now. >> live from new york where business never sleeps this is squawk box. >> becky and andrew are out today. let's get to the markets as we're less than a week away from the big fed decision. the u.s. futures are in positive territory. right now the dow would open higher by 40 points and the nasdaq by nearly 17.5. european markets also in positive territory for this hour. germany and france and italy are all higher and a far more indecisive one over there. those are up 10% after the company increased it's debt reduction targets and announced more cuts in capital

expenditures. we're showing you the asian markets there. let's show you what's going on with the asian markets overnight. nikkei lower by 1%. hang seng lower by .5% in shanghai. let's see oil. $37 barrel. brent is back above 40. $40.17 higher by 6 cents at this hour. >> with that in mind, chevron slashes it's budget by 24% in the midst of what's happening in crude. chevron says that it's aiming to control spending in the wake of a more than 50% drop in the price of crude over the last 18 months. the company plans to spend 26.6 billion next year around the world and the bulk of that spending on international oil and gas projects. shares at this hour not indicated. you can see they're in the middle of the 52 week range.

bargain hunting has already come in to a lot of these stocks. this has one of the highest yields. >> you know i have an obsession with chevron. >> exxon is quite a bit lower. >> it had gotten up to 6%. we're not allowed to own stocks at cnbc, individual stocks. >> what? >> but, you know, i build portfolios in my mind of what i would like to own or not own and boy i'd sell that and chevron is an obsession of mine. 6% yield. come on. >> i have to make a phone call here, no stock. >> no individual stocks. we're allowed to own mutual funds. >> the ceo of chevron this week also had reassuring words about the dividend. >> they have to say that. >> the big oils are in the business of just distributing dividends. they're not looking for oil anymore in a big way.

>> i remember paying $1 for a gallon of gasoline. i sound old. i remember when. dow chemical and dupont could be announcing a potential merger deal as early as this morning. we're waiting for the official announcement. both sides in advanced talks and would change the landscape of the chemical and agricultural industries. investors cheered the possibility yet with big moves for both of the companies. this morning doesn't look like a lot of action in the premarkets. >> the world's largest retailer announcing the launch of walmart pay available through the walmart mobile app. the goal is to make shopping faster and easier for its customers. they will begin rolling out the features this month. the nationwide launch they want to complete that by the first half of 2016. 22 million customers actively

use the walmart app each month. and -- >> have you paid for anything with a phone yet? joe? >> no. >> this is a big important step for -- >> have used a phone on amtrak. >> to check in. >> yeah. no, for your ticket. >> okay. >> it's got one of the things. amazing that there must be an infinite number of those and i have used it for a boarding pass but i have not -- have you used it? >> no, i haven't used walmart pay. i use it for starbucks all the time. just flash the phone. >> you use it to get gouged at starbucks. >> i do. for flat white. >> higher prices as coffee has plunged. >> isn't america great. >> yeah. socially responsible. >> it's not demonstrable to me

that it's that much faster. and i wonder if they like that you don't have that much change to give them. >> the point i was making is once you have that kind of payment system atwal mart it spreads much faster. >> remember that was a scene, alec baldwin. >> he was mad. >> there was a scene a couple of years ago. >> they made the coffee wrong? >> hard to believe. >> there's a brad paisley song about this? about how tough it is to be a celebrity. >> how do you know that? >> i've seen brad paisley in concert. >> great guitar player. >> fantastic. he was on the show once with me. >> wearing the hats? >> yeah. >> there's a way to wear the hats that you don't look quite as dorky. >> no, he hooks fabulous. >> easy girl, down. something about if you get ill from mexican food it's even worse, isn't it?

after falling ill after eating at the same chipotle. i'm starting to think it almost sounds, but it's not, it almost sounds like wow i feel sick. someone on a plane, if they serve fish, remember everybody gets sick. if one person gets sick it's like i had the same fish i'm sick. but this is not that. now it could be norovirus which is even more discussing. more than 120 students have reported symptoms consistent with the norovirus and the post player on the public health commission also confirming the presence of norovirus but only 80 confirms cases. we'll be hearing from the ceo about the growing scandal. the stock has suffered. at first it was the e.coli outbreak in the northwest and i'm not going to be right on this, i know, but for me, you know, nobody can have any preservatives anymore. it's got to be all natural so you're getting this stuff that god knows what's growing on it because it's so politically

correct. >> organic, et cetera. >> that's always bad to have something that kills germs. oh no. >> and a lot of people about non-gmo ingredients which doesn't make it healthier. >> what if there's a way to make it so that whatever you're using is resistant to norovirus in anyway? is that a bad thing? crazy world. >> you're going to read this. >> whoa. >> probably should take off -- if you're going to start being an anchor, you need to take off your jacket. >> do you think so? >> eventually. >> i assumed it was a union thing. >> no unions here. >> i thought i was going to wait for some official -- >> that's the next building over there. >> you get her all. >> the unions built the middle class in this country, you know?

maybe you're just talking public unions. >> i don't think they should exist at all. >> i don't want to get you started. >> let me get to this, a couple of stocks to watch this morning, shares of first solar falling after the company released 2016 revenue guidance that fell below estimates. they expect to spend 300 million more to 400 million more than in 2015. and shares of mens wearhouse not looking so hot this morning. company taking a $90 million charge for its failed investment in joseph a. bank. sales are down 45%. >> that stock is getting hammered. holy smokes. >> not going to like how that stocks looks, right? >> and the former ceo is he sitting around saying i told you so. >> he has given interviews to that effect basically saying not

necessarily enjoying the pain but he's not surprised by it. >> let's check on the markets this morning. as we told you the futures are suggesting a positive open. the dow would open higher. 47 points the s&p by 6 and the nasdaq by nearly 19. europe was marginally higher. flat across the board. and that remains the case. let's call it flat. germany, france, ftse, italy, spain, all of them hovering around the middle. nikkei was lower by more than 1% last night and shanghai was lower by .5%. the price of oil, 37.06 for wti. brent at 40.16. call it flat this morning. the ten year yield. i love the yield curve. let's see what -- 2.22 is where the yield sits when you look at that chart. just rotating around that 2%. i was on there right now. >> 110 earlier. >> really, wow, so much for that

parity call. 109 for the euro right now. 121 yen. just last week we were at 105, right? >> yeah. >> 110 this morning earlier. and the price of gold is lower by $5. joe. >> all right. the major averages have been down five of the last six trading days. three in a row. here to take us inside the markets miserable mood he's also a cnbc contributor and matt smith is director of commodity research and i feel for you dennis. and there's times that i think you ought to just -- when you identify a trade in crude you have to let it go. for awhile i think you said buy for a second and then cancelled that and i watched it go up and i said i bet he wished he didn't cancel it. it's just hard -- it's been a downward trend that you could have stayed in.

>> no ifs, ands or butts about it. should have stayed in. i still think it's going lower. i wish had paid more attention to the one thing i called everybody's attention to which is the term structure. how is it relative to the deferred future's trading. we're seeing it get wider and wider and he's going talk about what's going on there but as long as crude is bidding for storage and there's an abundance of crude. as long as the saudis continue to say we're going to defend our market share, any bounces that you get will be shorter. >> you do need to explain that. so how does the widening spread -- how does that mean that people are bidding for -- >> crude is related -- crude is for storage. >> are you going to talk about that? >> dennis and myself were just talking about that. >> you must have been.

>> what are you looking at? >> two things. inventory is a crazy high at the moment. but also there's a bunch of ships, a bunch of vessel -- >> bunch is a very technical term. so there's 54 vessels off the u.s. gulf coast hold 31 million barrels of storage. so you have it offshore as well so we're talking about the term structure in that if the prices 12 months out were $15 higher then it would incentivize putting crude on a ship and selling that 12 months out but that isn't there. >> what is it? >> i was well below sort of $10 or something like that. >> can i just make sure i

understand? so if i want to buy crude right now today delivery very soon. it's 37 for wti. but if i want to buy it a year from now, six months from now, it's priced at 45. >> and it needs to get over 50 to incentivize it being put on to that ship and sold forward. so you just have too much crude at the moment. it's pushing that price down lower here so there just isn't -- there's a glut now and it's just -- the prices aren't going to rise going forward there. they're not incentivizing it. >> after all of this we know there's no inherent value for barrel of oil. it's today's supply-demand dynamic. that's how you set price? and it can be worth a third of what it was. >> the saudis made that clear last week when they called an end to opec. that's what ended up happening. opec is now just a visit to have

y -- visit to vienna. they said you price this stuff. we lost our capability. >> if it's surveillance my and not demand -- >> it's a supply of soybeans, the supply of cotton is high. we're producing large amounts of agricultural commodities and large amounts of copper and iron and steel. and a strong dollar. >> could it be demand issue? because the story in crude has been wow we have this huge increase of supply in the united states that nobody predicted. so here it all comes but has that happened in wheat and copper. >> you had a commodity super cycle. this massive investment boom relating to emerging markets so you had in the last 15 years or somewhere like that everywhere

arno around the world. >> to similar ideas. >> there are huge amounts of palm oil being produced. >> really? >> it's the same process going on. money has been cheap. land has been put into production. supply increased. >> you don't mean they actually frak palm oil but you mean you can get a lot more than you used to. >> all of these things in the past would have been wow what a great time for financial assets. could have kept rates low and would have been no inflation instead the market goes down. >> it still does not make that much sense to me why -- tumbling crude oil prices. >> we always say sind kait coul it globally. >> demand is really strong but you are seeing slowing coming through from china and that from copper to zinc but in terms of oil demand it's super strong for gasoline here in the u. s. we're knocking on the door of $2

a gallon. super double digits. strong percentage wise from india but they're not showing the strength coming through. the demand side of things, particularly china because they're seeing slowing growth. >> always remember why inflation is so low and that would make me less hesitant to try to raise it to the 2%. they're trying get it up there because they're worried about deflation. if it's coming from oil they shouldn't be worried about it. it's just targeting inflation. they should be happy it's where it is. >> they should be. there's sometimes when deflation is a good thing. there's periods of bad deflation and good depolice station. this say period of relevently good deflation. >> so if at the hand is there and opec says don't look to us to cut supply, when do you have a national supply response from the united states and the rest of the world.

