tv Squawk Alley CNBC November 28, 2014 11:00am-12:01pm EST
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you. as always jon fortt with me for the hour. that just came out this morning. the movie doesn't come out for another year. and thanks to you on twitter everybody knows i haven't seen the star wars. >> i don't know about that. >> we have to start with the market. which is holding up well despite the fact that oil is khalil the biggest story of the morning. dow up 40, nasdaq just turned negative. domonic chu is back at headquarters. >> this is one of the biggest slides in divergences that we've seen in the market is in some time. oil prices continuing their downward move. down around 8% at the lows of the day. the immediate impact is evident in the energy sector. among the ten broader sectors energy is by far the worst.
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down about 6% on the day. that takes the sector into bear market territory, more than 20% from highs back on june 23rd. the second worse performing sector is materials. it's down around 2%. so a huge discrepancy. shares of oil companies huge downside as well. even bigger moves are happening in oil drilling and services related stocks. shares of the rig operator transocean have lost about a tenth of their value after losing big wednesday as well. and lower oil prices means less demand for alternative energy. solar stocks and sun power and solar city all taking bigger hits than the overall market. the good news, if you are an airline investor, lower fuel cost does mean higher profits
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for the carriers. all are faring well. and for now at least some consumer stocks are benefitting as people may be able to spend more money now that coast are at least down on the overall scheme of things. discretionary names, all headed higher. back to you guys. >> lines still long across the country as consumers rush into stores this black friday. and at best buy, finding the crowds might be your best bet. josh lipton is live at the best buy san jose with more. >> best buy's site has been down about an hour now. we reached out for an answer and nothing yet. we'll keep you posted. best buy stores did just reopen. shoppers are looking to buy as many electronics and gadgets as they can possibly carry. so what are going to be the hot
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tech products? televisions as always are going to be red hot. especially that ultrahi-def 4k tv should be they say very popular. >> if you want to sell tvs to the american public you need two things. they need to be as big as they can afford and fit in their house. and they need to have the best picture that they want. and 4k really addresses it. this is the state of the art of the picture. >> if 4k is a hit that is good news for samsung which control about 50% of the market. offering a number under $2,000. best buy offering one 4k model for about 900 dollars. gamers are also out in force on this black friday. deals on games and consoles. target offering the xbox 1 plus games and a gift card for $330.
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and a lot of demand for gopros, which range from 130 to $500. >> they dominate the categories they are in. and, you know, we've seen promotions on some of their older models for this holiday. we think they will have another big big holiday just like last year. >> and it's not just televisions, games and gopro. smart phones also expected to be hot. sams club is offering the iphone 6 for 99 bucks with a two year contract. >> unfortunately for best buy josh, the entire twitter feed is lit up with complaints about the website. so we'll see if they can fix that. for now good to see you. have a great rest of the day. joining us is kara swisher co-executive editor at re/code. i'm sure you were monitoring all your channel checks to see where people are spending but in all
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seriousness we sue quite an uptake in digital commerce yesterday. ibm sales ridesing 12%. so it is going to be a big day for tech, for gadgets for a lot of the stuff that of you cover. i'm wondering, do you think that there will be any clear winners here? apple for instance whose black friday deals include iphones for the first time perhaps. >> the online shopping is something that's just happened and we're going to keep saying it every year. and it's common now with everybody to do a lot of shopping online. and i think we're going to be waiting in the last minute to see what happens. because i buy them and because of the delivery services you can get them immediately. so i think they're moving to just in time kind of delivery i think people just wait and see what they can get through the season. >> there a black storm trooper in the real trailer. i checked and double checked.
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but on to black friday, different kind of the black friday. and shopping. mobile shopping seems to be surging. twice the rate of last year. people are actually using they are phones to shop online. how is that influencing thinking you think about entrepreneurs in the valley looking at different avps and things to do with people spending money on phones increase. >> i. >> it is another continuing trend. services like pinterest and others that give lots of choices and a lot of websites are better with commerce retailers. that said a lot of commerce companies have suffered. they have had layoffs and grown too fast. so those are a lot of mobile shopping experiences and at the same time they have grown quickly. so i think people are going to be using their phone or their tablets to do a lot of shopping.
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everything is shifting that way. >> and e-commerce has been around a long time. and you are saying it appears to be a tipping point now because the product and platform is getting better. >> definitely. every time we talk about the phone, everybody is using the phone. so it is not a surprise. and especially young people. they buy things immediately. so they are used to doing that on their phone and they will do it more. and it's a better experience now. >> doesn't sound like you are bullish on people rushing to get the iphone 6. you don't think there is going large uptake there. >> all the new iphones are selling and if they put any of the others on sale i think they will sell out. one of the things that's remarkable and how much people have taken to the iphone 6. i think you will see a blow out quarter.
