believe something bad may happen. >> do you think is there a chance to win this fight? >> definitely. it will take the kind of investment that i talk about yielding resilience dividend. better work in the good time, then protection when it's bad. >> thanks to judith rodin. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street," i'm carl quintanilla with sara eisen and simon hobbs. cramer is off and david faber is at alibaba headquarters in china where he'll speak with jack ma in about an hour. futures look set to push us toward new record highs. the dow going for its first six-day winning streak since june. see if stocks are able to buck

the downward trend. a shade above $77 a barrel today. bond markets are closed in observe yns of veterans' day. already record-breaking sales at alibaba with two hours to go in singles day, the single largest online shopping day on the world. jack ma will join faber for that interview in just under an hour. >> futures heading higher after the dow and s&p extended their streak for a record four days in a row. oil prices continue to fall. brent hitting a four-year low. >> more earnings to digest. revenue comes in light. >> in china singles day, the largest day of online sales is hoeding into the home stretch. alibaba with record sales. dave faber live with the company headquarters. we watched as sales started ticking up on the board. who knew they would end up where they did?

it's pretty impressive, of course, given where we are right now, what they did last year as we said many times. 5.8 billion a year ago. the last time i checked in the auditorium here where they have a running screen as you've seen of the tally, we are probably approaching 8.5 billion. looked like easily on the way to what might be 9 billion dollars worth of goods sold by the company over this 24 hour period with two hours to go at this point. as staggering or even more so the fact they are going to send over 750 million packages as a result of all the orders that have come in. that is staggering in and of itself. certainly a big, well, delivery, not quagmire at this point. they prepared for weeks. months, to get ready for not just the challenge of getting all the people on the site and getting it all to work right and

to get what they want on the site, but to make sure the packages get to them quickly. we were talking to joe tsai earlier. he said they actually had positioned goods in certain places based on order patterns in the past and were able to get a washington machine up to somebody's apartment in 18 minutes. that seems a little much to me. i'm not sure if they were already downstairs, but that does give you some sense to the challenges they are taking on here at alibaba as they take 11/11 or singles day global at this point. we will be speaking to jack ma in a little bit. >> i'm curious on that point about taking it global. are they going to get people in other countries to buy washing machines and clothing for themselves to celebrate singles day? it's amazing how this took this obscure holiday in china, owned it, made it the biggest shopping day in the world and are trying to do it in places like the u.s. where it doesn't have the same

brand recognition. i wonder if that global reach, that global effort is going to work? >> they certainly have been told many times, it's great what you're doing in china. if you want to make a big splash in world commerce, you have to do it in the u.s. that doesn't seem to be something they are that focused on at this point. certainly, there are plenty of people who bought things today on the alibaba platforms, the ali express is what they use in the u.s. no doubt about it. on a big map, you can see lots of things going back and forth from the u.s. to china. over 200 countries they had orders from. they are trying at least to bring it to many other parts of the world. we'll see if they have success in doing that. we have our own cyber monday which is dwarfed by the sales that take place here online. as for overall sales, black friday is the biggest day of purchases in the world in terms

of brick and mortar and online. this day will be one for the record books until i guess next year. we'll see what they can do and see whether they actually approach $10 billion in one day. we've got an hour and 55 minutes or so left. >> ali pay has been a lightning rod for many people. controversially spun out from alibaba in order to protect it in the face of the chinese government we get news overnight they are looking definitely at ipoing ali pay and it will ipo on mainland china. i guess that's inevitable it has to be in china giving the pivotal role it increasingly plays in financial services. >> that's a good point, simon. in fact, you reference an interview jack ma did give. the only one he did give today was cctv. as you know, their efforts in payments and in the money market fund they started, which has over $100 billion, and in micro

lending, all of which is included in something they call a.n.t., he did say in an interview they would consider a public offering of that on the mainland. to your point, they angered a lot of the traditional banks in terms of what they've done, both with the money market fund that became the largest in china almost overnight and with ali pay. their predominant payment system online here in this country. not to mention the micro lending. the yes, they would do it in the mainland. we'll ask mr. ma about that, and why they are focused on doing that here. that's another part of the story. not a part of alibaba. it is the separate financial services company of significant heft that will command a significant market value if and when it does hit the public markets. >> david, we'll leave it there for the moment. thank you very much. we look forward to the interview with jack ma in just under an

hour's time. david faber live from china. for more on alibaba, let's bring in r.j. present morningstar. >> thanks for having me. >> clearly, alibaba believes in improving its fertility on the top line. it's got to hit that big number for the close on singles' day. >> the numbers are quite impressive. it underscores how important alibaba is, not only for chinese buyers, over 307 million active buyers right now, but increasingly for sellers. one of the key take aways is the number of global sellers selling through alibaba. they are expanding their global reach even without having a presence directly in the u.s. the other takeaway, on the scoreboard at corporate headquarters, they are tracking the number of mobile transactions. that will be a key driver going forward. they've been talking about

increasing mobile monetization rate. with them tracking 45% to 50% transactions on a mobile device, that is an important long-term drive as we shift from desk-top based to mobile commerce platform. >> we should remind ourselves this is now the seventh largest most valuable company quoted publically in this country. more valuable than wells fargo, ge or walmart. why do you believe it is overvalued? your price target would indicate there should be about 1/4 market cap wiped out in fair value terms as far as you believe. why? >> there is a lot of exuberance in the name. it's got a great business model. we think very highly of the business model we have a long-term forecast of at least 30% topline growth on average the next five years. ebitda margins improving from the low 50% range to the high 50% range the next five years. we think that's been more than priced in the stock. we would be cautious at these levels. there is not a lot of down side

catalyst. admittedly, the company is a little overvalued at this point. >> what about ali pay? we were talking to david faber about jack ma saying ali pay is the heart beat of this organization collecting the money or transferring the money, that that will ipo. it's not within the alibaba structure officially for reasons we talked about many times on the network. what does it mean to you you get that ipo on mainland china? because that would always be the controversial element, won't it? >> yeah. absolutely. that's been the controversial element from day one. the relationship it has and with the senior advisory group having a larger stake in that company than alibaba shareholders. not necessarily participating other than the cash flow coming through the income line on the income statement. alley pay was always destined to have an ipo. it makes sense in mainland china as opposed to the u.s. for regulatory reasons. it will be a successful ipo.