>> sure. 1.6 million barrels oversupplied in q-2. 1.2 million in q-4. that will drop off next year. non-opec production won't be adding a million barrels a day to the market. it is going to be going through this period of rebalancing later next year but because u.s. production has been so staunch and is holding up we're still seeing it coming through and it's not tropical waving off there. north carolina just reported that october's production volumes haven't dropped. they were up slightly. >> all the numbers you just quoted, you calculated in there the return of iran to the markets. >> that's another thing. no one knows how much is going to come back there. it could be 200,000 barrels a day but it could by the end of next year if they get to a million barrels a day. >> they made clear they're going to pump it full tilt. >> that was the most astonishing

statement was that iran looked at everybody else and said we're in, we're going to produce and we're going to bring half a million barrels and we may produce more. >> they were explicit. nobody is going to tell whaus to do. >> that was astonishing as far as i was concerned. >> but they said they would cut. >> exactly. >> he said about that december 3rd move in the euro, she was -- she could barely speak but you guys are a great mind here. in my 40 years of trading i have never seen the euro move like it did that day. any time you see that you have to stand back in absolute awe of the majesty of that move which is what you did that day. >> yeah. >> thank you -- >> are you complimenting? >> no. i'm saying i thought you'd appreciate it. >> thank you, yeah. >> so you have thoughts on switching from oil now -- you have thoughts on draghi.

so he lost control? >> i think he lost control. the germans took control and he made it clear prior to the meeting that he was going ease monetary policy and be very aggressive about doing so and instead they did nothing and came out and said i even disagreed with holding it where we did. he wanted to tighten. >> yeah. >> it was 10550 that morning. traded 10540 for a few seconds. next thing 108.5. it is going to be difficult to get it above 110 to 11. but the majesty was quite responding. >> it was a rocket ship. >> it would not be a majestic move. >> i was short for an hour that morning. i said i'm out of the way. as soon as it went to 10625 i was like i'm gone. >> you felt like there was a

vice grip on your head. >> on my head. >> not very majestic. >> no it was not majestic after awhile. >> it reminded me of the days during the russian crisis. we saw seven big figures one day in the yen. august '98. >> you know movies? i can talk to you about -- and sports too some. >> sure. >> wow. >> that's about the limit. >> this is such good chemistry between these two. >> it was casino. that would hurt. can you imagine? >> no. >> you would pop like a grape. >> you talk before you get to that point. >> i would hope. >> i get my nails cut and i'm ready to talk. >> dupont and dow could be make an official announcement today about the potential mega deal.

that's next. and glencore surging as it gets more agleszive with degressive e reduction. kate kelly has the details. first though, on this date in history.

♪ >> why are we playing that song? soul cycle is announcing it's going to list shares on the new york stock exchange. it's another win for the battle with ipos. the ticker symbol will be slcy. they did not provide information on the pricing. the offer as good being lead by goldman sachs and merrill lynch. i'm a huge fan. any of you ever done it. >> no. >> soul cycle. >> it's a brand. there it is right there. >> i don't like clubbing or cycling. >> it's fun. >> everybody cycles together. if soul cycle is fun and womanly, fly wheel is like manly, everybody competes and they -- it's different. >> have you tried one of the

rowing classes. i wanted to do that. >> i didn't like it. >> too static? are you getting it's a low impact full body workout. i rowed in college. >> but the fun thing about soul cycle everybody pedals together at the same time and it's in sync and never happens in rowing. >> right. >> you're here to talk about glencore. >> we can talk about rowing if you want or queen or spinning. >> no, we don't like -- >> you don't like queen? >> under pressure is the only song of theirs that i like whanchts about t. >> glencore giving investors an up stake on the mining trading and building business. kate kelly joins with us takeaways from the investor call. it's easy to rally 10%, isn't it? >> they were up 15% earlier

today. >> how far below the high. >> well, year to date they were down like 68%. if not the worst, they were one of the worst components of the ftse in london although ironically their primary listing is in hong kong. people are excited about their net debt reductions. they were targeting getting to the low 20s billion down from around 39 or 30 billi-- 29 or 3n at the end of june. there continuing the course they set out. they suspended their dividend and raised additional equity. there's asset sales they're under going including minority stake they're hoping to finalize by the first quarter. they also reduced production in a number of commodities. exceptions would be oil and zinc but they have shuttered some

copper mines. they reduced their base metal manufacturing and they'll rely on the marketing revenue and logistics revenue. this is selling products from one party to another which they think is stickier than the core commodities production. free cash flow at more than 2 billion. continued capex reduction and the other things that i mentioned. it's worth noting short interests on the lsc still super high. prices not as high as late september when we had one day with a 30% route on almost no news in the stock market but climbing up there again. >> you know, this is exactly the kind you would do if the market gives you time to do it and the banks and who ever else and what about afterwards, strategically? is it business as usual? is the model still in place in terms of the vertical integration and the rest of it ? >> it's a great question and one

that's hard to answer. like many of the commodity companies if it's lower for even longer on all commodities. not just crude or corps it's the whole complex, that's going to be harmful to them in a situation which is that they pushed hard into the industrials and production business. they bought them a couple of years ago as well as the traditional marketer which he made his name on. the spot market the day-to-day market for supply. so we're going back to the rich play book hoping that will be more resilient in term of revenue as well as getting the cost down, et cetera. but how long they can go under these conditions isn't clear. leverage is a market concern although they have taken steps to address that. they're aware of their credit rating so it would seem they're okay by now but it depends on the length of the downturn. >> did he call you?

this is under your by line here. >> it's the story you broke late yesterday. >> he called me to tell me he's supporting marco rubio. >> how much has he got? >> 7 billion according to forbes and he has become a major personal donor. he gave 5.5 million to the governor of illinois and the use of his own private plane to help him campaign and that played a key role in getting him over the finish line. he said yesterday he will give several million dollars to rubio's super pact. and he will also harness his supporters to support him as well. it would seem that a lot of these that are politically active are getting behind rubio and they're neck and neck in a lot of polls. >> i thought you said ken

griffey. >> griffith. >> neither one of those endorsed finn. >> not that i know of. >> but he zbeez the hall of fame this year. >> he should. >> absolutely. did his father get in? >> no. >> he was a good player though. >> can i ask you a question? >> kw >> i don't know. >> what's your take on the ground swell for rubio? >> i don't know how to think about it. i've never seen anything like this. the only thing i'd say is has he been if the senate longer than our current president? >> i think he's four years in. michelle am i right? >> first term senator. he talks a -- i love his things that he says but governors are

out of favor but they have done things. they have balanced things and made decisions and dealt with disasters and what do they do in the senate? >> refuse to reach bipartisan agreement on bills. >> i wouldn't reach a bipartisan agreement either with the other partisans but i mean i think i'd try to do something other than just get good tables at restaurants and walk around washington like you're a big person. >> i don't know. i don't have an opinion. >> nor do i. >> nor do you. >> thanks kate. >> thank you. >> as we have been telling you big story dow chemical and dupont could seal their $120 billion tie up as soon as this morning. a couple of questions, what kind of regulatory hurdles might it

faces? what does it say about the m&a environment? joining me is dan. good to have you here. >> good morning. >> here's the initial thoughts on the deal. is it a smart deal? what's the impact? >> well, it's a smart deal for both companies but it's incredibly defensive. you have huge amounts of competition coming from companies and you have big activist pressure on both of these companies even though dow had a cooling off period with dan lobe so it makes sense. the idea seems to be combine them for a short period of time and split them into three other companies. the parts being worth more than the wholes. >> the stock market really -- insi investors loved that yesterday. you don't see at a when m&a happens. >> this is what the activists have been asking for. when you're at dupont or dow. >> and we know that there's leadership on all of it and you'll end up as three different

companies. >> that idea of three different companies i wonder if it's basically going to allow, you know, from these two monsterous companies you have to victim innovation on one side of it. could be some what better in terms of how the market treats the companies but also just what they're able to accomplish if they, in fact, have a growth vehicle attachment. >> well, maybe. again i think leadership is really important. the talk has been that breen that runs dupont would be ceo but that's a short period of time because you end up with three companies. if you look at least recently dupont has been the company that's spent much more money on r and d than has did you dow. so if dow is in charge it might not be so great. if the dupont folks are it maybe. the devil is in the details and we don't have details yet. let alone natural announcement. >> good to have you on.

we'll have to see what happens when it comes to down the road. thanks. coming up, reviving america. steve forbes talking tax reform and which candidates have the right stuff for the white house. and the material girl plays a surprise gig in paris. that's next on squawk box. as we head to break a look at yesterday's s&p 500 winners and losers. ♪

madonna playing in paris last night. playing at the site of the tribute of the november 13th attacks. she sang imagine and like a prayer. >> coming up a call on the candidates steve forbes out with a new book. the two time presidential candidate making a case to fix the tax system. he joins us next. and donl trump is up in the polls but this eagle may not be voting for the presidential candidate. we'll have that video next. as we head to break, here's a quick check on what's happening in the european markets right now.

surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?

while you're watching this, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far.

the next wave of the internet requires the next wave of security. we're ready. are you? here it is. the video we're telling you about. not much can ruffle the feathers of donald trump. during this photo shoot for time magazine, the eagle wasn't ready for the close up. here's the behind the scenes video showing the angry bird. that's my favorite detail. see it again? oh. he's upset. >> remember the -- you probably don't, but whenever they bring an animal on the tonight show all kind of stuff would happen. they don't necessarily act the way they're supposed to act. it's a great shot, though. who doesn't want to be shot way balanced eagle. >> no, you're right. ben franklin, early to bed, early to rise, smart but turkey

as the national bird. that was a good move to do the bald eagle. >> can't eat the national bird. >> no, killing two of them steve is chairman and editor and author of the new books reviving america. replacing the tax code and reforming the fed will restore hope and prosperity. i don't know whether you need a message to get through to them. they're on this page. aren't they? you need to spend this message to the other side or people in the country probably. they don believe that's what we need to do. >> a growing number of americans do believe it. this is what they're designed to do to give you the information to go out there and advocate for it and give candidates to do it.

