tv Squawk on the Street CNBC November 26, 2014 9:00am-11:01am EST
consumer is one of the parts of the area where you didn't really participate. >> okay. thank you. >> thank you. >> happy thanksgiving. happy thanksgiving everyone. we will be here on friday morning for the black friday shopping spree. in the meantime "squawk on the street" begins right now. ♪ good wednesday morning. welcome to "squawk on the street." on carl quintanilla with david faber, sara eisen, simon hobbs. cramer getting an early start on holiday as the premarket is responding to a generally disappointing round of econ data from cure durables to claims, not as strong as expected. the ten year has crept down to 2.24, the lowest since october, oil also in focus, down almost below 74. opec meets tomorrow. our road map begins with data. among the seven data sets out today, the s&p in position to
regain intraday high set yesterday. >> hewlett-packard shares are a bit lower on the premarket after quarterly revenues below the street's expectations. an interview with meg whitman a few moments from now. >> airlines are canceling hundreds of flights due to the weather in the northeast. all the latest advisories. >> opec ministers have arrived in europe for tomorrow's summit meeting. find out if there will be supply cuts on oil soon. >> first up, a deluge of economic data, jobless claims jumped last week, durable goods orders, personal income, consumer spending rose last month not as much as expected and waiting for chicago pmi and consumer sent mn. new and pending home sales datap one day after the s&p set a record intraday high but closed lower. shares of hp following after quarterly revenues missed for example, though earnings were in line. david's exclusive with meg whitman in a few moments.
sara and i were talking before the show, anything that beat, headline durables was higher but the internals no good, core capex and the biggest rise, weekly rise, for claims in three months. >> yeah you don't want to see that initial jobless claims that go over 300,000. we haven't seen that since early september. if you smooth it out and look at the four-week moving average you still see this improvement in the labor force. it's worth watching going forward, but sure, it was a rio of misses. on the headline numbers, personal income and spending, durable goods, defense spending, the reason for the tick up and initial jobless claims coming off of that amazingly good gdp number, surprisingly economists. 3.9%. >> that's surely the bigger picture, huge momentum in the economy. here you may miss by 10, 15,000 or whatever, but that is the bigger picture that the economy has phenomenal momentum. incidentally, we have had a another member of the ecb coming out suggesting that there could be sovereign debt purchases in europe in the first quarter.
it's one reason why probably yield on treasuries are under pressure again today. the germans managed to auction debt at a record low. not surprisingly as they will buy that debt in proportion to the size of the economy. that's a lot of boons that will get bought. >> even uk yields are lower this morning. >> absolutely. >> oil, we said below 74. actually 73 and change. this notion that he peck is in turmoil, can venezuela convince russia to coordinate even though they're not a member. the next 24 hours will be interesting. >> the russians said no. he arrived yesterday and pay peered to walk away. >> we'll see what the outcome is tomorrow. >> whether they're real cuts. they need to take about a million barrels a day off the table. they could promise that. will they do it? they're very split. >> the backdrop here is that slide, double digit slide. look at brent, peaked at 115 this year. prices are down 30%. so we will he see what pain threshold is. the swing factor has to be saudi arabia, right. >> which officially hasn't said
anything yuts bet but indicatioe they aren't up for it. >> the ramifications, remember venezuela and petro bass having its own set of problems and what that means. russia the currency down, what is it down? 30%. >> record low. >> yeah. that currency has been imploding. it's the outflows and also the fall in oil prices. >> obviously such an important part of that economy not to mention iran. so many different geopolitical levers that potentially get pulled as a result of the fall in price, not to mention the disclolations economically. it will be interesting to watch and see where we bottom if we bottom. >> how the pole ticks play out. a lot say this was the culmination of opec's influence on the markets we'll see if they can move it with a cut tomorrow. >> hewlett-packard, which reported earnings after the bell yesterday. 1.06 a share, nongap earnings did meet expectations for its fiscal fourth quarter of the
year as we noted earlier, revenues a bit light which did seem to contribute a slight sell-off in the stock. call it 1 to 2% after the market closed yesterday. of course we'll see how the stock opens about 26 minutes from now. joining me now in a cnbc exclusive interview, is hewlett-packard chairman and ceo meg bwhitman. good to have you every quarter. thank you for being with us. >> well, thank you for having me. good morning. >> i was looking at the analyst notes this morning, sort of summing up the quarter. one of them said luke warm. didn't have that spark of a great quarter nors the drama of something that might have been a particularly bad quarter. do you agree? >> well well, i think it was a good quarter for hewlett-packard. revenues were down slightly but we saw for the first time in many years operating market expansion in every single business and that hasn't happened since early 2011. so what you can see is that our costs discipline is in place and we're excited about the future because we have the best
innovation engine that we have had in many years, perhaps a decade at hp. so good quarter and now we're looking forward to '15. >> right. of course '15 is going to be a monumental year for the company because you're going to be splitting hewlett-packard in two, something that will take place let's call it october or so of next year. it's been about six weeks since you first announced the intent to split into two companies, two fortune 50 companies. meg, you mentioned margins going up and they did significantly. can you continue to increase that and what about costs that can keep coming out of this company as a result of the split? >> yeah. well, our objective for hp in 2015 is to make sure that we hit our numbers and we deliver what we told the street we would deliver because that's the best way to get these two companies off on their own good footing. so you -- in the separation, you can imagine, we have a small number of people dedicated to the separation, but 99% of the
folks at the company are all about delivering '15. we're about profitable growth. we're about introducing all the new innovation to our customers and partners. and boy, there's a couple areas i'm really excited about, particularly our enterprise group, our new line of industry standard servers and high performance compute. we're excited about ink in the office and office jet pro x. we have a lot of good things coming. >> right. now, you know, back to this idea of costs. since i think it was 2012 when you first announced cutbacks in employees or layoffs essentially, 27,000 then moved up to as much as 41,000 and then in october another 14,000. so 55,000 job cuts overall. is that going to be enough? is that where the margin improvement really has come from? >> it's across the board, david. certainly we are managing our labor costs effectively, but it is in supply chain. it's in global real estate.
every single thing that we do, we've looked at and said, how can we do this more effectively so we can have a cost structure that allows us to provide products to customers at better prices. in this new world order there is a new style of business going on out there. it's very fast. you have to be remarkably cost competitive. so every cost matters. and one of the really interesting things about separating this company is we get a chance to clean sheet two fortune 50 companies that no one ever gets a chance to do. so we look at every line item and ask that question that you wish you could always answer in business, which is if i knew what i knew now, how would i set up these two companies? we have an opportunity not only to ask that question but to actually answer it. i think both of these companies will be leaner and more cost effective. there's more we can do in technology. think about this. we get to clean sheet two new technology operations for both companies. our fundamental i.t. is based on
a manufacturing system because we used to be a manufacturer. it's part and skew basedp we don't have to do it that way anymore and we can really just build the entire new style of i.t. for both these companies. so those are the kinds of things that are going to make us more efficient and effective for the next decade. >> you know, meg, on this notion of innovation and some of the things you're discussing as benefits from the upcoming split, i did want to get your reaction to one of your competitors wrote yesterday in the "wall street journal," michael dell, in an editorial he had yesterday. in which he stated, along with a number of other thoughts, that major players like ibm and hewlett-packard are selling off and splitting up. huge disruption at a time when long-term innovation and customer focus have never been more critical. such moves may boost share values in the short term, but too often, at the expense of real innovation. your response? >> so i would say it's quite the opposite at hp. our innovation engine is the best that it has been in a decade and frankly, separating
these two companies will allow each company to focus on the innovation that is most important to their company within an organization. printing and pcs, a third of their business is to consumers through best buy and major retailers across the world and major websites and they're now going to be deeply focused on what's the innovation like immersive computing like 3d printing, while on the data center side we are all over the software defined data center, what will help cios for businesses of any size reduce costs, become more agile and be better able to service their lines of business. so i would argue that focusing is going to lead to even more on target innovation for those customers. so we think it's a big benefit. and as far as disruption, i am really proud of the hewlett-packard organization. we've got people focused on the separation and everyone else understands that they've got a day job that is going to help set this company up if we do it well. so we -- there was no disruption
at all in the fourth quarter. people were not hanging around the water cooler. they were out in front of customers explaining the separation and explaining why we thought this was going to be an added advantage for customers and partners. so i think there won't be any disruption here and we're really excited about the future and so are the employees, which is great fun. >> on the -- again, on the split itself, a number of analysts and those that follow the company to have time to digest and ask their questions, i want to ask one, evercorp, a note they wrote about a month or so ago when it comes to the split, they cannot believe that hewlett-packard post-split could -- kbts help but believe that hewlett-packard post-split could face at least a few percentage points of revenue risk from loss cross sell xanl and enterprise hardware risk 1.4% margin head wind once no longer getting the pc leverage. going to this point of disruption and potential drawbacks in some way to your ability to buy more, can you
address that? >> sure. one of the questions i get asked all the time is what about the supply chain leverage, because pcs and servers we buy memories and chips and there is leverage to being a big purchaser of those commodities. so we will have a supply chain agreement between hewlett-packard enterprise and hp ink to make sure we don't lose any buying leverage with some of our biggest partners. and then there may be sometimes, with certain venders, where it's better to be smaller and more nimble so we can buy more on the spot market and take advantage of deals that they have to offer that suspect tied up in an enormous purchasing agreement with some of our big partners. we're going to have a supply chain agreement and we'll also have the flexibility to maneuver more if we need to and it's advantageous to both companies. >> personal systems group had a strong quarter. adding to what had been significant gains, particularly in the commercial market, although the windows xp trend is starting to run off a little bit, that transition.