if you do a quick math, that statement could be at least $50 billion valuation, if not higher than that. >> we know that alibaba has ambitions. david mentioned it to move into the u.s. and expand its operations, compete with amazon and ebay. they choice to debut the biggest ipo here in new york at the stock exchange. how do they grow that u.s. business? is it going to have to be through acquisitions? >> almost certainly has to be through acquisitions. that is a difficult proposition for us. same reasons that made alibaba so successful in china, it's very difficult to supplant that in the u.s. when you've got amazon, ebay, they have to look at an acquisition to have a meaningful presence. without it they won't be much more than a niche player in the u.s., at least near term they have to look at acquisition as potential growth strategy in that region. >> we'll see the figures they come through with in the next 90 minutes or so. thank you for joining us.

looking at the broader market, stocks are coming off another history-making day. we do look poised to open higher again. the s&p and the dow and the dow transports, each finishing monday's session at record closing prices. philadelphia fed president expressing some concerns about interest rates. he feels that they're too low. he talked to cnbc europe earlier today. >> there are many indicators that tell us rates are too low. we've been at zero nearly six years now. there is no precedent in history, even when inflation was too low to have rates at zero when unemployment rates are as low as they are. i think we are behaving in a way that is outside historical norms. that should make us nervous. >> charlie plosser, one of the notable hawks on the committee who has expressed concerns about low interest rates, but he and mr. fisher of dallas are

retiring next year in mark that. could change the make-up and internal debate. boston fed president was talking about how we should be cautious and hesitant when it comes to raising rates, be patient. >> and this morning saying deflation very unlikely here in this country. but there is a chance of it in europe where we see new evidence of it all the time. >> the irony is nobody is nervous about where we are in the market sense because precisely rates are so low. the moment which janet yellen starts to indicate she is nervous rates are so low is the point we have a problem on the market. >> you can't just say it's about rates. there are fundamentals happening. earnings growth up 10% we saw in the third quarter. jobs growth. >> slowing on ton the revenue side. >> fundamentals paint a solid picture in the u.s. you still have the argument that the u.s. is the least dirty shirt when you look at the economic fundamentals of the united states. >> the dollar is not our responsibility. we are a more closed economy

than those in europe. >> the dollar, $1.16 on dollar/yen. there was some optimism overnight they would delay a planned tax height in 2015, but the nikkei, the japanese stock market continues to surge. >> i thought there was a rumor they might call a snap election. there was overnight and they had to deny it. >> interesting to watch all this collide at apac where the president had meetings with putin, abe. by the way, we are getting a cake-cutting ceremony of the floor of the big board to celebrate the 29th birthday of the u.s. marines corps which is actually yesterday. quite a day for the marine

corps. founded in philadelphia in 1775. an infantry force designed to fight at sea and at shore. 194,000 active members of the marine corps. congratulations to them. our thanks as always. as they like to say, sempre fi. david's live interview with the founder of the chinese e-commerce giant.

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brent crude oil hitting a four-year low as the u.s. energy administration says shale says no signs of slowing. libya remains closed after protests on the weekend. crude just above $77. gas prices, we got the average below $3 a gallon. front page of "the washington post" is the story of the hummer. gm stopped making in the late 2000s, yet in terms of older vehicles on the used market, it is the fastest growing car because it's so cheap to power it. >> it's creating a lot of winners and losers. losers are the energy companies

which continue to get sold off on these concerns about falling oil prices, the supply glut. if you look into the future, there is a lot of supply. this is leading up to a big opec meeting november 27th in vienna. >> does this set a floor here? >> you are seeing outside moved compared to other commodities. they are pointing to the fact that the u.s. is producing the most oil it has in decades. opec only controls about 40% of the world's output. >> a lot of rumors and talk in the parlor game opec stays as a cartel number because their power to control the market is nowhere near where it was.

>> dr horton missing street forecasts but did beat consensus up 48 cents. if you wanted a home builder that would answer the shortage on low-priced inventory, it really is horton's that are doing that with their attempt to shift more inventory, be a volume player, be the walmart in the face of the other home builders going for higher-priced, more profitable units. we'll see what the new ceo says. >> first new sector since 1999. we are used to seeing all 10 s&p sectors are up.

you look at horton's numbers. 38%, that's good. >> the housing market is continuing slow and sluggish return to normalcy. we are seeing some indicateors which is putting pressure on home builders. we'll continue to see the analysts, but we are not back to the boon market prices. >> horton up 35% which is one of the problems they have this morning. >> they call themselves the walmart of builders. >> they do. >> and texas oil markets could hurt the hot housing market. who is most exposed? they found texas is a key market for a lot of these guys.

>> they've been having trouble be things like policemen because you get paid so much more to go into oil fields. >> only in this country is that really happening. only is the regulation so lax you can boom an industry such a way. can't happen in europe. >> that has been a stimulus. that's why some are concerned normally the falling price of oil would help consumption so much you have that offset a little bit. when we come back, david faber's live and exclusive interview with alibaba founder and executive chairman jack ma. coming off the record-breaking singles' day. one more look at futures. dow going for six straight. hasn't done that since the

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as you probably know, it is veterans' day. the nyse will observe two minutes of silence in honor of the veterans and the brave men and women of the armed forces. the department of veterans affairs calls it a day to honor american vets, love of country, willing to serve and sacrifice for the common good. after world war a world war i ae legislatures approved it a legal

holiday. after world war ii they changed it to veterans' day to help incorporate the veterans, anyone who ever served in any war in the history of this country. >> the bond and credit markets are closed. >> here is a moment of silence at the new york stock exchange.

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welcome back to "squawk on the street." opening bell just rang. we'll get you a look at the s&p at the top of your screen. at the big board, general john commander, commander of the u.s. southern command marine corps commemorating veterans' day and the 239th birthday of the marine corps. cake has been served here at the exchange. over at the nasdaq, members of veterans corporate round table celebrating veterans' hiring initiatives, including members of our parent comcast which hired 3,300 veterans since 2012. ranked on some list of companies in terms of how friendly they

are to hiring veterans. congratulations to comcast. let's bring in art cashin, director of floor operations at ubs. good morning to you. art, you tweeted a picture of your flag tie. the power of the rally is being talked about as extremely strong even by historical standards, the way we bounced off that october low. i asked you last week whether or not the seasonals were coming into place. you said they are. >> phenomenal set of seasonals. not only is it the old sell in may and go away. october come back into the market. november and december historically good for the market. coming up on the year 2015. in the decade, the year ending in a 5 is historically bullish. the year before a presidential election is historically bullish. the history books and seasonality tells us the bulls

are going to win out here. >> the sandt awe clause rally. there was a tribute to taylor swift, shake it off. he was talking about volatility, ebola, russia, ukraine, oil concerns. what happened to all of that? none of that went away. why has the market been able to rally 10% from that october 15th low? >> let's start. ebola proved not to be as rampantly contagious as a lot of people thought. that is off the key radar screen at this point. ukraine is still there it hasn't accelerated. >> isis? >> isis still there. >> there is this wall of worry we climbed as we have so many times in this bull market. >> ukraine, you get photos of russian tanks, but nothing new. they could all come back with a vengeance, but for now, the market is playing scarlet o'hara when she used to say, "i'll

worry about tomorrow." >> you are not given to conspiracy theories in general. in your note this morning, be you choose to write about questions being asked about the employment report. why did you decide to mention that? >> because the seasonal adjustments were so strikingly large. i mean, the raw data without the seasonal adjustment shows we picked up over a million jobs. even if you took the last seasonal adjustment from the previous october, it would have been up over 350. i'm writing not so much about conspiracy but bapaul singer of elliot associate is a question of lots of the data around. he thinks inflation is understated and the economy may be stronger than people think. >> is the suggestion the true employment growth figure may be better or worse than we're told? >> it may be better. the jobs are lousy, but a lot more jobs out there. >> interesting.