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i was just making fun of the fact that you make fun of my large iphone, which i love. and many people love their large iphones. and we're not going to be quiet about it. >> you have to read the piece for the full story. >> you're envious. >> oh my god. look at her iphone it's so big. >> i'm just going to ignore that. overwhelmingly calling for a breakup of google. this initiative has no direct power. but if it does go anywhere. all this highlighting the growing resistance to google overseas which has a market share of over 90% in europe. even though this is non behi behinding and more formulate. there is corollaries people are starting to draw. how do you look at this? >> interesting. google is very worried about europe. they are very concerned about
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their perception there and concern with the eu and what they can do there. they dominant the market. while it is not their most important market it is something that u.s. regulators decline to do in any way. so i think it's interesting to see how they handle it. for years europe has been banging on google on lots of issues. italy and germ sany and now the european union. and they have to be concerned about this. >> and seems to me google has to be careful here. they took a hard line already on china. the middle east is going to be complicated when it comes to their lack of openness in certain types of laws. google kind of needs europe for growth and all kinds of things. especially when you have yahoo getting more aggressive in search. microsoft too. even though they don't like some of the regulations eu wants to put in, don't they need this piece geographically to work? >> i think it will be interesting to see where search
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goes. it is all moving to mobile, which is an interesting trend also. and google dominates there. so it is going to be an interesting question of whether the others can catch up. i doubt it. i mean honestly. i think they can try. i think the real thing is what's going to happen when apple renegotiates its search deal next year. and that will be an interesting shift. an important one for google which has opinion the preferred search provider on that service. moving over to microsoft bing. and yahoo wants to get in there too. and we'll see what happens. >> we should know there's been an ongoing antitrust investigation of google in europe since 2010. so it will be interesting to see if this issue finally comes to a head now that some of that sentiment is known. uber is leaving las vegas, at least temporarily. suspending service in nevada after a judge issued an injunction over regulatory concerns. uber saying in a statement, it is unfortunate that nevada is
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the first state in the nation to temporarily suspend uber. that means nearly a thousand jobs just disappeared overnight. playing the victim here. and does this give fuel to the fire to other states looking into the similar issues. >> nevada is tough because of the casinos and there is a tight relationship between the taxi and the hotels. and it's a funny state. las vegas is where all the action is. i think the issue is, they have faced injunctions before and faced trouble in new york. their first act was to have an injunction with san francisco. and they dealt with this before. and in other cases they just kept operating. now they are not. they are actually suspending operations and we'll see if they have the popular support to get people to rally their legislators or not. nevada is a very difficult state for them. and probably important but not a good couple weeks for uber.
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one thing after the next. these things tend to build and they have to pull it back on getting their image improved. >> and they could probably get some support here. because you and i have both taken taxis in vegas. it is not the best experience and you kind of get the feeling that with the tight knit business community. >> it is a racket. >> exactly. >> it is a racket. and they werun the show. it will be interesting to see if they bring the lobbying power to it. if they weren't in a bad state from the pr point of view but it's not in the best state right now. >> bad state for pr possibly. but there is that lingering report they are raising new much from the mutual fund community that could push valuation to $40 billion. do you think that is a red herring?
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do you think that will erase other issues? >> no. they're raising the money. it's the biggest things that investors are the going to. and they have no qualms about bad pr or problems in nevadneva. it is going to be an execution story going forward. and we'll see if they can mature as a management scheme. facebook went through troubles like this and managed to raise money and go pelyco. and -- go public. >> and we have to mention your piece on anthony noto. if the cfo can't use the product, who else can. >> i can. i've dmed very successfully. although i a fail that was kind of embarrassing. it's confusing the question is the product should be paramount. that's where it all rises and
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falls in consumers using the service and becoming more popular. >> wearing black on black friday from a rainy washington d.c. have a great weekend. >> thank you. >> best buy's website is down. the company issuing a statement saying a concentrated spike in mobile traffic triggered issues that led us to shut down best buy.com norm to tain order to te proactive measures. our consumers can take -- certainly an issue that seems like not a quick fix. >> this is a big deal because they specifically call out mobile traffic. probably from smart phones. adobe has already said that traffic is twice as high as last year. though it is not the majority of traffic overall. so here you have a minority of
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traffic from a specific kind of device taking out an entire website. this is a huge event. >> and down more than an hour and a half so far. we are learning won't be restored for the next several hours on the biggest shopping weekend of the year. >> and cisco and a lot of companies that sell networking are making their pitch all the more on why you need to buy our specialized mobile stuff. >> indeed. >> coming up are most consumers shopping big or small? the ceo of ethan allen with us. and tech wearables. and you can see the mall of america on your screen. but soon black friday crowds could be a thing of the past. we'll tell you why a little later on this hour. "squawk alley" back in a moment.
