. the show hasn't mentioned bitcoin yet. >> we have been on the air for 3:00. about time you did that. there are about 11 trading sessions left. do you expect moderate chop here? last week, some big calls or the vix, like a 22 strike price. >> if they say anything on wednesday, we are going to have to taper. people have been waiting for the down 5% on that news for the last 35% increase. someone has got to be upset about it, don't they? we have been tempted. there has always been a call
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around the fed. we are afraid they are going to do it. if they finally do it, should we suspect we rally on it. then, what do we have other than the debt ceiling? you have to give the bears something other than the eagles sunday night in philadelphia. >> deflation. we'll start worrying about deflation. >> we could be like indians, stag fl st st stagplation. why don't we just make something up. >> there is a bad setup for the bears in that you have got to have someone from the feds say this market, this economy is overheating. they have to say it. i look at what's happening in britain. they are incredibly strong. they still haven't said it. we have to stop buying, things are good. look at britain. they are on fire and they are still not stopping them. if you're a fed person, you might say, well, you know what, they are still fearful in england. maybe we should not be so quick
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to stop buying. >> interesting. one of the biggest arguments against a taper this week is that in year-end, liquidities, a little bit light and maybe the fed for calendar reasons would choose not to do it at this meeting. >> if you remember, there was this 2:00 to 3:00 swoon. i haven't seen that since 1990. holy cow, there is. bomb's away. it was 12:00 high, 2:00 high. sometimes right at the top of the hour. >> daylight precision, nighttime saturation. it was carpet bombing. it was very reminiscent of the 8th. i couldn't even see the sun. >> you mentioned some of these zeals, david. we have a lot to get through on the deal front. >> we do, indeed. carl, you are right. aig announcing the sale of its
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aircraft leasing business. it is called international lease finance corp. they are selling it to aercap holdings of the netherlands valued at $5.4 billion in stock and marks their exit from the last noncorp business. here is what ceo robert ben mo say said this morning. >> we wound up owning 46%. what you accomplished was an ipo and' merger all at once. you get the accounting treatment so we can write the assets down to market, which is very important. >> that had been on the block for some time. they thought they had a deal quite some time ago that didn't quite make it to the finish line. the money didn't end up in the bank when it was supposed to. they got this deal done. aig shares, we haven't talked about them that much. we are stalled because of this. i think they can take off again.
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>> you are getting back to the realization of book value. this was a very good deal. i saw the stock pop $1.50. it was a better price. benmosche got a better price. good work by him again. >> they are calling it the last major sale of the noncorp assets. this was considered one of the crown jewels, even more when you consider the aircraft business. >> whoever has the planes wins. he waited for a year. he didn't mean to wait. it gained value over the year. this is the wonder of 2013. you don't do the sale. you are really bummed out and you wait a little bit and there is a better bid. 2013 is like that. it is a year of bounty. >> the year of bounty. not the paper towel.
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how about bounty for avago and lsi. >> this is the deal of the morning, unexpected in the sense we had no idea it was coming, unlike aig. understanding from the technology side may be more important. when it comes to m&a, which we have seen so little, you have avago, an investor chip company, about $11.2 billion mark in cap, spending over $6 billion, taking in another billion from silverlake. they are not going to get dill lewd diluted down as much. you are talking about $2 million by the end of the year ending november 1st, 2015, which would be the first fiscal year after closing. annual cost savings, not sin irgies. that's what the market likes here. the stock is up sharply. >> dr. avago.
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s we'll see how it performs today. we can remember this with sysco deal. the first day pops are extraordinary. we should argue for why there should be more deal-making but this should be a year in which there was very little. >> there is one stock up more than avago or equal which is aercap, with the company that bought ifc. the wrong sisco is involved. not the food service but the down and out network infrastructure, csco. many companies involved with enterprise chip. lsi is a big data chip company. avago has some wireless. sort of a one-stop shop.
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there are so many semi companies if they started combining, it would be huge for the industry. >> it is $11.15 is the price. it was about $7.90 on saturday. it was an unaffected stock price on friday. we had not heard news of this creeping out in any way that i'm aware of. >> a year and a half ago, i had abi talwakar, the ceo of lsi. we thought it was a real bargain. the stock was at $6. dave had a hard time realizing value. a lot of these companies are fed up. we have been doing everything. lsi had been doing everything right. you couldn't get the stock to go higher. let's just give up. let's just go make money for share holders now. i remember when it was llsi. it was the third stock i recommended on my answering machine in 1983 at law school.
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>> your voice mail greeting used to have stock tips? >> yeah. i'm not here right now but i think you should call llsi. >> 1-800-743-cnbc. >> it was like sportsphone. you call and get scores before the explosion of data. >> on the deal front, it brings us to these reports in the journal. sprint working toward a bid for t-mobile, which if approved, would leave us with three, days after a big story in the times about having the fourth player was considered a victory for regulators and consumers. >> t-mobile has been aggressive, growing, pursuing a competitive policy. i would point out, there is nothing in this story that indicates there are any talks going on between these two companies or, in fact, that
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there have been any bankers employed specifically for the opportunity. we know that they want scale. he wants scale and if you want to be a competitive presence in the auction, you want to do it as a unified company. big questions, though, on the antitrust front. big questions. >> we'll talk about a couple of down grades for twitter and industrial production after a short break. the ocean gets warmer. the peruvian anchovy harvest suffers.
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welcome back to "squawk on the street." we just received october tic data. whether you are looking at net flows or long-term flows, both numbers were solid. industrial production, up 1.1%. that's double expectations. 79.0, also above expectations. the revisions were positive from minus 1 to positive 1 on industrial production and utilization moved from 70.1 to 78.2. we had a soft empire, a strong tic and industrial past utilization, coming in strong on the backs of some of the pmis out of europe. we know germany is cooking in greece. an interesting day.
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you see the stocks the same week of a fed meeting when everybody is looking to see if fed will remain santa claus to the equity markets. rick, back to you. rick santelli in chicago, double wham any suntrust valuing. they have a strong management team. a 40% run in two weeks. a lot of the initiations came out a couple of weeks ago and they are having to revisit their whole model. >> i had been critical of robert pack because he came out with a buy with very high numbers from twitter. it seemed fanciful to me. he documented what could happen,
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what could happen, what could happen. everything he said happened, everything. this was a remarkable buy. it is a remarkable mutual. this man-made you a lot of money. much more than a lot of the services that i have followed that told you to short twitter at 40. robert patton, congratulations. >> i don't know why you would be considered about a company that's trading at 295 times consensus, ebita for revenues. >> if my family loved me the way the market loves twitter, it would be a wonderful time, specially in the holiday season. >> i can remember having very similar conversations back in '97 and '98, saying it is ridiculous. stocks kept running. some of the companies almost justified the evaluations. >> amazon, yahoo!.
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you don't want to be there for the 2000 fall. >> webvan. >> webvan didn't quite make it. it was too early to buy them, just a little. it's coming. >> we tweeted friday morning, twitter was at the top of drudge on friday morning, no profit. whatever the valuation was at that moment. >> it is not just because it is going lost on people. >> the public is. when we say the public isn't bullish, 146 characters. less than 10, i love you or i love you #twtr. twitters never having to say you're sorry. >> what he says in his analyst report. >> this is robert? >> yes, at this point, you should be willing to pay 17 times a $4 billion revenue estimator $6.5 billion estimate
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to justify where we are if we assume you want a standard 20%. i haven't seen that since sign it and buy it. they changed their name to tuesday evening or something. we were in a period where this was vertical won, commerce won. it could be an incubator. how can you value by sales when it is incubated. >> it is like the incubating in -- >> cmgi. >> you are talking about b to b plays. >> like dave weatherall. >> cmgi, that was one of the greatest of that year.
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>> twitter is the new cmgi? >> of course not. it has incredible growth and potentially a great business model. >> who is going in against twitter. all those companies had opponents, somebody else coming in against them. there is no twitter 2, a son of twitter that's going up against twitter. >> not to mention partnerships with large, historic institutions like the nfl, have some equity in this band. >> we are all struggling with the ceos that say, listen, we have to pay facebook. twitter is free. then, we see on twitter that there is an outbreak of flu in a town, we rush clorox there. >> but they are not paying for the opportunity to get that opportunity. >> not yet, david, not yet.
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this is all to come. >> as it should be. 36 times revenues for 2014. >> it is early. >> when we come back, the need for speed. cramer will get your trading week off to a start. not bad axe here. wide open. up triple digits earlier. now, 90 points. a lot of "squawk on the street" from the nyc straight ahead. life's an adventure when you're with her.
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we have a mad dash for a monday. back to the oil. >> there is a subtle theme to the research about oil of late and goldman captures it. goldman goes hold to buy on exxon. they down grade marathon. exxon warned buffet, buyer here, just huge. he has been dead right. they have refining and marketing and they are doing everything right. the last quarter was terrific. marathon, mro, had, i felt, a very good analyst meeting but this reps an independent that is drilling. in north dakota, what's happening is people are shying away from these unlike pioneer. from conviction buy to buy. these are all part and parcel -- >> you have been critical of exxon. >> the last quarter was extraordinary. these companies don't trade on earnings. they trade on production growth.
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the production growth is accelerating in exxon. it is a very interesting commercial. it is 360. it is about how gasoline dpgive you more bang for the buck than any other energy. >> they are. it is not a great deal for them. they are not talking about that at all. they are basically saying, look, we're not going to have natural gas gas stations. chevron -- shell disagrees with that. clean energy fuel is obviously trying to put it up. exxon is going all gasoline, david, all-in gasoline and so far, the stock has been a real winner in the last few months. >> we still talk about the u.s. being energy independent by 2020. overall. >> north american. north american. u.s. only if we use natural gas as a fuel. exactly. thank you. we have al lot more coming up
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you are watching cnbc "squawk on the street," opening bell. we will see what bernanke says on wednesday if this is his last meeting as fed chairman. i am struck by how many various upgrades. >> i think this is supposed to be the season to be jolly. an unwritten rule in the last couple of weeks. don't down grade and don't preannounce and don't down grade. preserve people's years. that's why i love this conway buy poorly timed. that doesn't help anyone. i do think, remember, the way it is supposed to be is brokerage firms are supposed to help out, supposed to do good things for the institutions. so you see cessation of down grades and a lot of reits with price target rates. >> we are going to get some key select earnings, fedex, nike, oracle, blackberry on friday.