>> what about the head winds overseas? we saw a gigantic move in the dollar/yen, the nikkei. short term seems all these moves to weakened currencies overseas and another from europe is bullish for overall markets, including the u.s. >> yes. it goes around. at some point you worry that this terms from minor manipulation into a currency war. in the '30s they did it with tariffs. you could wind up doing it by depreciating your currency and simon depreciates his. >> then what do you do? you only buy u.s. companies exposed here in a home? >> you look for some protection. you have to make sure that if it turns into a currency war, it doesn't become rampantly inflationary. so far, the money supply has no velocity. that has screwed up the gold

bugs. >> plosser makes the point this is a relatively closed economy. >> i think that used to be true. actually, the amount of outside earnings, earnings from elsewhere coming in has been growing. >> more important to the market than the economy, arguably? >> absolutely. >> the s&p is now a record high, 2038. we've got transports high again. dow industrial high. we have investor sentiment at the highs for the year. are you feeling topic? >> not really, not yet. i would suggest -- >> why not? >> you can get periods of optimism that can be sustained for weeks at a time. everybody was talking about the alibaba top. west texas intermediate, below

$77 can become a negative for the markets. >> that dynamic has changed. remember when oil was down. took the market down with it. energy shares under pressure. under $77 and certainly under $76 may start to get people's attention. >> art, thank you so much good. to see you. we mentioned horton and baba. watch bloomin, loco, sprouts. a day after gopro allowed a deal to allow investors to exit. a lot of investors are beginning to get out of these names that became public this year. blmn.

they argue hbo going over the top could add earnings per share by 7%. they argue warner brothers is entering a strong content cycle. >> you continue to get that argument that hbo is this undervalued asset. we heard that before, right? it goes back to the rupert murdoch bid and why he wanted that company so much. that was the key highlight of that research report. >> biggest gainer will be darden. key bank takes it to a buy, price target $62. they don't believe olive garden is a broken model with 5,000 guests per store per week. they argue those comps are in position to go positive. >> previously, arguing it was badly managed by the previous ceo and coo. the problem is other analysts would argue you're not sure what talent you have in there now that would turn that around.

>> frack space up 7%. they do guide below the street on resch ewe for the year. also issue $500 million buyback. juniper made headlines this morning. >> and drama. >> the ceo stepping down. stock not moving a whole lot. the board issues statement there western concerns about his behavior regarding a client? >> it was a little bit vague. for the moment the company is putting in executive vice president rami raheem as the replacement. you don't want to see that at the top of companies. concerns about net neutrality weighing on feasibility of time warner cable. we'll talk to one of the

commissioners. "usa today" has a story about inventory for super bowl ads, only 90% sold. they still have lots of time to sell them and are asking $4.5 million for 30 seconds. in the words of one of the nbc executives, we are not impervious to economic trends. >> they've been rough lately. >> if you wanted to maximize profits, set your last ad on your last day. that's good going. we saw that in disney. >> and ronald mcdonald. >> revamping their image. they have work to do. >> we've fallen back now. bob pisani is on the floor. >> yesterday was the 39th time s&p closed at a record high this

year. let's remind everybody where we are at this year. record stock prices, yes. also record earnings. and i've been mentioning this several times the last few days, we are near record profit margins, 9.7% for the s&p this quarter. that's terrific. 8.5% is the ten-year average. we are not seeing a dramatic erosion in profit margin. some predicted we would. they've been predicting this a couple of quarters. nothing killed the rally so far. if you look at the market leaders for this quarter, it's only five, six weeks old. it's all defensive names. these are the leaders for the fourth quarter. utilities, health care and consumer staples. i'm not sure what that says about the market utilities. a small part of the s&p 500. it is interesting that we are not getting any of the more growth-oriented names that are leaders. several beaten-up sectors have

done nicely the xhb, the etf for home builders had a nice v-shape bounce above the lows we saw a couple of weeks ago. we are not that far from an historic high there. we are heading in that direction clearly. we talked about d.r. horton. we've got excellent numbers overall. average selling price up 6.3%. borders up 38%. earnings were light. that's one of the reasons the stock was trading lower preopen. it's opened on the positive side. the this is a company that buys a lot of options on lands and often does not exercise those option. they have a bunch of impairment charges. this is the biggest home builder in the country. they have to lock-up land, sometimes they don't exercise the options and have to pay the

farmers even if they don't buy that land. there is demand out there. toll had 10% growth. toll 10%, taylor morrison 37%. these are good numbers. demand is okay. there's not a lot of supply. sort of like a same-store sales numbers. we'll hear from these guys horton on the conference call in a few minutes. another etf launching today. china is continuing to track. market vectors is opening a china-based bond fund. these are bonds you can only buy in mainland china that up until now were largely excluded from outsiders being nonchinese citizens from buying them. they had a big hit about a year and a half ago when they opened the market vectors china etf,

syst symbol pek. largely for the first time. this is all starting to steam roll now. on monday, the link between the shanghai stock exchange and the hong kong stock exchange will go high. they will be allowed to buy these shares directly the first time. this is a big move. hundreds of shares will open up that weren't available to outside investors before. we'll talk with the ceo of market vectors, 12:45 eastern time today on "fast money halftime" report to talk about the implications how investors can get in on that here in the united states. back to you. >> certainly is interesting with president obama meeting with president xi in china. oil prices under pressure again. jacqui deangelis at the nymex.

