>> okay. tim, thank you so much for joining us today. we appreciate your time. >> thank you. >> he said the animal rights, the extremist views. that was kind of like -- i don't know. he wasn't being sensitive to everyone's needs in that case. >> either way, our time is up. i have to hand it over. thanks for joining us today, everybody. time for "squawk on the street." good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. bulls have their work cut out for them. fuc futures are lower on reports from macy's. bond market reopens today. ten year is around 2.33. crude oil is weighing on sentiment yet again, almost back down to $77. our road map begins with macy's earnings. the retailer cutting its

outlook. why is the stock moving higher in the premarket? mcdonald's ceo with a vote of confidence from the board. what's coming at the fast food giant as we hear from the chairman. and a watershed moment for twitter ceo. it is twitter's investor day as yahoo! ceo marissa mayer faces questions of her own. first up, macy's reporting third quarter earnings, 61 cents a share. revenues do miss as comp sales down 1.4. macy's also reducing sales growth forecast for the rest of the year. the ceo says he remains optimistic for the rest of the quarter. they hold margins pretty good in this environment. inventory is up but not by a lot. >> macy's is a tight ship. you can look at the so-called forecast and say this is not an aberration. they've repeatedly done this. they've cut forecasts, so to speak. you go through and see big

buyback, optimism, easy comparisons. you see they're not spending nearly as much money as you would think to get these sales. you take a look at the multiple on number of, say, foreign chan change. that's not that expensivexpensi. >> comps, we said, down 0.7. people had lowered their estimates to one. wouldn't you have expected more of a gas price tail wind. >> great call. when the headlines came out, the stock was down a buck and a half. that makes sense because, geez, how could they do minus comps. let's get two, three comps. i've seen guys doing four, five comps. in the end, this stock remains a core holding for a lot of people who want an undervalued retailer. because target keeps delivering when you see 9 million shares. obviously has tremendous conviction. i don't personally want to own a stock that has negative comps. >> of any kind? >> no. no, i mean, i got a costco out

there doing really incredible numbers. why do i need to own a macy's. there's a lot of companies in the sweeter spot. the mall is a challenged space. macy's is part of that. also, 42nd street, i don't think it looks that sharp, but they're delivering. >> it's the third drop in comps in eight quarters. it just shows you, you can be really well conditioned, but the environment is going to test you. >> yes. >> and you mentioned malls. i'm thinking what mickey said at our gala last week. the american mall is cookie cutter, cookie cutter. >> i thought that was a great interview. sometimes we do things at cnbc, that gala, a lot of the juice at that dinner was so exciting. i would look at macy's and say it's not as bad as the whisper. there was talk this was going to be a major miss, that macy's has not been hitting the ball out of the park.

terry lundgren shows you, don't bet against me. he talks about maybe we have different weather patterns. i think this is going to continue what has been a very nice run in retail, even as you would say, well, where is the line about gasoline, disposable income. not there. >> we're going to talk later on, in a few minutes, about what you do with jcpenney today. reporting after the bell. >> much tougher. >> men time, despite sluggish sales at mcdonald's, the nonexecutive chairman telling "fortune," quote, we're very supportive of donn. we see the leadership team moving forward with a sense of urgency. language matches almost exactly what was in that comp release. >> travel trust owns this one. feel it's a very inexpensive stock because it hasn't done anything. people probably say, why didn't they say, you know what, this is not exactly what we're looking for. the fact that they're for him --

in some cases, people will say, you know what, these guys are oblivious. i look at the last month's numbers and i see improvement. >> dramatic from september. >> why not give the guy a chance? he puts up the first real good number. maybe you're going to see a bit of a trend. >> interesting. we talked about the yield all the time. the article quotes some analysts saying, what do you do when you go from the industry's best results to the industry's worst results in three years? that doesn't happen a lot. >> no, but you take a look at chipotle and say, what do you do? you serve this organic, natural, anti-food chain, meaning the company that spawned us, mcdonald's. mcdonald's is on the wrong side of history. that's what people are worried about. the soda companies have been able to do okay. wait a second. burger king is not bad. wendy's holds up at the $8 level. if mcdonald's -- something clicks, you'll see this big leverage. that's why people hang out in

the stock in the meantime. they're paying you that dividend. in order to be able to wait until some changes occur. >> which you've said is part of your reason to buy. either he gets it right or the board says enough. >> it's the twitter of fast food. >> which we're going to talk about in a minute. yahoo! meantime, buying bright roll for about $640 million. that deal is going to make yahoo!'s video advertising platform the largest in the country. separately, reuters reports at least two big yahoo! shareholders are pushing aol ceo tim armstrong for a merger and want him to run the combined company. cnbc and yahoo! have a business alliance to share and co-produce editorial content. this is turning into a heated parlor game. >> what do these people want? honestly. did we really just have to sit there and say she's a total bozo, the stock is up 20%. aol on the other hand is down 3%. this acquisition of bright roll

is a good acquisition because it does program matic video, which is something armstrong is struggling to do. i say this whole notion that mayer has done nothing misses the point that it's not financial engineering. it's genius that the first thing she did was negotiate a deal to get out of selling more alibaba on underwriting. what do you have to do to please shareholders? >> but that is not increasing page views. that is not increasing share in display. the stock price, you could argue, is untethered from those core metrics. >> that's true. what you're doing is betting it's going to be a good steward of capital. is it doing well? it's caught up in what we all know but very few people talk about, which is the death of advertising online. when you're programmatic, that should say to you that's a spam way to be able to place ads which takes away the one-on-one relationship, the gin and on

toic relationship we used to call it, where you go out with a big advertisement firm and say, you need placement. it's placement across the board. that's hurt yahoo! more than anything else. >> it is the first big purchase since she got the alibaba proceeds in her hand. >> well, the margins for video are holding up. on election night, you saw katie couric doing a yahoo! presentation. you say, well, wait a second, maybe it's catching on. we know that google -- that youtube haven't even begun to monetize it. there is a sense that maybe this is the way to go. i continue that yahoo! goes toward much more of a yelp model. they buy some of these companies that have been able to lever the yellow page of travel, restaurants, small business. that's got to be a better way to go. i think video is going to collapse too. it's only a matter of time. >> you mean margins? >> yeah, they flood the market in everything. advertising on the web is horrendous.

tv advertisement, despite the downgrade today of voiacom, it' holding up good versus web advertising. why don't people tell the truth about web advertising? there is just a tremendous pressure down. you've got to get away from it if you're yahoo!. you have to use that money to get away from it and put together a grubhub, a home away, a yelp. prices are going her way. she certainly can do it, but you cannot just rely on advertising. that market has just been destroyed by google. >> you know about this firsthand. >> i know from the street. if you look at the street.com's advertising, you can tell if the company didn't have subscriptions, it would have been out of business a long time ago. >> very tough environment. meantime, $3.4 billion in fines have been doled out to five major banks in a probe of currency market manipulation. ubs, hsbc, citibank, jpmorgan,

and royal bank of scotland will pay those to regulators. ubs was hit with the biggest individual fine of $661 million. i think for viewers, jim, it's hard to keep all of this in your head. fines coming here, coming there, doj, global regulators. in this case, instances that go back at least a year. >> there's a lot of checkbook writing. the thing i would point out is that when attorney general holder steps down, i think you're going to see a cessation of this. i think the new attorney general not going to be -- this is the swan song in the united states. this is one, by the way, where the tapes were bad. guys, when you're on tape, don't say things like, what a great cartel we have going here. let's just keep fixing it. i mean, honestly, when you're on tape, say things like, i'm a competitor. don't use that language that basically says you guys are losers who are not part of our cartel. the tapes destroy these guys. this was a an easy open and shut. >> does it mean anything for the

