the graphic up you can see, but the big question, can these companies actually deliver? we've got more packages, which means more potential risks to the networks and thus to profits. it's a situation we've seen play out in years past. shares of fedex and ups slightly lower, but trading near all time highs. guys? >> morgan brennan, thank you, on the shipping story. with that we're seeing the losses pick up steam, the dow is down 80 points and we'll send it to you, carl, for "squawk alley." >> good morning, it's 8:00 a.m. at amazon headquarters in seattle, 11:00 a.m. on wall street, and "squawk alley" is live.

good cyber monday, welcome to "squawk alley." seema mody, kayla tausche, and john ford has the morning off. first story this morning, new records for black friday boding well for cyber monday. according to adobe insights and the nrf, online black friday sales topped $3 billion for the first time ever, a jump of more than 21% compared to last year. mobile shopping saw its biggest day ever, $1.2 billion in sales, up 33% from last year. let's get to our courtney reagan live at an amazon fulfillment center in new jersey with more. good morning again, court. >> reporter: hi, good morning to you, carl. amazon hopes today will be another record day. to do it, though, it's got to take in more than 23 million items. that's the number that was ordered last cyber monday, and

that was up 40% from the year prior, so will amazon be able to beat its own prime day, which happened in july, and right now where's the crowd for its biggest day ever? though black friday did just beat amazon's black friday last year, so that bodes well going into today, and they estimate amazon will grow twice as fast as other traditional online retailers today, getting 2% of its annual sales on this cyber monday. it's doing it by getting aggressive on price. according to price link, which finds the lowest price on products mng 11,000 retailers, on a particular day amazon is the lowest price 60% of the time. price link says the first ten deals on amazon's cyber monday day seven beat. the other two are kplexclusive

amazon. amazon is offering 75,000 deals this week, it's heavily pushing its own devices like the echo home assistance, fire tablets, and the tv sticks. another big goal for amazon during the entire holiday season is to grow that prime membership base. it's a group that heavily outspends nonmembers. estimated amazon has approximately 50 million prime members currently and that rate has accelerated recently up 28% since december. this facility in new jersey is one of the busiest and one of the biggest. it's more than a million square feet, more than 28 football fields, and 14 miles of conveyer belt. there's actually one right above my head right now, and it's getting pretty busy in here. back to you. >> as it should, courtney at the amazon fulfillment center, thank you. trump rally taking a breather today while america is doing record shopping online. for more, let's bring in matthew boss joining us and eric is

chief investment strategist at russell investments. guys, good morning to you both. let's start with you, sounds like traffic the first couple days was robust, always promotional, but does any of this sort of change the quarter to date narrative? >> it's a great question. so we were encouraged by what we saw in the stores from a traffic perspective. we think online was also very strong. the issue is, it's been a very tough start to the quarter. the weather has been unseasonal, a lot of competition, and i'm just not so sure that a strong black friday weekend really changes the quarter to date narrative. >> rebounding small caps up 16% over the past three weeks. is this move justified, or is there more room to run here? >> you know, as we look at it, we think convenience and value is really driving retail right now. and there's a big separation between the winners and the losers, so these online only retailers, they are adding a lot of competition to the department

stores and some of the legacy core base specialty, so we really saw a mixed bag out there this weekend. the online and again the foot traffic. the problem is the discounting was extremely deep and i think some of this discounting really cut into the sales gains that the retailers might have otherwise seen. >> eric, you're seeing the s&p retail sector sell off a bit today. consumer discretionary had a pretty big bounceback, along with some of the other leading sectors since the election. what's interesting is it doesn't seem tied directly to policy moves that might be anticipated. do you actually think this sort of sector leadership, leaders and laggers from election day to now are going to sustain themselves as we get into next year? >> i think on balance we do, you know, the big winner for the trump rotation has been financials. we think that will continue, because we think we're going to get higher interest rates between banks, insurance companies will benefit from that. on the retail side, we like multiline retailers, specialty retailers. we're a little bit less -- much