are you expecting to see the consumer come around when it comes to actually buying pcs? >> we are seeing real life in the consumer segment. commercial was the first to come back, as you point out, on the xp migration. but we do expect the consumer now to be strong. we saw pretty strong results from the consumer in the fourth quarter and again, i think it's a refresh cycle. what drove the commercial side was okay, time to upgrade xp. we haven't upgraded in a while, and now you're seeing the consumer start the same thing. so listen, we believe that segment will be in a slow decline over time, but we ought to be able to gain market share as that industry consolidates. the outlook for the pc business is pretty good as we go into '15 and '16. >> do you have an outlook for the u.s. dollar? i ask that because, of course, you did face currency head winds. we would expect many multinationals will face the same kind of pressures not just from the currency but your ability to compete against domestic competitors in some
markets, printing, for example, is facing some price competition from japan. will that continue in '15? >> yes. we think it will. so what we told the market yesterday and when we afownesed the separation that we thought revenue growth in 2015 would be about flat. if it was not for the currency headwinds we were facing we thought we would grow about 2%, about where we thought we would be. but the currency has moved at lightning speed in just the last quarter. and we hedge, we do a lot of things, but when the currency moves that fast, there's not that much we can do. and then on the other side, of course, you know, the japanese competitors have the advantage of a weakened yen so they can price aggressively and we are seeing some of that. that said, we're sticking to our guidance. we think we can deliver '15 but it would be better if the -- if we weren't facing the currency head winds across the board no question about it. it's to the just us. it is most american companies. >> will you choose to compete on price where you have to or
willing to crede it? >> so we are really focused on profitable growth. we look at three major metrics. what's the revenue growth, what's the profitability of that revenue growth, and are we gaining or holding share. when we do all three of those, we call it, you know, we hit the trifecta. and so it's a balance. but we're very, very focused on profitable growth. share for share sake or revenue growth at losing margins it's not a winning strategy for this company. so profitable growth and boy, we were able to do that in many quarters last year and pcs were one of those. >> right. company ends the fiscal year with $5.9 billion in cash, leading some to speculate well, you know, maybe they're going to start to think about m&a again. is that something you can think about prior to the split or should those who believe that there will be mergers and acquisitions in the future for hp, enterprise or inc only after the split? >> depending on what the opportunity is we might do
something this year in 2015 to set both companies up, but, you know, deals have their own timetable and at one point we have to actually make sure that we can chose the books. we have a trial close for three months before we actually separate. so there will be a moratorium on acquisitions at some point during '15 but we have time now and if the right target comes along and it makes sense for shareholders we'll be very disciplined financially, returns based. but if it furtherers the agendas of one of the two companies we'll take a look at it. >> that company was not emc, was it? >> don't comment on rumors and speculation. what i will say is this industry is undergoing some of the biggest changes that i think most of us have seen in our career. and so you have to be nimble, you have to be fleet afoot and you have to be able to move when it's required. >> speaking of careers, yours once included politics, of course, having run for governor. i notice that your fellow
compatriot in your state, carley fee rene no, may be considering running for president, meg. any advice to give? >> carley doesn't need advice for me. she ran for senate in california. she's a terribly accomplished woman and, you know, listen i have a lot of respect for people who want to run for public office until your name is on the ballot you don't understand what it's about and it's a real sacrifice, a real honor, a real joy, but i'm in favor of anyone who has the appetite to serve this country or their state or local government, people should go and do it because we need great leaders. >> all right. meg whitman, as always appreciate your time. thank you. >> thank you. >> meg whitman, chairman and ceo of hewlett-packard. >> what do you think? >> what do i think? >> i mean stock wise, the quarter sort of not going to move anybody one way or the other. guidance was a bit -- you know, when you take that high end of the guidance and lower end, some
saying well moving in into next year they sort of lowered it a bit. currency head winds something our colleague sara talks about a great deal is going to figure prominently into hewlett-packard i think, carl, and so many others. something we have to start to get used to here with this violent move in the dollar and, of course, the split is the big thing for hewlett-packard. we can sit and talk all we want about flat revenues which have been the case for many years now and lack of revenue growth but that's what investors have focused on. >> our surprised review of the sprout, one of their desk tops, "usa today" calling it cool and promising. to quote ed baig, potentially the most exciting change to come to desk top computing in a very long time. hp. >> do people want desk top computers i guess? that was one of your questions. are the consumers going to be on board. >> she believes consumer demand is coming back, but if you heard the long-term trend obviously is not necessarily a positive or up on. >> still returning $5 billion of cash to shareholders next year, 7%, not insignificant.
>> a free cash flow they've said they will devote at least 50% of what they generate to dividends and share repurchases. >> when we come back, thanksgiving travel expected to be the busiest in seven years but stormy weather ahead, altering flight plans. the average arrival delay of laguardia is about three hours right now. we'll get a report from o'hare in a minute. jim o'neill former chairman of goldman sachs asset management with his take on the global investment landscape. where the macro data not tilting in the bulls' favor. a lot more "squawk on the street" from post nine at the nyse in a minute. zapped it, right to our house. and that's how they got it here. so, santa has a transporter? for the big stuff ...
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welcome back. i'm eamon javers in washington where the ep has announced proposed new rules on ground level ozone, a long awaited new leg glation. the epa saying the standard will be 65 to 70 parts per billion for ground level ozone, big implications now for power plant, coal industry and industry groups have been fighting this regulation for a long time. critics saying it could be one of the most costly regulations in history. the obama administration has been weighing this for years now, and it's a long-awaited decision and the news is out, 65 to 70 parts per billion the new proposed standard from the epa. >> thanks very much. we'll keep an eye on the shares
after the open. thanksgiving about 46 million people will travel 50 miles or more from home. that's according to aaa and that's the most since 2007. but stormy weather already causing flight cancellations across the country. phil lebeau is at chicago's o'hare airport for a look at a the holiday travel landscape. for the airliners how bad is it? >> not that bad. we expect it to get worse as the day goes on. here at o'hare we checked at the board just a few minutes ago. a few cancellations, mainly to the east coast. security line is moving along well but it will be a messy thanksgiving particularly for several destinations on the east coast. we're talking washington, philly, new york, newark, maybe up into boston as well. flightaware.com says we can expect about 262 cancellations so far. that number should rise a little bit as we go throughout the day but the real problem, delays. thousands of flights will be delayed, primarily your regional flights, smaller destinations, smaller planes, the delays we're
seeing right now. when you look at for the airlines on the east coast, people are saying, what happens if i have to rebook my flight? three airlines so far, we probably will see more, have said we're going to be waiving rebooking fees because of the storm on the east coast. two charts i want to show you that really spell out why we're in the sweet spot of the year for the airlines. first of all, when you look at the airline index relative to the dow transports or dow jones industrial average from november 15th to the end of the year, when you looked at the data over the last 20 years, no comparison at all, coming off a sell-off which we usually see in the beginning of the fall, maybe the beginning of winter, we start to see the airline stocks rally from there and that's what we're seeing right now. also i get his question a lot, what's going on with airfares relative to jet fuel. if jet fuel is down shouldn't airfares be down? they trade in tandem. in fact we had this data tracked over the last 10, 15 years, yeah, there is a spike of about 15 years ago, but generally speaking, you will see airfares and jet fuel trade in tandem.
