good morning. and welcome to "squawk box" here on cnbc. i am joe kernen, actually, along with becky quick and andrew ross sorkin. it's a big day for youtube, apparently. the google owned site is launching its music subscription service will will compete with spotify, rhopsody and -- can you get taylor swift on -- >> keep reading. >> today's rollout is a private invite only test. where is my invite in the mail? focusing on youtube's heaviest music users. the company has signed deals with many record labels, but sorry, taylor swift fans, you won't find her songs on

youtube's new service. she was on the cover of "time" magazine in, right? >> we just had the editor of that piece in last week. >> loved her. >> it was a guy. >> loved him, too. >> i have to say, well, the editor of time magazine is a woman. this was one of the deputy editors who say here. but taylor swift. >> that was friday. >> remind me of things like that. the funny thing is, you can remember everything else forever, but -- >> i can remember childhood things, like back to when i was 3. betty? no, becky. >> that's just what some of our guests say. >> taylor swift, i think, is a great role model for the kids. i'm really glad she's out there. >> i am, too. earnings are just out from

dow component home depot. the company beating estimates by 2 cents. revenue was above expectations, so was did 5.2% increase in same-store sales. home depot did say it has not set aside money for the costs related to that recent data breach. it says it can't yet estimate all of those expenses, but otherwise, good numbers across the board. we'll see where that stock trades. >> let's talk this morning, if we can, about some top market stories. >> okay. >> why don't we. >> yeah. take your time. >> what's going on in japan? >> a little bit more cadence. one day after new gdp figures, japan officially falling into recession. the country's prime minister gave stocks a shot in the arm. abe announcing a delay in the second sales tax hike by 18 months. we're going to have more from our colleagues in tokyo on all this in just a couple of minutes. but first, remember, from 5% to 8 perls on the tax. meantime in europe, better than

expected sentiment data out of germany, giving stocks a boost. the bulls are welcoming the numbers after a recent sign suggesting the german economy was slowing. was that cadence okay? >> it was good. someone asked me if japan need good or bad. it's like here. last time they did qe, we were up 300 points. >> aren't we used to zero? >> the nikkei was down 3%, but the week before, it had been sitting at new multi year highs because of the expectation that they would be pushing back the sales tax increase, anyway. turn it around today. >> 20-year lows, yeah. check out some of these stocks to watch this morning in the u.s. gopro announcing it's going to sell more than 10 million shares in a public offering. the news came in a regulatory filing. edison and one of its units are buying first wind for 2.4 billion. the deal is going to let sun

edison enter the u.s. wind power market. and edison's quarterly profits dropping as the company dealt with the losses spin off. urban increased by marketing expenseses. xilinx announces buy back and as a result, up 2.4% thus far. the s&p 500 closing at another new high. take a look at where the futures are this morning. this tells you about how investors are dpeelg. we have not seen big swings in the stock market lately. it shows you a little bit of investor caution as we're looking here. the benchmark index has moved less than 0.1% in each of the

last five sessions. the dow had one move since october. we'll see where things have moved since october as we get closer to the opening bell. oil prices, right now you'll see oil prices are up slightly higher, up 342 cents. brent crude sitting at 79.50. still below $80 a barrel. and check out natural gas prices. as we mentioned earlier, natural gas prices yesterday rising to their biggest one-day gain in nearly nine months. check out where things stand right now at 4.279. take a look at what the ten-year note is doing at this point. the yield sitting at 2.333%. dollar this morning looks like it is down across the board. euro is trading at 1.252. dollar/yen, 116.6 of 1. yesterday the yen moving all the way up to 1 17 -- or the dollar moving to 117 yen. also, gold prices at this point

look like they are -- wow. up 18 bucks. that's a big move for gold. back above 1200 to 1,201.10 an ounce. we're going to go back to the top market story of the morning, japanese prime minister abe calling a snap election and scrapping that sales tax. kaori enjoji joins us now. good morning. >> good morning. well, the prime minister here in japan, shinzo abe formally announcing that he will postpone a tax consumption hike originally scheduled to happen by 18 months. but he says says by april 2018, the tax right will go higher. and using the slogan no taxation without representation, he said he was going to call an election because he wants to ask the public whether or not they are

on board with some of the reform agenda that abe nomics so far has promised. the so-called third arrow that has been -- well, the third arrow that has been missing throughout the last two years. and you want to ask the public whether or not they say any other alternative. he says the economy is just too weak to weather another consumption tax hike at this point. now, technically, he can delay a consumption tax and not call an election because election doesn't really need to be called until 2016. and so that is why political analysts are saying this is a move by the prime minister to solidify his power within his own party while his support ratings are high because, as you know, when he's tried to embark on some key reform measures, whether it be agricultural reform, tpp, he's run into a lot of resistance from within his party. so that would argue that this election, probably held on december 14th, is an attempt by

the prime minister to do away with those. now, it's possible after this election they may lose the two-thirds opposition. there's less risk of that now than there was maybe several months ago. so i think at the end of the day, he's decided to postpone this consumption tax hike. it looks like he's done a deal with the business lobby, which is the kadondon. i'm hearing that maybe even tomorrow they will announce an across the board wage hike. as you know, higher wages has been, really, a missing link in this whole reform process. >> kaori, thank you. >> yeah. why was that -- that's an unexpected drop. >> well, because they were looking for, i think, a gain of

2%. >> how does that happen? >> i don't know. that is what economists were expecting, but i think the government had to have some idea because those rumors started last week, that the sales tax hike was going to get put off and a snap government was going to -- last week. >> if you were abe and you knew that the purple income tax was like 50% or whatever and you knew it had been 20 years of just -- >> look, he said to nigfight ba. that's why he's calling the snap election so he can say, look, my way is the right way and all you guys pushing me the other way will be voted out. >> you would think thoot public, of course. the consumption tax. >> it's a tax. it's like you hear ainge

yellings singing ♪ ooh tax the s&p 500 closing at a record for the 4/2nd time this year. >> we haven't seen him since friday. >> listen, do you remember -- carl win love carl quintanilla, but i love carl icahn, billionaire activist investor carl icahn. no, he's not fanning investor fever. he's not. no one cares. he believes there will be a major correction in the next three to five years. wow, okay. thanks, carl. was it three were four, five months ago when he said he's been saying this? >> yeah. >> so we're up from there. i can tell you, he's very smart, he's loaded, i love him. but 15 years ago he told me this was going to happen. so i was there. i know the man. >> the question is whether -- >> three years ago. >> he's the hedge fund manager

and part of what he does is protect money from the downside. so you're always looking for that. >> while the market has moved from 5,000 to 18 thousand, he's never thought this the market i was was not overvalued. that's all i'm telling you. >> take take it for what it's wor worth. so that doesn't mean he's not going to by right this time. have we moved from a relatively undervalued situation to where stocks are either fairley valued or overvalued in your view? >> our perspective is that we're at fair values rights now. you have to fundamentally look at what's if trajectory for earnings, right? corporate earnings have continued to be very, very good. we came into the third quarter looking for 4% year on year earnings growth. we got about 8.5%. so you look at where the market is year-to-date. we're up about 11%, 12%. we really have not seen market

multiples move up that much. our view is that we're fairley valued here and this is going to be all about corporate earnings will continue to look very good to us. >> and andrew lovefield, he says this all the time. made a lot of money creating the corporate kiems mega mergers again popular on wall street and mine melds. >> corporate managers aren't always right. sometimes they sell stocks at the wrong time or make wrong moves. but can we count on them being right that earnings are going to continue to be -- >> well, look, i don't think we have to count on them being right. investors have been right. if we look by how acquirers have behaved this cycle, they've gotten awarded for doing deals. and that's actually somewhat different than in prior cycles when the acquirers who were

sometimes perceived as perhaps paying too much saw their stocks punished. >> but you look at mergers and acquisitions as a backward looking indicator, right? you're not looking at it as a failure looking indicator. does it matter where you are in the cycle to make that judgment? >> i think it completely matters where you are in the cycle to make that judgment. from our perspective, we're really mid cycle. we haven't seen a big, huge boost in capital spending yet. and there's still huge amounts of cash on the balance sheets. so many of these deals are highly strategic like the ones we saw yesterday, the two deals we saw yesterday were highly strategic deals. from our perspective, there's no reason not to trust the market and how we're evaluating. >> but i'm going back and thinking back in 2007, 2008, i was thinking txu, depending on where you thought the cycle was at that time, you would have said, oh, this is another indicator of the great animal spirits and we're off to the races and other people would have said we're at the top. >> yeah. >> and can i ask mark a

question? >> inge it is about an allocation of capital standpoint. and one of the things that is helping right now is because capital is so low. the leverage component is so large, the margin of error becomes so small that the risk increases dramatically. >> but at the moment, you think we're so far from that? >> well, i think there's -- you're going to see it on a deal by deal basis. that's something we'll have to obviously watch very closely. right now, what we're watching, and lisa touched on this, at what point do business leaders become confident and say we want to spend and invest as opposed to doing it from an m&a aspect. that's the part we haven't seen in terms of business leaders buying in and saying, we believe this is for real and that we want to invest in the future.

