>> people are still mad at him. he skewed one election. >> yes. >> the most asked question was how do you tie a tie someone told me. >> that would be the millennial thing. >> begin the show with the tie -- begin the show with a tie and end it with a tie. thank you for being here. >> nice to be here. thank you for thanking me. i'll thank you tomorrow. >> join us tomorrow. "squawk on the street" is next. ♪ good wednesday morning, i'm carl quintanilla with jim cramer, david faber at the new york stocks exchange. yellen speaks just past noon eastern time. three other fed speakers take the mike as well today. asia steady overnight. europe is faltering on this disappointing flash cpi.

germany two-year hits a record low yield. adp good stateside, oil inventories this morning at 10:30. the market coming off a good week of rallies. >> the latest on yahoo!. the board considering a sale of the core business meeting this morning. as for the fate of marissa mayer, that's not the core argument going on now. >> and mark zuckerberg's new baby and the pledge to give away 99% of facebook shares. >> do want to get to yahoo! this morning. given the "wall street journal" story last night, above the fold, saying the board is considering a potential sale of the core business. let's back up a bit and explain what's going on here. if you recall, yahoo!'s board decided early last year they would go forward with a spinoff

of its 15% stake of alibaba, they reiterated their intention to move ahead in october with that same spin but without a private letter ruling from the irs, which some anticipated yahoo! would get along the way. nonetheless their lawyers and many others believe the deal would be considered tax-free. the irs would not come after them. however, jeff smith at starboard, we know not long ago wrote a letter to the board that the risk of that becoming a taxability transaction had increased markedly in his opinion, and to a certain extent in the opinion of others as a result of the irs no longer saying it would issue private letter rules, but also a number of other changes it made in t m terms of what it's considering when it considering these spins, how large it is, if there's a real business purpose to the spin.

the point being the risk of it being a taxable transaction increased in the opinion of mr. smith and apparently other shareholders as well. sources tell me over the last few days a number of other significant holders of yahoo! stock have written letters to the board expressing their concern as well that the risk of it generating taxes down the road if the irs were to revisit the transaction and say we don't believe it was tax-free has increased. increased to the point where they are behind a plan in which yahoo! would spin off or sell, i should say, it's core business generating a tax bill of about $1 billion, but giving certainty that the remaining alibaba stake and stake that yahoo! japan in cash would be nontaxable and create overall a lot more value for shareholders. what can i tell you now? the board of directors this morning will meet and potentially make a decision about which way it wants to go

the likelihood is that they stick with the alibaba spin in january. in speaking to people close to the situation here, it's close. a number of board members belief the risks now exceed the rewards when it comes to that. you will pursue that spinoff of the alibaba stake, you will see it trade at a fairly substantial discount potentially because of the risk that it may be viewed as taxable, you will face a possible proxy vote from mr. smith down the road, most say he will come with a proxy -- he wants a see the on the board himself. therefore what will you have done because the core business continues to be something that many believe has not been managed appropriately in terms of returning it to some semblance of growth. >> what i found astounding is

that this is a company that's so obviously dysfunctional, this they get letters from people and they try to make a decision. if you go -- i went over the clarity of which they initially said that the irs was going to bless this. it was almost as if it was, okay, we talked to the irs, it's cool. david, i have to tell you, this company is not a company. it's a holding company. when it's a holding company, and they get rid of the business -- >> it's over. >> the actual business, the idea that you're standing behind ma r maies ma rrisa myer, what are y standing behind her for? >> others believe private equity would be interested, but you're disbanding the company. yahoo! in its current form ceases to exist. >> so what am i standing by here for?

swisher has a piece this is not saying we are getting rid of marissa mayer, but if you get rid of the company, do you not get rid of marissa mayer? >> you do. >> how are you standing by her. >> she's firmly against the idea, as you might imagine, of selling the core business or moving down that road. the question in that boardroom is how many feel the risk is too high to pursue the spin of the alibaba stake because it could conceivably down the road generate an enormous tax bill that may be $10 billion which defeats the economic benefits doffing it in the first place, or it trades at such a discount that there's a fear that it's not worth doing. ma marrisa may stand up and say no way, but who will stand up with

her? i don't know the answer. we may know soon, or it may be a number of days of deliberation. but it may be closer than i anticipated. >> this is a company that was worth a great deal a year ago. now we find out they may not know what they're doing in capital allocation, the regular core positions are wasting assets, and they have to get out faster than they expected. yahoo! sports, doing well. yahoo! finance, doing well. why is this the gang that can't shoot straight? >> you are arguing that the valuation of that business at less than zero is a mistake? >> yes, i think it's insane. look what verizon paid for aol. if verizon is so inclined, you

put these two together, people go to yahoo!. it's not myspace. i go to yahoo! every day. i don't know, maybe i'm an idiot. maybe that's it. maybe this whole thing is being an idiot and looking at yahoo!. okay, i'm an idiot. self-proclaimed idiot. i have it in my iphone. does that make me a stegosaurus? >> i will reserve comment. >> maybe t rex. >> >> they're not extinct. >> termite? >> $838 million in potential 2016 earnings before taxes, depreciation and amortization. if you back out the value of alibaba, yahoo! japan and the 5 billion in cash you have a core business trading 2.4 times '16 ebita. >> that's ludicrous.

>> this is the argument this board will be dealing with today. i'm sure it promises to be an interesting conversation. they will speak to mr. smith this morning, i can tell you that's scheduled in about an hour from now. i believe they'll have that conversation and then the board meeting. he wants a see the on the board. i don't think he's going to get it. he will make his arguments yet again. still considering nose other shareholders who have sent lette letters. >> max levchin is nobody i want to deal with if i'm underperforming. i had him on, i wuas worried about underperforming in my interview. >> we'll see. it's an interesting time for yahoo!. when i saw the letter from mr. smith a couple weeks ago i didn't give it credence. partly because he was doing a 180.

