>>. >> that is a tease. have a great thanksgiving. see you next week, see you tomorrow. time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and dave faber. a nice surprise on gdp. kay shiller is out. futures are higher. gdp revised up to 3.9. second strong quarter in the row. back above 2.3 and oil back above $76 with that opec meeting a couple of days away.

we begin with the markets looking to burn through more records. plenty of fuel after third quarter economic growth gets revised higher. results came in shy of the missed performance. asia hurt by slowdown. the night of protests in ferguson, missouri, after a grand jury decided not to indict police officer darren wilson. economic growth was greater in the third quarter than the government originally thought. gdp up 3. % compared with 3.5%. latest results suggesting upwards revision of business and consumer spending. data one day after the dow and s&p closed at record highs. apple finishing at an all-time high. market value almost to $700 billion. pennies away from doublie ininie tim cook took over. the average gdp back above 2. >> one thing i think people feel is why did the market get up

here? dave and i were talking about you have to be skeptical. if our country is the strongest country in terms of projected growth on earth with the possible exception of india, i don't know. maybe india, maybe not. then we are a magnet. one thing larry kudlow talked about, the strongest country always wins. it doesn't matter what the fed is doing with that country or the politics. the strongest country is a magnet for capital. when you're a magnet for capital your markets do well. it is self-evident our economy has the best trajectory of growth of any of the major economies in the world. >> and we've got interest rates at least when you think about it, you're actually -- where else are you going to go? >> we are being forced out by other countries. how could you not be long in the u.s. treasury and short in the spanish ten-year? >> negative two-year yields in a lot of those countries.

>> don't you short germany? i'm not saying anything ever lasts. you'll get caught up in something i didn't foresee. if you have the strong dollar and ten year that gives you better return than germany, i don't know how you're going to go that wrong betting against the ten year there. are rates going to go to zero? i doubt it. >> tiffany, third quarter profit 76 cents shy by a penny. hurt by a 12% drop in japan sales. the chairman was pleased with overall sales performance in light of economic and geopolitical challenges around the world. america's comp where they get more than half their sales up 11%. >> i was embarrassed by this. i thought everyone went to jared. that is clearly wrong. this is one of those numbers where i said the rich are spending like mad. we did a piece last week on "mad money" about polaris and

snowmobiles. diamonds. very nice silver. tiffany is where you go when you want to show you spent more money than anywhere else. >> the little blue box. >> they did guide lower on four-year sales. mid to high single digits. are they low-balling here? >> they are a very conservative company. this will be an amazing shopping season for them. i like to give people tiffany gifts. my father was in boxes. i've got a blue box that looks just like tiffany. no, pop, you can fool some of them but you can't fool all of them. tiffany is a great place to get gifts for the holiday. it's been a reach for a lot of people because you didn't feel it was in keeping with the kind of gloom that surfaced. i feel this is going to be a great tiffany holiday season. >> do you? >> i do. >> back to that gdp number. personal consumption was up 2.2%

better than the 1.8% going back to this idea. we talked a lot about retail lately and what expectations are as we head towards black friday a few days from now, jim. that's got to be a decent sign at least coupled with -- and this is not the high end we are talking about when you get that gasoline, but it helps. >> what did you pay this weekend? >> i didn't drive this weekend. i didn't fill up. i'm a new yorker. >> "the journal" has a piece from retail cfos who don't believe it's going to be that great. consumers don't believe gas prices can stay this low for this long. >> i think opec fractures and you get a run back to $80. the world economies are not that good. i've been doing work in preparation for trying to surprise management to take a trip there to visit some of the

fields. >> jim brown, president of western hemisphere, a title i coveted. it happens to be for halliburton. he said over and over again, come to the permian. >> i have an on-air plea. >> maybe we should all go. we should finally show people we mean it when we say how important it is. >> it is as big as when we discovered the permian. the marcellus is as big when rockefeller found it. eagle ford is just right there right underneath. what happens if you can't export? >> i have cousins in west texas who work for halliburton. they've never felt this flush. >> $90,000 a year for a trucker.

you need a ticket. you've got to get there. this is a boom that is part of the gdp. they are not going to stop at $75. they give you a $30 production level. because you don't miss because it's right there. this is tremendous for pioneer, delaware basin. in colorado, we are really putting tremendous pressure on the oil prices. >> you keep doing your work. you were grappling what's the number. you said $40 is the wost. >> $40 is the cost. >> $40 is the technology. >> that seems like a stretch. >> technology of halliburton and schlumberger?

natural gas is high. it's beautiful. >> the most recent competition between halliburton, schlumberger. obviously that's one of the reasons i felt halliburton needs to do some disposals. they've got the price to take you out on this ground has been incredibly reduced. that's another greatness of the story. that's pure technology. >> without a doubt. >> night of vital protesting after a grand jury decided not to indict the officer in regard with the shooting of michael brown. >> reporter: good morning. it is daylight finally, the morning after here in ferguson. in the cold light of day, you can see this city has physical

healing to do before the emotional healing can begin. some fires are still smoldering here. there were at least a dozen burning overnight. the chaos occurred in the dark of night. that led to a lot of second-guessing of the prosecuting attorney here who made the announcement between 8:00 and 9:00 local time. after dark. which may have led to a lot of the chaos here. but the st. louis county police chief in a news conference overnight said it's not clear an announcement any other time would have made much difference. >> can you make a night like this? we didn't have anything of this magnitude. it was very difficult, i think, to telegraph exactly what we should have expected. i didn't foresee it being like this, i will be honest with you. >> the chief said he did get a

good heads-up from the prosecuting attorney when the announcement was going to take place. he was not told what the grand jury's decision was. the prosecutor said you can ask me anything except what the decision was. the chief said, i don't want to know that. that's how a grand jury process worked. they did the best they could based on what they thought was going to happen. based on the situation back in august. the riots that initially erupted after michael brown was killed. it was a whole lot worse than that, a lot more violence and more damage control to do. >> as the president said last night, the department of justice continues their investigation into whether michael brown's civil rights were violated. this chapter may be closing for now but the story is not over. >> no, it's not. of course, neither are the larger issues that this points to. the president talked about last night about the very real fear

that the african-american community has about overreach by the police. but the protesters last night were not reading the volumes of grand jury testimony that contradicted the early narrative about michael brown having his hands up or running away from officer darren wilson during that confrontation in august. both the officer and witnesses testified that brown was actually charging at the officer when the fatal shooting took place after an altercation earlier on. so there is a lot to pick apart here. of course, they are going to do a lot of that. the federal investigation will use that very same evidence in a different set of laws. we'll see how it goes. >> scott, thank you so much. when we come back, nobel laureate robert shiller on the released shiller report. what it tells us about the home prices in this country.