way these shares trade? >> i think we got a couple jpmorgan downgrades today. >> one yesterday too. >> a key downgrade. i'm thinking there's something to these downgrades that's bigger than jpmorgan. these read like, is jamie dimon going to be as aggressive? i look between the lines. i think jamie dimon, you know, has a terrible disease, obviously. maybe you have to rethink. this will be denied by everybody nine ways to sunday. i look at these downgrades, and they seem too ephemeral. there's not enough there to make me feel like you should sell jpmorgan. and no read through here on these probes. the probes are running out. there isn't anything -- what else are they going to do? automatic tellers that spit out money where they were rude to you. they didn't be like gps. >> but you're saying these

regulatory head winds exit with holder? that seems hard to believe. >> no, because -- well, fannie mae is telling me stuff offline that they're really expanding the way you can get a loan. the banks have to be a little more forthcoming in loans. if you're wells fargo, you're saying is, listen, we're out of the woods already. if you're jpmorgan, i mean, sure, absolutely, there could be some other guy in government. the fdic could call and say, listen, why don't wow pyou pay check of $5 million and we won't open a file on you. some people would say it's extortion. when the government calls you, and i'm friends with people on both sides, the government calls you, they say, listen, it's 15 billion. why? because the next guy is going to pay 16 billion. okay, sounds good. >> when we come back, we're going to preview twitter's investor day today. >> oh, wow. >> i think you have some thoughts on that. >> also ahead, walter price.

been pretty outspoken about twitter management. what does he want to hear just a few hours from now? take one more look at the premarket. doesn't look that good. if the dow can do it, seven straight would be longest streak of the year. in fact, back to march of last year. "squawk on the street" live from post nine at the nyse when we return. ♪ music ...the getaway vehicle! for all the confidence you need. td ameritrade. you got this.

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♪ twitter is set to hold its investor day in less than three hours. the event comes just days after the company's first anniversary as a public company. amid that big investor impatience with the management style of ceo dick costelo. a story that has become almost a mainstream press story. >> yes, i think there's a sense -- there's two themes to this. one is that twitter should be one of the biggest, best juggernauts going today. as a matter of fact, there are lots of people who feel twitter is going to be indispensable worldwide. and there's a group of people who say the only reason why it isn't is because of costolo. he doesn't really know what it is. i have to tell you -- >> do you believe that? >> yes, i do. because if you follow the company, those of us who like read the releases and read the

conference calls and we're told to look at certain things, and then what he steers us toward, he disappoints in. this is highly -- there are not many people who are top companies that i find who could mix messages so poorly as this man. with a company that clearly could be worth a tremendous amount. there are other people who say, listen, if this keeps up, one of the big guys will buy them because it's such a great franchise. i know partners who are disenchanted. i understand board members not that crazy about it. i just think, look, it's just a gem. it's being obscured by this man. >> so you -- there's nothing he can say today? i mean, he's essentially a buzz saw he's walking into today? >> yes, that's good. i like the buzz saw analogy. >> there's no saving his job? >> there could be some bloomberg today where it's basically, does anyone there know what it is? the answer is, i think a lot of people know what it is, but it may not be the top guy. i have very rarely ever said i

think a top guy is just not the right guy. >> you haven't put him on the wall of shame. >> no, i haven't, in part because i recognize that -- i'm not saying it's a foregone conclusion. but i think the momentum is there to say we need new blood at the top. if you look at the conference call, the grown-up portion of the last conference call was the investment banker from goldman sachs. i just think that there's just one guy keeping this franchise back. >> below 40 yet again. >> buy, buy, buy. just buy it. >> where do you buy it? below 40? >> buy it right here. i believe it was undervalued. you can say, you've been dead wrong, jim, it's not undervalued, it just goes down all the time. this is one where if you had a new ceo, you'd see a quick uptick. >> shares down 38% for the year.

>> it's been just a nightmare. >> and of course monthly average users were up 22 in the quarter. year ago prior it was 38. rapid deceleration. >> i'm going to pay the ultimate insult. it trades like an oil stock. maybe even oil drilling stock. there's sea drill, transocean, and twitter. >> that's ice cold. >> the day rates are going down there as fast as they're going to transocean, but it doesn't have the yield. >> we're going to be on the lookout for any kind of news. >> it's the macondo of social media. >> sparing no expense today. when we get back, we'll have cramer's mad dash. one more look at the futures, which are negative on this monday morning. a lot more "squawk on the street" from the nyse straight ahead. (vo) watching. waiting. for that moment, where right place meets right time.

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♪ just about eight minutes until the bell. let's get cramer's mad dash on this wednesday. looking at bill ackman. >> there's a gem of a company, animal health, spun off by fooi pfizer. they're solving a lot of problem, including the recent problem with pigs. they're just the best. so what happens to the best these days? that's who raiders go after. this morning, bill ackman, 8.2%. they are apparently pushing for it to be sold. all the notes this morning say

they want to sell this thing to valient. it really sin credibis incredib. you take the companies doing the best, you take a stake, and you basically say management is not doing enough. no. >> does it matter if bill can get it done, or is it just having his presence there that makes it move? >> i think that these guys are giving her all she got. i don't know what more they can do. this is kind of like allergan. everybody ends up making a lot of money with allergan. can zoetis go higher? i think zoetis at 44 -- let's just say i had them in the mid-30s and not much happened fundamentally. >> that's a big story today. at&t made some comments this morning. pausing their investment in 100 cities on fiber because no one now knows what's going to happen. >> the president came out and said he favors net neutrality. this is something that would

make is to perhaps you don't know whether you're going to be able to recoup the money you spend on equipment. these companies spend fortunes on this cysco. this is going to put -- there has been a sense that the equipment sector is not the place to be. alcatel just had a very positive analyst meeting. so there's some hot money in the group. maybe it pulls back. this is a very curious story. you know what? you don't pause spending. you have this directv. maybe you blow it out. i want to find out more about it. but stephenson is a hot-button guy. this kind of statement basically says, we're not going to put as many people to work if you do this. it's a real shot across. >> meantime, front page of "the washington post" goes into a meeting with wheeler, the chair of the fcc, saying that he does not -- he wants a more nuanced approach than the one the

president has laid out. >> i think that everyone was looking at the fcc before the president got involved. president, he's in climate, right. he's in net neutrality. and immigration. he's obviously taking the big democratic win last tuesday and really gone for -- the republicans won. >> there is a sense -- in fact, "the post" quotes an aide saying the president relishes the net neutrality debate because he feels it's a fight with republicans he can win from a populous standpoint. >> i think everyone wants a "w." in the end, he needs a couple ws. he's not in the playoffs. this is an easy one to pick. the american people, when you sit down, what do they want? they want netflix and they want it cheap and don't want to see buffering. he should have said, i'm against buffering. everyone's against buffering. that's an easy win. that's green bay versus the eagles. i sure hope otherwise. you come out against buffering, i think the american people stand with you. >> the american people.