>> half the time, he works very hard to create the type of growth quickly that they need. and that's why they're doing the m&a. >> absolutely. >> it's not a function of the fact that they don't want to invest in their own business. it's invest in their own business and get them to the other side as quickly as they think they need to. >> you're exactly right. it's a time frame issue. in terms of voting on short-term versus long-term, the m&a address is the short-term issue. >> you're waiting for them to invest in their business itself? >> i would like to see it. i think that's what creates long-term value. >> all right. must be more in dallas? >> susan burns. the actual income is from mississippi but, you know, i don't think texas wants to claim it, but that's okay. >> do you think mississippi state was overrated? >> no, i don't. and i'm a mississippi state fan, so -- >> oh, they were number one, but they were underdogs and they

were number one. >> but, you know, it's -- >> which one of the sharks? mississippi state or -- >> that's ole miss. tuscaloosa is a tough place to play. we'll see. >> people go in there and walk out feeling very good. all right. let's say hi to her. >> i will. >> she was one of our squawk -- one of our originals. all right. thank you. lisa, thank you. >> thank you. have you done jury duty? >> i've done jury duty. i've never been picked. >> there's a lot of waiting. i can't really talk about it. all i'm going to say is it's very gratifying and that i love this country. i love this country. and you look at the way -- this is one of the crown jewels of

our system and that is a time by jury of your peers. and i looked around yesterday, and it's hard work. it's hard to get these people together. no one wants to do it. once you see democracy in action, it brought a tear to my eye. there's not sanl person i saw there that didn't look like a well intentioned good person that would have done their very best to cancer all the evidence. >> and you told them that you wanted to be there, for the case? you told them that you wanted to be an unbias member of the jury? >> like i'm saying, i can't discuss the actually details of why i'm not there, but -- >> so you were called into court? >> i was called into court. i did speak to the judge. i can't mention whether it was a -- i called this individual your honor. i can't give any details because it's a big trial coming pup. >> really? >> i can't really talk about it, but we do have things. we're going to d.c., we're doing

some things with the business. >> so this has been a long-term trial. >> exactly. >> but there's a lot of waiting around and it's just -- >> that election, there's two things about that. >> ride. all i can say is guilty. i don't care what the facts are or anything. but guilty and you're not getting off, fella. >> hang em high. there you go. when we come back this hour, wall street reacts to home depot. we'll talk to an analyst now. coming up, comesport reports on the latest read sales heading into the critical shopping period. coming up at 6:45 eastern, we'll be talking about education with former new york city schools chancellor joel fein. "squawk box" will be right back. for practically just your signature, you could drive home for the holidays in a german-engineered volkswagen.

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welcome back. the total amount of money records from bernie madoff's ponzi skiem is nearly $10 billion. and the lawyer in charge has also brought in, i should mention, over $1 billion in legal fees for his handy work.

commission, 10% of the business. i don't know how you feel about that. >> wow, that's a lot of money. let's talk about home depot. we told but the results earlier this morning. it came in with estimates that were better than expected on both the top and the bottom line. it had comp store sales better than expected. the retailer did note a $28 billion third quarter expense for that recent data breach, but said it can't estimate the total cost at this time. joining us with his reaction is brian nagel, from oppenheimer and company. it looked like it was pretty good news. why is the stock trading lower this morning? >> good morning. i agree. i think it was a good record. there wasn't too much that was unexpected here. we saw another good comp store sales out of home depot. i think the stock is reacting because there's nothing really new here. shares had a big run lately. >> so, again, you're looking at the stock trading right now, 96.70 is where we have the bid. the ask is 97.89.

that to me would suggest that people were looking for higher guidance, the company came in and affirmed guidance. is that a disappointment? >> i don't think so. i think let's see how the stock trades through the day. it's still pretty early in the morning. home depot, as they've updated investors and customers with this data breach, we've talked about guidance a couple times through the quarter, so i don't think that's much of a surprise here. >> what do you think about the stock overall? what do you think about the prospects for the next 12 months? >> i like it here. i look around the environment. you were talking about weather. i think that's a big positive. this quick shift, if you will, to the winter weather i think will be a positive for home depot. but more important than that, i look at underlying home or housing data in the united states and even consumer spending data. i think the environment is getting better for home depot. as we look towards that, sort of say that peak selling season next spring, i think this will be quite good for home depot. so i think the stock sets up well here.

>> you think the overall housing plays into it? >> i think so. >> if you look at the data direct correctly, we're starting to see better sales data. >> this is the second quarter in a row that home depot has been almost best in breed, not just with home improvement, but with retailers. remember last quarter? everybody else was -- we were like, wow, what happened here? and sooner or later, you have to say something about frank blake, don't you? >> i think frai frank is one of the best ceos i've seen in the retail business. >> as i recall, home depot did much better last quarter than lowe's did. it was just across the board with the home improvement guys, right? >> no, tease true. home depot has been outperforming lowe's for some time now. lowe's is doing well, but you will get an update on the results tomorrow morning. i think overall what this speaks to is the strength in this

category. >> frank looks like the guy in mayberry at the hardware store when you walk in who says, hey, neighbor, what are you doing? come over here. what kind of job have you got? if he was waiting at every home depot with the orange apron, wouldn't you feel more comfortable going over there? >> i shop at home depot. don't write me off like that. >> you're not a lowe's person? we have home depot cards, so -- >> you're a home depot -- >> yeah. >> light bulbs? >> 23rd street. actually, you know what i am? i am a pc richards man. do you know what pc richards is? >> electronics. >> they sell a lot of home goods. i just bought a new washing machine and dryer. lg. >> you did? >> yep. >> my maytag, which i thought was never supposed to break -- >> you couldn't get -- the

maytag repairman? >> the whirl pool guy. >> sorry, we digress. >> and so any of the key investors and founders people. >> all right. thanks. >> thank you. >> something langone has told us before, too. >> yeah. things are different. the world has changed. it used to be every year we would play golf. we would try to play golf on thanksgiving and a lot of years we would play golf around thanksgiving and -- >> you're getting the quibble. >> climate change. until all this warming caused all this coldness, which, you know, all the snow and -- >> this year, it is not happening. you're not playing golf on thanksgiving. >> no, with the warming causing all of these freezing temperatures. coming up, why your favorite bottle of olive oil could cost

you a pretty penny. plus, get a jump start on the retail madness. with a first on cnbc tally from online sales. first, as we head to break, here is a look at yesterday's s&p 500 winners and losers.

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>> why the music? >> what happened? >> futures are down? >> that was the music we played at the top. you didn't have your ear piece in. >> natural gas and the weather. it's cold out. it's a little chilly if you're getting up early this morning. >> look at the window. welcome back. you don't get olive oil. a cool summer. all that warming. a cool summer in europe are taking a big bite out of the olive harvest in key regions.

it threatens the plant. output alone is looking at plunging. >> yet we learned we may run out of chocolate in our lifetime. >> demand is growing so fast and there's some problem with the cocoa production. they don't think they can keep up with demand in the next 102020 years. >> is that a cookie or a candy? >> cookie candy.

>> it's childish, but if you say penis, maybe i'll say penis howard. anyway -- >> let's talk about the headlines this morning. toyota planning to introduce its first mass market fuel sell car next month. the vehicle runs on hydrogen instead of gasoline. the automaker wants to copy the success of its preyum hybrid. the company cutting costs and investing in films, including the new spider-man film and former sac portfolio manager matthew martoma, he's going to order to begin serving his nine-year prison sentence for his insider trading conviction. e-commerce sales jumped last month 15% compared to last year. looking ahead, the company is now predicting this could be a record breaking holiday shopping season online. one reason is there is one extra day of shopping this year. joining us now to take us inside

the numbers is jan corfoni. i would be shocked if it wasn't a record breaking year. i think every year for the last 15 years it's been a record breaking year in online sales. what are we talking about? >> yeah. we think this year we'll see about $61 billion spend in november and december, which would be a growth rate of somewhere around 15.5%. the thing that's different this year will be mobile. but beyond its role as a buying device, i think that we're beginning to see the impact of mobile, having a negative effect on in store buying. it's very easy now for consumers

to check prices while they're in the store. and our daddy suggests the use of mobile devices is accelerating the channel from instore to overline. >> are there things the retailers, the delivery companies are doing differently this time around, that the people that got burned won't trust it as late as they did in years past? >> yeah. i think they mainly trace back to the fact that it was such a short shopping season. it was just 28 days between thanksgiving and christmas. what that did was caught a lot of variability in day-to-day buying. for example, it boosted buying online on the weekends to the tune of 70% increases.

and i think that that daily fluctuation caught the retailers and some of the shipping companies by surprise. i have no doubt they will be determined to not less it happen again next year. >> there are other things that can be taken into account. you would expect the same things for the big online retailers not promising it will get there in time for christmas if you don't order well in advance? >> yeah, i'm sure they're looking at that. we're seeing somewhere around 60 to 65% of all transactions now with free shipping. and it's almost become the cost of doing business for the retailers. and i think that that parameters around that in terms of when you can expect to receive your gift, your purchase, i should say, is really something that the retailers are going to take really a close look at. >> jan, thank you so much for

joining us. >> thank you. still to come on "squawk box" this morning, we're going to talk education with former new york city schools chancellor joel cline. he says students need to spend a lot more time in the classroom. he's got some management tips for us. then at 7:00 eastern time, "squawk box" with the ceo of united airlines. and then later, bentley's chief executive is going to talk high end cars live from the los angeles auto show. before we do all of that, let's take a look at what's happening in european markets right now. we're back in just a moment. then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind. it's no wonder last year we sold over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪

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welcome back, everybody. right now it's time for the

squawk planner. at 8:30 eastern time, we get the october price index. at 10:00, it's home builder sentiment. the cdc will hold an ebola hearing in washington. it will be in response to the public outbreak. also in d.c., freshmen will pose for a photo on the steps of the capital. we'll see if there's any unusual poses in that. right now, andrew, over to you. big question, how can we cultivate better educators? joe cli joe klein arg, author of the ne book "lessons of hope, how to fix our schools" is joining us. we're thrilled to have you back at the table. >> thank you. it's good to be back. >> i key the this up before the

commercial break to say there's some management lessons, not just the world about education, but there's questions about just the world of business. >> absolutely. and one of the things that astonished me when i became a chancellor in 2002 is that the public sector seems to think that effective management is a bad idea. it's a business idea rather than the way to run an organization. so i'll give you one example. i think the most important this education is the quality of individual school. you send your kid to a school, you don't send your kid to a school, that's all from the politicians and all that. and if you're going to have a great school, you need a great school leader, a great principal. and yet virtually no one focused on that issue in public education. they try to micromanage the principal, the rules from the union try to dictate everything that he did or she did. so one of the things we started with right from the beginning was the leadership academy that

we really trained with a new generation of principal. and over the course of the eight years we gave more and more authority and greater and greater accountability. >> i want to talk about the leadership academy. this was an academy effectively of bringing new people into the program to run these schools. you could have taken the best teachers in the system and move them around? >> absolutely. >> but the unions wouldn't allow you to do. >> you're not allowed to move anybody around, no. so what you have to do -- and you're not even allowed to use incentives. so i was always short math and science teachers. it's the nature of the market. so if i wanted to get more math and science teachers, i would have to pay more in the private sector. in the public secretary we shall you can't do it. it's nuts. what do i do? i have a whole bunch of well intentioned people end up teaching math and science when they aren't trained to teach math and science. that's where it's hardest to get good teachers. so the system doesn't realize