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we are back with the key housing data. showing a brought-based showdown

for home prices in september. joining us the co-founderess case-shiller index. good to have you back. good morning. >> good morning. >> we've seen nice surprises on permits, starts, sentiment, existing. why do you think this flies in the face of all that? >> we had no change in this composite. i think it's a slow season. if you seasonably adjust it, it's up. we haven't expected exciting growth for a while. it does look like seasonably adjusted home prices are still growing. >> where do you think this is going in terms of 20-city composite? would you expect the numbers to get smaller and smaller?

>> we are in the winter season. i'm still optimistic. the futures market at the mercantile exchange is predicting 10% increase over the next two years. that's 5% a year. that sounds possible, reasonable. it's not an exciting investment except maybe in these times some might find that exciting. >> jim cramer here. we had jim miller on yesterday from lennar. the ceo was saying we are at recessionary levels. a lot of this is credit problems because standards have gotten too high. are we going to be building a million units where we used to build many more? >> it's true if you look at residential investment, it took a plunge with the financial crisis and is not coming back. i think it's got to come back

eventually because the population continues to grow. there's a fundamental shortage of housing. >> we had this debate when we talked with you. what is the healthiest level for homeownership in this country? it's not 70%. is it currently around 64%. should it be 60% or lower? >> there is a deep question. i think we are souring a bit on homeownership. it was at a very high level because people thought it was a wonderful investment. now we learned home price estrogenly don't go up much more than the pti. it lost its luster. i think there's just kind of a new urbanization that is starting to take hold. people are more interested in condos or apartments. it's not quite the same market

that it was ten years ago. >> every month we have you on, i ask you where the market is. you tell us it's historically expensive but could continue to be historically expensive for a long time. is this month any different? >> i think that it is very reasonable to have it tied to the stock market. not excessively exposure because you now it does look pricey now. you've got to put your money somewhere. i'm still in the market. >> on a morning we do 3.9% on gdp. how many countries would kill for that kind of number. >> yeah. things are looking up. i said it, i'm in the market. not enthusiastically because it's pricey.

>> when you talk about affordability, rates are down. when i look at your numbers for what's happening, i'm thinking affordability just got better in the last six months. >> better in the last six months? >> affordability. rates are back down, housing prices aren't climbing as fast. employment got better so the average person in this country has a better shot at being able to get a loan. fico score may be up, maybe easing with the banks. but rental numbers are off the charts. >> people got burned last time. it's psychological. i do these surveys with case and thomson. the long-term expectations, it's nowhere near where it used to be. people were expecting 12% a year. it's starting to go up. there is another positive sign

but just incrementally. >> professor, great to have you. we'll see you next time. robert shiller talking case shiller and a lot more from yale. we'll get cramer's mad dash and count down to the opening bell. you're driving along, having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident. now you have to make your first claim. so you talk to your insurance company and...

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>> we are going to do less than 4 40%. >> they do not understand long-term plans. it's an amazing company. they are battling oracle. when a contract comes up they tend to win it and never lose it. when you're doing 50%, 60% growth -- >> and you've got a multiple that reflects that. >> workday is in the penalty box. >> this is a momentum name. >> right. >> people think we've got to sell it. western digital is a winner. people are going to go to a sandisk and leave the cloud

momentarily. that's kind of the trend i'm seeing. here is one i know you'll be interested. netflix is not showing any improvement. the stock needs to come down. this is pure heresy. are you allowed to downgrade netflix between now and year end? >> i don't know. apparently you are. >> i want an investigation. amazon is expensive. tesla is expensive. when you cnet flicks go down, they did not make the numbers last time. this is an expensive stock. because you like the service like amazon prime, netflix, be careful. these stocks are priced for perfection. you can't have any deceleration. that last call i thought that might be --

>> the stock is well off the highs because of that last call where they didn't exceed what was perhaps more luminous expectations. >> you are in the last call, the last 25 trading days of the year. there are portfolio managers saying i don't need to be in netflix i can be in celgene. i don't need to be in amazon. i don't need to be in a stock with a gigantic multiple like amazon when regeneron has a 35 multiple. that's the decision. people want to be in winners and are selling losers. suddenly netflix looks like a loser. it's the momentum guys. >> it's right at the cusp of being a loser for the year. >> isn't that something? you thought it was a winner. >> i did. >> these portfolio managers want to show how smart they are.

they are going to buy apple. we on this show urged over and over again to own apple. >> hold it. >> yes. hold it. >> we've got more stocks to watch. the opening bell about four minutes away.

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you're watching cnbc "squawk on the street" live from the financial capital of the world. opening bell just about 60 seconds. if you missed revised gdp this morning it's 3.9%. revised up from 3.5%. we were only looking for 3.3%. we had two good quarters in a row. actually four of the past five have been good if you strip out that miserable q-1. >> what would happen if we crossed china in 2017, 2018 and we grow faster than china? >> i'll take the other side of that bet. that's only two years away. >> you're taking me over on china. >> first of all, they can make it up as they go along.

