europe is week this is not necessarily a domestic concern here. it's more of a -- >> starting in japan >> japan, europe concern make sure you join us tomorrow we'll see whether the market recovers at all today. but "squawk on the street," coming up right now. >> academy at west point starts its morning. jim cramer is there, hosting a special veterans day edition of "mad money" tonight. welcome to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange futures, dow set to open down 100 points we haven't had a triple digit loss since late october. jitters about tax reform, retail is weak. the president continues his stay

in beijing europe is weak and claims a little higher than expected. the two-year is at a nine-year high our road map begins with retail movers macy's and kohl's moving in different direction. >> plus, more media m&a intrigue the future of at&t and time warner's deal is in question as the department of justice asks for changes and the two sides may end up in court. >> and futures are slipping. markets are awaiting more on tax reform today, as we digest a number of earnings movers. so let's kick it off with jim, who is at west point today, ahead of a big show tonight, jim. and we're looking at some early weakness this morning, some attributing it to the increasing difficulty between reconciling what we've gotten from the house, what is being marked up, and what the senate is eventually going to tell us on taxes. >> well, i'm continuing to be very skeptical i'm looking for a repeal and replace here in other words, i just don't

think that they're going to be able to get it together anytime soon but you know what, we're back into a pattern and the pattern is when europe is weaker, we're weaker. and i've noticed that europe pulled us down i'm not all that concerned i think buyers will come in regardless of what happens in congress by the way, it's really interesting to see a bifurcated retail thing we're going to be going over it. but i thought macy's quarter was strong kohl's was not andic th i think retail will color the action, because we're in that part of the earnings season. >> kohl's is a miss, a couple of cents. although comps, jim, down a tenth. a little bit better than the down 0.7 that we were looking for. >> true, but i think people are thinking that kohl's would be consistently better. i like the call out at macy's, where inventory was down that's so important. it was the opposite last year. sg sk sg&a down. i genuinely think that macy's will be able to navigate this far better than what the stock seems to indicate.

>> there's a lot of moving parts in retail today. elf is going to be interesting down in the pre-market lpd has some projections about the holiday market they three 36 to 4, which is what we did last year. they also say it will be the best holiday in years for consumer tech. and you can probably guess why >> right you know, apple's going to take a gigantic part of the holiday season, as it always does. this one in particular, i think, because of the higher price point of the ten those that have seen the x, carl, i think it's pretty breathtaking and the $1,000 price tag is not as bad if you think about it from any -- if you buy it from one of the big telecos, david will be talking about the telcos and what they mean, but i'm pretty sanguine about the holiday season because of the joblessness. we've just been having an unprecedented employment rate here i know the claims this morning may not have been terrific, but

i think that retail and employment dovetail, always have, which means that the season is going to be strong it's just a question of how much amazon captures, because i think that amazon is going to be the star of the show >> well, to that point, amazon is already getting their marketing plan in line i don't know if you've seen or if we have the holiday ad that amazon is now rolling out. sort of, a big play, david, on their logistics strength follows a single box all the way through all of the conveyor belts, through the distribution centers, as this girl right here taps on her phone to buy a gift for what looks like her niece or sister this is what it's all about. the convenience that amazon uses as its selling point >> they have, of course, as we know, einveinvested so much int logistics over time. given that luxury by their shareholder base and the willingness of those shareholders over the last 15, 20 years to accept the fact that those investments were being made to secure future clothes. and this is what separates

amazon in so many ways this idea, even a couple of years ago that you could get something same day seemed far fetched. and now, of course, it's a reality. and that has med them, well, we know it, we talk about it every single day, of course, the most powerful force in retail and the scale of which is simply unrivaled in any way, even in some people's imagination. >> yeah. jim, it makes you wonder whether it's retailers who are nervous by something like that, or logistics, whether it's -- i mean, whether fedex and u.p.s. deserve to be nervous after seeing that. >> i think that fedex and u.p.s. have all the business they can handle i think one of the problems is, they're overwhelmed during this holiday season that's really hurt u.p.s i keep comingback to xpo logistics as being the last mile provider that no one's talked about. brad jacobs has got a suburb ecommerce strategy and i think that they will be a dominant player. i also think, look, let's just

understand ooemp amazon is making it up so people -- if you buy it online, you can pick it up all around the clock. none of these companies is doing that particular strategy makes a lot of money on those strategies the fact is is that amazon can make a lot of money because it is so digitized and uses so much artificial intelligence. i don't like the way a lot of retailers are winging it to compete against amazon there's nothing about amazon that's winged. it's process, process, process all the other guys are trying to catch up only walmart, do i see, and that's of course why the stock is up so uch, only walmart seems to be able to develop a strategy that is uniquely silicon valley and is very much, very much designed to stop amazon >> we're, obviously, a couple of weeks out from black friday week, and we're going to be talking about that in the days ahead. we do want to get to some media news at&t says it has no intention of selling cnn as part of its planned $85 billion deal to buy

time warner after reports surfaced that the doj wanted to sell cnn to win governmental approval randall stephenson putting out a statement, i have never offered to cell cnn and have no intention to doing so. we'll hear more from stephenson today on cnbc when he joins our andrew ross sorkin at 1:20 p.m. eastern time a lot to unpack in this story. >> there certainly is, carl, and it's taken let's say an unexpected turn over the last few days of course, as we reported, as andrew did, and others have a well, that ask from the doj was unexpected it has come in the last few days this for a deal that was very close to the finish line, as i reported yesterday, back in september, they were days away, people close to the situation tell me, from having what they believe would have been a consent decree or what we call so-called behavioral remedies for concerns amongst competitors in terms of the bundling that would take place with hbo and direct tv now and the distribution network and everything else there. they didn't get there.

and makehin del rahine was confirmed to his post to run the antitrust division at the doj. and things have changed since then despite the fact that mr. del rahine said he did not see this deal posing an anti-trust threat, well, that was then, this is now. and now we're at a point where it appears, at least, if the two sides hold firm to their current positions, they're going to have to settle this in court. it would seem going into court, if that is, in fact, where we go, that time warner or at&t/time warner will have the easier case. the government, remember, is the one that needs to bring the case, needs to prove its case. and it would seem to in some ways, at least, according to antitrust experts, need to be relying on a somewhat novel theory, because this is not about jim pushing another competitor out it's not a horizontal deal, as they have said, time and again,

from the minute they announced it it's vertical. we all can see why sprint getting together with -- t-mobile getting together with at at&t, or sprint getting together with t-mobile would be conceivably an issue for doj four competitors going to three in an incredibly important market that's not what's happening here and so it will be interesting to see what the arguments being made are require them or want them to divest and what at&t's rebuttals would be, jim. but it certainly took people unaware. the stock is now 88 bucks. at&t was up a bit, but down this morning. >> david, i think that the big issue here, i've been saying this about facebook and about alphabet, is some sort of jihad against concentration of power concentration of power, with at&t and time warner is nowhere near as powerful as the concentration of power that we're seeing with facebook and with alphabet. if you're going to go after this merger, do you not, david, have to go after these giant

conglomerates that started at small companies, that are now considered to be stiflers of innovation, because they're so powerful >> that's, i think, is the key question, jim. it's certainly not clear that we're at that point, yet but just think about the events of this week my report on monday of fox's willingness to enter talks with and have talks with disney about selling most of the company's entertainment and distribution assets to disney, as a result of the fact they did not believe that they could compete in terms of the scale required to do so with what they call the big 7 or 678, if you want to call them, the apples, amazons, netflix, googles, facebooks of the world. jim, then you've got this, where at&t would argue, this is what we need to compete and time warner would certainly argue that we no longer want to be alone. we need the scale that will be afforded by being put together into this larger conglomeration of media and telecom assets. so, it's a shifting landscape. i think your point is an

