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 gains after that

opec supply forecast coming in for next year. what we will hear from chipotle ceo on the company's food safety debacle. they like what they are saying so far. >> we will give you the latest developments on that potential likely deal between dow and dupont. could create a combined company certainly worth $130 billion in the marketplace before it splits it all up. >> the world's largest retailer getting into the mobile payment race with walmart's new plan for consumers and the competition. stocks looking to snap a three-session losing streak in which the 200-point gain was essentially wiped out. weekly jobless companies go to a high. debt reduction and the stocks still down about 70% year to date. both glencore and ben chevron making comments about the

export. glencore is a survival issue. they throw a good face. constantly saying, we have much better cash flow than you think. they may have it. they are very good traders. i put them in a different category than freeport. three times eye charm. oil, you have to understand when you see this chevron budget cut. these guys don't think like us. they have projects on the board for 2025. they are not going to scrap 2025. they don't know, as brown said the other day on another one when bloomberg was interviewed by the former ceo. we don't know where it is going to be. we can't decide that we are going to base our budget on where it is. you think, why don't they just ratchet back down 50%? because they have things they want in 2030. they have to figure them now.

>> on that point, wti did, excuse me, reverse this morpg. it is now below 37 again. we should point out. >> so opec comes out and says, we actually believe nonmember supply is going to drop more next year. arguably, their strategy on preserving share, working. oil is not responding to that. >> this is not true. there have been remarkable things done in the last six, seven months about technology and getting the cost down. an outlier in col ol still worthwhile. eagle, fabulous, $45, working for these guys. they won't stop. additional barrels we have had in the last few years. the sunnis may say what they want. it is not us. at $45, it works. at $45 shl, it works. listen, your are at 37.

most of the companies are using $45. >> they don't know. >> they are not planning to cut back the way you would think they would. >> what's the danger? >> they need the cash flow. they can't stop. they bring down the cost. they bring down the cost. we are the marginal user. we are still doing it. natural gas, by the way, accelerating production. they are accelerating production because of this under dollar. these are guys that do not think like we do. this he are not watching our show. they are trying to figure out how to get oil out of the gulf of mexico, which they will get

for $15 a barrel if they spend a fortune now. >> they are also watching their balance sheet. we are in a period where debt becomes more important where we talk about lefverage ratios and the ability to pay interest. that becomes more important not as much as for the big guys but the medium and smaller guys. even for glencore. earlier, the ceo of the company said, we are going to make 2.7 to 3.7 in annual profit from trading no matter what commodities are doing. that was his quote. now, not so much. they will still make a lot of money but not as much. it becomes more important because of the debt they have on their balance sheet. >> copper is very different from oil. >> what's their leverage rate. you range industries now and

people start looking at kmi, of course, and the pipeline. what's the debt load? what happens if ebitda goes down? >> it ended up to be terrific, 5% yield. they suspend the dividend. the reason they had some adjustments again. they are selling at the market. they are selling a ton of stock, $1.5 billion. another $400 million they are selling at the market. those of you that think carl icahn bought a 10. freeport is selling stock every day, because they have to meet the credit demands. copper is what you use when you build major infrastructure. you want to look at the china numbers and brazil numbers.

they are not building major infrastructure. that's what copper is used for. i have found five new uses of copper. aluminum, there are more uses. it doesn't matter. >> it goes into a carrier air conditioner at a new condo. carrier has a full day meeting. they these guys have to decide whether they want to meet demand for otis elevators in 2018 and join them. it is not as easy as we make it sound. >> you think that dow decides, this quarter with ag. no, they are saying basf is not stopping. the chinese aren't stopping. we have to combine. the world is not looking like we thought.

they are thinking 2022. >> chipotle's ceo speaking out about the food safety issues surrounding his company. he apologized to those who have fallin ill from eating there and defended his company's approach to food quality and pledged safety for those that choose to dine at a chipotle. >> if you look at the quality of our ingredients over time, we have made great strides, meats with out antibiotics, more organics an local and sustainably raised foods. this was a very unfortunate incident. i am deeply sorry this happened. the procedures we are putting in place are so above industry norms that we are going to be the safest place to eat. >> the safest place to eat. can they do that, maintain their commitment to certain supply chain issues and grow at the

same time? >> it is interesting to see steve ells out there. steve ells doesn't do tv. i think they made a very good case that they are going to be the cleanest and safest. >> been there a couple times since then. i've eaton chipotle too. >> would you go eat there for lunch today? >> yes, i would. i think it is very interesting that jack, jack in the box had a meeting yesterday. they have had no pickup from chipotle, nuone, none. we have a qudoba close to our

th ch chipotle. news coming out of aig, the department yur of a number of senior executives at the company. if you recall aij in a battle with carl and john paulson. they want the company to consider breaking into three parts. for their part, they don't believe that would result to any benefit to share holders or financial benefit. four of the 15 most senior executives departing. that is a continued effort to real line duties and to cut costs. they are under the pressure from mr. ic icahn and mr. paulson.

maybe you don't do it through spins but do it through divestures. move ahead with the three ds. they have strongly come back and said, it is not going to help. it wouldn't help. i am not quite sure what i'm reading here what's going on. >> you don't wake up one day and find out that the top management. >> the new executive leadership team designed to execute the strategic priorities and provide value.

