♪ live from new york where business never sleeps, this is "squawk box. >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. if you check out the u.s. equity futures, at this point things are relatively flat. dow futures indicated up by less than a point the nasdaq down by 4 this comes after a day when the dow and s&p 500 managed to eke out gains despite the pressure we saw from ge with the worst day, down about 7% those two indices managed to finish with slight gains the nasdaq was down by 6.66 that devilish number. we will see where things get as we get closer to the opening

bell if you look at what happened overnight in asia, you will see the nikkei was flat overnight after being down sharply the day before the hang seng was down 30 points the shanghai was down by close to 18. if you look at what's been happening early this morning in the european markets, at this point similar trends there very modest advances or declines the ftse is up by 0.2% that's actually the biggest mover in the region. we've been waiting for those home depot results, dow component just out with quarterly earnings it looks like the home improvement retailer came in with earnings of 1.84 a share, two cents better than the street was expecting. revenue topping forecasts. the comp store sales were up 7.9% versus a consensus view of 5.8% increase. home depot is raising earnings for the full-year based on that beat it says it expects to earn $7.36 versus the 7.34 the street was

expecting. basically saying it expects earnings to be in line with what the street was looking for for that fourth quarter. talking about a few other issues, just in terms of the disasters, unprecedented number of natural disasters including the hurricanes, wildfires in the west, the earthquakes in mexico, all of that impacting things according to craig ma nenier, saying the company saw an increase in hurricane related sales by 282 million, but the gross margin was considerably less than the company averaged they also dealt with some damage because of hurricane-related expenses as a result the operating profit was hurt by $51 million in the fiscal third quarter >> that would have been a nice buy. 167.94 is the print for the all-time high. four cents away. probably will do it today. 1$195 billion company at there point. closing in on 200 billion.

the three guys that started it are still young. still involved that's amazing to do that in your lifetime. >> i was looking around. i looked this up last summer, just because i was eager to see. people like bill gates who started microsoft. there are only about six companies where you can still see somebody who has turned it in their lifetime into a dow component like phil knight of nike >> or michael dell he might be the most annoying. he's not even 60 gates is -- unfortunately gates and i, we have always been the same age >> once that happens, you're tied forever >> he's done -- i don't know if he's as happy as i am, but he's done better in certain other respects maybe >> you think >> well not necessarily overall. >> depends on your measure >> exactly i'm not envious. really . >> at all? >> no. >> let's get you caught up with

some other big stories shares of buff bualo wild wingse soaring after rosark cap paitald a $150 offer for the company roark has a restaurant heavy investment portfolio and it includes sandwich chain arby's i haven't been there in a while. i love that roast beef >> the cheddar and the french fries the curly fries. >> the texas fries >> roast beef, i'm not sure what the hell it is >> doesn't matter, it's good >> you can get it with that queso on it. >> and that onion bun it comes with it's been years since i had one. >> i miss roy rogers >> they're around. >> i used to get a hamburg wer a

pie hamburger with a piece of ham on it it was called the double r burger putting ham on top of ground beef is just -- that's just -- >> that's a true hamburger >> that's a bridge too far >> talking about companies in our childhood, lord & taylor -- is that too mean to say? it is sort of -- >> from the mall days? >> from the old days maybe it's trying to get into the future here. it struck a deal with walmart to launch a store on the big box retailer's website in 2018 through the partnership, walmart.com will provide dedicated space to lord & taylor on its site. the chain continues to operate its own e-commerce platform. this comes as walmart's haven't recent strategy has been focused

on fashion as customers look for higher-end products. japan's softbank is considering investing in uber but even though we keep saying a final agreement is upon us, a final agreement has not been reached. softbank saying if conditions on share price and minimum shares are not satisfactory, there's a possibility that softbank group may not make an investment at all. this comes a day after uber said a planned investment deal with softbank was moving forward. to clarify allthese comments, there is a deal that's moving forward, it's a tender offer, but softbank is saying if you don't sell us enough shares at the price we're looking for, the whole deal is off. so it's dependent not on just uber's board agreeing to the outlines of the transaction, it's more dependent on the shareholders, early stage investors or employees to decide if they want to cash out at ostensibly a discounted price to the current valuation.