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>> here is barclay saying fedex is further up side. deutsche bank raised target. this is the biggest day of shipping of the year, ups tells us. there is so much love for fedex, almost like a twitter thing. it is really well-run and been around for a long time. >> it is the busiest day of the year for shipping, biggest pick-up day. tens of millions of packages are going to get picked up. >> lexington realty trust celebrating the company's 20th anniversary. over at the nasdaq, looks like society general doing the honors. you wouldn't know that from the promptor. >> i am worried about sock gen.
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>> their exposure to a lot of other companies in europe, italy. was it two years ago? remember, italian rates were soaring. >> there is still an italian bank that's in trouble. their benefit. they have been able to refinance. we still don't like france. france is one of the slowest growing. i think it is incredible to see the resurrection of a socgen being the achilles heel. >> i have seen a lot more retail here in new york city. i don't know if you noticed that. >> bbva is doing incredibly well. >> broadly, jim, we are coming off our worst week since the summer. back when the jobs number was good, the narrative was the market has given its permission to taper. suddenly, we have our worst couple of weeks in months. what's the narrative right now?
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>> i think we have a big lock. i think the narrative is that the bears are running a little scared. they see things that are happening that make them worried. exxon upgrade, a very big company. we had united technology preannounced badly. it department go down. a lot of stories. an upgrade from verizon. a lot of money being thrown at these. "the washington post." the redskins don't give you much to write about. at the same time, still, a buyback is a lead story. $750 billion in buybacks. >> that's been the story of the market. the pointed undercurrent of that
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is, they don't do it to create jobs. >> they do it to boost shares. >> if you would have a tax holiday on repay tree eighting, i don't know whether that would be the case or what you could structure to make sure it wasn't. >> the return of capital is the biggest theme. it is, period. it is not just obviously buybacks, it is also dividends in this incredible low-yielding environment. the ability of companies to borrow at extraordinary low rates, that's been the store are i. >> ask the fed if they stopped buying bonds, we are supposed to lose that prop. the companies are flush. if the economy is getting better, they are just going to keep buying. >> you mentioned verizon, by far the strongest component on the dow. that upgrade, if, in fact, if sprint gets encouraging feedback from regulators about the
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t-mobile, does that put the rest of the players in a better position regarding prices. >> anything that makes it so there is no more price wars. i thought it was interesting when that article came out on saying there might be a deal. davis sits here every day saying there might be a deal. there might be a deal. why don't they say, according to david faber, who spoke about it every day this week, why don't they say that. >> david faber inc has said every day, there might be a deal. >> you and i have had that conversation more in the realm of based on what i know. certainly, it is a long standing desire of them to get bigger. he wants scale as quickly as possible. we had that conversation about the antitrust impediments to a potential deal. we cited the comments from the chair in ohio talking about how
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four may be better than three. we know t-mobile has been aggressive, succeeded at being aggressive. they may run into a wall when it comes to spectrum at some point. there are a lot of questions as to whether it is ever going to be able to p ha. what i have not reported is that there are talks going on, because there aren't. >> dish, we just kind of drop off the group. doesn't dish need to be involved? >> ergon is trying to figure out. he will point you to the center of his palm and say, here are my options. i haven't figured out which way i am going. >> i get at&t to buy me at a huge premium. >> go long. >> i merge with t-mobile. >> here is romo. we pass it here to green bay. >> i still buy light squared and figure something out, some commercial agreement out with one of these carriers. >> it is peyton manning. it is colorado. >> i buy the denver broncos. i don't know.
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>> that size sportsman. >> ergan is the richest man in colorado. >> taking away that plan. it is going to take a little soap. >> your point is a good one. i don't believe mr. ergon has yet figured out what road he wants. he is all about optionality. >> by the end of the week, we are going to read an article of what the sources say. >> he believes in that. he has. he has been right to have done so. when he bids, it drives up the price of spectrum overall. value of it. it helps him. he owns a lot of it. >> you are supposed to have a deal. i left friday thinking there would be a deal for time warner cable. sources. >> we're going to wait and see on that one as well. >> we mentioned blackberry before. earnings, friday. john fortt is going to set down with john chen at the end of the week. >> will he still be there? >> he said cash is declining, will be declining over the coming quarters and liquidity burn will be a big thing to
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watch. >> bernstein, by the way, was questioned and said, sell it and it goes to a hold. if they fire everyone, stock goes really high. maybe if they clothes tse the s. >> apparently, there would be significant cost to winding down the business. billions in cost. you still have the intellectual property. the idea, if you shut it. burn through an enormous amount of cash shutting things down. they have $1 billion of the z-10. >> i can't do what nokia did, call up balmer and have him pay a couple billion dollars for the handset. why is steve not helping? facetious. spoiler, facetious alert. >> maybe it will be the last thing he does right before he leaves. >> let's get to mary thompson on the floor with the dow down 165. big move on this monday. the futures were pointing to this kind of an open on wall
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street as the markets are reacting to some decent data from overseas. the decent news on japan's business confidence and the u.s.'s november industrial and the worst week for the dow and s&p since august. all of the sectors participated. leading the dow, exxonmobil helped by that upgrade to goldman sachs. the focus will continue to be at the fed's meeting, the conclusion, that two-day meet willing on wednesday. a number of traders say they are expecting a modest taper has been priced into the market. they continue to watch the yield on the 10-year note. it could take the wind out of any kind of rally we are seeing right now. given the yield is lower at 2.84, we are seeing support for stocks today. take a look at some of the deal stocks. aig, selling its aircraft
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leasing business to aercap. the price tag, $5 billion. aig will take a stake in aercap. also, we want to take a look at semiconductors. the other big deal is that ls is is being acquired by avago. the price tag, over $6 billion. taking a look at some of the competitors of lsi. st, micro electronics today. i want to end with gold. gold actually is steady after a decline. of course, it is on track for its worst year in about 13 years. the number of people, traders say, have been dumping. they are a little bit weaker again this morning. in early trade, we do have the dow up 162 points. david, back to you. >> thanks very much, mary thompson. >> rick, thanks, david. year-end, always has a lot of question marks adding in a very questionable outcome for the fed meeting starting tomorrow.
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add in a general notion that there is a lot of uncertainty in certain pockets of europe and you get a really crazy fixed market. look at a two-day chart. the data came out at 9:00, 9:15 eastern. well, right after the data came out, yields moved lower. see how significant they are on a two-day chart, about ready to take out some low yields. look at the bun, same response. they didn't have their own specific data. it was hours earlier. it was strong also. the fixed income marketings, the rates are starting to move a bit lower as the equity moves higher. look at the dollar index, under 80. last week, we tested unchanged for 12.31 where we closed last year, 2012. if you want to see some of the
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big moving parts, you want to take a 26-month look at the pound versus the dollar, certainly, it doesn't have 1.64 handle but a heck of a run. we have to take this chart back to october of 2008. certainly, we are not on the highs. we are very close on this one. going back to october, 2008 really begs the question. their yields are ready to touch 70 base points as you saw in the previous chart on a ten-year jgb. we need to watch if we pop over 70 basis points on the fixed income side, the jgb. the weakening currencies, a big story for 2013. many think it would be the biggest for 2014. back to you. i don't know if you have seen these reports on google robots but the company is on a robot buying spree closing their eighth robotics acquisition in six months.
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>> that's just one of them. this latest company makes robots for the pentagon. we are going to talk about google as a military contractor after a short break. how sweet is it. god die va looking to capitalize on the holiday season. we'll talk to the company's ceo about the business of chocolate when squawk continues. [ female announcer ] thanks for financing my first car. thanks for giving me your smile. thanks for inspiring me. thanks for showing me my potential. for teaching me not to take life so seriously. thanks for loving me and being my best friend. don't forget to thank those who helped you take charge of your future and got you where you are today. the boss of your life. the chief life officer. ♪
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this is the pursuit of perfection. back to squawk in the street. i'm sharon epperson. looking at the crude market has a lot to do with the situation in libya and the fact that the export terminals remain shut and may remain shut for some time. they have not come to an agreement about opening the terminals. we are watching what is happening in terms of wti
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prices. only a slight gain there. the latest from energy information. we will see a significant increase in crude production through 2016. 8.5 will be produced until we get to 9.5 billion barrels per day. we are taking a look at natural gas losing many of the gains we got last week. it is down more than 2% today. we are getting some warmer weather forecasts. some profit-taking going on there. you have to remember, we do have plenty of natural gas. the latest report from the energy department also showing that we are going to see a big increase in natural gas outfits over the coming years. it will be up about 56% between 2012 and 2040. we are talking about this increase in production, having a great impact on the exports that we're seeing of liquefied natural gas, as well as natural gas through pipelines, to mexico and canada. we are going to see the u.s.
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become a net exporter of natural gas by 2016. >> in its eighth robotic acquisition, they are acquiring what they call the big dog. one of sefrt robots written about that can scuttlebutt over various terrain. you can kick it. it will find its legs. imagine, somebody wrote the code to make these legs operate. it brings us to this morning's "squawk on the street" question, which is, what could google be up to. tweet us as "squawk on the street" and we'll get your responses. google is designing these things and their rival, yahoo! is trying to make sure their mail service doesn't crash. these will be excellent when amazon power shoots things to you and they don't land close to you. you get one of these.