excellent one. when will that case be brought about simple market power if you're going to go after this one, in terms of sort of the same idea? >> i mean, you know, yesterday you saw the pathetic parody of profit that we saw from snap i mean, snap is a deeply hubble company, with the incredible arrogance of a team that have taken some sort of permanent intellectual vacation. but i do notice that facebook decided to wipe out snap and they can do it they can do it because they have tremendous power, they have a great vertical now, of course, snap is so busy committing economic suicide, it may not be a good case but it reminds you, do you really want to go up against facebook now it's pretty late in the game to go up against a powerhouse like that at&t needs this, because it's a pitiful -- it's a pitiful, helpless giant without time warner soy totally agree with you i think the justice department is trying to create some sort of

thesis that this is a colossus give me a break. it's no colossus when it comes to alphabet and facebook >> no, it isn't. and and again, vertical integration has not been something they've typically gone after. we say 40 years, maybe a little less than that, but it's been a long time since a case was brought to break a deal up or stop a deal that was vertically integrated, carl by the way, when you imagine what the case would be against the facebook or how you would even argue to break that company up, it's far from clear to anybody how you would actually do it. what would you break up? >> and if you believe some of these reports that it's truly politically motivated and about cnn, is it clear to anyone what the white house gets, how their concerns are alleviated by having at&t have to sell it off? >> other than punishment, in some fashion -- >> punitive -- >> yeah, a punitive -- no. and that certainly is the concern, if, in fact, it is somehow proven or believed that the white house has truly interfered with and/or significantly influenced the antitrust chief to take this

action as a result of his being -- trump's antipathy for cnn, that's a worrisome signal, to say the least >> as the fcc commissioner, jessica rosenworsel tweeted yesterday, are we really going to make the justice department use antitrust law to force the sale of a cable channel because the president doesn't like its news coverage. she's a commissioner, but not the only voice at the fcc. >> and that concern is being raised of course, at&t and time warner are thaep happy to see it out t. perhaps the idea that if enough of this goes on, it will back the doj up to a certain extent in terms of their ask. we'll see. but it will be novel theory and we'll have to see if and what they actually bring to bear. it will take, what, six months, jim, most likely, for this thing to even see the inside of a courtroom. and that, of course, on the investment front and the uncertainty that comes with that is what concerns investors and why time warner has sold off so

dramatically over the past couple of days >> and this has to be one of the more arbitrary and capricious that i've seen it was when jfk told bobby kennedy to get hoffa they set up a special hoffa unit of course, hoffa had not been indicted, not accused, nothing they just said, we're going to stop hoffa i guess they want to stop zucker >> but to carl's point -- >> a different magnitude >> to carl's point, cnn is going to be owned by somebody. and it's going to want to make money and it's going to follow a programming strategy, conceivably, that would allow it to do so so who knows what you end up with >> does he want manafort to run cnn? it's an interesting idea manafor manafort no bannon maybe he wants a change at the top. >> maybe >> it's as ridiculous as the

prosecution! bezos could buy it >> there's also the added wrinkle that some say bellarine is not favorable of preferred remedies >> structural meaning you need to divest something. but behavioral is a dissent decree it's what's comcast, our parent, had to enter into when it bought control of nbc universal it's what, way back when time warner bought turner, they had to enter into as well. they owned a cable company back then, time warner cable. but that doesn't appear what they want. it's unclear what they're going to get and how they're going to argue it is something that the law supports >> yes >> and precedent supports. >> we'll be looking for developments -- >> david, i just got to ask quickly, david, is it really true that they maybe have to give up direct tv otherwise? that seems like a complete canard what is that, the nfl package? where's the antitrust there?

one guy has nfl and the other guy has something else >> it is one of the asks, direct or turner, was apparently the ask from doj, jim and you're talking about direct tv now, which many would say is a competitive product in an increasingly competitive market, ben official for consumers and so, certainly some question marks as to why that would be an ask. >> guys, when we come back, taxes topping the docket on capitol hill, as the senate now gets ready to unveil its version of the tax bill. we're going to get to fox earnings, square, roku is way up in the pre-market. downgrade for snap and of course, nvidia and disney, tonight. we're back in a minute whether it's connecting one of the world's most innovative campuses.

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futures are in the red this morning. dow looks to open down triple digits jobless claims up more than expected and taxes top the agenda on capitol hill the senate version of the gop tax reform bill is expected to be unveiled today. more "squawk on the street" continues in just a moment

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got eight minutes before we get started with another day of exciting trading in the markets. let's get to a mad dash here send it over to you. the hudson river over your shoulder there, jim, looks beautiful this morning want to talk a little square >> thank you all right, look. the payments processing business, the sector, whether it be paypal, visa, master card, it's been red hot. but the hottest stock in the whole group is square. and square's jack dorsey and sarah fire, who our own deidra will be interviewing later today. david, this is ato story about e company that started helping the little guy it's now going after the big guy. everybody uses square that i

know, say in the little restaurant business that i'm in. this is a remarkable technology. and because they actually know how you're doing, they can make sure short-term business loans to you, because they are at your register it's a remarkable model. a lot of people felt it was going to be an afterthought. something dorsey had come up with and really didn't matter. instead, it's become the next big powerhouse that everybody has to confront. because they're doing so well. what that great quarter. >> yeah. you know, it's funny, my coffee card outside the nyse, he uses square now they're kind of advanced cash still a little bit quicker than using your credit card. >> well, yeah, and fastest is paypal, which eliminated the credit card and the cash dan shulman the other day on "mad money," really remarkable story that they have but sarah fryer is driving the bus here of square she's from goldman sachs this has a very heavy goldman sachs overtone david vineyard is on the board

he's the guy that makes me feel very confident about the debt that they are taking on. >> yeah, and as you pointed out, square's market cap is very close to that of twitter and he continues to run both companies, mr. dorsey. not sure how much longer he can keep doing that. >> you know, it is interesting that if you look at the valuation of twitter and snap, snap's valuation is higher i'm -- that's just wrong i mean, snap really has no -- no game whatsoever. twitter has got still a lot of room for its total addressable market square is almost tapped out. i focus -- i mean, snap's almost tapped out i focus on snap, because at $15 billion, it's almost impossible to fathom. if this company were to become public now, it would have a blue apron feel, not a canada goose feel >> yeah, i sense this morning -- >> canada goose -- >> you feel snap is a suboptimal situation, jim i think you've made that clear

>> i think the whole -- i think the ipo was ill advised, david >> all right jim, we'll take another break. >> these are terms we use. >> yes, they are >> some of our favorite terms. yes, they are. well, we're genteel gentlemen. we like to keep it on that level. we'll come back to you in a minute the opening bell after this. stay right there question.

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from brighthouse financial established by metlife. you're watching cnbc, "squawk on the street," live from the financial capital of the world. the opening bell in two minutes on this busy day the president is in china, delivering some big business deals, or at least some memorandums of understanding, which we'll talk about in a bit. we're looking for the senate to unveil some details or at least brief senators about their own tax bill and then deal book is going to have a packed agenda today uber, mark cuban, randall stephenson, jack dorsey, drexler, we'll try to dip into that this morning. >> i'm headed up there after the show, carl mr. sorkin manages to get them all together and then he does every single interview himself. >> because he can.

