futures are indicated up by 25 points, s&p futures up by a point and nasdaq down less than a point. this comes after another day of records. it's now been 57 record highs for the dow this year. the s&p we are looking at 51. >> make sure you join us back here tomorrow. right now it's time for "squawk on the street. ♪ good tuesday morning, i'm carl quintanilla with david faber at the new york stock exchange and cramer at one market in san francisco. stocks up five days in a row the president in south korea and media world continues to react about the scoop about disney fox yesterday. oil not far from the two and a half year high the news that disney approached fox to buy part of the company

faber broke the story, a lot more on what it could mean for media content and streaming and more >> the vote is in, bill ackman has lost it was a pretty tough shella shellacki shellacking. we'll talk to carlos rodriguez about this company's victory coming up. bob lutz says we are approaching the end of the automotive era and in 20 years no one will even own a car we'll dig in on bob's predictions. >> david, first up, the latest on disney fox. >> listen, yesterday's story was interesting, largely for the fact while it may not actually occur, that is disney buying many of the units of 21st century fox, the idea that 21st century fox was willing to engage in talks designed to sell a large part of the company, willing to go smaller in and of itself sends a significant signal to many of the traditional media companies out

there and that is the case again as we had reported through yesterday at 1:30 when we broke the story, talks had taken place over the last few weeks. they had ended although they could be revisited and i'll get more on that in a second that would have essentially left fox with the fox network, the fox news network and business network and it's 0 and 0s and regional sports networks and fox sports those assets contribute what may be as much as two-thirds of the company's overall cash flow. you are talking about still a company that would not have been jettisoning most of the cash assets but selling the studio and tv production arm and nat geo, fx, star in india, ownership in hulu. we can go on from there. there were a lot of assets in play disney approached fox but fox has been thinking for some time and this is the key point i

think, guys, it doesn't have enough scale to compete in the new world. we talked about it yesterday after i had broken the story it's a world of netflix and amazon and google and facebook and even to a certain extent microsoft and couple of other names that they see as the dominant providers and they simply don't see the path to a certain extent to be able to get the scale they need to compete >> congratulations, i love when you read research. cnbc's david faber says and everybody has to react to that which is fantastic congratulations. i think you're totally right a lot of this is about tv content and a lot of this is about what we watch on netflix if you look, great work this morning, if you look at what we watch, we watch things like simpson's, the longest running tv show and family guy we watch this kind of tv cartoon that fox owns and then we also watch action figures, these are also owned by fox. then the fox technology people yesterday, they have a fantastic

slate but looks like the slate that disney would want to have so i do think there's -- this deal makes so much sense i can't believe they don't take it to the finish line. >> the market react yesterday to our report was quite positive. don't forget, fox had been a heavily shorted stock and down on friday and up as much as 10% yesterday and importantly perhaps more importantly, disney shares were also up as much as 2% you understand from the disney perspective when you look through. the direct couto consumer offerg in 2019, one will be sports but the other will be entertainment. and it's -- the star wars franchise and marvel franchises, what if you could add avatar and a lot more what they like to call intell lekt you'll property but mainly shows to the pipe they are bringing to the consumer in a direct way >> jim, you mentioned "the

simpson simpsons", the screen shot, they foretold fox they have the logo and they say a division of walt dismy company which is hilarious. >> there it is. >> does it point to disney feeling they don't have enough a.m. monmmo to go direct yet. >> i think they saw an opportunity and trying to advantage. it certainly wouldn't hurt to have a more robust offering. >> the best shot of most. >> they've got -- when you think about scale, they certainly have it, let's not forget the parks it depends how you want to define that in terms of content but they've got the most scale but when you look at the rest of media, and you look at what has happened, jim, we've talked about the discovery deal with scripps and reception that has gotten investors stilg n s still not c domesticically it has enough scale and that becomes the question for so many of these

companies. >> i don't think they do have enough scale because i don't have anything i must watch right now. you mentioned a franchise, it is so important i'm glad you brought it up avatar can be star wars, when bob iger is trying to figure out, i've got to broaden that. there could be twenty avatars and go back to tv content. why has not fox levered simpson's far more than it has the answer is because they don't have a place to put it but disney does. if you get hulu, you have something that looks like netflix. they were talking about stopping amazon this year i keep hearing netflix. this is the way to stop netflix. >> and listen, the idea now that fox is willing to entertain potential offers for a lot of the company is not going to be lost on other providers out there. by the way, the amazons in the world and apples, you never know apple was the other name i

didn't mention as part of that group of companies that really are redefining potentially the landscape and broadly speaking media. they all conceivably could line up our parent company, it's hard to see a path there, comcast owning nbc universal but there's always interest when things are at least potentially for sale. so we'll see how this goes i do want to come back to the fact that they are not talking right now. i've heard different things from different people on both sides in terms of the likelihood that they will reengage, hard to know, but certainly possible but it's not lost on any of the other companies as well that there is a possibility for at least prying these loose from fox as they would embrace this idea slimming down to become a sports and news company with a broadcast network, not with a studio but similar to cbs. >> why wouldn't cbs want to merge? why wouldn't cbs want to get

together with these guys conceivably unless there's an nfl clause i don't know. >> i don't know, there are two family controlled companies and those -- some people have asked me, why in the world would james and lock lan, the murdoch brothers, why would they want to give up their opportunity to run a very large company they may be looking at the world in a very realistic way but that said, they are still family controlled companies and that makes it very difficult to imagine a cbs fox tie-up. >> one thing is certain -- david, in terms of being in play right now? >> no, i mean i think the main takeaway from the story has to be that if you're a media company in the traditional sense of that word, you've got to be thinking about things in a way you hadn't previously and that's why i think the story has been met with a lot of wow, because the idea that fox and its management and board of directors would embrace potentially this idea that we

don't have enough scale, we're not going to be able to get it, so we'll go the other way, is a key that a lot of media executives -- evand i've heard from a number of them, saying, okay, let me think about this. >> how can you not be big enough if you're fox. 100-year-old company, tremendous library, and worldwide reach and they are not big enough? >> to david's point, that's why yesterday was so aamazing. >> the world changed that quickly? that's incredible. >> you know it did you know it did. just like hemingway? >> i mean, you know it has, it has -- this has been the year -- sat here and talked about it, the cord cutting. >> total surprise. it's called faux surprise. i do think that -- i listen to a fox presentation about trying to get in touch with the consumer are you kidding me it's true, fox is trying to

figure out how do we get in touch with people to watch our stuff. remember when you put out great stuff and everybody watched and that was like in philadelphia we called it three, six and ten three stations, fox wasn't involved i think this is incredible, spending a fortune trying to figure out how to get people to find them. it used to be so easy but the clutter is everywhere, everybody has a channel. the faber channel. >> the knfox network would be dilutive of contend -- >> i remember channel 29, you needed that special clicker and round thing on the top of the tv that ring. >> let's get to sales force noungsing it is forming the new strategic partnership with google at the dream force conference last night about the new partnership. >> you look to google and see this incredible world of information and see the advertising but you also get google analytics and google analytics coupled with sales force and service and marketing