>> your new management structure will assure they have strong end to end capability within the segments to transform in a more efficient organization. that is a direct quote from ceo, peter hancock. so they bid ado to a number of senior executives. >> i think that battle is far from over at this point when it comes to mr. icahn and mr. paulson. to update people on another enormous company, a bigger company in the making. come to the final points if you will in terms of getting an agreement between the two for a

merger of equals that would bring them together in a historic deal. it would have been announced today. oftentimes, deals this large can take a little longer to get to the finish line. nothing seems to be offtrack. they seem to be simply saying, probably tomorrow. important for people to understand, when we talk about the split into three separate companies, this is going to take a while. the deal, itself, when they announce it, is going to take as long as a year to get approved. nothing is saying it won't get a tough look from the anti-trust regulators. then, you are going to embark on spins of the parts that we have talked about, specialty products, materials and then ag. that could take 18 months. you are looking at 2 1/2 years between now and when you see three separate companies.

i so wanted them to get ahead. they won't go there. they said, 2018. >> most likely, this won't get done until the sec half of '16. you are looking at most likely 2018. >> a look at how badly they wanted this, liveris got the call. >> i have known andrew for a long time. a man of his word. >> we talked yesterday about how he tried knocking on his door and didn't get anywhere. >> i betcha they are low balling it. >> say again.

>> they are underpromising in taking over. >> you do? >> i really do. >> the synergy number will be very important. >> the three companies. you want to be in the ma jurority. >> $14 billion in value was created. >> the only thing that was good yesterday. >> when we come back this morning, walmart jumping into the world of mobile payments. we'll fill you in on what that means for the world's biggest retailer. b of a just had their stress test approved by the fed. we'll talk about what bob peck thinks about a sale in the first six months of next year. a lot more "squawk on the street" from post 9 in a minute.

walmart is moving into the mobile payment world. the world's largest retailer announcing the launch of walmart pay available on the walmart mobile app to make shopping faster and easier. they will start rolling it out in select stores. nationwide launch dubee the first half of 2016. retail giant says 22 million customers actively use the app each month thinking back to we had doug mcmillon on the show in february. we asked him, are you going to

commit to apple pay? we wouldn't commit and now we know why. >> they are probably going to go to an open system. doug is really trying to do everything he can to get the company much more millennial, so to speak. howard schultz has his system, which has been very successful, the best in terms of the way it works. in the end, you are all going to find that this is k--everybody h has to do it. starbucks has the most important and valuable app. you need an ecosystem. it is good move by walmart. i continue to believe maybe it is wishful thinking. i continue to believe that doug is going to pull it off. i wish he would spend lesson the buy back and more on making it so you can beat amazon. they have the ability and family to support them. this is what they have to do. >> that's a long-term turn. >> you are not going to sit here

and go, he pulls it off next week or next month. it is going to be a while. >> by the way, i say something and i don't mean it in the wrong way. he is a nice guy. i mean it in a good way. i think he is trying. i think this is important and it shows me they have a lot of people go there. i have my walmart app and they are getting better. i'll go there this weekend and see it. >> you will? you will go to walmart this weekend? >> where? >> where is the walmart? what do you do, wonder the aisles? >> you just go and see all the merchandise and just shop there. this is not kmart. i have bought outdoor stuff at walmart and boots and jeans there. >> is there something you need? is there something i can get you? >> no. this is what you do.

you go shop. i'm an american. i know it hasn't come up yet. >> you buy some t-rex arms and wear them around all day. >> when lee staub was running walmart, i made some comments about how i didn't like the emergency room feel to it. i didn't like that hospital feel. he said, go to some. he started changing some and i started liking them. lowe's and home depot keep getting better and better. amazon keeps getting better. home depot is so good. when the gardening season comes, i drop by walmarts to see what they have. home depot, they put in some motion and i feel bad for doug. the other guys are relentless. everybody isabel belichick in t

business. >> we will get cramer's mad dash and count down to the opening bell and talk about what home depot said about their changing. a lot more "squawk on the street" from the nyc after the break.

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it's a mad dash. we have been so busy. we have about six minutes. i don't know what we are doing. >> we are going to talk about piper raising their price for trip adviser. i'm using it as a segue to get into what happened yesterday when we had yahoo!. they could have bought trip adviser, hotel tonight and

become a competitor of price line and expedia, which are fabulous stocks. this company, it would cost them a lot of money. we are hoping they say, we have a vertical coming up. whether it be the sports vertical. it could have been concur. this is what you do if you're an aggressive company. >> expedia understood it. >> they interviewed the ceo not long ago. >> weren't you impressed? >> yes. they are doing a solid job. the key has been the ability to immediately book while you are on trip adviser as opposed to having to go to the separate place. >> if yahoo! were to come on and say, we are going to blow you away with a new vertical, the menu and how people get food and have it delivered to you, they never showed you that level of

creativity, david. that's what i think in the end, they needed somebody here. >> that's it. get in there. he said the company is for sale. that's what it was. >> we're going to talk more about yahoo! when we get the opening bell. >> more "squawk on the street" after this.

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you are watching cnbc "squawk on the street." 36.52 is the low they have set this morning. february, a lower price. 34.59.

>> the amount being pumped right now is extraordinary. the amount that's in tankers is extraordinary. the demand is not going up. >> there is the opening bell. members from u.s. customs and border protection. and nasdaq, atlassian, business and collaboration development celebrating. a bunch of names from last night. menswear house. >> and joseph f. banks, a disaster. >> hasn't gone right since. >> steven, with a pretty good note about it. this is a bad acquisition. they shrunk the buy.