more leery about the evaluations on the principally online only retailers, so we'll underweight those, but in general we like the american consumer. we think it's going to be good and fuel good consumer spending in 2017. >> matthew, are you trying to parlay potential trump changes in policy as it relates to the consumer tax cut to retail? either at the high end, low end, can you extrapolate it that way? >> i think the best way to think about it is there's two sides. number one, the election uncertainty is behind us. that's a clear positive. i think number two it really is, it's both the corporate tax rates, but also the personal tax rates. there's no question that if pieces of this policy begin to manifest itself, it would be a clear positive for retail. >> more so to a nordstrom or a dollar general? >> i think the lack of uncertain -- the lack of certainty as we progressed has hurt the higher end more than the lower end. i think some of the tax cuts and some of the changes that we're hearing about, i think, could

benefit the middle income, the macy's shopper, down to the lower end, which would be the dollar store customer. >> what about these protectionist trade policies that trump will potentially bring to the white house? the negative impact on some of these retailers like walmart, which brings in $50 billion in goods from china every year? >> i think this administration is going to need to navigate this carefully, because i think most retailers, most brands, are going to pass along any type of tariff, any type of cost to the consumer. so i think at the end of the day, if that is the case, i think this will appear in retail prices out there, so net-net neutral to the retailers, but potentially end up hurting the customer. >> that, of course, is months away as that cloudy picture gets more into focus. appreciate it very much. thank you. >> thanks for having me. meanwhile, cyber monday is not just about the retailers. for consumers planning to shop online or pay with plastic, chances are most transactions will be powered by first data,

the world's largest merchant processing network, and that's where we find our kayla tausche today, at the command center in omaha, nebraska. hey, kayla. >> hey, carl. it's a large but less talked about company in terms of the retail spending that we're seeing, but first data processes transactions for 6 million merchants. it issues credit and debit cards for 4,000 banks and about half the plastic in this country has made its way through first data in one way or another. that's why we were so interested in coming here to get a snapshot about what a sample of 1 million of its merchants were seeing to really take a pulse on what spending will look like this holiday season, not just based on traffic, but based on actual transactions, based on what first data saw on thanksgiving and on black friday. sales grew 9% from the prior year, and interestingly, sales in store on thanksgiving grew less than 6%. that's about half of the growth rate from 2015, mainly because

fewer stores chose to open their doors on thanksgiving. if you look at the breakdown of retail sectors and where sales actually took place, you'll see the lion's share of that growth was in electronics and appliances, where the average ticket grew by $41 over last year. other strength we are seeing in garden and home improvement stores, as well as in book stores and sporting goods stores, as well. of course, e-commerce is becoming such a huge part of the retail industry, especially in this season. and we wanted to take a look at exactly how much of total spending e-commerce is becoming. at first data, for first data merchants, a quarter of transactions took place online, and that is a multiple of what that stat was in just recent years. interestingly, we're talking about consumers that are transacting online and on mobile. it's largely been a place that consumers have been searching for what they wanted to shop, but we're still not seeing perfect conversion of searches

into actual sales. adobe insights said that 55% of shopping took place online, but only 36% of sales, so the conversion still isn't perfect. i know that's something we're going to be talking about. the nrf, though, today cyber monday expects 122 million people to be hitting their browsers. first data, according to its exclusive hourly statistics has already seen about 10% to 15% growth over 2015 activity, and, of course, it's early in the work day and usually that activity ramps up later through the day. we're going to be talking more about that, about cybersecurity, and the outlook for the holiday season with the president of first data coming up later on this hour. carl, for now back to you. >> that is some high quality data. kayla, we'll talk to you later in the hour. meanwhile, the world and the business community keeping an eye on cuba following the death of fidel castro. our chief international correspondent michelle caruso-cabrera is in havana with more on that.