means that both of our customers are going to have customer insights they never had before that's really exciting. >> jim, what a win for alphabet. what's the impact on others, including amazon >> well, look, this is anti-amazon, even though amazon is a great partner with sales force. sales force wants to be schwittswi switzerland. we call her wonder woman, she said it and i was like wow, let's call her wonder woman. they have an incredible set of data you hook into them and it's an end zone, wow, we're in the end zone, there's nothing else wrong, amazon has the data and then they put it to work with you with their own eco system. now google has an eco system that makes it -- let's say you're wall mart want to do stuff at google google therefore has more data that can be put to work as yours challenged by the mike crow

soft she just hoped she could have the largest web service. this makes it so it's actually believable maybe one day the dream will come true for them >> meanwhile, there's the guidance from sales force itself about 19, looking for revenue, that's another -- put another 20% on the board >> well, look, this company wants to be a $20 billion sales company. a huge amount of deferred revenue you can't see. i remember when people felt this was a company that really didn't have a business or that it was just making up the numbers this company has a huge amount of cash and has tremendous scale. when you go to the different booths as i did, there isn't anybody who doesn't use them you need sales force in order to be able to connect with already, here we go, millennials. i hate them. why does everybody -- what about else we have -- >> we don't matter. >> do we need bleed? if you poison us, do we not die?

>> you're just a drain. >> they like to lose me. we're not used by older people come use us. >> you had your chance, you were 26 once, we all were. >> man was i in charge then. >> still to come this morning, a live and exclusive interview with carlos rodriguez after winning the proxy battle against bill ackman. if the s&p avoids a half percent decline today, it is the longest streak without one since 1968. we're back in a minute

adp shareholders reee leked all ten of thecompany's directors, that's a loss for bill ackman who sought three of the seats. hey, leslie. >> hey, carl, that's right i'm curious to hear from you what do you think the message the shareholder sent to you today is >> it felt like a resounding support for our ten candidates so we're very happy. feels like a big victory and mandate for us to continue on

the path we're on with the strategy we have. >> continue on the path you're on this has been a three-month process. ackman issued 168-page presentation detailing different things he would recommend. is there anything you take from that plan moving forward without his position on the board? >> as i said multiple times, a lot of things bill raised over the last three months are things the company was already working on there's not a lot of debate about the themes he's brought up it's been about pace and risk imagine. management i would say we learn a lot but there's really no dispute about i think the company's path in terms of what it needs to do. >> a specific strategy was laid out during the process in communicating the shareholders and proxy advisory firms by increasing margins and various points laid out on that end. do you think the proxy contest

itself influenced those new strategies moving forward or was that something that was already set in motion as well. >> yes, that was already set in motion we've said that a number of times. specifically the margin improvement numbers we put out there. we have a lot of companies our own long term strategic plan and has numbers attached to it really what we did, we provided longer term guidance to our shareholders but that's a strategy and plan we already had in place and board already approved. >> jim cramer has a question back at the new york stock exchange. >> carlos, congratulations on your win i wanted to know if bill ackman hadn't chosen a kind of general sherman march strategy to sort of scorch earth, would you say maybe listen, come back a year from now he did kind of leave atlanta burning. >> i don't think the approach really had anything to do with it jim i don't think it would have made

a difference it may have been more cordial and professional in terms of the approach but i don't think it would have made any difference at all we listened to bill and all shareholders and we'll continue to do that into the future >> well, will you follow-up on anything he suggested? he has issues about the number of employees versus revenue and says you have way too many buildings and that it would be easier to consolidate. any of those things ring true? >> well, i think as i mentioned to you before, the consolidation of our facilities and buildings is something we had under way for 18 months, that recently wasn't a new idea. and the question of revenue for employees, using the raw numbers and you and i have had that dialogue. >> very true thank you. david? >> sure, i'll ask a question carlos, was this just a waste of your time? >> well, i would say that the last three or four months we have described it has been highly distracting and probably

not a great use of time for a small group of people but for the other 58,000 hard working associates adp has around the world, really didn't throw them off their game you saw performance in the first quarter and i think we continue to march ahead serving our clients and delivering great results to our shareholder as well. >> mr. ackman said he'll remain a shareholder, he is a significant shareholder but i'm been curious about his ability to convert to a full 3.8% position but still owns 2% if he gives you a call, will you take it? >> of course, we engage with all of our shareholders on a regular basis and a lot more engagement than we typically have, we have an ongoing dialogue with our shareholders and constantly listening to them. >> given your answer to david's question just now, does it change the way you think you'll approach these types of situations from activists in

foot you' future, whether it's ackman or not? >> we hope to not face these situations again in the future as you can see, the shareholders are firmly behind the company. we have a long term oriented base very supportive of the board and strategy so we would hope that this is a message not just the big bill ackman the country has a long tradition in economics and politics of respecting a vote. and i hope that bill and everyone else will do that in this case and move on and let us move on with our business. >> bill ackman said yesterday on cnbc that even if he does not win today's election, which now we know the results that he could come back in a year and launch another proxy fight if there are any missteps along the way. does that concern you at all >> i hope that he moves on

i think that it was a clearly very resounding victory for the board and our company. i think it's largest margin of victory of any large cap proxy contest ever i think that would hopefully be a message that it's time to move on i think that the pennsylvania plans and other investors that pay the exorbitant fees he charges and give up 30% of the upside will be well served to really deliver a message that he should move on and focus on something else >> all right, carlos rodriguez, ceo of adp coxing oming off the victory in the proxy fight against bill ackman. thanks. >> thanks, leaslie, we'll count down to the opening bell in a few moments. s&p up four days, up 14 of 17.

futures steady on a busy morning. it's election day, nikkei at a record high, dollar at the four-month high. opening bell a few moments away.

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told you not to talk about us. this is the fight club in action the first rule of being an apple supplier, you don't talk about apple. it's a great opportunity to buy the stock. >> there's a whole narrative running on social media about how the camera on the 10 is makes users self-conscious because it's so good they don't really like how they look, which is what you said would happen. >> i look so bad you can see pimples that i had when i was 13 and 14 and that really bugs the heck out of me that's why everybody has to go and go to estee lauder, you have to sephora yourself before you go on. i'll go every day because he was selfied to the point where i like to wear it to sleep i wear it when i wake up you can't leave the house without makeup any more with the 10 it's changed my life

>> we can just keep our makeup all on day. >> i plan on it. let's get the open being bell and s&p at the bottom of the screen at the big board it is changed, celebrating the launch of the diversified impact, fossil fuel, nasdaq web summit, a global technology conference held in portugal overall, jim, in terms of the markets if we get our record high on the s&p, we will tie 2014 for the fourth biggest yearly total the melt up is continuing. >> i love the fact that the melt up -- let's call it a revolving met up we had entertainment go up a year ago it's surging again did not believe this move in the oils, no one seems to be care. but you have this whole area of

the stock market just been fallow and come to life and that rotation has made it so even though the stock market hitting highs, you don't feel it's in excess because maybe the oil -- it's their day but do matter to the s&p. >> yeah, how much do you attribute the move in oil to what's happened in saudi over the past 72 hours. >> i think 100%. i think that yes, because it's not -- you can say some of it is demand oriented. but remember, the saudis used to ship more oil to us. i'd like to know how much they are shipping i think they cut back which allowed this oil level to blow through where the hedges are at 55, almost every single well is profitable in our country yet they can't seem to be able -- no matter how many rigs they have, impacting every single one, even in areas in north dakota they come to life at 55.