airfares this year, they're up only about 1% even as jet fuel has pulled back. finally the stock of the day, american airlines. now it's up 75% year to date. why is american in focus this thanksgiving weekend? historically, american has not flexed its schedule on sunday as some of the other carriers have done. but this year, american is flexing its schedule. it's also, you know, adding more flights that will bring in more revenue, and it's also bringing it down the number of seats that will be available for frequent fliers. look for the revenue numbers to be rather strong this year for american. guys, back to you. >> all right. phil, thanks so much. our phil lebeau. we'll get the opening bell in a couple minutes. female announcer: through thanksgiving weekend at sleep train,
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energy stocks were a big loser yesterday, down 1.6% ahead of the official start of tomorrow's opec meeting. can they cut production? steve sedgwick is live in vienna. do you think opec will cut production significantly tomorrow? >> simon, i -- no. no, i don't think. i think they're very much in plan b territory and i think that would come as a shock to
many. they would have liked to cut production but aren't going to do it on their own. the russians are in town with the mexicans. they're not opec members, the russians, mexicans and opec that is over 40 odd million barrels a day, half of global production. russians came and went and promised nothing. the mexicans as well. the opec members were being asked to do all the heavy lifting. they're not prepared do that and lose market share by cutting back the production with everybody else continuing production. in shale, domestic in the u.s. is growing as well. we're very much in plan b territory. i think the statement is going to be along the lines of the following, we will have close adherens to our 30 million barrels a day cap and we will try to be better at policing that because, of course, they cheat quite often and go 31 million a day. they will try to adhere to that and monitor the markets and talk tough. in terms of cutting they don't want to do it on their own. plan b is not price, it's the fight on market share. back to you. >> steve sedgwick in vienna.
in the meantime opening bell about to ring at the exchange. a look at the s&p at the top of your screen. at the big board, the 88th annual macy's thanksgiving day parade, that is santa claus. this year sandra lee at the podium. we'll speak with the executive producer of the parade in few moments. over at the nasdaq, adma buy logics. >> i don't know -- >> more exciting for santa or miss usa. >> yeah. >> down on the floor. >> looking at the ball kofi a little more. >> -- balcony a little more. >> good combo. >> we'll keep a close eye on the names we mentioned. john deere in focus, 1.83, does beat 1.57, revenue ahead but warning on sales for 2015. sees income of $1.9 billion. that implies 535 to 550, street
at 634, dramatic miss if that happens. 20% decline in farm sales as these farmers and their incomes -- >> it's corn and soybean. the prices have fallen over the last two years. you saw it with adco when they reported recently. i don't think there's any surprise they're down. >> depend on the buyback and how they're able to massage the eps next year. >> the question is, is it one for the deep value players the hedge fund long owns to be looking at this point because deer has had a rough year on the fact that the commodity price have been down. we spoke to the ceo and wasn't willing to call a bottom on the prices or farmers income. he has had to lay off and right size production as they adjust. it is a highly cyclical one agriculture machinery. look at a deer versus a cat it ter pilar something "the wall street journal" did to show
caterpillar in the same sort of business, not yag, has been doing better on the rebound. >> going to get some love as jeffreys says that pfizer the most likely target for pfizer. >> there is still this view that it pfizer, of course, having failed to win astrazeneca, as i reported they were talking to activist before they chose to go after allergen, signing up a deal last week. this continued belief that there is a desire on the part of pfizer to do a deal. i think that's probably fair to say. what it will be is very much unclear and whether mylan makes sense, also something of a stretch in some ways. but there will be the speculation. always interesting when analysts decide to weigh in with their take on speculative names. >> the wildcard is still glaxo partly because it's so big it could actually circumvent the new treasury rules on the tax inversions. >> right. >> in other words you would be able to -- >> right. anything above -- exactly. a merger of equal so to speak
cross boarder is going to give you a lower tax rate conceivably if it's with a glaxo. mylan is in the midst of inverting with the abbott laboratories, abbott unit that they're merging with and then going to end up -- i forget which country it is. but the inversion rule changes by treasury definitely, definitely stopped pfizer to a certain extent from its goals of being able to find an acquisition partner it could use as an inversion. >> needs to find a bigger one? >> potentially if it chooses to go that route. we'll see. you know, actyvis is an inversion, one day you can imagine actyvis and pfizer. they plan years ahead. these things don't happen overnight. >> they went through the whole deal and shy rebuffed them. a huge amount of money and time wasted. >> advisory did that. >> forgive me. >> diamond offshore rig, chesapeake, and so forth, noble,
neighbors, all of them 3% lower as crude now is below $74 a barrel. >> 73.53. >> yeah. >> striking what's happening here. in advance of the opec meeting. dreamworks will get some attention up 4% as morgan stanley takes it to an overweight. argues that they're going to better monetizep ip, some of the film risk out of the company, co costs, discipline after the hasbro deal did not happen. >> yeah. a series of rumors. i wasn't able to dig in on hasbro so i don't have a lot of background to provide as to how serious it really became. that was reporting of others. but that stock has been whipsawed. it's a dangerous name to be around given the rumors although they've seen to run the course. after softbank and hasbro where will you go next, those were not what you would have anticipated as potential candidates to acquire it. >> should we look at the ten year e one more time? 2.24 after all that data this
morning no good. as santelli pointed out yesterday we hadn't closed below 2.3 since october 22nd and then today's numbers came out and we fell below that. >> a story of the year, the persistent strength in bid for u.s. treasuries, relative value they have against some of the other bonds all over the world. it's something we talked about with jeffrey gun lack and he said they look steep if you look at the spanish ten year. insatiable demand for u.s. debt whether coming from overseas or just a sign of the persistently weak disappointing economy with the strength in the u.s. >> or sitting in a currency you know you will decline in value. if you're european what do you want to peg your money to? the dollar because it's going to rise relative to your own currency or japan at a time when you are churning this huge amount of cheap cash flow, a currency trade gone on acceleration. >> a lot of people saying now the dollar is coming off from a four-year high, interesting to
watch given the ripple effects it's had in the treasury and equity market. this requested that a strong dollar is a reslapg the landscape for asset prices for companies we talked about it with hp, toward the end of this year and into next year, pretty much the consensus trade and as gunlack said sometimes the consensus is right. >> we've seen that in the data. >> where did he say the yen and euro going to? >> $200 yen in the next few years. significantly weaker yen right now. he said the euro could go to parody in the next six months. not necessarily because of ecb qe but just on this idea that something has to give. the weakness in europe so deep rooted and they have not fixed some of the big problems, the structural issues that separate -- >> a lot of people called -- >> planning his paris vacation right now. >> italy last, but i'll go back. i was thinking -- wow. i'll just eat my way through europe. >> how about shop. >> excuse me. >> shop too. >> i don't do the shopping. i do the eating. let's talk a bit about
hewlett-packard shares are actually up. this does seem to happen often. we're down about 1 to 2% after market, up not much at all after many ways a luke warm quarter. one bright spot was the personal systems group where they saw computers up. that along with print will be hp inc when the company does split into two, something that is under way right now. they're going to have at one point about 450 people solely dedicated within the company to focusing on that split. many other consultants will be helping them advise on it. they are at full board having spoken not just to meg whitman on the show but yesterday in terms of focusing on that split. you know you wonder, i don't know, lower gasoline prices maybe? give people some more money and they buy a computer. you might ask that doesn't necessarily make sense but meg whitman did say they are starting to see signs of strength in the consumer pc market. >> we are seeing real life in the consumer segment. commercial is the first to come