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taking that down more than an hour this morning. moving on. after over 25 years of the helm of ethan allen interior, our next guest has seen his fair share of the traffic. joining us now is chairman, ceo. thanks for joining us. we see best buy being surprised by the amount of the mobile traffic coming in. do you have lots of different ways that you distribute and sell furniture and other home goods. how have the shifts in technology and the way people shop for things changed the way you do business this season. >> technology has effected every enterprise, every business. we have a business which is based on having almost 2,000 interior designers. 1500 in north america, 500 internationally and our challenge was how to combine the personal services of designers
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with technology. because today technology is great. but if you can combine it with professional personal service that is really where we are going towards and that is what we do. >> you sell what i would call grown up furniture. if you are in college just coming out you might buy something from ikea. but when you get money and your first really good job maybe then you go out and buy some ethan allen furniture. but people still want to price compare. how has your brand been influenced by that process? >> it is a question of ecology and design. i just came back yesterday from dubai. we had a grand opening there. and this is the second one. the first one is the dubai mall. and it's amazing, 70 million people go through that mall. >> are they buying furniture. >> they are buying everything.
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shopping, window shopping. but they also put in a second one outside the mall. a great design center and you know what they like about us is we are first an american classic brand for 80 plus years making great product. 70% of that we make right here in north america. third our focus really has been to make great quality furniture and quality products at a time where actually mediocre is the norm. >> and you also rely heavily on a strong housing market where people are moving in to new homes or renovating houses. and the data for october was disappointing after a good run. i'm wondering if you are prepared for a slowdown or what you see in that market. >> there are certainly mixed results. if you take a look at retail sales in october they were
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actually somewhat positive compared to the decline in september. if you look at a consumer confidence, it is a seven year high. if you look at oil prices, they are coming down. on the other hand you also take a look at the job growth. while there has been job growth, and fortunately we know that a lot of folks especially the 15% below are not doing well. having said all those things, that it's an interesting question you ask. where people are now more and more looking to be an owner of good products rather than just a user. so that is where differentiating that if we have great ecology and great service, you are able to differentiate. because if you are not able to differentiate it is a tough market. >> given all that, you gave some puts and takes. i got a question for you, a fill in the blank question we've been asking all the ceos. and that is the state of the
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consumer is? in one word. >> cautiously optimistic. >> that's two. but we'll let you have it. >> we'll let you have it. thanks for joining us. >> up next a lot of people will be flocking to movie theater this is thanksgiving weekend but not to see hits like the hunger games or penguins of madagascar. we'll explain what it is they will be looking for when we come back then all the parts come together, and there it is ... our new car! so, that's how santa fits it in his sleigh. wow ... wow. the magic of the season is here, at the lexus december to remember sales event. this is the pursuit of perfection.
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opening with about 6 million in the u.s. box office on wednesday that is on track for about 45 million dollars on the holiday weekend. smaller than the last three. so catsenburg is hoping that the shrek will inspire people to head to the theaters. hunger games' u.s. total about $160 million. the other new movie, horrible bosses two is projected to bring in as much as $35 million. even if all the films hit estimates the box office won't top last year with frozen packing theaters. fan boy, a movie out not for a
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year. a teaser launched this morning. launching around the world in december next year. there is so much hype there. i wouldn't be surprised those 30 theaters feel a bit of a box office as a result. >> and there's my black storm trooper. we got him in. >> there are two big piece os information in europe. one is the price of oil generally and the fact that euro zone inflation came through at 0.3% as expected. that is the head line figure. if you strip out energy clearly the core inflation is higher at .7. but still enough to further pressure the cbc. spain down 0.5% there. the talk is not just about whether you get sovereign qe,
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whether they can choachieve than the beginning of next year. some suggest corporate bonds buying on thursday. the prices are rising the assets are rising in value. the yields are falling. kayla mentioned yesterday we closed with a yield below 1% for if first time ever. we've gone deeper into that territory now. italian unemployment also rising. going in the wrong direction. rising to report 13%. and you see the yields on italian and german debt moving further lower obviously on expectation that it could be bought by the ecb further or just simply because things are so bad. the deflationary impulls bronds the better bet moving forward. oil majors in a negative territory. but a lot of oil and gas services stocks really getting
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pummeled today. and you see the converts, the airlines rising. because air france partly is going to cut $870 million of costs in the next five years. and the moves on energy could cut 300 million from lufthansa. if we look at the months overall as we close out november in europe, you can see europe is doing slightly better but not that much better than where you are on this market. happy black friday. >> happy black friday to you too. have a great weekend. when we come back we still have our eye on oil. of course the big story of the market this morning. more on oil prices are headed in a moment. brent is able to resist that slide today. plus the top gifts in wearable tech.