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on the street," live from the financial capital of the world. we'll get the opening bell in just over a minute. busy day, as you know. what a streak we've been on. the s&p is above the five-day moving average, which is obviously a short-term trend. for 18 days. that's only happened six times since '96. just the scope of the rally off the oblgt low has been breathtaking. >> it really correlates with the total breakdown of oil. short term, like today, you see oil ticking down. people say sell the market. that can be an hour-to-hour analysis. if you look at a chart of oil and chart of the the dow, you'll see this gigantic divergence. as oil goes down, you collectively breathe a sigh of relief. when you see oil down short term and the market is down, just go the other way. because oil lower is -- oil is a tax and it's being cut back. >> meantime, it's going to be a busy couple of days for retail. we'll work our way through

macy's numbers this morning. jcpenney tonight. news on walmart and american eagle in a moment. first, let's get the opening bell. a look at the s&p at the top of your screen. down here at the big board, coding systems celebrating its ipo today. we'll talk to the ceo and nascar star jeff gordon in the next hour. over at the nasdaq, ultra industrial motion corp., manufacturer of motion control products. speaking of retail, we haven't gotten to fossil. >> fossil, once again, we see kate spade now fossil saying basically what core said about weakness and accessories. let's take it with a grain of salt. 18-cent beat. billion-dollar share repurchase. this is a $5 billion company. that really emboldens people. this used to be a high-multiple stock. it is no longer. i think we keep looking at what's selling in the malls, and

we just recognize that coach and now kors no longer the hot item. it's very hard. you're playing fashion. when you play fashion, you're going to get burned. >> yeah, it feels like kors' ipo, and they were god's gift. feels like that was two weeks ago. >> that's the way it was for coach for so long. you just figured it was going to be good. fossil was up and down during the period where they reigned supreme in this country. that was when fossil was really pushed on -- fossil was getting a five in the overnights. >> so fossil is going to be up ten. american eagle is going to be up almost eight as they raise their q-3 view. >> you cut your numbers enough and do a better number, you finally have a bit of a pop. this game is played by a lot of retailers. i don't like it.

that's what happened to ab control bee. people were betting against fossil because of the apple i-watch. analysts are saying do not worry about the i-watch. >> what do you do with jcpenney. do you trust it after the bell? >> i think what's happened is if you can get macy's up right here, you're going to want to stick with quality. jcpenney do do a little bit of what american eagle did. they lowered their expectations. i come back and say, you know what, walmart and target, which have been forgotten, act very, very well. walmart had lowered expectations. that's a gasoline play. gasoline sr. not -- against the gasoline going down, food costs have gone up. affordable care premiums have hurt people. i like the discounters not in the mall.

i like costco because it's not in the mall. i just kind of want to distance myself. i don't like them. sears is financial engineering. i don't want to be with that. i have the container store on tonight. that's been a controversial stock. it's been a terrible stock. they talk about conscious capitalism. with a conscience, not like conscious. when i look at costco, i say, well they've got a conscience. they've got capitalism, and they've got same-store sales. that's a place to go. >> financials are going to be the laggard here. jpmorgan the worst component on the dow. is this the downgrade? >> i think the downgrade is glaring. i think people feel the stocks are a problem without the yield curve doing the right thing. the stocks got ahead of themself. they were cheap, now they're

expensive. i want to remain close to the idea that jpmorgan has had a big run and doesn't have -- there's people who have lost conviction in jpmorgan. again, i suspect that people feel, you know what, this jamie dimon is not going to be as enga engaged. if the guy comes out of the next ten days, comes down here, sits right here at post nine and say, not engaged, are you kidding me? i've been working 18 hours a day. i think people would say, i want to own that stock. >> yahoo! almost to $50. >> she's done nothing except have the stock go up. reminds me of when buddy ryan said, chris carter, what good is he, all he does is catch touchdowns. what good is that? she's the chris carter. >> when you make that deposit at the bank, the money is green, they don't ask how you got it.

>> alibaba we've not touched on. getting back some of what it lost yesterday. the $9.3 billion in sales for singles day made a lot of news. it's not as fast as they were growing last year. >> but it's the law of large numbers. i think there are a lot of people who just said, if he could spend that long with david, he's not focused. that was the longe esest interv i've ever seen. >> it was our version of charlie rose in the middle of the market. >> yes. and there was this -- also, you never want to hear a guy saying, look, i'm rich. the existential thing does not sell. i see numbers that could go higher. that was a big event. didn't really matter. they could have sold any amount. that run up at end was just too much for that stock to bear. remains an inexpensive stock. >> microsoft, a couple points on this one, jim.

"usa today" reviews the band, their new wearable with midding reviews. more important, it's within $6 billion of catching exxonmobil as the number two s&p market cap. >> that's interesting. exxonmobil has held up very well. it's been the least oil of the oils. i did some chart work. you'd be surprised. the force sr. with microsoft. xbox is good. this guy has a way with wall street. people really like him. they love amy hood, the cfo. who doesn't? she's a fabulous cfo. by the way, macy's cfo, another person who's loved. and home depot. three women cfos. i'm not being sexist. these are three of my absolute favorite, if not my favorite, cfos in the country. >> it's a great point. by the way, since nadullah

became ceo, up 3%. >> and what have the clippers done? >> that's a story to be told. finally, big buyback out of dow. $5 million. you got them on tonight. >> yeah, this is another guy. what does he need to do? the guy has done everything right. it's not enough. it's not enough. it's not enough. what does he have to do? the answer is just keep doing what he's doing. listen to him tonight. he's done remarkable things in terms of bringing up share hohor value. the achilles heel for dow is europe. dow brings its natural gas in

from algeria. normally we would have thought russia was safe and al gee geri tentative. alibaba is communism with a human face. look, the russians are no friends. they're not our friends. they're not our buds. >> they're not pulling the shawl around our first lady. that's for sure. so the dow is down 75 on some weakness out of financials. bob posani is on the floor. >> good morning, guys. u.s. stocks are lower. we're lower across the board. europe was not particularly good. it's still trading, of course. sentiment there has been rather poor. not so in china. the shanghai composite hit a new three-year high. up 1% there. that's been a real big performer so far this year. i talked yesterday about a lot of excitement building around

that shanghai/hong kong stock exchange link where foreign investors are going to be able to own shares in china directly if you have a hong kong brokerage account. they're talking about an explosion in trading there potentially. that'll go live next week. elsewhere, banks are generally to the downside. we had that u.k., u.s., and swiss regulators imposing fines on the big banks. barclays did not participate on that. they're seeking a separate agreement. all of them except ubs are to the downside. you mentioned macy's. i think the key thing is because they lowered their guidance for the fourth quarter, this whole argument that somehow we've had a lot of warm weather is going by the window. still, i know a lot of loyal macy's shoppers, including my wife. they love those constant sales. they love the attention and the fact you can order online and pick it up in the store these days. i agree with jim. i wouldn't count out terry

lundgren. we have an ipo today. axalta, the biggest car coating company in the world. they own 25% of the business, 50 million shares at 19.50. that's in the middle of the range. again, an auto coating supplier there. they were leveraged in a buyout through the carlisle group. they're the number one auto paint company with 25% market share. we've got another exchange traded fund. i told you yesterday about an interesting one. today we've got one on cyber security. these niche products are trying to find a particular home. sometimes they work, sometimes they don't. this one is the pure funds cyber security etf. it's going to begin trading today at the new york stock exchange. a basket of cyber security stocks. it's an interesting idea. these kinds of niche products look for people who want to own them. sometimes they work and sometimes they don't. i'll give you a couple that have