back as you point out on the xp migration. but we do expect the consumer now to be strong. we saw pretty strong results from the consumer in the fourth quarter and it's a refresh cycle. what drove the commercial side was time to upgrade xp. we haven't upgraded in a while and seeing the consumer start the same thing. we believe that segment will be in a slow decline over time, but we ought to be able to gain market share as that industry consolidates. the outlook for the pc business is good as we go into '15 and '1. >> that move up in the dollar is hurting them and in printing they were down 5% revenue year over year facing price competition in japan. >> with all that flat on the dow, mary thompson on the floor for us. >> you know early gains have faded quickly and the reason we're seeing a pullback in energy stocks in large part because of the decline in energy prices right now. so that's going to be a focus one day after the dow transports
managed to hit a record high yesterday, though, the dow and s&p falling slightly at the end of the session. interesting to note that if the dow finishes lower again today that would be the first back-to-back declines for the dow since october 16th. we've had as we all know a strong move in the market. we'll see what today brings. as i mentioned in the wake of the data mixed weaker data that we received earlier today. the focus is on oil prices and, of course, the conclusion of the opec meeting in vee yen na tomorrow when it's expected 2340 no production cuts will be agreed upon. what i want to focus on are the drillers, seadrill reported weaker than expected earnings and suspending its dividend as well because of falling oil prices. take a look at its shares, down 14.5% right now. and this has had a ripple effect through the rest of the drillers today. compounded by the fact that we have brent crude trading below $78 a barrel and west texas intermediate below 74. let's look at the rest of the
energy sector, some of the big oil stocks and see how they're performing today. as you can see, exxon the dow component is weaker. chevron, pioneer natural is weaker and eog. that group likely to keep a drag on the markets. the dow components, hewlett-packard with better than expected results, visa and goldman in the focus because they're being sued on separate issues, anti-competitor practices for visa and then concerns about platinum fixing for goldman sachs. ge slightly higher. as the dow right now is up just about 5 points. sara, back to you. >> thanks very much, mary. also watching what's going on with bond, treasuries, the dollar taking a pause. rick santelli at the cme in chicago. good morning, rick. >> good morning. this definitely seems to be the epicenter of a lot of action these days. you know, whether it's the uneven qualities of the u.s. recovery even though it's better than everybody else which would showcase in the data or relative value trade of plummeting yields
in various parts of the world we see rates are moving down. it's a parallel shift today. as you look at the following charts remember all are down two basis points but when you see how far the comps go back you'll see the inherent flattening that's built into the curve. five-year, go back to 10/28, the last time we were at the current yields based on a closing bases, down two basis points on the day. look at tens, back to the 22nd and it's down two basis points on the day. the 30-year you're going all the way back to the 16th, down two basis points on the day. and maybe the one of the main avenues, that is propelling some of the purchases pushing yields down and it's only one of the supermarket aisles the relative value trade. look at an intraday chart of bund yields, 73.5 was the he yield, 20-year chart you can look but won't find a lower yield on that chart.
last but not least most of europe, all the major currencies better against the dollar today. the yen, euro, the pound, but as you look at the euro chart going back to august of 2012, we're not at the lows but we're certainly at the train station that respects the zone of the current lows. simon hobbs, back to you. >> thank you very much, rick. coming up on the program, new york, times technology columnist nick billton. wait until you hear what he has to say about twitter.
got some breaking news on midwest manufacturing. rick santelli has that. rick? >> 60.8. 60.8. we are looking for numbers 63 to 63.5. and when you look in thor are view mirror -- rear view mirror unrevised last time some of the best numbers ever and that particular number back to october of last year which was 66.6. so how does this number stack up? you don't have to go back too far. 60.5 our september read so obviously this slips in. this is the first of the november data.
we finished october so you will be seeing me a lot in the next 15 minutes. back to you. >> rick, thank you very much. rick santelli. tomorrow the 88th macy's thanksgiving day parade televised nationwide on nbc at 9:00 a.m. fresh from the opening bell joined by amy the executive producer of the parade and joins us at post nine. great to have you back. >> great to be here. >> spoke to you last year as well. >> yes. >> talking about weather of course. >> yes. >> big whatever storm cato is that a waworry tomorrow some. >> no everybody we have spoken to told us the weather will clear for tomorrow. inflating our balloons tonight. do that all day. tomorrow they will fly high. >> wow us with numbers, numbers of floats. >> this is a parade of numbers. 27 floats, we've got 16 giant balloons, we've got 12 marching bands one drum corps, 1,000 clowns, 1,000 balloon handlers and 1200 leaders and dancers and 3 million people lining the parade route and 50 million
watching on television. >> i think the most interesting number is 1927 which was first macy's thanksgiving day parade. this has an amazing history in new york city. >> what's interesting in 1927 was the first year we had parade balloons. in 1924 was the beginning of the thanksgiving day parade and the math is off because there were three years during world war ii when we sdbs do the parade and donated the rubber and helium to the war effort. >> sting is going to perform. >> sting. >> and kiss. >> we have something for everybody. renee fleming, indina menzel. kiss will be incredible. >> what about security? obviously in relation to ferguson we have the protesters trying to block the lincoln tunnel last night, they've been out in times square. you're a prime high-profile target. what do you do in response? what are the nypd doing with you? >> every year we rely on the nypd and city agency to ensure what we produce is the safest parade possible. it's an entertainment spectacle.
we don't have a worry but nypd is on it. no doubt they are looking at everything now and making every effort to make sure everybody that comes to the parade and participates is safe. >> new characters? >> yes. >> who this year? >> we've got six brand new balloons. paddington bear, thomas the tank enagain new for the first time. are you a fan? >> i have 5-year-old twins. we're exiting that window us but yes. >> the mighty morphing power rangers, big red one in the sky. >> if i owned a franchise like that how do i get my balloon in the parade? do i have to pay a licensing fee? how does that work? >> to be up in the sky you have to earn your right to be there. you have to be an immediately recognizable children's character. you have to be perhaps in the advertising hall of fame. everybody knows immediately when they're looking up in the sky that is a -- the name of a balloon and great -- >> give us a word on the youtube stuff with the confetti carpet back stage if you would. >> you've spoken about the
talent in the parade. it's an unusual thing to have somebody like kiss and renee fleming and nick jonas in the same place so we're filming the interaction with all of that and on parade day that's going to be up and live, probably by 10:00. when you're watching television you will have your second screen and even more entertainment at hand. >> 50 million viewers. that's an audience. >> it's a big audience. >> how much does it cost? >> the parade is our gift to america and it has been and will continue to be. >> it's great having you. >> thank you very much. happy thanksgiving. >> good luck tomorrow. >> amy joining us from the macy's parade. >> a reminder watch special coverage of the 8 8th annual thanksgiving day parade by matt lauer, al roker, savannah guthrie 9:00 a.m. on your local nbc station. gauging the mood of the american consumer with black friday just two days away. we've also got breaking news on consumer sentiment data and market reaction all when "squawk on the street" returns. and apricots. what kind of chef comes up with this?