many of them are moving in that direction but they have much more to do in terms of how you replace obamacare. on the tax sides this is how you have to make tweaks on various tax proposals and on the fed only ted cruz and rand paul are willing to tackle the central bank and disastrous policies which gummed up the credit markets and one reason why we have lousy labor markets today. credit markets aren't working. small businesses can't get loans. > but everyone now knows you participation rates. >> the baby boomers don't want to work nil. >> niets spin but it doesn't work. people know it's bad. >> the college educated have an extremely low unemployment rate but if you don't have a college education. >> more money to forgive all the student loans and pay for college. >> that's the whole democratic mantra is we have a punk economy. don't think about getting ahead. we'll just help you out a little

bit but don't think you can have a better life. >> a lot of the demographics favor, it starts with demo and a lot of them favor the democrats and when you are heading toward some entitlement state you should be happy with 2% gdp growth because a lot of people are working on income inequality and what goes along with that is slower growth and a lot of that feels better. >> if you think the american people are feeling better today just go out on that campaign trail and you see the anger out there. angst about the economy, worry about the security of this country and 2% growth, people aren't worried about income inequality. they want growth in their own incomes. that's what these proposals can do. >> more and more economists that come in here are nowhat what we should expect from here on out given productive and the

age is 2 to 2.5%. >> that's actually -- that's actually a good thing because when they agree on something they're usually wrong. when ronald reagan was running they all said tax cuts wouldn't work. you just get more inflation. reagan enacted sweeping tax cuts. less inflation and more economic growth. these proposals here today, repealing obamacare. getting a flat tax reforming the fed and going to a gold standard. you'd see this economy take off like a rocket. >> a lot of people believe it when they say these ideas they're talking about, they say that brought us the no idea growth for the bottom between 1980 and 2010, brought us these -- drove the car into the ditch. >> between 19 -- >> do you want to give the same guys the case that drove the car into the ditch. >> between 1980 and 2000 we have the greatest boom in this country. greatest boom globally. massive job creation. in the early part of the last decade when we started to undermine the dollar, bush

administration, weakening the dollar, that's when you got that false commodities boom. the housing bust. you can't trash the dollar. you need a stable dollar. just like you have 60 minutes in an hour, you shouldn't be changing the value of the dollar each day. it's insane. >> given that the rest of the world, we have done better than anybody else. >> done better it's like saying batting .250 is good. >> what do you see that the fed has done that's held us back when most people -- when a lot of people say that the fed is what saved us and got us into a position where we're better than the rest of the world by satisfying the lack of demand after the financial crisis. >> first of all the fed brought on the crisis along with the treasury department. >> that's a different guy. >> ben bernanke. he was there for that and after the crisis the zero interest rate policy -- one statistic, credit growth to the government has gone up 37%. corporations, 32%, small businesses and households only

6%. if you look at the credit growth of the small and new businesses with job creation they have been devastated by the overregulation and zero interest rates. that's like rent control. great if you got the rent controlled apartment but the fact of the matter is you don't get more apartments built. so the credit markets aren't working. you have to get a tax code where people can focus on real things instead of this horrific code that's junkier and junkier by the month. >> before we let you go, a year ago you sold a big chunk of the company and that deal has gone sour. any update on that? it's been distressing to read about. >> well it was unfortune but we -- the company is doing very well. we had a very goodyear this year. we'll do well next year and we'll get this thing resolved so the company is good. that's what counts. >> steve my last question, okay, so repeal obamacare, cut down on

regulations, fix corporate tax code -- >> personal tax code. >> personal tax code too. with globalization and labor costs everywhere else and with technological innovation putting people out of work, is it possible to have a rebirg like 1981? i'm doubting it now even for me. i don't know whether supply side can bring us back. >> technology creates jobs because it allows capital to go into new things and when you take the railroad industry after world war ii. >> different this time. >> i heard that my whole life. >> so we could come back and have like the 80s and do -- >> better. we've had six punk years. worst recovery. globalization is good. the whole world is our market. the whole world is our market. >> and the whole world can rise up too. >> an that's good. more and more prosperity. more and more markets. so we should have several years of 5 or 6% growth. >> it could be morning in america again. do you believe that?

>> bright shining morning in america. that's what i heard in 19 -- you guys weren't around then. i remember all of that stuff. >> i remember it. >> deja vu again. >> i remember the 70s. >> you dos. >> frat tax, repeal obamacare, get a stable dollar, boom, growing. people want to do it. >> that's just -- i have to play this. anyway, matching the human genome, how this new era plays a key role in the future of medicine next on "squawk box."

♪

(train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.

in the first human genome in the first of the century. i think of 1900, but 2000fu was the turn of the century? took more than a decade and cost $3 billion, and now the genome sequencing business is booming. we are joined now at the beginning of a day long series on cnbc on the future of pee personalized medicine, and i know when they got the machine to do this, and i wish we were further along in getting therapeutics after all this, but we're getting there. >> there was a lot of expectation that this would lead to almost an immediate translation to cures, and while we have made progress,

researchers say not to expect things immediately. it takes more time and more people have to have their genomes sequenced before it translates into big advancements. the question is now should healthy people get routine genome sequenced as part of routine medical care? the jury is out on that. this cost almost $3 billion and took a decade and a half to finish it, and one thing that's helping drive uptick of this in the medical setting is how much the cost is down. there's app amazing chart showing how much the cost of sequencing fell over time, comparing it to moore's law. in 2007-2008, it dropped from $10 million, and now hovers to above a thousand dollars to sequence one human genome, helping a lot, but right now, it's really not been adopted for healthy people yet. there's a few barriers to that like reimbursement. >> so joe knows more about this than the average person. so when you pay $99 to one of

the places like a genealogy website, are you sequencing your genome there, or are you just getting dna? what's the difference? >> sequencing your genome is sequencing all dna. we're talking about whole genome sequences, what illumina does. and 23 me just basically geno types, looking for the ways your genome -- you could implicated in disease, and they can't provide health information because of fda stuff. >> single mutation diseases that you would know you were predisposed to, so complicated still. i mean, that's too much information now that you can't really interpret, and you see how many false positives people get from the big, you know, 24-hour physical you get. i don't want to do that because i know they'll find something,

most a false positives. you don't want that, people worry, and you don't know how the environmental interaction plays with the interplay with genetics whether you are predisposed to something. it's a mess at this point, right? >> there's a lot of risk. we talk about that all day, a great story on cnbc.com to check out.

oil pressure building in the markets, crude trading near six year lows, sparking swings in equity markets. we have guests here to weigh in. avoiding government shutdown, negotiators want to extend the budget deadline to buy more time to hammer out a deal.

a rundown of the sticking points straight ahead. walmart launches a new smart phone pay system for the stores aim aimed at the 22 million people who use the walmart app each month. we'll show you how it works as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> we have a story about queen earliering that's why we played that. welcome back to "squawk box" here on cnbc, first in business worldwide, i'm michelle caruso-cabrera with joe and becky and andrew are out this morning. and our guest host is cnbc commentator mike santoli, thank you for being here. >> great to be here. >> closing at a one month low, u.s. equity futures suggested a

positive open, not skyrocketing high every, but positive. news is just crossing from the bank of england leaving interest rates unchanged at .5% for the bank of england. that was expected. joe? >> walmart is launching a new way to pay at the stores, a smart phone service called walmart pay. pay at the register using their smart phone, using the actual app that walmart will give you on apple or android devices linking to debt cards and credit cards, and a nationwide launch scheduled in the first half of 2016. a couple other stocks, men's warehouse shares hurt badly, taking a $90 million charged for failed investment in jos a. bank. there's a mining program accelerating to pay off debt and

glencore shares plummeted by miranda warning 60% this year on weak demand in china, lower commodity prices, and that hurts its ability to pay huge debts. >> everything joe said ditto for brazil. moody's downgraded oil and put them on review for further downgrades, plus, the country faces the threat of losing its investment grade credit rating as well. the president is facing impeachment proceedings in congress, and issues in a rapidly deteriorating economy sparks review of brazil's credit rating. >> the house of representatives looking to extend the deadline to avoid government shutdown, and lawmakers have until friday to negotiate a funding bill to pay for the government's operation through september of next year, but the house leadership aid says there will be a vote on friday on a stopgap bill that would extend that deadline. among the sticking points, how to handle syria refugees and the ban on u.s. oil exports.

storms and flooding in the northwest killing two people and creating havoc for thousands. towns and highways underwater after parts of oregon and washington state were slammed by more than 12 inches of rain over the last couple days, homes without power, schools closed for the third day, and they hope to reopen highwayingss later ons morning. a triple threat to the markets, all in perspective, we are joined by a global market strategist from jp morgan, and bank of america's global wealth and investment management business, the cio of u.s. trust. ladies and gentlemen, great to have you here. i want to ask again. why is it that the markets don't like lower commodity prices when, in theory, that reduces import costs for companies all over the world? i mean, i understand why maybe you want to wait to buy oil stocks or don't want to buy oil debt, but the rest of the market

seems very perturbed by this, why? >> it's true. what's good for some is bad for others. it's bad -- it's not a one-to-one ratio, right? look at earnings of the s&p, for example, they are down 5%, the forecast for this year. if you exclude energy, because it was such a huge drag, they actually would have been off about 6%, but the problem is you can't exclude energy. you can't exclude industrials. you can't exclude material, and once you add it together, that adds to a decent part of the market. the other issue too is, we'll talk about the fed, but inflation expectations have. tracking oil down lower, and so if inflation expectations are down, does that mean the fed now does not raise rats? that's another market fear that's percolating. >> the market fears they would not raise rates? oh, wow. >> fearing both things, really. >> i'm confused. chris? >> the market has been trading in sync with expectations for a rate hike for a few months now. >> and it was not three or four

months ago, then it was, then it's not, but it is again. i would say this. when -- too low commodity prices bad, too high, bad. somewhere in the middle or somewhere, you know, 30s to 50s, stay there, let consumers accumulate, great. there's fear in commodity costs staying low saying deflation's coming back or at least the emerging markets are not going to come back from the growth scare, and since they produce a loot of these things, it keeps the global growth curve lower because they are in recession, and you can't get back from where that mud feeling is. that's the issue. that's the big issue. >> the biggest fear is the default cycle, right? the republican we talk about brazil and emerging markets because the default cycle is evolving and ramping up in those countries and in the energy sector of the united states as well. look at the high yield index, i looked recently, and 55% of the energy names are trading below