>> the world's most powerful central bankers and the most powerful reporters covering those bankers, they're in germany. steve liesman joins us now with comments from fed chair yellen, ecb chief draghi, the bank of england's carney and japan's kuro kuroda that was g wasnood, wasn't it. >> i'm just over the heudson. >> you're covering them, though. >> but i'm not in germany. >> with a green screen, you could be in germany. >> that's true >> you've done that before >> and a private plane as well let me tell you what's happening now. mark carney is making comments right now on the economic impact of brexit. he is saying there will be an impact on incomes. there's an impact on the supply side of the economy. part of the economy will become obsolete what happens with policy

monetary policy depends on final arrangement. this is what he told me when i interviewed him several weeks ago on this idea about the outlook for monetary policy relative to brexit earlier janet yellen defended the fed's communications she was also critical of some fed members and how they conduct their communications take a listen to what she said earlier. >> individuals should be explaining in their speeches really elaborating on what's in the statement and explaining what we have agreed upon we agreed that having done that individuals can go out and explain their individual perspectives i'd say that guidance hasn't been totally faith think ffully followed, though many tend to do that the press tends to pick up on differences. >> with those four central bank leaders on the stage, i thought it might be a nice time to look

at where they are with their qu. japan has done more than anybody else at 95%. the eurozone at 39%. this is how many assets they have now u.s. at 23%. they are contracting the uk at 22%. the u.s. towards the lower end relative to others the u.s. has begun to reduce its balance sheet and you can see right there, if you want to take that next big wall there, where they are relative to policy. there they are the u.s. at the higher rate, and also it is raising rates and contracting its balance sheet. so we're listening to them talk about communications earlier kuroda said he will retain the accommodative policy. back to you. >> was there a thought for you to go over there, liesman? would that have been a possibility? >> joe, it's pretty -- it's high fishing season right now in the long island sound and the eaooet

river and the bronx. >> so you have bigger fish to fry? >> way to go, becky. that was great >> if there wasn't fishing here and there was fishing there, i think that might have -- >> there's a legitimate question as to the trout fishing in germany that i need do more looking into >> must be >> i don't think it will be in and around frankfurt >> steve, i never heard janet yellen say anything like that before it wasn't like criticism, but we were talking about it. is this because, look, she's a lame duck at this point. she will say whatever she feels like on her way out? >> it may be the beginning of that there's a policy the fed has, they're supposed to go out and communicate what the overall policy statement was then go off and do your individual opinions. she is saying they've not done that we'll see if she gets more talkative or how would you say it -- >> i like it more outspoken in her views.

>> yeah. >> all right thank you. let's get back to the broader markets. joining us is matt toms from voya investment management and on set, jack cafferty from jpmorgan private bank. you heard what ms. yellen had to say. are you with her are you with her that's what they say, right? >> can you gdig it no when you want federal reserve consistency in terms of policy and communications, recognizing there could be different pers perspectives, if you want to emphasize a different facet of the communication, appropriate >> good luck taming these cats >> well, you certainly -- it takes a degree of confidence in your abilities to get into those sorts of positions different regions might have different perspectives in terms of what they need. for the most part we want to

think the fed has a xwrun fiuni perspective on the economy, so start at the big level and work down to unique needs >> are you a fan of her successor? i look forward to consistency of policy the idea of having an equal emphases on policy and the prospect of evolving regulation is something that the financial industry is looking forward to. >> matt what are you doing with your money right now. >> we like the transition as well we ultimately think that in the bond market volatility is likely to increase as qe begins to be unwound. so places that offer enough yield to offset that volatility, high yield looks cheap after a 50 basis increase in yields. >> can you give us an example? >> the high-yield market and securitized markets, and in a period of strong global growth, not just u.s. growth, and floating instruments such as bank loans, which we think the

fed will hike to a 2% level before pausing so another 75 basis point of yields, those broad market diversified approach makes sense in both markets. >> are either of you worried about the high yield etf market which is, to me, i always had some questions about >> you know, i think you look at high yields, i think you wind up with managers taking different perspectives you either want to look index like, so you want to have a portfolio looking like the etf or alternatively you come out and say i want to own nothing in the etf in order to create the more idiosyncratic profile, and not subject myself to the pressures that might come from flows. you can have two different high yield experiences. >> matt? >> yeah.