there is an impairment charge related to the banks. you can't bottom fish. >> meanwhile, chipotle is up 4%. you think what they said on today worked. they needed to make a statement. they made a statement. they were very forthcoming. by the way, they have not been hiding. there are some people that feel like they have been hiding, in between when the boston college story broke. they were already out there saying, please, let's find out whether it was e-coli. they have not hit it. they do have an ethos. you tweeted. they have an ethos that says, basically, fresh food. >> it was in their annual report. we may be at higher risk, because we don't freeze food wait a lot of other food chains

do. >> i think people are bouncing a short-term concern of e-coli. my daughter had the poisoning, it is terrible. versus long-term, do you want to have a series of illnesses? a millennial says, i'm not going to taco bell no matter what. it has to do with short-term, versus long-term. >> i'm glad you brought up yum's investor day meeting today. they did come out and give us china cops. kfc, falling 1%. pizza hut down 9%. they did reiterate, same store sales in china. they also confirmed 2015 guidance. the year is pretty much over. 2016 guidance, they expect to

grow. 10% at yum. in 2017, they are targeting on going growth of roughly 15%, jim. that's out of yum. that starts at 9:45. a few minutes from now, they will start their presentations. >> november was not good. >> i don't know if you saw the car sales. 23.7 for november. >> i was a little disappointed but i think the two companies will be something that wall street likes. i think that china would really start to come back at a level where you would want that chinese slipper.

chipotle is up big. on the "today" show, that was very smart. >> if i were them, pretty much guaranteed you are not going to be asked about guidance for the quarter. >> i was wondering if they didn't ask about same store reliability. what we wanted was gross margins and he comes up with stories about whether you get sick or not. i'm going to talk to matt after the show and explain to him what really matters is the granularity of the labor costs versus the through put. >> he didn't hit through put at all. that lawyer, he doesn't know how to do an interview. >> he is narrow. i'm wide. the most important interview i have ever seen for a company coming out there. >> we know we have a problem and here is what we are doing. i know we are going to make it safer than ever. >> they have a list of companies

they think apple could or should buy in 2016. did you see this? gopro, box, adobe, and tesla. is this being taken seriously? >> i would not buy box. going gopro is ridiculous. >> they have a history of doing big deals. >> i asked apple to do my directv. they said, are you aware it is old technology. att comes and buys them. >> att is trying to do some interesting things with it, in terms of some seamless between your devices an your thing on the wall, your tv. i guess they still call it a tv. >> that's an attractive list to get people talking. i know aaron levee comes on and he is the ceo of box. it is much more likely that ibm would buy them. they just came public and that is probably going to happen.

>> yahoo! we focused a lot on it yesterday given the news of yesterday and the interview we did with the company's ceo and chairman. stocks down again this morning. i would come back to this idea. some of the coverage this morning, they may be for sale and a number of analysts coming out with reports this morning that sort of indicate their belief that a sale seems most likely in some ways. you certainly can't preclude that. we asked the company's chairman and he said, if we get an incoming offer, we have aph fiduciary duty to look at it. there is a level of complexity in terms of separating this core business from the rest of the company, the alibaba stake.

a number of things that will take time. it remains unclear whether they will get anything incoming or not and what it might be. i've made this point. if you are a company that might be interested, but perhaps you want to wait until it has actually spun off to buy it. it has obviously a management team but a board and you could conceivably come after it in a hostile fashion were you to want to. you don't want to approach if they are going to do a tax-free deal. that would stop you from doing the deal for two years once it becomes public. we'll see is all i'm saying. >> what did you think of this piece about the idea that there may be contact? >> outcome, yeah.

>> for six months, is his view. they will tell you a different story in terms of how hard it is to get all those things signed off on. management will say, it could take a long time. the activists take a different tack. i don't rule out the possibility that this company still could find itself the subject of a proxy fight come spring. >> did you get any feedback on the interview? >> a little bit. >> you got some good comments. >> a green bay guy saying horrible things about donovan mcnabb. that guy keeps it up, somebody is going to hit him. after i did, he said, that wasn't supposed to be you. then, i had the guy thrown out anyway.

he was wearing the wrong color jersey. >> when you go to a game, you have to respect the house. i'm stuck with five different shady mccoy number 25 jerseys. what do i do? the answer is, i wear connor barwin, number 98, said that we are winning, because i am wearing his jersey. here is a guy that understands. nothing to do with chip kelly. let's get to bob on the floor. mixed opening. tech is leading. oil is below $37. oil stock down only slightly. conocophillips and chevron cutting expenditures. with oil down, normally, these would be down even more. it is encouraging. they are trying to find some type of bottom. i want to note the expenditure

of the cuts. their numbers were $11 billion. in october, they cut them to $10.2 billion. now, the most recent numbers we just got, they are cutting it to $7.7 billion. in a few months, from $11 billion to $7.7 billion. i'll give you an idea of the magnitude of the cuts that are going on. i mentioned, somewhat encouraging that oil stocks are trying to find some kind of bottom short-term. >> i have noted this tendency to sell losers for tax purposes in december and try to reverse that as you reposition and buying some of the worst performers. a basket of worst performers were down fractionally yesterday. the best were down more. the little bit of rotation from winners to losers may be starting already. maybe some of the deaths are out

there on winding trades. a pre-packaged software firm. they are going public today at the nasdaq. hasn't opened yet. $21, that's an excellent price. the talk was 22 million shares at $16.50 to $18.50. they had raised it to 19 to $21 as an estimate. this is a very good outcome for a dismal year. the tech ipos were cut in half. only 23 tech ipos this year. many of them didn't want to go public, because they had enough private finance.

>> the ipo fell apart the month of august. >> final lirks todly, today is interview with art cashin. the biggest story, oil, i asked art about that. he said we may have a very different ending for oil and oil stocks by the end of next year. >> my feeling is that the weakness in petroleum will continue into the early part of next year but not into the end of next year. so they will be able to do a couple of victory laps at the end of next year, because they have cut costs drastically. >> always nice to spend time with art at bobby van's and the friend of fermentation down the street. the fed, oil, earnings and the global security situation, art cashin talking about all those things and what's going to happen in 2016 on cnbc.com.