that if you don't respond to rationale incentives, you're going to end up with all sorts of mistakes and the kids are going to pay for it. >> how much blame do you place on the unions or not? is there a way to work with the unions? >> it's a yes-no question. we did some important work for the unions for the first time we negotiated a contract. if i told you that you were the principal of a school, half the vacancies you have could be forced on you, you couldn't even interview them, talk to them, talk about basic management practices, if you can't assemble your team, how are you going to execute against your obligations? but we did some good materials. but too often i think the union is too protective for a status quo that i don't think is working for its own members. just yesterday, i had a piece in "usa today" talking about let's make teaching into a real profession. the most iconic union leader

ever pushed this idea. so i think there are lots of things we can do to move them forward. >> what do you say it's not working for its members, either? union if argument is it's not working out for the kids. >> it's not working for the kids or the teachers. >> how is it not working for the teachers? >> because i think the teachers want to be incentivized to do great things. i think they want to feel like they're part of a respected profession. too much teachers feel like they're blamed for the problems in the system. there's so much irrational rules in the system. it used to take us one incompetent teacher who was documented incompetent, it would say us 2 1/2 years and $300,000. we had to pay that person for 2 1/2 years to sit in something called a rubber room. how ridiculous is that? i don't think teachers wants to be a part of a system that's dysfunctional. so if you think about it, if you made teachers a prochgfession, y

were responsible for setting something like a bar exam, the ed schools basically are not doing the work they need to do. so you have to reshift the whole thing. but i think if you look at country that's succeed, becky, you see the teachers are the most respected. in japan, they're called sensei for respect of the learned profession. we need to get there. and the way they are going to get there is by the unions and the schools and everybody saying this system is not working. we lose half our teachers in the five five years. any company that loses half its population in the fifty five years has to rethink things. >> you have a lot of people happily going into teaches in new york city. there's an article, though, that suggested that those kids come out of school, they work in the teaching profession, but as you just said, they work in the teaching profession for four or five years and there's a remarkable time in part because they get burned out and in part

because they're going to charter schools and other places in a good way, they're working 12, 14, 16 hours a day and there are some arguments being made that you actually do -- that seniority and some gray hair helps. how do you think about that balance? >> there's no question seniority and gray hair or even bald hair or the absence of hair helps. but you have to do it sensibly. so what you need to do is not have a lock in where people are basically rewarded, but if they want to stay 10 or 15 years, they have a portable pension so they can move to another system. so we need to do this in an intelligence way. what we have right now is a false dichotomy. they stick in the system forever because at some point, the attraction of a pension becomes so compelling. and every other industry, you know how portable pensions, people can move from one job to another? let's do it intelligencely. >> 401(k), right?

>> yeah, exactly. that way you don't get the kind of lock in effect. there's no question you need senior teachers. don't get me wrong. but you need the right mix and you need highly motivated senior teachers. i talk in the book about some of these teachers. you say, well, i've been here for 20 years. they're suggesting that they're finished. and, you know, that kind of attitude becomes part of a culture. and to me, i always say everybody has to get better every day. our kids need that. >> is there a school system in the united states that you think is a worthy model? >> the model that's working, i think, right now, there's several doing good things, but the one that's most interesting is new orleans because they had a restart after katrina. so that is driven competition and the results, it's a very tough school district. high poverty, lots and lots of kids who are struggling and they're beginning to see results. >> but that was a reset from katrina. >> that's right. but the basic principal of choice. the one thing i always think about, if you talk to everybody

you know, nobody is going to say, i'll go to the neighborhood school where it's good, bad or indifferent. would gets stuck with one and done? the kids in the high needs communities, the poorest kids. in new york, we opened up almost 200 chapter schools under mayor bloomberg. last year, for 20,000 charter spots, some 80,000 families, almost all african-american and latino applied. these parents know what they want. they want better schools. >> they don't get in, though. >> that's why you need more charters. what's going to happen in new york? the next thing, unfortunately i think governor cuomo is going to lead the way on this, they have a cap on chapters. why? because in the public sector, they don't want competition. everything you talk about all day long is competition drives the economy. >> like you said right at the very top, there are people with words like competition or business models or meritocracies or accountabilities. they don't like any -- we're arguing still about whether the

president -- is it good to have an effective ceo as president. that question -- now we question that, whether that is something that we need to do. how we cannot know at this point that accountability and someone having to answer for, . it's shocking. people think if you put a label on it and it's business, that -- i mean, what andrew said before about seniority. any organization that thinks that seniority is the altar you worship at rather than merit is going to get it backwards. that doesn't mean seniority doesn't matter. there's a reason in baseball there's a rookie of the year and a most valuable player. usually the rookie of the year is not the most valuable player. but there's lots of rookies of the year who are a lot better than senior people. organizations that aren't built on merit like joe says are organizations that pay a price. >> we are going to say thank you on that note. the book "lessons of hope: how

to fix our schools." go out and get it. >> thank you. appreciate to be with you guys. >> thank you. >> been at it for awhile. baby steps, i guess. >> no -- >> it's frustrating. >> we can't afford baby steps. every day we read about inequality. you hear the american dream is evaporating. give kids a good education. >> you think it's gotten better or worse? >> i think it's getting better, but not moving fast enough. we're moving at baby steps. but we've got to accelerate it. we wouldn't tolerate it if our kids are in dead end schools. we shouldn't tolerate it for other people's children. we care about their future and we want them to have a shot. yet today kids in the bottom are locked in. what's the greatest cure for that problem? give kids a great education and a great opportunity. >> right. >> and we're not doing it. that's why i call it lessons of hope. although somebody told me i

should have called it lessons of nope because of all the challenges. >> i know. that's why i was asking. >> thank you. >> thanks a lot, guys. still to come, united continental's ceo. and later a "shark tank" success story. group book allows users to upload books and get a bound book of those photos. if you think that's a good idea? shutterfly's founder thought so. he just bought it. as we head to break, check out yesterday's most clicked on stocks on cnbc. not surprising, there's apple. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last.

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coming up, why home depot shares are under pressure this morning. plus the news maker of the morning. shares of united soaring more than 25% in the last month alone. find out if low fuel prices and strong travel demand will keep business flying high. "squawk box" returns in just a moment.

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taking off with united airlines. lower fuel prices, larger fee revenue, a stock that's up more than 50% in a year. ceo jeff smizik will tell us if there's turbulence on the horizon. the big chill. plunging temperatures across america, blasts of snow. how will the weather impact the energy prices? a picture of "shark tank" success. >> i'm all about making win/win situations. >> congratulations. >> kevin o'leary wanted a piece of groove book. now shutterfly is swallowing the whole company. mr. wonderful and the ceos get into the squawk tank. second hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. if you are trying to stay warm this morning, we have a story to remind you to spring is right around the corner. maybe not right around the corner, but we are talking baseball. st. louis signing giancarlo stanton. this is the biggest contract ever in sports, ever. the 25-year-old led the national league in home runs before missing the last 17 games after getting hit in the face with a fastball. the contract works out to $154,000 a game. more shocking about the deal is the usually frugal marlins spending this much money is unheard of. pitchers and catchers will report to spring training. you heard the figure how much that is for a game.

that's usually $168,000 a game whether he plays or not. for a long, long time. >> really good work if you can get it. >> you have a problem with ceo pay but don't have a problem with this? >> thank you, joseph. >> no? i mean, it's okay? he's 25. >> free market. >> all right. among today's other top market stories, one day after new gdp figures show that japan has officially fallen into recession, the country's prime minister gives stocks a shot in the arm. shinzo abe announcing the delay in the second sales tax hike by 18 months. we'll have more from our colleagues in tokyo in a few minutes. you can see what happened to the nikkei. it gained back almost all the ground it had lost the day before. take a look at what's been happening in europe this morning. data out of germany. that gave stocks a boost there too. up about by 1.2%. the bulls are welcoming the numbers after recent signs suggested the german economy was

slowing. very big concerns if that motor of europe actually slowed down. check out what's happening we the dollar. dollars down against the euro which is trading at 1.2515. also the 10-year note at this point, looks like the yield is down around 2.38%. the price of crude oil is slightly higher this morning. up now only by about 11 cents to $75.75 a barrel. also look what's been happening with gold this morning. cold is up by $16. not sure what's cause the spike, but we have seen a few days of gains. right now trading around $1,200 an ounce. home depot beating the street. it was the 5.2% increase that did that. home depot did have a $28 million expense. but the recent data breach, they

can't tell what it would be. "wall street journal" reporting the chip maker will combine its production. to those who focus on mobile devices. set to take effect in early 2015. we've all seen gas prices. low energy prices clearly front and center for the airlines as well. united continental looking to take advantage of jet fuel cost which fell 8% in october. the stock, check it out, it's been flying high this year. near an all-time high. out-performing the s&p 500 by almost 40%. here with us on set, the president and chairman and ceo of united. what a long, strange trip it's been for four years. >> it has, indeed. >> and now record profits in the third quarter. the airline index was up 33%. united continental is up 51%.

so things at this point, your critics -- i don't know if they're as loud as they used to be. you said i'm going to take this great airline continental and buy united. at this point i'm sure you'd say it was worth it. >> it's been a long, strange trip. it's taken longer than i personally expected it to. we clearly have taken off now. >> did you have a choice in the matter to allow continental to stay like it was? you had to bayou nieted with all of its myriad issues. you had to do it for size, did you not? >> we need ed to stay in that. if we had stayed as the old continental, we wouldn't be around today. >> all along i sort of thought it's something you had to do.