>> we are seeing pressure on the commodities today. in the energy pits we are seeing red across the board. let's start with oil prices. brent hitting a four-year low. just under $82 a barrel. part of the problem here is that the strong u.s. supply is overstating. more of the focus than what traders are focusing on geopolitically, libya, et cetera. wti trading over 77 right now, but hitting 76.50 overnight. a lot of traders think these prices can still continue to go lower from here. something to watch. want to talk about nat gas prices. they got hammered yesterday. declines continued this morning. looking at around $4.25. that key level is $4.11. if we breach that we are going lower from there. we've got a storm potential coming. colder than average temperatures. traders aren't buying it until they see it materialize. i want to talk about gold prices. they are under pressure with the

equity market rallying. no real reason to buy gold. seeing it a at $11.55. could see more downward pressure. back to you. >> thanks so much, jacqui deangelis. will ford bet on that aluminum f-150 pay off? phil lebeau on what the ceo told him about the best-selling vehicle. stay tuned for david faber's interview with jack ma. alibaba sold $8.5 billion worth of goods with less than one hour to go on singles' day. tweet us your questions for ma. hash tag ask jack ma. to get a $300 million market cap has to below through 120.70. "squawk on the street" will be back. go ahead and put your bag right here.

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a big change involving ford. starting production on an aluminum version of its f-series pick-up truck. phil lebeau is at the assembly plant in dearborn, michigan. this shows what a big deal this is for ford. >> huge deal. we are here on the assembly line. this is the final part of the dearborn truck plant where the

new f-150s are rolling off the line. they are radically changing not only the fact they have aluminum panels on the truck, how the truck will drive and how it will react, but the manufacturing process. when you look at the f-150, keep a few things in mind. these will be rolling into show rooms in the next few weeks. by the end of the year, those who ordered one will be getting one. the big selling point, miles per gallon. it will be coming out epa rating later this month. many are saying will it be closer to 30 miles per hour? that's what people will be looking at. as we mentioned, when i look at the new f series, big point, the aluminum panels, high strength aluminum makes it about 700 pounds lighter and expected to be much more fuel efficient. here is mark fields, the ceo of ford talking about how retooling the plant has gone and the first versions are doing. >> the installation of the body shop went a lot smoother than i expected. we are exactly where we expected

to be on that ramp-up curve of production. we are right where we wanted to be. >> we'll be hearing from mark fields as well as the ford chairman coming up when they officially mark the job one ceremony here. it will be interesting to see what investors think about this new f-series, and if it gives a boost to ford shares, which like much of the auto industry, all these auto stocks have not been performing this year. that's interesting when you consider the fact that many believe over the next couple of years we could see auto sales go even higher. the first f-series rolling off the line. back to you. >> phil, carl and i were talking about how the hummer is back. this is clearly a play to conserve fuel. i wonder if there will be as much demand as ford initially thought begin we are talking about below $3 gasoline at the pump right now? >> absolutely, they expect to be strong. keep in mind, at the end of the day it's not just the fact it is

more fuel efficient, ford is touting it will have greater capacity, greater capability. there is a loyal base of truck buyers in the u.s. there always will be. i've got that base built in. the question is whether or not they embrace this new aluminum, fuel-efficient or say i will take a greater interest in ram or one of the gm models. >> great stuff. phil lebeau joining us from ford today. when we come back, we are minutes away from dave faber's interview with jack ma. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice.

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than coke and bigger than at&t. >> will it be sustainable becomes the question. when you see jack ma, so much of alibaba is about the individual in terms of creativity, but in terms of the structure of the organization. what is he going to do with that very valuable part alipay? >> i think the expectations game is very important here. speaks to your point about valuations. they are high. we had a record-breaking ipo. we had the first earnings report as a public company. that was a clean quarter. analysts are optimistic about this stock. here we are eight weeks after the ipo. >> also big questions about margins. you come down nine points in margins in a year. that's going to get people's attention. the degree to which they are spending on compensation and so forth. what their plans are. the hash tag ask jack ma.

the questions are about will you buy amazon? will you buy ebay or yahoo? >> analysts say in order for them to get into the u.s. market, which we know they want to do to expand in amazon and ebay, they have to make pretty big acquisitions. that has been the strategy. >> could be interesting for apple. there is a suggestion the corporate deal would mean apple pay in china would be backed by ali pay. so that would operate the back end of the system. >> the company has gained $65 billion in market cap. that is greater than the gdp of l luxemburg. we'll take you live to china for david faber's interview with alibaba executive chairman jack

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it's the final hour of singles' day in china. he joined us at our home for the historic ipo. now jack ma invited us to his on the biggest online shopping day in the world. in a cnbc exclusive, we are live inside alibaba's headquarters in china. >> i'm david faber in china at alibaba's headquarters here. of course, we are joined by the after mentioned jack ma, executive chairman and founder of alibaba. thank you for having us. >> thank you for coming all the way to china and introducing alibaba singles' day to american. >> you're welcome. i learned a lot over the last 48 hours. you just visited the auditorium where our viewers have watched the running tally how much has been sold over these last 23 hours. you've got one more hour to go. i think we were at $8.7 billion,

54 billion rmb. what do those numbers mean to you? >> it means a lot of responsibility. i've got to deliver all these packages the next three too five days. i think it means a lot in the domestic demand of china is huge. internet can change china's young people. i feel excited, but i feel worried more now because i wish there would be no snow, no rain the next three or five days. >> when you went inside it was 260 million packages you have to deliver. >> yeah. >> that's an awful lot given your average is about 16.6 million, maybe 17 million a day. >> yeah. in china the average people around 30 million package. today will be ten times bigger than that. all the traffic we are going to

watch very carefully which i was told like 500 intersections of the logistic centers will be watched. >> you think you'll be up to the challenge and get the packages to people the next three days? >> i hope so. so far the weather is okay. we can now see the snow. we don't see the rain. i was told tomorrow was going to be finished. hope everything goes off smooth. >> right. apparently people were able to see the sun in beijing, too. they closed down a lot of the factories. >> 11 in 2009 was not much of anything. last year 5.8 billion, this year let's figure at least $9 billion. how much can this grow? >> i think, i gist told the people there, i think this is

number six. on the anniversary of double 11 day i wish would be a global shopping day for states, for europe, for anywhere in the world. so i really can to the imagine how big that will be because i wanted more people involved, more companies involved more offline the shops involved. it's going to be big. i don't know. this day, i think the number today, i'm happy about that. yesterday afternoon i was in a meeting. people discussing how can we some way control the sales because we don't want to explode logistic system. >> we haven't seen yet. hopefully, you haven't. again, 300 million packages is an awful lot. is it realistic for you to think you could be global in that way that even in the states we'll celebrate singles' day to a certain extent? we buy an awful lot of stuff over there already. we have plenty of days in the