>> thank you, bob. let's get to the bond pits. rick santelli. >> what hasn't happened in 2013 or '14 or '12, or '11. what's moving the market and giving a bit of frenzy to the market, next week's fed meeting. two-day normal zation. we'll wait and see. if you look at a one and two day of tens, yes, rates moved a bit. look at the scaling. on monday, we settle at 223 and yesterday, 222. we are at 221.5 today. you get the picture. one part of the curve that traders are trying to handicap that has had the biggest contribution to flattening the yield is the five-year. if you look at this chart, since the beginning of june, it jumps

out at you. where are you offsides? you are off sides at 1.75. we want to pay very close attention to that. right now, 1.64, we are still a way aways. let's switch gears to foreign exchange. august 1st, look at the euro versus the dollar. why? because there has been some movement there. central epicenters are part of it. you want to pay close attention to. we'll go to the only currency, your weather vein for everything. if you look at a one-day, it is up a bit but not that much. t

"the wall street journal" had a big article. you are hovering at the dollar versus the currency. china's reserves, they keep trying to stem some of the big drops they have had in their currency. they sell dollars, foreign exchange, excess reserves. it seems like they are losing that battle at least for now. carl, back to you. >> thank you very much, rick santelli. see you soon. when we come back, what tim cook at apple is saying about the company's new iphone case. hyperloop technology planning on building a test track in las vegas. a step toward elon musk's vision for transportation. chipotle is back up almost 4%, back in a couple minutes.

i probably wouldn't call it the hump. that was apple's ceo tim cook talking about apple's new iphone charging case, which has gotten mixed reviews.

cook added, have you ever used other cases and tried to get them on? it is very difficult. if you are charging your phone every day, you probably don't need this at all. if you are out hiking and you go on overnight trips, it is kind of nice to have. >> i like what technology is doing with wireless charging. i don't know. don't take this away from me. >> i wouldn't dare. >> i wouldn't dare. if we get version 2, it probably won't be a wholesale reinvention. will you upgrade on that. >> i have to see. i like my watch very much. my favorite thing is the big ipad. the pro. i watched this jessica jones, an episode every night on netflix. the resolution is better than tv. it is one of the greatest

things. it has brought my wife and i closer together. >> you watch it and it is in bed with you. >> you probably think, tmi. >> instead of watching the tv on the wall. it is better resolution. >> she moved it at one point. i said, will you just keep it where it is? >> you are busy watching narcos. netflix gets nine nominations and amazon, five. narcos is up against game of thrones. amazon had a bunch. >> netflix is changing. it really is forcing so much change in the broader industry. they are spending, what, $4 billion now. they are going to have 31 new shows next year. i think that's the number. 31. think of how many hbo has. i think that's the right number. i want to make sure.

it is not an insignificant amount of money. this is changing. broader picture, changing everything. change the way you have to think about what they are doing when it comes to the media companies. >> jessica is the one that killed mr. white. that's why breaking bad had a decline. jessica and mr. free had a lot more integrity. this jessica jones is made for the ipad pro. tim cook, thank you. it is so great. >> you know what got shut out of tv comedy? broadcast television. it is all hbo, netflix, amazon.

that's the age we are living in, jim. >> dow up 45. don't go away. announcer: right now at sleep train,

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cien, tremendously bad guidance. telephone equipment company. a very honest company but they just said they are going to look for 550 to 590 million revenues in the next quarter. jpmorgan was looking for 657 million. what are these telephone companies doing? you always think they are in a big spending cycle. it turns out that they are not. maybe the core business is not. we need answers, krichciena. >> now, adobe, it is more of a cloud company. when they put out the number,

don't sell it from the headlines. people make a mistake every time. >> what's on "mad" tonight? >> we have a company that went private from public and is doing pretty great. dave and busters. i remember when we used to go and she used to play the claw. >> she never got one? >> three in a row. it was the greatest day ever, probably hyper bull as you would say. >> hyperbole. >> i don't know if you use post mates. they will deliver whatever you want. >> it makes me feel like i'm a pharaoh. >> bring it to me.

yule brenner. occasionally, i try to see a little musical theater. >> if you go to walmart with me, it is much more exciting. i am a merk. >> no americans ever come to see broadway when they come to new york, no, never. >> i'm part of the culture, part of 100 million strong. >> putting on a little show at walmart wherever you go? >> i am going to be in the aisles dancing. >> scaring little kids. >> i'm going to get remarried there. >> the nasdaq president on ipos in a moment.

at ally bank no branches equals great rates. it's a fact. kind of like ordering wine equals pretending to know wine. pinot noir, which means peanut of the night.

good thursday morning. welco welcome back to "squawk on the street." david faber at the new york stock exchange. some muted action. the dow is up about 29 points. we are keeping a close eye on crude, which bottoms out at