>> it might be a scary world to live in if you think about all they have rolling, right? >> there's the opening bell. the arch diocese of new york and at the nasdaq inovio ringing the opening bell. >> when they cnet flicks and see it's $300, that thing must have been going up the whole way. the gains were all from last year. there's been things happening in netflix i think are a bit

worrisome. there are a lot of people -- i watched time warner stock go up. >> $81.50 at times warner. by the way, making up a lot of the fall it suffered when unexpectedly, some would say, rupert murdoch and fox chose to walk away from their bid. >> isn't that amazing? i remember saying to you maybe there is a much higher bid. they would have to give the company away for a much higher bid. murdoch is the rare ceo. and pyatte at allergan. >> the targets out there are extreme extremely strong and the markets respond ped positively.

the 2013 earnings target. stock moved up and so has the multiple and pressure to make sure they can deliver. >> multiple should go up. they did all the things you want. it would have been amazing if for all the good things they do murdoch swoops in at the inflection moment. >> i still believe in a couple of years it will happen. >> really? >> i think there needs to be consolidation amongst the programmers. i believe it will be part of that. who it's with? i don't think we can say. >> apple, $119.20. close to its $1 billion market cap. it doubled since tim cook took over. targets were $110. >> i think it's going to be an apple holiday.

remember we talked about tiffany. apple is a tiffany product. you are going to find their pcs are selling well. you'll see they've got another story with the watch. remember the watch came out kind of and people panned the watch? i think the iphone 6. take a look at sum sung. all we read about now, are they going to get rid of people? apple's got this high end to itself right now. i think a lot of carriers are going to subsidize it. >> $700 billion now. market cap. $700 billion is reflection of the company and expectation of how much it will earn. when you approach and pass $700 billion and have $1 trillion in your sights. i remember one cycle where we had price targets that would

have indicated a $1 trillion market cap. >> it's around $142. it's not a huge stretch. >> remember, what made apple so interesting, why i felt apple was so good was that it was not expensive to next year's earnings. apple is still at a discount to the s&p 500. now, is that right? one of the things people struggle with how can you value a company with those numbers and the discount to the s&p? >> they've got $170 billion in cash. >> everyone struggles. portfolio managers struggle to say how can this sell at a low market multiple and i don't own it? >> tiffany will be our biggest gainer. almost 5% gain off that. a penny miss but the 11% comp and got everybody's attention. it followed by michael kors and

l brands. >> i pushed l brands hard last night on the show. the stock is not up. one thing i love about tiffany. they come out and say penny missed. did they read the release? if you go down, these are comp store sales. you need to see the comp store sale number to understand why a company goes up. if you look at the headline, it's going to be part of what's going on in japan. we all know japan is in some sort of -- unbelievable gdp numbers. >> down 6? >> a good-looking chart today is disney. pennies away from an all-time high which is $92.21. not much news. although a lot of talk today about the trailer for "star wars" is going to drop this weekend. we never talked about a trailer coming. we talked about a movie coming.

this is one year out. >> remember, i saw "hunger games" this weekend and was very disappointed. one of the things with disney is that the stock dropped. there was an analyst downgraded it. it had an ebola undertone to it. if you went to the theme parks, you could get ebola. i know that sounds in retrospect like something, how could that be said? here we are -- remember? remember? remember the absolute bottom in the ebola scare. we changed our minds and decided it was really easy to catch. like if you touched a bowling ball. the insanity. he constantly reined me in. i was afraid of ebola. >> you can be somewhat irrational.

there was great concern. it's i not as if that concern should not be there. >> at the same time there was a week right before you are trying to figure out the late mr. duncan infected 40 people in his world. right before the 21 day was when everyone was slamming and shorting disney except bob iger in the disney buyback. looking back you realize a lot of people must have gotten short disney and that's one of the reasons why it's spiking. >> we have a personnel move. harbinger group. hrg on the nyse. falcone will be stepping down as ceo and chairman. joseph steinberg will become chairman and they will name a new ceo upon completion as

foster. falcone is designing. a director will also resign. both are expected to dedicate their efforts in a press release to holdings and harbinger partners. >> what is that an harbinger of? >> i'm not sure. he gets a lump sum payment of $20.5 million one-time payment, $ $60.5 million earned bonus. not a bad profit. he and his wife could figure out a way to spend that. >> concerns for different payments he may have, taxes. >> utx, their ceo leaving the company. wells ups it to outperform because they think the

transition out of the way means risk/reward goes up. >> right. they are talking positively about the new ceo greg hayes. there is a lot of talk about december 11 analyst meeting. a lot of talk that perhaps he was against the restructuring. that could be announced. once again i want to praise united technology for the fantastic way they booted this guy. i'm sorry, to spend more time with his family. i said i would come on and praise united technology for the secrecy, the mysterious nature, for the absolute no disclosure, that's how it should be done. well done. you really get it. terrific. grade a. right? come on. join me in saluting it. >> i second that. by the way, not a quote in there saying so long, farewell, not a quote from him in the release.

clearly something happened here. >> why do you say that? >> i have -- i wonder. >> nothing happened. >> he woke up in the morning and said i had enough. >> it could have been a bad day. they haven't really told us yet. i salute them for not saying anything. it's the way it should be done. congratulations to the board of united technology, having no disclosure and doing it publically from the spirit of 2014. i want to congratulate them for violating everything i believe in. i thank them for that. >> you can rectify this. call me back. >> no. they did it in secret. the way it's supposed to be done in 2014. didn't he say disinfectant?

the cloud. >> we need a cchyron that says "sarcasm." >> gdp better than expected. i want to point out there is a bit of a crowd here. kinder morgan has been halted so investors and traders awaiting that. dow and s&p continue to inch into record territory. they have begin up some of the earlier gains. seeing a little weakness in banking and financial sectors. looking forward to the consumer confidence numbers which will be out in about 20 minutes or so. looking for a good reading there. this on the heels of another reading from the case-shiller home price index which showed home prices gained in september, the rate of gain in the month.

let's take a look at see how some of the home builders are responding to that news today. again, we'll have the consumer confidence numbers later. overall the positive underscored by the third quarter gdp report. you can see the home builders mostly positive across the board. i don't want to belabor some of these stocks. dow component in the news today. guys talking about united technology. that surprise move with the ceo resignation. the company not saying anything. today they get an upgrade at wells fargo. general electric started as an outperform from rbc. major changes should bring value. investors have been waiting for that a while. down about 0.1%. walmart down 0.4%. home depot, the data breach which happened earlier. retailers.

you were talking about tiffany. strong numbers out of north america. stock up 3.4%. gap signed a deal to distribute some of the clothes. dsw stock up 3.12%. campbell soup focusing on faster-growing segments up 0.2%. saying higher input costs here impacts earnings in 2015. that comes on the heels of other companies including fresh markets. dow holding on to a slight gain up about 12 points. >> good to have you down there, mary thompson. let's get to rick santelli.