states where we are buying things, 60%, 70% of the economy is consumption. a lot different than here in china. >> i think absolutely. absolutely, there is a great opportunity. six years ago, in the past seven years people challenging us. why they want to buy it? because we make this day is not an online purely sales day. it is a day the manufacturer, the business guy communicates with the consumers. consumers, it's a way to note innovation. the new products, the new trends of every year of the business. so i think the american people, if they know there will be products not only from china, products from philippines, kenya africa, argentina, all these nations, it would be unique. i think we have confidence. you don't expect to happen next year but maybe expect to happen in five years. >> five years. you do believe when and if that

time comes in the states, and in other countries, that you can differentiate the alibaba platforms, whether it be ali express or timal, you think you can differentiate them from the amazons and ebays of the world? >> yeah, of course. this is the question just like five years ago people challenge us. can alibaba be bigger than amazon, bigger than ebay? well, trust the young people. trust this generation's innovation. they are making things change in innovation every day. all the consumers want new things. they want good things. they want unique things. if we can create these kind of things for consumers, they will come. >> you think you've been doing that here in china? >> yes. it actually is a very difficult to do in china. we are so scattered everywhere. if we can do it in china. >> not in the united states? >> you benefited from the

absence of a lot of brick and mortar stores. there aren't as many here as there are in the u.s. or germany or japan. you benefited from the growth of the wireless business, for example. so much of your transactions now on the mobile phone. those are advantages that you got because you were first, aren't they? >> yeah. this is the advantage. also disadvantage chinese consumers does not have that much money like the westerns, right? we are trying to help in the remote areas, the villages how to get people shopping online now. i think an extra two, three years, the demand is big, but the money is not that big. we have to pay, we have to wait patiently for another six, eight years. so in america, i think definitely think, we have plenty of china's products, we don't want to buy online.

but you will see. when you have really good products from all over the world, when you really give them the good price, when you really give them good services, surprise, they will do it. >> do you think china can become a consumer-led economy? the chinese have always been big savers. it's only 34% or so of your gdp versus twice that in the u.s. can you ever approach that? >> changing so fast. see? i think i don't have the exact numbers, but i would bet 90% of the buyers today, i think we have 200 million buyers today, 80%, 90% are young people. they're not very rich guys. i think it takes time. we always have to be patient. you will see. five years ago, eight years ago,

people spend $200 every month. now they are spending $2,000 every month. ten times bigger. >> 307 million active users. you are saying most of your active users acted today, it would seem. >> yeah. i heard a lot of people speak saying they want the government to give a national free day to shop. >> you mentioned, of course, amazon and being bigger than amazon. you and i spoke when the company went public september 19th. since then your stock price has gone straight up, up 70% plus. you now are bigger in market value than walmart. what is your reaction to that?

>> many years ago people say alibaba is a terrible company. i know we were not that terrible. we are pretty good. we are better than people thought. today when people have high expectation, we are a company only 15 years old. average age of young people is 28 years old. it's a young company, young industry. it's not easy. very important, i tell my team be yourself. do whatever we believe is right. i don't dare watch the stock price because this is the other people think who you are. when people think you're good, you have to be sure that whether you're really that good. when people think you're bad, we have to be clear whether we are really that bad. >> you don't watch it? >> i don't watch it. i think let the market take care

of itself. we should watch and take care of the business. on a bad day, it's hard not to feel bad about it. >> we listed in the year between in hong kong exchange. i said we already got that marriage experience. we know what happened. up and down. if you're up and down, you can never do business. it is good when people -- i don't watch it, but people telling me, the stock got crazy. the stock going down. so what? going up, won't sell. >> helpful to use if you want to buy something else.

i want to talk about other ofrgs you made today. you discuss the possibility of taking public your financial services business. it's not a part of alibaba, but alley pay is its most well known part. it also includes micro lending and that large money market fund you have. are you going to take it public? >> yeah, sure. i think we should. as a company, we have to be transparent. go public, millions of people, thousands of people watch you. that would make you operate public governance, transparent will do better. we are in a business related to finance. i want this company to last long. i want this company to be audited by everyone involved. it's not the money we want to get, it's the transparency we want to get. it's the corporate governance.

it's the most important and understanding and trust from the people. i think we definitely will. >> is there a lack of trust right now in that part of the business? is there concern people have? >> people are concerned about it. it's been growing so fast, so big in china. 90% of the young people are using online payment, using our payment system in china. everybody say, wow, that big. anybody watch that for us? we use every system. if we can be public, more people know about us. more people look on us. that would be good. i can sleep well. if millions of people watch the company, i can sleep well. >> there's a lot of the big banks that probably aren't too happy about that business? >> we do business making consumer happen, our customer happy. if they are not happy, they will

get used to it it. think today we got a lot of understanding from the banks. we are giving them the technology and know-how. we want to help them so they can help our consumers, our customer better. last year unhappy, very angry and we had a lot of fights, but this year we had a lot of discussions. we understand each other. we are using data technology. they know they cannot kill us. we don't want to kill them. we started work together. >> so things are a little -- >> much better. >> you explained the value proposition to the banks? >> tell them how you are going to do it. we can do it more affectionally, much cheaply and fast. we want to support the small business. we want to support consumers which using their technology, they are not able to do it. >> when do you think the ipo would take place?

i think it's called ant? >> we don't have a specific date. i want the company's ready, pretty good, pretty healthy. very strong growth. >> alibaba go public is a big size. let people enjoy the healthy growth of our company is more important than be there so big and make the stock such a focus. >> you do it more likely in mainland china than in the u.s.? >> we would love to. we always want those people to get involved to get benefit from it. china definitely is a very ideal place. when you see 80%, 90% of young people using the service, if they can buy our stocks in china, would be great. we are pretty open. we never say only in china. maybe somewhere in the world. >> right.

a lot of bankers listening ri it now will be chasing after you. we'll take a break. i want to talk about the other news, bigger issues jack ma has talked about with us. we are back with jack ma after this. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier.

it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. mi'm a lineman and troubleman. i work out of the stockton division. been married seven years. i got two kids. this is where i want to raise my family. pg&e lineman, our job is to keep the power on so that our customers can go about their daily lives. if there's an emergency, we'll get the lights back on.

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the s&p which was going or is going for five straight the first time since june is down about a point, as well. let's get back to david faber in china with jack ma. thanks very much, carl. we are back here in china with jack ma. jack, we are talking about alipay and that business it's a part of before the break. about 37.5%, i believe, of the profits of that go to alibaba. if that was an ipo, alibaba does have a right to purchase, was is it 33%? on alipay, a lot of talk about a partnership with apple. you met with tim cook. is a partnership between alipay and apple pay a possibility here in china or anywhere?