at first he was pushing for the alibaba spin. the fact that it was followed by other letters from other shareholders seems to have good night the attention of this board of directors. does it mean they will go down this road. >> likelihood is they don't, but you can't discount it. >> can't dismiss the story as being the story of the day, what i would come back and ask, david, when a company has belief in a ceo, they don't take these letters all that seriously. when they don't, every letter is an issue. you say they got many letters. >> yeah. >> what the heck, if you like the ceo, hey, you know what? thank you. thank you for that letter. give them the heisman no heisman being given here. >> and it's a conversation we can't have now about what boards are sharing, what they are thinking or not, perhaps that comes through the cfo or ceo. >> we had that information with the mckinsey advice, it's not a

good sign when you outsource ideas like that. >> no. all i can tell you is this a company that is either arguing we should give up and break up or we should sell. but marissa mayer, we stand by her. what are we standing by? what are we standing by? >> right. if they decide to continue the course, they're standing by her. if they choose not to, your argument is probably the right one. it's more important that we create value for a shareholder base than anything else. and we don't have necessarily the faith that you can do that. >> do the departures play a role? >> good question. i don't know. does it not feel like every man for himself there? >> maybe. >> certainly a lot of the haven't accounts from departures from people, even people still there, saying the hardest part is watching a lot of hard work going unrealized because of missteps at the higher level. >> so much could be done with

the franchise. that's why i thought that ebita -- >> put bidding group together. >> if i weren't doing this darn job, i would do it in a second. >> you'd what? >> i'd put a bidding group together. >> buy yahoo! and run it. >> yeah. i can do better than this. it's full time there, making a little money. i'd do it in a second just because it's fun. >> would you give us each a unit? >> i could probably find you the money. >> i'll take sports. >> would you take sports? >> i'll stick with finance. >> i don't know who does that miley cyrus routine that i saw last night, "red" who covers that. >> i think we just solved yahoo!'s problem. >> all done. >> super. >> mark zuckerberg becomes a dad and is is it giving away 99% of his shares what that means for facebook and the future of given. >> and why goldman has taken nike off the conviction buy

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. facebook ceo mark zuckerberg and his wife announcing they plan on donating 99% of their facebook shares during their lives. as of now that amounts to $45 billion. the company revealing that pledge during the birth of their daughter. the donation going to a fully created philanthropic organization which will focus on causes including fighting disease, improving education, clean energy initiatives and reducing poverty. in a 2200 word post titled "a letter to our daughter" zuckerberg today your mother and i are committing to spend our lives doing a small part to solve these challenges. i will continue to serve as ceo for many, many years to come, but these issues are too important to wait for you or we to get older. by starting at a young age we

hope to see compounding benefits throughout our lives. th >> this is a huge change. saluting people who are giving now. saluting people who are giving in their lifetimes, which is basically saying that idea when i die, you can have it. things are too urgent. that's no longer the case. you must give it now. i think this will inspire more giving. when you get off the desk with people from the valley, they always say the same thing, boy, are these people cheapskates. they gikeep it, they don't give away. people are honored because they're giving in their lifetime. this is the ultimate. enough of that i'm going to leave it. i'm doing it now. can i just say, man, you're

great. you're great. >> yeah. maybe you'll change the way people give. >> there was a lot of atta boys, others argued it removes some fire in the belly at this point that it marks a tipping point for at least zuckerberg and his passion to run the company. you agree? >> no, i think this is what makes you -- okay. i know that i'm not usually associated with the person i'm going to mention, but -- please take me seriously. if you read the dalai lama -- >> i'm not. i'm taking you seriously. if you read the dalai lama, who is a genius, he talks about happiness first, working a full life and do better. how can you not feel happier by doing this and then working a full life. this is actually a very big change that the dalai lama had a couple years ago, a conversion thought. this is what the ultimate --

what the dalai lama would say, you can't have -- unless you have fun and do a good life, you can't be a productive individual. this is it. look, i'm -- have i ever -- have i ever had an existential crisis in my life? am i on my fifth? >> that all. >> but the dalai lama has a lot of answers. >> it is an llc, which is interesting. it's not a foundation. it's not a charity in that sense. it's an llc, so there's not an obligation to give the money away. a foundation hasis regulated to giving a certain amount away every year. the voting stake is 61. he said i plan to be ceo for many years to come. but mr. gates is no longer chairman of microsoft. a lot of that stock went to the foundation, so they were able to

get more currency on the board. that's a long way away. he's giving $1 billion the next few years, no obligation to give a certain amount each year to the llc. it will be interesting to watch as this matures. >> sometimes you can't step back and say darn, this is great? >> yeah. >> let other people do this. yes, i make no secret that marc benioff has been on "mad money" every quarter. when i was out for our opening of our great set -- >> yep. >> i went to the benioff hospital. he opened a hospital in san francisco, doing one in oakland. i think he's trying to inspire people to give now. this is a very big change. to give now, while running a company. it's a big change. give now. some people are saying, there's going to be an overhang, absolutely. will there be? i don't know. all i can tell you is there's some things that are bigger than money. >> yeah. >> as governments are

increasingly unable do this -- >> these are the governments. >> yeah. >> the governments are dysfunctional around the world. these guys are the governments. >> we'll get cramer's mad dash and count down to the opening bell on a busy wednesday. yellen around midday as we get a clue as to what the fed is thinking in advance of draghi tomorrow.

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time for a mad dash.

what do we have? six minutes before the opening bell. >> what day is it? >> hump day. there we go. last night i did a piece on "mad money" about how all the semiconductors are flying, except qualcomm. buy the others. this morning -- the problem with qualcomm i said is they're not being paid which is always a problem in business. you do want to be paid. they signed a deal with a gigantic chinese company that will pay them for 3g, 4g, everybody will fall into line, this is the beginning of the move that the activists wanted. everybody has been koreans, china -- but this stock, if they all fall in line to start paying qualcomm. >> it's been straight down for barry rosenstein at jana. that's been ugly. this is the pacifistpacifist.

as in give me a beegating, i'll turn the cheek. >> i have not heard you say a constructive thing about qualcomm in at least a year. >> well, that was good. >> that was good. >> now i just turned constructive. this is the beginning of the deals that will be made -- call com is a buy, even up here. >> you may not be an activist, you are a constructivist. >> i like that. you can't look at twitter sometimes, when you get made fun of because you like the dalai lama, who is left? i had dinner once with bishop tutu. >> mother teresa, did you ever meet with her? >> i gave money once. they would not take the money. they said we don't do that we take the crumbs. >> one in new york she did work with. they don't want publicity, they don't want your money, they want

your thoughts and your help. >> we have an opening bell about four minutes away, nor cover on "squawk on the street." please, stay with us.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about 60 seconds. a busy day, we're awaiting janet yellen to speak. adp, jim, not bad. 217 verses a 190 estimate. sets up friday nicely? >> it does. but that pmi number yesterday -- i listened to rick. you are seeing a stronger pmi in europe, though inflation numbers are low. better car sales what are they doing? loosening. we have apparently peaked in manufacturing. pmi coming down and we'll tighten. it's ironic. i'm not against tightening, i know we have good job growth. it's ironic to see the way two

continents are dealing with this. >> that's going to be the dynamic for the next several months. opening bell at the big board. look at the s&p at the bottom of the screen. s&p has alternated up and down for 12 straight sessions. the dow begins about 118 points from 18,000. at the big board, associated capital group, and at the nasdaq, mercury systems. one headline making the rounds, jim, this report out of citi, looking for a 65% chance of recession in the u.s. next year. they say china may become the first emerging market go to the zero bound. that's making its way across general business headlines. >> yet we're seeing the transports start roaring yesterday. saw a nice rebound in retailers. it's difficult to figure domestic versus international.