50%. there's a tremendous amount of distress that's accumulating in the energy sector and elsewhere. >> fed raising in december, you assume that as well? does that cause volatility or is it priced in? >> priced in for the next 125 basis points because the first hundred points is the fear is higher interest rates have the stronger dollar hit, you got the change in the twilight zone in monetary policy, and in the ecb, versus japan aerohend here, and the fed move or not? reality is, they are patient. they are going to move. they are going to stop. they are going to move. they are going to stop. >> joe highlighted many times this week this question do they move at the next meeting or the next year? >> that's all we talk about. >> again and again and again. don't fight the fed. >> i think that's right. but i take the other side,

michelle, of what chris was saying. even though we are priced for rate hike, i think we could see market unease around this because if the fed raises rates in september, what they essentially said is don't worry about the growth slow down in china, things are okay here. we raise rates, it's good for the market. now they are raising rates on top of falling oil prices, and a default cycle that's picking up. it's not initially a positive. michelle, going into next year, there's one rate hike, two rate hikes, and economic data cooperates, that's when the market eventually recovers and resumes the rally, not much of a rally, really. >> chris, as you mentioned, this is somewhat unorthodox backdrop for an initial fed rate hike. we've not had one in 11 years, late profit and credit cycles, and you have the rest of the world easing. >> yes. >> how does the market, i guess, digest that? >> it's going to have a hard time. you know, we're going to see

financial asset prices very similar to what we saw in the back half of the year. it's a great grind. you have money coming in, money coming out, everyone's trying to figure out the picture, and the real way to look at this is take your top three risks as you go into every year. write them down. figure out what's the probability of that conclusion actually happening? if the market prices those in early on in the year and they don't happen, you get a decent -- you move this bull market forward as a great grind. same thing happensworried aboutd hiking too soon. they worry about the fed playing catchup later because wage inflation is picking up. you never know how sharp that's going to pick up in the initial stages. if you look at -- you talk to small businesses right now, they are -- you know, their costs go up on the labor side of the equation, and that could be an issue ultimately for margins, down the road, so you got risks out there that we all write down every year for the year ahead,

and this year, it's a twilight zone. there's shadow and substance. >> you're not positive on the market? >> i think speaking of risks, right, one of the risks and challenge we have in the stock market, is say we are past the first rate increase, the second one, data cooperates, we're not done yet, but then what does the fed tell us? if the data improves, if inflation picks up, we're going to keep on hiking. i think, michelle, that's what puts a dampener on asset prices in 2016 on top of the other stuff we talk about like high valuations that fully value markets. you just don't get the same support from valuations as you did before, and on top of that, add earnings. they have to rebound by 19% next year, and i have trouble believing the number. the troubles this year are not going away next year such as high dollar. >> where to look in the world? this year, everyone loved europe, now outperformed, but that was in the first thrust of the year. emerging markets looking down

and out. how do you allocate? >> it's a very tough year because the differentiation between europe, japan, and the united states is going to be very deminnishing. they could struggle because of value, and we ultimately bottom out in the deflationary scenario we talked about. >> europe and u.s. are similar even divergence in monetary policy is wider? >> the issue in terms of costs of the refugee crisis, concerns, geopolitical concerns that could limit a good portion -- >> offset the monetary theoretical improvements. >> yeah. there's an episode, michelle, in the united states where the megacaps take the market higher because it's a move towards safety, and if you don't have anywhere else to put money, it's not an argument in terms of investing, but if you don't have that, you see moves to the megacaps again. >> you say the s&p hits 2200

next year. right now it's at 2047. that's higher. i'll take it. >> it's an okay year. could end at 2150 because of the rally that happens. >> i think muted returns for next year, right? maybe mid-single digits. an earnings surprise could be higher than that, but that's going to be a tough thing to deliver, but -- >> what's going to outperform the market? >> what you want to buy is three things. first of all, i would be looking at large cap high quality oil companies, beat up, but they will be the beneficiary of the default cycle in 2016 because they acquire scale and scale is how you deal with the price environment right now. secondly, look at the new economy stocks, right? joe, you were talking about walmart having their walmart pay. this is technology fuel consumption so that's what i'm after. that's what i've been after this year and next year. the third thing is high yield. i think high yield x energy --

talk about that separately, but high yield ex-energy could rival return of the stock market next year. that spread compression, not around the hike, but later on, you get a decent year in high yield. >> feels like 20. >> i know. >> yield is back in high yield. >> where do you go in the market right now for next year? >> good ceos. the type of market if you go further into the mid cycle, you get 5-7% returns. during the year, you know, point to point is tough, but during the year, if you get in the indexes, looking to outperform, you have ceos who deal with margin compression, deal with the change in the capital structure, know how to deal and stick the noise and put it off to the left, which is this g geopolitical stuff that clouds the market, particularly in the beginning of the year. >> all right. thanks so much for joining us this morning. >> thank you.

purely on the number of vowels you have in your two names. she has nine vowels in her two names. >> i'm glad we counted. >> look at the guy to the left. one. one. one vowel. you are vowel deficient. >> you have no vowels in your last anytime. >> it feels good. >> really? >> you got nine. can he buy a vowel? >> i don't know. >> do you need all nine? >> that's embarrassing. >> i'll lend you a couple. >> that's nine vowel. you have one vowel. you are vowel deficient. >> feels good. now that she left the stage, vowel deficiency feels good. >> you need a supplement. >> it's an efficient name if you think about it. >> exactly. >> lots of vowels. >> we'll just shorten it up. >> double y. >> this is getting weird.

honda winning approval for the business jet. it's been in the works for 11 years, and phil lebeau has an inside look next. remember the honda jet did not have a bathroom, which conjuring up all weird things you have to do. potentially. anyway, this one may have one. anyway, record year for m&a, and we will talk about the dupon dupont-dow chemical deal, and a star of "shark tank" is looking to tackle the gap for female entrepreneurs. that story at the end of the hour. become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.

welcome back to "squawk box" now. it's lower by 11 cents. it was 36 yesterday morning, and brent is back up. >> part of that is because of the warm weather, and winter holiday travel on u.s. airlines is busier this year than last according to industry group airlines for america. u.s. carriers are expected to fly 31 million passengers worldwide. that's up 3% from last year. airlines will use larger planes to meet demand. >> honda's winning certification for the small business jet. phil lowe bow takes us inside the aircraft that's been ten years in the making.

phil? oh, he's live. okay. i didn't know whether it was a package or you were live. that one has a bathroom, but there was one they had with really sort of almost -- well, it's not affordable, obviously, but there was one one, phil, remember, that was a jet? >> reporter: no, i hear nothing. >> oh, he can't hear. >> the way he was looking, i thought he didn't have audio. >> we're working on it. i hope to get it. this looks bigger. this is a business jet. >> this was the idea you'd get more -- jets getting cheaper -- >> like less than a million dollars, but there was no bathroom. when you're young, you can go on an hour flight, right? >> just land wherever you want if it's your jet. >> that's true too. i sit on set for three hours, so i could make it to south carolina from here, probably, but then, you know, we have ways -- it's not as difficult. >> women have it tougher. >> yes. you have it tougher.

phil, you can hear me now? this has a bathroom? remember the honda jet only for -- remember that one good for a couple hours that -- i don't know if they made that or sold any of those, do you remember? it was a beautiful little thing, like, almost a personal little jet, but you kind of had to hold it. >> reporter: joe, i will make sure that your concerns regarding whether or not you can relieve yourself is relayed to the executives at honda jet. this is the culmination on what they worked on for more than a decade. officially certified last night by the faa. here it is. cost, $4.5 million, carries six people, and when they begin delivering next spring, they believe this is a difference maker, particularly for the low end of the business jet market. the business jet, if you will, looking at the plane flying, you say, wow, it's interesting, a small jet, but one that could

rival a cesna. the ceo believes they have plenty of perspective buyers to tap into. >> many of them are high net individuals, but generally are entrepreneurs, young entrepreneurs, small to medium business, and several of them are also pilots themselves. >> reporter: that's who they are going after, the small business owner whom perhaps right now might have a turbo prop moving up to a small business jet. by the way, we went down to the plant in north carolina where they will be building the honda jet. they expect deliveries to be four to five a month, and 1700 people work down there. what's interesting, guys, the jet business market came back considerably since the recession, but the low end, entry level business jet, that's a really, really volatile part of the market. however, honda believes that the honda jet is perfectly positioned to reach those people

who are saying, you know what? i got four, five million dollars, i'm looking for a jet. i'm going to buy one of these. guys, back to you. >> costs that much, though? >> reporter: $4.5 million. chump change to you. >> yeah, yeah, sure. i think there's a really small little area in the back that looks like a toilet in there, and a sink. because there was one that didn't have one, phil, seriously. >> that's the million dollar one. >> that was the million dollar one. phil, on another subject -- >> reporter: just a million. >> just a million. on another subject, do you know what snacks you get on united again for free? did you see that story? >> reporter: i did see that. i did see that. well, i fly united a lot coming out of chicago. i think people are, you know -- >> what do they get, though? peanuts? >> reporter: people shrug and say -- it's a combination of things.

i have not looked add the menu, joe, but i'm not expecting the finest foods, it's a snack. you're on a two-hour flight. you're not getting the findest of food. >> right. phil, this may be the inflexion point from less and less. there was a guy from ryan air that was going to charge you to go to the bathroom. i think he was kidding -- >> and he would if he could. >> maybe this is the point where it goes back the other way. actually, wow, i mean, i might faint if i got a bag of pretzels on the the airline, but that's progress, back to the future. >> reporter: i'm telling you, i know a lot of united frequent fliers who agree with you. it's not a huge difference maker, but you don't feel as though you're as much like, you know, being herded on to the plane, sit down, be quiet, don't say a peep. >> right. >> maybe pillows are next. thank you, phil. coming up, "squawk box" booze news, a new service from amazon in new york city. stick around.