i like that, come alive at 55. >> sammy haggar wants his song back, jim. >> noz tt the same with the sele we do not come alive at 55. >> some reports today indicate 33 billion of personal wealth at risk as a result of the crackdown over the weekend. >> it is -- yeah, geo politically important to watch not to mention the hostilities in the middle east, between saudi arabia and yemen or saudi arabia and iran, certainly things to watch. i did want to get to altisse was down sharply but the parent company is worth taking a look at the france altice, the stock has been absolutely hammered this

after the company cut materially sort of cut its third quarter or guidance overall had a bad third quarter, worsening french decline s driving that miss. this morning at goldman sachs, they downgrade that to neutral undermines investment case, remember, they have been trying to figure out a way to buy charter also they kind of pulled back on that effort a little bit but doesn't help when their currency here is getting crushed also.usa is up they downgrade altice's parent to neutral but upgrade usa to a buy this morning saying that they see it having 30% potential upside trading in material discount to its large cap cable peers after a significant pull back.

you see positive this morning you may have charter itself. softbank in the previous bid to buy charter and made to liberty and cash and stock and the guaranteed upside to liberty over a period of five years or at least until 2022. just want everybody to keep it on their radar, guys. >> it's important because we had felt that cable was dead by the way, amazon stock, it's just a winner, people just say, listen, i've got to be as good as amazon. amazon's technology is not being challenged by the google sales force tie-up it's amazing how powerful the fang stocks are. >> it really is. netflix is down a bit and did get pressure yesterday because the idea that well if disney succeeded in buying those assets from fox, they would be in an

even more powerful position to pull content from the netflix platform and at some point -- netflix is all about its originals but people do like to have options as well beyond what netflix is producing. >> i agree maybe you have to have -- let's say they get hulu, maybe you have to look at something besides netflix. you get these smart tvs. and it almost seems like it's a netflix tv this would be something where maybe you have to have an iger tv david, you haven't mentioned anything about succession. it could be renamed. >> i know. that figures prominently, any deal they were due, if they would come back and get something done, would not close until close until his tenure is up some people are like with james -- not about any of that and question still loomz in terms of who's going to take over

carl worth looking -- fox is up 2.7% and disney also up again day two with people digesting all of the analysts coming out with comments. >> discovery having a little bounce as well disney market cap is still twice that of netflix. >> it is. >> so keep that in mind. >> jim, i have to ask about travel. >> wouldn't it be amazing if we had espn, a network that talks about sports as opposed to the achilles' heel of disney >> right cruise lines are having a banner day on the heels of a royal caribbean. and trip adviser and priceline are the biggest laggards on s&p. how do you circle that square? >> priceline is spending it's an investment year. people at home have to understand when you're in an investment year that means sell it means there's so much competition you have to spend more money trip adviser is the odd man out. in the meantime, royal caribbean. i have richard fain on today they guided up and have bookings

that are strong. royal caribbean. i don't know where in the caribbean you can go after that hurricane but this was a heavily shorted stock betting there's no way they can do the numbers because if you don't have any caribbean, it's like royal to nowhere. like a cruise to nowhere it is rather amazing they beat the numbers and even more important they said the bookings for 2018 are fabulous. the three of us will have to do the show from a cruise line. >> okay. >> we'll do that >> i saw one pulling out last night on the west side highway at night, it was beautiful those things are big. >> they are floating homes, floating apartments -- whatever you want to call them. >> very pretty, with all of the lights. >> and then there's dean foods i know last week we had a discussion whether the middle of the store was having some mean reversion back to traditional brands dean is up 11%. >> we've got this weird medication going with dean foods is good people like hain because

hain delivered if you're in the supermarket and you're not on the outskirts of it, it's all short term. i think hain can be acquired but they are not for sale. dean is going down, down, down they spun off white wave, that's the home run, what everybody wanted you the millennials like that.m carlos rodriguez join us shortly ago. adp is down 1.3% bill ackman's strategy was always kind of questionable how he came at the company and more than three board seats and thought they would roll over and give them a few. they fought, they fought hard. when it came time for him to convert his stake from derivatives into common shares, many people thought he would convert the entire derivative stake into what would have been an 8.3% common stakewhich woul have been helpful in the vote.

he didn't do that prior to the prior to the record date -- only owned 2% of the stock and even that wasn't nearly enough. nominees didn't get more than 25% of the overall votes cast. that includes the 2% certainly that pershing voted in favor here's mr. rodriguez earlier on mr. ackman's efforts and how much his shareholders pay him for that >> we hope he moves on there was clearly a resounding victory for the board for our board and for the company, i think it's the largest margin of victory of any large cap proxy contest ever. >> i would hopefully message to bill it's time to move on. i think the pension plans and other investors that put money in the fund to charge him and pay the exorbitant fees and give up 30% of the upside will be well served to deliver a message to him that he should move on

and focus on something else. >> first interview onset where he called mr. ackman a spoiled brat >> it does feel like that carlos took an ice pick and put it through ackman -- which is suboptimal for ackman. carlos said this guy is a total joker, i wonder why you give him money. does he start taking on the industry and carried interest and ackman's numbers are down and talking about ackman and what happened with herbalife and i like carlos because he's not taking this lying down it is a little impressive, that he basically says, listen, what are you doing investing with ackman, he didn't even get as

many votes he should run for dog catcher. >> well, yeah, he is questioning those investors and their decisions to invest with mr. ackman we talk so often about bill's track record in terms of certainly a lot of the low likes, whether it be a jj. krerks penny or valiant and allergan was a big win he's being sued. there's important litigation we may get to in the month or so ahead. he does have permanent capital, that was one smart thing he did amongst many everybody can't pull even if they wanted to. >> it's interesting -- how about valiant, really getting it together it might have been a last low price there, the ackman block but what can you say easy come, easy go >> valeant today, revenue ahead, stocks up 16%. also you mentioned jcp, which

yesterday unveiled its hours for black friday weekend i don't know why we're calling it black friday anymore, they are going to start offering a lot of discounts on monday or tuesday of the week and brings us also to tapestry today jim, 42 cents is a beat they do affirm fiscal 18 we're what two weeks away from what we'll talk a lot of retail. >> yeah, i mean, this is again if you go higher end, you make some money cour kors was the most up they talked about higher gross margins. i have news for j.c. penney, amazon is not waiting for that, cutting a price for third party. for me it seems a desperate action saying please come to us, we're like at the mall, don't worry, it can be a decent experience and we have artificial intelligence too. but i don't know what it is.