for a moment i wanted to talk about autos being so strong. people immediately, well, why can't i buy ford? how can i not buy this? we got numbers out of brazil. sales of cars, light vehicles and trucks, buses, plunged 33%. this is depression in brazil. not recession. >> worst recession since the '30s. you're dealing with russia down big. china the 6.9 is ridiculous. that's way overinflated. you are seeing all trading partners with the exception of europe, though they debase the euro so much, they are all taking a hit. i don't think we are in recession, we have good job growth. but it is, again, set in motion that we have to have this hike because people feel we have to normalize, and that the window is open, whatever. i've accepted it. but there's -- the data for manufacturing, for pmi, quite

shockingly bad. >> phil lebeau with numbers out of experian today. record numbers for car buyers, and people wonder if that's the new form of housing. >> cars last longer. you have cars 12 years old. you can amortize that. people get jobs, they buy cars. i often heard about this bubble. everyone wants to talk about bubbles. if you were buying ten cars, seven cars because of cheap money, yeah, you'll get hurt. cars are the one area where you will see the rates go up, the apr when we get the fed tightening. i refuse to say it's a bubble. i'm not seeing toll brothers and car max saying you can't buy more than three cars. at the top, toll brothers said we won't let people buy multiple homes. we're not there for that.

>> no. speaking of cars yesterday, we did discuss volkswagen before the numbers came out. they were down 25 plus percent, s&p downgraded them. was it a downgrade or review to downgrade. now the germans said we consider the defeat of isis cheating over here as well. >> you were right. >> it hit a high yesterday, it was up and then reversed course. >> i thought they built a little goodwill. they built a little bit of goodwill, but not enough to go -- they tried to keep the people who are currently owners -- >> down 25 for the month. not a good month. >> no. >> that's kind of j.c. penny, tom johnson numbers. >> and abercrombie, where if you are not good looking enough you can't go into the stores. i know i decided to stop going to abercrombie. i didn't want that criticism. it was like the velvet line.

bad numbers. >> yeah. the stock is reflecting that this morning, a bit. >> chevron gets an upgrade at citi. they go from neutral to buy. guggenheim had a note yesterday go long service that oil will make its way back to 100 by 2018. not helping the -- >> you have the opec meeting. the saudis are trying to keep market share. the amount of oil that is still being pumped in the country -- the biggest month ever in natural gas in terms of pumping. and i know the chevron, chevron has been a great stock. that's the kind of thing that says you'll get an opec meeting where the saudis will say we will cut back. i don't think until the edges run off and companies can't get credit that the saudi also bas k down from 11 million a day.

>> valeant yesterday had an incredibly strong day, up 10%. lilly was up. cellgene and giliad were down what is going on? >> lilly has -- >> bristol-myers is up. >> that cancer drug is so good. these are companies getting re-rated again. they're saying maybe they got more groowth. lilly has the best heart drug, bristol-myers has the finest cancer franchise. brent saunders argued that pfizer's anti-cancer is stronger. i saw astrazeneca get an upgrade because of their anti-cancer. no one is near where bristol-myers is. no one. what a company. the only person who talks about it is not ceo, it's me. i say get on board the

bristol-myers train. no, he resists. it's like i'll be there. one of the great stocks. >> we teased nike earlier. goldman taking it off the conviction buy. there's an interesting question about nike and whether or not you buy laggardses or leaders going into year-end. these names have had a good run. >> i had a good talk last night with the people from stekechers fabulous old-time shoe guys, up almost 70%. they said it was a fools game to play this off again and on again trade with nike. it's such a great company, just own it. they were like don't trade nike, just own it. they're in awe of what nike has done. you can do conviction buy, not conviction buy. maybe it goes to 128. nike is a company to own. they conquered every tough market. i think this is a trading call.

>> you did have skechers on last night on "mad money." here's what happened last night. >> you see the prices of addidas and nike and new balance, asics out there, we have so much room to raise our prices. they're at 120 for something that we're at 60 and 70. there's so much growth area, we're been taking it up slowly. it's a comfortable way to grow it because i don't want to upset the apple cart, so to speak. >> these guys are still early innings. >> these guys talking about raising prices a lot. nobody likes to hear that. >> i said you are the only guys who can have average sale prices going up. mr. greenberg, a very humble man. he said the average selling price of skechers going up, they are cheaper. i wear skechers when i go to the club. she said you can't wear the same shoes to the club.

i'm wearing the wing tips to the club. the reason i mention this, the best selling shoe is a men's casual. the main thing about these guys, they believe in technology and their shoes. and the foremost technologist in this industry is nike. they admit that. nike is a technology xracompany that sells shoes. my hats off to the skechers guys. they say it's business as usual. people got too excited. it's been amazing stuff. >> yeah. >> they're good guys. >> all that aside, relatively muted action as we await yellen around 12:25 p.m. today. let's get to bob pisani on the floor. >> mixed open. some interesting thing going on overseas. in china overnight, unusual to see a divergence between the shanghai and the shenzhen.

you think of the shenzhen, sort of like the nasdaq, younger, tech oriented. shanghai weighted towards financials and old school industrials. the financials in the shanghai flew because of belief that there was going to be more stimulus coming. the policymak maek emakers over still sticking to 7% gdp and will have to throw everything including the kitchen sink in. and the financials did well overnight. over in europe, a mixed bag. germany has been weak, volkswagen was down 3%. they had a downgrade over at s&p. that's worried germany a bit. we had soft inflation numbers. consumer prices up 0.1%. they were expecting 0.2. the target is to go towards 2%. draghi tomorrow. everybody is thinking i will pull out whatever it takes talk, more stimulus and potential bond buying over in europe.