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how much will the average person spend for the holidays? the answer? $805. in squawk booze news, amazon customers in manhattan can orders delivery of beer, wine, and spirits through the prime now moeshl apps, one hour delivery is $7, and two hour is included in prime membership. they will use third party delivery provider. >> bathrooms are here. >> in the jet? >> yes. >> oh, you got another photo. >> it's like where you sit, you can silt -- you can pull up the cushion and then on one side, that's where the -- that's where the laboratory is and the sink is across. it's not human, but you get the

job done, what's necessary. coming up, m&a in focus, a dupont-dow deal could be announced this morning, and talking to a private equity player from thl partners next. i sold my bike on wallapop, yes i did. oh, you having fun mike? you know what? i'm happy too. look at my happy dance. happy dance. ha-ha-happy dance. happy dance. (announcer) download wallapop. take a pic, list it. sell the stuff you just don't use to someone close by. make some extra cash and find great deals. thank you. no, thank you. no, thank you. no, thank you. (laughter) download the free app. if you don't use it, wallapop it. (horse whinny)

big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

welcome back to "squawk box" on cnbc, first in business worldwide. among the stories front and center, stocks to watch this morning, shares of men's warehouse getting crushed, down nearly 20%, taking a $90 charge for the failed investment in jos a. bank, and shares are down. joein joe, you're not going to say it? >> if you own the stock, you're not going to like the way you look. >> you're going to like the way you look. >> he's not there. >> now look what happened. >> now he's laughing. it's bad.

>> shares of glencore jumping this morning. the mining company is accelerating a program to pay off debt and slash expenditures next year. they plummeted 60% this year in fears weak demand would hurt the ability to pay huge debts. shares of chipotle gaining ground. the founder and coceo appeared on "today" moments ago making an apology. >> it's a really tough time. first, i have to say i'm sorry for the people who got sick. they are having a tough time, and i feel terrible about that, and we are doing a lot to rectify this and to make sure that this does not happen again. >> we've been following the stock, it's a tough go. more from the ceo coming up at the top of the hour. mike? >> the force awakens for fans across the nation at early screenings of the new movie on december 17th, and some decided

to wait out the time at the theater. the tent city is up in front of the theater in hollywood as fans hope to get a chance at seeing the early screening, and people in line encourages others to join them saying they believe the latest installment to the saga will be a blockbuster. that's a safe bet. >> yes, i can't wait. >> someone i read on twitter that on a tv talk show had made fun of the type of people that would stand outside for 12 days, just kidding, but she's getting hammered. >> yeah. >> i don't know if they were serious death threats, but the nerds get mad if you say -- >> how wrong could she be, really? >> i think you can still make fun of the santacon people. that's a niche. >> but 12 days? they got light sabers. >> they seem like quality people, and it's all rational,

everything they engage in. global m&a is at a record, $4.3 million as of last week, and a potential dupont merger could be announced this morning. with the view on the deal and broader outlook, the co-president, partner, co-president, board member of madison square garden, good to see you. where you been? >> just in the middle east. >> where else? >> kind of all over the place. >> you have been, right? >> yep. >> doing -- this was not pleasure. looking around, right? >> it was all business. >> and what can you tell us that nobody else knows now that you've done that? >> i can't tell you anything nobody else knows. well, you know, nice thing about being my age is i forget is real easily anyway. >> so the deals that your company will embark upon still -- in this country, would it be a buying deal or a selling deal? >> well, you know, like a lot of

others in the bids, it's been a great time to sell, so, you know, we've been reasonably aggressive at realizing on our portfolio companies, and we're in the business, like a lot of others, of buying companies that we think we can improve the operating performance on and do things to it to position it to have multiple expansion, and that results in being able to sell at higher price, and this will be a good market for that. in terms of buying, again, like others, we've been buying things that are really in our areas of expertise, and i would say, typically, these are somewhat smaller deals because that's where you have been able to find things, prices that better reflect intrinsic value, and one of the lessons of the 2006 and 2007 period is don't always buy because the market says that's the right multiple, but look at what the intrinsic value is, and i define that as, you know, what's sustainable growth on the revenue line, and what's the nature of the business model in terms of ability to generate higher levels of margins and

sustain the margins? >> is there really a difference between an environment where things are done defensively versus an environment where they are done offensively, and does 0% with the fe, dod, does that matter whether it's 0%? >> well, i would say that's a good point. 0% matters. when credit is cheap, prices go up, like buying a house or anything else, right? >> yeah. >> people are willing to pay more because the interest that you're paying in terms of the absolute dollar's out, and that results in smaller -- >> you can afford more. >> you can afford more. >> so deals are because of that. >> right. >> the dupont deal is because of oil? >> the dupont deal, like other things, is looking for ways to create value by focus and scale, and so, as indiana what they are doing -- >> defensively? >> defensively, but also for, i think, proactively, you might end up with three better companies -- >> yeah. >> opposed to two companies --

>> rationalized. >> right. bringing it together, as i understand it, by and large, they don't have significant product overlap. i was surprised by that because we all think of dupont and dow as both the two big chemical companies, but, in fact, over the course of a couple decades, they migrated away from one another in terms of significant direct competition, and the ability to bring more scale to different segments, whether it's agriculture or other types of performance chemicals or what have you by being a little bit bigger, being able to purchase better, being ail to drive costs down in the manufacturing side and production side of things, should result in improved growth and should result in improved profitable, and it's not -- i don't know enough to tell you that there will be anti-competitive impact. >> right. >> just looking at some of the numbers, doesn't seem as though you're going to have a lot of that. >> you mentioned smaller deals, things you know well. >> yes. >> will we go the whole cycle

without a big lbo? it's been absent bull market. >> leveraged buyout. when you take something big, a public company taking private, by and large, you pay market multiples, and those, today, i think, are reasonable. the high end of reasonable from a public market investors' perspective. in other words, i think the right investment in today's stock market can drive reasonable public equity returns. it's not as clear at those prices you drive the kind of returns we and our investors expect on the private equity side. >> valuation is not about the capital markets don't want to do deals anymore, but the banks can't lend discreetly? >> it's an adjustment period now when the regulators said to the banks, we don't only don't want you to lend to companies that have more than six times debt to cash, but we don't want you put any paper out there even if you

are not taking risk. i think that's not happened in the past, and i think there's been adjustment. one of the things seen over the last few years is while the debt multiples have crept back up to where they were in 2007, the coverage multiples because of the lower cost of debt are higher. meaning the loans have been stronger even above six times. >> cover interest very easily. >> yes. >> you mentioned it's a good time to be selling. what have you sold lately? what was it? how long did you hold it? what did you make? >> we sold a lot of things. >> one example. a big winner. >> okay. accosta is a company we sold, a leer in the marketplace. >> which is? >> it is -- manages the sell in and sell through of consumer products, mostly food, into every supermarket in the country. i mean, neilson, we realized on over the course of the last couple years, and aeromark we realized on over the course of

the last couple of years, and, you know, lots of others. they are a combination of acosta selling the company, and take it public, and over time, sell the stock. >> and what did you buy? >> i think the most recent public announcements are three companies. curo, the leader in the hospice business, a company called health care staffs businesses, a leader in nurse staffing, and then a company called bargain hunt. those are the three announced public deals. >> so the zero interest rates have caused a huge year in m&a activity in spite of multiples being what you would think are historically high, is that fair to say? >> well, again, multiples are high for our business. i think for the public companies who are buying -- who are doing acquisitions, the low cost of debt and the advantage of the consolidation economics allow

them to do very high lly deals that process. i'm not sure there's not a lot of room, even as rates go up at the pace people expect rates to go up. nobody's expecting to get back to a 5% ten year rate quickly. so if the rate goes up a little bit, there's still deals to be done by large companies out there, and i think you'll continue to see that. growth organically for a lot of large companies has been hard to come by. >> right. >> the way they grow is to do these interesting acquisitions that make sense and are high even at reasonably high purchase price multiples. >> so will -- i won't call them raids from foreign entities into our, you know, some of our crown jewels, but does that continue because of the differential tax rates? doing inversion thing, preclu precluding u.s. companies from doing this, but won't assets go over there because they can -- >> look what happens when they

do inversions. i'm neutral on whether, you know, what the policies are, but they are not really moving business over there. they are moving a headquarters that allow them to take -- >> talking about foreign companies that are able to pay more here to buy our assets because they -- >> well, that takes care of that. >> not completely, though. >> right. >> no, look, right. i think you're going to continue to see that. >> well, will that induce people to change? people should want to come here? >> this issue over inversion, moving overseas, they are not doing that. they are changing a headquarters location and a, you know, tax doma domain. >> diverting the tax revenue stream, by the way. >> allowing them to deploy more capital into the u.s. >> right. >> so, you know, it's not a simple story as the politics make it out to be. >> i know. my point is, right now, if you just change the how you remedy

instead of the crux of the matter is that capital should want to come here. we shouldn't be, you know, we shouldn't -- >> yes. we want more capital coming to the u.s. >> well, you got to lower the rate. >> inversions of u.s. firms going over there actually have the consequence of bringing more money back. >> paying less than we can because they make more money. they are raiding our crown jewels. >> i think the exchange rate plays a role in there too. thank you very much. coming up, america's addiction to cheap goods fuels china's war machine according to the awe though, peter navaro, breaking down implications for the presidential election.