36.52. just above that level. we know how much of a driver that's been. >> this is our road map for the next 60 minutes. tech stocks, some of the biggest gainers, specially chips. find out which ones you should own. >> the ceo and chipotle finally speaking out about the e-coli and noro virus outbreak. >> the ceo of nasdaq will join us and what's ahead for 2016. >> stocks modestly in the green. all major indices on track to end a three-day losing street. joining us at post nine is michael laroni. great to have you. >> thank you. >> the general view is, 2016, modest, if anything. that's sort of where you are too? >> we expect the u.s. will continue to struggle and have pretty uneven economic growth

from that perspective. what you want to think about heading into 2016 is who is able to grow their top line revenue and benefit from a strong u.s. consumer and parts of the market that may benefit from the beginning of policy normal zation. >> we think home builders and regional banks fit both of those characteristics. the u.s. consumer, unemployment, 5%. you have waging growing at more than 2%. gas prices are lower. import prices are lower. elevated savings rate. we think they are in a strong position. combine that with the fact that interest rates should benefit net interest margins and regional banks will help. housing recovery, lending recovery, that should help both. >> isn't it hard to make a forecast for the stock market

next year. >> certainly, i think finding that bottom is one of the things that is interesting, go back to the financial crisis and think about when financials began cutting their dividends. that was a sign that things had bottomed. we are starting to see that energy companies have gone for and away in terms of their capital investment projects. they have been cut to shreds. this might be the beginning of a bottom from an energy perspective. that might provide some bottoming from the market. >> do you think the attitude will change towards companies that borrow to buy their own stock. particularly those that have weaker balance sheets. ceo, stocks, time warner have bp identified by goldman as being perhaps relevant in that area.

in aggregate, it is more of a low, and share buy backs. to most, they are good. to your point, they are not all good. >> i'm talking about people that borrow. >> that is not a good use of capital from that standpoint. i think buy backs get painted with this broad brush. they are not all bad. you mentioned difficult cuts are generally a buy signal. last time, that came on the he'lls of bankruptcy, buyouts. why wouldn't you wait for the same thing to happen in energy? we are starting to see stress in the credit markets. we expect default will pick up. it is already beginning to happen from that perspective. it does seem as though

dividends, historically, when they have been cut, have been an interesting signal that it could be time to start entering positions. >> more in the near term. we haven't seen a hike since 2006. are you confident this market can handle an interest rate hike. >> i think it is interesting in that i do believe they will raise interest rates. it will be the most dovish, monetary tightening policy in history. >> they will continue to come out and assure the market that this will be a very slow and gradual pace forward. >> shi the fed decide to raise interest rates next week, with he could get a rally and it will move some uncertainty. finally, after all this talk, we are beginning poltcy normal zation process. janet yellen did a nice job

outlining that we have come from 10% unemployment to 5%. this is an indication of their confidence in the u.s. economy. this may help the market. >> i think more of the issue is it is aurnd certainty. the market is pricing in at almost 80% of fed rate hike. i have a colleague that says the only surprises she likes comes in little blue boxes with a nice white bow on it. the market doesn't like to be surprised either. >> if the pace is gradual or more gradual than people think, that interest margin is not going to go to the moon, right? >> right. >> doesn't that put some risk in

to the regional banks. >> they have done well despite redixs. they have done a very good job keeping their fee income. even though we would not like the sta the steepening we have in the curve. >> thank you, michael. it is nice to see you. we are watching shares of chipotle. the founder and ceo spoke out about the food safety issue surrounding the company in crisis right now earlier on nbc's "today" show. steve ells did tell matt lauer he apologizes to those that have gotten sick from eating at his restaurants. the stock is rebounding after the comments. they also defended chipotle and the safety practices. >> if there is a silver lining in this, it is that we have

looked at every single ingredient we use at chipotle. >> if you can't identify the source, how do you go about eliminating it in the future? >> unfortunately, what got people sick was no longer in the system by the time they even showed symptoms. and so unfortunately you will not find that. the silver lining comment is that it has caused us to put in place practices that our epidemiologist export, d dr. sonnenburg says this will put us ahead of industry norms and this will be the safest restaurant to eat at. >> to jim's point about marissa mire, david, coming on yahoo!. when a company is in a bad situation, it is good to come out and get out front and actually talk. it is hard for investors to weigh the reputational damage of

what this will do to stock and sales. >> it also means that you can't source locally as they had promised to in the past. many suppliers will not be able to jump through the hoops. the stock is down 25% since the middle or beginning of october. that's far more for the market about the structural story may be ending. these extraordinary return on investment capitals which you have nfr seen before in the restaurant industry, may be coming to an end. >> look at blue bell and costco and a lot of other companies have managed to move past this. if you can start installing, maybe they can grow. >> 16 analysts have cut their price targets keeping a buy on

chipotle. >> big tech stocks making some huge moves sips tnce the beginn of the quarter. a lot of those chip names up more than 30%. find out which ones you should own now. plus, honda. yes, honda is now making small jets. we'll have more on this when "squawk on the street" returns. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys!

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welcome back to "squawk on the street." i'm seema mody. d dow jones reporting the company separation will be a traditional spinoff. after the list therks will likely list on the hong kong stock exchange. they say they will return $6.2 billion to share holders before the china separation. >> some big moves happening at yum. thank you. honda, no longer just an automaker. turns out tonight, it also became a plane maker. our phil lebeau is live with that story. >> reporter: last night, the faa gave certification for the honda jet, which means honda is now officially free to deliver some of the first business jets that

it has built here in the united states to customers not only here in the u.s. but around the world. that's entry level in the world of business jets. the first deliveries will likely begin over the next month but ramp up in the spring. they believe that even though this is a vit is a vol tiatile market, he believes his company will do well. >> honda has good financial backing and we will be able to sustain that. if you take a look at the long-term basis, a strong corporation like honda is very big, good chance to succeed in the aviation business as well. >> honda already has orders for more than 100 honda jets. deliveries will start this spring. we thought it would be

interesting to take a look at shares of honda versus textron, the parent of cessna and ebrraer. yes, the jet business can be volatile and honda is primarily an auto stock. take a lack look at how they have done. they are a planemaker in addition to being an automaker. >> the entry price will seem quite low to a lot of people. this is something a lot of people in business might be able to afford. are the dynamics of the industry changing here despite that it is more fuel-efficient and so on. >> reporter: at $4.5 million, people will say, that's peanuts, nothing. that's the entry level for the business jet market. it is really small relative to the rest of the market. you are talking about

entrepreneurs, high net worth individuals that also have a pilot license that no longer want to fly a turboprop. some will say, well, it is a nice little entry. honda will use this to grow the business and move into other businesses. >> i think they also described it as a flying acura. good to see you, phil lebeau. coming up, no shortage of controversy when it comes to donald trump. what is all that controversy doing to his business brass? more on that when we come back. this holiday season, get ready for mystery. what's in the trunk? nothing. romance. 18 inch alloys. you remembered. family fun. everybody squeeze in. don't block anyone.