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totally different market where the swing in prices could be 50, $60 a barrel on a forward basis. this is going lead to a different way of thinking the industry. >> rethinking all around. the other thing in europe is over the weekend we are going to get a vote in switzerland over the swiss bank. a referendum that says it should hold 20% of its assets in gold. the expectation is this won't passal but these days expectations don't always go the way the market is thinking. >> thanks bertha. we're under an hour and a half
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away from the close of this abbreviated trading day. let's brink in kelly evans and bill griffith live at the stanford mall to tell us at least what's 50% off -- i mean what's coming up on the next hour in the closing bell. >> why are we here again? i forget. >> it's just there is not a better place to get the pulse of the american consumer right now. a black friday celebrating not just in this country but around the world today. >> you can hear the sounds of glee in this mall because of the falling oil prices. that means lower gasoline prices. we're going to talk to a lot of shoppers and find out in termination of bargains what they are finding. we have somebody from mastercard, somebody from mall of america which is 22 years old now. and it changed the whole world of retail for the moll world and we'll talk to the executive
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director. >> not just here in stanford but we have people all across the country. >> team coverage today. >> as they say and lot of great stuff coming? >> and the market as well. so join us. >> you guys are so brave to do this for a second year running, dwosh. hats off to you. >> when i come to a mall on black friday, trust me. >> it was bill's idea. >> have a great show. we'll be watching. as shoppers rush to the deals today, fitness gadgets are sure to be a hot trend. >> the best fitness devices to target. i have a microsoft band on here. anything better than that out there. >> i think it depends on what kind of active person you are looking for.
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if you are shopping for someone whose a really serious multisport athlete, then consider something like garmin's newest, can forerunner 920 st. it's not cheap and probably on back order for a little while but it's pretty much everything a serious athlete could want. and then the other are the activity trackers. my favorite is to walk, not run to the stores to buy one because there are still models coming out in the coming weeks that are going to be little more impressive than the wearables .1.0 we've seen. >> how do you go about picking something out for someone who might have something but they want something new? or you need to step up from what they have already. what is up there on the high end? >> great question. i think we're going to see lot of bands or smart watches with a
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optical heart rate sensors. they actually go on the wrist. you don't have to wear a heart rate monitor on your chest in order to get a heart rate reading and in some cases they may provide better data than activity trackers. in fact i think the microsoft band that jon is wearing also these heart rate sensor. i think this is something you are going to see more and more whether this apple watch or activity trackers that make these more viable. >> you are right. this does have an optical heart rate sensor. some people say it looks a bit like a futuristic prison bracelet, which makes me wopder about the fashion piece. i can i think get away with wearing this because my wrist isn't tiny but somebody with a smaller wrist maybe a woman might not feel comfortable with this. anything that you see that is fashionable and has decent
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battery life? >> well the new jawbone f 3 which isn't shipping just quite yet is actually a little more fashionable than some of the mo utilitarian looking wristbands out there. i think it costs around $180. that's one that's a little more transa attractive more like bracelet than the others. >> what is the chance a lot of shoppers bypass them all together because they are waiting for the apple watch middle of next year? >> it is quite possible. in a lot of ways the apple watch has raised awareness of the entire category. i think smart watches are still going to be a hot topic or trend this holiday season. but just as many consumers are going to be waiting to see exactly what the apple watch has in store in the new year. especially the sport version which is supposed to start at
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$349. >> thanks. i'll know this is really wheni n see kayla wearing one. and then i'll sit her down for a star wars marathon. >> whatever i have i probably won't wear on the show because we want to be fashionable on the show, jahn. >> i've given up. why this could be the last year ever brick and mortar stores lead black friday. >> i was watching you earlier. i can't believe there is a person on the planet who hasn't seen an early star wars movie, kayla. we've going to talk about the reserve, congress and there is a way the handicap the differential between europe and the u.s. i've talked about it many times. a hint, 150. the equipment tracking system will get you to the loading dock. ♪
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the difference between the growth rate in the u.s. and in europe is epitomized in the spread between bunds and tens. consider i've talked many times about the 150 basis points on this month to day chart has gotten constant. just about as constant as we are locked down in the fundamentals between the u.s. and europe. so if that expands and tests its 14 year high which is just several basis points higher at 157, that means the spread is widening. we're either growing faster or europe slow e or a combination of both. and if it tightens the opposite is true. while it's continuous at 150 we can continue to look at the issues pushing european rates lower and add 150 to bund which