but there were issues with united at the time. and continental on the other hand -- but continental was great. >> there are always issues in every merger. whenever you bring two companies together, there's technical issues, fleet issues, you name it. but that's what we're paid to do when we do mergers is to bring two carriers together and produce something greater than either of us had done. >> you honestly think continental would be out of business by now if you hadn't? >> maybe not out of business, but marginalized for sure. it's tough. it's very tough when you're a small -- >> what is remaining? are you -- okay. this is the dawn of the new united continental and it's all clear sailing from here on out? what still remains? >> it's never all clear sailing in the airline business, but most of the tough issues are

done. we have got a couple of things left without contracts. we have folks who maintain and flight attendants. we've got smaller work groups already done. but most of the cheheavy liftins done. we're focused on who we are as united. >> how would you grade your integration relative to delta, northwest, american, which is still going in terms of its integration? >> it's still too early to tell on american. i would say that ours was tougher than delta's. because delta's non-unionized. so it makes it more difficult bringing together unionized carriers. i'd say they were similar to the old continental and old united. but we've made huge strides in culture. >> that brings up a great point.

i fly united all the time. i fly out of newark here. i flew continental before that. i will say sometimes dealing with some of the legacy carriers, you have customer service represents, flight attendants, people who aren't happy to see you to begin with. and already some of that is what they feel they've gone through a rough time with the merger, things they've lost along the way. you don't have the same when you fly jetblue. people who are new to this brand new area. as a customer, you feel sometimes that there is -- people have a chip on your shoulder before you even show up. >> i think that's changing quite a bit. and we're doing a lot of things at united. we've implemented a very detailed service standards. we actually have a firm that flies around that's rating us on those giving us data. >> like a secret shopper type? >> we do. we have them on lots of airplanes domestically and nationally. we also offered buyouts. >> how do you change that culture? >> we offer buyouts for the

tenured employees who would prefer to retire. we recently did one for the flight attendants. we expected to get about 2,000. got 2,500. and i think that's healthy for them. that'll give them a good chunk of change and they can retire. and it's healthy for the company as well as for the service. >> you talked about it last week. that's when we were with virgin america. made that same point that when you don't have a lot of the legacy issues -- >> people feel like they've been battered and bruised. >> by the way, jetblue is almost a legacy carrier themselves these days. >> identify got to buy the biggest legacy carrier. united had more legacy issues than anyone else. >> let me say, if this merger works as we get more profitable, as we have the cash to make investments in our employees and in training and technology, you begin to get a very positive

sort of virtuous circle here. you see it in our customer satisfaction scores, on board the airplane, and we're investing in break rooms for employees. things that the old companies didn't do. and that's positive. >> delta has a bunch of old -- old airlines aren't necessarily bad. you look at airliners are not necessarily bad. you can retrofit all of them. you've upgraded the fleet. >> we've got a good modern fleet. but we also continue to invest in our existing aircraft. we retrofitted and are going to retrofit more. we can extend their life. we extended our 747s also. so you can. you can take an airplane that may be 15 or 16 years old and you can fly for another five or seven years. that's good cap allocation.

>> nobody doesn't like the pods. into the front of the plane -- >> i have a consumer question. different type of consumer question about pricing. which is one of the things that has happened. and it's benefitted the companies -- the airline companies. is that pricing has gone up considerably over the past several years. despite the airlines saying that after the mergers, we wouldn't see the kind of price increases that i think we can say we have now. how much more do you think we have to go? >> well, remember, in the old fractured airline industry, we used to lose money on every flight and tried to make it up on volume. that didn't work well for us. and what we're doing now is pricing our products that we can -- so we're a business. used to be an industry. now we're a business. now we can make money. air travel is still a bargain. it's still a lot cheaper than it ought to be. inflation adjusted, it's very inexpensive. >> i will say i just looked up a flight to california on united.

i could get it for 330 bucks still. >> i'll have to call and get that fixed. it still is a bargain. but we're pricing today to make a reasonable profit. we're not the level of profitability we should be at united. we will get there. but it isn't just pricing the product. there's lots of opportunities for us in ancillary services and ancillary products to make good margin. and those are things that customers value and they'll pay for. >> i want to talk -- southwest always -- whenever they're on, oil price, jet fuel prices are up. we were hit. wow, they're down. yeah, we made money dpop they really -- it seems like sooner or later if you're hedging against higher prices and you come down, you've blown money hedging, have you not? >> we are actually hedging -- >> do you wish you hadn't recently? >> you can always go back. it's like if you buy insurance

and you didn't have a car wreck or you didn't die, are you unhappy you bought insurance? >> yes, i am. >> well, you should have insurance. but different airlines have different hedging strategies. ours is one of insurance. we tend to be -- you can but you can also lose money. sometimes you win in the trade, sometimes you lose in the trade. we're just in hedging. >> you're doing well with where fuel prices are now, are you not? >> sure. of course. >> and now have you had an empty seat on any planes in the last week? >> we try not to. >> fewer -- >> it's great for the company. i love to see that. but i will say consumers feel like -- and i feel sorry for you being in this industry because everyone feels we understand the airline industry. consumers feel like it's gotten

less pleasant to travel over the last five or six years. they feel there are more fees, it's more crowded, it used to be you could sleep three across because there would be empty seats. it has gotten more -- >> it would be great to be the only passenger on a flight. but nobody could make money with that. and what we're doing is turning this into a business. i understand that people would prefer an empty middle seat. and we'd be happy to sell them that empty middle seat if they'd like to pay for it. but they don't. they value it but they're not willing to pay for it. >> i would like to feel like i know what the price is up front. i quoted the 330 bucks across country. that doesn't include $25 both ways for my bag. i'd just like to know the price. >> our prices are really transparent, becky. >> i will say by charging people fees for the luggage, it means that everybody tries to get a bag on the plane. loading and boarding has been more problematic when everybody

tries to stuff their luggage on for free. it makes boarding a big pain with everybody jumping and trying to cram this stuff in. >> there's no question that having bag fees has made the boarding process more difficult. that's something we don't have a solution for yet. we've got some ideas, but nothing yet. >> everybody needs to take a 1500 mile drive with children once a year and then -- >> remember why they like to fly? right. >> then go back on and say this is pretty good. sure, my shoes off? no problem. >> here's a question for you about those of us who have miles. for those road warriors on your planes all the time, one of the things that has happened since the merger is a lot more people who have higher status and as a result the, quote, higher status now means you have lower status. >> are we doing kids in first class? >> no, no. i don't know if he knows about our debate on that.

that's a separate one. as a result you have people who have the, quote, status but actually you sort of get bumped down. now being in zone one, everybody's in zone one. if you know what i mean. how do you change that effect and what does it do to the loyalty of the customer? >> although there are more people with more status because there's more people, there's a whole lot more seats. it's true they're sort of disproportionately more. in some markets in big business markets, sure there are because there's a lot of global services people. and we try to treat them very well. in other markets where there are fewer of them, i mean, you're probably flying to these fancy places with lots of -- >> exactly. you know what you just said about zone one? everybody's in zone one. you are such an -- i mean, you try to use code words and you try not to out yourself. but you just cannot help it. you don't want any kids screaming in first class. too many people -- there were

people in zone one that were not zone one people, jeff. i could look at them and tell they were not zone one people. and there they were. with me. you cannot help yourself. you cannot -- >> i think we better switch topics. >> thank you, jeff. thank you. >> how could you tell they weren't zone one people? what was it? their clothing? their hygiene? what was it that told you they were not zone one? everybody's in zone one. that was so funny. >> everybody's in zone one. >> everybody's in zone one! >> it's true. >> let's ask about the weather because we've seen all these pictures of snow everywhere. lots of snow on the ground. is that impacting how carriers can get around? what's that mean and are you concerned about this winter weather turning out to be as tough as it was last year? >> it was a tough winter last year. look, we're used to dealing with tough weather. we have hubs in -- if you think about where we are in denver, chicago, new york, dulles.

i mean, we've got hubs in knowy places and we're used to dealing with it. passengers understand it and they understand there are going to be delays when there's tough weather. and they want that because we need to be safe at all times. >> well, i love continental. united had its issues, but it is a great brand. great music. and united friendly skies. all that stuff. bring it back. >> we're doing it. we're doing it. we're making a lot of progress, joe. >> you're right. we'd all like to fly alone on a -- >> we would. >> -- g 5 but we're not going to. >> we will. >> you need a profitable vibrant industry. thank you for your time. >> thanks for having me. >> make sure you get joe into zone one. >> i don't want to be in zone one with those people. old zone one, maybe. not this zone one you're talking about. >> thank you, jeff. appreciate it very much. coming up when we return, a

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♪ welcome back to "squawk box" this morning. a new offering for burger king fans but only in japan. the fast food chain rolling out the berry burger. it has cranberry and blueberries

on top. the other burger is a mushrooms and cheese. the ad campaign reads berry kristmush. you going to buy that? >> yuck. >> not a burger king man? >> you? >> i actually like burger king fries. >> no. you need the thin ones from mcdonald's. >> i love mcdonald's fries too. >> i don't like them. too mushy. when we come back this morning, will energy prices increase thanks to the weather plunge? that's next. and we have ceos and mr. wonderful himself joining us to talk about a wild success story. right now as we head to a break, take a look at u.s. equity futures. things have turned positive. dow futures up by 14. nasdaq by just about 1. always obvious. s aren't sometimes they just drop in.

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welcome back to "squawk box" this morning. among the stories that are front and center, japan's prime minister telling party leaders

he's going to be delaying that unpopular sales tax increase and call a snap election. this comes one day after new gdp figures shows they entered a recession. the nikkei rallying overnight on that news. also germany giving stocks a boost. and a new study from erickson says that about 90% of american households have three or more internet connected devices. the average number of connected devices, more than five. also, a senior vp at uber is paving the way to help fight back against the press. buzzfeed reporting that the executive suggested that the ride sharing company should spend a million dollars to hire a team of opposition researchers to dig up dirt on critics in the media. >> i can't believe we haven't talked about this yet. he made these comments at some

dinner he thought was off the record. >> i actually know people who were at that dinner. >> he said they were upset with some of the journalists. i think there were one female journalist in particular who had given them a hard time about things. he wants to hire -- like, this is straight out of the dirty tricks game playbook to hire people to chase down these journalists, dig up dirt on their life and use it against them. he said this in a public forum. >> i bet this actually happens already. >> you think it happens in actual companiecompanies. >> i do. i don't think they hire people for this purpose, but i think occasionally there's some opposition -- >> this guy said it at a dinner. >> i -- indefensible. indefensible. joe? >> yeah. probably not good. and uber is one of the sort of new age companies where you would think that they're -- >> what was it hp doing this before?