yeah the prize has been the lack of flows. what you have seen in the high yield market is relative discipline we haven't been overwhelmed with cash flows that managers have to put to work. the bank lone side an side is m pressured. >> which of you would buy -- anybody want to buy ge today we'll be seeing the ceo of ge on at 9:30 today. >> i need to better understand what's going on there. >> matt, you're buying >> on the debt side. i'm a debt manager we think there's enough asset there as this plays out, there's value in the debt. >> we have to leave the conversation there jack and matt, thank you >> thank you as we mentioned earlier, home depot reporting just a few minutes ago. joining us is brian neagle, senior equity research analyst atoppenheimer. what did you make of the report?

>> you know, the key factor here in this report, we talk a lot about the underlying operating prowess of home depot, but the boost they got from a sales perspective in the quarter with the hurricanes i think the hurricanes probably added 1%, 1.5% to comps in the quarter. that's been a driver in the period >> they talked about that but also said the margins on sales was lower than average why is that? >> it's just the nature -- it's probably a couple things either the nature of the product, so the products that people are purchasing, especially in anticipation of the hurricanes are low margin. then they didn't say this specifically, but home doe poe ju depot may have been cutting prices as well >> they raised their guidance for the full year by two cents so they're confirming their

guidance for the fourth quarter. what do you think about the stock overall and the company overall? >> i like the stock here a lot i liked it for a while the message i've been telling clients lately, expect the hurricane benefit in the third quarter. the real key is this should be a benefit for the next few if not several quarters as communities in texas, florida and elsewhere rebuild. home depot will get a benefit from that. >> is that something that lifts all boats when you look at competitors like lowe's or does home depot have a leg up on competition? >> the easy answer is that it lifts all boats. i did a lot of field work around this after hurricane irma hit florida, i went and visited stores in miami. i noticed -- again this is a small survey this was one day, i was in a handful of stores. home depot was much more aggressive in getting the sales than lows. we'll see when lowe's reports next week, but i think home

depot is performing better >> we were looking at a chart of home depot versus lowe's, in the last few months home depot has broken away. why is that? >> we'll see what happens when lowe's reports results, historically home depot is better at capitalizing these events peop people may have done similar work in seeing this again. >> do you like home depot more than lowe's or do you have a buy rating on both of them >> i have buys on both of them i think lowe's is well positioned here. home improvement is definitely a bright spot within the overall consumer environment i think home depot is the better run company. if i'm picking one, i'm picking home depot, but i like boost of them today. coming up, the nifb out with the latest report on the health of small businesses. you know what's coming up

saturday, small business day >> is it already it's the saturday before thanksgiving wait, local shops -- >> you know about this small business day >> shop main street. >> i thought they meant -- yeah, they mean go to the small businesses >> are there any of those in new york city? >> answ >> absolutely. >> i thought it was next saturday friday is black friday, and saturday is shop on main street. >> we'll get it squared away with bill dunkelberg ♪ some moments can change everything. you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life

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we are watching shares of general electric the stock plunged 7% yesterday after the turnaround plan was unveiled that's the biggest single day decline for general electric shares since 2009. ge cut its dividend in half and announced aggressive corporate restructuring and talked about how long it might take for things to turn around. we'll hear from john flannery today on "squawk on the street," it's an exclusive interview. that will be at 9:30 a.m. eastern time. the national fed rag eratio

announcing their small economic trends this morning, the new thing is the optimism index which continues to climb this positive streak has remained, they say, since about last november. joining us is nfib chief economist, bill dunkelberg mustacheless bill. you're still the same guy. i can still recognize you. i knew there was something different. >> becky knew i had the mustache gone i'm impressed. >> 103.8, up from 103. i asked if that's a record it's not a record. 105 is the record? >> around 105. a little bit higher than that vm. >> that's what you mentioned the last time it was 103 was 198 3. >> it was 103 several times back