done good here. there's a clout computing etf. symbol is skyy. that's run by first trust. that's gone $350 million, $400 million in assets. another robotics company, the symbol is robo. that's garnered $150 million in assets. not big but enough to keep it going. so these niche products are reasonably successful so far. right now the dow jones industrial down 70 points. we're still waiting for indications on axalta. guys, back to you. >> bond markets back in action today following the veterans day holiday. good to have rick santelli back. good morning. >> good morning, carl. bob really nailed it. many markets, including the treasury market, getting back on track and monitoring some of the weakness in the european boards. so as you look at a chart going

back towards october 1st of tens, first of all, we are in congestion. rates are down three basis points and fives, tens and 30s. we are really in a congestion area. notice early yesterday it was around 85 basis points. it's now at 75. we're getting back, linking up with that type of post momentum on the fixed income. if we look at the dollar index, two-day chart will show you virtually mixed today. as i look up at the futures, i see the yen has had a bit of a rebound. yet, the pound is under a lot of pressure. so it is working out. the euro a little bit of a rally. but if you open that chart up to the dollar index to summer of

2010, you could really see how spectacular the move in the dollar index is really propelled by weakness in the european foreign exchange markets. if we look at the asian side, you can also see what a big move that's been. look at a two-day dollar/yen. down today, clipped to 116 yesterday. when was the last time we had anything with 116 or higher on the dollar/yen? oh, about seven years and one month ago, october 2007, as you can see on this chart. carl, back to you. >> all right, rick. welcome back. rick santelli, talk to you soon. a lot more coming up on "squawk on the street." we're on ipo watch, waiting for axalta to trade. when that happens, we'll be joined by the ceo and nascar superstar jeff gordon. also, the north american debut for what royal caribbean is calling the first smart ship. we'll have a live interview with the ceo when "squawk on the street" comes back.

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what makes you happy? >> this month i'm not happy. >> say again. >> this month i'm not very happy. >> why not? >> too much pressure. pressure from various -- i think i tried to make myself happy now because i know if i'm not happy, my colleagues are not happy. and my shareholders will not be happy and my employees -- i think my customer not happy. so i'm adjusting because maybe, you know -- i don't know. maybe the stock goes up. maybe i think too much about the future. >> if you missed any part of yesterday's exclusive interview with jack ma, you can watch it on cnbc.com. i thought what john ford said on this program yesterday was smart. jack ma needs more jack mas in china. right now all the attention is around him. >> yes, that's a good point.

lenin, famous mass murderer, who really got communism going in the soviet union and spread over to china, had a saying that i thought always resonated. if the rich are unhappy, it's their own fault. jack ma ought to be a little brighter. he's government the whole weight on his shoulders of china. show a little more enthusiasm. that was that moment in the thing where i just said, no, no, no, come on. >> we don't need to hear that. >> you're unhappy. geez, there's 7 million people on the planet kind of jealous of you. >> we have axalta open at post five. ipo today. we're going to talk to ceo charlie shaver. >> very controversial. ync >> why is that? >> axalta is the performance coating company of dupont. nelson peltz's team felt that dupont gave away this business. when you see the stock going up and the private equity guys obviously making a lot of money,

it does resonate. now, in coleman's defense, the ceo of dupont, he's done well. you haven't done as well as pepsi co. i know nelson peltz. i believe sometimes declaring victory is great. just a tremendous gain. dupont, i mean, maybe there's more to split off there. i think dupont's done a pretty good job. not as bad as nelson peltz said. he's a rigorous thinker who wants more. you know what? everybody deserves more. i also think that coleman did not do that bad a job. >> there are some people who feel home builders have gone up too far, too fast. i like this group very much. >> as you've said for a while. >> i think this group has got terrific momentum.

beazer, it's amazing they made a comeback. i thought horton, the ceo, very bullish. three to five-year run. stewart miller at lennar. i do not want to go against the home builders. short timers, you want to take profits, fine. but this most recent decline in interest rates is playing well. >> smuckers cutting on folgers. >> yeah, prices come and go. it's not the first rodeo for folgers. last night at the veterans concert -- >> that was amazing. did you see bruce springsteen with dave grohl? >> the boss. starbucks has hedged a huge amount of coffee.

obviously folgers may not have done that. but that's a very fine company. i'm not anxious to dump it. >> all right. we'll move on here. we'll get to stop trading with jim in just a minute. dow is coming off the lows of the early part of the session. "squawk on the street" will be right back. there was no question she was the one. she reminds you every day. but your erectile dysfunction-that could be a question of blood flow. cialis for daily use helps you be ready anytime the moment is right. you can be more confident in your ability to be ready. and the same cialis is also the only daily ed tablet approved to treat symptoms of bph,

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time for cramer and stop trading. >> a lot of people trying to catch the bottom in sea world. this is the orca, you know -- >> "blackfish" controversy. >> i say don't bother. they reported a number well below expectations. meantime, six flags is hitting the ball out of the park. why try to call a bottom? this is a butcher block stock. let's stay away. you want the other side, a stock that has got great momentum. this is one aye been behind ever

since there was a fantastic piece in "new yorker" saying they have tremendous ways to be able to go against cancer. this is the hottest small biotech stock in the country. they do targeted hematology work. they have some phase one work that's extraordinary. i have been behind this one and stay behind it because groupman is not only a great doctor but a great writer. to learn more about this, i direct you to the "new yorker" piece. >> "new yorker" at 300% this year. >> that's been a winner. >> jim, some people think the ukraine chatter is one reason why we're sticky here. >> you got to stay focused on ukraine, particularly when you hear about russia making more deals with china. obviously ukraine, every time it goes front burner, it can cause the market to go down. i am not -- this is the lone area of the world that i think people must focus on that

they're not. because it's not going to go away. there's got -- the germans are intransigent. the united states is intransigent. the russians are certainly mischief makers here. keep an eye on it because every time you hear that there's rebels, tanks going, you're going to have the market go down. >> you walk away from apec, you want to feel good about this climate change deal that the president managed to put together with china. that's a big deal. whether or not we can verify they're holding up their end is a story to be hold later on. >> of course, if the keystone pipeline isn't developed, they're going to send that heavy oil over to china, burn it, and four days later l.a. is going to feel it. having lived in l.a. during the period where you couldn't go outside, i don't know, felt like china. they cleaned up l.a. >> what's on "mad" tonight? >> we have dow. we have andrew liveris. the stock is starts to react. we have a very controversial stock, which is the container store. this is a store i like very much. but the stock has been literally -- it opened and has

been cut in half. they've been missing quarter, missing quarter. i will say the stock is down so much it is tempting. let's find out how the holiday season for containers -- which if you go into my refrigerator, it's stocked. but that hasn't been enough to do the stock well. >> good to have you back, jim. >> that was fun, wasn't it? >> yes. when we return, twitter ceo dick costolo feeling the heat. the company's investor day just a few hours away. ahead of that, we'll talk with walter price about what the company needs to do. we're back in a minute. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.