>> was pretexting? pretexting. >> is that for journalists? >> yeah, that was journalist who is got caught. >> uber is more of an aggressive culture than some of the other companies. >> you use it all the time? >> all the time. >> you do? >> yesterday. >> you did? >> maybe once a day. instead of a taxi. constant. constant. >> more expensive than a tax key, isn't it? >> cheaper than a taxi is you're on uber-x. >> like zone one. >> no uber-x is the cheaper version. you couldn't make it to zone one with uber-x. >> maybe some days i'll use uber. it's different than youtube. >> it's different. >> keeping up with -- see, this is what i -- it's hard for me. keeping up with millennials. it's a big job for companies

that depend on the tastes of consumer. morgan brennan has today's big job sector-nomics. can you handle this? >> i'm going to try. when it comes to consumer staples from packaged foods to personal care, new companies catering to millennials are out-performing the big, well established old-timers. take whole foods. stock is up 28% over the last month. compare it to century-old safeway. that's only up about 3%, 3.5%. safeway's had negative store growth for ten years. it's now trying to offer premium products for local markets. something whole foods already does. another example, keurig green mountain. that stock's up 12% over the past month. it's been helped by those single k-cup coffee pots. but smuckers up only about 2.5%,

3% for the past month. lowered its guidance ahead of earnings tomorrow on its coffee division. and it's now expanding its k-cup partnership with keurig. last one. check out monster energy. it's up 19%, almost 20% over the last month. and there is a lot of room for this company to grow globally. very different story from coca-cola which suffers from flatlining soda sales and a flat stock despite the recent market rally. this trend is why coke has bought stakes in monster and keurig. new tech, changing tastes, and a push towards convenience is what's driving millennials' pocketbooks. you see the stocks out performing. >> thank you. let's get a check on the futures this morning. we've been watching on the equity markets at least at this point are poised to open slightly higher. we have seen some green arrows develop. these are modest gains at this point with the dow futures up by only 13 points. also if you check out crude oil

prices at this point, right now wti is down. but only by about ten cents. $75.54. still trading well below $80 a barrel. been stuck in this zone for quite a while. joining us now to break down the market is jim iuorio. he's a cnbc contributor. and chris faulkner who is the ceo, president, and chairman of brightling energy. i want to start with you this morning because it's not just oil prices we've been watching with such fascination, but also natural gas prices. yesterday their biggest one-day gain in nine months. what happened? >> we think that natural gas obviously is responding to winter coming on. in the northeast it's what impacts. >> people are surprised that winter's here? >> you know, i think it was slow coming. texas we had a pretty cold spring. doesn't really impact the gas prices. as the northeast gets that, it moves up. natural gas prices will remain

below five bucks. so i wouldn't see supply and demand fundamentals have been fixed, but at least we get cold winters and hot summers moving the needle. >> you don't think it's simply supply and demand for the oil prices? >> no. we've got two concerns. number one, libya production came back on even if that's temporary. now the kurds have got to deal with baghdad. they can export oil out of the northern routes of iraq. they might put more oil into the market. the iran nuclear deal happening, if that gets sort of resolved, that could come down a bit. or if they don't, we could see extended sanctions in iran causing oil to come out of the market causing supply hopefully to come down, prices go up. the biggest thing is saudi and opec around thanksgiving. we've got russia and venezuela trying to convince opec to cut production. saudis saying they're not going to cut production.

if that happens, we could see oil prices go further down. >> chris, as opec lost control, is this about u.s. production? >> i think opec is becoming less and less relevant. there's a lot of in-fighting between these countries held together by duct tape, opec is now. i think all eyes are on saudi and what they're going to do. but now on market share versus price controls. i think saudi wants to beat their chests saying we're the producer of the world. united states is now producing 9 million barrels. but we're on their heels. they can drive the price down. they can weather the storm. they can withdraw money from that foreign currency exchange. then they can drive the price down. create the market share demand for themselves. saying we're still in control of this thing. how long that will last, how long opec will be around, i don't know. but the united states will have to make a decision if oil prices go below $70, are we going to

curb production relatively? i think smaller producers are going to be making those decisions rapidly quickly if things don't change here. >> let's talk about the markets. we did see the s&p set another record yesterday. but it's almost a begrudging record. it seems like investors are nervous at these levels. >> and they should be. we've traded kind of on the sideways range for a week. remember when we used to debate about whether domestic data base i think that argument has changed. now good news equals good news here. what we really like to see is bad news in japan and europe because what's going to happen then is that assures that they keep the pedal to the metal as far as liquidity goes. at the end of the day look at what do you need to buy. you've seen french at 1.1. our stuff here looks great by comparison. >> yeah. it looks great by comparison, but what else concerns you? i mean, obviously there's a lot of unease out there.

there's -- >> well, if we start to see the weakness in those economies starting to drag us down considerably, but then even then we'll see, you know, we could possibly see an acceleration of accommodation here. and that should support asset prices. the thing that bothers me the most, i guess, is just when people get on one side of the boat. like the euro trade. it could be destabilizing and people get worried. they sell risk. thap worries me a little bit. but not even that much. >> jim, let me ask you quickly about japan. how should we read that? is that good news? more stimulus is going to come. is it bad news because without the constant stimulus, they can't stand on their own two feet? >> it's good news in the short-term. the long-term, it's awful. the only way to get out of their problem is devaluing the yen. there's even some conspiracy theorists yesterday that were saying that number may have been massaged to the downside just so abe gets ground cover to suspend

the sales tax and increase liquidity. that's fine. because that money is going to end up here soon. it just -- like you said, it all comes down to the world's tallest midget. and that's us. that's a bad characterization. our economy is going well, but it's good news when we get bad news out of japan. >> thank you both. >> thank you. okay. coming up next, making millions in the shark tank. we've got details on the investment mr. wonderful made in digital start-up groove book and why shutterfly decided to buy the photo app. "squawk box" returns in a moment. (vo) rush hour around here

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oh, my gosh. >> welcome back to "squawk box." it is global entrepreneurs hit week. we are jumping back into the "shank tank" now with some news announcing they are buy iing groovebook. it's the first-ever buyout of a business featured on the show by a publicly traded company. making "shank tank" history.

joining us now is the founder of groovebook. president and ceo of shutterfully. and the investor of groupbook along with mark cuban. good morning b to you guys. >> good to see you guys. so let me just ask this question. was shutterfly -- were you guys watching "shank tank" when this happened? >> i happened to see the show. >> did you think you wish you could buy it then? >> no. i caught my attention because it was on "shark tank." then we watch it month after month after month. this went up and up. and brian the julie and the team executed well. and the platform was a phenomenal success for them. >> i love it, by the way.

i absolutely love it. love shutterfly, love groupbook. >> i love the app because it was -- i love photography, but i saw the compelling cataloging of a family that would be very sticky. once your kids are born and you start cataloging their lives, you don't stop. but we didn't expect this growth in subscriptions. this is the first time ever anything like this has happened. now we respect the platform for what it is. consumer goods on "shark tank" are remarkable. every week we're blown away by sales. i think, you know, i want to boast that i think we have the most successful venture capital firm on earth in consumer goods. there's nobody can touch what we do. >> i don't think that's a stretch. >> walk us through the math for you. >> so the way this works obviously as a shark, i love royalties. that's what i love. because i'm never certain what's going to happen. i have a piece of equity and a

royalty. all that goes away. i'm bought out, basically. he's going to make into this plot form. shutterfly has to own this business. it makes sense. but i want to reinvest in this guy. he's a winner. >> any hesitation about selling? did you ever think to yourself it's a much bigger business. why sell now? i want to be independent. we have so many people who come here with their new business and they say they have no intention of selling out. >> well, i know that the shutterfly brand is going to help grow the business and we can take it so far. and i'll be on to the next project. >> how did you and your wife come up with this? >> my wife lost her phone a couple years ago and i had a commercial printing company. i created a book for her after she lost her photos. she said i need this every month. we found out how to get it as inexpensive as possible. we started one by one and it's been credible. >> i feel like i take pictures all the time. my phone is always with me.

yet they kind of just disappear. you never have any hard printout of it. >> since airing we've had 200 million photos uploaded and over a million downloads of the app. >> think about combining shutterfly's life that can tell if their eyes are open and algorithms and lay it on this model. you're taking 500 pictures on your phone in a month, we'll tell you which would make the best book. you can rip them out, share them with friends, let your kids do school projects with them. it's a perfect marriage in what they built. >> who was printing -- you were printing everything yourself? >> no, we did it all internally. >> now it will all move over to your platform? >> yes. >> and will you stay with the company? >> i'll stay on board for a year to make sure the transition is

smooth. >> and make sure the check clears. >> it all started with this 37 the groove. this whole thing is about what brian dreamt up in a basement. it goes at under magazine ship rates because it can bend 30 degrees. that's sheer genius if you think about it. there's so many people that make this on the internet. but not this. this is the one thing. the little piece of magic. >> the one thing i will say, i'd like a higher quality one. my husband says it's because we're cheap and haven't upgraded. maybe that's what shutterfly can solve those problems. >> our brand has stood for memories and high quality. by takes this app and overlay it on to our customer care, our quality of manufacturing, you'll see the product continue to improve, expand, and we'll be able to put it in front of tens of millions of people which is exciting. >> so why couldn't -- i mean,

with all due respect to everybody, why couldn't you go off, watch what he did effectively and rip it off? why couldn't you do that? >> patent on the groove. my lawyers suing him if he tried that. that's why. >> we do that all the time. we look at what's happening in the ecosystem and given our scale we try to do it better. google does that. amazon does that. apple does that. in this case the platform of "shark tank." every time you're on there, it's the equivalent of getting $10 million of advertising. so that lead that groovebook created from that viralty. and you think about plugging in that mobile, social component into our platform. it made sense to do an acquisition at this early stage versus trying to compete. >> jack up our advertising fees on the repeats. in hearing that. really? how much? is hoffman watching? >> you think it's worth $10 million to $15 million? >> yeah. >> if you look at the success rate of capital, two out of ten