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it is kind of a google amazon partnership. particularly if there turns out to be a faux amazon bomb and they can dismantle it. >> you think about the surveillance society and what's coming and robotics may be more important than drones and how much money google is putting into it. >> google has a lot of money just like "avatar." there are guys in hollywood that say, i was all set with the robot thing and now they have alezium, for heaven's sake. >> i could stair at thre at tha for a long time. >> a face only a mother could love. >> that's right. you can't ignore this move with exxon. that's a massive move in a stock that big. that's one reason the dow is up. >> earlier, you mentioned liquidity. exxon has bought back a giant amount of stock.
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still, when you get an upgrade from goldman for a stock that is one of the biggest companies, it is breaking out so furiously. this is part of how did this happen kind of market. you sit back and say, exxon. how could exxon move like that in an environment where the rest of the oil companies are doing terribly. you can't own any other oil company. they are all awful. interesting. >> it has to be a candidate for one of the most market moving, analyst moves of the year. >> i remember when goldman used to be the only guy you would listen to in the oils and kind of got away from it. this stock is of why usually breaking ou. no o out. there is a lot of money coming out of the independent oils going into exxon. you want to show you owned exxon at the end of the year. >> twitter is back to flat. it had been down as much as 2%. on that down grade to neutral by an influential analyst.
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more or less back to flat, let's call it. the deal, lsi is up 38% on the deal at 1115 just trading at a slight discount to that price. you will need chinese anti-trust approval. that can take a while. timingwise, this avago/lsi deal could be a bit longer than anybody expects. of course, the real story, again, we have seen it time and again, is avgo. it is up 10%. $200 million in cost savings is what they are talking about, run rate, full year, by the first full year after clothes thse th have that. these company stocks seem to react very often, very positively to deals. >> we were discussing during the break, david and i, over for the dash, that it must be very difficult to convince companies to sell. you can easily say, listen, i'm
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going to get there on my own. i don't need to sell. i know lsi had been frustrated. morgan stanley had upgraded that stock in october. saying, good things could occur. some research, again, that was valuable. >> with that, the dow up almost 170. here is what's next on "squawk on the street." coming up, hey, panda, what the heck are you doing? it is cold outside. get inside and lit cramer warm you up with six stocks in 60 seconds when "squawk on the street" returns. ess pro. seeker of the sublime. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we.
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>> here you go. avago gets chatter going. anybody is subject to a takeover in this market. >> goldman up. >> this has been in a major tailspin. >> credit sweeps on ads. >> i had this management on thichlts the quiet player for
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when you get those cards that are infinity. they are the power behind it. >> cubis. >> they work in hospital bugs. >> opco cuts, amd. >> geez, i don't know. takeover, no, i don't see it. >> urban, doing well. >> last week, there was a positive comment in their "q." goldman says you want to buy it, an inexpensive retail. >> let's first gets what's coming up on mad tonight. we have pargo, the knockoff company. they do i allot of great knockoffs. perrigo. they are the solution for why rite-aid continues to go higher. this company is very undervalued. i really like it.
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>> that's "mad money." >> when it comes to the last couple of the weeks, if you tend to make big drexel bets. >> i used to buy a lot of deep in the money calls and let them roll. a lot of institutions that are determined in these up years to keep their stocks higher and take them higher. they will buy before and if it goes up, they will rush in. wait for that fed meeting. maybe you get a better opportunity for some. the answer is, yes, they do come in and they come in very aggressively. >> we'll see what happens over the next two days. let's see what simon has got coming in at 10:00. >> we are going to talk about twitter. suntrust says it is a great company but very little up side from here. we'll see how they are calling the numbers. steinberg will be here to talk about google's eighth robotic buy. we will have the ceo of
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chocolates here, godiva as we head one and truly into the holiday season. ♪ hmm. mm-hmm. [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offers end december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 glk350 for $419 a month at your local mercedes-benz dealer.
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the market stocks are in rally mode. we'll tell you what to expect going forward. >> suntrust analyst, robert peck, was one of the first people to issue a big buy call on twitter putting a $50 price call on the stock while the social network was on its ichlt po road show. why is he down grading twitter this morning no, not judgment day, just eight big new acquisition for google. they are making headlines after buying boston dynamics. what the heck is google going to do with a military robotics company. >> one reason why the most popular new year's resolution is to get back to the gym, because of the chocolates everybody eats over the holidays.
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godiva will be here to tell us what sweets are the biggest sellers. >> the dow up better than 1%. the taper watch is on as the fed begin is its two-day meeting in washington tomorrow. what should we expect from the fed this week? steve liesman has more back at headquarters. a man that has already made a call. >> how about that for a fashion access sorry, a taper watch. we could get one. in june of this year, bernanke said 7% was the unemployment rate where the fed would stop buying assets. let's listen to what fed chair, janet gelle janet yellen said recently at her confirmation hearing as we indicated, we do see strength in the private sector of the economy and we are expecting continued progress going forward. while there is no set time, we will decide to reduce the pace
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of our purchases at each meeting we are attempting to assess whether or not the outlook is meeting the criterion that we have set out to begin with, which is the pace of purchases. >> so noncommital there. at every meeting, the fed will talk about it. let's see what individual members have said. jim bullet from st. louis, what did he say? >> a small taper might recognize labor market improvement. he is still worried about inflation but suggests it could happen. >> dennis lockhart, some consider whether it is the trajectory of the recovery. the outlook for the economy justifies such a move. >> charlie evans, one of the more dovish folks, i'll be open-minded. everything else being equal, i would like to see a couple of months of good numbers this. this was improvement. not exactly clear from that
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statement. john from san francisco, i personally wasn't as far away from being willing to initiate a small taper in september as some other officials. remember, a lot of officials said september was a close call. the question would be, why they wouldn't do it now if it was a close call in december. let's listen to what ben bernanke said at a november 19th speech. >> when ultimately, asset purchases do slow, it will be because the committee has progressed sufficiently for the committee to rely more heavily on rate policies. the associated forward guidance and the substantial continued holdings of securities to maintain progress towards maximum employment and price stability. >> what's important about that, guys, this week, next month, whatever, that's the pivot the fed chairman wants to make, to go from a market or an economy that's guided by quantitative easing to one that's guided by forward guidance and ultimately interest rates. simon, back to you.
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>> i would love to get your take on one argument that says no taper of this meeting because liquidity is lighter and they want to avoid a dramatic move in bond rates. true or not? >> i have heard that have about. the idea of there being any problem with liquidity in these markets strikes me as not really taking account for all the liquidity out there right now. i think there is a lot out there. during the crisis around december and quarter ends, we do have that problem. i would be surprised if we had it again. >> the other argument, of course, is that the jury is still out fr all of thor all of the cpi figures come in tomorrow. inflation is the one box they can't tick. >> the bullard comment is so important to me. jim bullard was the one, simon, you remember, who dissented, because he was concerned that the fed had not had enough
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concern over inflation. bu bullard says a small taper would recognize the labor market improvement while holding judgment on inflation. that is so important to me in thinking about what is happening stocks are on full rally mode. we are up 167 points on the dow. let's bring in u richlt dsh uri. >> jerry, do you think that the fed will announce that it will start tapering or lay out a plan to taper on wednesday and how do you think the market will react to that if it does? >> sure. its most likely at this point now that the fed is just going to start driving this road map concept into the market, whether they actually start or whether they say it is now in place to begin is irrelevant. the market is going to shift from its five-year, stay under a
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rock kind of mentality to, wow, this is real economic growth. we have not in a position worldwide to see this many parts of the economy in an expansion mode. it had been since 2003 or 2004. investors are now going to look and i believe ultimately take the concept of the taper as a reason to now get involved in the market rather than a reason to leave the market. it is that type of confirmation that we have good, solid growth ahead of us in earnings that will sit behind a lot of very undervalued sectors. how would you feel the market would react if that is the case. the dow lost albeit that from a record high. >> the short-term reaction is difficult to gauge but it is interesting that you would note that people have been hiding under a rock for the last five years. the market has been a rocket shot over the past five years. i agree the conditions
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underlying a taper should be taken positively. we have to take a look at where the market is being priced after this liquidity driven portion of the market. eventually, this is going to lead to a mid-bull market cycle correction, possibly as much as 10%, 15%, as investors say, okay, i better take profits right now. the fed isn't giving me a protective net anymore. >> jerry, it is david. i would love to talk stocks for a second here. i always think energy when we talk. exxonmobil is up 3.5% on a positive call inching towards $100 a share. >> that's the example that hopefully proves my point. the overall market has some points in it. whole groups like industrial and energy stocks.
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a decline would put them at bottom evaluations. this is the beginning of the move into the sectors of the market and specifically energy. exxon stands out as well as all the energy names. they keep trading on the notion that the price has to go back to $80 or $70. that's just not happening. you are going to see a much stronger move in the whole space. >> why is that not happening? >> it is not happening because people are still worried maybe the chinese economy will roll over and europe will be tough and the united states will shoot themselves in the foot and our economies won't support stronger economy markets. think about the other side of this. we were just at the beginning of a big expansion nary period in the world economy. that's what drove those stocks ten years ago. >> before we let you go, let me ask you about this a.p. poll that came out today across the country. 40% of those questioned in the
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market will stabilize where it is now by the end of 2014. 39% predict that the market will drop but not crash. why is there such a big difference between what people on the streets feel about the economy and the market and what professionals say? >> our job is to try to separate fact from fantasy. there is high valuations in certain sectors and low in the other. as professionals, we migrate toward the undervalued sectors. we are more sanquin about the outlook. others are saying, the market is up so much, it can't keep going up. >> thank you, jerry and uri. the nasdaq undergoing a rebalancing. our seema mody is outlining some of the changes for all the traders that try to mirror the nasdaq without buying the nasdaq 100 etf.