in the u.s., couple stocks moving. delta's numbers very good. the november stats, traffic up 4.6%. passenger unit revenue, they talked with keeping it the high end of the guidance there. delta up nicely. it's done okay this year. performed in line with the market. the other thing that's weighing is oil moving. we talked about this yesterday. moving towards $40 again. that's putting pressure on energy stocks. a bunch of new lows out there. not surprising in energy. cabot at a new low, southwest, kinder morgan, that's a new low. it's hard to describe how bad it's been this year. kinder morgan was $45 in the middle of the year. southwest was $25, $27. it's $8 now. and cabot had to be $35 in the middle of the year. we are talking about 50% cuts in the last five months in these big energy names. to give you an idea how bad the

movement has been. a lot of people do not expect anything will come out of the opec meeting that they will continue production levels. in the u.s., retailers. the last retailer to report is asce ascena. a nice move up. good numbers overall. they beat expectations. still integrating the whole ann taylor deal. the legacy comp stores, put up the sales, lane bryant, dress barn, justice, very, very mixed bag. lane bryant did well. justice had a tough time of it. still trying to right there. talk about uneven business over there. that's important. look there at dress barn down about 5%. we saw mixed performance across our portfolio. that's the ceo of ascena there. a lot of talk about janet yellen giving a speak to the economic club of washington. the expectation is they'll be

dovish on policy action. this is what everybody is passing around. she is a voter and fed governor, the new normal is likely to be characterized bay lower level of interest rates than in the decades preceding the crisis which counsels a cautious and gradual approach to adjusting monetary policy. the key word is cautious and gradual. that's one of the reasons we rose yesterday. numbers on the ism were poor, but there was a belief that it was going to be a very, very shallow glide path, to use an overused word, carl, for the fed going forward. we wanted to hear today not are they going to raise next week or on december 16th but what's the glide path going to look like. shallow is what everybody is looking for. carl? >> thank you, bob. perfect segue to get to rick santelli. >> hi, carl. there's so many things going on. the data points, as everybody has been talking about, you know, maybe we aren't going go

into recession in the u.s., but the glide path has a lot of question marks, whether you look up north of canada, japan, the rate of change in china. manufacturing is not the biggest part of the economy neither is copper the biggest part of the manufacturing economy, but yet many look towards copper and manufacturing to be an indicator of what may lie ahead around the next economic curve. two-year notes tend to price in tight correlation with potential fed policy. this chart starts around the time you were paying your taxes in 2010. you can clearly see the short end continues to build ever closer to 1%, actually, on that 2-year note. let's look at the yield curve spreads. everybody has been talking tens minus twos. the five-year fire has burned out. basically flat since february. here is something neat. let's take the chart back another ten years.

let's go to june of '05. we're not at the lowest level or the flattest level but at critical levels with that much history is very important to pay attention to. long end of the curve, close like the tens a little over four weeks. as the notion of what type of economy we're going to be living with globally and domestically seems to play a bigger role in the long end, conversely to what's going on with the fed. bunds, very fascinating. let's go in reverse time. if you look at a chart from middle of october, you can see yields are slipping to levels that we don't see often of late. but when you go back to april and see the all-time low yield seven basis points, you can see how low the 40 basis point area is, especially pre-draghi. the last chart, i could show the dollar but i would rather show the euro. we're proactive with the fed

putting the dollar up, mario draghi is pushing the euro down. this goes back to '02. we are getting back to hiss coric levels that we have not seen in quite a long time. when we come back, the debate over giving the government access to your data is heating up. walt mossberg will weigh in on that. the dow down about six points. unh the leader for the moment.

♪ still time for you to nail the number. tweet us your predictions for nonfarm payroll. you could receive a cnbc

ornament autographed by the "squawk on the street" gang. best of luck. as a reminder, adp today up 217. a little above expectations. weakness in manufacturing, jim, service is powering thing. >> manufacturing is -- look at th cummings yesterday, down 8%. i think caterpillar after a nice pu bump has to come down. alcoa doing all the right things, doesn't seem to matter. the oil and gas infrastructure down dramatically. now starting to have problems with credit. so you're seeing a dimunition. >> the hedge funds roll off, and we keep thinking we'll get these

significant restructurings. we have seen some, but not as many as expect. >> we haven't had a new refinery built in 26 years. they built one in bakken, losing money already. everything they touch turns to -- i would say brass. doesn't matter. tin, copper, rubber. there's no commodity that can hold them. kni nickel. >> i understand. i get it. >> this is the second time you got me. you got me with the dalai lama. >> i love the lama. >> i like you assess me for who i am. >> you got that going for you. >> i'm in the present and mindful. >> mindful- >> just mindful. >> don't tell me you meditate.

>> yes. >> when do you do it? >> i do it before i go to bed. >> that a good time. >> meditate on this, united an american airlines are in the top six or so the biggest gainers today have double digit year to date losses. >> oil down here, the numbers will be terrific. spirit air coming back. these companies are adjusting to a stronger dollar. that hurt traffic. i think people were surprised at american airlines, usair smoother than they thought. my favorites are southwest and delta, but i'm jumping and saying spirit, down a tremendous amount -- he was on "mad money," came back and did a do-over. bill miller, a great fund manager, came on squawk and said these are the cheapest stocks he's seen in a long time. i agree. travel is strong in this country. travel is strong. >> yep. >> it is.

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it's time for cramer and stop trading.

>> i pulled up with bobby coda yesterday, the more i realize it's not star wars that will be the big game, it's call of duty and black ops iii. i think the numbers will be extraordinary. that's my number, not bobby's. that's going to be the gift. i think people have to recognize that franchise, like the grand theft auto, these are monster franchises. we don't talk enough about this industry. activision has the movie of the holidays. >> you see tiger woods presser yesterday about what he's doing as he's trying to recover? >> no. >> video games. he said i've gotten good playing video games. >> black ops 3, my nephew said the darkest thing ever, which is what he's looking for, gamers love it. the guys who are really gamers -- you're giving me that look again? >> i'm not giving you the look.

i'm not familiar with the shooter games as much as feifa. >> dalai lama and call of duty don't really go together. i'm playing c.j. anderson for football. i got that there the roto world guy. i'm covering sports, finance and entertainment. >> what will you cover tonight on "mad?" >> we have jeff immelt. general electric. talk about the digital economy and industrial, how he's the fastest growing industrial company on earth for organic. and manny chirico. pvh has been under pressure because people say the weather is no good. these two guys will tell us a lot about the economy. you can listen to yellen, lockhart or cihirico and immelt.