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i would ask you to look the athe good. there is no war, no disease. you deserve to know the truth about what they are. it's a relatively flat tape today, which is why this is getting some attention. twitter is up almost 7% to 25. almost $26. they are trying to get advertising dollars to what they think are half a billion people that sometimes visit twitter but don't log in. when you click, you might see an ad even if you never actually log into twitter. it is not entirely clear how much money they expect to get out of this new practice. it is something they have

announced today. it is being reflected in the stock. >> which is down 28%. i found a twitter commercial. they started showing them on tv. they are really trying to push out this idea of moments. i thought it was very effective for whatever it is worth it is something of an understatement to say that donald trump is a constant source of controversy. that's not helping his business partners, it would assume. what is trump for president doing for the trump brand? eamon javers is live. >> reporter: we are starting to see a reaction to some of the comments that donald trump made about blocking muslims from entering the united states later this week. take a look at some of the impacts. a religious coalition in stanford, connecticut, trying to block the trump name from a residential tower. crews in dubai have been

removing the trump name from billboards in the emmerate ther. in vancouver, they want the trump name off downtown condo tower. in the middle east, chain bans trump home products in qatar. we are getting a mixed reaction. >> i would be more comfortable with the name off. >> i don't think about the name. we use 160 riverside boulevard. we don't say we live in the trump building. >> i'm proud to live at trump place. i think donald trump has done a brilliant job with building what he has done here. i am proud to know him and his family. i think he is a great american. >> reporter: i just talked to mike jackson out in las vegos a. he is a brand expert who has worked for general motors and other big iconic names. he made two points.

he said, he has to imagine that new licensing deals for trump facilities, the golf courses, the hotels, those negotiations, he said, would have to be at a stand still as potential trump business partners wait to see how this plays out. if he is able to be competitive for the presidential nomination, if he gets the republican nomination, there could be blowback for other big american iconic brands around the world. this he will have to distance themselves from donald trump and his campaign if he were to win the nomination. that's looking out nearly a year from now but a concern for american business. back to you guys. >> thank you very much. we are getting breaking news about billionaire investor, warren buffett, investing a personal stake in a real estate investment trust, it is a spin offof sears stores.

we are looking at he is taking about 8%, worth $105 million. that is a small stake for someone like warren buffett but it is significant because neither buffet nor brookshier hathaway has ever invested in sears. we are talking about a company that holds about 254 stores. we have reached out to sears and also to eddy lambert, who controls this, and we are waiting for comment right now. we are reporting that warren buffett has taken a personal stake in a real investment trust. >> sharon ep per sop, thanks very much. >> also, watching oil prices. they have been the big market story over the last few weeks and year. what's ahead for next year? our bob pisani sat down with art cashin? >> with the friends of fermentation, art's gang. we talked about the big issues

for next year. global hotspots. oil is the hot topic in 2016. this big did question, how safe are oil company dividends? >> my gut tells me it will stay low probably through the first quarter of next year. they are problems with refineries. we might see a divergence when oil remains low and gasoline starts to go up. >> if oil is at $40 this time next year, the dividends may not be safe. >> they will have to cut down to the bone to keep the dividend safe. oil will remain weak in early

2016. you will see producers go out of business. we are living hand to mouth and things will begin to fall apart. >> art's point is that oil stays low longer, $40 this year, they are going to cut the dividend or go to zero capital expenditures, ugly choices this time next year. art does feel oil will be a bit higher. more on art cashin, at cnbc.com, his annual interview with bobby advance. tech stops continue to be standout performers. the headlinesers are high crow soft, up 24, alphabet, up 23. semiconductors have also been on a blistering run. sandisc, kla and nvidia. how much further can these high fliers run? we are joined by a portfolio

managers at saterna capital and brent stril is with us from ups. a lot of these moves happened in october. that's where it comes from. what do you think will happen to the end of the quarter and into next year. what are your picks? we are headed into a so son alley soft period for software. microsoft has continued to outperform. they have made the right moves in cloud and doing the right thing on the expense control. the partner, ecosystem, is starting to perk up a little more than they historically have. given some of the new directions that the new ceo has taken the company. we are still positive on microsoft. it has had a great year to date three-month run.

it is closer to our price target. relatively speaking, microsoft still remains in a great position. >> paul, where are you on the semi conductors? >> semiconductors have had a nice rally recently. the issue i have is if you take a look at the performance for the full year, it has badly lagged the sec nolg sector. you have had a little bit of life in the p.c. names. the stocks in the semiconductor industry that i like very much are the ones that are building out organically or through acquisitions. the internet of things businesses. one of those that i am very bullish on is the merger between nxpi and free scale, which is a deal that just closed. >> why? why are you so favorable towards that? >> a nice internet of things, positioning and as the companies merge, they will have about 40% of their business from the automobile sector, which is obviously going great guns.