>> i suppose so. i just don't want to hear him complaining. that's incredible to watch it will be great to listen to all of these people. will they say even more in terms of their fight with the doj right now? >> right that's a 1:20 p.m. eastern time. >> jim, you mentioned snap before the break you called it a permanent intellectual vacation. and today, if morgan stanley, their lead underwriter goes to underweight, target 11, brian nowak says, we've been underestimates or overestimates the chances of a turnaround and underestimating the challenges of monetization and execution. >> yeah, look, i mean, i think that's becoming the prevailing wisdom it was very exciting out of the gate, but what we really ended up seeing was sampling we saw a lot of different companies decide that they wanted to advertise there to see how well it went so you saw big contracts well, it turns out when those

contracts ran off, it seems like nobody reupped and i think nobody reupped, because they got areally bad return on investment there are a couple of guys they cited that seemed to like it but i think the vast majority left and that's why you have this programmatic advertising that was so without profit. so snap, i love them i'm trying to figure out if it's a company. maybe it's just kind of like an organization >> we're going to see how snap trades there's the opening bell and the s&p at the bottom of your screen and the big board today, celebrating its ipo. chinese search engine, sogu, and at the nasdaq, inflarx guys, this is the third -- we will have three chinese ipos at the big board this week. there have been 11 chinese ipos in this country this year since september, believe it or not >> it does feel as though virtually every time there is one behind us, it's china.

tom farley, the president here, must be going baffert a lot. but that does show you, of course, the power of these companies, the stigma seems to be long gone, carl, in terms of concerns about transparency, rule of law, and things of that nature, when it comes to china and it's where the growth is i mean, alibaba is up 109% this year, jim, so far, even being down today and we never even talk about ten cent -- >> which, by the way, owns a third, 39% of sogu today >> and wougt the 21% of snap >> and number six if it traded here we don't talk about it, perhaps, often enough, given its size and importance in the chinese economy. but, that's where the money is, jim. and so that's where the ipos seem to be >> but, you know what, i really only have confidence in alibaba. maybe baidu, but alibaba has

u.s.-like financials these other companies are a little bit opaque, historically, when we've seen this deluge of chinese ipos, it's a bad sign, not a good sign. i do want to point out that the president had some pointed thoughts about china, really blaming previous presidents for having an imbalance. but i'll tell you one thing that chinese have been able to do they are able to list securities quickly and without any trouble. the only thing that i have seen that has met any, let's say, real demand here is roku and it turned out that it was worth it because roku had a great first quarter right out of the chute >> wow, you're not kidding they're first quarter, ten cent losses narrower than the $1.37 loss we were looking for active accounts were upped, hours streamed were up it was a 30% gainer in the premarket and hanging in >> it should now, i know amazon and apple both have competing products and it came out during this quarter,

but contrast roku with now who i'm obviously picking on, which is snap. i mean, we thought that snap was going to have a great quarter out of the chute they clearly didn't, they had a ladder, not a chute -- i mean, a ladder, not a chute. and i think that roku has got the chute. this is really an incredibly strong quarter daily average users are up it's just -- these are what you want you want a company to hit the ground running, and the first quarter is great david, how many times have we seen companies in this most recent period where they become public and it's the last good quarter? apron, right apron -- >> that has gone so -- i know. >> i don't even know what to say about that thing >> well, i think we all -- i don't want to say predicted it, that would be unfair, but we certainly gave the ceo a lot of tough questions that day, jim. and i think many people anticipated that apron would become sort of a 300 or 400 million market cap, maybe not as quickly as they have managed to do that, but you're right, it's kind of ugly for a lot of these

things coming out of the chute, first quarter, apron and snap have been among them mentioning dish this morning, jim, if i can, dish is up in an otherwise pretty negative tape why? well, gross ads were 638,000 net adds of subscribers, they actually added they added subscribers 16,000 they were thought to lose 155,000. churn was also down. but this gets back to roku, to a certain extent why are they doing so well well, in part they're doing well because of sling, it would seem. sling had as many as 2 million subscribers now, and that would make it the largest virtual mvpd by far, compared to all -- these are the ott platforms we talked about. sling was the first out, more or less i think it was the first out but that seems to be helping dish, which also did okay in the old dbs business, at least,

given the continued declines thatwear seeing. and that stock is doing well there's roku, of course, very strong dish up 4% this morning. that was not anticipated, given the trends we've been seeing there. >> well, david, this sounds like the first time we can talk about dish as a fundamental story. all we ever heard of was like, dish was going to do a deal, dish is going to be sold well, it's an earnings story it's such a nice departure from what we always do, which is, i have to comment on other firms, other news outlets that rumored dish higher. there are some news outlets that try to put it in play. this is just a nice, solid earnings story >> yeah. and so they are being rewarded for it this morning. fox, of course, numbers also get more into sort of media land they were fine stock is down, as people know. it was up sharply on monday, after a report about the talks that took place to sell most of the company to disney. it was up the next day, but down a bit today.

they did not really address on the call last night in any significant way, as i anticipated they wouldn't, any of the news surrounding them, only having a broad comment about that they believe that they had the scale and the ability to continue to scale but as we've said, they are willing to consider and have by their actions in terms of engaging with disney, consider significantly slimming down the company because of the police chief that they do not have the scale to compete in this emerging world where it's not about their competitors, their old competitors such as cbs or time warner, it's about -- or disney, it's about their new competitors, facebook and google and amazon and netflix but that stock is down this morning a bit, carl. >> as you can see, s&p has their biggest slide since about labor day or so. g goldman sachs leading the blue

chips lower. it's interesting how macy's and under armour and nordstrom, we'll get to tonight, are all in the green. >> yeah, kohl's kind of inexplicably said, they're not really sure about the future macy's, on the other hand, spends a lot of time talking about how maybe some of the expenses are under control, that the inventories are under control. what this says to me is macy's is recognizing that there's a short story there. and the short story is that the dividend has to be cut these numbers indicate to me that you may think that the dividend has to be cut, but they're doing well enough to be able to support the dividend, and remember, they're also trying to fix their balance sheet. they're paying down a lot of debt i think he's doing a terrific job. i think he's completely underrated i think that he does not -- i feel like i have to sell him because he doesn't sell himself. he's just an operator, but i like the way he's operating. >> speaking of dividends, we got

a hike out of dr horton, and that is a one-year game for dhi, jim, it's 68%. >> yeah, housing shortage continues. and only the major players have been able to find the ways to be able to build on big blocks. big blocks require a lot of legal activity these days. big blocks require a lot of zoning issues. only the large firms, lennar, horton, can really be able to win their way through these regulations. by the way, speaking of dividends, watch century lilin c ctl. people feel that is in jeopardy. i agree with the critics this merger did not produce the cash flow that i think is sustainable for the dividend and i think david, we talked about this the idea was you put these companies together and there'll be more coverage, not unlike what we saw with time warner, at&t one of the reasons i liked time warner, is that there would be more coverage for the dividend >> and one of the reasons many people believe that at&t was

willing to do that, despite what certainly many people thought was a stretch on some rationale, strategically was being able to solidify the clothes behind the dividend at a company that relies in part, certainly, shareholders do, jim, on the dividend itself. i know, centurytel is a significant disappointment by the way, they did the direct deal as well at at&t, many people believe, to enhance clothes for that very same reason and time warner is down again, we should point out, given all of the news that we have at this point about the potential fight that is looming in court for at&t versus the u.s. government to try to preserve that deal, to acquire it at&t, for its part, is up, as you see right there. although, jim, you would wonder if the deal went away, if they did fail, let's say, in court, it's unclear what time warner would do, whether there would be interest from a fox again, for example. and what at&t would do, to your point. randall stevenson, by the way,

would be looking at two failed deals. t-mobile a number of years ago and this one that would not look good on his record, either he will join andrew sorkin at the deal book conference at 1:20 >> you know, i thought it was interesting. you said, i did not agree that our willing to sell cnn. i always find these ceos -- i always question the word "i. it's a little bit more of a "we. maybe it's because i'm at west point, where there's a notion of we, not i. but i thought it was really interesting that randall stephenson had that, you know, like, listen, it's my company and i didn't want to do it there are other people working at at&t. maybe andrew will bring that up about maybe the other people i don't know maybetha -- i mean, ivan seidenberg felt that way about verizon and always regarded it as a coalition of other people >> it's true carl, it's interesting, by the way, their statement yesterday from at&t about never wanting to have sold, that jim's referring to, i never wanted to, referred from a statement from the doj.