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welcome back to "squawk on the street." breaking news. september wholesale inventories and sales up three-tenths inventories, up two-tenths on the sales. on the sales, it's a win. we were looking for a small negative number, so up two looks good until you look at the revisions. last month's sales originally down eight-tenths. inventory's expanding a bit. we need to pay close attention to that.

why? of course, we want to see if the widgets we're making want to get consumed. doesn't seem to have a huge impact on the marketplace. looks to me like the 12th session in a row ten-years are going to close between a 230 and 237 yield. >> thanks, rick. we have some more breaking news at this hour. more bank fines from the regulators. kayla has the details. >> yeah, sarah. we are getting word of a settlement from the comptroller of the currency on those foreign exchange manipulation charges that we learned about just in the last few weeks. this is going to be $950 million against three u.s. institutions. bank of america will be fined $250 million. citibank, $350 million. jpmorgan chase, $350 million as well. this is a separate settlement and a separate press release from the fines that we saw very early this morning from the financial conduct authority out

of the u.k. and the cftc with five banks, two u.s. banks, and three european banks, that also concerned this, what they called exceedingly egregious manipulation of foreign exchange rates. in total, these fines are stacking up. jpmorgan and citigroup each paying $1 billion with all three of those agencies combined. roughly $600 million for the european banks. this is a costly issue, one that we've telegraphed, but it also is a har venger of further settlements to come. remember, the doj is still investigating this, as is the federal reserve here in the u.s. a statement from the fed this morning where they said that the agency has worked closely with other authorities in the u.s. and overseas and carrying out investigations into improper conduct in the markets. the fed is continuing to investigate in coordination with other authorities, including the department of justice. the doj's investigation also concerns potential criminal

charges. so guys, while we have a lot of news coming out of the pike on this and very expensive news at that, this is hardly the end of the road on this situation. we'll send it back to you. >> we'll keep following it. thanks, kayla. another almost $1 billion fine related to that probe. meantime, macy's out with mixed quarterly results this morning. revenue missed and the retailer did lower its outlook, but the stock has actually been higher this morning after being lower after the results. let's bring in matthew boss, senior retail analyst at jpmorgan. has an overweight on the stock. are you surprised to see the stock trading higher given sales were a disappointment? negative comp store sales and a lower outlook. >> i think what macy's showed you this morning is best in class. this -- so sales missed, down 1.4. that was worse than our model. the gross margins were better. this company finds a way to hold it together. if you really take a look ben d beneath the surface of the print, there was an asset shift out of the next quarter.

they took a more conservative approach with the fourth quarter, setting the bar lower. i think investors are looking and saying, conservative bar for the fourth quarter, better set up for a best in class name. >> really conservative. it was 10% below what the street was expecting for the fourth quarter, which is the most important when it comes to holiday spending. why does macy's have to lower it and set expectations lower? >> from a bottom-line perspective, i think part of what -- in terms of looking versus the street was the shift of an asset sale into the third quarter out of the fourth quarter. that was basically a 10 cent shift. taking all things into account, it's really the sales assumptions that were lowered in the fourth quarter. again, i'd rather see macy's, all of those companies in apparel taking a more conservative approach and potentially the underpromise, overdeliver becomes the case as opposed to missing during the important holiday season. >> would it have killed them to throw a bone to those who think gas prices will be a tail wind? >> i think what this does is it

clears the bar for some of your generalist investors, some of your larger picture as they take a look and say, look, i can own a macy's at 11 times earnings when i get double-digit growth plus a 2% dividend. we just released a note and i was saying i think your risk/reward is mid-50s to high 60s. mid-50s is embedding ten times earnings for a company that's giving you a 13% to 14% return profile. i think high 60s with $6 of earnings power as you look out to '17, best in class reset bar. i think macy's sets up well from here. >> inventories, is the environment getting more promotional or less as we get into the thick of it? >> i think the environment is getting more promotional. i think what's key with macy's is their inventories are clean. nordstrom is changing their promotional structure. they're moving to these clearance sales. pretty much every specialty retailer we cover has announced

negative with the exception of american eagle. it's a tough backdrop. i think there's pockets of inventory out there. i think it's going to be a really promotional fourth quarter. i think with inventories clean and a promotional game plan, macy's is as clean as it gets. >> next up, jcpenney after the bell. walmart, kohl's, nordstrom out tomorrow. is this an ominous signal for some of the others? >> i think in terms of being able to hold the pnl together, nobody beats the management team at macy's. you're going to see same-store sales worse across the board. i think you're going to hear from jcpenney. the real question there is their ability to hold the margins at the same time as trying to recapture some of these sales. again, it's tough out there. i think you really want to be positioned with who you believe in. >> if you're not following it as closely as you are, these individual companies, it does seem odd that consumer

confidence is at multiyear highs, that gas prices are at multiyear lows, yet the retailers, even the best in class ones with best executers, are having such a tough time negative sales right now. >> i think part of the third quarter was weather. when you have 75-degree temperatures in new york, mid-october, it's pretty tough to go out and buy a sweater. it's not the best environment to go buy a coat. look, i think part of it was weather. i also think that there's some shifts that are still taking place. there's no real fashion. there's no real must have fashion item right now in apparel. i think it's a bit of a different story in apparel versus some of the other sectors like the convenience stores. we cover those. they're starting to talk to some benefit from gas prices. i think you'll see it at the dollar stores. i think apparel is something that's going to take a little bit longer to see some of the benefits. >> thanks for joining us, matthew boss, on macy's. >> thanks for having me. shares of twitter are

positive this morning as investors await comments from ceo dick costolo. so far this year, the stock plummeting 30%. since its ipo last november, costolo has replaced five high-profile executives. are investors losing confidence in his vision? joining us this morning is walter price. you can probably tell from a blue screen we might have lost walter. there he is. walter, good to have you this morning. great to have you. thank you so much. >> thanks for letting me come on. >> you were outspoken in "the journal." i'm just very frustrated. when you talk to them, i think they understand the problem, but they're afraid of alienating those who tweet. people are losing confidence in him. have you been this outspoken about another ceo publicly? >> no, i haven't, actually. but i've been pretty frustrated because the company has said even going back to their ipo that they understood the

problem, that they wanted to improve user engagement, make it easier to use the service. here we are, you know, a year later and i don't see the progress. i'm looking forward to seeing more tangible signs of progress. >> what would constitute progress? is it a new ceo? >> i don't think it has to be a new ceo. i think the management team understands the problem. i think they just need to have development people that can help users get more engaged more quickly, particularly users that are readers, not active and avid tweeters. i think there's a huge audience out there that they just need to figure out how to engage that audience. >> to be fair, the flip side of this argument is that facebook, which it's often compared to, shares stayed under $30 for a year after its ipo. they went down almost 50% after the ipo until they figure kd out mobile. could it just be part of the new social media as public companies maturing into companies that

investors can like and be confident in, whether it's a management problem or just a knowing who you are kind of problem. >> yeah, no, i think that's correct. when you fix the problem and you have basically a great service, fix the problem meaning getting users engaged as facebook has done, then you can have very rapid revenue growth from advertisers. advertisers go where users are and where users are engaged. it's magical. right now twitter hasn't found the magic. >> when you talk about engagement and the worries of alienating the user base, what changes -- i mean, tactically, do you think need to be put into place and why would it alienate those who are already on twitter? >> i think people on twitter are there because they like to see their tweets. frankly, many of the tweets are irrelevant for someone that's looking for breaking news or

interesting opinions. i think they need to curate the site to people can find these nuggets and find them easily and use them. then they'll spend more time going to twitter and it'll be, you know, a positive feedback loop that results in users using the service more. >> curation has been a stick you print for a long time. then there's the high turnover in the coo and cfo's office. >> i think good management, good technical management, is hard to find. i think twitter knows what they want to do. maybe there's some tension inside of twitter that's not completely visible that's showing up in these management departures.