in those days. the average of the index over the last 40 years we've done it is about 998 >> you weren't with the nfib in '8 '83, were you? >> i started these surveys in 1973, fourth quarter >> so you were >> i'm an old guy. >> you don't look it without the mustache >> thank you >> if memory serves, that was jimmy carter who was president >> yeah. well -- >> 1983. >> maybe not >> no. it was that other guy that followed carter, wasn't it >> i think so. i don't pay attention. >> you can tell that from the date or the optimism index me me . >> how did the president who runs the nfib flip-flop on backing the tax reform plan as introduced by the house? something changed in the revised

plan that caused her to switch over and support it? >> well, apparently. what w . >> what was it >> that, i don't know. the problem with getting a good fix on what's going on, it changes every day. i don't spend a lot of time on the details. >> the pass-throughs >> the pass-throughs are the main issues to make sure the small business owners who pay taxes on the personal income tax schedule get a break in the whole deal as well as corporate tax cuts >> it's important. you're punting on the question, if the nfib doesn't support the republican tax reform proposal, there's something -- that's going to cause questions now the nfib does support it it's an important point to make f we can't get you on board, that's what it's supposed to be about, small businesses, isn't it >> hopefully supposed to be about small businesses that's what we'll be watching to make sure that's the case. as this thing changes and goes

to committee or whatever it's going to do to reconcile the senate and the high. >> explain the pass through. >> why do we think most businesses won't benefit from that and that most of them already pay 25 so they're small and they already pay the lower rate how many businesses will it help >> i don't know. we'll find out >> it's that important to where you wouldn't support it if it wasn't there >> yeah. if there was no good treatment of the past through organizations, there's 6 million employee firms out there, and then another, depending on the numbers you like in schedule c stuff, another 20 million or 30 million people who are supporting themselves as businesses if they are ignored in the whole deal, it would probably not be something we would be happy about. >> what else in the current environment in this country you think has the index at 103.8 tax reform is part of the optimism >> i think that's part of it.

>> what else >> if you look at what happened with the index, in october it was 95, below average. in the first few days in november, it was still 95. we got announcement of the election result. the rest of november, it jumped to 102 in december it hit 105 in january and february and march then we dropped to 104, 103. that string is incredible and kind of unprecedented in the history of the index never stayed that high that long >> now we need to know if that translates into actual, you know, the change in behavior of these people that causes them to invest >> first, before you invest money in things like expanding your business, you should be optimistic about the future. what was clearly happening is on the day the election results were announced, there was happiness about the change in the management team. so the management team changes,

then we look forward to other important policies like the reduction in the regulatory burden, like changes in tax. our top problem has been for decades and remains the cost of healthcare we didn't get there. tax reform is struggling the regulatory stuff is going forward. people notice it, but that's not headline stuff that kind of creeps in but it's very important. healthcare is our number one problem. taxes are number two regulatory costs, then the tax code complexity, frequent changes. >> i couldn't get to you talk at all in the beginning, now i can't get you to stop. thank you. that's music that's why they're playing it. >> i don't think he hears it when we return, the squawk ceo is in session, we will talk about the climate for business in america as we head to break, a look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. all right. good morning u.s. equity futures at this hour, we are going to check these probably another ten times. by the end of the session, sometimes you have no idea, do you? the dow is indicated up a little this morning

no small part from home depot. should be up more than that. home depot is called sharply higher after better than expected results trading at an all-time high. probably over 2$200 billion in market cap the zs&p down about 4 the nasdaq down 3. vodafone reporting strong growth in the first half of the year driven by demand for data the world's second largest wireless producer is raising its full year earnings target as well to 10%. that's up from the previous 4 % to 8%. shares of switch are lower after the data center company reported its first results since going public just last month third quarter earnings and revenue beat forecasts the stock run up nearly 6% yesterday ahead of the report. credit suisse has agreed to pay $135 million to settle a probe into its foreign exchange

business new york's state banking regulator alleged that traders improperly shared information to manipulate currency prices and used the electronic platform to trade ahead of client orders. standard & poor's declaring venezuela in default after it failed to make two interest payments on its debt they owed 2$200 million in cou n coupons. they failed to pay that. they have been downgraded to a "d" from double "c," and cut the long-term foreign sovereign credit rating to selective default. lord of the rings is heading to amazon. the company confirming it's working on a tv series based on the films. amazon's show will explore new story lines rather than retell story lines already depicted on screen i can't wait >> really?