there was no statement from the doj, it was just a report from other news organizations citing a source who said that at&t had offered to divest cnn. but they referredto it as a statement, that was a bit confusing. >> yesterday was very confusing. especially in the span of an hour, as the "ft" and then "the times" had very shades of aggression -- it would be divestitures >> i was happily at lunch during that period of time, but then i came back to that. >> yeah. so the dow's down 115. and we're going to watch this action closely bertha coombs is on the floor for us today hey, bertha. >> how are you, carl yeah, we've seen these large-cap indexes notching new highs every day. a lot of folks may not be that concerned if we see a bit of a pullback some folks saying it's time to take some money off the table today. some of the things people have watched is the small cap russell 2,000, also down again today along with the big index it's now off about 1.5% for the month here in the first six trading sessions

as far as tax -- the sectors are concerned, tech has been a big winner so far this year, and so far this quarter today, we actually have consumer stables. retail, actually, turning around biotech has been the big loser, which is off about 6% for the quarter. health care overall has been one of the things that has opinion under pressure and as we watch for the senate's unveiling of its tax bill today, one of the things that a lot of health care advocates will be watching for is whether the senate goes along with the house and tries to get rid of the medical expense deduction. this is a big deal for people who have to pay for long-term care, about 10 million of them use that deduction every year to offset those costs that are not covered by medicare, could potentially have an impact for some of those facilities down the line if that happens meantime, home builders have been one of the areas that's been with potential curves, but as you mentioned this morning, d.r. horton's results much better

and the company is also very confident about 2018, raising its outlook for next area. so they don't seem to be concerned about tax reform more disappointment in retail from choulkohl's, as you said, continues to be a terrible, no-good earnings season overall. but we are seeing a little bit of a bounce. a lot of these retail names have been beaten up quite a bit today. macy's big the biggest gainers today in that toururnaround. also, we have an ipo we'll be watching today it's one of about a dozen chinese ipos that are going public here in the u.s sogu is the number two mobile search engine in china they have been taking market share from baidu and they are backed by internet powerhouse, ten cent they're priced at the high end of the range at $13 a chashare, raising more than $500 million and finally, taylor swift is going to be dropping her new album tomorrow, "reputation.

and just as the revolution will not be televised, reputation will not be straeeamed, guys. so bad news for pandora. not sure how long that ban will last, but you'll have to buy it if you want to listen to it. amazon and apple, of course, do have that other revenue stream, if you will. carl >> when taylor moves, definitely, the industry listens. that's for sure, bertha. thank you very much, bertha coombs when we come back, roku shares are skyrocketing after its first report as a public company. the ceo, anthony wood, is going to join us later on and in a few moments, the ceo of uber his first public interview after being named head of that company, live at the deal block conference the two-year did hit a nine-year high around 1.65 at fidelity, trades are now just $4.95.

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♪ mark zuckerberg's 2016 tour of the united states is coming to an end in a new post on facebook, after visiting oklahoma, he writes, he had found tech doesn't create more jobs some industries win, some lose quote, the number of jobs stays about the same in order to operate the increasingly advanced technology, people need more training and therefore get more pay. we're going to find out if that's true. certainly, some other people have different views of the future, david. >> yes, they do. a lot of robots and artificial intelligence, not a lot of jobs, but there is a heated debate about that and of course, the advance of technology, everybody willtell you, ultimately results in more jobs, not fewer jobs i don't know about that. >> jim >> i don't think a robot is going to replace you

>> no, but i've got to tell you, when i was out at dreamforce, i was shocked to see a presentation where a company said, listen, we have bots and the bots are so much like humans, you don't even know. and that did make you think, well, what happened to the humans before they were replaced by bots? not clear. >> yeah. >> no. >> huge displacement and then in the meanwhile, jim, you talked to straus zelnick last night on "mad money" about the company and specifically about consumption. here's what he said. >> the average workday is something like 22 hours in the united states now. we're obviously not staying up that long. we do a lot of things at once now. we have the ability to multi-task only about an hour and a half of that is video games right now and it's the fastest of gr estf part of the entertainment industry >> on a weak where we got the latest version of the xbox, jim, we're reminded of the strength of gaming. >> yeah, look, "grand theft

auto" is the greatest single piece of entertainment in history. it just keeps giving it's actually about accelerating here all the video game companies now are beginning to embrace e sports i know that strauss is talking about esports and owning basketball teams starting in the spring this can be very the spring this is people watching other people game. it's kind of a second derivative but it's taking over the country by storm yes, i love the 22-hour day. that has to do with multitasking right now, i'm playing candy crush while i'm doing the show maybe not. >> i believe it. >> maybe more call of duty i'm doing more call of duty. reset button. >> call of duty, you do not. no, you don't. >> no, i don't but i'm going to watch la noir a new dark video game i think it will be great set in the 1940s in los angeles. >> l.a. law, wasn't there a show by that name. >> l.a.noir like that night.

>> the movie, okay. >> we're going to get stock trading with jim in west point this morning in a moment rading

>> you know, a lot of people

laugh when comae goose became public, saying it's probably only a seasonal business what do these guys no. they're using direct to consumer they came out with great numbers. this isn't even their season this company is like it was built for the internet it is surprising the upside. it's put blue apron down here in terms of peril, canada goose up here it's really remarkable. >> jim, we do have the worst session for the nasdaq here since august we had that reversal in the nikkei overnight what do you think's going on in. >> well, i do think we've had -- i think there is some sort of big program with really a lot of tech just being sold here and a lot of banks being sold here let it come in a little. nvidia reports tonight when it reported last, there was a gigantic decline nvidia, one of the great companies can of our time has

had too big a run based on cryptocurrency we downgraded it for the club i figure in pretty prominently that is going to cause a lot of people to say wait a second, this group has been too hot. we'll find out tomorrow. i understand it. tech's moved a lot here. let's give it a break. >> we'll get invidia, disney tonight as well as and nordstrom. jim, let's explain to viewers why you're in west point and how special "mad money" is going to be tonight. >> well, look, we have to thank people who are veterans and we have to thank the people who come to this great institution, the military academy we're going to have alex gorski, distinguished graduate, runs probably i think the most profitable pharmaceutical company, j & j it's just a special place. we've got to salute it veterans day is coming up, it's now veterans week. there's so many veterans that

need jobs. we have to figure out a way to get corporate to get veterans. by nature, veterans are a team and don't think about themselves as individuals we've got get them to do that in order to be able to get jobs. >> cop cast makes a big effort, jpmorgan unveiled a plan to extend loans to veterans we're glad you're giving attention to it. we'll see you tonight. 6:00 p.m. eastern time. >> thank you guys. >> when we come back, new uber ceo, dara khosrowshahi live from the conference the nasdaq down 1% [ keyboard clacking ] [ click ] [ keyboard clacking ]

[ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. talk to one today and see why we're bullish on the future. ♪ ♪ ♪ ♪

welcome back to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange got to sell off on this thursday morning, downtown is down 116.

worst day for the nasdaq got complications regarding an the tax bill as the senate is poised to unveil their version we'll see how hard that is to reconcile with the house but retail not helping either. a lot going on. >> yeah, and it started in europe which set a pretty defensive tone early in the action which you're still seeing right now. you're seeing defensive tone across currencies, as well some of the big miners and materialmakers in europe are selling off on commodities you've got a strong showing for one thing, which you can't forget the context stocks near record highs globally >> meanwhile, time warner, at&t continues to be a big story today. we're going to talk to john kline formerly of cnn in a few moments about that then the earnings season will continue nvidia and disney tonight, nordstrom. >> our road map for the hour does begin with big retail we have a number of movers here.