deals work. we're almost at four out of ten. because we think the marginal company is getting $6 million to $12 million of advertising. in is nothing like "shank tank" now. it is unbelievable for consumer goods and products. >> i think the biggest deal is making sure the company is ready for all that extra traffic. >> we do have that challenge. in this case nobody could foresee how many people would order this app. it was number four yesterday on the itunes store. people are devouring this product. so we need shutterfly's infrastructure. there's no way this company would stand alone. it's got to go with shutterfly. it's just too big. >> do you have another business up your sleeve? >> working on it. >> want to give us a hint on what it could be? >> in a year from now, be on "shark tank" again. >> is it in the printing business? >> i can't say. >> he gets a free pass any time he wants. any time. anybody that has done this, this

is the biggest deal we've done in "shark tank." >> how much did you put it? >> not much. i feel it's bad karma to boast about money. i've done very well on this, i'm very happy. >> instead of knowing how much, what is the return. three, four, five, six, seven times. >> thousands. think about it. when it came on "squawk box" ten months ago, it had virtually no value. look at it now. >> i'll tell you what i'm thinking and this is because i'm clueless. nothing's backed up on my iphone. i'm not sure why. it keeps asking me to with the cloud. i'd hate to lose the pictures. i don't know how to do this, but i might ask one of my kids to take my phone and do this. >> we've designed it so it's only two buttons. >> that's too many, but i'm going to ask my daughter or son. >> i take pictures until my phone fills up. then i have to download them on

the community. >> i go, i'm never going to need this and i just can't get rid of it. >> download the shutterfly app. all your pictures get backed up for free on our servers. >> what do i have to do? >> just go to the itunes store, type this life. >> during the commercial break, i will help you. >> if becky can do it, you can do it. >> what does that mean? >> i'm just telling you, anybody can do it. >> what does that mean? that was a diss. >> anybody can do it. >> the software i want you to build, by the way, to help you get the addresses to collect addresses every year. that's always the hardest part. >> we agree. >> you don't have the solution yet, though? >> we're working on that. we agree. but we're going to sell hundreds and hundreds of millions of holiday cards. every household in america will get more than three of the shutterfly in tiny prints cards this year. >> you're tiny prints too? >> yeah. >> congratulations on the sale,

guys. we got to run. brian, jeff, and kevin. tune into "shark tank" here on tuesdays and wednesdays 8:00 p.m. eastern time. coming up, time's running out for the dow hitting 18,000 before the end of the year. jeremy siegel joins us in the next half hour of "squawk box." and he's been dead on. ♪ (holiday music is playing)

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let's take a look at some stocks to watch this morning.

agilent's quarterly profits dropped. revenue, though, matched wall street estimates. sony says it wants to increase movie and tv revenue by more than a third in the next few years. they are cutting costs and investing in films including a new spider-man film. and urban outfitters -- the last one. >> i need any new content when it comes to spider-man. that's our obsession at the moment. >> he's one of the coolest. i like batman because he doesn't have any real powers. he does all that just with -- i mean, that's a bit of a stretch, isn't it? >> he's got spider dna. >> yeah, well -- >> we're both in the same place on the spider-man thing right now. >> and urban outfitters reporting lower than expected earnings. hurt by increased markdowns and marketing expenses as well. up next is the era of the

two-car familying coming to an end? the surprising results. "squawk box" will be right back. for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more. many americans who have prescriptions fail to stay on them. that's why we created programs which encourage people to take their medications regularly. so join us as we raise a glass to everyone who remembered today. bottoms up, america. see you tomorrow. same time.

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[ horn honking ] why it could be a game changer for the auto industry. >> got smokey and the bandit. do i even have my lights on? bentley taking down the top. the ceo joins us to talk about last night's big unveil ahead of the l.a. autoshow. and are you ready for "the hunger games?" >> if we burn, you burn with us! >> how lyonsgate is killing it even before mockingjay hits the big screen. as "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. if you haven't been outside yet, bundle up, forget about it.

it's cold out there. dangerous conditions as another round of early winter weather slammed into grand rapids, michigan, overnight. here is the view from behind the driver's seat. rough, rough roads out there. be careful if you are going out. grand rapids area could see 10 inches of snow, maybe more. we've seen pictures from all over the country showing us things you wouldn't expect this early in november. the rest of the country is in a deep freeze this morning. check out these windchills. high winds. you will struggle to get above freezing today and tomorrow with these temperatures. it's actually colder than the average january highs. how's that for a nice hello and a good morning. also we want to see how you're fairing in the cold. tweet us your selfie using the #polarplunge. it is chilly. i saw one where there was about two feet of snow and a dog dug a tunnel for him to go out for his morning business. rough way to start the day. >> you did change it just in

time. >> climate change? >> from warming to change. thank god. seriously, it wouldn't make any sense now would it? now change, you can't go wrong there. >> carbon or carbon dioxide? >> carbon pollution. >> among our top stories at this hour, u.s. investors once again waking up to major market moving news out of japan. the prime minister there abe saying he's going to call a snap election one day after gdp figures showed japan has officially fallen into recession. rallying about two percentage points on that news. also home depot earnings beating estimates. $28 million expense for the data breach. it didn't estimate what the total cost is going to be. and toyota plans to introduce its first mass market fuel cell car next month. the future has arrived. the vehicle runs on hydrogen

instead of gasoline. they want to copy the success of its prius hybrid. time to say bye-bye to two-car families. i don't want to hear about this. are we going to three or back to one? >> back to one, they claim. >> a new report out is suggesting something that few of us could have ever imagined. not to have a second vehicle. or not to even have one. phil lebeau joins us now with the details. is this people moving back to urban areas or something, phil? my daughter -- i'm going to have three one of these days. not two. >> i do have three. >> then you'll do what i do. you keep one in the garage and your wife says why do we have three cars here? this study when you look at what it is, this is essentially all about the trends in america changing according to kpmg. essentially it comes down to this. 57% of the country right now, we are two-car households. that's going to drop down to 43%. you've got more urbanization.

car sharing companies, they're popular. people are saying i want to do something like zip car or relay rides. then there's the cost of a vehicle, owning that vehicle as it continues to rise the cost of a new vehicle. more people are saying do i really want to buy that. take a look at the -- likely to see in the future according to kpmg. if you look into the future, you'll see the possibility of the number of vehicles in the u.s. starting to decline because you have the distribution of income as well as employment and people are looking at this saying i want mobility on demand. i don't want a two-car household. we asked the head of the ford of the americas are we moving towards the end of the do-car household? here's what he had to say. >> a little too soon to call that in the end b. it's still a big part of america. suburbia and going to work and school, we think it's a big part of the future as well. >> so this is not going to happen overnight, guys. but this is the trend and this is what you get when you have more of the car sharing services

and more urbanization. >> i like that, though, phil. you asked the president of ford north america are we going to go to a one-car -- and he didn't think so. >> of course not. >> no. >> you know what, though? with that last week where we had the guy talking about tesla and how just a couple of moving parts and -- i mean, the big three, you do -- >> ron barron? >> yeah. you do have to worry long-term about the big three, i think. it's unfortunate because it is a big -- >> although i think i would side with joe hinrichs saying it's probably not here yet. phil, stay with us. we're going to bring in the author of that kpmg study. gary sillburg. i have to say this is a study that makes us raise our brows a bit. what did you find and how did you go about gathering the information for this survey?

>> well, first of all, we did the analysis, you know, owning a car is not the most rational economic decision and in our paper we talk about it right up front. the aempl price of a car is around $31,000. the minute you drive it off the lot, you lose 11%. and by the way, it sits idle 90% of the time. so you don't have to have a ph.d. in economics to say why would i purposely buy an asset that loses money off the bat. that was the genesis of the paper. when you have this revolution going on in the automotive ecosystem with technology, we think there could be profound implications on that economic decision. and why is that? well, one, people buy cars because they're consumer products. people love cars. it's a -- you know, it's part of who they are. they've made it in the world. but the other reason they buy cars is for utility. right? i've got to get to point "a" to point "b." becky, if you have to take your family somewhere or you have to go wherever that chore you need

to take care of, you need to have a car when you want it. >> right. >> but if i say to you, going forward you don't have to pay for parking in new york. i don't know what parking goes in for new york, but i think it's $1,000 a month. i don't know what it costs for maintenance and insurance, but it's very expensive to own a second car. and with mobility on demand with uber and lyft and all these other alternatives, we think that the two-car family over time, it's not going to go down to zero. but is significant amount of people are going to reduce that number. and in our study, as phil talked about and you talked about, instead of being 57% of households that have over two cars or more by 2040, we think it could drop to 43%. >> gary, i see that you're in los angeles. is that where you live? >> i actually live in chicago. i live in the city of chicago although i do like given the weather i saw, i like it here for the moment. >> it makes sense to me if you are a city dweller that argument makes perfect sense to me.

but i would argue that's been a similar situation for several years. when i lived in new york city, i didn't own a car. or i got rid of my car because i got tired of getting it towed and finding places to park it. that makes sense to me. but there are massive swaths of the country where what you talk about uber and lyft, it's not a possibility. i don't see things changing there. >> well, think about it this way, becky. in terms of the population shifts, this concept of urbanization is shifting more to cities. this a global phenomena, number one. the other point is and this is a the nuance, we're not arguing the two-car family goes away. we think it's significant. 43% it's still significant. but the implications of it if people share cars more is where we're talking about. and remember, this is 2040. by 2040 if people are sharing cars and it goes down to 43%, the overall car market could decline. and we think it is an urbanization story.