there is increasing penetration of that. >> can you focus on micron. >> the way i look at this at $14 a share, i say the replacement value of their machinery is in the mid 20s and a chinese company had an offer for $22, $23 a share. i think at some point, the stock is going to bounce nicely. this quarter could be a miss. this zero rate interest has been great for companies to

raise money to some of the public stocks seeing tremendous growth. how vulnerable is the tech sector overall to what could be the first interest hike next week in a decade. >> we think we are getting near this cycle and tack. that favors the larger platform vendors with good top and bottom line. you could buy stocks with any type of growth. no one cared about the bottom line in those. that's changed. as we go into 2016, the theme of good top line, bottom line is going to continue. we are seeing fewer ipos. we think it is going to be a tighter environment. fewer platforms that are going to win. >> are there any other names you put on the table for next year for people now. >> we are still bullish on

salesforce.com. in security, palo alto has been a favorite story for us. in midcap go daddy, we think is misunderstood. our favorite midcap name. >> thank you, brent. paul meeks, people would never guess the difficulty you had to get to work. thank you for an extraordinary effort. thank you, both. breaking news from the energy pits. let's go to jackie deangeles. the department of energy out with its weekly nat gas storage report. a drawdown, 76 billion cubic feet. prices are rising slowly. we have fallin so far, so fast. nat gas down about 6% in a week and 12% in a month,because there are four trillion cubic feet of industries in total stocks. weather temperatures, just not that cold right now in terms of

see onality. a lot of people not turning on heat at this point. these prices getting a little bit of a bid because of the drawdown. expect to see more if mother nature doesn't change her tune. not that we want her to. that's what we need for this demand to pick up and work through some of this inventory. >> no one is complaining about near 60 this weekend here in the northeast. thank you very much, jackie. when we come back, the only ipo for december is debuting at the nasdaq. >> reporter: this is what we call a unicorn among unicorns. not only is it a price above the range of $21 a share. it is bootstrapped as an energy company and has profits. let's see if the nasdaq can continue once it starts trading publicly when we come right back.

i'm sharon epperson. here is your news update. support the military operation in syria. volkswagen chairman says the company will start road testing with the emissions results to be verified by a third party to avoid a repeat of the scandal.

a cab driver holding on to what he believed to be an uber driver's car. he was dragged more than 40 feet. it was fueled by a protest. fans have formed a tent city in hollywood, people in line encourage others to join them saying they believe the new star wars movie is going to be a blockbuster. >> do you have your tickets? >> yes, i do. i have to watch all the previous star wars because i have never seen it before. thanks, sharon epperson. keeping an eye on stocks, turning higher. if they hold, it would break the losing streak. the s&p 500 up .03%.

he just put out his 2016 outlook today. this is a change from you. you have been pretty optimistic and pretty positive among wall street economists. are you changing your mind? >> for me, the tide has turned. i see growth next year of about 2.2% on a year over year basis. it is down 50 basis points from where i have been. growth staying around 2% hopefully. it is at least 2. there are risks with the up side and the down side. i have been accentuating the risks. >> they are doing the fed's job,

essentially tightening policy and hurting our economy. >> the fed is going to be hiking rates into a profit recession. >> is that the pabasis of your more negative outlook. >> they showed the best year for growth was 2010 at just 2.7%. after those revisions, it is clear the best we could do is 2 something. with all the q.e., with recession and manufacturing, you have to be more cautious. that's what my view now reflects. >> david, do you share the caution? a lot of uncertainties, the price of oil and the federal reserve hike and strengthening dollar. what's your outlook? >> our outlook is about the same that the u.s. economy can grow about 2% in 2015 and 2016. the dollar is strengthening. it looks like the fed is going to move next week.

there are a lot of unknowns particularly surrounding corporate profits and the price of oil. risks do exist. this is a seven-year bull market, which we are currently sitting in. >> this is terribly depressing. where is the business cycle going? presumably, a lot of people feel yellen should take some responsibility for this. it was one and go and things strong enough to raise rates. if you look beyond that, there air lot of people that say you could expand the economy for another two or three years. i don't know if that is true or not. if that got more widespread attention and ceos and entrepreneurs believe that to be the case, it could trigger more than we are assuming here. i am hoping at least. >> we do think the u.s. economy has about two or three more years in the cycle. opec is contributing to uncertainty right now. we need to see a little bit more

clarity on where things may be headed for corporate america to come back. to your point, once we get this first rate hike out of the way, the market will be more comfortable and 2016 could be a decent year for u.s. equities. >> on the topic of enthusiasm and animal spirits, the m e megamergers continue. is that a sign that growth is hard to come by? >> i would say that the latter. ceo of business confidence plunged. i don't take a lot of comfort that the mna activity is a function of animal spirits. the back that they have brought back so much is a concern. i agree with mostly what david said. i want to make one other point. what i'm fearful of as a bond guy traditionally is the fact that we are replacing one sort

of incertainty when the fed moves with another sort of uncertainty. what's the next move and what's the path of rates? our view is that the path of rates will be shallower than what the fed believes. there is this chance for miscommunication between what the fed says and what the market anticipates. that's a concern also for '16. >> over the last few years of the bull market rally, there has been this wall of worry that the market has climbed. the more strategists and economists that come out with doom and gloom. >> i have never seen you like this, joe, in seven years. >> we are not in the type of environment where companies have the ability to grow the top line as much as we think they could if we were earlier in the cycle.

a sober joe lagornia. >> at least until new year's eve. >> joe, thank you for coming on and david leibovitz, good to see you, as always from jpmorgan. the only ipo set to open at the nasdaq. the president of the nasdaq will join us for an exclusive interview when "squawk on the street" comes back. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.