hi, michelle. >> reporter: hi, carl. president-elect donald trump making news on cuba again this morning with a brand new tweet saying, "if cuba is unwilling to make a better deal for the cuban people and the cuban-american people and the u.s. as a whole, i'll terminate the deal." what is the deal, what's that mean? the deal itself is pretty simple, re-establishment of diplomatic relations and reopening of embassies, but even though the u.s. government has not lifted the embargo against cuba, the obama administration has done a number of things as part of the thawing process to make cuba -- the cuban government's life easier when it comes to financial issues. for example, they've removed cuba from the state sponsored terrorism list, permitting the cuban government to use dollars for overseas transactions, there's direct correspondent banking relationships now, and also slightly easier trade terms that u.s. sellers of agriculture products can give to the cuban government. plus there's easier travel terms between the two countries and cuban exiles living in the united states can send back as much money as they want to their

families still living here. donald trump could undo none, all, some of those. we have to wait and see. in the meantime, it's day three of mourning here and as you can see behind me, there are thousands of people in line to go into the monument here at the plaza of the revolution. we are told fidel castro's ashes and a book of condolences will be in there. they say there's neither, but people are going through and paying their respects to a large painting or photo of fidel castro that's in here. the mood is somber, big contrast to what we saw happening in little havana in miami. guys, back to you. >> following the news in havana, michelle we'll come back to you later on, as well. meanwhile, we want to send it to sue herrera, who has an update at the active shooter situation at ohio state. sue? >> here's what we know, the nbc affiliate in columbus is now saying, quoting police, that one suspect is dead, and we say a suspect or one suspect, because

it still remains to be seen whether or not there was more than one active shooter. that active shooter situation was declared a little bit more than an hour ago. right now we know that we have eight people who have been injured. eight have been transported to local hospitals, according to the nbc affiliate in columbus, citing police officials, one of those people is in critical condition. seven are in stable condition. this incident began earlier this morning at watts hall, which is a materials, science, and engineering building. basically, ohio state, huge campus, huge school, 60,000 students at the main columbus campus, so it's one of the biggest universities in the united states. so we do have a report cited by police that one suspect is dead. we do not know whether there are still other suspects at large. it is still considered an active shooter situation and a still developing story.

eight people have been hurt, one is critical. seven others are stable. carl, i'll send it back to you. when we know more, we'll be back on the air. >> thank you very much, sue herrera back at hq. when we come back, more on the future relations with cuba following the death of fidel castro. markets coming off fresh record highs, backing off slightly this morning. where do we go from here? and later to ebay's war room, where the company is expecting record traffic this holiday season when "squawk alley" comes right back. ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. (bing)

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with the passing of fidel castro and a new president-elect set to take office here, what will relations be like between cuba and the united states? joining us this morning is the former department assistant secretary of defense for the western hemisphere and current director of the latin american and caribbean center at florida international, frank mora. welcome back. >> thank you, good to be here. >> this view that donald trump has taken this morning on twitter, that the benefits of the deal that's in place, that they've been asymmetric, is that widely held? >> i think among certain constituencies, particularly where i am here in miami and some of the more elements within the republican party believe that, but i think generally across the board, even in the business sector, i think there are many people who have seen the benefits, at least for the united states, of expanding this engagement with cuba. you know, today the start of

commercial flights begin. there will be about 100 flights to and from cuba starting today a week, so the question i have, if, in fact, president-elect doubles down on his policy of eliminating or determine nighting the deal, he says what will be the economic impact on delta, cruise lines, and other companies that have invested quite a bit of money already in cuba? >> you know, frank, i guess i wonder what would the other side's argument be in continuing to take a hard line against cuba? it's no longer a front in the cold war, not as though the u.s. government holds other regimes that don't really follow our human rights ideology, so exactly what is the stated national interest of getting tough again on cuba? >> that's, i think, a very good question. i think this is all about politics. president-elect came down to miami and made certain promises, and he's doubled down on the tweet. his chief of staff, reince

priebus, said yesterday he is, in fact, going to reverse the policy, and i feel quite frankly that in many ways donald trump really is not very interested in cuba. he's going to delegate his policy to his constituency down here. constituents for which he has -- or feels he has a political debt, but i don't see how returning to the previous policy of sanctioning and taking punitive action will result in a freer cuba. we've seen that policy fail, and it's unlikely to succeed now when donald trump decides -- if he decides, and it seems so, to reverse the policy. >> do you expect some of these companies that have made inroads will have to do some kind of adjustment, if not 180-degree u-turn? >> well, depends how far donald trump goes. if we go to the just prior to december 14th, 2014, when president obama announced we didn't have diplomatic relations, the cost will be huge. we have to get out of cuba, and if cuba is returned to the list of state sponsored terrorism, it