>> everything is possible. i respect apple. the company changed the world. i like tim cook's vision and execution. perfect. both are interested. good things takes time. we are pretty patient and we are right now working on the teams discussing, not only on the payment but on the other side because we believe is a lifestyle. alipay, both sides are interested. >> when you say the other side, what do you mean? >> people having the cloud and apple cloud and also the apple they want to sell the phones here, probably our channel is the best. >> i was watching. apple was number four on the board and there is no discounting. >> the only thing they do not

have enough products here, enough amount of them, phones, to be sold on our site. because i bet if you sell the iphones here it would be amazing. you would want it to be about payments or broader, bigger circle? >> company like apple and alibaba, if we do something we should look at a long view term. think out of the box. if it can be done, great. if it cannot be done, let us not stop doing the other things. >> describing what might happen to apple, you give people a sense of the aecosystem in alibaba.

it's not similar to amazon or ebay. you talk about the ecosystem and write about it in your shareholder letter. what does that mean? the u.s. investor say this is china google. >> the china facebook. >> yes. alibaba is so unique. looks like facebook. we believe helping small business, you should have an ecosystem get more people involved. big company. millions of small business, it's

impossible to give each business a solution. we should get more parties involved. that is the ecosystem we believe. i've been telling people an ecosystem of africa it is not decided by lion, tiger and elephants, but the minor insects, the tiny insects. these are the things that change the future of ecosystem. so fours, consumers, small business are the key. if we can serve these consumers and small business well, big companies will get involved. if you keep good size of shrimps, all the sharks will come, big fish will come. >> you have surpassed $9 billion now. >> oh, good. >> not bad. that's a good day's work.

>> i start to worry. how can we deliver? every hour i think about how we can deliver. there will be a million of guys on the street. i don't want them to get hurt or injured. everything is peaceful. this is only thing i want. >> you want a lot of other things, too, i should say. you talk in fact sometimes about the big picture when you say we firmly believe that business in the 21st century must take responsibility to help solve the problems of society. >> yeah. >> i've interviewed, i don't know how many hundreds and hundreds of ceos in my home country and abroad, i don't think i ever heard any of them talk about the problems of society being one of their main responsibilities. >> i think it's not the main responsibility, not only the main responsibility but the great opportunity. company like our size in china, it is very difficult to catch one or two opportunities that can make you sustainable growth.

good opportunities, all the big companies start to grab it. so what we believe a company like our size have to think about what a problem in china we'll have in ten years. you start to prepare now. this is exactly what we did. ten years ago, 15 years ago we think environment for small business is so unfair and so unsophisticated. how we can use the internet to build up the infrastructure for small business. i worry about the china environment, the water, the air, the pollution, the safety of the food. that's the big challenge in china we have in ten years. how we can use our technology, our data that in ten years solve that problem. >> how? how are you going to clean the air up? this is supposed to be a beautiful city, i haven't seen it because the pollution has been so bad. >> the government is putting a lot of efforts on that.

i think everybody start to realize how serious it is. while we worry about the water, the air may cause lung cancer, liver cancer and stomach cancer because of the safety of the food. how we can solve that problem, as i told the team if we do right, in ten years, china should not have a lot of hospitals, should not have a lot of factories making medicine, should not have a lot of doctors, we should be making sure china have less hospitals, fewer doctors, few medicines. that way that means we solve the social problems. >> i don't mean to doubt a man who began this company 15 years ago in your apartment, but i don't understand how this company is going to be able to solve those kinds of massive problems. you have to give me some sense of what you're talking about. >> from what you buy, what you eat, vegetables, fruits, fish you buy, your living habits,

which areas, the air conditions there, the water conditions there dna, all the health check data, will tell you, okay, you've got this problem. solve the problem. in some cities we have liver disease. that area must have water problem. we should involve the government, inform the government, inform the community. clean the water. do something to solve the problem instead of just sending them to the hospitals. getting the data we have, we can prevent the disasters to help. instead of disaster coming. >> big data, which i assume you have an enormous amount but are only the beginning of really

understanding, you believe can actually cure some of this society's biggest problems? >> yeah. >> that is quite a statement. >> well, this is something we want to do ten years later. 15 years ago, 10 years ago telling people china some day we'll have a lot of people shopping online. we have 9 billion a day, they say this guy is crazy. >> they said you are crazy? >> nobody believe it ten years ago. today start to believe it. we are talking about data can prevent china having a lot of disease. people don't believe it. let's see ten years. if we keep on doing that, focusing, really solve the problem. >> you need, would seem to me you need the government to be your partner on that. >> yeah. government is definitely very essential partner in our ecosystem. especially in china. >> will they be a partner that way. do you believe that would be the case? >> i think so. you work with them. communicate with them. as people always say, china

government, censorship, here and there, i see the positive side. if china's government is so conservative, too backward, too censorship, how can china have 600 million internet users? internet is so new to any government and data so new to any government. sit down. talk to them. listen to them. communicate with them. >> if i'm a shareholder, i want my executive chairman to not be focused on solving the world's problems. i want you to focus on the bottom line and top line and do better and better. what do you say to those? >> as i always say, to me, customer number one, employee number two, shareholder number three. those people shareholder number three does not mean i look down

upon them. when we decide which way to go, we believe customer, society number one. i think those people who buy us believe our philosophy. this is how we got to today. this is how we'll lead us in ten years. solve the social problem. because if you have a solution, solve that problem. you create a different unique value. you will be paid. i am pretty confident. >> if you don't solve those problems, does your future get hurt? >> no. i think even if you cannot solve the problem absolutely 100%. if you can do even 20%, 30%, you can make tons of money. making money is the result. you have to know very carefully what you want to do.

to us, this is my earliest shareholder question me, jack, what are you doing? how can we make money from the small business? i was ten years ago saying when i watch the "forrest gump" nobody make money by catch shock and wills. people make money by catching the shrimps. solving the problem for small business. solve the problems of the nation, of the world. you will get a pay. you should have philanthropic heart but business way. you should not do the opposite of business mind. >> it works the other way around. >> you have to believe what you can do and do in a very business way. >> you mentioned "forrest gump" who you brought up as well when we talked on september 19th during your ipo. which leads me to the film business. i know you like movies.