>> j.r. tolkien is dead. >> if you can take these characters and run with them, it's like starr w"star wars." you want to know what happened with the characters before and after. >> you don't think it can stand on its own -- >> like "squawk box" or "squawk on the street" >> no. hopefully they'll be loyal to the original -- what was the other one. >> i am constantly starved for content. >> they went ahead with game throof thrones -- >> he's alive it gives supervision where the thing is going. >> you're not going to watch this >> it frotto going to be back? is it going to be patty duke's son? what about gandolph? >> we'll move on to a different topic now.

if you can believe this, i can't believe this data. it will take more than 200 years to close the gender pay gap, that's according to the world economic forum the new report found women were not represented in finance, i.t. and joining us is beth mooney, she was the first chief executive of a top 20 u.s. bank. and janice reals-ellis is also here, ceo of the ellis group they are both in town for a conference hosted by the women's forum of new york that i will be a part of today. you will be on my panel. >> i am. >> we're excited to do that. it's remarkable to look. some numbers reflecteding that even in 2017 the gender gap widened. it's not gotten better given all the conversations we've had around this table and so many more over the past decade f not longer, what is happening? i go to you first.

>> the world economic forum report did, indeed, indicate -- it's a global report, but what's important and what we're here to talk about today is what ceos, board leadership and others can do to be more constructivie itly patient and have more adeediver in the boardroom and in the businesses >> to be constructively inpatient, men occupy 80% of all s&p 500 board seats, only ten s&p 500 companies have 7 or more women on their boards. what do you have to do >> fill every other opening with a woman for the next ten years, then you will get to parity by 2025 that's why we're celebrating today 375 companies that have 25% or more women on their boards we only have 43 companies that

have 40% so, companies have to be very intentional. >> let me ask you, do you change the criteria for the board member in the old days, people wanted ceos or former ceos on the board. ostensibly, a big publicly traded company if so few women are currently ceos of publicly traded companies, it seems to me you have to really think a little bit outside the box and very differently, in fact, about the sort of backgrounds -- >> it's a chicken and egg problem. you can't put women on the board if they haven't been in these positions, and they can't be in these positions -- >> dare i say, then you get into a question of experience and what that experience is. >> if you look at the board room, it's not all sittingceos as a practical matter the skills matrix look at business leaders with experiences and

capabilities in many different areas other than sitting ceo sort of leadership it does help bias. that's one thing the reports do show i don't think you're outside the box or lowering the bar. i think you're broad enaing the lens >> because there are so few women in positions of power, i had one complain to me i always get invited to these conferences because i'm the token woman in this industry who is the ceo for these things how do you move beyond that? >> you open the lens i do executive search. there are many women out there, but the key is ceo sponsorship board directors and chairs have to sponsor women there are many women who have the qualifications, but they're not necessarily ceos but they're in the c suite, running companies, in academia, they have key skills in science

and what have you, cybersecurity, international, who can be on -- >> we just don't know about them >> but search people do. board directors do ceos do. so you have to go out there and look into new pools of candidates you have to open the lens. >> when you say you have to fill virtually every seat to get there -- >> every other seat. >> my question becomes you're sitting there with a pile of applicants and potential candidates for role on a board, should you be selecting based on gender >> you should be selecting based on experience. >> right but hold on -- this is interesting. experience is different than talent >> and potential >> i know a huge number of women who have remarkable talent and potential, but you could argue in certain cases it's hard to say that we have enough women who at the same type of

experiential level of some of these male ceos. i'm not saying the male ceos are better at all. you're in this -- back to what becky said -- this very chicken and egg dilemma. >> i would suggest to you when i'm talking to the ceos and when you hear them on the panels today, they will say to you the pipeline is there. the talent is there. you just have to look for them in new pools when you talk to the ceos on the panel today, that's what they will say they're out there. you just have to look for them >> if i could weigh in, key corp, 40% of our board is diverse. so the pipelines are there i just think you need to be very conscious when you're looking at the skill sets to bring in people with different backgrounds other than just sitting ceo and the talent is rich and it's out there. >> we are talking about women now. how do you think about diversity even more broadly than just