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listen up. five stocks are being added effective december 23rd. the addition, dish network, illumina, nxp, trip adviser and tractor supply. trip adviser is thriving on an increase in travel. tractor has been a hot name. this stock up about 70% over the past 12 months. the stocks leading, fos sill, microchip tech, sears holding, dentsply and nuance communications, the worst performing stock within this pack. the nasdaq rebalancing is washed by fund managers that track the intex and lead to investors rebalancing their portfolios. get this. according to the investment research stocks that were added at the end of 2012 are an average up 34% since then while
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stocks that were removed from the nasdaq 100 index are on average up 41%. two of the stocks removed in 2012, that outperformed this year, you know these names, netflix and green mountain coffee. perhaps getting added to nasdaq 100 isn't as lucky as you would think. >> seema, thank you so much. all eyes are on the senate set to vote on the budget compromise deal by the end of the week. despite bipartisan agreement is no sure thing. john harwood, live in august washington. >> washington has shown a consistent ability to miss point blank field goals in their perpetual struggle between democrats and republicans. so there has been a bit of nervousness surrounding the vote in the senate even though you had more than 300 votes. both parties heavily supporting the deal in the house of representatives. dick durban, the second-ranking senate democrat went to the sunday talk show to say democrats need more help from
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republicans. >> the struggle is still on in the united states senate. we will need about eight republicans to come our way. i feel we will have a good, strong showing from the democratic side. we need bipartisan support to pass it. having said that, some of this is kibuki, carl. it is usually a politically safer vote to vote yes on almost anything. you have in the senate republicans who are positioning themselves for the 2016 race. you have members of both parties that are up for re-election in 2014. to some degree, they are drawing for the privilege of who gets to vote no. i do think by the end of the day in a cloture vote tomorrow and final passage on thursday, you will clear the 60-vote threshold and washington will decide there is at least one present they can give the american people this year. >> john harwood joining us live. it has been a great couple of weeks for twitter.
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shares of the social network have been rallying hitting record levels during trading last week. one analyst says, not so fact. he is down grading shares of the social network. he will tell you why next.
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i'm alex cone in the cnbc "newsroom." we are following a situation at harvard. we are told they have evacuated
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four buildings after unconfirmed reports of explosives being planted somewhere on campus. final exams scheduled for today have been postponed. there is no confirmation again that there have been any explosives planted about you out of an abundance of caution, the university says, they are staging these evacuations. as you can see, the situation there unfolding in cambridge, just outside of boston. i believe we also have a map of the buildings that have been evacuated as a result of these unconfirmed reports of explosives planted on the campus of harvard university. we, of course, are keeping track of this. as we get more information, we will bring it to you. back to you. >> scott, thank you so much. our scott cohn. twitter shares breaking just above $60 this morning hitting a new record for the fifth consecutive session. this despite two down grades. suntrust evaluating to neutral
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saying the valuation has become stretched. he does maintain his price target. robert, great to have you. good morning. >> thanks for having me again. >> you make note of the last two weeks in the 40%, 50% run. why the down grade now? >> the stock is more than doubled since the ipo. in the last two weeks, it has run over 40% on really no new significant news this wasn't already expected by the market. when you look at what that implies as far as the multiples, it is about 36 times revenues. we historically went back and looked at other high-fliers and saw how high they got back. 28 for linked in. we think the valuations run a little bit more in the near term. >> where does it get interesting again, the share price? >> our price targets $50 for the end of 2014. if you get some sort of pullback, it will be something for investors to pull back. we have a hard time paying 300
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times ebada. >> did you go back to the 1990s. this puts me more in mind of '98 and '99. linked in was very controversials when it ipo'd. >> it did justify to a certain extent that multiple. it has been nothing short of a very successful companies in all ways. >> if you look at the estimates the brokers put out when they ipo'd, you had almost a doubling of this. you get to about $5 billion of revenues in 2017. to justify the current targets and pay a ten times multiple, you need to be around $6 billion. it is still a stretch as far as expectations.
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>> we are still waiting to get the first quarter as a public company. are they telegraphing to the street whether current growth is too high or too low. >> i don't think they are. they only had a week to buy or sell. i think they are letting the numbers come in. they will convey all that information to everybody when they report the earnings call. >> you make the point that the stock has risen on the lack of any substantial news. what's been the most substantial data that you have been since the opo? >> they have their sort of facebook exchange, negative advertising where they are getting more targeted tailored audiences. everyone expected them to do that. they have been tinkering with it since july. they officially announced it a couple of weeks ago. it is a big deal, very well anticipated and expected by most analysts. >> is there something we are just missing here that could conceivably contribute to an
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expansion of sales to what people are anticipating. >> to get that $6 billion of revenue, you need a revenue reacceleration which you could call for in '15 to '16 to get there. you are having a weird dynamic where there is a small flow, locked up in very stable shareholder hands. you are seeing a lot of shorts covered as you head to year end. they don't want to get steam rolled. >> robert, hard to down grade on this. it is certainly not having much of an effect. we will watch it close. >> robert peck joining us from suntrust. do you have a sweet tooth this next season? our next guest certainly hopes so. holidays are the most important time for godiva. the company's ceo will tell us what kind of candies are buying this year after a short break. the c in. bc real time exchange network
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with 450 boutiques online and a strong presence online, godiva, winter is the busiest time of the year. jim goldman is the president and ceo. he joins us live with product. welcome. >> happy holidays. >> how is business at the moment? >> business is good. it has been good since black friday weekend, thanksgiving is later this year. a little ice and snow. the next days are the key ones to get out there and enjoy and buy. >> what are the innovations this year? the new holiday truffle flights? >> we invented truffle flights. it is a taste journey. we have a holiday one with all
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the flavors of the season, ginger bread, cranberry, peppermint lindzor tort. >> what is selling best? >> our gold balatin is the classic gift for the holiday. what's great for us this time of year, we're perfect for a lot of occasions, whether it is a teacher gift or an employee that you value or someone in your family or stocking stuffer. >> you reckon you can sell across the market then. >> we do. we really have something. even if you need a dipped strawberry to recharge batteries. it is ready at a godiva boutique. >> low end, high-end, domestic buyer, where is it the strongest? >> that's a great question. >> we have some accessible price point for things like stocking stuffers. we have wow gifts like our ultimate trouble collection this year is 80 troubles. it is unbelievable for an important customer. godiva.com sells a lot of gift
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baskets. i walked in here this morning and one of your previous guests just send you a godiva gift basket. >> really? >> is the corporate buyer making up for weakness on the leisure buyer, so to speak? >> pereveryone waits until the t minute. that's true for corporate buyers. it is not too late. for the consumer, they really want value for their money. they want to know they are getting a quality product and something that people will enjoy. >> it is almost six years to the day that campbell's soup sold you to that private, turkish buyer. what has that meant to you to be own b owned by a private player. you have been trimming down some of the stores here in the united states. >> we have high aspirations, higher aspirations for the business, investing in the business. we have broadened across a number of different dimensions globally. our array of products and our innovations is at an entirely different innovation.
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>> cocoa prices treating you well or not? >> it is tough. it is high. our prices this year are the same as last year. so with he think we have something for everyone to bring a little cheer. >> you feel like 2014 will bring you a little more pricing power? we have this discussion with a lot of people. >> you have to work hard to make sure you minimize the pass-through to the customer. at the end of the day, we want to drive sales. >> the short fall is reckoned to be 160,000 tons next year. that's a big short fall. >> we really go after the highest callihigh quality cocoa beans. >> mr. goldman, nice to see you. >> thank you, simon. >> take this with you, by the way. when we come back, what exactly is google up to buying this giant robot technology. we have a foo you ideas and we're going to talk about them in just a moment. ♪
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some of the stories we are talking about. amazon really wants you to buy a kindle fire tablet so much so it is letting you pay in installments under a new plan. this he will let you pay for a kindle fire in four payments over nine months.
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it can run you up to $379. "the hobbit," the desolation of smog was the number one movie at the box office. "the hobbit" beat out disney's "frozen" which took in $22 million. if you didn't buy a lottery ticket, now is the time, the megamillions soaring more than half a billion dollars. $550 million. the next drawing will take place tomorrow at 11:00 eastern. the odds are 1 in 259 million. >> it is worth a shot. dow is off the high, still up 150 points on some upgrades. some little mna action, some speculation about the fed meeting which begins tomorrow. this is the biggest gain for the dow in about six or seven sessions. really, not that moving. is google building an army of
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robots after they announced the purchase of robots dynamics. josh is here with more on the story. >> certainly, simon, big dog, cheetah and wild cat, this he were always hugely popular on youtube. maybe it makes sense that the robots now belong to google, the internet giant, buying boston dynamics, the engineering company that designed the robots that became internet sensations. there is big dog, a loud, four-legged sci-fi terror that can merge up hillsides. there is also wild cat. this is a noisy robot seen bounding, galloping and turning through parking lots. finally, you have cheetah, which is shown running on a treadmill at 29 miles per hour. that's faster than olympian usain bolt. "the new york times" first reported the acquisition noting that it is the eighth robotics company that google has bought
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in the last six months. the whole robotics effort is being led by andy rubin, the executive that led the development of android. he has referred to his robotics work as a moon shot. google would not tell cnbc about the price or its purpose. there is speculation that google wants to build a new class of robots that could perhaps do everything from a warehouse work to package delivery. its rivals see the potential benefits of such technology. amazon's rollout of robots from a company it bought last year called kiva systems could save it $9 had been milli00 million . >> our josh lip tton in san jos. this move snapping up the creator of the fastest-running robots. is larry page the new jack welch. jack steinberg joins us today. good to have you back. >> the ge of the internet world.