different philosophies about how to increase user engagement. i hope we get insights into that today. >> would you rather see the cfo a in the ceo's position? investors seem to like him. >> i really like anthony. that's why we bought some stock. i think he's a very level-headed and logical guy. but, you know, he hasn't been a ceo before. i think he works closely with dick. so maybe that's the magical combination they need to rejuvenate the company. >> all right. just to put a period on it, walter, whether or not you buy more stock or sell any stock is not necessarily contingent on dick staying or going. is that correct? >> that's correct. >> we're going to find out a lot more in just a few hours. good to have you. please come back. >> great. thank you. >> walter price joining us from san francisco. let's send it over to dom chu for a quick market flash. >> social media to chemical companies. check out dow chemical. the stock is moving higher after

the chemical maker increased its quarterly dividend a nickel a share to 47 cents a share. also said it would buy back an additional $5 billion worth of shares. that almost doubles its repurchase program. the company is being pushed hard by hedge fund manager dan loeb. and in a programming note here, dow ceo andrew liveris will be jim cramer's guest live tonight on "mad money," 6:00 p.m. eastern. an interview none of us want to miss. >> thank you very much. when we return, royal caribbean launching its first smart ship with robot bartenders and virtual balconies. we'll be live on the deck of the new ship with an interview with royal caribbean's chairman and ceo richard fain. simon has that when "squawk on the street" continues.

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♪ your ticket to a better night's sleep ♪ with everything from bionic bartenders to virtual balconies, the quantum of the seas is being the called the world's first smart ship. our simon hobbs is on board, joined by royal caribbean's chairman and ceo richard fain. >> good morning. welcome to south jersey. a lot of people in the industry have waited a long time to see the quantum and finally today

they get their chance. remember that the business trick here is to put new things on ships so people at home go, i'd like to sail on that. therefore, they can increase the price and raise the margins. richard fain is with us. thank you for having us on board today. >> great to have you. >> there are so many original features to talk about. the one that stands out is the passenger capsule behind us here that's basically raised 300 feet into the arm on a mechanical arm and moves to either side of the ship. >> it really is one of many exciting things, but it's fantastic. you're in effect 30 feet over the water and you get this amazing view from either side of the vessel. >> there's sky diving in a wind tubl. there's bumper cars. this cost $1 billion to build in germany. you're only keeping it here for six months. then you're going to take it to china and home port it in shanghai. why take the best and brightest to shanghai in a market in which

you don't have so many ships an don't know so well? >> we're growing very quickly in china because the chinese market is an exploding market. we're getting terrific interest from the chooi these. we're getting great pricing. so we are bringing our biggest and our best. of course, for the new york area, we're also bringing back the sister ship six months later here into new york. >> and they're sending it to the u.k. >> and then we have the third ship coming. so we definitely want to service this market, but it's wonderful. this is a terrific problem to have. everybody wants this vessel. there are so many exciting things. we have got three of these ships, and it's not enough. >> the other thing you're doing in china is you're selling a ship to actually the same partner as priceline has. then you're going to operate it jointly. it's a joint venture where you learn how to operate a chinese brand in china. where does that take you down the line? >> well, first of all, our own brand is just exploding in china because the middle class is growing so much.

so we see that as an enormously growing market. but we also see a market for indigenous chinese brand that's really not an international company. so we are working with sea trip to see if we can put together a joint venture that will give us the opportunity to play in both markets. >> do you lie awake at night and dream of being a lodging ceo where you go asset light, get rid of the shapes, make somebody else own them, and you just operate them and take out the risk in this industry. because this is a really cyclical, risky business. >> no, i don't dream of that. this is an interesting business, but it's one with great potential. and we have the assets. our assets are extraordinary. and they're part of what makes us who we are. i think for the bulk of things, that will continue to be our model. what we need to do is bring our return up to higher levels. that's happening now. >> you have the double-double. we've spoken about the targets you have on return of equity. >> and the double-double's

working. >> let me ask you specifically about the caribbean. you have plagued one another within the industry. norwegian, carnival, by having too many ships in the caribbean and having to discount year in, year out. does the china factor change that? obviously you're chasing demand in china, but you're also taking presumably where you can capacity out of the caribbean. what i'm asking you is does the china factor mean there will no longer be cheap cruises in the caribbean notably in the winter? >> well, i think you're seeing two things from china. one is, as you say, it's actually siphoning off capacity from our western markets, caribbean and elsewhere. and that's helpful to the markets. but the other thing we're doing is we're building demand. the issue isn't too much capacity. the is not enough demand. a ship like this with all the new features and the excitement she's generating is building demand for the whole industry. there's a halo effect. not only is this ship doing

well, but it's helping our other ships because it's really saying, wow, look at all the things i can do on a cruise ship. that's bringing people who have traditionally said cruising isn't for me. well, this ship shows it is. >> because you've always said your main aim is the vast majority of people that don't cruise. what percentage of the population cruise? >> only 20% of americans have ever taken a cruise. >> and 40% of people on board are usually first-time cruisers. >> that's right. so we need to convince the people who haven't, who have this old ideas of what cruising is about. when you see a ship with the north star, with bumper cars, with sky diving, it helps overcome these old things that this is a sedentary vacation. >> my final question, and this is very personal. why do you launch ships in the biggest media market in the world in november when it can be this foggy and this wet and this damp? you could do it any -- why? why do you do it in november? >> we want to make you feel at home, simon. >> i feel like i'm in britain. >> building these ships is

incredibly difficult. we have to take them where they are. one of the beauties of this ship is her ability to handle this kind of weather. the enclosed spaces on this ship are as spectacular as the open one. >> we're out of time. traditionally, i believe this is the time when mickey ericsson sends an e-mail congratulating his rival. richard fain, chairman and ceo. it's going to tour around here for the next six months. importantly, it's the slow boat to china. back to you. >> i think i'd like to see you if the bumper cars at sea, simon. >> you will on power lunch. >> oh, good. all right. simon hobbs. >> it's an all-day outing, sarah. not just the one show. we go through the day. >> we miss you, but looks like you're having fun at sea. up next, you're looking at axalta making its debut here at the new york stock exchange. the stock trading higher in its ipo, up more than 5%. the company ceo will be joining us live here at post nine with his first reaction after the break. and i have diabetic nerve pain.