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goldman sachs says they have found a way to cash in on chipotle's health woes. how do they do it? find out. right now, more "squawk on the street." if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed?

wealth management at charles schwab. the leading sector is up nearly 2% despite crude oil touching a new seven-year low of $36 for the year. the energy sector is the worst

performing sector off by around 22%. powering today's games, consul energy, diamond offshore, chesapeake energy and kinder morgan up over 3% following yesterday's rebound on news it is cutting its dividend. simon? >> thank you very much. >> the software company is the only one going public today. >> looks like a strong way to end the year. pricing above the range. we are hoping to get some indications on how it might open any minute. i am here with the president here at the nasdaq, adina friedman. let's join her. what went right for atlassian.

>> it is a tremendous company and been profitable for many years. it is a b-2 b software provider. therefore, it also has a great business model that investors can understand and get excited about. they did very well with their pricing and generally, we feel a lot of excitement leading up to the opening this morning. a lot of people are comparing this year's ipo ts to last year. what is your opinion? >> we have had 142 ipos come to nasdaq. there have been 192 ipos throughout the united states this year. it actually has been a very strong kreer for iyear for ipos. we still see a lot of reaccept matt ti receptivity. as we go into 2016, we are seeing a very good pipeline of

companies coming in looking at public markets, knowing they are getting themselves ready to go public and we expect to see a very good start to the year. the market environment is one where people can be patient. they want to wait for the right time. they will assess the market environment. a very nice pipeline coming along. >> in terms of size, the top ipos down the street, does size matter in this context or is it more about the volume of wins that you are getting? >> we look at it as how can we make sure the economy enabling growth through the public markets? with 142 ipos, raising over $16 billion here at nasdaq, we feel we have had a lot of growth capital coming in. those that have chosen nasdaq as their list of venue. we are thrilled to be the home. 73% of all of the ipos this year. we feel that nasdaq is the home to companies that are innovative and growth oriented just lie

atlassian. >> a lot of people are looking at you at you as the successor to ceo. what do you think is going to be key for overall leadership at a place like nasdaq over the next five years? >> we have to look at the fact that the public and pry varies markets are healthy and growing. we also have nasdaq private market that is the home to private companies. a lot of companies are staying private longer growing through priva private equity. we want to be the partner to every company that chooses to go public. looking at the next five years, nasdaq is the home of innovation. we are never standing still. we are always looking at ways to support our companies and exchange clients around make sure we grow our company for investments. >> what determines whether you

get the companies versus your vifl? >> we have a much better position and offer services that we own and operate to be great public companies and we provide those services for free as they mature into the public company. we have a wonderful market for them. great visibility tools and our market structure is second to none. we are the best value. >> we are getting indications at $26 a share at this point. this was expected to price between $19 and $26. priced at $21. thank you so much, adina friedman. we are going to continue this big ipo. >> we will watch for the opening of that stock. up next, how this $2000 speaker is currently the hottest thing in the audio world. now, the top 14 apple stores will be selling it. we will talk to the ceo of the

company that makes the speaker right after the break on "squawk on the street."

check out this $2 throughs speaker. it's called the phantom. it's said to be the first high-end non-apple gadget that the tech giants row tail has brought into the apple store. some say it's further signs of apple aiming at its ultra lux market. what's it like to work with appear and what makes this thing so special? quinton is the ceo of the company that makes the phantom. he has it with us. what makes it so unique? the reviews are coming in very positively, but why should people pay so much more than what's out on the market for this? >> it's a new way to amplify the sound. in fact, when you are amplifying sound, you are creating distortion, noise, and so on, and our technologies is really a new technology to amplify the sound, and the advantage that the benefit for the user is the emotion you get from the music when you amplify it. >> so the whole thing contracts and expands all the walls contract and expand.

i see 20 times the normal volume for its size. >> yes. the idea is that we are coming from the high-end. we are leader in amplification system. the very high-end, up to $30,000. the idea was to shrink a very, very high-end system and to divide by 30 the size, the price, and everything on the product without losing the quality of the sound. how do you get up inside the apple store? >> in fact, it looks like perhaps like an apple product because we the same dna in term of design. the way we consider it from the to make very simple product, to imagine product so we change everything in the way we can

design it, and i guess people at apple, they understood it is really a breakthrough, and they love this kind of product. >> my question would be if the way that we can see music is changing, apple music begs the question, do i need a cd or an on-line collection at all? am i going to watch everything on-line? i have move flats recently, move departments. i haven't set it up because these stand-alone speakers are so powerful and so good it's the way that we consume music going to change? do we not have music systems anymore? it's the iphone and a stand-alone. >> you absolutely are right. if you want people to have a stereo system at home, we have to change everything. everything is changing in the past because music is available everywhere. you can have streaming music and so on. now it's time to change the devices we are using to listen to the music and to share the

music together because everybody to listen the music for himself, but nothing to share the music in a huge quality, and it's a purpose of our company. it's really to change the way we are sharing the music together because it's so emotional to share the music when the quality is there. >> i read that actually it was mark of sales force that introduced you to clarence. is that true? >> in fact, we had a wonderful support from people in the silicon valley when we introduced the phantom. we came in june and july, and we spent two months to meet wonderful people in the valley, and after in los angeles and new york city and a super wonderful way. >> all right. apple stores today. thanks for coming in and showing it to us. quinton. >> viva la france. >> how much?

>> it's $2,390. >> wow. >> on the program the ceos of the only ipo for the month of december. enterprise software maker will join squawk alley next on cnbc.

zirchlg good thursday morning. it's 8:00 a.m. at amazon headquarters in seattle, washington. it's 11:00 a.m. on wall street, and squawk alley is live. ♪ good thursday morning. john fort is live at the max. first on cnbc interview with the ceo of atlassian, which is expected to start trading in the next few minutes. back at post nine for the hour, sarah