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>> just listening to josh's segments. giant robots and youtube views as a way to thread the line between the two efforts. i think it is very hard. maybe google is a conglomerate that's held together by a general interest in internet and teg technology. they have youtube, g mail and self-driving cars and robots. maybe it is the next conglomerate. >> there have been vanity projects so to speak in the past. the self-driving car was called that for a very long time. do you think this is playing with house money or play money? >> i don't think it is a vanity project. apple doesn't have anything to do with their cash. that's equally a problem if you can't put up growth. we are looking at smart cars. the company needs other places to invest. factory automation seems like a weird thing to say that's what google is focused on. this is a whole other classic investment area.
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david is smiles at me. >> we are a far cry from itt and harold. >> long before your time. long before mine. >> many would argue the company is looking past the day whether search is going to be its main rod duct when it product, to run out of growth and room. ex acts exactly what you would want of companies. the founders take risk. using a small sliver of their cash, they generate an enormous amount of what they can generate in these companies. >> look at a company like g.e., in energy, aerospace, health care. you could make the argument that google is doing effectively the same thing with robotics and internet technology. if you are controlling the robots and they are carrying something for you, it starts to look like similarities with aig. >> it is interesting, because it is not ge that is making this investment. it is a very rich tech individuals. that may say something about
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where we are in society and who is willing to take risks at what point. >> it is interesting you bring up it is not ge. they are going into more internet-based technologies. are these two companies kind of converging a little bit? are we going from industrial to internet and internet to industrial? i wouldn't say it is a direct collision course. it is somewhere. >> how about the military, the federal government contracting part of this equation which has not been until recently part of google's image, per se. >> we have gotten very little out of this transaction. i am surprised it isn't a filing. there is a dod contract. now, google which has had all these issues with the nsa is now a vendor to the government. big dog and wild cat are not the friendliest-looking robots. this is all leading toward sky net. when they achieve consciousness, big trouble. >> they played the terminator 2 language. wild cat runs pretty quickly in
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loops. it is quite interesting to watch. >> you bring up the point about the other businesses trying to look past the shelf life. this weekend, a big story about samsung and the "times" trying to get out of the android trap that long-term is bearish for google. >> samsung was never in the smartphone business, went into it, now, it's the single largest revenue line. could we look at a google five or ten years down the line where robotics is the defining element. these companies have to radically change or they are being made obsolete. you have a five or ten-year horizon where you need to get into a new business. >> always good to see you. ron steinberg joining us. >> closing arguments are expected today in the case against the former s.a.c. capital form manager, michael
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steinberg. cnbc's kate kelly is live at the courthouse in new york with more on that. hi, kate. >> reporter: hey, simon. how are you? right behind me in this courthouse, closing arguments did get underway shortly after 10:00. the government has made the case that michael steinberg, on leave from sac capital, his long-time employer, the hedge fund, traded on insider information on a couple of occasions in the late 2000s. the case the government is making is that steinberg trade based on edgy, proprietary information, in this case on a couple of tech stocks that are at issue. what the defense has tried to do is beat down the credibility of the star witness, a former analyst that worked for steinberg. unclear if they have done so effectively. edgy and proprietary are words that could be used in a coded way. they may not mean nonpublic information, according to the defense. according to the government, it was understood that steinberg,
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the defendant, wanted nonpublic, and, therefore, illegal information. based on the time frame we are seeing, the jury could start deliberating as early as tomorrow, possibly the tail end of today, although probably unlikely. that means, depending on how much dispute there is, you guys, we could see a verdict as early as tomorrow in this landmark case. >> kate, thank you so much. our kate kelly in laurel, manhattan, joining us with more on the steinberg case. a couple of deals this morning giving us some nostalgic. it has been a pretty weak year for mna. get some answers next. mine was earned orbiting the moon in 1971. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection
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and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. a couple of fairly big deals announced today. kind of reminiscent of a merger
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monday. will it carry over into next year. somebody who gets paid to make deals. joining me now is morgan stanley's global head is vice chairman, robert kindler. we do this almost every year. last year, you thought this would be a pretty strong year, m&a wise. >> i did think sitting here last year, it was going to be a great year for m&a. why? it is hard to know. part of it is there have been some uncertainties in the market. the market really ran this year. the market ran but ceos and management really hadn't changed their view of the world. so valuations.
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>> it all comes down to intrinsic value. what it comes down to is what multiple you are really paying and can it acquire and make money on that. the stock just ran this year. >> so, to be fair, 2012, you had an accurate prediction. a lot of people saying it was going to be a good year. you were in the camp of not so good. but this year, hostile bids you also have been right. which is they are not going to be any. they are going away. are they gone? are we never going to see the likes of nasty, hostile fights ever again. >> i think the prediction could end up being right. instead of coming into this year, i thought there would be very few hostile bids. on the hostile side, it is very hard to get a hostile deal done. i think this year, there has been virtually none. if you look back on deals, aer products made a bid for aer gad. when they are hit with an activist, a very difficult position for them.
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>> they said, we will give you a few directorships. >> they were in a weak position because they had a few failed bids. you look at cfo was subject to a hostile bid at $90 a share. prestige brands, $16.50 a share. stocks trading in the 30s. it is hard to do. >> i would think it is hard enough for a ceo apparently to be convinced to do a friendly deal. it is that much harder to do one that is hostile. >> you could do a hostile deal and then even take over some of the board members. what's the history on that? those board members end up voting against the hostile bidder. at the end of the day, it all comes down to what multiple are you paying and what's the intrinsic value? >> the real hostility we have seen is in activism. you have become the marty lipton of the banking side here. you are the banker these
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companies go to when they want to fight and say, no way. why is that? >> look, i have been doing this for 35 years now. i did it in the '80s. i defended companies. i am used to doing it a long time. when these fights happen this year and basically globally. sony, you are third point. >> you won there. you have been involved in i allot of the big ones where we are seeing more settlements. you don't seem to like to go down that road. >> sometimes it makes sense to settle. in fact, this is becoming more and more the case. the fact is that i think you get measured in these things not only on the public ones where we have been really successful but most of what i do never sees the light of day. most of it is really meeting with boards, speaking privately with activists and trying to get the right things done. >> what's going to happen at sony. >> i think sony basically has done what it is going to do. that is been very helpful. the third point deserves credit on showing the underlying val
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yoo y ue of entertainment. they had an investor day, very well-received. >> they don't see subsidiary ipos. >> let's get back to next year. give me your prediction as to what we can expect? not a great year for m&a. they can't seem to get to the confidence level. what do we see going into next year. cross border is going to be very prevalent. you look at deals we worked on. we represented shineway in the smith deal and tokyo electron in doing a deal with applied materials and verizon with vodafone. notable about that, big stock components being issued out of the u.s. in those deals. people didn't think you could do that before. i think we are going to see a lot more cross border deals. if stock prices stay up, we'll
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probably see a lot more of stock deals. people always talk about debt is so cheap. so why won't you do a deal? you actually do have to pay it back eventually. >> it helps when it is 3% as opposed to 8%. >> if you are taking a long-term view, just because debt is cheap, that doesn't mean you could borrow. you have to get back to fundamental borrow. i am hopeful on next year. i would say we should be up 10%, 15%. >> hopefully, you will come back before a year passes and who knows, you might even be right. rob kindler, as always, thank you so much. head of global m&a at morgan stanley. simon, over to you. let's send it back to dominic chew at headquarters. let's keep that activist theme going. the soap opera surrounding italy's biggest telecom italia company, they upped their take
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to 7.8%. there has been a battle between shareholders in how the company is going to run its future strategy. shareholders are going to vote on whether or not to remove the board on friday. spanish firm, telefonica is the company's biggest shareholder will the big apple soon turn into the green apple? a new proposal could completely legalize and tax marijuana in the state of new york. is legalized pat pot in new york a reality. we will talk to one of the co-sponsors of that bill in a few minutes. [woman]ask me...
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let's get to the cme group. rick santelli with the santelli exchange. good morning. >> good morning. i guess the topic should be illusions and i'm not sure exactly if they're good ones, bad ones, not what's behind the mirror, what we're going see when the curtain opens up. but there was an interesting op-ed in financial times by none other than larry summers. almost fed chairman according to many. throw it up on the screen. first, it's not a growth acceleration in the works in the
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u.s. and beyond. there are certainly grounds for optimism. note recent statistics, strong market in the end, at last sharp physically contractions. fears of secular stagnation common at the end of the second world war and proved wrong. na makes sense and the title why stagnation might prove to be new normal and new normal's been around for years and years and years. i talked about new equilibrium. at the end of the day, after world war ii, let me think, we compete now with eurozone, specifically germany, japan think autos, china, were all of the countries like at the end of world war ii? come on. i'm sorry, boy, the world was our oyster at the end of world war ii. the industrial complex was going 5,000 miles an hour. we swiped from planes to cars and washing machines and i don't think the landscape looks
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anything like that now. let's take a bit of info we learned today. thanks for putting points on the numbers. net purchases, october, 40 billion. that was pretty darn good. september 28.5 billion. the problem, year-to-date, .9, .10 of 415 to 420 billion last year. why do i bring it up? who's going to fill the void that the treasury -- excuse me that the fed has because obviously foreign investors have a lot on their minds. think japan, buying everything in sight in their own country. last point i want to make about the illusion, whether it's obamacare the government's going to have under control, september, october, everybody's going to be fine. i think the same thing's going on with the fed. don't worry about it. janet yellen's a great communicator. i don't know. when you bite off too big of a bite and don't have good teeth,
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maybe it doesn't go down exactly right. back to you. >> a lot to chew. tweet time. tech giant google is acquiring engineering company boston dynamics. the resume includes designing research robots for the pentagon. that brings us to the squawk on the tweet. what could google be up to? tweet us at squawkstreet. my customers can shop around-- see who does good work and compare costs. it doesn't usually work that way with health care. but with unitedhealthcare, i get information on quality rated doctors, treatment options and estimates for how much i'll pay. that helps me, and my guys, make better decisions. i don't like guesses with my business, and definitely not with our health. innovations that work for you. that's health in numbers. unitedhealthcare.