macy's and koes reporting earnings with nordstrom and penny's results on deck. what macy's ceo said about his outlook for the retail sect sister next. then dara khosrowshahi will sit down with andrew ross sorkin. >> and finally a deal in jeopardy the latest on at&t's takeover of time warner. anti-trust regulators pushing for major changes. these two sides could well end up in court. as we said earlier, markets seeing losses across is the board. the dow coming back a bit but still down 0 points. the nasdaq down a full 1%. interestingly, today is the day the s&p could set the all-time record would likely set the all-time record for the longest streak without a 3% drawdown. mid '90s, 370 days judging from today's action, still early in the session. >> after we close another fresh record high yesterday gave up some of the big declines we saw

only only utilities and consumer staples are higher this morning. that is on the back of buying of treasuries, something we've seen a lot of people pointing to the high yield selloff that could be a sign that thing are turning. we're going to watch that carefully. we're also watching big retail reporting earnings this morning. macy's and kohl's. courtney reagan spoke with the ceo of macy's earlier and joins us with more. >> the initial reaction to macy's shares saw them pulled lower in premarket action. shares actually now higher for the department store the conference call is just now starting i spoke with jeff gannett over the phone this morning to get more color on what happened in the quart. will comparable sales did disappoint, the hurricanes in florida and texas hurt more and so did warmer weather early in the quarter. october though saw it start to pick up. tourism lower in the third quarter than in the quarter prior. still it, earnings beat gross margins also improving

ga net told me anything that wasn't cold weather related actually sold at or better than expectations when it comes to guidance i asked him if he was being conservative he said that he thinks it's where we need to be. gatt net says the fourth quarter is really macy's shines. kohl's shares are lower on mixed results. the department store missed on earnings but posted its first positive comp sales in seven quarters by a hair but still counts back to school sales were strong but margins were lower there large increases in both nike and adidas according to the ceo kevin manziel and continued strong performance from underarmor manziel wouldn't elaborate much on the call about the early results from amazon returns. guess we'll have to wait for more time to pass. nordstrom reports after the bell of the three department stores reporting day, sales expectations are the highest for nordstrom.

we'll see if they can pull it off. david, back over to you. >> yeah, we'll keep a close eye. kohl's the worst performer thank you courtney at&t this morning saying it's got no intention of selling cnn as part of its planned $85 billion stock and cash deal to acquire time warner. the justice department wants them to sell turner broadcasting or directv vermont in order to get approval from the government to go ahead with the deal. so-called structural remedies being south by the government as opposed to behavioral remedies which typically take the form of a consent decree to not do this or that. john kline is a former cnn and u.s. president of that network and tap media ceo now. first it's fox, disney you're back a couple days later. >> what a week. >> what a week for media, of course, two unexpected stories this one also. it's a vertical integration, typically not something that

meets with a great deal of disapproval from the department of justice doesn't seem to be the case here into markets hate what, they hate uncertainty the doj has introduced a huge level of uncertainty around their m&a philosophy in general. right? if markets think that m&a decisions are going to be driven by personal vendettas, that's not helpful. so i can offer them a potential philosophy they might put out there. maybe they're concerned about comcast. and here's what i mean about that comcast is a company that resembles what at&t would look like after a merger with time warner distribution as well as content because they own nbcuniversal. this order to get there, they didn't have to shed any assets, no structural issues for them. >> and a consent decree. >> which lapses in less than a year maybe the anti-trust division, which is now run by a guy who

used to lobby for comcast wants to send a signal about the kind of behavior they expect of these big new coming media conglomerates. that's the benign interpretation but right now, there's a void. there's no interpretation. there's no explanation because it doesn't add up to say that somehow shedding turner, which is cnn, adult swim, tnt, tbs with all the sports, somehow shedding that is going to solve potential issues >> again, they're not knocking out a competitor which is typically the case for why the doj would potentially take action against a merger. you're raising the prospect though that this is simply because the president doesn't like cnn >> he has said so. >> he has said so on many occasions. >> he said before he was elected he wasn't going to approve the deal. >> that is true, as well it's not his role, of course it is highly unusual in the sense if there's a direct connection between him and his

attorney general jeff sessions and del rahim has a reputation to rely on also. carl raised the point earlier, so what if they were to sell cnn? does it necessarily mean it would result in any more favorable coverage >> absolutely not. somebody's going to buy it and going to run it as aggressively as it's been run for the last few years. >> what if that's sinclair instead? >> could be. i mean, could be >> you can imagine how the tone would change. >> sinclair which by the way is getting a free pass to go ahead and cover 72% of the u.s. market so they don't -- the doj doesn't see any regulatory issues there. >> or the fcc which is an important certainly in the regulator when it comes to local broadcast stations is the key regulator. >> right but somehow they see them here so it does race the specter of it, and they've got clear this up quickly. >> it's probably more of a legal question even if there is a valid case to

be made by the doj about consolidation of power, if at&t can use the president's words against him in court with tweets, constantly bashing cnn. >> you would think and at the same time, just the sheer business logic says that at&t as a content owner would want their content in as many places as possible on their own systems and others because they get paid by those distributors and by advertisers based on the number of eyeballs and as a distributor themselves, at&t which owns directv, would want to feature as many channels as possible because could you imagine if at&t pulled fox news off of directv, they'd lose 3 million subscribers overnight. that's how many people are watching fox news on a given night. >> right, but there is objections from the like of stars i believe saying the ability of time warner to offer hbo free or discounted rate to

subscribers debilitates us as another pay tv provider. >> take the case of the next netflix out there somewhere has a legitimate fear that they could be stuffed down, right throttled down, beneficial pricing for at&t on properties those are legitimate complaints to have. but those are not dressed by forcing at&t to sell either directv or turner broadcasting of all things. >> when you talked about the benign explanation of setting some framework for what they expect, what do you think they might expect from these companies post mergers >> who knows republicans supposedly believe in laissez-faire, let the market dictate. they have said that that there is a plethora of content and distribution opportunities for folks. so there's no need to have a heavy hand in regulating any of

this so i thought till i saw the news yesterday that that was going to be the marching order. maybe it still is philosophically but maybe there are personal reasons for this happening. > right. you ran cnn once jeff zucker runs it now. he knows the president well. >> yes, he does. >> they work closely together. >> helped make him who he is today. >> he did. >> and is running cnn well. >> do you buckle in some way or a new corporate parent in at&t, do you think that that raises concerns, as well given they've certainly put on notice they do complete this deal, that well, you know, it could be they're watching very closely. >> cnn is one of the crown jewels of time warner. it was always treated that way you'd be surprised if new owners would somehow want to damage the brand by reining it in any way they've said they have no intention of doing that. you know, the proof will be in

the pudding. but i don't know any journalist or news executive most of whom have been journalist who's would tolerate much interference from the corporate level. >> jon, thank you. >> thanks for having me. >> jon klein joining us. >> roku a big story. take a look at the stock this morning up 30% in the premarket and still has a gain of now 48%. the company seeing an increase in active accounts and streaming hours as well as a continued push into the add business anthony wood is the ceo of roku. anthony, congratulations on the quarter. we've had you on several times in your life pre-ipo did you imagine a stock, some price action like this >> you know, we had a great quarter. i don't spend a lot of time thinking about the stocks obviously. but you know, we did really well on all fronts especially our advertising business and

building our roku tv programming. we feel super well positioned as the world transitions to streamin >> year on year, platform up 137. hardware up 4. to what degree are you watching the slower growth of hardware revenue? >> yes, so our business really is about building active accounts which grew 48% in the quarter. great growth, driven a lot by roku tv program and we monetize those active accounts. that's our platform business and where 90% of our gross margins come from. so for us, selling players is just a great way to build accounts and we optimize that business around volume of players. player unit sales up 35% in the quarter. asp down a little bit. so revenue growth was slower that's not our goal with the player business. it's the drive active accounts. >> you also say users streamed 3.8 billion hours in the quarter

up 58% from the same period a year ago who are these people are they cord cutters? where are you getting business from >> you know, our people often ask about our demographic. it's americans we're america's leading streaming player you know, maybe there's slightly more millennials but it's the whole range of americans, people switch to streaming because it provides a better way to watch tv, more content and better value, as well >> anthony, i've asked you this question in the past given especially what we've been seeing over the last six months, the tumult if you want to call it that in the pay tv world, what are your expectation here's are we in the midst of the seminal change the way people view tv and pay for it and will streaming numbers continue to accelerate in terms of growth rate >> yes, we are in a tectonic shift in the world of television and advertising, moving to stream roku has you know, our active