>> not only is that key, it isn't a big surprise to many traders ideal with. it's clear. yes, we have better than expected second revision with regard to gdp. first revision, if you want to get technical. we did pop-up a couple of basis points. we didn't hold it. the two day clearly shows that. as carl pointed out, we are slipping below 230. we haven't settled under 2.30 since october 22. this could be the 21st session in the 2.30 to 2.38 range. long bond broke its 22-day pattern friday. that was the canary in the coal mine giving your clue as direction of rates for the rest of the year. let's look at extremes and see how extremely different they are. as we look at a ten-year and start the chart in june of 2012,

there you see the lowest yield ever right whisper under 1.40 in the summer 2012. if you look at the uk you can see their low yield was right around the same time at 1.43. the bound was 120 basis points. in october this year, it made its-all time ever low 75.5 basis points. it traded lower than that intraday today. we want to continue to monitor that. the relative value of trade, how high uk and u.s. rates can go with the bund where it is, think if you were an investor is something to pay attention to. let's look at all the foreign exchange extremes. the pound isn't at the extreme level, but it's very close to september of 2013 extremes against the greenback. close august 2012. the dollar/yen is very much

close to its seven plus year low against the dollar. all that goes a long way to explain why the dollar index continues to be a favorite with investors. carl, back to you. >> thank you, rick santelli. saks fifth avenue flagship store is the most valuable retail building in the year. courtney reagan will countdown to black friday and will talk to the ceo of saks. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems.

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anthony noto sent out a public tweet that was meant to

be a private message. he said, i still think we should buy them. he's on the schedule for december 15 or 16. we need to sell him. i have a plan. noto since deleted that tweet but not before it was screened by a lot of followers. one theory is they are messing with us and trying to demonstrate engagement somehow. >> wasn't he a comedian at one point? >> do you really use what would seem to be a fairly high-level communication, do you really use twitter that way? why would you do that? >> they have a very loosy, goosy thing. >> it's a private company. doesn't have any shareholders. wrong. i'm being very sarcastic. sandt any noto is a terrific

guy. he does tweet, he does instagram. he is kind of a fun guy. >> the joke is if you have a meeting at twitter december 15 or 16, you are in the cat bird seat. congratulations. >> maybe the's yelp. maybe it's priceline. i don't know. >> who is that meeting with? we need to know who that meeting is with. >> temperature check on you at 40, where are we now? >> 3986. >> 3990. >> wow. i don't want to own it. i suspect change is going to come. this is a sam cook stock. change is going to come. there is no way the shareholders can continue to let that comedian run the joint. >> you want to be cupid, right? >> yes. yes. i tell you something, those guys should be on a chain gang. they don't know about history

either. i'm having a bad time. i'm not dancing to their music. >> they got some money cause they just got paid. >> yes. lou rowls doing the background on that. >> s&p hanging on to a slight gang. ing. take a closer look at your fidelity green line and you'll see just how much it has to offer, especially if you're thinking of moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options...

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. cramer and stop trading. >> the stock i like was down 22% coming in. you should buy lululemon. they talk about women's foot wear best in second quarter 2014. i've been waiting for purchasing power to surface. there is purchasing power in the women's shoes. there could be some purchasing power through lululemon. their last month of the last quarter was strong. i think it was undervalued at $6

billion. if it doesn't get a bid the next year or go higher, i would be surprised. i think it's in a major turn. i don't care for the ceo. someone can come in and take it higher. >> that is a bold call. >> yes. i think it's the take away from dsw. we have irwin simon. target, big into them now. walmart. he is going to have an organic turkey. i don't know if he is sparing the organic turkey or if it's too far along in the process, so to speak. >> chase it with one of those smoothies. >> i'm going to do a cleansing. do i have to do another cleanse? >> bring 100 because those things aren't cheap either. >> all right. it's going to be a hain thanksgiving. actually, it will be whole foods. i've got to do the crudite. any idea what that is? celery? >> hidden valley ranch?

>> you're asking the wrong guys. >> you don't even drive. >> i do drive. >> you do? >> yes. >> $2.64. >> i drive more than i care to. >> there you go. i'm thinking i was going to make egg salad, but that's too hard. >> see you tonight. >> driving and cooking have in common, i'm not sure. >> that's what americans do. >> here we go. >> when we come back -- >> breaking news on consumer confidence at the top of the hour. plus retail and more with the ceo of hudson's bay. ♪ oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now - but hurry, the offer ends soon.