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shooting death of 18-year-old michael brown. our scott cohen is in ferguson with the latest. scott? >> hi, carl. last night police say was better, but better is relative. there were protests and there were arrests, 44 people they say arrested for various things including a number of fell ifeny charges, but at the same time, there were peaceful protesters, police say, that stepped in and helped the police in their role of trying to maintain or restore order. nonetheless protesters focused some of their wrath on a ferguson police car which was flipped over and torched. this movement has spread across the country. virtually every major city in the u.s. seeing protests, including new york, where protesters at one point marched up the fdr drive on the east
side, shut it down, over to times square. and the officer at the center of this case, officer darren wilson, breaking his silence, in an interview with abc news. >> when you look through your heart and your mind, that if michael brown were white, this would have gone down in exactly the same way. >> yes. >> no question. >> no question. >> reporter: michael brown's parents in the meantime were on the "today" show this morning and michael brown's mother said that interview with darren wilson added insult to injury. carl? >> scott cohen in ferguson, thank you so much for that. we got more breaking economic news. this time it's consumer sentiment at just about 30 seconds. for the meantime action has been soft. the dow down about 7 points. rick? >> well, we're expecting university of michigan and, of course, we know this is the final read. the number we're looking for is somewhere around 90 just to give our viewing and listening
audience some kind of history. the last four full month that we had was 86.9. the mid-month read on this was 89.4. the reads that we're going to be looking at, anything over 90 takes you back to 2007 and we're seconds away right now so let's see what we have. 88.8. 88.8. is the final november read which wipes out the 89.4 mid-read and it comps you back basically as i said you're looking back into the very middle of 2007 to find better data points. so even though we have an uneven recovery it's still at times showing some pretty strong data points. back to you. >> all right. thank you very much, rick santelli. what do you make of it? what do you make of the macro, sara? >> the headline numbers have been a little disappointing but nothing to veer us off the trend
which has been better and more importantly resilient u.s. data. alan ruskin of deutsch bank calls it the theme of u.s. exceptionalism in the data. i would point out that telecom and utilities are the strongest groups in the s&p 500 and that is the dividend payers on this idea they're low rates, low yields and another excuse to buy treasuries. the fact that we have data misses something we're seeing enforced. >> a lot of housing data in four minutes time. after that the question will be how many people remain at their desks or go early for thanksgiving once we -- great programming on cnbc stick around but for most people -- >> housing one pocket of strength. good numbers on existing. starts okay. permits have been better. case-shiller wasn't all that hot yesterday. >> and we have seen that in the pricing and that was broad based. you spoke to robert shiller about that. look the economy is doing better in the united states and especially i mean i keep coming back to this theme but if you look across g7 really only
canada and the uk putting up these kind of growth numbers. we saw that 3.9% gdp carl, yesterday, and you said -- people would -- a lot of the developed world would be jealous. >> even within the uk. private investment is falling as you saw in germany. you don't see that to the same extent here. people still investing. >> how much is baked into the market because valuations are a little higher. >> when we come back, we'll get breaking news on new home and pending home sales at the top of the hour. meantime dow is almost exactly flat. "squawk on the street" will be right back. they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably.
make the world predictable. thrillingly predictable. welcome back to "squawk on the street." breaking news. november new home sales, 458,000. that's seasonally annualized and adjusted. we're looking for a number closer to 470. last month, 467 downgraded to 45 a 5. from 455 to 458, that's up 0.7. to give you history we vns been over a half million homes since may of '08 and eight years since we've been above 1 million. . see the numbers are a bit on the soft side of history and this one in particular isn't bad but
softer than we're looking for. another home data point we're going pending home sales, diana olick, d.c., what to we see? >> it's a double data today. pending home sales disappoint. signed contracts to buy existing homes. fell 1.1% in september. the street had been look for a slight gain. pending sales are still up 2.2% from a year ago. that's a second straight month of annual gains. realtors say buyers are lured in by more listing and less competition from all cash investors but facing head winds tight credit and lagging wage growth. regional lower in all parts of the country except in the northeast where they eeked out a half percent gain. inventory of homes for sale up 5% from a year ago. bang to the new home sales, basically kind of a long expectations, not a huge price, a lot of folks say to take this number with a grain of salt because it is a small sample and we get huge swings. i want to find out if prices
moved at all. what's the price? 305k. that is a huge jump in the median home price of a newly built home because it was 264, 300 in october of 2013. a big jump. we had been seeing the builders lowering prices to get buyers back in the door, so that's a real surprise on the prices. inventory last month had been at a 5.3 month supply, what are we seeing? 5.6. more on the market as well as more existing homes on the market. those higher prices, though, i have to say that's a concern going into the next couple months in the slower season. back to you. >> thank you so much, diana olick. dig deep near the housing numbers as well as all the other numbers we got this morning. senior economics reporter steve liesman back at hq. what's your take on the morning? >> what a difference a day makes. yesterday we had the balmy late springlike weather in the northeast and now raining and snowing and the data turn from thinking about the economy shifting into higher gear to now thinking are we going to at
least hold the trend of 2, 2.5% on gdp in the fourth quarter? pending home sales, new home sales, the consumer sentiment numbers everything is going to be disappointing. not much to the downside but not the upside surprises we had been getting in the data prior to this week and yesterday with the gdp number that made everybody optimistic. some of the data at 8:30, durables up 0.4%. reason to be happy, no. all of it was defense spending. so you take out defense it was down 0.6%. jobless claims, jumping up for no apparent reason. in other words no excuse given by the labor department. up 21,000. one of the first readings in several weeks above 300,000. again that's still on track for probably plus 200 k in job growth for the month of november but not the improvement we've seen. personal income light. personal spending light. the savings rate at 5% telling us that people tend to be spending exinterest income they may be getting -- extra phone call or whatever windfall from
oil rather than spending it at the malls. see if that holds for november and holiday season. morgan stanley saying the weak report durables -- there's the durables number. you can see. year over year we're still holding on to gains, not too shabby, but again not getting a surge there. morgan stanley writing about the report says it's a weak report pointing to at least a temporary sharp slowing in business equipment investment. over at hfe, we doubt the weakness in durables is the start of a trend. finally at bmo on the spending data, a little on the softer side of expectations. so not a super encouraging start to q4. i agree with that. so we'll have to take what we have, a decent tuesday, and a not so great wednesday, into the holiday and come back next week when we get some critical data again on the economy, sara. >> i like the compare sop to the weather. thank for rung through that. >> sure. >> all the misses the dow only down 12 points. the s&p is positive. talk to tom lee, founder and head of research with fund strat
global advisors. a noted bull on the equity market. tom, there is a smorgasbord of data, anything worry you in terms of all those headline misses? >> i don't. i think everybody who's following markets has to be careful not to get into bear traps. you know, if a data point disappoints, that the trend has changed. i mean, i think the narrative this year is the u.s. economy has shown a lot of resilience. it's going to benefit from lower oil. the weakness in europe and asia haven't really damaged the u.s. economy but now i thinks u.s. strength plus lower oil will help those regions. investors should stay bullish and just keep a data point in perspective. >> i guess the question becomes, tom, at what point is all of that good news on the economy and the resilience against the threats overseas priced into this 're looking at valuations 16, a little more for the s&p 500 to expected earnings in the
next year. that's above the historical average. at one what point do they look rich and priced in the good news? >> yeah. well i mean valuations, you know, matter in a perspective like if stocks got extremely expepsive we should worry, but as we're moving through a bull market valuations are going to increase. i think there's been some good news on valuation, though, because for the first time maybe in, you know, four years, the s&p p/e is now converging with high yields relative value. that's a relationship for almost 20 years high yield was always trading at a discount to the market, we're seeing that revert to normal. i think that tells us the market starting to normalize and p/e should keep expanding. >> ecb has been a big theme for the markets right now. we've seen that u.s. equities can move off of what the ecb delivers. a lot of talk about what they're going to do including from some members of the board. do they have the tools to do now what the market is expecting and
wants and is that a risk ins terms of disappointment for u.s. stocks? >> well, as you know, investors have been reluctant sort of to embrace the ability of a europe to really employ all the tools at their disposal because of disagreements, but yes, it makes a big difference. i would still be optimistic because one, we have, you know, some big actions coming out of japan and i think europe is really leaning towards doing something bigger. that should be supportive of the markets. >> you're sticking to your bullish guns, tom, which i know also we didn't talk about the active manager under performance theme you have going on. what would change your mind? what would cause you to sing a different tune and be bearish on the market? >> well, you know, we've done a lot of studying. i think, you know, what most people don't appreciate, establishing the regime, whether you're a bull or bear, is really the majority of getting investing right. once a bull market is four years or older, it really comes down
to the business cycle turning. so, you know, what we watch is the business cycle maturing and the two things are investment spending peaking, today only 23% of gdp, typically gets to 28%, that's an $800 billion swing coming. i think we still have years of business expansion which is bullish for stocks. >> we continue to see outperformance right now at least, telecom, health care, utilities, consumer staples, some defensive names, low yield names, not exactly bullish signs for the overall market in terms of a cyclical recovery. you want to see the consumer discretionaries gain. what part of the market would you be looking to buy right now some. >> yeah. i mean i think that's been frustrating for investors, right. we've had interest rates rally, but high yield and corporate bonds widen, so it's made defensives work but not cyclicals. i still think the sweet spot of the market is really the health care trade, being long tech. as you know, the two biggest sources of outperformance this
year have been being long apple and microsoft. those have mattered more than utilities and telecom. and i think maybe the surprises in terms of what could actually do well in the next few months is financials. and energy. energy i think is a contrarian trade because people have been so focused on the decline in oil. >> all right. thanks very much. always good to check in with you. this as we see the ten-year yield, 2.23. tom lee fundstrat global advisors. >> happy thanksgiving. >> happy thanksgiving. >> to you too, tom. >> a winter storm targeting the northeast as millions of people are trying to travel for the thanksgiving holiday. flight delays already starting to mount as the region's major airports deal with the increased traffic. cnbc's kate rogers live at laguardia airport with the latest. good morning, kate. >> hey, good morning, simon. we are here at laguardia and starting to see the rain pick up outside. no snow yet. but cancellations are continuing to mount. we've been tracking flight aware for you guys all morning. so so far in and out of the u.s.