>> phil, you got to question too? >> isn't it true when you talk to people in the industry, all of them say the same thing. as hard as they try, they have a tough time putting any kind of a number in terms of mobility on demand. what will uber do, what will the car sharing services do in the future? your projection here in the future, it's a bit of a leap of faith. we're not sure that these programs will take off as you're suggesting. >> well, we think, again, if you go back to our thesis that owning a car is so expensive and getting from point "a" to point "b" is one of the reasons they'll do it, we're in 2040. we're talking about a small decline over this period of time. but will have profound implications on the industry. that's what we're making in the paper. and i would tell you if you talk, we did research in our paper last year in los angeles, in chicago, in new york, in urban areas and we asked the question if you could get to

point "a" and point "b" and you could be sure you're going to get there at a cheaper cost, would you consider not owning a second car? and the vast majority of people said yes. look at the number of uber and lyft drivers. we think the shared economy is going to be the economy of the future. certainly in automotives. >> it might make l.a. livable. because it's not now. you like the weather out there, try driving from pasadena to malibu on an afternoon. you can't get there from here. you can't. >> right. >> awful. >> the other thing, if you think about it, if you're in a car and this is part of our paper we haven't really talked about. what are you going to be doing in the car in the future. right? we think it will be autonomous potentially. all the different things you'll be able to do in the car. and the time, the value of your time will be very important to you. and that's another reason, you know, why people -- i took uber here today. there's no reason for me to be

driving. i checked my e-mails. it's the trend, we think. >> i get car sick. >> me too. gary, thank you. >> thank you, everybody. have a great day. >> thanks, phil. we'll talk to you soon. okay. coming up when we return, can the dow reach 18,000 by the end of the year? jeremy siegel predicted it would end the year at that level. find out if he's sticking to his guns. and later, the l.a. autoshow starts tomorrow. the bentley is starting the party early. the company rolling out a bit of a surprise. we're going to talk luxury cars and check out the company's new convertible in just a couple of minutes when "squawk box" returns. e

financial noise financial noise financial noise financial noise

♪ this time of year you've got to believe the market usually rallies into the year end. but complacency have many thinks that santa claus may have already come to wall street this year. the s&p has moved less than .1% for five consecutive sessions. the last time that happened was 1969 in january. what else was happening around that time?

the new york jets had had just won the super bowl. >> that long ago? >> and as someone paid a plane to fly over the stadium that said jets have been rebuilding since 1969. and, you know, the point was well taken. anyway, despite the lack of big swings lately, jeremy siegel still believes we're going to hit a dow 18,000 in the coming weeks. jeremy, when we had that 9% pullback in the s&p, were you -- like, were you dialing cnbc to say that you were going to pullback on your 18,000? did you have any self-doubt? were you waking up in the middle of the night in a cold sweat? were you questioning yourself at all at that time? >> well, i will admit when that ebola scare hit, i wasn't sure whether we were going to do it by december 31st. i had a feeling that we were going to control that epidemic.

and i certainly think we have. so, yeah, there were a few seconds where i wobbled a bit, joe. on that. but once the ebola scare went away, you know, there's no reason why we couldn't hit. all we need is a normal rally actually from thanksgiving to new year's. and we're virtually there at 18,000. >> jeremy, i had the same thought. ebola was truly that wild card that none of us really understood because right at the height of that when i guess the individual that -- unfortunate individual had passed away and then a couple of nurses had contracted, we didn't know we were thinking sneeze droplets and all bets were off. one thing you probably saw at the airline, oil prices were plunging and the airline index was down 20%. that was clear wli ebola related. that's one of those black swan events where -- >> you saw what happened to

disney, right? >> yeah. >> disney tanked. you know, theme parks, anything that related to people congregating was way down. yeah. that was a scare. fortunately it looks like we have this under control. so now earnings and interest rates can tell the story. and they're still looking very good. particularly the interest rates. i think the decline in oil is the huge story into 2015. i think we're going to get negative readings on cpi for the next two, three, four months. you really wonder when is the fed really going to raise rates if they see negative inflation. we already had a dissent on the side of being more dovish going up. so i think the climate -- i mean, interest rate is always the biggest threat to the

market. that looks like it's fine. earnings, i'm just hoping -- i'm looking at those holiday sales. we know that oil price dropped, gasoline price drop is like a tax cut for americans. i think we're going to get a enterpri surprise on the upside on retail sales and that's going to boost the dow well past 18,000 if we get that outcome. >> is there a word for the opposite of stagflation? stagflation is the worst thing that can happen. no growth and high inflation. what's it called if you get 3% growth and no inflation? what's that called? that must be good. >> that's the goldilocks economy, it seems to me. yeah, if we get no inflation -- but the 3%. that's the wild card. unfortunately fourth quarter i've been looking at a number of

forecasters, most of them between 2% and 2.5%. so that's -- we want to be above 3%. we want to see people coming into the labor force. we want that participation rate to stabilize and start to increase. we want to see some increases in productivity which has been flagging over the last couple years. it's not all clear why that has happened, but we would like to see that boost. if we can get into that 3% to 4%, wow. under a low inflation scenario, you know, we could be at 20,000 at the end of 2015. now, there's a number of good things, i think, that need to happen. but certainly i think that would be even conservative for fair market value if we get some of these favorable trends coming together over this next year. >> so can we do it all just

domestically? or who -- where do our most portant trading partners live? japan we're not going to be able to count on them for much, it doesn't seem like. china's a little better. what about europe? can we count on europe to be a strong -- or does it matter they're not as big a trading partner as it used to be? >> you know, we're still net importers. i mean, our gdp growth over the last couple decades has not relied on exports. we have had a trade deficit. if we get a boost in those exports and we might, you know, energy as we all know natural gas is $12 a deckitherm. we have that ability if regulation would exist permit to do good exports on that energy. we are still on that importer.

we are still net benefitting from them. we just have to see that in the kumpl spending over this third quarter. >> in your heart of hearts do you still think that the eagles are in the top echelon of the nfl at this point after that game? >> that was very, very painful. rodgers was on his game. >> my god. for four straight games. he looks like -- him and brady. >> he looked like a superman. i moo en, the first ten minutes i was shaking my head. i said, this is not going to end well. >> so you didn't really answer the question. >> we got the comeback. of course the -- >> are the eagles in -- i'll ask cramer too. are the eagles in the top echelon of the nfl right now? >> well, in terms of their record, the answer is yes. >> okay.

all right. you're punting. you're all over the place on this answer. >> i'm punting a little bit there. >> great coach. >> we are still one of the few -- we still haven't won a super bowl. that's our great hope. >> i know. >> we've always had good teams. we have not won a super bowl. >> hey, jeremy, you've been right about the markets this year. i know it's very early. do you have an estimate for where you think the s&p will be next year? >> i always worry when you have a little winning streak what's going to happen later. we are certainly closer to -- two or three years ago i thought we were really undervalued given interest rates and earnings. i thought the bullish calls were, you know, easy to make. i still think we are 10% undervalued given the interest rate structure. but once you get closer, it's a little bit of a wider range. so, you know, people ask me where do you think the dow will be? i think, well, i can see us at

1900 to 1950. but once you're closer it could be up to 2100 which would be another nice gain. i think it gets a little bit wider. i know where i think the market should be, but goodness knows those of us who follow know that, you know, in the short run we could be 10%, 20% above or below. but i still think we have the momentum on our side going into 2015. >> all right. professor siegel, thank you. >> thank you very much for having me. >> better luck next week. when we come back, youtube's new music service debuts. what you can expect from the new streaming service. and later, lionsgate's "hunger games" mockingjay expected to be a huge hit in theaters. it's logged the most advanced ticket sales this year. take a look how the latest installment is winning before it even hits the big screen. and a programming note.

the ceo of halliburton joined "squawk on the street" to talk about the acquisition of baker hughes. "squawk box" will be right back. ing u.s. is now voya. changing the way you think of retirement.

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welcome back to "squawk box." october ppi headline up .2. that's .3 higher than anybody expected. we were looking for down .1. strip out the all-important food and wild energy, it's up .4. we're expecting .1%. no revisions at all. if i look at year over year numbers, up 1.5%. .2% higher than expected. strip out food and energy, .3% higher than expected. maybe it's more important to switch from expectations to what our last look was even though it was unrevised. last month down .1%.

core up .4% versus unchanged last month. year other year on headline, 1.6% last time. and at 1.8% year over year stacks up to 1.6%. so no matter how you look at it, a little bit hotter. because growth was a little bit hotter. whether it's sustainable or not, you know, you want inflation, bring growth. if you want causation, use quantitative easing. went from up 7% to up 5%. maybe the big is e the foreign currencies are taking a bit of a hiatus on their selloff predicated on their weak economic fundamentals. i see that the pound's up a little. the euro is up a nice helping. of course we'll continue to monitor the dollar/yen. the yen is a little bit lower, but virtually unchanged. coming close to pass as sustaining. really that is the currency maybe to pay most attention to.

if you're looking at the dollar index, it's due to the euro. back to you guys and gals. >> rick, thank you. steve leisman is here on set with us. he has more. what did you think of the ppi? >> hotter than expected. i'm trying to figure out where it was. they've changed over this index year to be more focused on services and wholesale services. and there's an item in here, final demand for trade services which was up 1.5%. i'm sure somebody will write in and tell me just what that is. final demand for services overall -- sorry. consumer demand for services up 0.6%. so there's some kind of services component. when i look at real goods and finished goods, i don't see a whole lot of inflation in there. for example, going up the chain of processing intermediate demand goods, processed goods down almost 1%. so here's the question that i think everybody's asking. if you have this lower energy

prices feeding into core inflation, there's a lot of thinking out there. sullivan writing a piece this morning say b you know what? rate hikes could be off for next year. >> what? wait a minute. back up. say that again. >> people have said that. >> people have said that. if the fed moves further from their inflation target of 2%, let's look at what's going on around the world. weak global demand. there's global inflation which it's a very long chart. just for people who may not have been tuned in in the 1970s, we did have double digit inflation. here we are down near 2%, 3% globally. and then take a look at the united states and europe. you see two different stories. and the story is if the u.s. which is the white line starts to look more like the orange line, it's going to change fed policy. you can see that's european inflation coming down near 0% and the u.s. barely hovering

above 1.5% here. then the fed could according to some analysts which joe has heard them before -- >> remember when people have said that. first quarter of 2016. >> you think that's actually -- >> well -- >> i would say that's a wild card. >> what we want is an inflation cross. as the headline falls because of energy, the core should rise because the fed wants that core number to be higher towards its goal. >> but wait a second. do you think -- i've heard it before. >> i'm not leaving here while you're confused. >> -- a wild card and they're going to raise rates. do you believe the people who are saying that? >> i think that is something for the fed -- here's one thing i do know. the litmus test for raising rates has shifted. from employment side of the mandate to inflation. and there is at least a palable risk out there that's what is

happening globally is affecting the united states. jay powell says the united states doesn't depend that well on foreign trade to determine internal prices so it's not that big a deal. if these numbers show up, theess lower inflation numbers show up in core inflation, that makes thursday a very big day. >> it does? >> only a couple months of lower energy prices. and for example, you were talking about airlines this morning. here's a chart. you can see how sensitive airline fares are to energy. there's jet fuel right there. and look at the direction of that that. so you have, andrew, disappoint what you think, you've had a couple months of lower airline fares. >> we did a study where they were sticking through another price increase. >> it's interesting. right now you've had a couple months of declines according to our consumer price index. and that lower jet fuel should -- >> where are they getting those

numbers? >> survey them from the industry. >> because i -- literally in the last four weeks we just did did sh. >> you said you had a cheap flight to chicago. >> i also remember we just did a story about the fifth rate hike of the year and it was supposed to stick. >> the boss upstairs just got a couple of cheap tickets to toronto. so i don't know. we're watching it carefully. >> i hope, actually, the old school airlines, the prices still go up. i think then you'll finally get a new entry to come in and undercut them. but you need the rates to go up enough. >> get the people's express back to $19. >> that's right. and it will force everything down again. in the meantime, we're going to talk about autos. truly high end autos this time. the los angeles autoshow kicking into high gear with the first media day tomorrow. some automakers getting a start. bentley unveiling two vehicles at an event last night. phil lebeau joins us once again with a preview and a special guest. phil?