will become very difficult to have financial transactions with cuba. it's clearly not clear how far he will go, but his rhetoric seems to indicate that he will be going very far and sort of reversing everything that the president obama has done over the last two years. >> frank, if we broaden our focus to latin america, a trump presidency was seen as having a larger impact on mexico, the mexican etf down 17% since the election outcome, but with castro's passing, will trump prioritize cuba? >> i don't know. i don't think so. in order to reverse what the president's done, he can certainly do another executive order, but there's several bureaucratic steps that need to be taken. i'm not sure this is going to be his number one priority. clearly, issues with taxes, issues with immigration and free trade will be at the top of their agenda, but you bring up an important point. i think that changing the policy and taking a more punitive and hostile approach to not only

cuba, but to mexico, will have a broader strategic implication for our relationship with the rest of the americas, who already are skeptical about what to expect from a president donald trump. >> certainly we're going to have to wait and see what the actual policy outcomes are, not just the tweets. frank mora, thank you so much. >> absolutely. still to come, exclusive holiday shopping data from comscore, their forecast for cyber monday and the entire holiday shopping season is next. and later, kayla tausche's exclusive interview with the president of first data live at the company's cyber command center. you don't want to miss it. more "squawk alley" coming up. hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony.

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e-commerce continues to grow with more shoppers choosing to buy from homes rather than stores. cyber monday, of course, currently under way. joining us now for a cnbc exclusive is comscore ceo gian

fulgoni. gian, good morning. >> good morning. >> you know, it's interesting, we kind of gave a little bit of the news there, double digit percentage gains in online shopping, according to your data. i wonder if you could put that in a little bit of context according to the overall trend of e-commerce growth. in other words, if we picked any day this year, would it have been up double digits from the prior year, or is this an acceleration in holiday time? >> well, we've been seeing growth rates running, certainly, in the 15, 16% range pretty much consistently this year, so i think these growth rates we're seeing, certainly on thanksgiving and black friday are maybe a few percentage points higher, but e-commerce is just powering along both in terms of desktop buying, and now using mobile devices. >> interesting, you mention the mobile spending. what do you think that's going to come in at in terms of overall volumes this year and

how's that relate to prior years? >> generally on a typical day we see somewhere around 20% of all digital commerce being done with a mobile device. but that percentage tends to jump as you get to the holidays, and it jumps on thanksgiving, it jumps on good friday. excuse me, black friday, and that percentage can be north of 30%. and i think one of the drivers of that is that people are traveling, they are not at their homes, they are visiting family members somewhere else, and they tend not to have their laptops with them, so the use of mobile devices increases during those periods. >> the growth we're seeing e-commerce is truly commendable. is it a sign, gian, that consumers are reserving a larger proportion of their holiday budget for e-commerce over going to the brick and mortar stores? >> yeah, i don't think there's any question about that. the numbers that i've seen reported for traffic into physical stores over the

thanksgiving holiday weekend were down about 1%. and so i would expect that's then reflecting lower sales or a decline in sales versus a year ago in the physical stores, and you have to contrast that to these growth rates that we're seeing in the mid to upper teens for online. so this channel shift doesn't show any signs of abating this year, certainly. >> gian, as usual, apparel and accessories is the top category for friday, but toys and hobbies, the highest rate of growth. it's funny, we have a downgrade of hasbro today and i wonder if there are theories as to what's happening behind toys? >> no, listen, it's an interesting observation that the toys are showing the strongest growth rate. it's certainly not the largest category by any stretch. apparel is now. it used to be computer and computer hardware, but apparel is taking that number one spot. but in any individual day it's difficult to predict what the fastest growing category is.