>> yeah. there was a lot of coverage you went to hollywood and people speculating jack ma wants to buy a film studio. does jack ma want to buy a film studio? >> not necessarily. i want to learn a lot from the inspirations, innovations in hollywood. in ten years we'll be focused on health industry, happiness industry. health industry, worry about the disease. happiness is china is coming to the middle class. i think the u.s. hollywood grow so fast when u.s. grow from the big amount of middle class people coming. next 10, 15 years, china will have a lot of middle class people coming. they need a good cultural products. i don't want to see china's young people have a deep pocket but shallow mind. hollywood brings that. hollywood, if you can put movie,

music and cinema combined with commerce, it will be great. it will be the greatest innovation we can have. >> making people happier. how does it help alibaba? how does it fit into your ecosystem to be providing movies? >> we have 600 million registered users. over 300 million active users. we are probably the largest entertainment company in china. every night, not only today, every night 60 million, 80 million young people browsing our site. they are having fun. they need a good content for movie, tv series, for music, for online gaming. these are the things those young people need. these are cultural food. >> did you learn anything when you went to hollywood? did you come away with a lesson?

they can be tough over there some of those hollywood people. >> i learned some success stories. i tried to learn some mistakes they made. in japan they have a big appetite many years ago for hollywood. we have to find out why they failed. i'm good night only interested in why people fail. i'm not interested in why people succeed. very difficult to learn from people why they succeed. >> we learn from failure, as well. you tried to start an internet business in '95 and it didn't work. >> yeah. i learned so many from mistakes i made. i learned so many from the usa. >> from the usa. >> you see yahoo, netscape, the thing's up and down. we have to think. if you want to be successful, it's very difficult to learn from the other side how he succeed. there are lucky factors inside. but the mistakes human being makes are almost the same.

very few people can survive. you have to learn how to survive first instead of being successful. >> i want to take one more break. i want to ask a couple of questions we received from twitter, then we'll let you go. we'll be back with jack ma, executive chairman and founder of alibaba. how do you beat the number one seed? you just have to win 70% of your points at net. and keep unforced errors under 10%. on the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. data can help show you how to win, no matter what business you're in. today there's a new way to work. and it's made with ibm.

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just over an hour into trade here at the new york stock exchange. the markets flat as a pancake. one of the major events of people on financial markets today is david faber's interview with alibaba. alibaba surpassing $90 billion in sales on singles' day with 20 minutes to go. light cross back to david with jack ma. >> thanks very much, simon. jack, we were talking a bit

about hollywood and what you were trying to learn there. i watched you walk onto that auditorium, i watched you get mobbed by people wanting to just take your picture and everything else. you are a celebrity in this country. has it changed the way you operate? is it a pain? >> it is a pain. especially "forbes." i don't know which magazine said i'm the richest guy in china. this is a greatest pain. i never thought i would be. i don't want to be. i just want to do the things -- >> you don't want to be rich? >> no. >> you started alibaba not to be rich? >> no. >> why did you start it? >> i said when i start the business, i asked my wife do you want your husband to be the richest man or a respected businessman? she said be respected business because we never thought we would be rich, right? >> but you are. sometimes an entrepreneur like yourself, that typically does

motivate a lot of people. having dealt with number silicon valley, that's the reason people start businesses to make a lot of money. >> i was just testing how i do business and when i do internet, can i be successful? can i try new ways? really, people say, jack, please, rich people is good. yeah, it is good, but not that richest man of the world. or of china. it's a great pain. when you are the richest person in the world, everyone surrounding you for money. >> do you feel that way now? >> yeah. when you don't have money, you're looking for money. >> you find out who your real friends are, too. >> i have a lot of friends. i think today when i walk on the street and people look at you in a different way -- i want people to see this is an entrepreneur. this is a guy having fun as himself. i want to be myself. today, people probably have big

demand on you, on many other things. >> if the money is a pain, is there something you can do to put it aside to get rid of it? >> yeah. i want to focus on these three months. next year when i have time and set a good plan how we can do more for society. spending money. as i told bill gates. spending money is much more difficult than making money. because we are learning how to do the charity things and how can do the environment, water protection. we are learning. >> do you see yourself setting up a significant foundation and becoming becoming becoming a philanthropist along the lines of bill gates? >> you cannot spend it by ten baths, 11 houses. you want to spend money in an effective way.

spend money in a business way that can really help people. so i think when you have that much money, it's the trust people are giving you. how you can spend money more affecti efficiently. who can spend money more effectively and do better. >> that is a nice way to think about things. not everybody shares that view. i want to get to twitter questions. talking about money, yahoo have plenty of it thanks to the enormous move up in alibaba. >> we helped shareholders. >> they still own 16% of your company. how is that relationship? some say it was not doing well. but then marissa meyer helped put it on a better track? >> good shareholder now. we work peacefully. i'm so busy here and they are so

busy there. as i said, when i see my mother busy in the kitchen, good, stay away. they are busy changing yahoo. i watch them carefully and also working on my own things. >> working on your own things. what does that mean? >> well, i don't think today that a lot of yahoo people in the company that know china e-commerce or china internet, we have to focus on ourself. we have to make sure that the shareholder -- i think the shareholder would be happy because the result is happy. >> certainly has been. >> i don't think they want jack ma to follow their strategy. they want jack ma to make money. judge, that's what they want then to be able to exit eventually, i guess. >> they will. i think they're happy. do you think they are happy? >> i think they've got to be very happy. do you think ma is happy?

>> i think he is happy. he's been there for so many years. he wants to stay. if he wants to stay, let him stay. >> you are going to let him stay. you don't want to encourage him to sell? >> i would be happy if he sells. i would be happy if he stays. that's his choice. that's his freedom. >> all right. let me get to a couple of these twitter questions. then we'll let you go. jacqui tweets here -- i've done this by the way, have viewers take over my interview. are you happy? i did pick these. if so, what makes you happy? >> this month i'm not happy. >> say again? >> this month i'm not happy. >> why not? >> i think too much pressure. the pressure from various -- i tried to make myself happy now. i know if i'm not happy, my

colleagues are not happy. and my shareholders will not be happy and my employees and my customers not happy. stock goes up, people have high expectation on you. i think too much of the future. >> so the ipo made you unhappy. that's what i'm hearing you say. >> not the happiest people expected. the ipo is great. i'm happy with the wonderful job the team make. i'm happy of the results. but honestly, i think when people think too highly of you, you have the responsibility to calm down. to calm down, be yourself. if i do not calm down, everybody will be jumping like monkeys. that's no good. >> what are you going to do to make yourself happy, jack?

>> i don't know. i need to have five or ten days' sleep. >> that always helps. finally another tweet. what is the most important lesson you learned in business? s. >> always trust your people. spend money, time, results on your people. the best way to make your people good is the culture. making sure that i always be a teacher. a teacher's responsibility and the fun part, the great value of teacher is always expect students to be better than you are. i think the lesson i learned every time, if i spend more time with my team, business good, everything's good. if i spend more time thinking about making money, start thinking about other crazy things, team not happy, result is bad.