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live from the cme floor. november read for richmond fed. we are expecting 16, last look at 20, we get 4. 20 was the best since december 2010. you have to go back to march of this year to find a lower number which happened to be minus 5. 88.7 on november read on consumer confidence. we were looking for a number in the mid 90s.

our last look at 94.5 revised to 94.1. still the best number since the fall of 2007 on last month 88.7 takes us back to june when we had 86.4. so i'm not sure that is a miss. i think it's more likely last month was an anomaly. we'll have to wait for several more numbers to average it all together. today for the first time in 22 sessions, it looks as though the possibility of closing under 2.3 yield in 10 my happen. we are several basis points below that rather psychological and especially technical benchmark over the last month. carl, back to you. >> thank you. dow and s&p are trading barely at the record closing highs. below the intrai did highs we set yesterday. want to take a look at apple

this morning. the market cap has gone to 700 billion as it crossed 119.36. bigger than exxon and j&j. >> let's get to the economic data. steve liesman back at hq with more. this question is 3.9% growth not bad. is it sustainable? >> plus a couple of turkeys this morning in the data. we are looking at them. the richmond fed was a tour kay. consumer sentiment was what people thought would happen because oil prices gave upward lift to consumer sentiment number. we have to dig into that deeper to understand why it would decline the way it did. this unexpected upward revision sparking a debate. is the u.s. economy shifting gears from underlying growth of 2% to more than .3%?

the 3. % growth in the third quarter was a 0.4% upward revision. four of the past five quarters have been above 3.5%. t without it, this would be a 4% economy. business investment up 1.6%. government down 0.6%. inventories revised up. that is important because that causes some to lower the third quarter, sorry fourth quarter mortgage you'll see in a second. net trade less than expected. deutsche bank saying the widening q-3 trade gap should reverse this quarter helped by lower oil prices. that makes them optimistic.

morgan stanley says incorporating the higher inventory revision we see q4 gdp tracking at 1.7% instead of 1.9%. they are upbeat on consumption and final sales. this looks like an early cycle breakout. job growth high, economy is printing above potential growth rates and inflation is low. one negative, a down revision in wage income. there is hope of better times ahead with improvement in the economy and solid job growth. >> i don't get it. this economy has amazing momentum, that is quite clear. on friday you were discussing how low inflation should keep the fed on hold for a longer period of time. why worry about that when you have momentum? >> you always have to worry. it goes with the job. that's what people do. that's what they do at the fed.

you look around the world and you see low inflation, weak economic growth and worry about it washing up on our shores here. you can't live in a vacuum. the united states is less affected than other major economies from trade and other global influences. you say what do i have to worry about? we have good solid domestic demand and some momentum. when you look around the world you say, you know what? maybe we need to be more worried. you see some of that in the export numbers which are a little bit weak. >> thanks, steve. >> saks fifth avenue flagship store is the most valuable retail building in the world according to a recent appraisal. hudson bay looking to put that value to work. courtney reagan is there with a special guest. >> reporter: good morning, simon. i am sitting here with saks on fifth avenue with richard baker. this building the most valuable retail building in the world.

we say this is the best than half the real atate portfolio. how do you unlock that value so that it's i realized by investors. >> good morning. >> good morning. >> it's a great commentary on manhattan and new york city. the values we've seen on fifth avenue for a whole variety of different asset classes has been impressive. it's no big surprise to us this appraisal is part of our financing and highlighted the value of this particular building. as the ceo of the hudson bay company we think and our team believes that it's important to let shareholders understand the value of the assets within our company. we go to, we do a lot of work to highlight the value of our real estate so our shareholders can understand where opportunities are and where the value of our company is. additionally, as we highlight the value of our real estate, it

creates tremendous value to our balance sheet. the stronger our balance sheet and more flexible our balance sheet, the better for operating company. by obtaining this 1.25 loan against the saks fifth avenue building, we were able to get a 20-year interest-only loan at a very competitive interest rate. less than 4.4% fixed for 20 years. that is great for our operating company and great for our balance sheet. >> when you're looking at this building itself, you are going to flow in $250 million more to make improvements. that is a big vote of confidence when you previously said you want to enhance the digital sales. you think there is value here in the physical real estate? >> this is, as you started to say, this is the single most valuable retail building in the world. it deserves to be the finest retail store in the world. the team will spend $250 million renovating this building so that it is the most exciting and most

interesting and most compelling department store in the world. we know that's going to attract tourists and attract our customers from manhattan and from the surrounding areas to come visit us here. that's going to drive up sales and describe up ebitda. >> you have a question back at headquarters? >> sara downtown. >> good morning. >> what's the best barometer how to measure your sales? especially saks fifth avenue with stock market at record high, bonuses that could be lower. how do we track that and get ahead of what you can expect in terms of holiday sales? >> i think the first callout is that luxury is really strong in this market. what we are seeing is the customer's coming in looking for unique, exciting branded product. they want something different. the higher-end customer is willing to spend money. we have chinchilla blankets and

sabel blankets for $110,000, $120,000. we are selling them. people are coming here for things they can't find anywhere else. as the numbers you reported earlier continue and as the higher end of the consumer market continues to stay strong, i think it's going to be a very good thing for saks fifth avenue. >> good morning, it's simon hobbs. are we saying the building you are sitting in is worth $3.7 billion? >> we are saying that as part of financing, the bank hired an independent appraiser who evaluated this particular building at $3.7 billion u.s., yes. >> didn't you last year buy the entire saks chain for $2.9, for less money, that building and the other 39 stores? if those valations are correct -- and congratulations on the purchase -- somebody must have been asleep at the wheel to

sell it so cheaply, surely. >> i don't think anyone was asleep at the wheel. they had a full process. we have a very talented team here at the hudson bay company and we bought something that fit in well with our existing company with lots of synergies and advantages in our operating company and the real estate was added gift with purchase. >> on the conference call you hinted -- >> i was going to say don't you see this time and time again in retail where you have guys like you who really understand retail is so much about the estate they occupy, yet you see brands -- people become billionaires through this process time and time again. there is something obviously you guys can take advantage of than brokers or other people in this marketplace. >> there is no question, there are operating companies in the world that have real estate assets that are hidden in the company that have tremendous

value. just look at the deal that hilton did recently with the waldorf-astoria sold for $2 billion. that is another great example of hidden real estate assets in an operating company. this comes out most often in markets like this where the real estate market is driving up and all of a sudden these jewels come out of these operating companies. >> speaking of finding these hidden jewels, you hinted yesterday there may be another deal coming. can you give us any more color? are we going to expect a sale or acquisition? >> we told our shareholders by the end of our fiscal reporting period we would highlight to them our entire real estate strategy. we are working diligently and expect to present our entire real estate strategy which will show more clearly the value of our other assets and structure we'll have going forward. >> if i can jump back to the consumer, you talk about this high-end consumer, the

chinchilla blankets for six figures. you are expanding the other location. >> we are very fortunate at saks because we have our online business which has exciting growth ahead of it. we have our full line stores we talked about then we have saks off fifth as of our last conference call, sales were up 15% year-to-date. that is tremendous. the previous five years sales were flat, zero. we think we've redone our management team, we changed the prototype and we think there is a lot of opportunity and growth ahead of us in that segment because customers want fashion at a value price as they can get it. >> good luck for the remainder of the year and holiday season. hopefully we'll speak to you soon and see how it went. happy holidays.