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is 70 and know pretty much where the year is going to go. there's been a lot of confusing talk on energy but in the end most of the early talk on this industrial revolution, where yankey ingenuity is at the epier center we are permanently bending the cost curve to energy. and especially when things like should we export energy are being debated and congress is going to change next year. and that is of course, well, is it really a big deal that we have more natural gas or more crude oil? because in the end it is not going to do a lot for the united states because it goes on the global market where it's fungible and the price is so much higher. but we're learning, yes it does matter. we're a power house that is bending the curve down. it is making a difference and it is making things cheaper here. and the last point there is an
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op ed in the "wall street journal" today, the fed needs more than an audit. i'm going to go through the intricacies. but in my analogy we celebrate 101 years that congress created had fed. what congress can give, congress can take away. the fed was for many years a nudger. they have gone from a nudger to a major policy make ner so many ways. this has to be taken under scrutiny and there has to be over sight. checks and balances. true checks and balances. >> may the fed be with you. or maybe not. consumers are going mobile. and why shoppers are turning to their devices when we come back.
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to camping out storeside for deals? bubba moracca is a partner and led android development for facebook and starting the facebook home project. so what's happening that you see with phones right now. i keep hearing larger screen phones like the 6 and 6 plus and samsung's and leading people to browse away from the pc and shop on the goi. >> thanks for having me. it's incredible how it's leading things. specifically in the context of shopping ibm released over 52% of online traffic to commerce sites was from mobile devices. both the drive of larger screens as well as just the always on personal nature of the devices is leading to massive amounts of usage. >> 50% of traffic but only 30%
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of sales and ibm also reported the average ticket for consumers who made purchases online, only about $130, which is the same as last year. so it seems that even though the activity is shifting online from off line it is not that this is additional commerce. this is just being shifted around here. >> well that is a good point. i think the other way to interpret that data is it is becoming more mainstream. so there are more digital shoppers via mobile phones and making purchases from underneath their thanksgiving table. >> what are you encouraging entrepreneurs to do who are coming to you for counsel. it is a big part of what you do. when they are trying to figure how to divide time and resources when it comes to mobile development. if they are looking to make money, how much is ios and how much is android? ios has major share of purchases compared to their share of overall devices.
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>> yeah well one of the things i really love and we all enjoy doing at this part of dfj is working closely with the entrepreneurs. and i think the biggest focus is just to go mobile first. i think as you pointed out ios is definitely monetizing better because of the penetration in the developed world but also because itunes, iios accounts come requiring a credit card. and google and android don't require a credit card when you sign up for the device. >> on the cusp of the mobile payments. what is your outlook for apple pay and whether that cares the next leg of the payment boom going forward. >> i'm really bullish on apple
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pay and i think there are two ways it moves everything in regards to commerce. one ecommerce goes through the roof. the challenge of entering a credit card number on a small device has basically been eviscerated. and i think agoogle and amazon follow up with something similar. and secondarily as we look for ways to reduce friction in retail locations more and more i think there is going to a new set of purchase behavior because of less fraud and less friction in the way of buying smaller good items. >> thanks for joining us on this black friday, which is being already in mobile. >> thank you. and may the mobile be with you guys. >> all right. can brands handle the increase traffic on mobile andenline? best buy might be back up but others going down this morning. more when we come back.
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crazy scene from london shoppers earlier. the black friday frenzy has made its way across the pond. this fight is over tvs. and what black friday wouldn't be complete without a squad cheerleaders. as we mentioned the best buy website is back up after nearly 2 hours offline. the website for top shop also showing errors messages. i wonder in all of this is over mobile traffic. >> you would think they would invest in that infrastructure ahead of such a busy day. hopefully they can rectify those quickly. before we go a couple stocks. starbuck's getting a bump up. also a big play for black
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friday, a lot of gifts inside starbuck's stores. and twitter up 1.5%. a lot of long onlies getting into this name today. so we'll see. have a great weekend. >> you too. >> that's all for "squawk alley." to kelly and bill in stanford with the closing bell. >> and welcome to our very special black friday edition of the closing bell. >> did you just see the video of black friday in great britain? where are our cheerleaders? we need cheerleaders. [ applause ] oh we have cheerleaders here. and shoppers are maybe feeling
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