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in its eighth robotics acquisition in six months, tech giant google acquiring boston dynamics. the company's resume includes designing research robots like this. this is called the big dog for the pentagon. brings us to the squawk on the tweet. what could google be up to? mike writes, building football players that won't be concussed or a defense for my lovable cowboys. oracle rights, breeding robot dogs to fetch and destroy amazon drones. robotic pony express. interesting that a lot of these technologies may converge in a few years. >> and we will have an unemployment problem.
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that's how they're stacking shelves in warehouses. >> you cannot tlool video enough. i'm not sure how google's trading but the competitors in the space not doing too badly in terms of social. twitter did have a $60 print today. we talked with the analyst who downgraded it to neutral at suntrust. not much effect. >> the multiples that we're talking, out years versus revenues. talking about trading at ten years' worth of sales on 2017. but people love it right now. we'll see how long that lasts. we'll see what the first earnings quarter they report looks like. >> can i mention starwood, having a good day. a call on the lodging stocks today. suggesting on the top stocks you can make 25% to 30% over the next 12 to 18 months. not able to comment yet on
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hilton but hilton also when i last looked having a good day. >> finally you can't talk about the market without talking about exxon. all-time high, going back to our data, back to 1951. hard to get a move on a name this large. market cap 416 billion. but that is -- that's a tear on xom. see you later on. if you're just joining us, what you missed earlier this morning. >> welcome to "squawk on the street." here's what's happened so far. >> there's a balance capacity of the fed and they're running up against that. they don't want a huge balance sheet. they want the balance sheet to return to normal and they do not plan to sell assets. this is why they need to taper and why they should have done it earlier. >> what you actually accomplished here was an ipo and a merger all at once and you get the accounting treatment so that we can write assets down once the market, which is very important. >> if they do not signify a
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taper, all of that could have been for nothing. only thing on the horizon that worries me, it's clear there's no ceiling deal in washington. [ bell ringing ] >> our price target's $50 for the end of '14. we think you get pullback here, for investors to look at again. we've had a tough time paying 300 times ebida right now. >> cocoa prices treating you well or not? >> it's tough. it's going up. demand for chocolate's high. we manage through that. prices this year the same as last year. and so we think we have something for everyone to bring a little cheer. >> the "squawk on the street" countdown to christmas is in full swing. ♪ >> good monday morning, live at post 9 at new york stock exchange with a check on the markets. a couple of rough weeks for the
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market but was getting some back today. dow's up 134 off of the highs. m&a action, upgrades on a lot of dow components, exon mobile, citi group, verizon. lsi, agreed to be acquired by avago technologies. exon is the biggest gainer on the dow. that's up 3% after goldman upgrades the energy giant to buy. firm says it seize more upside for these super majors in the oil sector. road map goes like those for the next hour. stocks kicking off the week in rally mode. look at where you should put your money ahead of the much-anticipated meeting at the fed. >> buzz surrounding google's latest acquisition involving creator of the fastest running robot. will the big dog mean bigger things ahead for google? >> new york state law makes pushing legislation to legalize marijuana in the empire state. we'll talk with one of them. >> the dow's up triple digits,
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after two consecutive weeks of losses. all eyes on the two-day fed meeting tomorrow. chad morganlander joins us and the chief investment strategist for janney and montgomery. there's an interesting note from rbc over the weekend where they see upside risk to their price target for the s&p next year. i wonder if you feel the same way. >> next year will be a muted year. you'll get perhaps a 5% to 7% return on the s&p. keep in mind, the market has been surfing the tsunami of liquidity courtesy of the federal reserve. we'll have to go through the trangs peri transition period. perhaps the taper happens in january. we are maybe you get a 10%, 15% market correction. but really the issue for 2014 for a broader market is going to be you're not going to get the multiple expansion you enjoyed this year. baton has to be passed from the liquidity market driven rally to
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an economic and earnings driven rally. >> yeah. i guess the reason why i ask, there are signs that that may be in place and that if anything, you know, again you can look at the world in 2014 and say, absent volatility, there is -- perhaps it would be ground for similar performance like this year. not that we're going to put in 30% upside but i wonder if people in your position looking skeptically next year are starting to wonder, well, we need to rethink things. >> notice i said 5% to 7% return. but you can see a multiple or a market pulldown in the early part of next year, as the fed starts to taper. you are receiving or getting a modicum of credit creation so that credit deflation area pressure is starting to abate. and you saw that last week when the z1 report came out from the federal reserve where you started to see household credit or mortgage credit on its own expand for the first time since
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2008. >> mark, let's talk about the pivot point of the ten year. what's your target for 2014, and does a decision, a taper this month or even next month, does that allow that to rise in a gradual fashion the way the fed wants? >> for us, we're looking at a ten-year yield in 2014 of about 3.5% before the year escapes us. what we think we'll see is a gradual grind higher in interest rates over the balance of the year which is caused by two things. one is obviously the fed beginning to moderate the amount of bonds it's buying on a monthly basis, if not certainly in december, more likely for us we believe to be march. coupled with the fact that we think what we're going to see is u.s. economy really being poised to accelerate over the course of next year particularly a result of a receding fiscal head wins and better economicfuls and what that will lead to is again ten-year yields grinding higher and ultimately, though i don't think stemming the rally we have in equity prices because it's on
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the back of better economic consequences which should be good for profits. >> it would suggest we've moved from a period of the risk on/risk off high correlation where the macro environment didn't seem strong enough to handing the fed exiting the picture. if you look at prior rallies there's no reason why the fed's tightening cycle would mean the end of the move where we're about to enter the sixth year of the rally. >> agreed. we have a price target of the s&p 500 of about 1920, what we think is going to occur is that beta equity bourses, nonu.s. equities, are going to, we think, be a more rewarding experience for investors are next year, both because valuations are more attractive leading to a better opportunity but as well the upside is rewarded as again these macro economic risks continue to recede and investors buy into this notion that we're in the mid of a synchronized global expansion. >> chad, i'm noticing tech pick for 2014, ibm, which sort of
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makes one thing, gosh, the number of losers out there that are still ripe for bargain hunting is limited, isn't it? >> everyone loves to hate ibm at this point. hey, here's the deal with ibm. you're getting a market -- multiple around 10, 11 times, capital spending has been lackluster for the last three years. trending well below gdp where historically it's been a multiple gdp. if you get a turnaround with capital spending, ibm will be very, very beneficial for them. so our price target's 220 -- >> chad, why is ibm going to benefit from a turnaround in capital spending when disrupted by new players in the space? >> i don't think -- look, kelly, you have had -- im ovibm over t last decade has expanded the revenue line. they've gone through six quarters of declining revenues but we think that ibm, once capital spending starts to kick
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back up, european economy starts to get back into a better situation, that ibm will be a winner over the long run. okay, it doesn't mean they don't have their problems. we do know that. for a value manager like ourselves, ibm has good value. by the way, you're in good hands because ibm, the largest shareholder, is warren buffett. at least you're in good company with this one. >> at least you're buying with the company, with the $50 billion buyback program. thank you for your thought is there's morning. >> thank you. what does a big dog, wildcat, cheetah have in common? the names of robots by boston dynamics. google continues its string of acquisitions with the engineering company whose repertoire designs robots for the pentagon. a talker all morning long. it's our twitter question. what exactly is this company up to? >> you know how they say you can run but you can't hide when it
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comes to google -- >> i don't know if you can run or hide. >> exactly. the robot can go 28 miles per hour. soon you might not be able to do either. it's interesting. google's in driverless cars which are kind of like robots, if you think about it that way. now moving into different types of machines that can do different types of work. we know the mote motorola unit is looking into sensors. came from darpo, a customer of boston dynamics, it's kind of scary. every time siee -- they're looking for john conner and they're going to find him. >> like an ad spps app on crack. >> sensors an important part of the technology. also, boston dynamics used to have a software company the military used to do human
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simulation. look looks video simulation, see how people on street or part of the military operation might react. so, they spun that off but i'm curious how much of the lynn le intellectual property remained. >> i don't know how much you know about the robot ticks but the coding that makes this works how advanced that is. >> i had the lego set as a kid. >> you're steeped in robotics. >> absolutely the other thing that occurs to me, with google glass, the self-driving car, the products they're innovating on make you uncomfortable. there's probably a reason for that, right? >> yeah. on the robotics front, it might have a lot to do with manufacturing also. surely, there's the moon shot possibility and andy ruben is working on far-out ideas they call moon shots. but now that google's trying to do more of the hardware manufacturing and source that in
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the countries where they want to sell product, there's a big incentive for them to figure out how to make machines do the work that humans can do which is not great for the jobs picture but got for costs. >> we'll watch it closely. not just an android company anymore, for sure. >> now android company and android company. >> thanks, jon. next guest hoping you're gearing up for a holiday journey. live interview with the ceo of trip adviser are on the state of travel what it means for the company and consumer. first, rick santelli in the windy city. >> windy city for sure. y many think it's about to end. it's about politics, windy. tom demark, 1980-' 81 computers were allowed on trading floors. sometimes it was demark analytics, a pioneer in technical analysis.