>> very nice. thanks, courtney reagan. let's get over to dominic chou. >> we'll go from high-end to mid-scale dining with cracker barrel. earnings rose better than expected 25% in the first quarter thanks to cost cutting and higher menu prices. as a result it raised its full-year guidance. stock was up by about 3.5% early trade. a nice move for cracker barrel in today's trade. >> thanks a lot. the tech sector has seen a nice 20% gain this year. we'll help you find some bargains among the technology names. the nasdaq catching up to the dow and s&p for the month. we'll go value hunting in a minute.

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my nai'm a lineman for pg&e out of the concord service center. i have lived here pretty much my whole life. i have been married for twelve years. i have 3 kids. i love living here and i love working in my hometown. at pg&e we are always working to upgrade reliability to meet the demands of the customers. i'm there to do the safest job possible - not only for them, but everybody, myself included that lives in the community.

i'm very proud to do the work that i do and say that i am a lineman for pg&e because it's my hometown. it's a rewarding feeling. violence erupted overnight in missouri after the grand jury decided not to indict the officer in the fatal shooting of michael brown. >> reporter: it's a cold and clear november morning. it's hard to grasp what's been going on over the last 24 hours. take a look at the view from above. pictures shot earlier this morning. you can see that there is quite a bit of physical and emotional healing to do. at least a dozen businesses in ferguson and in this area were set on fire overnight by the protesters, looters, whatever you want to call them.

in addition to the fire there was gun fire that kept firefighters from getting to where they would need to go to put out the blazes. the protests continue this morning, largely peaceful. this is from clayton, missouri. and where the grand jury was meeting and made the decision there was no probable cause to indict officer darren wilson. there was a plethora of evidence presented to the grand jury including testimony released that suggests a lot of the narrative about the shooting of michael brown may not have been accurate, according to officer wilson, of course, but according to witnesses interviewed and testified before the grand jury that michael brown was charging at the office r when he was

gunned down and killed. that debate is almost secondary to the larger issues that have gone on here. the distrust between the population and law enforcement that will take months, if not years, to heal. back to you. >> scott, thanks for the report. up next, shares of pandora are falling sharply after a downgrade at fdr. citing debilitating cost structures.

technology stocks have seen big gains this year. there are still bargains to be found in the sector.

dom chu is back at hq with that. >> 65 of them in the tech sector overall and we went looking for all those that have a price-to-earnings ratio below the sector average. in addition to that, we want to look for stocks that have price momentum. one-month price appreciation to the upside so you're mixing value and growth together. 24 of them out of 65, some of the big names highlighted for you. hp, big one here. it's going to report earnings after the bell today. trades at 14 times earnings. already a discount to the sector overall. it's up about 7% over the past month here. when investors have been putting money into hp, it trades at a discount to the overall sector. another one to watch is apple. it's worth $700 billion. still trades at a discount to the tech sector 18 times earnings. it's also up about 13% just over the past one month here.

a lot of price momentum behind that stock. another big name technology company cisco trades at just about the market multiple 18 times earnings. it's up 14% over the past month. then the single biggest gain in terms of an s&p technology stock over the last month is yahoo. it's up 19% but also trades at a discount valuation just seven times earnings. as we look for where investors are trying to find some of these values, it's important for these investors to look at multiple components here. you look at value screen price to earnings and marry that with a growth momentum screen and that's the way some investors are trying to find value in a technology sector. tech is important. it's the single biggest sector in the s&p 500. a big sector to focus on investors' minds. >> thank you, dom chu.

>> the key important pandora is licensing costs for some artists. good to have you back. >> happy to be here. >> the copyright royalty board, what's about to happen? what do we need to know? >> music is a very interesting industry in that it is kind of like note board of ages ago. the government sets the prices that pandora that are qualified as radio services pay for music. pandora is going through a process of what they have to pay for music performance rights in 2016 and beyond. in the legal situation here, suggests there is meaningful risk that the way pandora is currently operating under which is a band-aid settlement gets reset to older levels that are very difficult for the business. you should step aside. we are downgrading to underperform with an $11 price

target. >> telling people to sell. is apple exposed to this? >> well, apple has a direct deal with labels for music for itunes radio. i think that agreement is going to enter into the pandora proceedings. pandora is doing this privately. pandora has chosen to live on the generosity of the government establishing a rate. apple hasn't. for that reason i think pandora has a lot of uncertainty if you look at the rate apple is paying, they are paying as part of their deal, we see parts that suggest a minimum percent of revenues which we think if that was used as a precedent in this proceeding could be cautionary. that's one of the numbers of benchmarks we look at. >> barton, i wonder if taylor swift's decision to pull her

music off spotify changes this debate? that the artists are taking a stand, they want to get paid more for the music they are producing. >> i think the bigger picture is the music industry is evolving fundamentally. the labels are arguing we are going from an era of ownership to an era of access. they want to make sure they can make a living in an era of access so people will get music through subscriptions like spotify, access to pandora and make sure they get paid appropriately for what is going to replace sales of cds, down loads. this does speak to the tension there is in the industry right now. >> there is a copyright review board which may or may not get an incremental increase. but the point you're making is the doj investigation that

fundamentally could change the structure, no longer determined by the court. is that a political decision at the end of the day? >> i think the doj investigation and publishing rights are a different track than what i'm focusing on here which are performance fees which with are a larger cost for pandora. doj is important when you think about their ability to maintain access to publishing rights. ultimately i think what you have is a messed-up situation from a regulatory perspective. it's screaming for someone to pass a law to clean this up. there is no reason why am/fm should pay nothing. there should be proceedings that force rates on to pandora. this should be straightened out and cleaned up. this is how americans and the world want to consume music in the future. in congress there is no movement that has any momentum to take care of that. you can't count on it the next couple of years for pandora. >> media is changing quickly. it's hard for policy to keep up.

barton crockett, thank you so much. straight ahead, shares of tiffany at a record high thanks to strong sales in the americas. demand not so strong in asia what should you do with the stock now? the conference call.