male/female? >> i think diversity comes in many forms when i say diverse, it includes people of color as well as gender and as i look at our company, 40% of our leadership in our company is diverse. the more you look at jepd gende background, experiences, thought, all that helps drive a more inclusive culture and better decisionmaking. >> looking forward to seeing you guys later >> and better financial performance with more women on board. strong correlation >> it's proven >> thank you, guys >> thank you when we come back, squawk's ceo call we'll talk to george holm about the health of the restaurant industry. and coming up at the top of the hour, a closer look at ge's turnaround plan. we'll talk to a management expert. and later, carla harris is one of the most powerful women in the banking industry. she advised president obama on economic issues and her gospel

llncerts have sold out carnegie ha she will join us at 7:40 eastern time stay tuned, you're watching "squawk box" on cnbc but they t. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

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the american heart association has now lowered the target for high blood pressure. it used to be 140 over 90. now if you used to think you were okay, you're not. you have high blood pressure, because it's 130 over 80 that means that nearly half of the u.s. adults will now be designated as having high blood pressure the guidelines were changed to help treat high blood pressure earlier preventing strokes and heart failure. the aha says most patients with the new high blood pressure d designation will be scribed diet modification and exercise. they also suggest cutting back on salty food and eating more potassium rich vegetables like sweet potatoes and butter nut squash >> don't bananas have a lot to

of potassium in them i also heard caffeine, alcohol and aspirin are the three biggest causes for making it tough to fight high blood pressure >> bananas have a tendency to bind you up a bit. >> i haven't experienced that. >> as you get older, you have to keep that in mind. >> thank you, oh wise one, for letting me know. >> trying to keep everything in balance. damn, i wonder if i have high blood pressure >> 130 over 80 >> that's pretty low, isn't it >> yeah. i'm not sure where i fall in that >> the fda approved a digital pill for the first time ever it's a medication embedded with a sensor that can tell doctors whether and when patients take their medication it's meant to address a 1$100 billion that patients often don't take the drugs as scribed. the digital pill will notify doctors and others approved by the patient. it will note the date and the

time that the medication is ingested via smartphone and it's a pretty good idea, especially when you think of seniors who have had a tough time keeping track of some of these drugs >> why you are looking at me >> you're the one who just explained to me about the binding. >> i do take one thing every day that i forget sometimes. >> yeah. that's why you need the pill boxes, so you know if you have taken your vitamin >> i will take it until it works. taking it until it works i want to have hair everywhere >> you want to be like cousin it >> yeah. like cousin it. coming up, the "squawk" ceo call we'll talk to george holm. we'll ask him about the growth of independent restaurants and the recovery from the hurricanes that disrupted supply lines.ear,

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let's talk a little bit about what you did learn and how

things kind of worked after the storm. you were the last time we talked just getting ready and trying to figure out how to prepare and how to get things in advance and how to come back in after the storms came out. how did all that play out? >> well, in many ways easier than in the past because technology is better particularly around routing. we know what roads are closed down that part is easier. coming back, been a little slower than normal >> in terms of restaurants getting back to the same level of sales that they had before. >> correct there's usually the same pattern. when the storm is going on, the business goes down quite a bit usually comes back fairly quick. a lot of construction workers are coming in, and people are eating out it's probably shortage of construction people. we just don't see that activity to the extent we have in the

past immediate activity part of that may be because it's two major metro areas at the same time that may have something to do with it as well. >> split the resources between the two. >> right >> let's talk a little bit about your business and what you have seen because people are eating a little differently especially the millennials they have different expectations how has that kind of played out into your business >> well, we think all in all it's probably been good for us because it's been kind of -- they lean more towards the independent restaurant, and the more profitable part of our business, but we do a significant casual dining chain business snoo you are talking about the chain that we've known for decades. >> the big casual dining chains, yes. >> like a tgi fridays type of things millennials are less likely to go to some of those places, and those chains have struggled. >> sure seems that way right now. >> when you talk about the independent restaurants that you are serving, how does that work?