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company exxon mobil. in the s&p 500 energy sector, the best performing stock is refiner tasor. carl, one of the better performers you want to keep an eyre on energy stocks today. >> huge move. thanks so much. it's that time of year, not talking about shopping at the mall. millions are gearing up for holiday travel. simon's here with a special guest. >> carl, it's going to be an exciting type for tripadviser in particular with the holiday season to kick into high gear. additional news that tripadviser added to the nasdaq 100 monday. shares have doubled as you can see over the last year. here in the first on cnbc interview, the president and ceo of tripadviser. welcome to the program. >> thank you very much. >> did you, when you founded the business 13 years ago, did you
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realize then that it would get this big to a 13 billion, 14 billion company? >> that was pretty hard to imagine, and, no, i certainly did not have that level of foresight. we're incredibly grateful for all of the visitors. at this point over 260 million unique visitors a month coming to tripadviser. it's a testament to something we're doing right. >> the big upgrade to the customer experience, of course this year, which is fundamentally changes a lot of thing to you, you went to met ta sent you get the live real-time pricing, no pop-up windows, you're not losing traffic to online travel agencies. how transformative has that been for you as a ceo? >> i mean we think it's a fantastic move for the company and for all of the visitors that company to the site. and that's part of the hallmark of tripadviser being an independent company. it's keeping our eye on things
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that can help improve that user experience. come to the site, find best price for providers for anywhere you want to stay. it's great satisfaction to the consumer and that's what's helped us. >> you mentioned in the course of that as an independent company, you were spun out from expedia. when you made that switch this year, expedia got itself into a lot of trouble because it wasn't bidding properly. what went on there? it lost a quarter of its market cap in two days over the summer. >> expedia's a fantastic company and a tremendous partner of ours. they're back on the train, everything's going well with them at this point. when we look at a small blip you think of it as a small blip things are going quite smoothly now. >> the major advance in terms of mobile this year was in part to be already preloaded on the sang sung galaxy s4.
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are you able as you get people browsing on mobile are they buying on mobile? the conversion rates are low, aren't they? >> conversion rates in general for the tripadviser visitors on the phone are lower than desktop or table. we look at a number of different directions. we want to be wherever the customer's choosing to browse or buy. certainly people are doing a ton of research on the phone. we have over 100 million unique visitors using our phone apps and we're the nonmap in terms of travel downloaded politics we're number one. we have a tremendous amount of traction because it's great for travel planning and great for when you're already in the destination and you're traveling city you look up restaurants, find great things to do close to where you are and that's through the samsung preinstall. preinstalled on the s4 galaxy
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phone or iphone or any other android device. >> steve, i'm curious, as you've got a lot of competition, new entrants into the space, i think of the likes of things happening in terms of restaurant mobile apps, does that start to chip away at your user base? do you view them as competitors or what happens when people access and think about travel and leisure in a dern way? >> well, certainly we have a number of people that have tried to replicate the tripped advise experience but it's really hard to generate as many reviews and as many users contributing to the site as we have and that's a global statement. what we do have competitors in certain countries, by and large with our user base, it's gone beyond what a start-up can now copy. you have other sites that would compete with us in the vacation rental space but again, they have a lot of properties, we
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have over 400,000 vacation rental properties in addition to all of hotels and inns and b&bs and different lodging types that tripadvisor can bring to the equation. >> you had priceline buying kayak do you think we'll see more of that? would you be an acquirer or an acquiree? >> it's hard to say if there would be any large-scale acquisitions. we have a successful history, at least in our view, of acquiring companies and pulling them into the tripadvisor media group. if history's a judge of future behavior expect us to do additional acquisitions as we go forward. >> thank you very much for sparing time to see us. steven kaufer, ceo.
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. take a look at markets here. dow's up 136. off the highs. walk in the door this morning and there are a series of upgrades of dow components, exon mobile up 3%, upgrade of verizon, citi group having an affect on the dow, per se. m&a action, $6 billion, almost $7 billion, and macro indicators, industry production taking out the prerecession high. clearing the decks if you're a fed watcher, a shutdown averted for a couple of years and data
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continues to improve. >> the journal saying the jobs piece, check the box. gdp piece looks better. inflation piece is not there. it has not changed since september when the fed decided stand pat. ten year's moved down and that could be the gold gold did locks sent nair year. >> getting aca enrollment numbers. back to headquarters and check in with bertha cups. >> americans have one more week before they select an insurance plan to get coverage that starts january 1st and they've been doing that in new york. new york state of health out with new numbers this morning. enrollment this month alone in the first 15 months of december has jumped 109% from the end of november. total 95,200 enrolled in the qualified health plans on the exchange, up 37% from last week
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in new york. of course, not going to get numbers for the fed for december. but looking at what we've heard from the states, we are almost at 540,000. we have a graphic on the wall. still well below where the administration thought they would be at this point but we're seeing numbers ramp up quickly here with just 15 days until january 1st coverage set to begin. >> the clock is ticking. speaking of which, a few minutes left to go in europe's trading day. a rally on the other side of the atlantic but worries about france. impact here, stay with us.
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from the families of aig, happy holidays.
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dow's up 138. >> steady gains here in the markets since the rebound from a weak last week. the weakest week for the dow and s&p since august. strong data giving markets a lift and strengthen the energy sector. the dow movers. talking about this all day. exon mobile upgraded over at goldman sachs, inflection point for the super majors but likes exon, it was the only one that receive and upgrade because of valuation. ibm, caterpillar, verizon, and jpmorgan had its price target raised at raymond james to 77, leading bl ining blue chip stoc. strength in oil. oil's up a buck right now. along with utilities, telecom
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and i. t. a look at energy gains as we mentioned. exxon mobil earlier and fmc raised from sell to neutral. another stock receiving an upgrade in the note from goldman. lsi is being acquired for $6.6 billion or 11.15 a share, a lift to other semis but we did see downgrades at oppenheimer as we look at semiconductor index which is among the stronger movers today, too. you can see a gain. a couple of other stocks a boost from analyst upgrades making moves today. moody's raised from outperform. monster, another bullish sign or vote of confidence from rbc which rated as one of its top pick for the year seeing strong sales in convenience stores as well as brazil. so its stock responding, one of the better performers today.
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dow up 141 points. >> strong start to monday. now something to do with how markets are closing in europe. simon hobbs with a look at what's happening there. >> a good day for europe and data's good as well in europe. i'll come back to that in a moment. it's broad-based, telecoms are leading. deutsche telekom on the talk but sprint might buy t mobile usa here in the united states. deutsche telekom up. dom was reporting blackstone's increased its stake to almost 8% in advance of friday's shareholder meeting. the italian ski wear operator successful ipo in milan, surged over 40% of the open. val ewing the stock at $5 billion. the coo told our local staff he's in it for the long term. >> i want to say to my people in the company, we have to do a good job, we have to really work on -- do the best and the
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numbers come. i don't know what's happened today but i want to see what's happening in the next ten years. my vision is long term. >> that was the ceo of moncler. i want to take you back to data. if there's one thing you take away from this report, i hope it is this, remember we had two months where data was soft in europe and we were concerned it might be going back into recession? today's data, a composite purchasing manager's index, serves as manufacturing. overall for europe is higher, 52.1. germany's surging away. a problem with france, second largest economy, indicating a contraction there on that particular pmi reading. >> the spread between the manufacturing pmis and the two is at its widest in some time. 12 percentage points, 57.5 germany's reading. 45.3 for france. my question is this, if the french economy's struggling, the germany property market shows
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signs of overheating, where does that leave the european central bank next year? >> can i correct myself. i said blackstone bought a stake, upped its stake in telecom italian. it is blackrock. >> you're not the first to confuse the two. >> sorry. >> it was a big -- a big -- let's leave it about. >> thank you, simon. we'll figure out what the ecb might do. let's get to rick santelli over in chicago with some more, rick, on technology levels to watch. >> absolutely, kelly. down here, if you find traders they're holding charts. i'd like to welcome our technical champion, tom demark, famous for demark analytics. thanks for taking time today, tom. >> great to be with you, rick. >> all right. listen, you know it not only picking a direction of a market and coming up with a trading strategy. it's also about timing. and you've looked at some historic markets in past and the
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s&ps and the dow and you've come up with interesting findings. share those with the viewers and listeners. >> rick, we've been involved in the industry for over 40 years, close to 45 years, and back in the late 1970s, mid 1980s we started making comparisons between the current sbhashmarke historical markets. the peak, august 25th dow jones peak, we started comparing it with the dow jones average september september 3, 1929, there was trading on saturdays but the market did mimic 1987 decline did mimic 1929 decline. we've kept um comparisons in the background in our research department. we came up with one in 1973-'74 which led to 1975-'76, a comparison almost one for one with 19 -- with 2007-'08 market
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decline and what evolved in 2009 and '10. i think we published october 1st, the first comparison between the dow jones average as it was, as it appeared in the currently versus 1929. as the charts on the screen show you, a sharp rally which began in october of this year which was comparable to something we experienced in 1929. we're not saying the markets are going to be templates of one another but we're looking for something that could approach what happened in 1929 which could possibly terminate with a peak in the middle of january. we've also used some other comparisons to support our view from 2002 to 2007, the dow jones average chart, as you'll -- the s&p chart in this case peaked and that's comparable, on a weekly basis, comparable to what's occurring as well. we've got two warnings that are
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currently obvious to us. one additional one, if you were to look at the peak, january 14th of 2000 and connect that peak with the october 11, 2007 high, it intersected november 29th which is just two weeks ago and on that peak, the market spiked that day. the market was repelled. there's some legitimacy or value in that particular trend line that was drawn off those two prior long-term peaks. they're all converging currently. we've had a formidable opponent in last year and a half, two years the government, the federal reserve. every time we produced 13s, the market has hesitated or we've had pullbacks. every time the market restored or resumed the rally, that was atypical. if you compared our model and applied it to the hang sang or shanghai, they've worked perfectly. what we're seeing currently is
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something that's really unseen in the past is where the u.s. market is being influenced whereas the foreign for east markets are not being, and they're adapting to our models. >> tom, i have to interrupt you here. there's never enough time. i wanted to get to the gold. one second, we're out of time, are you looking to make a bottom or more lows in gold. >> off the high, 1900 plus high that we made back in september 2011, projecting as a low 1180. we go 1186. redefined now, looking for 1155 to possibly 1180. but we're looking for a huge move in gold beginning next year. i think bottom -- >> to the upside. >> what? >> i got you. listen, tom, we will invite you back to see how that gold call develops. gold always excite in first quarter of any new year. thanks for taking time today. back you pow. >> very nice, rick.