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our next guest says the beneficiary of the middle east challenge is none other than china and what a rising china means for a preoccupied america joining us is author of "crouching tiger," what china's militarism means for the world. great to see you, peter. >> great to see you, michelle. >> why is it us being distracted by the middle east is good for china? >> this goes back to 9/11,

pre-9/11, george w. was about to pivot to asia because he recognized the rise of the military power and the importance economically, you know, in a region that has half the world's population and 70% of the future gdp growth. we've been distracted since then. over the course of economically transferring wealth and jobs and factories to china, china accumulated what will soon be the most powerful and diverse military in the world. now, that might shock people because we think we're that, right? >> how long before they catch up with us? i know year over year, their increase in spending percentage is much bigger, but they are working off a smaller base. i mean, the united states spends more than almost the rest of the world combined on defense. >> yeah. two things here, michelle. one is that you don't have to match us to beat us. they engage in something called a-symmetric warfare, and

basically, if you have an antiship ballistic missile, which they developed, shot from a thousand miles away from the chinese mainland, hit an aircraft carrier zigzagging in the taiwan straight, those cost $10 million a pop, and aircraft carriers are $10 billion. >> right. >> interestingly, we're in the week of pearl harbor anniversary, there's a lot of analogies between imperial japan and rising china. one is the a-smymmetric warfare and the japanese basically established a perimeter outpost of islands we fought through. china is trying to push us out, and geopolitically, over the next 10 to 20 years, there's natural security issues, but for investors, geopolitics is when the money is made. if you don't understand the chess board when the bullets fly, you don't understand the markets. >> differentials in candidates

and how they respond, correct? d >> there's a schism with the left, like sanders focusing on jobs and unfair trade practices, and the on the right, hawks want a bigger military. i'm trying to get people to understand the interconnection between the two. you can't have a strong military without a strong economy, and so as we bled away our manufacturing base, we saw shipyards in china going absolutely bananas. our military ships we want from 600 in the reagan years down to 200 and we want to pivot to asia, and after the pivot in 2020, there's fewer ships there. signs are trouble ahead. i mean, we don't want another taiwan strait crisis or shots fired between japan and china. we don't want trouble in the south china sea which china claim is, one-third of global shipping. >> an issue we don't talk about, but it's a huge focus.

good luck on the book. great to have you on the set. normally it's via california. >> great view here. >> great digs, huh? one of the stars of "shark tank" wants a change. kate rogers has the story next.

funding gap between male and female entrepreneurs is real,

but one is trying to change that. cnbc's kate rogers is trying to change that. a report found that less than 3% of companies receiving funding from 2011-13 had a woman ceo, and women ceos got 3% of the dollars at that time, and the shark tank is out to change that. with more than a third of his portfolio now made up of women owned and run businesses, he's seeing better performance. they return cash 65% faster giving him 75% returns. >> this is not a debate on theory, but this is hard returns of cash. these women make me money. it's that simple. >> he's done well backing wicked good cupcakes giving him a whopping 400% on royalty deal he

did with them two and a half years ago. >> for me, personally, as a female inteentrepreneur, one of things that's a bit challenging is because i'm in sort of like a crafty business where we bake, i'm not always taken seriously, and people don't realize the scope of the food industry, especially if they are not involved, so i think being taken seriously is an issue that women have. >> o'leery told me, and you don't hear it often, but the bias is to back women like tracy, which is great to hear. >> super interesting. >> he says on "shark tank" eyes are peeled for successful and great ideas from women entrepreneurs. >> there is research now that women ceos, women owned businesses seem to outperform. is that something people actually feel like is significant you can bank on this? >> the more you hear from kevin, you see the gap closing in, traditional funding like sba loans in 2015, women run

business got $3 million and men got $16 million. >> we're in the early stages of what we assume is a trend, the early movers are the self-selectors who are far more likely to make it because they are more determined, more willing to see themselves as an entrepreneur, whereas there's a larger percentage of men who are willing to do that, and as a result, maybe you get, you know, a lot of mediocre performance. >> i absolutely think women like tracy in particular, she hooked up with cat cole is mentoring her. she sees herself as a trailblazer in the industry and will take it upon herself to help other women, which is great. >> i'm backing a woman in business. certainly. i am. >> yeah. >> good to hear. >> you should hook up with kevin. >> that's right. talk with mr. bofwonderful. >> make a lot of money. it's my business too, i think. i don't know. we share. >> equity backer?

>> yep. >> there you go. >> equity that -- >> the silent partner. >> barely. >> check this out, a fantastic finish in last night's matchup between the pistons and memphis grizzlies. memphis was down two with seconds left when matt barnes nailed a half court shot to win the game. that was not the crazyist buzzer beater of the night. here's a full court shot with seconds left in the high school game in minnesota. northfield. >> no way. wow. >> an austin player pulled down a rebound from a missed free throw and sunk the full court shot to -- >> amazing camera work. usually they lose it. >> right. >> wow! >> not enough people -- >> watch again, here it is, look at the screen. >> a few more people there. >> hole ly smokes.

>> plus, it was to win the game, too. >> that's the best! >> it is. >> less than a week away from the first expected rate hike in nine years, but our squawk market master is worried about the impact of divergence. mohammed explains next. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators... that's wonderful but... i can tailor a curriculum for each student by cross-referencing aptitude, development, geography... sorry to interrupt. but i just have one question: how do i keep them quiet? (pause) watson? there is no known solution.

chipotle's stock hammered after an e.coli scare and neurovirus sickened 120 people, and what they are down to calm fears and keep consumers happy straight ahead. >> a win for alexion pharmaceuticals, discussing the million dollar baby and pricing war on a first on cnbc interview. >> how much are you willing to pay for a handbag? a high end auction where rare, one of a kind ladies' purses may fetch $150,000. the final hour of "squawk box" begins right now.

live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" here on cnbc. we are first in business worldwide. you have not seen me do it in my other voice. you want me to do that? i'm michelle caruso-cabrera and we are less than ni90 minutes ay from opening bell. >> we were saying that when you are trying to read prompter, you can't -- >> just talk naturally. >> otherwise it's flat. >> we're talking to mike, he's reading prompter today. >> a little bit. >> acquired. i was never good. i never try. it suggested content anyway. you don't have to read it. >> bullet points. >> yes. >> check out the european markets at this hour.

right now, they are -- >> she's good, though. >> mixed, germany's high, and france is higher, barely, and ftse, italy, spain, barely lower. here's the stories investors are talking about today. chevron slashing the 2016 budget by 24% amid slumping oil prices. they plan to send $26 billion around the world next year and expect conoco's plans in a couple minutes as well with app updated 8:30 eastern time on those numbers. dupont and dow could announce this morning. they were higher on reports that a deal was coming. dupont having the best day ever dating back to 1972. filings expected to be down from last week, and initial claims have been at record lows for more than 20 weeks. >> there's been heightened market volatility and market

uncertainty weighing on the rate decision next week. joining us now with his perspective, mohammed, a cheer economic adviser, and you have insightful things to say about the world, too, and i know by now that term you came up with for the new normal, we've used in so many context, and it's been so useful, and begin the world we are living in, it would be another period of new normal in terms of security concerns. >> we are, and from a market perspective, we are in a period of divergence. i think that's going to be the key issue, joe, looking in 2016, which is do divergent central banks, are they still able to repress the volatility that comes from the geopolitics you just talked about that come from the economics, you know, that's going to be the great question, is how do markets react to great divergence given that central

banks are no longer on the same side in. >> the other day, i referenced you again because you did put the flag up about this a couple weeks ago, and then draghi did not diverge as much as we thought he would. in fact, the day he announced that the euro is up four or something, so it didn't look like divergence was the problem, but it looked like they didn't like it because there was not enough divergence. >> so he flip-flopped on the thursday he, quote, disappointed markets. i didn't think he disappointed, but markets are used to him underpromising and over delivering, and this time, he over delivered according to consens consensus, but friday, oh, you didn't hear my properly. i'll do whatever it takes, and we saw the market rebound, so, you know, it's -- for me, there is no doubt to the simple paradigm. the fed is going to be easing its foot off the stimulus accelerator. the ecb, the bank of japan, and

the people's bank of china is going to be pressing harder on the stimulus accelerator, and because nothing else adjusts in the policy world, it's going to be the currency maker that carries the burden, and that's going to translate into higher volatility and more tactical opportunities for investors. >> are we anywhere near superseding monetary concerns by geopolitical concerns? are we in -- boy, the risk of something, or when it happens, we won't be talking about central banks and financial things as much, but talking about the ways that we're dealing with the very dangerous world? >> so we are in this world today, but we -- it's been repressed by central bank. look what happened yesterday. yesterday was just an example of the whole year where you travel a long way in markets to get nowhere. on the one hand, you have real

uncertainties of geopolitics, security, economics. on the other hand, you have injections of liquidity either by companies doing m&a deals and/or by central bank, and that tug of war and the market looking at both sides, there's volatility. we saw it yesterday. we traveled a very long way to end up slightly lower yesterday, and it's been all year. >> for somebody that, you know, your name was bantied about as president of egypt at one point. it was. >> treasure secretary. >> president. >> really? >> it was. >> joe, you're being nice to me. what's going on this morning? [ laughter ] >> i want to know whether you know how to solve the problem in syria right now. would you? or between -- i mean, even isis. do you know how -- it's -- you got assad, rebels, putin,

turkey. can you go over there and figure out a strategy to try to diffuse all the situations? it's tough, isn't it? >> it's tough. way beyond my own expertise. yeah, it is tough. there are many moving pieces, and you get coalitions forming and then dissolving and it's very hard to figure out what's begin on. this is really, really tough. >> you said that there were -- it's michelle -- you said there's tactical opportunities. what are they? >> there's unhinged markets, high yield, markets, and good names are hit quite hard and unjustifiably so. this is a security selection world for the unhinged markets. second, you're getting these unpredictable correlations happening all the time. i mean, remember central bank sat or delivered the three

things that investors like most, high returns, low volatility, and favorable correlations. now that central bank effectiveness is in doubt, all three are moving, and that's where the tactical opportunities come, but you have to be really, really nimble in this environment. >> iunhinged markets and slippery correlations have anything to do with being year end, banks not playing the roles they did, are there liquidity or mechanical concerns in the market? do they have a large role here? ride out the end of the year and maybe they just correct themselves to some degree, or is this just the way it's going to be? >> yes. they are having an impact, mike. some of it will be reversed. some of it is temporary. there's a fundamental change. you know, a few years ago, broker dealers were big, and the end users were small. now the broker dealers have been

shrunk by regulation market forces, and the end users have gotten bigger. when the paradigm changes, there is no countercyclical force anymore in the system because the broker dealers are not willing to play that role for understandable reasons, so markets overshoot on the way up and on the way down. that's our reality. it's worse to the year end because people protect their balance sheets. >> all right. we were corresponding during that -- i couldn't believe it. they did not screw it up. could you believe that? >> i couldn't. i thought they were. but i'm back on the band wagon. i'm a cincinnati bengals -- >> if i don't believe they'll be good, it all ends. i need to stay off the wagon. it's like -- >> then get off. >> i just think that they -- i'm amazed at how great tom brady --