about 348 complete cancellations of flights. as for the delays, we're up to around 725. here at laguardia, 86 flights have been completely canceled or delayed alone but that being said, a lot of the passengers that we're talking to here are still feeling pretty optimistic they're going to make it to wherever they're raveling to in time for thanksgiving. >> the weather in colorado is kind of snowy, but i think they probably have better ways of handling than the east coast. they're used to it more. >> i'm here a little early, very early, my flight doesn't leave another two or three hours. >> and while the snow isn't expected until his afternoon, the tsa did just hold a press conference and say they are well equipped to handle the situation. >> we have a fleet of modern state-of-the-art snow removal equipment. we believe that we have enough resources on board today to make sure that we have a seamless operation. >> and as for how the individual
carriers are handling these flight delays and cancellations and the inclement weather, american airlines, united, southwest and delta waving fees they typically charge you. if you want to change or cancel your flight they're around $200. they're giving you a shorter period of time to make those changes so you don't incur extra charges but they are going out on a limb to help consumers. back to you. >> all right. one more thing to think about this weekend. kate, thanks so much. when we come back, listen up parents, a new hot holiday toy out there, and it beat out barbie for the first time ever. find out which toys are at the top of every parents' shopping list and which stocks are set to profit the most when we come back. by the way, if the dow musters a single point move today that's three days in a row, longest stretch in almost four years. back in a minute.
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for one low price! and they'll deliver it free. television announcer: the $197 mattress sale... bulldog: oh boy! television announcer: ...ends sunday, thanksgiving weekend. ♪ mattress discounters take you live to a place near san diego, near la hoya, northbound interstate 5 blocked by some protesters who have made their way on to the highway, blocked traffic, sort of an echo of the protests we saw around the country in new york and washington, chicago, oakland, and other cities the last couple nights. we'll keep an eye on this and see how things develop over the next few hours. >> meantime want to check on the markets right now after a flood of economic data. remember the markets closed and so a lot of the reports tomorrow, the market is closed. a lot of the reports came out this morning. a mixed picture as you can see with the dow down 4 points. the s&p 500 and the nasdaq both positive.
nasdaq in the lead up 0.2%. after durable goods, initial jobless claims, home sales, personal income and spending missing the headline mark. still momentum coming from last quarter's gdp number. >> well, on a brighter note two days to go until the complete frenzy of black friday shopping begins. frozen toys are at the top of many wish lists for girls this year. our next guest joining us for a toy sector preview which will be the winners and losers and can investors benefit. let's bring in garret johnson, toy analyst with b mo capital markets. good morning. >> good morning. >> to pick up that headline characters from frozen that are now the most popular amongst girls, breaking barbie. matel's grip for ten years. >> that's right. i brought some hot ts toys with me, but if i could find some of the elsa dolls i would have brought them. >> i have some. i'll bring some in on monday. >> elsa dethroned barbie? >> this year. barbie is in a little downturn.
the toy industry is cyclical. barbie will be back. >> these are what you believe will be the hot toys? >> small selection. teenage mutant ninja turtles. robotic pets are popular, the birds. >> hold it up. they can't -- that's great. thank you. >> this is an ipet. i trained this one to talk. don't know if you can hear that. >> this crazy troll will not stop moving. >> electric kid. dancing to the beat. >> and who makes these? just give us information here. who makes this here? >> that's a private company called wowe. the toy industry is performing well but most of the toy companies are private companies this year. >> and you handed quite rightly, are you going to demonstrate this for us into the microphone, into your own microphone. ♪ >> that's going to live on youtube right there. >> gross out toys a big trend. >> gross out toys are huge this year and you can think the mignons from last year for getting that ball rolling.
we have all sorts of gross out toys, little boys love them. >> these are things that replicate bodily function sounds not just guns, pianos too. >> i have a piano over there. >> nice. >> how would you -- we always say looks like hasbro is outpacing matel. how are the two relative to one another right now? >> you're absolutely right. hasbro is performing well. i wouldn't say it's performing exceptionally well. the difference is matel is in a down draft right now. >> because of barbie. >> barbie cycled down. the toy industry is cyclical, they had good runs, starting to reach their peak. >> should hasbro have bought dreamworks? >> i would say no. you don't need to own the means of production. they have great ip. you can outsource that. >> matel is down 35%. hasbro flat for the year. you've got three other stocks that you're covering here. leap frog, jack specific, build a bear, a small cap company, the
stock up almost 180% over the year. i mean has it further to go? >> on top of a double last year. >> right. >> it's got much better product, more relevant product and profitable business. it's hard to tell because there's no good valuation metric because of the earnings have been so depressed. perhaps it does. hate a strong momentum. >> how young are they to be getting ipads and apple accessories? how much does that factor into holiday toys for kids? does that compete with this stuff? >> that's a hot topic and we've had technology compressing the age range for a long time. it's not new on the 8 to 12-year-old range, but where it's impacting is in preschool and counterintuitive. people are taking an ipad and throwing it at their 2-year-old saying be quiet. used to be something like this. >> they set it up at dinner in front of the kids to watch movies and play games. >> fisher-price, playskool have been soft in the last couple years. part a decline in birth rates but a lot the technology reaching the 2 and 3-year-olds. >> happy thanksgiving.
>> thank you for having me. >> from bmo capital markets. >> up next on "squawk on the street" while many americans gather around their dinner tables at home for thanksgiving hundreds of thousands of retail employees will be at work. boston market responsible for bringing thanksgiving dinner to them. the ceo will be joining us at post nine to talk about how his business is gearing up for the holidays after the break. she's still the one for you. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex.