>> so it's about keeping everybody happy who works for you. >> you cannot keep everybody happy. >> you can't. >> you try to keep the people you trust and they trust you. i cannot make every shareholder happy. the shareholder has to understand. this company have a strange, unique philosophy. we are building on a business model. it's an ecosystem. we are focusing on helping customers, small businesses. focusing on making sure employees are happy. and then the shareholder. >> so if i have to ask you to describe the culture of alibaba, what is it? is it that? >> trust. and transparent. because we are working with my company and the team, we have 30,000 smart people. if you work with smart people, i've got to be transparent. make sure they trust you and you trust them. making sure everybody have the same vision and value.

these are the core. because they are so smart. it is sometimes great to work with the stupid guys, whatever you say they follow it. but it's a real pain if you are smart and they're dumb, disaster. >> i asked you, people say they talk about the variable interest entities, for example, and they wonder could things change at this company, can i trust jack ma? >> i trust my people. i trust the young generation. i think it's not jack ma change the company. it's this young generation is changing the company. it's the new technology change the company. if you say whether you trust me, just like whether you trust the young people, young generation, which i believe, and i trust my colleagues. i trust them more than i trust

myself. i always rely on these guys. they are younger than i am. so it's always like that. when you trust me, i don't care you trust me or don't trust me, but i care. my team trust me. and my customers trust us. if you can do that, whether shareholder trust me or not, not important. they know if -- they trust the good result. >> jack ma, thank you for your time. thank you for having us here at your headquarters. appreciate it. >> thank you very much. >> jack ma, executive chairman, founder of alibaba. guys, i'll send it back to you. >> david faber in china. thank you so much, as we continue to react to what jack ma told david over the past 45 minutes. obviously, talking a lot about valuation. he's humbled by the stock price, which is down today by about 2%. amazon is up 2%. >> it was down premarket.

it's not a response to anything that happened during that interview. i loved it. he might not have advanced many of those big issues we discussed, but you got a clear idea of his philosophy, which is educational. if you put young kids in front of that, how do you succeed in business, what should your focus be, that was a master class. >> it was candid. he admitted this month he hasn't been happy because he is feeling the pressure and needs a long time to sleep. if he's not happy, people around him will be dancing like monkeys? >> coming back to the pressure from the stock price. the stock is up 17% since the ipo. >> which he doesn't watch. >> but he obviously feels that pressure. he says, i don't watch it. taking care of the business. when people think a lot of you, you have to stand your ground. >> i think it was interesting to get his insights into some of the concerns, bigger concerns, bigger picture, worries he has including pollution and health problems that poses in china. how he thinks -- this is an

interesting point -- big data is a solution to that. just to give you a sense of what goes on in the mind and what keeps jack ma up at night. besides 300 million packages for besides. >> the ali pay ipo it may not just be china. and it would be some sort retail deal. up next. goldman sachs strategist david goldman sachs strategist david costen. hey matt, what's up?

i'm just looking over the company bills. is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business,

i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. 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. stocks are relatively flat here this morning. still green arrows as the dow for its sixth straight increase. third time since june we've seen that. joining us is strategist, david kostin your strategy in 12 months. >> 2150. >> record price on the dow. the s&p, transports. santa claus rally coming early?

>> i think a period of time right before reporting earnings. once they reported the opportunity of the corporate buy backs kicked into higher gear. >> is that a good thing that this rally is -- >> about 25% of the annual buy backs take place of the during the months of november/december. we're in that sweet spot where corporations have the ability to finish reporting results, a lot of cash and margins are high. so that is one of the uses of the cash. we've got buy backs. in fact they are up around 25% this year. my forecast is next year you will see it increase about 18%. >> what are your predictions when you say the market will rise about 6% because of what earnings growth will do. >> when you look at the individual companies the buy back is a variable.

but from the index level it is not. >> so -- >> right. this is really earnings growth of roughly 5%. and the multiple is high. >> what do you say to this point raised by the journal yesterday that people should be concerned about the lack of revenue growth. the flipside the buy back. companies are nearing the earnings per share to boost it. >> number one source of cash is to invest for growth. that is the biggest use. companies are the investing for growth. what's different next year is we're not going to get the same increase in energy company spending but the rest of the economy will see strong cap ex growth. -- >> revenues are growing ruffly 4

to 5%. the economy is going to gro around 3% next year. this is an environment where growth is more modest. >> you recently put out o note talking about the impact of a strong dollar and tim pact of low oil prices. is that going to play out into 2015. >> most important variable is u.s. economic growth. key driver of revenue, margins and earnings. second would be your global, global growth whether in asia. and relatively weak growth in europe. oil and the dollar are relatively far down the list in terms of drives. however i recommend focus on

u.s. companies selling domestically. those are company where is revenues are the domestic. and they are better positioned. >> give us more names. >> that's one strategy as an example. another would be corporate buy backs and we talked earlier, even though you are a cynic. >> what some companies for example, marriott have done with buy backs is extraordinary. i'm just an observer. my question is whether the companies aren't growing sufficiently, because of the buy backs. which is a form of financial engineering. it is not a form of informsing for growth. >> revenue growth is there. >> -- >> we're a company buy back yields. via com.

in general that is a winning strategy, to own companies that are repurchasing shares. companies are there are high margins. so lots of uses for cash. buying back stock is one example. paying dividends is another strategy. >> can those margins stay into 2015. >> i think they can stay around this level. maybe a touch higher. >> -- forever. at what do you change the tune and not be bullish. >> margins have been this way for few years. >> you can't cut the cost and cut the -- >> the economy is growing now 3% forecast into next year so that is a tail wind for stronger growth. >> do you think there will be disruptions as the federal reserve pivots into a more normalized interest rate?

>> certainly they have been talking for a long time. and if -- there was one event as well tele graphed as possible. question whether that comes in the middle of the year or late in the third quarter. it's certainly well tele graphed. >> what did you learn about the slide we saw in october? should we get used to those swings? >> entirely consistent what we've seen since 2009. that length of time. that magnitude of pullback was 7% drawdown from a closing perspective it's pretty consistent with what you have seen in the past. >> david kostin. chief equity strategist at goldman sachs. it is seconded before midnight in hon joe china. a record day for alibaba.

sales on singles day crossing 9 billion dollars. and jack ma talking on that possible partnership with apple. >> i respect apple. as the great company that changed the world. especially the mobile time. and i like tim cook's vision and execution. perfect. so we had great discussions, and i think both are interested. good things takes time. so we're pretty patient and right now we're working on, teams are discussing not only the payment but other side. because we believe it is a lifestyle. and the apple is a lifestyle. and ali pay. definitely both sides are interesting. >> joining us is yahoo's for columnist. and