no receivers, and the jets, how happy they must be versus the inner city -- >> an emotional roller coaster. i'm too old for this on sundays. >> i got a giants fan in my ears who will not talk about this because of what happened. what was that? >> yeah. they gave us the game. tell him thank you on my behalf. >> he said if the giants get rid of the last 75 seconds of every game, they would be 10-2. >> if the game ended. >> yeah. >> if the jets would give up on the second half, they also would be 10-2. >> hey, it's better this year. they have a shot. thank you. we'll see you later. >> thank you. >> all right. chipotle under fire over an e.coli outbreak and neurovirus problem in boston sickening 120 people. the stock bounced back over the last few days, and the ceo spoke out on "today" in the last hour,

and morgan brhas more. >> sitting down on the "today" show to discuss the outbreaks affecting nine states, and this week, neurovirus in a restaurant in boston. they started the interview with an apology. >> it's a really tough time, but first i have to say i'm sorry for the people who got sick. they are having a tough time, and i feel terrible about that, and we're doing a lot to rectify this and to make sure that this does not happen again. >> he also outlined how the chain is taking steps to boost food safety hiring a team that implements practices to put chipotle ten years ahead of industry norms. >> closed restaurants out of caution and tested all ingredients, surfaces, thousands and thousands of tests, matt, and they were all negative for

e.coli, and so if there's a silver lining in this, it is that we have looked at every single ingredient that we use at chipotle, that's 64 ingredients. >> when asked about the financial toll, they have lowered the guidance and the drop in the stock price, saying they are not thinking about that now, but focused on safety and quality of ingredients and implementing practices making chipotle the safest place to eat. since the first cases were reported, shares down almost 12%, but bouncing this morning, up 2% in premarket. over to you. >> more aggressive on trying to get the story out. thank you, morgan. coming up, the ceo of alexion pharmaceuticals on the company's new drug to fight a rare genetic disorders and how much it costs and thoughts on drug pricing. futures opening higher at this hour. ja "squawk box" will be right

back.

the poster boy for the drug

pricing debate is getting into the game. hedge fund manager turned pharmaceutical executive purchasing the sole copy of the wu-tang secret album, reported price $2 million, and known for purchasing life saving aids drug and raising the price 500%. the album signed prior to his drug pricing controversy. the wu-tang says the bulk of the fee is donated to charity. >> could be $5 million before. cut 33 tracks, and they sold to the one person -- you own it. >> that one album. >> it's a new album. he's allowed -- they were not going to commercialize it, but he can open it up for other people to listen to. >> can he stream it? commercialize it? >> can't kmecommercialize it, b he can stream it, but he's --

the whole idea was interesting. rather than going through the normal record channels to sell to one person, and they worked on it for, like, a long time, 33 tracks. >> like an artist would do. >> apparently, he's not listened to it yet. >> really? >> yeah. >> paid $2 million and has not listened to it. >> meg's here. off camera, you tweeted that out. she asked if i wanted to see her genome, and i didn't know how to respond to that. [ laughter ] >> it's a little forward. >> it was. and, you know, married, and everything. >> just engaged. >> engaged. >> you're married. >> yeah. >> all right. sorry. >> alexion drug received fda approval over the drug that treats a potentially fatal genetic disorder.

generic disorder could be anything. >> true. >> generating sales for the company. which is why i tell you that's optional. better if you don't. >> talking about the teleprompter. >> we have more on this. with a special guest. >> that's right. thank you for joining us, and you guys have a big day today, laying out, really, the research and developmentinvestors in new york. talk about the new drug, and understand it's priced around $310,000 per patient per year sounding like a lot of money to a lot of people, but help us understand. >> we were thrilled to receive the approval just on tuesday from the fda under the break through therapy designation and received with this approval pediatric rare disease review voucher allowing us to use an accelerated path for another drug. the fda really wants companies to be investing in these rare

pa pediatric and devastating diseases. this drug is an enzyme replacement therapy for a disease that affects infants, young children, and adults. it's -- these parents have a genetic mutation unable to actually produce an enzyme which is vital to their, frankly, their life and ability to metabolize fats and lipids so babies do not live past eight months. we were thrilled to bring this to the market because of the survival rate of infants surviving, and children and adults see benefits as well. the price, there's so few patients with this disease, it's an tis pitted there's a few thousand patients in the u.s. with the disease, far less than 10,000 around the world, and, essentially, all of them are not yet diagnosed. this is so rare that physicians do not think about it. this starts our hard work now to

go out and educate the community, the medical community about the need to test patients at high risk for this very rare disease. >> and in this environment of such scrutiny of drug prices, are you feeling any pressure, in your business model? it is so different from the things we see like raising prices of old drugs, but still, a price tag like that, do people fixate on you guys? >> pricing is an important discussion to have, and we're having it. in fact, we've been having it since we launched our first drug back in 2007, and, you know, i think in the context of price, in that discussion, we also want to discuss value and innovation, and so our drugs, you know, it's important to think about three key components. one, the extreme rarity. these are not orphan diseases. these are ultra orphan diseases that affect a very small number of babies. >> like under 10,000 patients in the world?

>> under 10,000, less than 20 patients per million. >> if you're the parent of one of those, boy, it's super meaningful. >> i had a chance to meet with parents. they refuse to take no for an answer. their child is bouncing around the medical system. they are being told we don't know what your child has, and they do not stop until they get an accurate diagnosis. the extreme rarity is one element. the second is, rarity shouldn't be enough to charge a certain amount for a drug. what is the natural history of disease no matter what is available to treat these patients? four, the diseases we are focused on, for example, infants don't live to one year of age, another approval just received in october from the fda, strensic. baby can't grow bone, and if you can't grow bone, you don't grow a chest cavity, and without

that, you can't breathe, and they die before a year. this is the enzyme they are missing, 90% survival rate at one year. that's the key about innovation that society is looking for. >> when it comes to pricing, greatest frustration is, to me, at least, is we in the united states subsidize the rest of the world for research and development. germany, japan, they insist on price controls, cheap drugs for their citizens when they are very, very wealthy places. why is it that they deserve to reap the benefits of what -- why don't they agree to pay more? it's so up fair. >> so, michelle, i share your concern, and, in fact, at alexion, we believe whole heartedly that we should have a similar price around the world. it's important to know that we do operate in 50 countries as a small biotech company, and two-thirds of the business is outside the u.s., and our price around the world is similar in all of the countries in which we

operate. >> so when the governments say to you, no, no, no, no, we negotiate for the people, lower the price. what do you say? >> we turn back to the discussion of value and innovation, and if i may, england is considered the most restrictive governments in the world with nice -- >> and asia. >> with health care authority. our first drug approved for a rare disease that ravages the kidney. half of patients die, progress to die alysis or have permanent damage after one year diagnose. our package for reimbursement, they saw 80% of the children an adults on dialysis before receiving this drug were able to eliminate dialysis. >> and they paid for it? >> we subsidize their security.

we can't do their security and their drugs. they still can't grow faster at 2% either. >> thank you. great to have you on. >> thank you very much. coming up, the retailer launching an app to pay with any smart phone at any walmart. details straight ahead. (politely) wait, wait, wait! you can't put it in like that,

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welcome back to "squawk box." breaking news. we have november read for import prices. they were down ..40%, what we were booking for, and it's down darn close to expectations. there were subtle revisions on year over year, and month over month is more interesting, originally half of 1%, is nno nonow now .30

continuing claims, moderate increase, and the aftermath of all of this activity, 221 ten year going in. let's crunch it, 221 coming out. rise in claims does not seem to be doing much yet, normally, of course, a rise in claims would be determined as a negative and bring yields down a bit, and preopen equities down 35 and futures dow up 34. likely retail sales is the one number this week that's the top tier to get markets moving, but in lieu of next week's recalibration by the federal reserve, this is all dwarfed by gears grinding a bit to get ready for a big economy going the other way. joe, back to you. >> okay, rick santelli, you have

mike santolli here. it's tough. >> the vowels change. you like vowel. >> i do. look at these, conoco phillips, and morgan brennan, wow, you went from chipotle to this. you are, like, a renaissance person. >> i am. multitasks. >> you are. >> oil major releasing the operating plan capital budget, and amid the low oil and gas prices, we continue to see the steep -- the cuts are steep, so the company's cap x is down from the expected budget of 10 billion, which, by the way, revised lower every single quarter so far this year, and it's down a hefty 55%. operating cost is lower, but production growth is expected to continue. conoco is forecasts 1-3% increase next year adjusted for asset sales saying the production guidance remains unchanged, so in release this morning, ceo and chairman ryan

lance saying, quote, entering 2016, we have greater flexibility and competitive cost structure, streamlined portfolio with ability to deliver high profit growth from the resource base, and this coupled with strong balance sheets gives us the ability to maintain a compelling price dividend and cash flow. we have seen others earlier this week, but they stand by the payout yielding 6% right now, and shares of the stock down nearly 1% on the heels of chevron last night after the bell saying they are cutting their capital plan for 20 2012016 24% as well. >> not touching the dividends. >> nope. >> we are joined by the index committee of s&p dow jones indexes. good morning. >> morning. good to have you here.

what do you think? is this a cataclysmic moment when they raise rates? >> more relief than cataclysmic by a long shot. this has to be the most anticipated fed rate increase in modern times. it comes after seven or eight years of nothing from the fed in the since or nothing obvious in the market at that point. widely an tis pitted, there's not a big impact, debate starts in january and february whether they do it quickly or just sit on the sideline, and there's a huge amount of commentary and pressure arguing to sit on the sidelines after this one. they will have demonstrated they can raise rates despite the balance sheet and a new operating procedure because of that, and they'll sit tight. >> rates, with investors, it's been brought up, okay, we get the first one out of the way, but then all of next year's about when do they hike again?