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welcome black to "squawk on the street." we're looking at a news alert right now with regard to google. you may notice if you go to certain websites like cnbc.com, usatoday, bbc, there are no ads on the site. this is because of a failure at a google ad server that's causing a number of websites to fail to load correctly. again, some of those websites affected, our own cnbc.com as well as bbc, usatoday. a note from google. the company says, our engineers are already on this and will be providing an update asap. in response, some of these websites are actually not loading their ads themselves. so again, if you go to some of these websites, you'll notice no ads on there. it's because google has one of their ad servers having some problems. we'll bring you more details when we get more on this

situation. back over to you. >> all right. thanks for that alert. shares of axalta coating systems climbing more than 5% after the paint company debuted today on the big board. the company raising about $975 million in that ipo. the carlisle group selling 50 million shares. joining us first on cnbc at post nine, axalta chairman and ceo charlie shaver and four-time nascar cup series champion jeff gordon, whose car paint scheme includes axalta's color of the year, radiant red. did you choose the radiant red? >> i didn't, but it's an amazing color. >> so charlie, we should talk about the history a little bit about this company. originally part of dupont. the carlisle group bought it back in 2013. why now did it decide to take it public? >> yeah, thanks. you know, we actually have about 145 years of heritage with this company. we've been around a long time under the dupont tutelage. as you correctly pointed out, the company was brought out a

couple years ago about carlisle. we're the fifth largest coatings company in the world. we felt like it was a great opportunity to take the company public and take our place alongside many of our peers and competitors who are also public companies. >> carlisle still holds nearly 80%. any plans to release more shares after this initial offering? >> no, i don't think so, any time soon. they own a big holding. still we have a lot to achieve over the next couple years. we look forward to continuing to work with them as we grow the company. >> some of the auto related stocks that went public had very successful ipos. is that part of the reason here you tied to auto sales as most of your paint goes to commercial vehicles? >> yeah, we're one of the largest in the world in automotive paints, both new car and in the refinish world. so we believe the next few years, the auto park continues to grow, the emerging middle class around the world. we think the next few years being in the sector is going to be a good place to be. >> there's still worries about -- given the run rate we're at right now, that we're

in some sort of peak auto environment. why don't you think that's true? >> i think, you know, about 75% of our business is outside the u.s. we have a unique ability to look into a lot of emerging markets like china, places like brazil. we see good, strong, fundamental demand right now, even though some of the countries may not be growing their gdps that great. the world's desire for transportation at the individual level continues to grow. >> jeff, you go back with dupont 20 years. >> this is our 23rd year. >> the longest tenure with any one sponsor? >> yes, it is. >> what is it about them that made you stick with them for so long? >> well, first of all, the timing was perfect. they gave me my shot. i started my nascar sprint cup series career with dupont when they first came on. they've been credible partners. that's what nascar is all about, having great partners. i think we're sort of a testing bed for their products. at the same time, we know we have the best quality coating out there to do what we do.

now axalta coming on board and really reenergizing the excitement of the marketing and the interaction with the customers. these last couple years have really been fantastic for the partnership that we've been able to continue. >> there must be some cool statistics about what a coating, the right coating, can do for your time. is there something? >> if nascar would allow us, i know axalta could really design something amazing. >> we put a few extra clear coats on there if they'd let us. >> i want to change the topic a moment, charlie, because some investors might be aware of axalta after nelson peltz of trion, who wants to make changes at dupont, pointed to this sale to carlisle of axalta a few years ago as a problem with management. an example of some of the leadership issues as dupont. what can you tell us about that sale and what it says about dupont's leadership? >> well, look, i think i can't really comment on dupont because i wasn't there. i think we got a great business. we've also put a lot of money

into the business. we've really focused on it. we've also brought in -- made a lot of changes to the business to really grow it. >> i know you weren't there at the sale. >> that's right. i was part of the carlisle team that came in. we've put a lot of money in the business to really grow it and focus in growth areas. we feel like we got a really good business and just made it better. >> you must be happy to see crude oil declining so much. i'm sure you have high raw material costs. >> roughly half of our cost of goods are hydrocarbon based. we think two big benefits from that. one, over time our raw materials will go down. obviously, our customers like that as well. but we also think for the consumer it's a stimulus. miles driven for people buying cars, getting out on the road. over time we think those are just a great factor for our business. >> finally, jeff, what's up with the -- come on. it's not the first time. >> well, this new format that nascar has come up with has really created even more

intensity and more drama, obviously. there's a lot on the line. so there's a lot of passion that we have about winning and winning championships. that's what comes out when things don't go your way. you know, you feel like you were wronged. it brings that passion out. >> it was heartbreaking. >> it was heartbreaking that we didn't make it to the final four. we've had one of the best teams all year long. i feel like we've done everything we needed to be there and still not being there. but we're going to go and finish out there season in a big positive way and go into next season and have another great year. >> i would not mess with you, man. that's all i have to say. that's great seeing you guys. >> thank you very much. >> thank you. >> jeff gordon and charlie shaver. nice of you to be here for your ipo on post nine with us first on cnbc. >> thank you. great to be here. >> when we come back, walmart abandoning the one-day only black friday sales model this year. don't worry. retailer has other bigger plans. details on that when "squawk on the street" returns. location. location.

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welcome back to "squawk on the street." check out shares of allergan, which are moving higher. bloomberg is reporting that acativ and itself are discussing a possible deal, valuing at allergan at $60 billion or over $200 a share.

they are citing people familiar with the matter. allergan shares up by about 1.5%. actavis down by 1%. interesting we're hearing price tags associated with a possible deal. they're trying to fend off a hostile takeover. back over to you. >> oh, yes. the latest in a long-running soap opera. thanks, dom. the world's biggest retailer has big plans for this holiday shopping season, but not all of those plans revolve around black friday. courtney reagan has the details on walmart's holiday strategy. >> yeah, that's right. so with the influence of the internet and thanksgiving hours, black friday isn't isolated to one day anymore. so walmart is just another retailer like target, best buy, and others offering staggered deals, hoping to keep consumers shopping all weekend long. the world's largest retailer releasing plans for a five-day promotional stretch from thanksgiving to the monday after. deals will begin online just after midnight on thanksgiving day and will be offered in stores beginning at 6:00 p.m. on

thanksgiving night, again at 8:00 p.m., and then staggered over the next several days it on a variety of products. and walmart executives laughed when suggesting we should rename the period. instead of calling it black friday, just november. promotions include $350 off a visio tv to $150 off beats by dre headphones. walmart also bringing back the one-hour guarantee. shoppers in the designated areas of the stores between 6:00 and 7:00 p.m. on thanksgiving are guaranteed the ability to purchase the gift they want right then. that's good for shoppers traveling away from home that weekend but still shopping. it's also walmart's way of making sure supply satisfies demand. something that hasn't historically been the case for retailers on black friday weekend. now, every store at walmart has crowd control plans in place for safety as well. retailer also offering interactive store maps to help find where these deals really are going to be.

sarah? >> all right. too bad. that great american tradition of waking up at the crack of dawn for black friday may be a thing of the past. thanks, courtney. meantime, forecasts for a big winter freeze are causing swings in gas. traders betting on low prices but many of them could be caught off guard. our kate kelly is live in deerpark, texas, with that story. morning. >> reporter: good morning, carl. it's 46 degrees here in deerpark, texas. we're preparing for an early freeze in natural gas. the commodity already giving traders a run for their money so far this year. it's still early days. going into early november, the trading community was about as short as it had been in two years. helping to push prices down to about the $3.50 mark or so. until colder than expected forecasts for this month actually pushed demand and prices back up to about $4.50 before settling down again. i see we're just a touch before $4 right now. kyle cooper, the head of

research for cypress energy, which is a local hedge fund, says the weather forecasts for this year are all over map. because of that and other factors, we could see extreme volatili volatility. for example, if we see a warmer than expected winter, and right now we're thinking it will be in line with last year, which is colder than average, you could see prices that are actually higher than expected. maybe even going -- i'm sorry, lower than expected, maybe going under $2. but on the upside, if we have infrastructure problems, if there's trouble getting gas pipes to the northeast or chicago, we could see a much bigger differential in price. all told, we're expecting another volatile winter. the trading community here is bracing for it as the cold sets in. back to you. >> all right. nice glasses, nice hard hat. thanks very much, kate kelly. up next, bb&t ceo kelly king