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let's get over to dominic chu with a market flash. >> looking at a hike. archer daniels midland, up 2.5 after the board of directors authorized a 26% increase in the quarterly dividend to 24 cents a share. it's going to buy back 18 million shares of stock from the public by the end of next year to offset effects of stock tied to compensation and benefit plans. those shares, adm, up to session highs. >> a story about stock buybacks the front page of "the washington post." . >> to do it to offset delusion of stock options, but it sound likes that may be what it is, which gets back to the point is that the best way for a company to use its cash? >> a lot of critics regarding that point. they say new york is the city that never sleeps. maybe this will help. lawmakers in new york pushing a bill that would tax and legalize marijuana. we'll talk to a lawmaker when
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or other types of cancer have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. make the most of every moment. ask your dermatologist about humira, today. clearer skin is possible. >> coming up at the top of the hour, hitter's week on "the halftime report." some of wall street's best and brighters will be here to unveil their 2014 play books. today, we kick it off, tom barrack and dan niles straight ahead at the top of the hour. >> looking forward.
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>> colorado, washington, could new york be the next state to go up in smoke and legalize marijuana? officials introduced the marijuana regulation and taxation act, treating marijuana along lines to similar to new york's system of treating alcohol. new york state assembly woman crystal peebles-stokes joining us on the cnbc news line. thanks forring here. >> you're very welcome. thanks for having me today. >> how far do you think this measure's likely to go. >> how much support do you have? what will this mean. >> we've had several colleagues to call to be ask to be co-sponsors on the bill. i think it means a tremendous amount for the state of new york. it will, i think, dwrood reve a revenue, decrease the cost of incarcerating people and the
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cost on the courts and the cost of spending on social services. >> don't you believe it you legalize marijuana people will kind of ramp up to the next available or illicit drug for whatever reason fits the bill of what they're after? >> i think people are already ramped up. i think for some reason americans have a propensity to alter the state of their minds and do it on a regular basis. this is something that we cannot control. we've been fighting the war for last almost 50 years and we've lost. not only are we losing resources but we're losing people and we're losing people's lives. losing generations of families, trying to fight a war that we've lost already. it's time to acknowledge the fact that we've lost it and move to end discriminating drug policies and turn around the financial conditions of a lot of states particularly new york. >> you deal with the same challenges even the states that have legalized it are dealing with, how do you tax it efficiently?
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how you regulate the supply? how do you keep it out of the hands of minors? how do you answer those questions? >> we want to propose that we tax it one time, that's an excise tax. if municipalities in the state choose to have legalized marijuana sold in their communities they can tax another 5%, which will help them provide services to constituencieses. how do you keep it out of the hands of people under 18? the same way you keep cigarettes out of their hands, pass the laws, try to enforce them, work with parents and community to make sure young people don't do these things you'd like them not to do. >> cigarettes sold via a vendor who has to get a license to sell cigarettes. it more complicated than legal pot across the board would be where deals are taking place on the street. >> no, these deals would not take place on the street any longer. much like they -- that changed under prohibition of alcohol, it will change under eliminating
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prohibition of marijuana as well. people have to go to a regulated site where they can purchase it and they can use it, will not be able to smoke it on the street, no matter how old they are. it's something you have to use in the privacy of your home and you have to be over 18. >> finally, where do you face the most resistance? >> well, we're just starting this process. this is literally just the very beginning of this. i think we're going to -- new york, as you know, has introduced municipal marijuana laws, we've had them in place for a while and they've not been approved. we have decriminalization laws in place that we've been trying to move forward in new york as well, and either one of those, both of which i support, neither one of those have moved. this is ramping up the discussion. this needs to move forward. the war on drugs has been lost. communities that have suffered as a result of this war have been almost decimated and it's time to stop it.
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we want to ramp up the conversation and we think this proposal does that. >> crystal peoples-stokes. thank you explaining your effort. >> have a great day. merry christmas. >> a market flash here. >> carl, while the broader market is surging here, there are losers out there. steelmaker, the giant is down 2% following downgrade. analysts are worried about the risk of declining iron ore prices, though shares going down in this market. >> we are in a rally mode here. the dow trading up 142 points off of the highs. but getting back some of the losses over the past week. on this important week for the economy, where do stocks go from here? the one and only art cashin in a moment. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong,
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plus, get free delivery and sleep train's 100-day low price guarantee. but hurry, sleep train's interest-free for 3 event ends sunday! superior service, best selection, lowest price, guaranteed! ♪ sleep train ♪ your ticket to a better night's sleep ♪ a lot of green arrows all morning long. dow found its way to 15900. art cashin joins us. great to have you. you said for weeks the pivot is 285, maybe a range just above that, and that's held true, almost every day, right? >> it is. we dipped below 2.85 and like a blind squirrel finding an acorn, we were heavily oversold, so you
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had to have the condition there, and that got us this nice rally. creeping up above 2.85 for the viewers, you've got to think of a little narrow range. at 2.85 and below it's bullish, brings in buyers. at 2.9, it is negative and it will bring in sellers. as you vase late within the range, expect to see force on the market. >> do you think it's all about the fed. >> i think it is. a great deal of debate. i would say the majority, at least of the people i talked to down here, are expecting commentary about tapering but not implementation quite yet that they're going to use the press conference, let's not forget, yellen hasn't been confirmed yet. it's hard to hand off the ball to somebody who doesn't have a uniform. >> true. >> we're going to wait on that.
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i think that might give you a bit of a bounce and it might begin the santa claus rally, last five days -- last eight days a year. >> historically, december's gains are back-end loaded we could use it at this point, right. >> december has been weak. >> we certainly can. but that's not 100% unusual, carl. it tends to be flattish to occasionally down which gives you running room for the head start into the santa claus rally. >> how much do managers want to show that they own a piece of this at year-end and how much does that carry over into the first week or two of the new year? >> what i'm hearing on the circuit, the wall street watering holes, the people who are behind, and need to get into performance have isolated it to the high beta names. and he they've got that little line on the side and keep buying and repeating and buying options on those things with some velocity that have been moving up.
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that, i think, is why things like the advance/decline are not broad enough for a big rally like this. people are concentrating. >> great point. does this explain what's happening with twitter? one of the napes -- what did we hit $60 mark? incredible when people didn't necessarily think that was one to pop. >> yeah, no. i think they're into potentially dangerous game of musical chairs here. if the music stops, you'll be the last one with the hot tomato, to mix metaphors. >> what degree do you have the vix in the sight of your eyesig eyesight? >> i've never been a big vix fan. you know i know that some of the option guys parse the nuisances, minor ticks here and there, but you know, i look for other things. i look for, you know, flights to safety in the currencies and/or bonds, et cetera, rather than the vix. >> just a final one i don't know if you heard tom demark talking
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to rick santelli and he was saying that he looks at the charts and starting to line up this sharp upward move with e equities, technically speaking guys are talking about the same kind of thing or whether or not that relevance has diminished because there are other forces driving this market. >> tom is an excellent technician, highly respected all around the streeting for decades actually. but that having been said, there are people around trying to force fit some overlays of the 1929 chart on the action here. you can make almost anything fit something else. you have to be careful. history does repeat itself. we walked through the same trapped doors time and time again. i don't think you have that long a predictive nature. bears watch bug it doesn't mean
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it's fate. it may impell you, it does not compel you. >> art, thanks for stopping by. art cashin. >> tweet time. eighth robotic acquisition in six months, google acquiring boston dynamics,maker of the robots there, the resume includes signing research robots to the pentagon. the squawk on the tweet. what could google be up to? stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. but with less energy, moodiness, and a low sex drive,y first. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men.
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welcome back. amazon wants you to buy a kindle fire tablet, it's now let you pay in installments. under a new plan, amazon will let you pay for a kindle fire in four separate payments over nine months. the kindle fire can run you up to 379. perhaps easier on some to split up the payments but we're into the talking about cars or computers the old 1,000, 2,000 machines. >> true. says a lot about the economy and consumer if you have to finance a purchase like that. we'll see if it drives sales. meantime in the eighth robotic acquisition in last six
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months google is acquiring boston dynamic which makes this. designs research rerobots for the pentagon what happen could google be up to? robotic military olympics summer or winter. glo glo google will map out where cars can't go. forget driverless cars. driverless 18-wheelers a national train without track system. >> rick, i like that one. >> innovation right there. >> deep thoughts to end the hour. >> the stock price, continues to hover above $1,000. i've seen price targets for $1313 on google. as people think a lot of the new technologies are eventual gi ly accretive to earnings. >> one or two examples of companies doing splits here even in the case of mastercard, 10
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for 1. most happy with the high ticket price. >> updade gradgrades. goldman taking exon to a buy. evercore upping citi. we asked cramer in the 9:00 a.m. hour, what's with the upgrades on monday? brokers and investment firms and banks want to do no harm toward the end of the year. >> window dressing. >> could be window dressing. exxon move hard to move 4 billion name 3% on one call. goldman's call might put it in contention for the most influential upgrade of the year. >> the stock chart's amazing year-to-date as well. speaking of grades a couple of downgrades to twitter. we watched as it hit that $60 mark earlier this morning. both suntrust, you talked to him, wells fargo coming out, underperformed where they think the company has now. >> yeah. 40% run in just two weeks as the
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analyst noted on little news. we'll see as a public company which will tell us where growth trends are for twitter. incredible move. scott wapner on this monday and "the halftime". >> guys, thanks so much. what we're following today. halftime hitters, some of the best and brightest investors with us all week to roll out their 2014 play books. today, kick things off with deepak naruula. after hitting new highs last week, wery are two analysts jumping ship on twitter? a strong starter to stocks in a week where the stakes could not be higher. will the fed taper? if so, what will it mean to the rally? will it end or extend over the final ten trading days of 2013? a new poll

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