to some degree, though, i will say that consumer electronics are certainly pulled some of the buying that used to be reserved for the toy category. consumer electronic, i think, is now the third largest online product category. >> and i wonder, gian, what you can say about the flow of the overall holiday season. in other words, are we front loading a lot of the activity because people now start to shop on thanksgiving? it seems if you looked at spending intentions, whatever individuals said they were going to spend for the holiday season, maybe a third seems it was done by some estimates over the weekend. >> yeah, well these promotions that are being run by the retailers keep occurring earlier and earlier in the season, so that tends to pull some buying forward. what was really interesting, though, with this particular holiday shopping season beginning in early november is that the election actually had a dampening impact on spending, and on the day after the election we actually saw a drop of a few percentage points in online spending, but then it recovered pretty quickly.

and at the moment, i would say that our forecast, which is in the range of 16% to 17% growth for the season as a whole, we're still holding to that forecast. >> all right, see how it turns out. giai yan, thanks very much for your time. gian fulgoni from comscore. counting down to close in the uk and across europe. stocks pulling back following a third consecutive weekly gain. italy among the biggest losers due to continued weakness around the banking sector, this amid uncertainty surrounding this upcoming sunday. italian referendum and worries about the banks' nonperforming loans. among the biggest losers is monte paschi, and uni credit down over 60% this year. during an interview which aired last night, matteo renzi stated his case for a referendum "yes" vote. >> these referendum is not a referendum to change democracy

in italy. it's a referendum to reduce bureaucracy in italy. italy is the worst counterfeit bureaucracy in the world. >> meantime in france, former prime minister francois fillon won his center right party's primary by a landslide, liking to take on marine le pen. france's election takes place in the spring of 2017. finally, the divergence in the bond market something to keep an eye on this week as a result of the recent selloff that we've been seeing in german ten year. the yield spread between italy and germany has now climbed to its highest level since 2013. in an address to the eu parliament, ecb president draghi said growth is recovering, debt is sustainable, but politics a big topic of focus, as it always is in europe. elections in austria and the referendum in italy.

>> yes, can't wait for this weekend. when we come back, an inside look how one company is looking to secure the billions of dollars spent on cyber monday. a cnbc exclusive with the president of first data is next. as we go to break, coming off the record highs we saw last week. s&p is back to 2205 more "squawk alley" continues in a moment. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

hello, everybody, an update

on this breaking news situation at ohio state university, where a shelter in place was put in place a little bit more than an hour ago. an active shooter bulletin was tweeted out by ohio state university. we have just been told that the shelter in place order has been lifted at ohio state university. the nbc affiliate quoting police officials saying eight people have been injured, one is in critical condition. the seven others, apparently, are in stable condition at various hospitals in and around the campus. one affiliate in our nbc affiliate is saying that the perpetrator of the incident, one of them, is dead. there was some talk earlier this morning that there might be multiple suspects. we still do not know if it is a single suspect or multiple suspects. all we know is that a suspect is dead in this incident that is still developing at ohio state university. keep in mind, of course, it's right after thanksgiving, this is the first day back in school

for many of those students, obviously, an awful way to start their day and their week with that shelter in place put in place earlier this morning, but it is now been lifted. carl, i'll send it back to you. it's still very fluid situation there, so we'll be back when we have more information for you. >> we will come back to you for more, sue, for sure. sue herrera back at hq. meanwhile, cyber monday still in focus, not just retailers preparing for record traffic. first data is also getting ready while putting special focus on securing the billions of dollars in sales expected to come from mobile this holiday shopping season. our kayla tausche is live in omaha at the cyber command center there and has a special guest. kayla? >> thank you so much, carl. and we are here at first data cyber command center in omaha with a special guest, guy chiarello, who is the president of first data. thank you for having us on your home turf today. >> well, thank you for coming here today to omaha, a place that first data started in 1971,