>> ge in the top seven of dow components for the year. >> fastest organic growth. >> jim, we'll see you tonight. >> love the show, guys. the full bredth -- i don't know. >> i'm not sure either. >> coming up, what a new ceo has to say about mark zuckerberg pledging to give away their vast amount of wealth. nasdaq hitting a four-month high going back to august 5th. we're back in a moment. good.

welcome back to "squawk on the street," i'm carl quintanilla with sara eisen, simon hobbs and david faber. a lot to watch today. yellen at about 12:30 eastern time. flash cpi in europe. watching airline traffic numbers. yahoo! in the news. oil helping some of those airlines back to 41 and change. >> the road map for the next 60 minutes. mark zuckerberg and his wife welcoming their daughter by

pledging to give away 99% of their facebook shares. we'll talk about what it means for facebook and zuckerberg's role as a leader. >> and the latest on yahoo!. rumors swirling about the future of marissa mayer. >> and semiconductors on track for their sixth straight day of gains. find out why chip stocks could be breaking out. fed chair janet yellen delivering remarks to the economic club of washington, d.c. later today. of course tomorrow she'll testify before the joint economic committee. steve liesman is back at hq. this is it now, steve. the key messaging on what they do after the rate rise. >> i think that's the way to think about it. janet yellen should make the case for the fed's first rate hike in almost ten years at her speech today in washington. she's not expected to say rates will rise, but she'll likely paint a portrait of an economy more than likely to sustain some

hikes. she probably won't front run the committee, but express the general consensus that rates will rise this year. it's telling that the most outspoken doves on the committee seem to be arguing not so much that the fed shouldn't hike but raise rates slowly thereafter. this morning's adp report suggesting strong job growth coming this friday. at the least it's unlikely that the government report on friday will be weak enough to deter the fed. adp said private sector gained 217,000 jobs, rephrased up the october report. decent goods job report there, and strong service employment. atlanta fed president dennis lockhart earlier this morning saying there's a chance that the upcoming fed meeting will be histori historic. he says the case for liftoff is

compelling, the criteria has been met, and the factors suppressing inflation are transitory. the big issue for yellen and the fed are the downturn in manufacturing, how long will it last and the surge in the dollar. but these are not seen right now as likely to deter the feed. we may be in a world where incoming data if it's weak or strong is processed by the market when the second rate hike will come, not the first. >> very good. a lot to talk about there. markets reversing some earlier losses. dow sis up 5%. t's talk about these numbers. art, we have a double dose of yellen, we have mario draghi in a decision tomorrow, and the jobs report on friday. it will be an exciting 72 hours. what's the best strategy going into it if you're a short-term

investor? >> if you're a short-term investor, a couple things are clear. this is a market that's resilient. we have as much dad news as we've seen in november. we will a bad ism manufacturing number yesterday and yet the market plows through that. you need to stay the course in you're long equities. three reasons for that the fed will lift our for the first time in a better part of a decade in december. the path forward will be gradual, i think. the s&p 500 probably earns $125 next year. if you put the current multiple on that, you have 8.5% upside next year. i think we overextended the dollar and yield on trade. that's been the biggest head wind for folks. >> a bullish view there on the stock market next year. first let's start with the next 48 hour source when yellen speaks at the economic club of

washington after noon today and then to congress tomorrow. to steve's point, how does she thread the needle between setting up expectations force an interest rate hike in december and weak data in manufacturing? >> i think clearly the fed rate hike in december is pretty much a done deal. the markets are priced for an 80% probability. i don't think she will do anything to change that perception. if anything, i think she will hammer down the message that the earlier the fed starts, the more gradual they can be. her focus will be on what we call the new neutral at pim co, where the fed funds rate is lower than in past cycles. the path as was told to us yesterday will be very gradual, and the fed will be cautious

social security p despite the first hike in december. >> what was interesting to watch yesterday, we were sitting here when that ism manufacturing number came out, very weak. you saw reaction in the stock market but it climbed all the way back up, almost to the highs of the day. does this tell you how the market will react to bad data? does the new group think that the fed will raise rates in december, but if the results are mixed, they won't move much beyond that. >> that's an interesting point, but you want to look at fact that ism manufacturing data covers about 17% of the data. and you want to look at the jobs data. you want to keep a closer eye on what the fed is look at versus some telltale signs. ism manufacturing in contraction has predicted 10 out of the last three recessions. it's not great predictor of

where the economy is going. >> you know, fascinated about where you think the markets will, you describe them at resilient even though we only had a 2% gain in the s&p 500. to think next year will you get an 8.5% return, a lot of the big houses are demonstrably more cautious now about what will happen next year, particularly in the second half of the year. how do you square your optimism with their caution? >> simon, very much like we talked about in the past. it's oftentimes intellectually stimulating to be negative all of the time. we hear a lot of that. the major concerns we see as headwinds in the economy and for this market at some point in time will dissipate. the strong dollar has its

limits. the die ververgent monetary pol will have limits. we're forgetting things like u.s. auto industry -- >> the view is that that's going to peak. that's parent of -- i understand your view that journalists and tv are often negative, i get that's your view, but these are houses here that are in it for their clients and getting it right. >> the view that the auto industry would peak was, well, and nobody expected it to be doing what it's been doing. i'm saying that there are more tailwinds than headwinds in the u.s. economy. earnings are going to continue to grow. if we continue to dwell on the negative we'll be like those people who have been out of the market for the last five years, missing another significant year. unless and of course you want to

be in the ten-year, which is going to be something like 2.5% in the middle of next year. that's fine. that may be a safer place to be, but my contention is the s&p 500 earned $125 next you're, put the multiple on that next year, get a return of 8.5%. >> how is pimco playing the big monetary divergence which looks to start in december, and the theme that the fed goes one way and everyone else goes the other way. >> i think this has been a theme of ours all year. you see it playing out in the fx markets. we continue to think the dollar can strengthen further. we have seen a big move already but we think it has further to go, especially against the euro and those asian current rcurrei.

that's the boast wboast w we also think that bank bonds in europe can do well in this environment, where the ecb is still easing, while the fed is embarking on what we think will be the most dovish rate hike we've ever seen. >> so, just to confirm, you expect a big surprise on the easy side tomorrow from mario draghi? >> not a big one, but he'll want to surprise positively. that's his strategy, yes. >> the dollar continuing to rise this morning. thanks for speaking on all big themes for the next few days. when we come back, mark zuckerberg and his wife pledging to give away 99% of their facebook shares over their lifetimes. will other executives follow suit? we'll talk about that when "squawk on the street" comes right back.