>> and finally, guys, don't want to lose sight of yesterday's $105 billion hostile bid we haven't heard officially the rejection from qualcomm we've told you will be coming in part on price and in part on regulatory but the stock is up, 7 bucks below the $70 bid from broadcom, 60 of that is cash, rest in stock. we'll talk more about it in the days and weeks ahead as they decide whether they want to launch a proxy fight as well december 8 kt is when they have to decide by. >> news cycles move fast. >> people like hock tan. yesterday people kind ever felt your characterization of hock tan may be aggressive. he's loved because he has so much content and the apple but then again, i am conscious of the fact their growth has come from takeovers and sometimes -- oops, sorry, sometimes when you do it from takeovers people

begin to question whether the growth is not organic enough and that's why they have to make this kind of acquisition >> guys i'm hearing we're going to have ackman in about 20 minutes, just after 10:00. keep that in mind. dow is up 34 record highs across the board. bob pisani is on the floor. >> happy tuesday, everybody. oil rally has a lot of legs, moving markets around the world. asia closed higher, a lot of big oil stocks ats asia. cnooc and all up, tullow oil and bp has been on a tear recently u.s. energy stocks all started very much in the green within about three minutes, started moving to the downside hess, halliburton, apache, all notably potentisitive and mixedw there's been a convergence, oil and energy stocks lately

a lot of generalists left energy, not a lot of people who own oil stocks if you look at oil versus the xle, the big economy nergy etf, going nowhere. with oil over $57 at this point you see the big move up for oil but not such a big move up in the energy groups right now. let's look at the sectors this morning here health care, financials, industrials and material by the way, you see oil stocks moving to the upside there is spdr health care and energy was positive but three minutes turned negative. priceline is quite amazing, trip adviser reduced advertising spending and disappointing on the guidance, room growth for priceline. expedia had poor guidance a short while ago. it is still to the downside.

a lot of changes going on with these travel agencies. more effective hotel loyalty programs, i think is probably the main thing these companies are getting better at keeping people within their own eco sphere and competition from air bnb a big deal online travel agencies take on the cost to integrate the nonhotel inventory into their sights to compete. want to tell you -- put that back, please tell you about a new product launching here at the ice tomorrow this is a new futures contract everybody kept wanting to play the fang stocks, they'll have a new way to play, a quarterly futures contract trading on the ice. consists of futures contracts of facebook, amazon, netflix, alphabet and alibaba and baidu and twitter, all together. you should be able to get it through your brokerage account tomorrow why is this happening? exchanges and etf companies are

noting the low volume. they are trying to figure outweighs to get people to trade more people love talking about the baskets, the fang the most famous of them but it's hard to put them together. legally the structures are difficult. they are trying to make it easier to put them together in short periods of time and say if this is hot, maybe put it into perhaps an etf structure, this is not happening yesterday but this is the future, creating baskets of stocks you can easily pick up on that are in hot spaces and don't take long to get through the system we'll keep an eye on that. right now the dow up 43 points back to you. >> we'll see you in a bit. rick san telli at the cme in chicago. >> good morning, carl, we had a lot of central bank meetings, some of them very important like mario draghi and ecb big data points like the jobs, jobs jobs report if you look at the one-week chart, it seems the 10-year and treasuries are starting to establish what we'll look at

until we come to the next mogul of events in data of top order year to date chart of 10s, as we hover in the low 2.30s, look at the bottoms there in the left hand side of the chart, january, february, march. so well worn the only difference is we have broken the pattern with the one close above unchanged when we had a 2.46 a couple of weeks ago. there's a rounding aspect to that but many traders are playing it on the yield curve instead. if we look at all of the yield curve trades, not just the popular ones, you'll see what i mean, 10s minus 2s, did trade 69 and unchanged on the 10s but that's in september. these are unbelievably large moves in a short period of time. 30s minus fives at 80. 30s minus 10s under five and 10s minus 5s at 33 basis point these are narrow and underscore the dynamics of twin motivation

for traders, not only do they think the feds' course of action will still keep the shortened snug, they look at europe as we continue to see soft rates in europe finally, there's one market that isn't snoozing in the tight range the dollar index back close to a .3%. hovering now above 95. we had a couple of closes in the high 94's on the most recent move above 95 would be another area of technical contention in the rearview mirror should it forge ahead. david, carl and jim back to you. david, great reporting on the fox disney story many people were glued to it. >> thank you, appreciate it. >> thanks very much, rick. disney is leading the dow this morning. highest level since about labor day. you heard from carlos rodriguez. now it will be ackman's turn to

speak. you'll get his take on losing the adp proxy battle at the top of the hour. s&p 2595 back after a break ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

the s&p, and the nasdaq this morning. disney is leading the dow, 30, up about 47 points on the index. we'll get "stop trading" with jim in a moment. on at schwab. oh really? thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

let's get to cramer and "stop trading. >> so everybody knows that there are too many restaurants what happens if you decide to take pause, try to figure out what's really going on, how to bring people into the restaurant, not just have them take out, and really kind of figure out how to handle labor costs and food costs, and maybe just say, you know what, wall street, we're not going to put up more stores until we do if you look at what happens, red robin gourmet burgers. the stock is 26% because they admitted what everybody says, we're not making the money everybody should we have to figure out how to do better there you go 2 does say perhaps that you should put up more stores in order to get your stock up, but

red robin is too disciplined this is what happens if you say wall street, we're not playing your game. wall street comes right back and puts the shiv in your back >> jim, what's on "mad" tonight? >> well, how about a stock that's up 62%? royal caribbean. we saw a better number how about a stock up 81%, new relic. how about a stock, a giant stock up 75%, adobe. shantanu narayen is a competitor of sales force this is not necessarily even a frenemy. >> looking good out there, my man. we'll see you soon >> the sun is great. >> "mad money," 6:00 p.m. eastern time when we come back, bill ackman on losing the adp proxy balett dow's up 47 points don't go anywhere.

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eisen and david faber. record highs across the board once again at the open on the dow, nasdaq, and s&p oil did approach a 2 1/2-year high but is settling back just a touch. >> our road map for the hour begins in big buzz in the world of media after david breaking the news of disney buying 21st century fox >> the ackman/adp battle comes to a close he'll join us exclusively in a few moments from now >> and it is, quote, the end of the automotive era why the former vice chairman of general motors says you can kiss the good times good-bye. >> all three indices hitting record intra day highs as they look for the 53rd record close of the year. a mark that would tie for the fourth most ever for more on this, we're joined on set in a cnbc exclusive by chief equity strategist david

kostin people make notes almost every day that the market is approaching your target for the end of '18, right? getting close to the end of your '19 target you haven't changed the targets. >> think about the valuation of the market, if we include tax reform, and our forecast would be a valuation of around 2650, which would be slightly above where we are now, we're maybe 2% higher the expectation of most participants and most fund managers with whom i talk is there's more likely than not we'll get some tax reform. not exactly clear the nature of that, which makes tax reform investment strategies by definition a relatively low sharp ratio, and a risk adjustive turn opportunity, and more of the fundamental approaches, we have seen this year companies that have been investing in their business in terms of capital spending, research and development, have a significantly outperformed companies that historically have done, strategies involving buybacks and dividends there's been a notable shift, and i think that maybe is

reflective of the fact there is the economic data suggesting there's a synchronized global recovery certainly hear that terminology a lot, and the economic expansion is likely to exist, so companies positioning themselves for that have been doing better. >> midyear, we had you on several times. we talked about bask tsd of companies where margins were growing. is there a new basket? >> no, i would say basically it's top line revenue growth and companies investing in their business, two related strategies we have just finished pretty much the results of the third quarter. had about 85% of the companies have released their results. it's been an excellent quarter particularly dominated by tech 80% of the tech companies beating their expectations on the top line and the bottom line margins have been expanding. that's probably been a theme all year been an area of focus, we have been recommending the technology sector and financials as two areas to drive the market.