45 years later we're here talking today. >> we thank you for churning the numbers behind us too so we can see what's happening. north of $2 billion on all of your merchant networks, but talk specifically about e-commerce and what you're seeing so far today. >> today's information so far looks like a 10% to 15% increase in transaction volume year or year, and we're also seeing a very significant amount of that activity happening in the e-commerce space. a lot of times i'll talk about it as card not present. e-commerce means everything from what you might do at a phone, a computer, or anything that doesn't have card presence, so we're seeing about 35% of today's volume coming in as card not present, compared to yesterday's full day of 21%. >> so how will that activity progress throughout the day, given that it's still early? >> you know, last year on cyber monday we saw a tremendous amount of activity occurring one in the 2:00 to 4:00 p.m. time frame and the other in the 6:00

to 10:00 p.m. time frame, so we're already seeing, as i said earlier, volumes well above last year's level. i can only imagine what we'll see the rest of the day. >> yeah, i wonder how much productivity is coming out of the workforce between 2:00 and 4:00 p.m. thinking about where the spending is happening, credit cards, debit cards, gift cards, what are you seeing? >> you know, it's pretty balanced across the board. we absolutely are seeing an acceleration of card not present activity, and that growth has been occurring across all categories, not just retail. so since 2013, almost a doubling of the amount of activity that happens away from plastic. if you're first data, it doesn't really matter, as well. we process commerce across all spectrums, so we're delighted to see it in any type of formula, but in a lot of ways these categories of spent range from electronics and appliances, which you talked about earlier, we've seen significant uptick over the holiday weekend. >> i know you guys print about

650 million gift cards each year. that's a staggering number. how do those favor certain retailers and what should investors be thinking about where the demand is for certain types of gift cards? >> first thing is, statistic is about 640 million plus gift cards, we load about $25 billion annually on to those cards. we're about 2% digital three years ago, now at about 19% digital. so we're really seeing a progression both in gift card utilization and spending, but also delivered digitally versus pure plastic. >> we're seeing less focus perhaps this year on cybersecurity. a few years ago there was the massive target breach, last year a lot of focus on hotels and health care. are threats elevated in certain sectors that we're just not talking about? >> the threats still exist. it's amazing that it's not talked about as much as it was a couple of years ago, and maybe that's because there's no big

breach. helped stem some of the counterfeit card fraud, but i would say today what we're seeing is about 50% of the calls that we get from our clients are, you know, really talking about fraud in both card and card not present. it's about 50/50 right now, or somewhere close to that. so it's still there. it's a, you know, $8 billion plus, you know, fraud business on an ongoing basis, and it's helped a bit, but it has shifted a lot of the fraud opportunities into the card not present space. >> i want to ask you a little about the macro economy, because first data is a leveraged company. you service about a billion in interest expense every year. what happens when the fed raises interest rates next month? >> you know, i think we've done such a great job repositioning the company. if you take 2014 and '15, we raised over $6 billion in cash. we took advantage of great interest rate environments and refinanced a lot of the debt in the company and generating free

cash flow growing the top line. we're going to pay down debt in a significant way this year for the first time in as long as probably first data can remember, and we had our first analyst meeting two weeks ago, first meeting in ten years where we told the analyst community that and i think it was met with very positive feedback. >> how long until first data enters cuba and what does the weekend's news do to change that? >> you know, cuba is an interesting situation, and this weekend probably makes it potentially even more interesting. our ceo frank bisignano and some of our people have been feet on the ground a couple of times in cuba working with the government, trying to understand in a number of different ways how we can help that country. if you're first data and already do business in over 100 countries around the world, being able to process transactions for cuba or help set up the commerce for that country is as interesting that goes on every day. >> we know you need to get back to crunching the numbers for today's transactions, which could be a record. appreciate you joining us today.

>> thank you again for being here, appreciate it. >> guy chiarello is the president of first data. guys, back to you. >> great stuff, kayla. kayla tausche at first data in omaha, nebraska. when we come back, why big box retailers aren't the only ones on cyber monday. startups getting in on the game, as well. first, rick santelli, what are you watching on this monday? >> i'm watching all the headlines, whether it's the banks in italy, the renzi referendum. seems as though governments of the world hasn't been able to fix what ails economies and central banks maybe making matters worse. we'll discuss all of that and the big number two, 212. tune in after the break and find out what it means. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses.