>> we have more to offer when you get a large chain, they can negotiate pretty well directly with the manufacturer they're very specific about what they want to use, and they use large quantities when you get to an independent, they really rely on us to help them with their product. they tend to use our brands. close to half our sales to independents are brands that we've developed. >> laying out the numbers, you're going to hit them that's a big part to do with it. our business has been going in the right direction, as far as growing the independent business much faster than the rest of our business we have a division called -- it's done extremely well

it's basically a candy, snack, beverage business. that's actually been our leading earnings producer. >> have you found that is that -- >> yes in 2002. >> you founded that in 2002. yeah then performance bought visco, right? >> the other way we bought them in 2008 >> great success story in 14, 15 years -- >> we've been fortunate. >> yes incredible >> hey, george, want to thank you very much for joining us today. it's really a pleasure to see you again. >> great thank you. >> thanks for your time. >> okay. coming up when we return, two big hours. we get a closer look at ge's climb. we'll talk to a management expert about that cut and aggressive corporate restructuring. as we head to a break, take a look at u.s. equity futures at this hour. we're going to share what's going on right before we head to that break you're looking at the dow. looks like it would open up ten points higher. nasdaq up marginally

s&p 500. we'll call it virtually -- maybe off two points it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. allow you to take advantage of growth opportunities. with a level of protection in down markets. so you can head into retirement with confidence.

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that's why i have launched the my shot at epilepsy campaign and i'm asking you to join me. take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. this is our shot to take. learn more at: myshotatepilepsy.org home depot beats expectations the stock is on the move to new highs ahead of the open. plus, what's next for fellow dow component general electric shares dropping more than 7% yesterday, and they were close to multi-year lows already can management right the ship? we'll discuss in just a couple of minutes then politician and ceo of the international rescue committee david milliband is taking on the refugee crisis he tackles one of the biggest political and social issues facing the world right now he will join us to discuss that.

plus, a wish list of discretionary stocks for the holiday season it's a special santa sector nomics that could have investors feeling thankful for their portfolio. the second hour of "squawk box" begins right now >> the nasdaq off about two points s&p 500 off about three points a couple of pieces of news janet yellen says all comments from fed policy makers should be viewed as conditional. speaking at a central bank conference in frankfurt earlier this morning, yellen said that fed commentary should always be evaluated with the idea that views could change as -- excuse

me -- economic conditions develop. the government is going to issue october producer price index futures. economists looking for a .1% increase in the headline number and a .2% hike in the ex-food and energy rate. we'll be watching shares of buffalo wild wings private equity fork roark capital has made a $2.3 billion offer for the restaurant chain that's according to the "wall street journal." more than $150 per share would be the price tag the company has been under some pressure from activist investors mike cotter capital management, which now has three seats on that board >> the dow component, home depot has moderated its gains to some extent after being sharply higher earlier this morning. it's still up a little company reported results earlier today. it's up $1 .15 it was well above the old high of $167.94 there was a print above $168,

but it's up $1.15. it's reporting a profit of $1.84 a share. that beat expectations by 2 cents. that's really sort of in line. revenue was slightly above expectations too as you can see there at 25.02 versus 22.55 estimate comp store sales were up 7.9%, and that was better than the consensus estimate of 5.8% the company also increased its full year earnings forecast to $7.36 a share. 2 cents above the current estimate, but they just beat by 2 cents. >> that's basically i remember requesting the fourth quarter numbers that the street is looking for. >> exactly in the meantime, shares of general electric, another dow component, dropping by 7.2% yesterday for their worst single day decline since april of 2009. the company announcing a huge dividend cut and other corporate restructuring plans as it looks to right the ship. mike santolli h santoli has mors story. this is a huge, huge story looking at a 125-year-old