they're responsible collectively for the large part of the 20% rally in the last year >> we were just talking about the break about one year since election day hard to believe. and the trump rally, the trump trade that we talk about every single day, s&p up 21% how does that fit in historically with other presidents >> if you think about presidential first term presidents coming in, third best after john kennedy, george h.w. bush, and this would be ranking number three there if we think about all presidential terms, one of the obama terms, his second term as well as bill clinton in 1996 had better terms in the first year >> do you give more weight to the globalized synchronized data or some of the better economic data we have seen in this country? >> a combination of both the economic data has certainly been strong. that's reflected in very strong underlying corporate results, both top line revenues as well as the bottom line earnings. sort of one aspect, but the tax reform is significant because if

we think about a baseline forecast for 2018, $139 a share in earnings. if we make some assumptions making tax reform, estimates will be closer to $148 so that incremental value for a while was uncertain whether there was likelihood there would be tax reform. now, the shift is probably more likely than not. >> can you put a number on it? >> well, economists would put around a 65% probability i would say the market is implying around a 75% probability. the way i think about that is that without tax reform, the valuation of the market in a world of higher rising interest rates looking forward and earnings of $139, the market valuation is fair closer to $2,400 if you throw on the idea of incretion from tax reform, it could be 2650. >> 75% chance? >> if you look at where the market trades now, it's about 75%. >> but high-tech stocks aren't necessarily doing better

the consumer discretionary, the russell 2000 wouldn't they be doing better? >> think about that in a slightly different fashion so the high tax rate stocks, which would be by definition beneficiaries of a reduction in taxes, also generate most of the revenues domestically. in a weak dollar environment, that has been, i think, if you will, the trump card that has dominated as opposed to the tax rates. look out in next six months, we assume some probability, better than not probability that there will be tax reform, those stocks more likely than not will outperform in that environment >> specific stocks, david, you referenced earlier the strong earnings from many of the technology companies it can just be that easy should i just be coming in and buying took, amazon, google, and apple and calling it a year? it certainly would have worked last year or this year >> it's a simple story with respect to that, which is the revenues of those companies and others are growing four to five times faster than the market their margins are twice as high.

and they're trading at the average relative valuation versus the market over the past decade as long as those three things hold, those stocks and others, the large cap tech stocks in particular, are likely to outperform in my opinion those are the fundamental dri r drivers. that's the message, while you can focus on the global economic activity, domestic economic expansion, tax reform, it's fundamentals revenues and companies that are making these investments, the high-cap x, the companies that are doing a lot of r & d, those are being rewarded by investors. i think that's appropriate in an environment wh, they should be positioning themselves -- >> they also have a lot of scale in each of their individual businesses >> if you're bullish on tax reform or tax cuts, would you rather buy the russell or s & p tech >> s & p tech would be a better area of focus. if you think about small cap versus large cap, it's really the businesses that sell into

small businesses so it's not so much the small capitalization companies it's those that are catering towards smaller businesses smaller businesses, if you look at the nfib, national federation of independent business optimism, it's been the highest it's been in a long time it rallied sharply after strump was elected. it's a reflection for better or worse, of the idea of less regulation that's a positive thing for many small business owners. therefore, they're making these investments in their businesses. that's reflective of a group of stocks that we follow that are catering to customers that are smaller businesses >> can you name any of those names? >> square comes to pliend where you have a company that is more focused or directed towards smaller business and customers those are the small businesses that are helping to drive that up >>good looking chart, obviously, on square we have to run thank you. david kostin

>> adp shareholders have spoken, and bill ackman will not get the three seats that it was seeking on the board it will not get any seats on the board. it was a hard-fought battle. earlier this morning, we spoke to adp's ceo, carlos rodriguez, about that battle. >> i think it's the largest margin of victory of any large cap proxy contest ever and so i think that would hopefully be a message to bill that it's time to move on. >> joining us now with his response is mr. ackman he's outside adp's headquarters. you can see him standing next to leslie picker. jim cramer also comes back to join us for the interview from san francisco. leslie, you take it away >> thanks, david hi, bill thanks for joining us. in the meeting today, adp ceo carlos rodriguez called this a, quote, ass whooping. how would you characterize it and do you think you need to change your strategy with targets like this one? >> people should be careful not

to rely on the company's characterization of the vote, and just a few things i think are important. the company said we got 25% of the vote, but what they were doing is comparing the votes i received to a vote director that we did in the post that's not the right comparison. the proper comparison is how did i do compared to eric fast, the director i was running against, in affect. i got 31% of the vote if you look at the 81 million votes i received versus the votes that he received. of the votes cast, i received 31%. interestingly, mr. fast got 62 million votes withheld against him. why did he get 62 million votes withhold against him because iss, one of the most influential proxy firms said shareholdered should appoint me to the port by withholding against mr. fast those votes withheld against mr. fast were meant to be support of my election i would have received 45% of the vote but one more thought i think is important. in this case, vanguard is the

largest shareholder of the company, they own 10%, maybe more than 10% of the company i lot by one shareholder had vanguard voted for me, it's almost a 50 million vote swing for my candidacy we lost by one director. importantly, the second largest shareholder of the company, blackrock, supported us. i don't want to use the term i found it really kind of an inappropriate way to describe an election, particularly when the second largest shareholder votes against you. i got 31% of the vote. a little more than 31% of the vote, and had you counted those withheld votes against fast which were intended for us, we would have received 45% of the vote i think that's a very strong vote of confidence from shareholders for our ideas >> regardless of whether it was 30% or 25% or 20%, are you - >> or 45%. >> or 45%, are you humbled by the results you see here today, and do you see any lessons learned for future activist targets you may pursue >> yeah, no, no.

i think the biggest lesson for us is the use of universal proxy card is important. the reason we lost this is wasn't a universal proxy card. adp was unable to allow us to use a universal proxy xard as a result, iss came out with this recommendation to withhold for fast to support me they didn't want three directors to end up on the board they thought if people voted on my card, they might unwittingly vote for the directors had i run one director like nelson did, it wouldn't have been a need for iss to go through that same recommendation i thin one advice is have a universal proxy card or run for one director >> and i think my colleague jim cramer in san francisco has a question for you >> please. jim. >> yeah, bill. carlos, when he was on with us on "squawk on the street" talked about how you're dramatically overpaying, and perhaps investors ought to rethink being with you given the fact you

wasted a lot of people's money i think you did a lot of education about the process and how people can and should be speaking up. the characterizations seem to be rather ill-advised in terms of how you may feel, but it certainly was emphatic by the way he thinks that perhaps your investors should pull out. >> yes, look, all i can tell you is it's an unusual response from a ceo of a $50 billion company when tens of thousands of your shareholders voted in favor of us, including blackrock, one of the most respected and largest asset managers in the world, they're sending a very, very strong signal that they support the various ideas that we have had for the company. i think, how did the company win the proxy contest? they made a series of commitments to shareholders. they committed to improve margins by 500 to 600 basis points they committed to a launch of vantage 2.0, which is supposedly upcoming, which is why iss supported us for only one