♪ >> the holidays are here in new york city. you're looking at a live image now of 30 rockefeller plaza where the christmas tree will be officially lit this evening, 7:00 to 9:00 p.m. is the special ceremony. tune in to nbc to watch it live. a worldwide symbol of the holidays in new york. the tree is lit until january 6th. >> let's hope the rain stops before then. the season of giving is underway

with mark zuckerberg and his wife dannouncing they plan to give away 99% of their facebook shares during their lives. could this be another testament of his leadership skills? joining us is jeff sonnenfeld and bill george. good morning. >> great to be with you. >> bill, you called this stunning, historic, yet people still have questions about this llc structure. what do you make of that? >> i think this is historic. no person this young has given away 99% of such a large amount of net worth. it could have a huge impact. he has a long-term view of curing disease, education,

connect communities, inspiring, idealistic. the llc gives him a chance to go beyond just giving money away as a 501 c3 and influence policy. it's clear he and priscilla want to influence policy in clean energy and other area. he's matured rapidly since he founded facebook. >> jeff, this structure does show that maturity. do you agree. >> i think the good news overwhelms the complexity of the structure. there's an important message in the structure, i hate to disagree with bill, but i will. bill comes from a city of

philanthropy from the corporate sector. in minneapolis this would stand out there. for silicon valley, astoundingly so. a lot of the press has gotten it wrong a bit by suggesting this is unusual for this generation. for the millennial era generation. this life stage, this young, regardless if this is baby boomers or the bobby socksers, but this kind of philanthropy is rare. the great dynastic world happens in later stages. the rockefeller money came from john d. rockefeller, he was giving dimes away. henry ford followed in his wake. carnegie, andrew carnegie, his money in the final years of his life, he gave away 20,000 church organs, 3,000 libraries. they all came at the end.

even gates and buffet. it was quite late. ted turner had to provoke them. >> bill, i wonder if it's a function of as jeff is suggesting that technology and the fact with social media you can make so much money so young as a programmer or however you term it or it's about a different generation that sees the importance of living their life in balance and giving back as they go, which is what i would experience talking to tech entrepreneurs in new york, then i read the notes for the interview, and see you meditate for 40 years, and meditate for 20 minutes before you get on board every flight. is this a generational thing or a technology thing? >> i think it's a generational thing. i think the millennials are very focused on giving back. they looked at a lot of the baby boomer generation as more focused on themselves and building up wealth. and maybe giving it away later, maybe not. i think this is going to

influence a lot of young entrepreneurs to give away a lot more money. but the more significant thing, simon, this is going to be the driving force in creating social change over the next two to three decades. we found the stalemate to government, particularly the united states government. business has done a lot of good work. it has limitations from the investment community. we'll see philanthropy become the driving force. >> but why, bill? this is an important question. why should individuals be able to succeed where governments or multinational organizations or charities have been unable to succeed? if you look at the gifts they already made, i think zuckerberg himself would admit they have not been executed terribly well. >> well, i can tell you, my wife and i decided to give away 90% of our net worth about ten years ago. it's hard work to give it away thoughtfully. this will take a lot of work.

we're pikers compared to zuckerberg. this is a huge amount of money. they will spend a lot of time and have to have skilled people. one of the people on his board, sue desmond, she is a wise person. i'm sure she'll be advising mark about how to create the llc and manage it. he has a big job to do, a family. i think there's a lot yet to come. i'm eager to see how many people will sign up. give credit to bill gates and warren buffett for what they've done. i think it will create great societal change, but it's a targeting thing, where governments spread the money all over in this case, the zuckerbergs can target their money and say where they want to go. yes, there will be money like newark, which didn't produce much, but you've got to have failures, too. >> jeff -- >> yes? >> i wanted to bring up another point here, which is much less talked about than the 99%

headline, that's the fact that mark zuckerberg is taking a two-month paternity leave. is he setting a standard here as well when it comes to maternity and paternity leave which we are so far behind as a country? i think california is one of three states that offers paid maternity and paternity leave. >> that's a great question. this is a different mark zuckerberg than we saw three years ago. at the time of the ipo, i wrote a tough piece on his leadership style that was a cover piece for the "washington post." it was called "year of the dragon" which was the year 2012. he had a very insular autocratic style as he stepped in there. perhaps learning from what he didn't like about steve jobs in the late career. steve jobs was never celebrated as a great father let alone as a great philanthropist.

probably nobo zuckerberg speaks to a different era of business leaders. business leaders as folk heroes, present as common origins, sweeping visions that transform their businesses and the way we live and work with, but also want to have social impact, from henry ford to people in the current year, ted turner, they want to show they're having driving direct impact on the personal model they set as a father and philanthropist. it's an important message that he is trying to show he's not defining his impact through the walls of facebook or through their customers. here's a guy who took over. he had less than a quarter of the ownership of the company, yet he had 60% of the control. he wasn't going out on ipos, road shows. he was sending out these videos of himself, watch that, wearing the hoodie and was disdainful of taking other peoples money, which he did. look at accountability he shows

now. >> i think your important about him being serially underestimated is well taken. if he can -- >> i agree, carl. i think we should also say that he's been influenced by cheryl sandberg as well. >> sure. >> cheryl and his -- >> we got it. >> the board. >> you guys are too good together. that's the problem. thank you so much for your time. >> thank you. >> more of a dinner party than an item of a show. coming up, the storage war for oil is on, and companies are finding new creative ways to store crude, like salt caverns. we'll look at that after this. is your christmas tree missing something special? let us add the finishing touch?

this cnbc ornament. all you have to do is guess friday's nonfarm jobs number. you have to be at least 18 years of age to enter. sorry, kid.

this country has so much oil that the hunt is on for more places to store it for now. morgan brennan is live in houston with more on that. good morning. good morning, simon. look at this rig behind me. it's drilling down to an existing underground salt cavern that stands 750 tall. almost as tall as the woolworth building in new york city, but under my feet. when this comes online, it will hold almost 3.5 million barrels of oil. this is one of three caverns that are developed by privately held fair way energy partners that will hold up to 10 million barrels of crude oil with plans

to expand that to 20 million. >> we are activeliy leasing the capacity, we have a competitive cost advantage that we're trying to exploit as much as we k and offer a much needed service here. >> so, salt caverns are typically the least expensive way to store oil. that's one reason that fairway expects this to be profitable, even if storage demand falls in coming years. but fairway is not the only company plowing money the gulf coast energy, some more examples are phillips 66 doubles capacity to 16 million barrels at its texas terminal. in louisiana, hazelwood is planning a $400 million storage

and blending complex, and enbridge will build three oil terminals which will enable the more import and export of oil. these are still months and years in the making but underway at a time when we are seeing storage capacity across the u.s. and the globe beginning to tighten. just how much in the u.s.? we'll find out in a few moments when the eia releases its weekly inventory numbers. a lot of energy infrastructure investments here in the gulf coast, including these salt caverns underneath my feet. >> becoming a big business in the country. morgan brennan, thank you very much. straight ahead, yahoo! considering a sale of some of its businesses, and rumors swirling about the future of ceo marissa mayer. the stock is up 6.5%. david faber has all the latest details when we come back.