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gather for dinner tomorrow thousands of retail workers will be on the job gearing up for black friday where boston market fills the gap. the company expecting to feed more than 300,000 retail workers at chains like best buy and walmart which on top of its formal business makes thanksgiving day the busiest of the year. joining us at post nine this morning is boston market ceo george michele. great to have you. good morning. >> good to be here. >> you brought some samples so to speak. last two year thanksgiving day sales up 50%. >> that's right. and so far we're up 20% over last year which was a record year for us. >> how much of that is corporate business? people feeding their employees versus regular joes coming in? >> it's a split evenly between the two because we are very busy during thanksgiving day. we have a meal for 11.9 $9 like you see up here with as slice of pie. a great value. we feed employees but we also feed people that to have to work that day like call centers, airline employees as well, mechanics, people on the ground
need to continue to provide essential work. >> generally what have you been seeing in terms of your competitors? there's a whole bunch of new upstarts, some of the burger chains, fast, casual protein focused type companies that are growing very fast? has that been a big competitive threat for you? >> not at all. our sales have been up in the last three years. 25%. that's our compp sales. we're looking to start to expand now and open few restaurants. for us, we're in the rotisserie chicken business, very unique in a lot of ways. it's not about chicken that was prepared somewhere else and brought in to the restaurant to be cooked. so we're very proud of what we serve. we just got on to the u.s. army bases as well to open boston markets that have done very well. getting great reaction. and soon we're going to go international. >> how much did you say the meal was? >> the meal with the dessert 11.9 9. >> what is happening to your input costs and margins. you're owned by a private equity
since spun out of mcdonald's. we don't often get this information. what's happening to margins and how are you seeking to expand them? do you have pricing power? >> we have had to increase prices a year ago. >> right. >> and we're going to take a small price increase in january of 3%. the reason for it, more people are switching to poultry because beef prices went up last year. there's been a lot of demand for chicken. so chicken prices have gone up about 4%. but as far as turkey is concerned, we prebought our turkey a year ago so we haven't had to pass any price increases to our customers. >> you own and operate your own -- not a franchise. >> no. >> it's a private equity, sun trust owns them all. why are you expanding when other chains are finding it difficult some. >> we've had tremendous success in the last 3 1/2 years. focusing on guest service, updated our restaurants and finding a need for real great food. you know, having a rotisserie
chicken, poultry is good for you. dr. oz talks about it. different health experts talk about it. they really say there are three proteins, chicken, turkey and fish. and we're in two of these two proteins. we're blessed. >> not always with gravy but we see your point. >> exactly. >> thinking of an amazon, of a google express, a costco, that can delivers this to your house. how much of that is a threat in terms of market share? >> i don't think they can deliver a rotisserie chicken just cooked about an hour ago. so we're in a very unique position. we deliver food to people's homes, to offices, because we can get there quickly, cater to big parties as well and that's what we're going to be doing tomorrow night into friday morning. >> retail foot print if adding five to new york. >> five in new york and eight more on army bases and looking at going into the middle east and also looking at florida and texas. >> all company owned or franchise some. >> the ones on the army base are licensed to the army. they operate their own.
but the rest are all company owned and operated. >> i'm surprised at how few people -- sounds like if you're expecting this big day, people aren't cooking themselves. is this a trend? more people migrating toward prepare foods. >> this year the survey said 49% of people are going to want prepared foods. it doesn't haves to just be the turkey but could be the mashed potatoes, gravy, stuffing, because a lot of people are busy. they only have so much time to prepare and it's also very stressful when you are preparing dinner for 12 people. you want to make sure you show your best. >> stressful for two peoples sometimes. great to have you. happy thanksgiving. >> thank you. same to all of you. >> george michelle, boston market. >> cooking this is is year. >> what do you think? >> straight ahead on the program, hewlett-packard on ceo meg whitman speaking to "squawk on the street" this morning. find out what she had to say about michael dell's short at her own business. we'll be right back.
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i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. welcome back to "squawk on the street." we've got the weekly inventory numbers from the department of energy. we saw 1.9 million barrel build in crude stocks, a little bit less than what we saw as far as the industry numbers yesterday. we also saw a build of about 1.8 million in gasoline and a heating oil draw of 1.6 million barrels.
mixed report but we are seeing oil prices move just a little bit higher here. of course, the big thing that they're watching here on the floor is the opec meeting. we sort of live and die by those opec headlines. will opec particularly the saudis, the rhetoric continues to be no cuts in terms of production with the meeting taking part tomorrow during the thanksgiving day holiday. makes it a precarious situation for traders. electronic trading ends at 5:15 this afternoon and resumes at 6:00 tomorrow night. so they're going to be watching carefully as they head out towards the thanksgiving holiday to see what the mood appears to be in vienna. we'll be back with inventories for nat gas because of the thanksgiving holidayater on today at noon back to you guys. >> thank you very much. let's check what the mood seems to be in vienna going where steven sedgwick is standing by. where are we on the central question as to whether there will be a meaningful cut
tomorrow? >> simon, i think the answer to that question is more and more no. i think they might have strong language about sticking to the official 30 million barrels a day target which has been in place about three years. this is very much plan b territory. the russians and the mexicans who aren't in opec came here yesterday hoping someone would cut but they said they wouldn't be cutting themselves. the iranians i've been speaking to and venezuelans who are hawks came into the meeting hoping someone would cut but they didn't want it to be them, of course. the iranians saying to me they look to grow as soon as the sanctions issue is sorted out, grow their production by a million barrels, not cut production. who would be cutting? saudi and their gcc allies. as we've heard there the uae and saudis are turning around saying hang on a second, we're conduct? what about everyone else. we have to give up market share? some of you might want to increase production if you're iran or iraq or nigeria or lib dwra if they can sort their act
out and end the civil war as well. everybody wants a cut but no one is prepared to do it themselves. that's why i think we're in plan b territory. the saudis are hoping it stabilizes by itself and the fact that the iranians didn't get a nuclear deal earlier this week also in this town in vienna, i think that means they don't think there's going to be the rush to get the extra iranian export on the table as well. they think the russians will lose some oil next year just by natural attrition, by the fact that you're not getting the extra investment and the bet on shale that they think that if we carry on at these low prices the new investment into shale, in texas and elsewhere won't happen. that's the bet saudi is prepared to make. the cure for low prices is more low prices. less investment eventually you get the pop when demand picks up. back to you. >> there are those like deutsch bank believe they will have to eventually. good luck tomorrow. steve sedgwick at the opec meeting in vienna. >> we do want to get to eamon
javers for breaking news in washington. >> good morning, carl. the supreme court says justice ruth bader ginsburg is resting comfortably at a local hospital after heart surgery this morning. they say she experienced some discomfort during routine exercise last night and that early this morning she had surgery but they're calling it a coronary kathization procedure to place a stent in her right artery. the blockage was discovered after she experienced discomfort last night. she's expected to be discharged the supreme court says in the next 48 hours and she's resting comfortably now. justice ginsburg is 81 years old and she is the oldest justice on the supreme court. and there have been some calls from folks on the political left that she should step down at some point during barack obama's remaining years as president so the president could appoint somebody else to the supreme court. she has resisted those calls. it's unclear how this all will play into that, carl, but the supreme court saying she is
resting comfortably now at the hospital. back to you. >> more developments. you'll get back to us. thanks so much. >> shares of hewlett-packard up this morning, perhaps surprisingly so after the company reported its fiscal year fourth quarter numbers after the bell yesterday, 1.06 is what the analysts had been anticipating, $28.4 billion revenue number appeared to be below analyst' projections as the guidance given to a certain extent for next year. that said, margins were fairly strong. but a mixed bag overall. also taking a bit of a hit on the currency front. recally on "squawk on the street" we had, as we always do each quarter, chairman and ceo meg whitman. i asked her to respond to some who said, a luke warm quarter at best. >> well, i have to think it was a pretty good quarter for hewlett-packa hewlett-packard. revenues were down slightly, but we saw for the first time in many years, operating margin
expansion in every single business. and that hasn't happened since early 2011. so what you can see is that our costs discipline is in place and we're excited about the future because we have the best innovation engine that we have had in many years, perhaps a decade at hp. so good quarter and now we're looking forward to '15. >> on the subject of innovation many may have read yesterday's op ed from michael dell, seems to be on a campaign of sorts to talk about how swell everything is when you take your company private. in that article or that op-ed, he did note as well or take a shot at hewlett-packard saying those companies splitting up, and hewlett-packard is the key one that is, may face huge disruption and went on to say such moves may boost share values in the short term but too often at the expense of real innovation. as you might expect meg whitman disagrees.