director supposedly, there's a product coming to address their market share losses the growth is going to reaccelerate from 2% to 3% in this fiscal year to 7% to 9% for the next fiscal years. those are pretty big commitments. why did we lose vanguard my guess is because they wanted to give management another year to see if they can deliver what we heard from shareholders who didn't support us is they said, look, management heard you loud and clear they get it, they know what they need to deliver. if they don't, we'll support you next year. what i heard from carlos today, surprisingly, is he seemed very dismissive if he views this as a mandate from shareholders when even by his own calculation, 25% voted against management that's not the right comparison. the right comparison is myself versus mr. fast, where we got almost a third of the vote, then again, if you include the withheld votes against mr. fast, we got almost 45% of the vote. that's without the major shareholder of the company good news here is that, one other point that's useful to

make, the stock hit $118 a share. it started at $97 or $98 when we launched this. we bought our stake in the company. they hit $118 a share when we got the support of glass lewis for all three of our nominees and they wrote a damning indictment of the company's performance and the way they responded to us in the proxy contest. when iss came out with the recommendation, which was a backhanded way of supporting me for the board, the stock started to come down it came down because people's perception was what probability of my getting on was lower today, the stock dropped further when we lost the election. what is the market telling shareholders, people who look at this company what is the market telling management if persian square was on the board, it would be higher. that's a glower endorsement of us >> bill, i went by an empty chipotle yesterday it was open, and i'm thinking in terms of that line of thought, the narrative you just outlined, when you announce in 2016 that

you were taking position at chipotle, the stock, you got on the board, sometimes it doesn't matter because the stock is at 273, how do you turn around chipotle you're in on the board how do you get the customers back in? i think that's a case where you won, but it's not really clear whether -- clear-cut whether the results were all that positive >> okay, so first of all, i'm not on the board of chipotle, but we do have a couple representatives. >> you have people on all, bill. >> sure. so chipotle's credit, they invited us onto the board. we stepped on after the company's collapse you know, the stock price collapsed, and we're working to help them. it's in the midst of a turnaround we're in a position where we can be helpful to the company. they made a number of key additions to the management team they had a very unfortunate inskremental food safety issue at one store with one sick employee that's caused people to lose confidence, but we like chipotle, and we have been able

to work very cooperatively with the management we approached this company the same way as we did chipotle, the same way with other companies and they chose to have a battle with us and attack us and the various approaches they have taken. i stay high minded we focused on the facts. that's why we got the support of major institutional investors here we intend to be a significant shareholder in the company they made commitments. if they meet the commitments, the stock price will be higher if they fail, we'll be on the board next year. >> bill, it's david faber. >> i'm not hearing your question sorry. hold on. i lost the earpiece. go ahead >> bill, it's david faber. can you hear me? >> yes, i can. >> okay. the performance of pershing square this year has been less than stellar i think you're still down for the year you seem to be saying this was not -- this was a loss, but

certainly not one that affects your strategy. i'm just curious about your own conversations with your investor base as you go back to them. given your subpar performance, giving your failure here to get any board seats, do you have to take a new tack? do you have to have a discussion with your investor base in terms of why they should stay with you as an activist/stock picker who is going to be able to perform over a long period of time above the market averages? >> sure. and look, we have performed above the market averages for the vast majority of our history. and i remind you that the goal of a shareholder activist is not to win proxy contests. the goal is to make money for its investors. and my friend mr. peltz, who obviously just ran a proxy contest recently, lost the proxy contest, but did he really the answer is no, in the say way adp is under pressure to deliver on commitments to shareholders, p&g is precisely the same thing. go back to dupont proxy contest

a year or two ago where nelson supposedly lost. the company disappointed shareholders and the board replacement management and a series of steps nelson recommended. we have laid out a very public case for why adp is underperforming its potential. that case resonated with shareholders there's not a shareholder who doesn't think this company can't do better in terms of margin performance and can't address the significant market share losses management made some commitments. they made those commitments to iss. you can see that by reading the iss report to address their market share losses. we're rooting for them if they're successful, the stock price is going up a lot. if they disappoint, we'll be able to make the necessary changes to make this a more profitable business. we have won and lost proxy contests in our history. we have run very few, but it's a tool we use in order to influence a company. if adp just rests on its laurels

and is complacent and makes no changes and don't meet their commitments to reaccelerate growth in the back half of this fiscal year and get to 7% to 9% growth by 2019, shareholders will be disappointed what we have done in effect is put a line in the sand they committed a bunch of things the vanguards of the world have said we'll give them another year to perform because the stock price has done well. what we did here is took on a target where the stock price has done well even though it's meaningfully underperformed its potential. >> to david's point in terms of your performance, did that hurt you when you were trying to persuade people to vote you and your directors onto the board? is that something they looked at sxdz maybe pershing square should get their scores up higher >> i think if they looked at our performance, they looked at 35 activist campaigns, four disappointments, but 31

successes over a 14-year history. but really what they were focused on is how big is the opportunity at adp why do they have half the operating margins of paychecks even though they have overlap in 35% of their business. why do they not have a competitive enterprise offering when companies like work day and ultimate software and others are very effectively competing against the company. these are important questions that shareholders would like answers to and you know, i think many shareholders said, you know, certainly a majority said, we're going to give these guys another few quarters to perform. three quarters from now is the nominating deadline for the next shareholder meeting. the company said we asked too late for a universal proxy card. we're going to ask for one today. therefore, the company is on notice that, again, we don't want to run a proxy contest next year, but if the company underperforms its potential, we'll be back in front of a group of shareholders we have gotten to know over the koersh of the last least months and we'll be able to measure

management's accomplishments relative to what they committed to if they meet or exceed the commitments to shareholders, we'll be a happy, very quiet shareholder. >> bill ackman, thank you for joining us back over to you guys at the new york stock exchange. >> okay. well, thank you, leslie, for bringing that to us. thanks again to bill ackman. and jim cramer back at one market as well in san fran sara, over to you. >> when we come back on the show, a possible media mega merger in the works. more fox, disney, bob iger, the murdoch family author of disney war, jim stewart, weighs in quk t see wl be right back