accounts grew 48%, 16.7 million active accounts. there's a lot more households in the united states and the world and everyone over time is going to shift to streaming. i think importantly, the entire add business, television add business which today is still predominantly on traditional linear tv is moving to streaming. that's the big change, as well >> he anthony, a lot of your competitors in the space have developed a taste for creating their own original content you've resisted that why? do you think you'll do that for long >> you know, our business is being a distribution platform for other people's -- other companies' consent being a large scale distribution platform. we don't have any plans to produce original content. >> are you worried about moves like disney's going at it alone in terms of distribution getting off the netflix platform in a few years? do you worry as the content creators become bigger, they can

take on the distribution themselves >> when a company like disney you know, if they do launch a channel that's an over the top channel, we are the leading ott distribution company in the u.s. so those companies naturally come to roku for distribution of their content. we're just a great partner for them we've built a lot of features to help them build audience to, help them reach a scale audience, monetize their content. those companies as they shift to ott, that is driving our business in q3 we launched directv now on roku, launched a new version of hulu, hulu live. there's a ton of content moving to streaming we're the best. immediate to drive that content. that drives our platform business. >> you've come on in your preipo life we're glad to see you're coming on after you went public thanks again >> thank you. anthony wood, ceo of roku.

huge gain today. uber's chief dara khosrowshahi is sitting down with andrew ross sorkin let's listen in for a moment. >> just help us understand the thought process and the process itself because if you read the headlines during had period, it was a practical insurrection going on on the board. there were scandals every which way. there was the holder report. and you're thinking, what did you need to know before you took this job and did you make any demands of them >> i did make certain demands of them, absolutely listen, what i knew is that this is an incredible brand and a terrific service and i have seen that thing are never as bad as the press makes them out to be and they're never as good as the press makes them out to be you know, the public version of what's happening is often overkill and overdramatized. to me, it's about.

>> was this overdramatized this time >> maybe this one wasn't overdraim dramatized but listen, to me, it comes to the product and the brand and frankly, the product and the brand that this founding team travis and his founding team have built is extraordinary. and the talent at the company is extraordinary and the culture went wrong and the governance of the company went wrong and the board went in a very bad direction. but if the product is good, then if you can bring in good leadership and you can ultimately bring it together i think we're on our way we're on our way it's going to take a lot of work, but after two months, i feel better about where we are than frankly, i was going in >> so what is your relationship like with travis kalanick? >> it's a good relationship. but it's also -- it comes with balance. what i told travis very early on

is that any new ceo needs space. and needs distance from the old ceo. and so i told him very early on, travis sometimes i'm going to be pushing you away early on because i need my space. i need to be able to meet with a team i need to be able to communicate with them so they're just communicating with me and they don't have someone to go around if they don't like something they've heard, et cetera so you've got to let me engage with the team, engage with the company, engage with the culture. and i was a little worried about that conversation. but actually he took it really well he took it really well and he's been very respectful and at the same time, he's been available to me whenever i've needed him and i think we're going to go through a process where early on, i've got to put my stamp on the company. the new team has to put the stamp on the company and over a period of time, i would be foolish not to use travis' incredible genius and his knowledge that really was you

know largely responsible for getting the company to where it is now so he's there. when i need him. >> how often do you guys talk? >> it depends. we'll talk, some weeks we won't talk, some weeks we'll talk ten times. >> do you think he wants to be more part of this than he is. >> i think so. >> how hard is that conversation to have with the founder of the company? >> i think he understands the why which is early on, i've got to have my space and be able to push the company, kind of right the company. i think he respects that intellectually he gets it. he's been very plain with me he wants to be involved with the company. i've told him i want him involved with the company, absolutely. >> there's a huge debate going on and still going on on this board. there's a lawsuit between travis and one of the largyer shareholders in this company, also on the board. >> yeah. >> about super voting rights in part and at some point, i imagine your interests may be diverging

with his or at least the interest that he thinks he has >> i think that that is true of travis's interest and potentially larger shareholders' interests. listen, when i got into this role, i didn't want to take sides. and the only thing that i was focused on -- and i wasn't interested, you know, you have meetings with certain parties and they tell you about stuff that happened in the past and stuff that they're emotional about, and everyone is, if you listen to one party or another party, they seem justified in their anger. and i've kind of told all size i'm not interested in what happened in the past i'm interested in the company and the employees and the brand and how we move forward. so i've tried to consistently play this role where i don't take sides, don't tell me about what happened. tell me what we're going to do and as it relates to governance, for example, we've taken some very i think positive actions as

it relates to governance, actually the board itself and the high vote shares voted to get rid of the high vote shares and essentially get into a one share, one vote situation. we're reconstituting the board it's going to be a big board but that's okay. and i think step by step we're preparing the company where you're going to have much better governance going forward and ready the company for an ipo. >> it feels there is still tension on the board in large part because there's been an expected investment as you know from softbank. and part of that investment requires everybody on the board getting it together. >> yeah. >> and that hasn't happened yet. >> it hasn't happened yet but it will >> why what's happening >> because the -- our making the changes in governance is unquestionably good because our bringing in softbank as a strategic investor at the right price would be a good thing. we've got to get to the right

price, et cetera and you're right there's negotiations going on. they've probably taken longer than they should have. but we're going to get there because all the parties in the end, they know that this is a good direction to go in. we just kind of have to badger our way. >> you do see the perspective i imagine, of travis's side which is he's saying to himself, i'm the founder. i started this thing and now i want to run this thing. and i have these shares. we agreed when we first starred this thing, i should get more votes than everybody else and now they're telling me the thing they agreed to isn't the deal that they agreed to. >> yes, but the high vote shares themselves as a class are voting and travis in the end agreed with the direction that we're going. lis, the fact is that you have -- i don't necessarily have anything against high vote shares but there are many, many, many companies that have low vote shares, amazon, sales force, et cetera that make the

kind of long-term bets that you would want any company, starbucks, to make so there's this reasoning behind high vote shares that i don't think is necessary in real life. and high vote shares work when the leadership and the high vote players actually are in concert and you have two parties here who are far from being in concert. and are shooing at each other. what i told the board is if you're going to shoot at each other, at least let's shoot each other with conventional weapons instead of nukes get rid of the high vote shares and become a great governance, let's become a great example of strong governance and let's move forward. this is not about control. this is about the company. >> one more question on this particular topic and i want to go somewhere else which is this. tell us about the day that you learned that travis wants to put three board members on the board and didn't tell you. >> two board members. >> i'm sorry i apologize, two board members you put out an e-mail to your staff calling this

"disappointing news" and highly unusual. what was that day like >> it was disappointing and highly unusual >> what was it like inside the room >> listen, it was a surprise now, the board members, the thing i was disappointed in is that the board members that travis picked are actually great board members in terms of their resume, in terms of their background, and it put news a weird situation because actually, the subjects the folks that he picked were great. but we didn't like how he got there. he had his own peschell reasons. i don't want to recount them he can recount his reasons i think in the end it's going to be fine because ursula and john aren't on the board because of travis they are because they picked them but they're on the board because they're interested in the uber situation it looks like a difficult situation and they think they can help. >> what was the culture like going into this?

i wanted to ask you before, before you took the job, did you ask to read the holder report? how much diligence did you feel like you needed to do? >> i did not ask to read the holder report. and listen, the holder report isn't public but i think a lot of the elements of the holder report are out there so i had read the susan fowler post, et cetera. i certainly knew the company by reputation i looked at a bunch of the legal stuff that they were going through and the financial matters of the company and the fact is that actually the company, despite all of the -- all of the swirlard at company has been operating at a very, very strong cadence and what it needed was a culture reset and that's something that i think i'm pretty good at and that's something that to me seemed like a great challenge and a great opportunity. >> did you ever think about making the holder report public?