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we're watching the utilities sector. deep in the red today. dom chu with more on why. >> so sarah, the weakest sector in the s&p 500 so far today. those utility stocks, looks like some of that profit taking is taking hold for this sector. it's up about 10% just over the course of the past three months. in today's trade, leading the way lower. first energy, also exelon and wisconsin energy. a tough day overall for the utilities. but they have been on a solid ride over the near term. >> that's for sure. thanks a lot, dom. a big bank deal this morning. bb&t looking to acquire u.s. is

questi -- susquehanna. are you keeping the name or not? >> no, we'll not be keeping the name. the economies of marketing and advertising are such that, you know, you really need to use the bb&t name throughout the footprint. we'll be changing it over time when we get to the conversion. >> a lot of investors wonder whether your appetite is getting larger and whether or not regulators are entering a period where they're going to let some of these regionals, some of these super regionals buy more than they have in the past few years. >> yeah, well, you know, we've always tried to grow on a steady basis organically first and for years, as you know, carl, we've done a number of mergers. we try to do about 5% to 10% of our asset size in mergers each year. that's what we'll be at about this year. so i think the regulators are

certainly willing to see mergers. i think to a large degree they see the logic behind bank combinations. and i think the focus for the regulators is whether or not they're prepared to make the acquisition in terms of, you know, investments in systems and processes, governance practices, et cetera. so i don't know that they have not been in the past, but i think today they're receptive if it makes sense. >> after this big deal, following on that question, would you expect to see a more meaningful pickup here in bank industry consolidation, especially in the u.s., which remains much more fragmented than other parts of the globe. >> yeah, i think the long-term drive for combinations in the u.s., to your point, is such that you will see combinations. it just makes too much sense. the cost for banking today to be regulatorily compliant is increasing substantially. technological costs are

increasing substantially. and so skill, you know, really does matter. so yes, i think over time you will see more combinations. you know, whether or not we're a little ahead of the curve, others will be immediately right behind, it's hard to know. mergers are very unpredictable, for us and everybody else. over time, i would expect you would see combinations. >> hey, kelly. we got this big fine for a number of banks around the globe today. various downgrades here and there on much larger banks. arguing that the regulatory head winds are going to get worse, not better. we have an exiting attorney general. i never want to get you in trouble, but in general, for the space, is it -- are head winds on the regulatory front going to be better or worse? >> you know, i don't know a lot about the foreign exchange issue. as you know, we're a mainstream bank. we're a long way from a wall street bank. but i think in from the wall street bank. in general this is a dated

issue. and a lot of what you have been reading and hearing about over the last year or so are dated issues. they go back years and years. so i personally think that we are seeing kind of a plateauing of regulatory focus. i certainly hope and pray going forward it is going to be subsiding somewhat. but i think that you are reading a lot more about it now doesn't necessarily imply that they are more vision about chasing issues with the banks. i think it is more of a carryover. >> kelly, great to have you. congratulations. i'm going to miss the susquehanna full-timename a lit >> we'll work hard to make bb&t sound just as good. >> see you soon. thanks. she's been called the $9 billion witness and j.p. morgan's worst

nightmare when we come back. the whistle blower joins us live with her side of the story when we continue. (trader vo) i search.

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>> elaine fleischmann helped nail the case against j.p. morgan. now she's speaking out. and she joins us this morning at post nine. >> hey carl. thanks. elaine thanks for joining us. >> thank you for having me. >> you were a due diligence manager in the mortgage unit of chase leading up tot crisis. how did you find yourself wedged between a giant like j.p. morgan and another giant like the justice department. >> as a deal manager working with the due diligence managers, i saw some things there that i thought was wrong and raised them up through management. and eventually wrote a letter setting out specifically what i was seeing on one deal but also general problems with the diligence across the board. so years later when these investigations started, the sec spoke to me and took some information and then really the d.o.j. out of sacramento broke the story wide open using the

testimony and information from that letter. >> and when you say you wrote a letter about what you had seen and some of the practices in that group, what exactly was that and why did it strike you at suspicious and why would that been something that then would have been of interest to the sec and d.o.j.? >> the first flag was when we had a new diligence supervisor coming in who was senior who wasn't send emails and would tell us we couldn't send emails to him. which is exactly what you expect when you want due diligence and compliance is you want to create a record. and then one deal we we had a loan pool come in. and very quickly about 40% had over stated incomes to. a point of a manager saying her income was $117,000 which is five times bigger than our data was showing us they should be. and when you give those loans they are very likely to default.

which is going cause problems. >> and these were the type of anecdotes and evidence that helped the justice department and other agencies put together what became a $13 billion fine finish j.p. morgan. yes part was tax deductible. part did go to consumers. but the article paints it as a terrible outcome for the country. why do you feel that way? when that was money that the country didn't have before. >> well i think the difficulty is the country is told this is all an accident and no evidence to go forward. and there is a mountain f evidence. reports, e-mail, reports, external reports, testimony from other employees. so i think the concern is when this can happen, and it can get written off as we just didn't know what we were doing then you can see this happening again. and if you care about investors and the ordinary american who is lost money in this, you can't let this happen over if over again without holding someone, whose accountable, to account

for what they did. >> the department of justice retained its right to bring criminal charges in the future. we could still see those. j.p. morgan has declined to comment citing the confidentiality agreement they had. which owe ostensibly had as well and chose to break. but if j.p. morgan could speak, what would they, say, and paint you as an employee and tried to do the right thing? >> i would hope so in certainly i did what you were supposed to do as employee. i saw problems and raised it up the ranks. regardless of what the results would be for me personally and others did as well. i would hope what they would actually want was to see this taken care of properly so they can have the trust of investors and the general public. >> and for those who overstated their incomes to begin with, do they ever face accountability or not? >> there has been some of that. the bigger concern, even this one deal, this as billion dollar

security. so wore we're talking about a lot of money where any one of these and it has to be done correctly. >> obviously j.p. morgan is who you are critical of and also the obama administration should get some blame, correct? is that what you're trying to say, the d.o.j. >> i'm actually almost more critical of their response because when you look at the complaints and what else happened at all these other bank, citi or bank of america. the real question when you noi know securities law and you know the industry and studied white collar crime is how it possible you could have this much fraud and not a single person has done anything criminal. >> this is a very big point of debate for the industry. elaine we appreciate you bringing your story to us as well. >> elaine fleischmann. >> thanks. more from you i know coming up in a bit and "squawk alley." including you are going to be all over the countdown to

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work all morning aboard the quantum of the sea. royal caribbean's new ship what do you think? >> it's a step changing cruise. at least that's what they're trying for. the vertical wind diving for example. this is the type of thing you will see appearing across the country. but it is a real engineering feet to get on the ship. the fact through the satellite partners they can give you landline speeds for internet to use your xbox or check in online or book a restaurant. you have been disparaging on food in the past. let me tell you. there are 18 restaurantsen and you can book them on line. >> cruises have come a along way. simon much more from you aum day. i might even come join you out in byayonne for the smart ship. for now over the carl. >> it is 8:00 a.m. in industrsa

francisco. 11:00 a.m. on wall street. "squawk alley" is live. welcome to "squawk alley." jon fortt, kayla tausche. and dow breaking a the winning streak and also twitter. the investor day kicks off in little less than an hour. and shares of the company down about 20% over the last month. down 38 for the year. jo