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morning. they are set to hit close to a record high. ed, it looks like you agree with the stock reaction. you think it was a solid quarter. the americas number was particularly strong. >> that was the strongest american result since 2011. we think there's been hard work in the america stores. sales people are friendlier. they introduce new products and everything is manifesting itself in much better results. >> margins look good. is that that they are keeping a lid on costs better or are they raising prices and going onto higher-end jewelry products? >> we think the strength of the new fashion jewelry offering. they launched a key clicks. we think it results in higher margin in the store. >> what did demand look like for

the new collection? it says a lot about their new designer. >> absolutely. this was her first big launch. we saw product out of stock in key locations. that's the first time in a long time we've seen tiffany sell out of jewelry. consumer response has been very strong. >> what do you do with the stock? record high 110. is all the good news priced in tiffany does have a sizable portion of revenue coming from overseas. asia was week, particularly japan in recession. >> the stock is one of our favorite long-term buys. we are watching international very closely. you identified there's been weakness in asia. we are watching europe closely. in terms of a long-term investment, 2ive2ive tiffany is outstanding brand. >> they are going to undergo a new ceo change next year.

>> we think it could be one of the most seamless transitions. they've begin people ample warning. we think it will be a seamless transition. the new ceo has extensive international expertise. clearly, that will be important as we navigate difficult international conditions. >> what is the pop seller this season? >> some of those key collection items. great value, great fashion. people should have that underneath their trees. >> is this best pick in the luxury sectors? you sound positive on the stock. >> in the luxury sector, this is our top pick. there are nice margin drivers. frankly, one of the strongest brands we cover. >> just to revisit this, why are they calling for a fourth quarter that looks nothing like

the rest of the year? why don't think trust this will be as good as it appears to be shaping up? >> there is conservatism they want to inject. retailers have been down beat through the year. a number of retailers have lowered guidance. tiffany is one of the exceptions. they maintained guidance which we think is impressive in light of their difficult international conditions. >> it's that volatility in currency. >> absolutely. that affects international operations and the foreign tourist that comes to the u.s. shopping. >> thank you for pointing that out. shares trading not too far off from a record. >> growth accelerating at 3.9% in the third quarter. we give back a bit but s&p is

returning for the year police striking a 46 record close. joining us is manager director and senior portfolio manager with matrix asset advisors and chief economist with stern a.g. welcome to the program. this has been a phenomenal year in the market for an awful lot of people. how would you sum it up for next year? >> the performance this year surprised people. our expectations are probably 10% plus or minus with some volatility and stock specific performance. the environment is quite positive with the gdp this morning. that suggests the economy is doing pretty well here in the u.s. internationally, certainly those are the more difficult economic

regions. you think for u.s. investors the strength of the u.s. economy should outweigh some of the issues overseas. we would expect some improvement next year in stock prices 6% to 8% range from earnings. we are not sure there can be multiple expansion from here. >> a lot of people are saying that. what about gdp figure? 3.9%. obviously, it's backward looking. what would you say about the future and strength on the economy? can we sustain it? >> the problem is it was a mixed bag. we saw unexpected underlying strength in key components. on the other hand that unexpected strength is offset by expected weakness, particularly in the trade sector. this is a sector of weakness we expect to continue to put downward pressure on growth as we get that fourth quarter number and turn the corner into 2015. it does suggest it's strong. some of those strong

contributors including trade, government spending, those are expected to wane. it does paint a weaker picture looking forward. >> isn't that usually a bad sign for the stock market? >> valuations have expanded. sentiment has become more positive. even in any market environment, there are companies and sectors underperforming where outlooks are not quite as strong as perhaps everything else. of course there is still risks out there the largest risk is unpredictable geopolitical risk, terrorism. looking at company fundamentals and u.s. economy, it's not such a bad place to be right now. >> let me pick up the point about russians and oil.

we have an opec meeting thanksgiving day in vienna of which there is clearly pressure for opec to get it back together in their view and cut production. apparently the russia oil czar is already on the ground meeting people there. there is some suggestion that the russians could cast along with members of opec. if they are able to move the price of oil higher, what does that mean here? >> it's interesting. with oil down and gasoline prices down, consumption has arguably been unchanged. we've seen retail sales disappointing over the past three months in spite of an energy price reprieve. if you see reversal at the pump as consumers try to fill up the family car, that will compound the retail sales and undermine a lot of spending in that key holiday season as we enter into black friday, christmas sales, et cetera.

>> you are quite bearish. >> i think there is good reason to be. looking at the retail sales numbers, a bit of a bounce. declines are barely offset by october increase. consumers facing long standing head winds. doesn't paint an optimistic picture as we look to the aggregate of the economy. >> on that note, we'll leave it there. thank you for your time. when we come back, we'll talk about what high-end consumers are buying. location. location.