>> thought about it. thought about it, but listen, the holder report has a lot of details. and listen, it's details about behavior that to some extent has already been reported that is nonskoous excusable. but the holder report is actually very detailed with lots of individuals, et cetera who may not want their stories public you know, they were interviewed. they were in situations, et cetera, and if they wanted their story to be public, they would have made them public and i think from a material standpoint, it would create a bunch of sensational product out there, but it wouldn't change the story and it wouldn't change the direction that we're going in and i this i we've been very transparent as a company about what's going on at the company, where we are and where we're going. >> where is the culture of the company now? you've put out a value statement. >> norms we call them. >> norms >> behaviors, yes. >> which were in large part a

repudiation of the culture under travis >> i'd say yes and no. yes and no so there were -- there were certain cultural values at uber having to do -- it's like toast that being principle confrontation that meant well. intellectually you want to challenge your fellow employees to get to the right answer but they're twisted into excuses for bad behavior and just being an asshole, right that did not work even though that was not the intent of those cultural values. so we're very clear then in our new norms ha that kind of behavior is not acceptable at the same time, we carry through a number of values about acting like owners, making big bold bets, ideas can over hierarchy, a lot of ideas that were actually in the old culture of the company listen, the values of the company were different

they were interesting. they were not all perfect. but the fact is that it's those values that created the most highly valued private company in the world. so you don't want to take everything that brought uber here and throw it away because there's a huge amount of value and capability there you want to get the best, take the best of what brought the company here and then combine it with a new set of norms and a new set of behaviors to take us to the next step. >> you've said the next step the company has been explicit the next step is an ipo eventually. >> 2019 is the target. >> travis used to say that he wanted to stay private for as long as humanly possible jeffrey was asking a question of howard schultz about the public versus private markets given all of the spotlight on you now even as a private company, why would you want to be public? >> said it best. we have all of the disadvantages of being a public company as far as the spotlight on us without any of the advantages of being a public company

so travis and the whole board now agree we should just go public the numbers support it the system support it, et cetera and the fact is that if you set up the company in the right way and you are honest and plain spoken to your investors about being a long-term player about surprising short-term quarterly results for long-term gain, you will find that right set of shareholders who will support. >> you do you need to do that to get the capital that you need from companies like softbank >> do what >> go public >> no. no i think the results of the company speak for themselves and by the way, they can get better and we can execute better but actually, if you talk to softbank, they don't have any particular interest in going public they are the result long-term investor >> i have a quick softbank question i saw -- i knew you were in saudi arabia two weeks ago as

was i. there wasa fascinating article in the times" earlier this week by our tech columnist talking about really the idea of saudi money or potentially russian money or other money, foreign money, if you will, in the valley >> uh-huh. >> and how the valley or corporate america should think about that $45 billion of soft bank's $100 billion comes from saudi arabia. there was earlier investment made by saudi arabia how do you think about that? >> well, first of all, i wouldn't commingle saudi money and russian money. they're different animals. right? and the saudi money didn't come with any strings attached other than the strings that any investor would have. and yasser who is on our board has been nothing but a model board member whose so interest is helping the company get to the right stage of maturity, et

cetera i wasn't here, but at the time when we took the money because i asked the team about it, the company definitely talked about it and i would say the most important issue for the company was the women's rights in saudi arabia and actually, the company explicitly talked about how we actually believe that women should be able to drive. and since then, the changes that we're seeing, the cultural changes we're seeing in saudi arabia they are unambiguously positive they're daring but it certainly does seem like the country is moving in the right direction. >> let's talk about the operational business itself and part of an ipo i imagine, i don't know if you'll get there by then but how do you make this company profitable there has been an argument made over the years given all the capital that's come to you and so many of your competitors, that we are all having our rides home and elsewhere subsidized by the venture capital community and that there may never be a day where the math actually

adds >> that day is today because the math is actually working in certain areas in certain geographies. if you look at the portfolio of the business, there are certain markets such as the asia-pacific markets, if you look at southeast asia or india where we are in heavy heavy investment mode and appropriately so and we lose money, the bigger the company gets, the more money we lose because we're actuallicy diesing those rides. but we have been able to demonstrate a track order and you've got to look in the numbers and look in the geographies where over a period of time we can pull back on the subsidies and over a period of time get into a position of profitability on agee graphic business it doesn't happen everywhere but you think we can certainly demonstrate it. what's the key and time frame for that to happen >> it depends on the market and the competitive dynamics in the

marketplace. to some extent. >> pretty fascinating interview with the new ceo of uber, dara khosrowshahi, formerly of expedia talking about what it was like to come into that company amid all that corporate drama. his relationship with travis kalanick, why an ipo makes sense. he said we've had all the disadvantages of being a public company without any of the advantages >> i thought it was funny he said he didn't think he was a serious capped for the job in the beginning. it wasn't even a call he wanted to take and bet his wife he wouldn't take the job. he said he has a good relationship with cal la nick. shed light into a potential softbank investment. >> that's still out there as a possibility in part relying on this copied hostility on the board of directors that andrew was asking brch dara khosrowshahi about namely about benchmark and the line uber needs liquidity as in sales created by the very shareholders and wants peace on board prior

to making a very significant investment from the vision fund. >> more from deal book throughout the day a news update from contessa brewer hi there. >> after meeting with x, president trump says they have agreed on the need to implement all united nations security council resolutions on north korea. >> today, president xi, we discussed our mutual commitment to the complete denuclearization of north korea we agreed not to the replicate failed approaches of the past and there were many. >> pacific officials say a suicide bomber struck a vehicle carrying a deputy inspector general of the police in a southwestern city killing him and three other officers the taliban claimed responsibility nine others were also injured. six catalon lawmakers are testifying in madrid about steps taking by catalunya to declare

independence from spain. they could face 50 years in prison if charged and found guilty of sedition that's the cnb news update for this hour. >> more "squawk on the street" when wecombae ck, including lloyd blankfein and the ceo of adidas on that company's earnings cale lal sat down with s

lloyd blankfein in china as the president continues his tour through asia and she joins us now from beijing with more from that exclusive morning, kayla >> good morning, carl. after literally rolling out the red carpet, president x jinping tonight threw a state dinner for president trump toasting the two the countries as partners not rivals attending the dinner officials from either country as well as an executive delegation that inked what the administration says is an estimated $250 billion worth of cross border deals. among them, lloyd blankfein

whose goldman sachs set up a new $5 billion fund with china's sovereign wealth fund to invest in u.s. industrial companies that are exporting to china. he today told me that the chinese economy is stable, healthy even though risks abound. i took that opportunity to ask him about down side risks in the u.s. market. here's what he told me. >> the downside risk i'd say the -- i would say this is a period of high anxiety without a specific thing to be anxious about. in some respects because you look at it, you know, the economy is virtually full employment. interest rates are low inflation is low which justifies to some extent the low interest rates that we have, commodity prices are low conditions financial conditions seem pretty benign and so but yet, they've been pretty benign for a long time. we all know there's a cycle. we also know when money is as cheap as it's been, maybe it's not being allocated efficiently.

if it's not being well allocated maybe there are bubbles popping up you don't always see them till they burst >> what happens if that adjustment takes place at the same time that the economy is getting a big stimulus from tax reform or an infrastructure bill is that ultimately a good thing for the economy or could it have unintended consequences? >> well, the nature of unintended consequences you don't intend them, of course i would say and you know, i have said this is not a moment in time when the economy is going pretty well. the last quarterly gdp -- it wasn't the whole year this isn't a moment in time crying out for a big stimulus but the government feels that the rate of growth that can be achieved without -- that kind of a normal, you know growing economy of the scale of the united states could grow more than 3%. that's a big controversy

but if they're right and they can stimulate even higher growth than they have now. >> if they're wrong. >> if they're wrong, they run the risk of overheating the economy and inflating it but i would say we feel so far away from inflation and i never thought i would have said this early in my career, we're trying to cause inflation to some extent because there's almost not enough of it. >> reporter: so there's a new termfor you, economic anxiety is what blankfein fears. he does agree with the trump administration's overall goal of ginning up growth in the united states despite his frequent and thinly veiled criticisms of the administration, he does support them we'll have more from that part of the conversation next hour. carl in. i'll take it, thank you. kayla tausche. coming up, adidas coe after the company's strong showing in

north america. the stock is down 4% markets overall are red. the dow down 108 points. disney higher ahead of earnings. the s&p 500 is off half a percent led lower by technology. we'll be right back. olf. wait, what, what happened? i was having a good round, and then my friend, sheila, right as i was stepping into the tee box mentioned a tip a pro gave her. no. yep. did it help? it completely ruined my game. well, the truth is, that advice was never meant for you. i like you. you want to show me your swing? it's too soon. get advice that's right for you. investment management services from td ameritrade.