. welcome back. i'm jackie deangelis reporting from the nymex, a build up of 1.8 million barrels, almost 1.2 million barrels higher than last week. traders were expecting to see a decline. they were expecting a million barrel decline because refineries are using more product to make product, but we got a surprise build on our hand this sending prices under the $41 mark. the session low, 40.90.

we have not broken through that. bearish factors continue. the strong dollar continues to be a problem for all commodities. the dollar index close to march highs. opec on friday not expected to change its stance on output that could send the prices under $40. sue herera, over to you with the news headlines. here's your news update. secretary of state john kerry holding a news conference at the nato meeting in brussels. he says nato members are ready to step up military efforts against the islamic state. he welcomed nato's invitation to montenegro to become a full member of the alliance. david cameron opening a critical debate on whether great britain will start air attacks on syria. and donald trump remains on top of the republican presidential field with 27%. that's 10 points ahead of marco

rubio. ben carson continues his slide down to 16%. on the democratic side, hillary clinton leads bernie sanders 60% to 30% in head to head competition clinton beats trump 47% to 41%. chinese environmental experts are attributing days of thick smog in northern china to increased use of coal and industrial emissions. the number of polluted cities in that country has risen to 37. david, back to you. thank you very much, sue herera. one important meeting of yahoo!'s board of directors scheduled to take place not long from now, in which the board of directors will decide whether they want to continue on the current course, a plan to spin off yahoo!'s 384 million shares of alibaba into a separate company that will be distributed into shareholders or reverse course and consider selling the core business of yahoo! leaving behind those shares in alii li

and the cash they have at hand. that seems to be the plan begun by jeff smith who in a letter dated november 19th to yahoo!'s board said we no longer favor the spinoff of the alibaba stake into a separate company because of fears that it will not be deemed to be a tax-free transaction by the irs. a number of months back, the irs declined to issue a private ruling saying that that spinoff would be ktax-free. many consider it is a tax-free spin but it's the risk that the irs will come back and revisit the transaction and say it's not that shareholders are concerned about. they believe if the spin takes place, the shares in question will trade at significant discount to the face of alibaba shares. they also believe if it takes

place, mr. smith will mount a poxy fight against the company. the deadline for doing so is not until the spring, and introduce a lot of different dynamics that will not be good for the company overall. so that board of directors, according to numerous sources close it, is actively and seriously considering whether or not to pursue a course that would include the sale of the core business. how likely is that? perhaps less than a 50% chance. those who are aware of their deliberations are thinking tell me nonetheless it is not a slight chance to say the least. there's a look at that board of directors. it may be growing a number of share holders have agreed with mr. smith's contention which is in his november 19th letter. a number of large holders have sent letters to the board over the last few days, and some members of that board believe, they do need to consider whether or not they create more value by spinning off a business that by

most people's measurements is valued at a low multiple to its earnings before interest, taxes, depreciation and amortization. perhaps as little as two times of what it's expected to have in terms of ebita in 2016. the idea being if it were sold to private equity, telecom company, it would garner a much higher price tag, and it would have a tax bill of $1 billion, but would have the rest of alibaba, that alibaba stake, the japan stake and cash left behind which could be successfully distributed in a tax-free manner. hence creating more value, also, guys, having yahoo! disappear in a sense unless it was simply a transfer to private hands as an operating company. perhaps sold to another company. >> on a balance of risk, the way you laid it out there it's a no-brainer. if the value is in that stake and you're worried it will be

destroyed by the tax man, you'll hang on to it and keep spinning out the bit that she promises to turn around. >> that's the question, whether or not she can successfully turn around the core business and how much support she has in the board for doing that. to your point, most people believe it will be treated as tax-free. most board members do but they have started to consider this risk, even if it's 90% chance, it's still too much risk. >> the judgment that the irs is going to make, is the key question, as you look across the board you wonder how many people have that detailed information. they have to take the opinion presented to the board do they not. >> but the opinion presented to the board from their lawyer who said this would be treated as a tax-free transaction. that's the opinion they have, but they're getting bombarded by a number of shareholders who say the irs is changing its tune, the tone has change, how it will consider whether an active trade

or business will be part of it, and what the business purpose of the spin is key, and therefore the risk has grown. >> i don't get what it's worth. even with today's 7% rise, the market cap of this company is almost 32 billion. isn't the alibaba stake worth 30 billion? >> you have to assume the discounts conferred to it regardless. when you add up yahoo! japan, the stake there -- >> 8 billion. >> and cash, you get a number not far off of 32 billion, hence the underlying core business not being valued at more than 1.5 billion, $2 billion. >> besides yahoo! everybody is talking about mark zuckerberg and his wife's decision to give away 99% of their facebook shares, but there's a question of the initiative structure. we have more explanation of this idea of llc versus charitable foundation. >> mark zuckerberg is innovating

in philanthropy, but some have questions about the structure they have used to transfer their wealth. zuckerberg is not giving 99% of his wealth to charity. he is pledging $45 billion in facebook shares to a new private llc. most billionaires like bill gates or warren buffett, when they give to charity, they give shares or money to a not for profit foundation or trust. why would mark zuckerberg do an llc? one could be disclosure, lobbyin lobbying and investing. according to filing the company will participate in policy and shape debates. not for profits are restricted in how they can invest money to make sure it's in keeping with their charitable mission this llc is free to invest in

anything and it expects, in fact, to earn profits on those investments. foundations have to give away a certain amount of money every year and disclose the gifts and activities in public filings. this llc can remain totally private. why don't most people use llcs? you don't get the income tax deduction, but zuckerberg's income, i think last year he made a nominal salary of $1. that's modest compared to his total wealth. he's giving up a small income tax benefit in turn for more control and less disclosure on how he giveses aw aces away his coming up, why those packages you ordered at cybermonday may get refused at your building's mail room. recommend synthetic over cedar?u

"super food?" is that a real thing? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.