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want to take a look at shares of both disney and 21st century fox. both of which are up rather sharply yet again. this, of course, a day after our report on the talks that took place over the course of let's call it early october into early november between these two companies. focused on a deal in which disney would have bought many of the assets of 21st century fox leaving behind a company that would have been focused on news and sports, but certainly having jettisoned its cable networks and the entertainment areas such as fx and nat gee o not to mention the fox studio, fox production of television shows its ownership in bskyb

star, hulu, and a number of key assets they have not been talking, at least in the last 24 hours it's possible that the two sides could re-engage, but perhaps the most important takeaway from this overall story and what has gotten people's attention is simply the willingness of the murdochs who control fox to say, we may benefit from becoming smaller given we cannot conceivably get the scale we need to compete in this newly emerging world of media. for more on that, i want to bring in jim stewart, our pulitzer prize winning "new york times" columnist christianer, also the author of "disney war." one of my favorites, goes way back, but still a great read what i just said is what people really had been focused on wait, the murdochs are going to go the other way and yes, they are, and the board is willing to really consider that that certainly seems to be giving people something to think about. >> absolutely. that was a great scoop yesterday. you're much too modest but it's fascinating what we're seeing are the

dominos starting to fall from disney's decision to kind of go it alone, go over the top. the traditional distribution models are breaking down to be able to do that, to compete with the netflixs, the amazons of the world, you certainly do need scale. even when disney announced, people were wondering, does disney have the scale to go up against that that leaves the other studios kind of out in the cold. what is fox supposedto do? it doesn't have nearly the clout. doesn't have the brands, doesn't have the franchises, doesn't have the market share that disney can bring to that project. so i think from the fox point of view, this really does make a lot of sense you can see the market really likes it and the murdochs' willingness not to stubbornly dig in and say we're going to pursue the strategy that was invented before the world changed, i think they deserve credit for flexibility there. really, from a fox point of view, this is pretty compelling. >> we don't know where this will end up it is certainly possible the

time-o two sides will re-engage and it's possible they won't they weren't able to make headway in terms of price, and you might imagine the tax consequences of a deal like this were also complex. there's a lot there, but jim, disney approached them to your point, let's make our direct to consumer offering as robust as possible you can understand why they might have been interested >> i think the market has been slower to wake up what's in it for disney the percentage gains aren't quite as big there, but it is fascinating that they were the ones who initiated that. they're clearly looking for the scale to make this over the top thing they're going to do very robust offering. and then, you know, this is a horizontal merger of the studios. i was looking at the box office share today so far this year it looks like disney is at about 17.5%. fox is at about 12.5%. whether that raises some anti-trust concerns, i don't know >> these days with amazon studios, netflix, and everybody else, it seems -- >> this is so influx the traditional hollywood box office numbers may not matter so

much given how much has moved to over the top still, what you see there is, there's going to be less competition, number one, so people like that secondly, you know, disney will get some nice assets there they do have some good properties there "avatar" was a huge hit for them can you exploit that disney is the master of the sequel theyed can bring a lot of talent there, cut cost. there's a lot of traditional advantages to this, and given this adding weight and the international distribution they could get, you know, it adds a lot to the disney portfolio. >> always raises some questions about the chain reaction it could set off, whether it happens or not, does it put fox in play? what does amazon and netflix do about it and some of the other content players out there. >> that's really -- i mean, every other studio has got to be, you know, looking hard in the mirror and saying, what is our strategy going forward given this new alignment, given the

arrival of the superpowers, the technology companies moving squarely in the entertainment space? i think frankly they're going to have to find some partner. would a netflix or an amazon actually buy a hollywood studio? i mean, two years ago, i would have said that's a preposterous idea >> they may pay close attention. >> they will be looking. is it cheap? first, they have shown that the barriers to entry here are low it's amazing to me how amazon and netflix have moved in here they're producing very successful entertainment products on the other hand, you have the film libraries, the sound stages, the legacies of these, you know, these older entertainment companies that would have to be attractive at some price to them, i would think. >> on the netflix front, there's an argument that they have such a time advantage, right? going direct, that they can afford to, sure, try to catch up with us. on the other hand, others argue there's no net flex land where we go and ride pandora rides

would you say, would you say it's net negative for them or not? >> not really. it's fascinating that netflix kind of shrugged when disney said we're going to sever our ties to you or reduce them and netflix is thriving since then now, we haven't actually seen the impact of disney coming in in a big way with this over the top offering so it's premature to evaluate that, but i think netflix is in such a commanding position from a technological standpoint that they're feeling very secure. the danger might be that they're feeling too secure it still remains to be seen, can disney pull this off from a technology standpoint. they're going outside to get the talent disney does not have a good track record when it comes to had internet there's something there, a learning curve that they just have never quite gotten on >> espn, to be fair, is a pretty successful digital product >> absolutely. >> r & d, spending - >> i'm not talking about that. purely the internet products,

the internet offerings is something that seems to have baffled them over the years. which is why they always went, they were just a content company, and we're going to make it available on any platform, and now they're clearly becoming a platform company forced into it, i think, by the big platforms which are amazon and netflix at this point. >> yeah, a rapidly changing world, jim >> and fascinating story >> it really is. thanks we'll talk a lot more about it thanks, jim stewart. >> when we return, the president meeting with the president of south korea. we will go live to seoul as the president continues his trip across asia. >> dow has lost some of its early gains but did hit record highs. back in a minute i think it's terrific.

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good morning, everybody. i'm sue herera here's your cnbc news update at this hour. the air force under fire for failing to report texas church shooter devin kelley's court-martial convictions to the fbi. that would have prevented him

from buying guns air force secretary heather wilson addressed the error on cnbc earlier today >> i'm more interested in responsibility we take responsibility, and we're going to find out what happened and fix it >> two attackers one of them a suicide bomber, struck a local tv station in kabul, killing at least two guards and injured 21 more isis quickly claiming responsibility the attackers had military uniforms on. police rescued some of the tv staff as the attack was unfolding. >> here at home, virginia gop gubernatorial candidate ed gillespie voting this morning. president trump supporting the former republican committee chairman the race against democrat ralph northam is too close to call it's being seen as an early referendum on president trump's popularity ahead of the 2018 midterm elections. that's the news update this hour sara, i'll send it back downtown to you >> all right, sue, thank you as we head to a quick break,

take a look at stocks at this hour taking a pause here near record highs. disney leads the dow, though media stocks are hot today, off david's reporting. discovery at the top of the s&p, which is down just a half of one point. "sawonhetrt"ilbequk t see wl right back stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and.

we are the driven... the dedicated... the overachievers. we know our best investment is in ourselves. we don't take no for an answer. we fight for what we want. even for the things that were once a given. going to college... buying a home...

and not being in debt for it for the rest of our lives. but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. south korean president moon today. kayla joins alive tonight from seoul with more on the president's trip to the region and some of the headlines he's made so far. kayla. >> reporter: good morning, sara. at a state dinner this evening in seoul, president moon of south korea raised a glass to the one-year anniversary of president trump's election, and called the two old friends despite the fact that moon has only been in office for six months he said they established an intimacy, and they did announce some progress on issues of consequences for both of the two nations today. here's some of the things they announced today. first, they said they would have

closer coordination on north korea. they said that there would be expanded military equipment from the u.s. to south korea. president trump said there would be billions of dollars in sales, much like he said with japan yesterday. and they both also said that there would be expedited trade talks over the korea and u.s. free trade agreement that is an issue that has been in contention for these two countries after president trump in june said he wanted to renegotiate it but on both north korea and on this trade deal, trump sounded a newly optimistic tone. >> i would like to thank president moon for instructing his trade negotiators to work closely with us to quickly pursue a much better deal. a deal that, frankly, has been quite unsuccessful and not very good for the united states >> reporter: that change of heart didn't happen just today i'm told that it happened around

late september when the korean negotiators showed they were willing do come to the table in earnest and weren't going to call president trump's bluff about withdrawing from the deal. tonight at the state dinner, south korean media reported executives from lg and samsung were in attendance that's notable because a trade panel of the u.s. government is currently considering tariffs against washing machines from those two companies in order to favor the u.s. giant whirlpool a decision on that is coming in a few weeks. and so having those executives there could potentially sway trump's hand there if you guys are wondering whether trade is a big issue for the consumers and the people of this country, obviously, they do care about north korea that's priority number one, but just take a look at the front page of this paper today, and you'll see the only english letters are fta. that is the free trade agreement with the united states it is very top of mind for the people here. there's a hearing on friday, and we'll see what else we can learn about the talks that happen

today. back to you. >> that is eye opening, given how important some of the national security questions are. kayla is in seoul with the president. we'll talk to you in a bit >> when we return, we're approaching the end of the automotive era that's according to our next guest, the former vice comarman of general motors, bob lutz, who is going to join us to explain don't go away. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts

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what is one top market strategist calling the achilles heel of trading? find out more "squawk on the street" coming up.

let's hop over to the cme group and getthe santelli exchange good morning, rick >> good morning, carl. thank you. it it's fascinating i watched these numbers, really stratospheric in terms of their 6 million handle the brings the whole argument that what's going on in some of the jobs report indeed still may be getting its gps considering

all of the hurricanes and events that it's had to deal with, with regard to be accurate. in the end, i think the real discussion when it comes to jobs, wages, all depend on the 95-plus million workers that could work they're not working, and they're not counted. that pool is underestimated in terms of the ability to come back in the workforce. maybe president trump ought to say, i hope for a higher unemployment rate, as participation changes and we bring many workers back into the fold another issue happened today you know, one of the big, big topics of 2014, 2015, 2016, and even today to some extent, tina. there is no alternative. we have heard it so much, we don't want to hear it anymore. and what does it mean quite simply that many forces at work globally over the last several years have put investors into a stock market position. many still fight it. money funds still have quite a

bit of money but t.i.n.a. may begetting trumped or losing top billing to of all things, t-bills as i look today, and i want you to look at the five-year chart of one-year bills, yeah, you're seeing it right. about 1.5% 150 basis points doesn't sound like much, but look at the left side of the chart. we had bills in negative territory and hovering near zero for quite a while. fed rate hikes have changed that, global outlooks have changed that fed moving from overly stimulus crisis policy to less so maybe there is more of a competition and friend of cnbc peter brought up today, the spread between the s&p dividend yield and a 150 t-bill is only about 40 basis points. something to consider. there was a time where savers couldn't get anything going for themselves maybe that is changing, and it's also an insurance policy if you get nervous about spocks with regard to a competitive area of

investment finally, look at the next two charts quickly these are both june starts to the euro versus the dollar and its mirror image, this way mirror image, not sideways, dollar index the reason i bring it up, there's a lot of issues with mario draghi, he's going to have to contend with, and all of those are currency unfriendly. it looks like it's going to continue to melt 114 is what many traders are talking about, and the dollar index now trading a bit above 95 is getting credibility to that strategy of trade. david faber, or scoop faber, i should call you, back to you >> actually, that's what we named my dog scoop faber. but he'll thank you as well. thank you, rick santelli let's send it over to john with a look at what's coming up on "squawk alley. >> good name for your dog. you're always chasing scoops well, we're going to be following up on that scoop disney apparently hungry, perhaps looking to swallow part of fox, but what are the

implications for technology? that includes hulu and other competitors looking to get in on the content game we'll dig in coming up on "squawk alley. i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

the end of an era.

our next guest penning an op-ed in the automative news magazine, saying, "we are fast approaching the end of the automotive era. author of the op-ed, bob lutz. very provocative piece here, the end of the line for the automobile because travel will be in standardized modules for those who haven't read the piece, briefly describe this future you're looking into >> well, i said 20 years and many people say that's too short, and for all i know it could be 30 years or 35 years before we get there, but it is absolutely inevitable. i mean, human-driven vehicles are on their way out, except at automotive country clubs and offroad dude ranches where the wealthy may still -- just like well to do people have their horses and horse stables now, but basically it was the end of the horse era and now it's going to be the end of the car era, and from a standpoint of moving

human beings around the surface of the planet safely and efficiently, let's face it, it's the only way to go human beings just can't handle it anymore >> bob, your piece was great, and got a lot of attention and it deserves the attention, but aren't you underestimating human beings' love of driving? i mean, entire car companies have based their marketing solely on that message, the joy of driving and your argument suggests that's just going to disappear >> well, again, i refer back to the horse, you know, where certain breeders had horses that had certain characteristics and kind of it all went away from the public highways. it still exists on private land. and, yeah, cars are entertainment, they are social objects, they are psychological objects, they are objects that help attract the opposite sex or whatever sex you're trying to

attract. and that's -- that is a major role but it's not the primary role. that's the fun part. that's the image part. that's the excitement part but that has nothing to do with efficiently transporting human beings >> so what does it mean for the automakers will they be the ones behind these futuristic modules of self-driving cars, or do you see other winners here >> they will for a while, and it's going to be a gradual transition and there will be more and more autonomous vehicles and less and less human-driven vehicles, and then there will be a tipping point where the feds say wait a minute, 30% of remaining drivers are causing 99% of the accidents and that's where everybody will have five years to get rid of their car. but it's interesting, the car producers are going to be in a position like nokia was as a producer of hand sets. it used to be you used the hand set and you made money on it

now modern cell phones, the makers probably make next to nothing and the value is captured by the service providers, the verizons, the at&ts, the sprints, and so forth. and it's going to be the same with cars. i always use the analogy, have you ever heard of american freight car company? american freight car company is a big company nobody's ever heard of them because you don't brand freight cars they get sold to the railroads who put them in trains that's much the way it's going to be with the makers of the modules. they will be bidding on big contracts for people like uber or lyft and all the other companies. >> why wouldn't it be -- to that point, uber right now, their business model is based on having a driver who owns a car they might help them buy that, but why will it be gm, which owns the car, and just the software >> well, that's -- gm owns the

car, if you look at the invested capital of not only owning the means of production, the plants, et cetera, et cetera, but also owning the several million cars a year that are out there, i don't know where they get the -- but your point is an excellent one. general motors is a company, one company that gets it and is investing heavily in the so-called fleets, where the value is going to be generated, which explains general motors' partial ownership of lyft and gm's partial ownership of maven and down the road there will be others, so the smart car companies are going to start -- >> go ahead, bob, finish your thoughts just screaming back here >> oh, okay, i thought it was a question so, the smart car companies are going to work themselves to where they can get into the

downstream portion, because let's face it, when the big fleets order modules, they are going to put out bids, go out for bids and say we need 300,000 medium-length modules in the fourth quarter >> i'm sorry to cut you off, but we are out of time the hour is up but it is a thoughtful piece, and it's got a lot of people talking and i'm sure you're getting a lot of feedback within the industry, as well. >> not all good. thanks >> i'm sure. >> read it if you can. when we return, former fcc igngn sioner robert mcdowell wehi ion disney-fox. "squawk alley" is next

stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and.

welcome back to "squawk on the street," i'm dominic chu we're keeping a close eye on the consumer discretionary sector on reports from both priceline and trip adviser watch all of those travel-related stocks when it comes to that sector that does it for "squawk on the street." let's send it back downtown for the start of "squawk alley."gu