company stock is an unlikely big-time winner since the election find out at trading nation".cnbc.com more "squawk on the street" coming up. [ keyboard clacking ] [ click ]

[ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. >> adidas third quarter sales out tonight. the bright spot continues to be north america, 31% growth in this market as the german company continues to steal share. china was also strong. european sales slowed down leading to a miss overall. potentially one reason why the stock is down. earlier today i spoke with ceo kasper rorsted about the results. >> top line number by 12% and bottom line by 35. 30% of the u.s. and 307 in china

and 40% online we're seeing a 7% growth in western europe down a couple points we're not very concerned about that overall, as you know, the european economy is grow big 2% to 3% points while slightly slowing down it's not an overall concern of ours we think spending will pick up with the world cup spending starting to take place in russia. >> talk what's happening in north america. are you just taking share from rivals like nike or are you expanding the marketplace here. >> we don't believe the overall market is expanding. perhaps slightly in the ath leisure side but overall there's no doubt we have taken share and estimate we've doubled our market share in our foot weier business in the last two years in the u.s very strong performance. >> are you seeing -- >> we're seeing is professionally driven environment. the best reaction to that is

bringing new exciting products into the market. of course, having great brand ambassadors in the u.s >> i noticed you recently hired posh spice victoria beckham distinguishing yourself from the likes of nike which is focusing on athletes mainly you're going more for the celebrity tastemaker are you trying to differentiate yourself through that strategy. >> no but we think the market between athleisure and performance is closely connected. we think we need to build beautiful products both for i would say the consumer and sports consumer. we want to make sure we have the right balance. we signed the mls a couple months ago and now signed posh for our reebok brand we believe balance of both is going to make us successful. so far that strategy worked particularly well in the u.s >> what are you introducing new and exciting right now for a while it was the retro trend, sort of the style versus performance. in terms of ath leisure.

what's coming in 201 to keep it going? >> you'll see expansion of our are entire portiportfolio. our three carbon products where we can 3-d print a shoe customized to the consumer >> i want to ask you about the ncaa scandal now that one of your executives jim got toe has been indicted. what do you know at this point about what went on in terms of allegations of bribery and corruption >> i hope understand i can't comment on the details we immediately within 24 hours had external counsel do an investigation to reveal everything that's going on we're committed to getting all the facts on the table and make the right decisions to move on we are a company committed to compliant behavior and upset about what's happened. overall the basketball business is 1.7% of our total revenue we don't think it would impact our business. >> digital, you made a big

splash at the dream force conference introducing your new app. feels like the next front in the sneaker war is going to be waged on apps, on digital. what's special about yours. >> i think there's no doubt creating a relationship with the consumer and creating better products and more relevant information so the consumer is going to be what distinguishes one supplier versus the others i gave you one example before, the 3-d printed shoe is a way of shoesing digital towards the consumer and also having the app delivering the right information to the consumer so when they connect us, we know he or she a runner and interested in a number of things we can be very specific to that one consumer we're investing resources in the u.s. and china to give the consumer the right digital experience. >> that is the story with adidas, it continues to be one of a battle for market share in new york america it's what's been driving the stock and constantly driving the

outperformance in a slowing category nike still dominates the u.s. sneaker market clearly with 34% share and also owns jordan brand. it has basically half of the market but adidas has doubled its share over the last year at almost 11% there under armor with a small slice trying to get into the footwear business. that's the story people constantly ask me why this isn't a growing market. it's a category slowing down nike reported its slowest sales growth in months under armor reported a decline and it continues to be the sweet spot of result turl little relevant shoes and fashion in ath leisure. >> a lot of viewers wonder given that north america needs resets on pricing and inventory, did that affect adidas at all? >> he talked about a promotional and competitive environment. he said the retail picture, the carnage we talk about, the macy's sales for instance and the wave of bankruptcies doesn't affect them.

he says he was underpenetrated in the u.s. in terms of retailers. that's why he's focused on digital on rolling out that new ai powered app stores like foot lock remember increasing what they're putting out from adidas. clearly that's the style working and as i told you guys many times, a lot of this really is about kanye west and yeazy he's the most valuable person when it comes to the shoe market even if the shoes put out by kim kardashian on instagram were ugly >> are they paying a lot of money? >> i don't know how much, but nike used to work with kanye west it's still the most expensive neeker on the market in terms of the resale market. adidas took it apparently he's hard to work with >> really, kanye hard to deal with >> yeah, shocking. as we head to break, look at shares of square

beat estimates on earnings and revenue while raising full-year guidance stock is off a little less than 2% square ceo sarah friere joins us in the next hour on "squawk alley. stay with us ar joins us in the next hour on "squawk alley. stay with us throughout my career, i've been fortunate enough to travel to many interesting places.

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joining us from riyadh with more from the interview, good morning, hadley. >> good morning, carl. so of the 208 people that have been rounded up in saudi arabia under this investigation, this major crackdown on corruption, what we now know from the ministry of justice is that seven of them have been released without charge they are also looking for the whereabouts of around $100 million they say has been siphoned off the saudi state over the last few decades due to corruption and embezzlement. i had a chance to catch up with the former foreign minister of saudi arabia and asked him for me >> bottom line is, money was stolen from the public treasury, and that robbed the country of the ability to invest it for the good of its people, and so, of course, people have to return the funds that were stolen >> all of this, of course, coming around heightened

tensions with iran now saudi arabia's foreign minister also telling me he believes the united nations should get involved, there should be new sanctions against iran i asked him about that and what happens next he said iran is on a rampage listen in. >> until and unless iran behaves like a normal country that respects international laws, that respects the sovereignty of nations, that respects the principle of good neighborliness and not interfering in the affairs of other countries, it will be impossible for people to deal with iran >> so a wide ranging interview talking about lebanon, what to do about hezbollah, everything to do with this corruption crackdown and essentially the message from the foreign ministry is this should not deter investment carl >> hadley gamble, those comments moving oil today, as west texas is 57.5. our thanks to you. we had a pretty nice reversal off the lows of the session. we were down on the dow at one point as many as 151 points. tech and industrials leading the

down draft, but goldman went positive, russell had a reversal to the upside. >> i think tech is going to be worth watching throughout the day. it's been such a key leader of the market and the leader has been the chip makers one of them, one of the best performing up 90% this year, nvidia, reporting earnings after the bell today maybe it was the launch of the fang futures contract that put a dent >> i think it's still the sixth best performer this year >> you're talking about nvidia >> yes, nvidia specifically. we'll see what earnings look like after the bell. >> tonight when we come back, a lot more on today's price action "squawk alley" continues in a moment

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welcome back to "squawk on the street." i'm dominic chu. stocks are trading lower, but off their session lows the s&p 500 tech sector is the worst performing one so far today, down by nearly a percent. shares of a variety of different tech companies out there, including ebay, electronic arts, chip makers, nvidia all down between 2% and 5%.

certainly a sector to keep an eye on, it's taking a breather that does it this hour for "squawk on the street. let's send it down to the new york stock exchange for the start of "squawk alley." back to you. >> thank you good morning it's 8:00 a.m. at roku headquarters in los gatos, california, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good thursday morning, welcome to "squawk alley." i'm carl quintanilla with sara eisen, mike santoli at post 9 of the new york stock exchange. interesting day as the eight-week run the markets hav