>> so i would say it's quite the opposite at hp. our innovation engine is the best that it has been in a decade and frankly, separating these two companies will allow each company to focus on the innovation that is most important to their company within an organization. you have to remember, printing and pcs, a third of their business is to consumers through best buy and major retailers across the world and major websites and they're now going to be deeply focused on what's the innovation like >> she trails off. that was interesting. interesting fade there from meg as you've seen the stock has not faded at all. in fact, up over 3% this morning. taking it to new recent highs is hewlett-packard after again, a quarter that was not necessarily applauded but so much of the focus you on the coming split of this company. she talked on our interview about their attack on costs. it's not just 55,000 employees that will have gone from this company by the time they -- those all those layoffs take
place. it's opportunity she said to take a line by line look at each cost of each business. >> clean sheeting it. she made the point on the call last night, some are talking about that, the fact that you have two opposing forces if they are splitting apart who's going to take the overhead. i don't want it. interesting dynamic and that's why ultimately it may be the right thing to do to split them up to create the internal dynamic. >> it can. they, of course, she believes that things are changing so much more quickly than they had you need to be at least more nimble in the marketplace. to your point, sun light on some of these places where costs perhaps are just hard to get at can actually why do you have two offices in seattle, one on one side of the bridge and one on the other. real life example. do you need that? those kinds of things. >> a privilege to get to really slice and dice this kind of thing. >> nice. >> coming up, former chairman of goldman sachs asset management, jim o'neill, joining "squawk
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♪ dow relatively steady down 7 points. energy, though, is the biggest losing sector in today's trading session. dominic chu is back at hq with more. >> all right. carl, if you're looking for stocks being left behind in the trade today check out the energy related names, specifically transocean, halliburton and neighbors. all three stocks are trading at new 52-week lows and in the case of offshore drilling specialist transocean here trading to levels we haven't seen since january of 2004. many of these offshore drilling companies are moving down in
sympathy with sea drill the company missed earnings estimates and halted dividend payments amid lower demand for oil rigs as oil prices are falling. the rough ride continues for oil services and drilling names. investors shaking off this idea that seadrill is halting its dividend payment. >> very nice, dominic chu. made my day. >> i try. >> a norwegian company in fairness. to rick santelli for more. good morning, rick. >> good morning, simon hobbs. listen, i would like to welcome our guest this day before thanksgiving, andy brenner. thanks, andy. it's tough around the holidays and i really appreciate you taking time out of your busy schedule. >> always a pleasure to see you, rick. >> all right. let's go right from the beginning. you know, there was an op-ed yesterday that had a line in it and i'm going to borrow liberally, i think the president said that regarding jonathan gruber, that the notion that politicians really aren't up for
the challenge of dealing with things like reform and this is for every developed economy in the groupings, therefore, we have a lot of policies that are flawed or half thought or never put through cost benefit analysis, many come from unelected officials like central bankers to put something on the books is better than nothing. do you agree that has -- rings true? >> no question about it, rick. whether it's the united states or europe, the politicians are not up to the challenge for a variety of reasons of which i'm not going to go into right now, so the central bankers have taken it upon themselves to try to create both fiscal and monetary policies. and that's why you have a lot of policies that just don't seem to be doing everything. many times it looks like the central bankers are pushing on a string but that's the best we have right now. and that's the only thing we have. i don't see it changing any time soon. >> i agree with that wholeheartedly. let's take it and make it
simple. one of the problems with quantitative easing is that when our fed basically puts trillions on their balance sheet they put those trillions in liquidity in the hands of a select few big banks, but the problem isn't creating the liquidity. the m.i.t. models were flawed as to how it was or wasn't put to use. why is that outcome going to be different as the ecb tries to raise its balance sheet by nine figure amounts? >> rick, it's really hard to say. right now you have some of the lowest rates i've ever seen in the european space with bunds around 75 basis points, you know, spanish rates inside of 2, italian rates above 2, all the ten year area. those are absurd rates when you look at where credit default swaps are. u.s. and germany about the same, spain four times the u.s. is and italy over five times yet all have rates well below the u.s. it's really creating a lot of unusual circumstances that we haven't seen in a long time.
>> all right. let's dig down even more. we see our yields moving down. i personally have made my call that i think the year end rate for the ten-year is going to be roughly the settlement on the 15th, the wild capitulation so 2.14. there's a huge influence based on european rates keeping ours lower. in some of your writing you disagree the numbers in the u.s. with interest rates are reflecting some of the stronger data. i contend the 150 basis points between our rates and bund rates totally reflects the differences with regard to the economic landscape we are currently each in. your final thought? >> i think it has to do with the central banks are heading. i think the ecb continues to talk about easing and how they're going to do it, whether they buy corporates, don't buy corporates, buy sovereigns, don't buy sovereigns, whereas the u.s. fed said they're not going to buy anything more. i think that's part of the differential. i can't disagree with what you're talking about with a 2.14 ten-year. the gdp number was up 18% higher in expectations yesterday.
something has to give. >> i got you. we'll have to see what the next quarter looks like and the quarter after that. we're still only averaging a bit over 2%. carl, it's all yours. >> rick, talk to you in a little bit. rick santelli. when we come back the million dollar home competition is back and this time we are going home for the hole days, cnbc reporters going back to their hometowns to see what $1 million can buy. join on the competition and which home you think is best after the break. (trader vo) i search.
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there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. cnbc's popular million dollar home competition is back. two one million dollar homes face off and viewers decide the winner. get ready to vote by going to cnbc.com/vote. last year's week's winner the brick duplex is taking on a new competitor. >> home sweet home. this historic condo is city
living at its best. inside this beautiful duplex boasts 1500 square feet of living space. hardwood, lofty ceilings and detail. three bedrooms and two and a half baths the first floor master has enswut with a sauna. over 150 years old this, property is all about elaborate original detail. gorgeous marble mantles. and double doors between rooms. you can call this place home for 974,5 974,500. >> this home sits on two acres. just steps from this classic staircase and vault eed ceiling in this 4900 square foot.
a kitchen so large, two islands, two oven, a large pantry and instant hot water. security, fireplaces throughout. including one here in the master suite there there is a closet big enough to live in and a completely remodelled bathroom. hidden away but close to everything like year round horseback riding or golf. >> all right. voting is now under way. up to you to select the winner. which do you think is the better bang for your buck? vote now. right knnow at cnbc.com/vote. where is jane wells 4900 square
foot home. >> in santa clarita, california. both houses are so fabulous. now the question always becomes bang for buck. bang for buck means am i going to resell for a profit in my mind. >> whose is that? >> that is jane. >> and there is mary thompson. also from boston where her duplex is. >> seriously, which is the better real estate market for that price? >> the better real estate market definitely is boston. only nine houses in competition with this particular one. california, they have 23 in direct competition, another ten not far behind. in that whole same price range.
we asked the broker, why hasn't it sold yet. it's on the market 211 days. she said well, you know, it's not for everybody. i said well that kind of in my mind is real estate parlance for it's not for anybody to some degree. there is always that real estate speak. and i think that is the problem. too many houses on the market. high unemployment rate also. >> looking at the poll right now people like excluded digs. >> they like it but there are 23 others you can choose from. so which one are you choosing. >> many people on the northeast stuck in freezing sleet and snow are thinking maybe i'll move. >> which do you like? >> me, definitely boston. >> because the market. >> you can resell it. i'm an exit strategy person. i think exit. >> although the solar panels were pretty cool out in
california. >> try maintaining them. >> and a pigger house too. >> exactly. it's all about maintenance. people just don't want a hassle. >> this is always fun. we locked in the vote and 71% favored excluded digs. they don't agree. >> 5,000 square feet, two acres in the west coast. >> big space. >> the trend is the smaller actually. >> while you are here there's been a lot of talk about commercial real estate value especially in manhattan. >> definitely. when you see black stone selling, you have to say oh that's a mark. we are getting rich. and does that mean residential is close behind. >> on the high end i think it is already there in the very high end. we're see the million dollar, two million dollar move move
move. but the expensive part is tough. >> so it cools off in 2015 a little bit? >> depend where the rest of the market is. >> always good to see you dolly. she'll be back in power lunch for the next match-up and during closing bell she will crown the winner of million dollar home, home for the holidays. >> black stone has been selling equity stakes but that is another time. and the jon fortt. >> tablet sales have not been blowing the doors off. but what does it mean? is it something for investors to be concerned about? we'll have nick bilton of the "new york times" talking twitter. what might they be looking at buying. decoding that crypted tweet. and finally wrrks do you get a hotel room for 7 bucks on friday? will we'll let you know. it's a big deal on "squawk alley."
♪ welcome to "squawk alley," joining us this morning john steinbergs, jon fortt, kayla tausche as always. market's not doing a lot but we we might see some trouble for tablet this is holiday season. according to research growth in tablet sales will fall to 7.2% this year. one of the main reasons is that ipad shipments are expected to fall by about