welcome back to "squawk on the street." check out the markets overall, relatively flat, but one sector, energy, moving decidedly to the down side. this as oil prices fall on rising stockpiles dragging the energy sector down on names like kinder morgan, oneok, cabot oil all down. >> dominic chu, thank you very much. let's get over to rick santelli at the cme group for santelli exchange. >> we're gearing up for something, that's for sure, i think it's more like the movie

rocky n th rocky, in this corner, you have janet yellen, in this corner you have mario draghi. >> it will be fun, the great divergence. in three hours janet yellen will give a speech, testimony tomorrow. and draghi will have his press conference tomorrow. in 24 hours it should be clear we have more qe coming out of europe and we'll cut rates here. rates in europe and the united states will move in opposite directions for the first time in a long time which is being dub t dubbed as the great monetary divergence. >> out to seven year, it's been out to nine-year in the euro curve before, over 40 negative in the two-year in a euro note. if you wanted to intentionally create negative pricing pressures, deflationary pressures how would you do that? this is a great question.

the economists will differ on it. i think the act of creating negative interest rates creates deflation. i think it sends a signal to the marketplace, negative interest rates means negative prices. this is key in a twilight zone world, if everything was normal like the '05 economy but you wanted deflation, you would lower rates to negative to accomplish that. let's fast forward to the world we're in. they want to create inflation, but they keep in essence pushing rates lower, part of that is the market's assessment of the global economy. is that a little perverse? >> it is what they're doing is by pushing rates negative, they're artificial, so people don't trust the rates they see. they're afraid it's a market signal to them, negative rates means inflation and they adjust behavior accordingly. that's why after seven years of this experiment we have no inflation, we have no growth. maybe if the fed starts raising rates, they're going to get the opposite effect.

however, we don't know what the effect is going to be on financial markets with the central bank of the united states going one way and the central bank of europe going another way. the effects that will have on money markets, corporate bonds, sovereign debt is still a giant unknown. maybe it works out fine, but it's a big experiment. >> the biggest market in the world, foreign exchange. i'm a simple guy. meat and potatoes. to me, that great divergence will put the dollar in a camp to be strong for quite some time. your thoughts? >> i think you'll see a strong dollar. unlike last spring, when we had what was called the crowded trade where everybody was betting on a stronger dollar, you're not seeing that to the extent -- >> at that point in time the first part of normalization was still highly contested it isn't in the market anymore. >> that's right. so i think the dollar has some room to strengthen. and that's going to be a negative for corporate earnings because of how much they get

from overseas. >> jim bianco, always a pressure. simon hobbs, back to you. >> it getting more and more historic. it might feel forever, but it's only two days since cybermonday, now millions of mac ca packages are out for delivery. some landlords are saying no more. diana olick has more on that. >> black friday and cybermonday adds to millions of packages flooding into apartment mailroom packages like this one. as early as yesterday the loaded carts were rolling in. santa's sleighs have nothing on u.p.s. this year, but this is posing challenges to landlords. the number of rental houses has been soaring with little letup in demand.

apartment construction has been s soaring and camden property trust implemented a controversial no package policy at most properties. they said the package glut was costing them almost $3 million a year in lost productive. the it was met with complaints from drentsz but not enough to change the policy. >> no, we do not have evidence that anyone has moved out because of this. we had a few residents tell us they plan not to renew their lease, but any time you make a change to policy you run the risk that you do upset some residents. >> or landlords and reits are using high-tech to deal with the high volume in this building they're using an app which was originally designed for paying rent, now it can alert you to packages. at another building, monogram is using high-tech lockers. we'll show you how they work

coming up on "power lunch." this morning on a poll on twitter we asked if you would live in a building without package services? 83% of you said no. sara what do you think? >> interesting take. thank you very much. up next, semiconductors have been on take tear recently. up more than 3% in just the last week. which chip companies are the best bet, and what is behind the rally? more on that when "squawk on the street" comes right back. here at td ameritrade, they love innovating.

and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.

are chip stocks breaking out? the smh semiconductor etf has risen more than 7% outpacing the broader market. within that applied materials is up 11%, intel up nine, xylnx up 8, all within two weeks. on the phone stacy rasgon. the ranked number one semiconductor analyst. should we be buying here? >> that's a good question. i think the reason the stocks are up -- we just got through

earnings. i would say by and large things were not all that great, but they were not as bad as low expectations. i think broadly, particularly in industrial and automotive markets where people have been worried about slowdown. in general the commentary on end demand was reasonable. it was things are not good, but they're not falling off a cliff, and at this point i think that was probably enough until we're seeing some of the stocks rally off of that. >> i was just going to mention, stacy, qualcomm. the stock is up 7%. though it is still down about 30% so far this year. it has this new licensing deal. john fort was trying to explain it to me. what does that mean? what's the significance? >> yeah. so qualcomm has been having difficulty collecting royalties in china, and you probably know the bulk of the profits comes from world collections on smartphones and other types of devices. they've been having issues electing in china. they settled with the government

about eight months ago, but ever since then the customers have continued to negotiate. any prospect of them signing new agreements under the new regulations in china i think are taken as a positive. the question in my mind for china, though, is not so much is qualcomm going to get paid from china, but rather, how much is china actually going to pay qualcomm. as a china royalties come in, they're actually coming in at a lower royalty rate, and so that's going to be the ultimate question is tcl and et and some of the others that signed recently, we want to see where earnings go. >> we're rapidly running out of time here. i want to let you run free through the space that you analyze here. if the message is one of broad stabilization, in that environment, who does best? these are very different chipmakers as you look down the list. >> absolutely. i even think the question of stabilization is still open for debate. if you listen to the industrial income customers, they don't all

sound that great, so far it's not yet showing up broadly within the semiconductors, but that's going to be the controversy as we're moving out this year and into the early part of next year. >> i just want to ask a final question. i'm asking from one of your competitors here, credit suisse. they did a survey of what people wanted the ceo's to do with cash. they said they wanted them to reinvest in their own businesses. credit suisse says are we seeing a sea change in the market, what people used to want to see, and, for example, intel becomes quite a rare commodity because it's one of those companies that is reinvesting, for example? what would you say to that argument? >> absolutely. i think investors like to satisfy cash return, but at the same time semiconductors are built in innovation, and if that slows and companies are no longer invising many their businesses, that will be good for a near term, but horrendous in the long-term. some investors are taking a longer term message.

>> thank you for your time. stacy rasgon, ranked number one in semiconductors. well, now let's send it over to the after mentioned john fort with a look at what's coming up next on "squawk alley." good morning. >> good morning, sarah. we're going to talk yahoo. what does that mean for that company's future? also, you might have heard mark zuckerberg giving away 99% of his wealth. not exactly. we'll dig into what is going on there. finally, drones for the holidays. a lot of them are going to sell. not clear what's legal to do with them, though. all that and more coming up on squawk alley.

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