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all right, coming up today on the half-time report, big debate for small caps. is it too late to get in now? plus, why a technician says the breakout for stocks isn't over and the names that could lead the way. and jim cramer is with us today talking retail. we'll talk disney after their new movie and energy stocks on a goldman sachs upgrade. carl, see you in about 15. >> thanks. in the meantime, let's check in with rick santelli and get the santelli exchange. >> good morning, carl. well, 212's a big number today, not only the temperature at which water boils, also the temperature at which some securities are boiling. it's a difference between our ten year and ten year euro zone

booms. we haven't reached a level this wide since before the euro zone existed back in the late '80s. what's more, this will be the eighth session in a row the spread is over 200 bases points. why does it matter? it matters for a number of reasons, not the least of which is the u.s. dollar. as the spreads continue to widen, they will heighten all the interest rate differential moving parts. most likely resulting in a very strong dollar and whether that affects multinationals in a negative fashion or not, it almost at this point doesn't matter. we have a wide diversity now between the policies of one central bank versus another, and this isn't predicated on whether they worked or not. this is predicated on market and what the assumptions of investors are. in the u.s., for example, it took a major change in government potentially, a brighter optimistic future from a growth standpoint regarding taxes, regulations, health care, and we don't know how all these

things are going to actually work out, but the central bank of the u.s. put us in a very precarious situation. they treated our crisis as cyclical, then admitted it's structural, so we're pretty much at full employment and looks as though some of this growth is going to hit and most likely cause a bit more inflation than anyone counted on much more quickly. as for the 215 basis point intraday high spread, it also goes to the policies in a big way of the ecb and mario draghi. we could debate whether they should have done this to the extent they have, but one thing is for certain, next week's ecb meeting most likely will result in bigger and longer. now, whether they get away with it, i'm not sure, but i can tell you this, in the end what's happening is structural issues in italy, and no matter how much quantitative easing, which by the way is putting a real scarcity factor in some of their better securities, what we're

finding is their policies aren't going to help these banks. really, are they? are they going to help the balance of the italian banks? renzi and the referendum that's coming up, whether it's that or brexit or our november elections really shows the difference between market driven activities and the governments and the central banks trying to create a scenario versus a real scenario that we are now seeing for the last three and a half weeks in u.s. markets. back to you. >> all right. rick talking about divergences of various kinds. rick santelli, spreesht it. still to come, how one startup is changing the game. the cofounder of birchbox is next. then we go live to the war room at ebay. an inside look at the company's cyber monday operations when "squawk alley" returns. generosity is its own form of power.

you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter?

get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. >> we are at the height of holiday season. adobe data showing that black friday broke on-line sale records with $3.34 billion. what will cyber monday look for etailors? it's great to have you here on "squawk." >> thanks for having me. >> mobile revenue exceeding $1 billion. that is first time in u.s. retail history.

>> mobile has been the vast majority for the past few years, but it just surpassed -- >> we are doubling down just like everyone is and should be. >> traditional retailers now trying to fend off competition from the likes of amazon by refining their amazon offerings. how would you say amazon has changed the cosmetics industry which your company competes in. >> amazon is still lighter. it's not working directly with major brands as of yet. we still have a lot of ways to compete right now. the major players in beauty are still offline brick and mortar, and we're focused on being the destination place for on-line when it's not just something you already know you want. if it's not just replenishment, we want to be the place you go to. >> have you wondered why sometimes it's taken the legacy players so long to graduate from bricks and mortar? >> some of them have, and some

of them haven't. if you think about beauty in particular, it's such a touch, try, and feel category that the internet wasn't a place where people really wanted to go to discover, and every year hundreds of thousands of products are launched. the number one reason why someone buys a beauty product is because of trial. they have to go to try it before birch box. birch box allows them to have a personalized trial experience in their home, and that really changed the potential for on-line beauty. before that if you wanted to change the face wash you're using, the mascara, you are going in to talk to somebody and to see what are my options, and now there are new ways to actually have that experience. >> well, it's interesting. you position it as if it's kind of a chore to go in because if you look at things like ulta salon, one of the most successful retailers, the story is that people go in to just sample or maybe get something to put on to go out. >> it depends on the consumer. the beauty industry has very much focused on a william who loves beauty, is so passionate about beauty, and for her she absolutely loves going into a store and playing for hours. for the average woman the 80% of