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today there's a new way to work. and it's made with ibm. transportation sector trading higher. >> rider systems is leading the way higher followed by ocean

freight carrier. rental car companies, as well, avis, jetblue, overall good day for the transports. transports are a subsector, industry group of the industrial side of things. industrials are outperformers in today's session, as well. back to you. >> dom, thanks. >> let's check in with rick santelli. >> good morning, carl. i'd like to welcome our tuesday morning guest. thanks for taking the time, mark. >> happy thanksgiving, rick. >> and you, as well. when it comes to housing, i still say that car analogy is best. it's a transmission problem. we can tinker around with credit, to transmit the credit in the system that were stereo

typical of '06. >> average house prices are lower than in 2006. yet given the loan programs that are popular today, the 30-year fixed versus the pay option back then, it costs up to 40% more per month to buy the house. houses are unaffordable at these levels relative to 2006. >> let's dig deeper. you have an issue with seasonality. there are so many numbers we look at where we have the seasonal adjustments. explain your problem with the seasonality and seasonal adjustments regarding metrics for housing. >> for the past five years, we've seen spikes and surges, high volatility in interest rates. when rates plunge, demand incrementally is created in housing through a very short window of time like we've seen the past couple of months. when that happens in the offseason when seasonal adjustments are at their

highest, it creates headlines like record home sales in november, when in fact demand is anemic. we are going through a period of that right now. >> your analogy is imagine a big box store has a huge sale, sales go up because of the drop in prices, but then they normalize the next month. i love that example. >> right. >> if we are looking at seasonal adjustments and look at affordability, if you were the federal reserve and you wanted to help housing, what would you do to make it more comparable to the past? how would you open up markets? would it be changing scores of end users? anything that can be done? >> back in 2009 when we gave 10 million people mortgage modifications and allowed them to stay in their house, it thwarted another 10%, 15% down side in the housing market. it also took away all those buyers, those end user buyers

that should be buying first time and being repeat buyers now. only time and debt deleveraging and moving up and employment and income labor gains will fix this problem over a long period of time. right now we just have to wade through the mud until that time. i think over the next six months house prices will suffer. i think on deck we are going to see lower year over year house prices that follow the demand anemia we've seen over the past 12 months since rates popped up last june. >> mark, thank you so much. i hope you and your hamly have a healthy and happy thanksgiving. >> thank you. >> sara, it's all yours. are you behind in your holiday meal planning? the co-founder will be joining us look i've to talk about the fast-growing start-up.

welcome back to "squawk on the street." two shoe companies are kicking up a storm today. we'll results as same store sales roelz 2.6%. raising full year guidance as a result. there is also brown shoe jumping on better than expected third quarter results. it too boosted full year earnings. outlook for them up about 6 and a half percent on the day's trade. >> we're going to stick on the retail. gentlemen, listen up as we finish mo vember, will the male grooming market stay hot. seriously the men's grooming market? i remember when they used to just buy shampoo. >> when you look at mask and

pres siege combined it is about $2.5 billion. and grown about $220 million since 2008. we're definitely leading the market with kehls. >> you yourself have a beard. it's very trendy this day. >> is this november alone? >> ono this is most of my life. >> as more men have facial hair how does that change the way they buy products. >> men are really more comfortable with experimenting with their looks. changing up their haircuts and facial hair. about 45% of the men out there except for you guys have some of kind of the facial hair. it is a growing trend. and even in the department stores you can see have they carved out that he has areas. products for them specifically.

getting aed vice. there is a comfortable environment now that didn't exist before. >> i would say it's not growing perhaps as well as it has been in asia. and i'm fascinated by the brands you have. you're owned by laurel. and yet you have what somebody described as a more androgenous brand. >> you have to think about it. you have a market in asia where they don't even shave. because the need for shaving is greatly reduced versus this market where everybody is so obsessed. the one thing you got from dad. in terms of kehls and approachability we've always had this minimalist approach.

growing up everybody was using everything. so we have minimalistic look to packaging which makes it unisex and makes it inviting. >> we talk about commercial real estate and especially the value of the stacks building here in new york. do you see a point where you are going to start reducing footprint and rely more online. >> not for us. today men and women the way they shop, there is -- they are looking online for content but still going to brick and mortar. they still want the experience inside the. >> why would you want to fight the crowds friday? >> friday is a whole different element. but in general, especially for men, online has provided this safe forum to ask every safe question. but you still want to try it and

make sure it's right for you. went to shob and we want it to be quick but we want to make sure it's right for us. brick and mortar will always play a an important role but you have to do the up front research. >> you see retailers getting promotional into the holiday. why don't beauty products ever go on sale? >> for us it was -- i always go back to 2008. and we have a real choice in terms of what to do with pricing because everything was going up. and ingredients for us. and it just felt like as an all american company we had to keep prices reasonable. we don't advertise and e don't no any outside packaging that's required by law. >> you're part of laureal, the french giant. how are you doing in that broader portfolio? >> we're doing exceptionally well. but we have kept very focused on

bringing the right products to mark for men and for women. and we haven't veered from our study guide. and we have to listen to the consumer and make sure you are bringing the right products to market. >> good to have you here and talk about trends. maybe you should have a goatee simon. >> we're not allowed. or i would. >> let's goat bertha coombs at the nymex. >> we're watching oil take a little leg down here carl. of course the market is riveted on vienna, ahead of thursday's official meeting. the venezuelans say they have been talking with the russians and mexicans and say they do not have a deal on an oil production cut. again though of course the

official meeting is on thursday. but it continues to look not very good here for the prospect of an agreement on cutting opec's production levels and that here hitting oil, brent in particular at this hour. back to you. >> thank you bertha. 4:00 until "squawk alley" hits the air. >> hits, misses and the next big thing. on the hitd side, apple up above 700 billion in market capital. what's next for them? and then twitter execs oops. does it tell us something about the company? and, inc. magazine's is here to tell us who they named company of the year. trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts...

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good morning. 8:00 a.m. at twitter, 11:00 a.m. here an wall street. "squawk alley" is live.

joining us this morning, mike santoli, and as always jon fortt and kayla tausche. and as this morning apple is a $700 billion company. stock opening at another new high. apple now has a $300 billion lead over exxon, the second largest company in the s&p. and the market cap has doubled since tim cook took over the job. it's up a whopping