it's just this eternal question, and, ultimately, do you ever fight the fed? >> not if you want to get along and prosper in the markets, no, you don't fight the fed. i think the big story right now, and i think, you know, year, two years from now, the story we're going to remember is oil. it's not the fed. opec is essentially falling apart. demand is weak. supply is strong. i don't see anything that pushes oil even somewhat back to where it used to be. i mean, for a long time, 40 to 60 sounds like a range. we're below that at this point. >> a range of this price or up 50%. it's a move from here even if it's not big deal in the grand scheme of things. what does that remind you of? oil crashes, 1986, decline in price, did not imply recession,

so a benefit? >> it -- well, in the long term, it's a benefit. if you stack up producers and consumers in the u.s. economy, there are more consumers than producers. globally, it's the same story. obviously, if you run a place in the middle east, two years ago you were, you know, a lot of money, and now there ain't much left. you got a problem. you know, we are seeing the final recognition of the problems with cartels. if you want to get rich in the oil business, join the cartel. that's what the opec members did. if you want to get filthy rich, join a cartel and cheat. that's what they are trying to do now. nobody will cut, and there's too much supply, and the only way you sell is if you trim the price, and that's how we trim it down. $60 sounds expensive for oil,

even though two years ago, $60 sounded like a 50% sale. >> we talked about the fed raising interest rates, but that's, of course, short term interest rates. in the meantime, the temperatn- yield never moves, still 2.2. sometimes it skyrocketed to 2.5. what do you think of long term yields at this point? >> i think to get them to move or really get the spread above fed funds, you got to have inflation. i mean, the real difference between short term rate and long term rate, the long term, you are committed for big chunks of time means you worry about inflation, and i know the core rate 1, but nobody seems to be -- nobody other than the politicians in washington who want to complain about the fed, and i think they mostly want to complain because they realize the fed has a lot of power, and

in washington, the other guy has a lot of power, you don't like that. >> you want that power. >> absolutely. well, it's not only true in washington, but they complain more in washington about the fed. we don't like to control the fed, but, you know, we want them to not do anything crazy. >> david, great to have you on this morning with the bow tie, signature item. >> you know when we'll know the exact bottom of oil? >> tell me when. >> when blitzer takes chevron and exon out of the dow. >> why did i not think of that? you're so right. >> at least we'll have a signal, the ultimate indicator. >> such a good point, i know. >> winking. >> you'll read about it at some point. >> not going to complain on camera to him about apple? >> oh, no, no. i had something new. >> i see. >> predicting it. it was not press, though. >> oh. >> as you said, people complain when other people have the

power. [ laughter ] >> you know, with great power comes great responsibility. anyway, you know no one gives you powerings you have to take it. you know who said that? >> an oil man. an oil man said that. >> i was thinking lbj. >> no. >> jim davis. nobody gives you power, you have to take it. walmart in the mobile wallet launches walmart pay, and cnbc mary thompson has the latest. >> joe, walmart's mobile payment solution is out and could drive up sales by appealing to a wider consumer base. more on that in a minute. what the senior vice president tells cnbc is walmart pay completes the experience for shoppers and helps them find items, and now they pay at check

out with the phones. fist of all, set up walmart pay on the app, available on any android or ios device. prioritize payment methods already on the walmart.coming the or add another gift card or credit or debit card to use. open the app, scan a code at the register linking to your basket, and receipt e-mailed to you. no information shared in the store. it starts in arkansas today, and it's expected to be completed nationwide by the end of june. new futures and maybe other mobile wallets could be added in the months ahead. why spend the money for the technology? well, walmart gets more data on shoppers' habits, and maybe it's a way to get you to spend more money at walmart. the ceo had said in-store clients spend an average of $1400 a year, online spent $200, and those using both spend $2500 a year. he said the company's growth

will come from middle and higher income customers, customers more likely to use mobile phones to shop. we'll see how it plays out. >> it's a key moment in mobile payments when you have a huge retailer, you know, 22 million walmart.com accounts you can link to the app. it brings up question about the partnership it has with currency, this retail consortium with a loyalty program they launched earlier with chase pay, how that will play into the walmart. they say they will work with it and eventually added to the app as well. it will be interesting. >> thanks, mary. >> sure. when we return, handbags can make a statement and, tomorrow, auctioning off the most expensive purses from the top names in the business. they are going to cost you, though. details after the break.

can is the first ever u.s. hand bag auction. one of the bags expected to sell for six figures. robert frank joins now with more. robert? >> an amazing story. more than $2 million worth of handbags auctioned off on friday, the first ever live handbag auction that the auction house is holding here in the

u.s. we have the handbag specialist, i can't believe i said those words, chrities's handbag specialist. >> thank you for having me. >> ferraris, art, wines diamonds investments, but now handbags, really? >> absolutely an investment. with kind of the rise in the primary market, it's about a $3 billion market, luxury accessories and stores, and makes sense like everything else, in the secondary market, and women buy them because they know they are worth more later. >> what's amazing, if you order a kelly bag, they are going to tell you it's a year, 18 month or a two year wait. the secondary market, particularly for these custom bags, what's the markup versus retail bags? >> it can be significant. >> two to three times? >> can be, absolutely. some retail for $12,000 and sell

at $30,000 in auction. >> which is cheap compared to these. >> three highlights from tomorrow's auction, actually, and to begin here, we have a horseshoe, custom ordered by a client, and the bag is three iconic colors, but one put together is really special. the estimate is $15,000 to $20,000. >> there's a secret vip list, only select few women or men customers can order custom bags. you have to have spent, what, hundreds of thousands of dollars to get on that list, right? >> you have had to amass quite of fortune of handbags i have to say. this is the most expensive lot in the auction. this is the diamond burkin. it's 35 centimeters, white gold and diamond hardware. the estimate is $150,000, and we

sold one recently in hong kong for $230,000. >> original price? >> we do not say regional, but prices are around $300,000. >> oh. >> pricey. this is my favorite, on the cover of the catalog. this is a himalaya kelly, one of the most rare bags, so rare that in order to get the gray to white gradients is complex dyeing process. >> you say in ten to 20 years, calling these investments, these are worth as much or more than you sell for on friday? >> that's what's special about the category. keep them in tact, plastic and hardware new, you make money selling them years later. >> who does that? >> these are my clients -- take them home and wear them as you

should, and you can sell for what you paid for it when it was brand new. >> if you're not going to ask it, mike, you're too shy, is there a murse to be auctioned? is there a man bag in the auction there? >> i have to say we have a number of the best men's bags and briefcases in the auction. we have the briefcase -- >> i don't want a briefcase. >> we have a couple murses. you. >> a satchel. >> what's that cost? >> $15,000. >> discount compared to women. >> i see my wife's closet, to buy some, but -- >> i don't know what to get a man who has everything, andrew. >> a $15,000 murse for andrew. >> tomorrow at noon there's a number of them. >> any way i can get it for $15? >> probably not. [ laughter ] >> thank you so much for joining us. >> thank you for having me. >> when we return, jim cramer from the new york stock exchange. here's the futures right now. they are, oh, a little up, a

little down all day. dow's down, the other two averages are indicated a little bit higher. we'll be right back. at ally bank no branches equals great rates. it's a fact. kind of like playing the boss equals the boss wins. wow!

. . let's get down to the new york stock exchange.

did you get the chance to see the performance of the chipotle ceo? >> i think it is reassuring. one of the problems they have had is by the time they get there to try to figure it out, it is gone. chipotle did not have a good last quarter. they have already set expectations for what the rest of the year is going to be. if they beat those expectations, the stock will be done going down. the brand loyalty remains strong. >> what about con ocophillips? >> they are not going to react to this current price. during the days when oil was at 12.10, they didn't react. they have to react for 2030. that's what those budgets are about. you don't see them cut by 50%. >> i think you should recuse yourself from talking about mexican food, cramer. >> good crowd last night. >> changing the menu up in

january. >> you can't get a noro virus at san miguel. >> i tell those guys at chipotle. i say, listen, i'll match you toe-to-toe with any tequila you guys serve. that's how we have them. >> you have to have a margarita with mexican food. >> i have a mezcal margarita and a spicy margarita. i'm just pouring the aldamas. >> what's the best for a margarita? do you need a clear agave? >> 100% agave. the reason you have a hangover is they have 50% agave and 50% sugar. 100 agave is mandated by the government to be all the same. >> we need to talk, do triple sec or quantrum.

>> quantrum. >> important questions. >> very important. >> great to see you, jim. looking forward to the show in a few minutes. coming up, an eagle ruffles donald trump's feathers and star wars nerds unite. folks in hollywood feeling the force and gearing up for the big launch. details right after the break.

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victoria stilwell, you appear on tv working with canines. are you a dog lover, watson? i do not own a dog. but i work with veterinarians. how do you do that? i help them analyse over one hundred thousand pages of medical studies. that's great... 'cause they can't exactly tell us what's wrong with them. isn't that right, rosco? rosco. who is a good boy? who is a good boy? you are. yes, you are. watson, i think you need to work on your dog voice.

a tent city has gone up in front of a theater in hollywood as fans are hoping to get a chance to see an early screening. the latest installment to the star wars saga is going to be a blockbuster. >> would you stand out in tlin long? >> absolutely not. >> not much can ruffle the feathers of donald trump. during this photo shoot for "time" magazine. the eagle with the donald wasn't ready for his close-up. this behind the scenes video shows an angry bird. >> fix his hair. that's my favorite part.

watch again. doesn't like it. >> then, the standing-up shot. >> someone told him, don't put your finger there and he did. >> here it comes. >> we can laugh at this but he comported himself pretty well. he is not afraid. you can imagine how many people would look terrified. >> right. he would stand right up to him. >> they would look like total wimps from that. he was like, come and get me if you are going to. take your best shot. >> mr. trump announcing he is postponing his trip to israel after benjamin netanyahu's office condemned his comments about muslims. >> you would imagine a trip like this would be pretty difficult for the israelis at this point. you remember the birds. when they find the corpse, you know what they look like. you know what's missing, the eyes? >> you are right next to this

eagle. >> i would want to dunk. because these are tasty, squishy. >> don't, don't. donald has said he will go to israel, quote, after he becomes president. >> ikea could be coming to a main street near you. they will focus on access to public location when considering locations. they prevently targeted highway junctions. >> chipotle shares are gaining ground. dealing with health scares on the northwest and the northeast. the founder and co-ceo apologizing on the "today" show. afraid to come here. the questions might be too tough. putting into place sweeping new food safety practices they hope will prevent outbreaks in the future. that's fine. today is our sister network.

probably got a slightly wider audience. dow chemical is getting combined. the deals are being valued at more than $120 billion. >> join us tomorrow. >> i'm not here tomorrow. join kelly, joe, maybe andrew, tomorrow on squawk. "squawk on the street" right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. some modest gains. central banks and focus as the swiss and u.k. leave banks unchanged. the nikkei down three days in a row now. here in the u.s., jobless claims just slightly above estimates this morning. crude was trying to hang on to some earlier