women, it is a chore. it is not where we want to hang out. we want the best products. we want to look our best, but we have other passions and priorities in our lives. we at birch box focus on the beauty majority, on the 80%, where for her it is a chore to go into a store, and we can make it efficient and fun to buy. >> your company has been hailed as a disruptor in the cosmetics space. there are reports that your company, birch box, is facing challenges on the funding front, finding new investors. what do you have to say? what is your response to that? >> it was challenging for a while when the entire retail industry has suffered a little bit. it's been tough in the actual public markets and that absolutely impacts the private markets. we are able to get our investors to support us, and our on the other side definitely on our targets. >> two rounds of layoffs so far in 2016. will there be more to come? >> no. >> are you clients of aws or google? >> yes, we are clients of aws and google. yes. >> really? >> has pricing on that moved much in the last six months? >> the pricing has changed, but we are not completely dependent. we do some of our own servers as

well. that mitigates some of the pricing for us. >> wondering what's the proportion of your business that is gifted. >> right now this is the biggest time of year for us for gifting. starting cyber week all the way through the end of december. gifting is massive. in the typical year it's less than 20% of our business. this will be a huge surge. we'll get hundreds of thousands of new subscribers during this very few days. >> will that help birch box become profitable? >> yes. we're actually definitely on our plans for that. >> all right. we will leave it there. good luck this holiday shopping season. we'll be watching the numbers. co-founder and ceo of birch box. >> when we come back this morning, black friday, cyber monday. what about mobile wednesday? how one e-commerce giant is betting on the rise of mobile shopping this holiday season when "squawk alley" continues in a moment. ♪

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>> let's go live to the war room in san jose. hey, aditi. >> hey there, carl.

that's right. this is the nerve center for the company, and it's very busy on this cyber monday. wucht hot sellers on-line right now is this nintendo nes. at launch this was selling one of these every 18 seconds. this is one of the top sellers on-line where analysts say a record number of shoppers are headed for their holiday shopping needs. in fact, deloitte reports that 74% of shoppers plan on shopping on cyber monday. that's according to a recent survey they did. the study also found that shoppers plan to spend most of their holiday shopping budget 51% on-line and on-line and in store will draw nearly equal amounts of traffic. now a subset of all of that on-line traffic is also growing. mobile. adobe reports that on-line shoppers spent a recordsetting $1.2 billion from their smartphones and tablets on black friday making it the first day in retail history to drive more than $1 billion in mobile. deloitte says they, too, predict mobile will be a lucrative channel this season. >> two, three years ago we

didn't see hardly any transactions take place there. it moved up to about 30% last year. we expect to be closer to 40% of the transactions now where folks will use mobile in some capacity. it really is taking off, and it's become a medium for commerce, which is something that we haven't seen in a long time. >> ebay is north american tells us mobile is huge for them. so much that they dubbed last wednesday the busiest travel day of the year, mobile wednesday. >> more and more you see folks multi-tasking, shopping on their mobile phone as they're in the car or whether they're at the airport waiting for their plane or even on the plane, and we're seeing mobile penetrations increase dramatically on those days. this year ebay for the first time will be offering specific deals and values just that are mobile only on that day to kind of capture some mind share and drive traffic and awareness. >> and because of on-line sales being so lucrative this year, a lot of brick and mortar stores are beefing up their cyber

presence. >> aditi joining us from ebay. a lot of command centers. i guess that's what it's all about. >> seeing whatever goes on. >> absolutely. >> meanwhile, dow has been in a tight range, but keep your eye on crude. up more than $1 as get closer and closer to that opec meeting in the middle of the week. let's get over to headquarters and "the half." ♪ >> all right, guys. thanks. welcome to "the halftime report." i'm scott wapner. our top trade this hour, small caps, big run. what the russell record says about the trump rally and whether it can keep going. with us for the hour today, joe terra nova, josh brown,ing steve weiss, and pete najarian, and on set cnbc's jim cramer. he, of course, the host of cnbc's "mad money." jimmy, russell going for 16 straight. you got to go back to the 1980s to get a longer streak. what does it say about the trump rally in and of itself? >> i think the