>> thank you, andrew. i'm with the ceo of bentley. what a gorgeous car we have back here. tell us about the grand convertible. >> well, we are quite proud about it. it's the first time that we show this concept car worldwide. it's a combination of very luxurious driving together with open top driving. it takes the experience to the next level. >> is there still the demand for controvertibles? i know california is the big market for you. >> yes. we have an open top car and our biggest model the flagship to say, there was no open top driving up to now. and there is a certain demand. and this is why we put together this concept car and are going to test how it is liked here in los angeles. >> i like how you're going to test it with people and see what they want. is that upper end market -- your sales are up 3.1%. but is it slowing down at all or

do you look at this and say it's full steam ahead as it has been the last few years? >> well, the world view is changsing. we have some markets, but also some very stable markets. and one of them is the united states. it's our big market. we do good over here. we also do good in continental europe and back home in great brita britain. >> let's talk about china. they're challenging and explain why. it's a political situation over there, right. >> basically it's a good market for luxury product because the chinese customer likes to show what he has. they want to know -- >> they want to know where they're getting the money for buying the car. >> exactly. and they are doing some stuff and the corporate governance needs to be considered. and for this reason our customers are a little bit

careful right now. but it's not really complete crazy market. it's constantly going. >> and you've got the suv coming late 2015/2016. are you hearing from the people saying bentley can't build an suv? >> no. i like to listen to customer. this is where we get our work for strategic thoughts. with the bentley suv, there is a great demand. it will be a revolutionary product and we are going to rock the suv market. >> rock the suv market. ceo of bentley. there you hear it, guys. before we were talking, he said you think we're going to make an suv and it's not going to look like a bentley. proofed he will be making one. back to you. >> okay. thank you, both, for that. i don't know. can we get one of these cars? >> thanks to wolfgang and phil

as well. >> what did you think of the car? >> i like bentleys. you have to be a certain type of individual to want to drive one. >> really rich? >> that's one thing. >> what's the other thing? >> you need to be comfortable with people thinking you're really rich. you know what i mean? it's luxury. i like german cars. maybe he's bringing some german engineering to bentley. i don't know who owns bentley. it's confusing. let's check the futures. they're up. and europe at this hour -- what's wrong? right here.

>> wait a second. it is volkswagen owns it now. >> okay. volkswagen bought just bentley? >> i'm still reading. i don't know. come back. go to commercial. >> but it's still -- operations are still in -- >> it's british. they still call it british. the rolls-royce ownership. >> you still have to drop the transmission to change the windshield wiper blades. it's still british. up next, lionsgate is cashing in on "mockingjay." but it's facing challenges. >> they bought it in 1988. volkswagen bought it in 1988. previously owned by rolls-royce. there we go. >> so we're only 30 years behind. julia boorstin will walk us through what you need to know about the latest installment of "the hunger games" series.

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welcome back, everybody. the country blanketed with bone-chilling temperatures. the weather channel's mike bettes has more on the cold weather gripping the nation. he should know because he's in hamburg, new york. how you doing? >> reporter: we are here in the village of a.m. burg south of buffalo. it has snowed about 15 inches since 10:00 last night and this morning. this is what they are waking up to. it is truly blowing and drifting

and it will continue like this, we believe, for at least the next two days. so we could be looking at record-setting snows in this part of the world. there are so many interstates that have been impacted today. including portions of i-90 through new york that are shut down. the new york thoroughway and the nay yor says a travel ban in effect for south buffalo. schools are closed. buffalo international has closed. roughly 40 flights canceled there. they try to keep ahead of the snow on this runways. travel is not advised. some of the roadways will be closed down pretty much all day long. but the locals, they love it. this is what they live in western new york for. lake-effect snow. but the biggest storm this year and more coming today as well as wednesday and thursday. as we get close to thanksgiving, we've got good news for you. if you're traveling, temperatures much warmer. actually above freezing for a

change and some sunshine that will come back out. lips are frozing this morning. just about everything is frozen this morning. that's the latest here from hamburg, new york. back to you. >> this is one of those mornings where if you have a job indoors, you're lucky to have it. you're probably trying to think of things to do indoors if you're stuck there. you may want to reserve your tickets for "mocking jay part 1." it hits theaters this weekend. but lionsgate is seeing money roll in before the release. julia boorstin joins us with more. i've got to admit. got my tickets. >> good. it's smart to buy ahead of time. i was at the premiere last night. the audience seemed to love it. it seemed like the teenagers who turned out in droves in los angeles as well as here in london for the glimpse of j-law on the red carpet. they have a huge fan base. "mockingjay" has more than

double the interest of any other film this holiday season. lionsgate has tapped into that to build buzz with the video franchise starring seven youtube stars who have millions of youtube subscribers. it's already fandango's top advanced ticket seller of the year. it could match the last installment's opening weekend which could make it the biggest year debut. lionsgate needs the franchise to deliver and not just because "mockingjay part 2" is coming next year. it's part of a subscription service they are working on. plus ahead of the final film's debut next fall, there will be an exhibition of "hunger games" costumes and props. along with a play in 2016. while a number of analysts say the performance could swing the stock, it's warned that strong

performance from "mockingjay" is already baked into the stock. saying next year is more important. one key challenge to watch is that imax is not showing the film. it's sticking instead with interstellar. this year's film box office will not benefit from imax's higher ticket prices. >> all right. julia, thank you. it's worth it, you think? >> the film? yeah. it was totally fun. it was really fun and it will definitely keep you warm and toasty if you guys are dealing with the polar vortex there. >> we are. thank you. we'll see you again soon. up next, jim cramer from the new york stock exchange. and as we head to a break, we welcome the students from fairleigh dickinson university. they all got up early to come in and observe the show this morning before class. so thank you all for spending the morning with us. even though we hear the professor is a little bit of a crank. ameriprise asked people a simple question:

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shares of apple quiet rallying this fall. now a top executive is suggesting the tech giant's

market capitalization could go as high as $1 trillion. if so, that would make it the first $1 trillion company. right now it's at nearly $669 billion. >> now at the new york stock exchange, jim cramer joins me. other companies above $600 billion and all the ones i remember are now worth $200 billion. >> yeah. it's almost as if you never want to hear that. i love lee. i'm not sure about the context of what he said it. there are many companies in 2000 that could be a trillion dollar company. when you hear it from lee who is a seasoned investor and recognizes it's not an expensive stock, i guess we have to say this time $1 trillion isn't as much as it was worth before. >> what do you make "the journal" had a big piece of what finally happened -- i know them because they make botox, but what happened with allergan.

did you read the piece? >> yes. i think david pyatte didn't want this company to go to just anybody. if you can do $25, it's worth it. i think actavis can do it. there is a drug that will come out in a couple of years that could be a big franchise. botox is unexploited. there are a lot of studies done on what could become of botox. i don't know why the stock was at $80. >> the point was there are no u.s. firms given the bidding and traction structure. >> definitely. in the end, it's the pipeline. i disagree with that analysis and that some of these companies could use that growth. if we are going to focus on the tax issues, yes, definitely. in the end, a lot growth of allergan is so great a pfizer should have looked at it. >> how about home depot, one we can count on in retailing?

>> some say it was a penny missed. some say they did a sale of home depot supply. i like the comps. some were saying the comps weren't that good. this comes in, tjx, macy's downgrade. you want to, if you're listening to professor segal, this is where you want to buy because of gasoline and employment. that's so these stocks are buys, not sells. >> almost at an all-time high and down a little bit today. it's tough to interpret why. >> exactly. this stock had a monster move. stocks that run up have been selling off. >> all right, jim. >> thank you. >> i didn't bring up aaron rodgers or anything. >> no. the bye week. >> what about sanchez? are you okay with that? >> you know, he looked like a

backup quarterback. >> when he keeps getting, if he doesn't have any protection, so to speak, he looks like it starts affecting him. it can look good if he is not ready to just get hammered. he got hit hard a couple of times early on. >> some guys just don't take a hit. some guys don't take a hit well. >> i know i don't. thanks, jim. coming up next, the money marlins spending big bucks for one of the best hitters in baseball. the biggest baseball contract to date. financial noise

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million -- >> beautiful country. >> 325 million 13-year contract. averages $25 million per season no matter what they do. >> capitalism is a wonderful thing. >> the deal includes a no trade clause. stanton can opt out after six years. >> only in america. this is what stanton looked like after being hit by a fastball in september. it ended his season and he wasn't going to be a free agent until 2016. nobody knows if he will be the same player that he was before he gets hit by the pitch. stanton's contract is worth more than the marlins' pay-off. >> adrian peterson suspended without pay at least the

remainder of the 2014 season. this is something i think we also are going to hear about the internal study from the roger goodell commission. that's coming soon. join us tomorrow. "squawk on the street" is next. good tuesday morning, i'm ca carl, this is jim cramer and david faber. europe in the green on stronger