company. >> i don't know if we're calling it day two of this whole new campaign right now it seems as if right now -- i think when you are looking at it from an investment perspective, the question is are we in some kind of a bottoming process? do you see anything yesterday in terms of the reaction to news that would say, you know, perhaps, in fact, we are about to stop this down trend, which has been very severe in ge i would look at a few things cosmetically the stock does not yet look cheap they've effectively given you 2018 guidance of a little more than $1 per share. that's what they were talking about in the summer. 18 or so times earnings. not cheap. if that's base earnings, if that's really a trough of what they're going to be able it on do and it grows from there, i do think the market is going -- the stock is going to probably firm up before perhaps it looks cheap on the surface now, wall street in ermz it of the analyst opinion was quite negative on ge even before yesterday's move i would say he probably had fewer buy recommendations on ge as a percentage of all recommendations before yesterday's move as you probably have had in 25 years you did get a downgrade today as well it seems as if it finally the

street is losing patience. that's usually one ingredient in a bottoming process. then just amazingly heavy volume yesterday. it raises the question it was capitulation by investors that are hanging in there to collect the quarterly dividends. >> the company came out, and it announced it was slashing its dividend at 6:30 eastern time yesterday morning. watch the stock. it actually traded higher on that news. it wasn't until later when they started speaking and giving a little more details that things kind of fell apart what happened? >> yeah. i do think it was that 2018 guidance, and also among some investors the sense that maybe the measures that they detailed were not quite radical enough. it was not a complete kind of break-up of the company. keeping health care. very slow and measured withdrawal from energy all that stuff just the fact that the stock hadn't gotten, you know, cheap yet on that basis. i do think the ingredients are there. i don't think anyone is faulting flannery about the kinds of things that are being considered and the sense of urgency, but, you know, in terms of what you have to work with and modelling

next year's numbers -- >> the previous regime still has minions that are still in overdrive spinning you know, i got a lot of comments yesterday it just made me think what's the first thing someone has to -- if you have a problem, the first thing is you need to actually acknowledge that there might be a problem. >> the aa stuff? >> yes, yes. one of the first steps one of the first steps is that, i mean, they have not run out of lipstick yet that they're trying to put on, you know -- they really -- i figured by now the lipstick is gone, but they're vociferous about it. they're continuing to insist that this was a great, great restructuring and turn-around of a company that -- >> the company got into that mode, as you know, of saying, look, we were dealt a tough

hand stock was at a high. we had 9/11. we were badly positioned for a lot of these downturns skbro when it is obvious to everyone else, that's when it starts to sound like you haven't run out of kool-aid. >> ibm in the early 1990s when they slashed the dividend. massive restructuring. the stock didn't turn around that day it was the start of a process. it was a similar mode of a reckoning that came after years. >> market cap for ge was -- >> there was a lot of pe >> middle of the pack for the

dow. >> a lot of things about why revenues would always miss, and that it actually isn't what it looks like, and now we know that some of the results maybe didn't completely tell the whole story or so. at this point it's been, you know, i don't know -- you lose a lot of credibility it's new management now. we'll see. >> we're going to dig deeper into the story joining us right now for nmore, let's bring in mary yulby, managing professor you know the situation you've seen the road ahead what do you think the new ceo does have to do? john flannery. is there more you would like to see? >> i think the analysis you provided is right. we have to think about what happened before and what flannery has inherited ge lost one-third of the value since immelt took over my own feeling is that immelt was slow i think that they were not on top of the change. i think this is an organization that got very clunky they had the spare jet story,

after all. if you think about that from that standpoint. flannery gets it flannery gets that's a problem in the company there's some question about whether people think that it's good to have an insider or whether we need someone to come from outside, but flannery calls himself the insider's outsider he comes from health care. he understands the complexity that health care has been in people thought when he took that over that he would divest it or spin it off, but instead, he looked at it, and he saw what the potential was in it. i have to be honest, i'm pretty optimistic about where i think he is going to go with it. >> not only what does he need to do, but what does he need to not do as he kind of sets down this path >> exactly he is saying that he has been hurt by complexity i think investors are saying, well, that means that the business is too diverse. if you think about a conglomerate, it's a real challenge for conglomerates in today's environment because even for single line businesses, this is a really tough environment. we know that things changed with

the global financial crisis. we know that things got more complex, but in the last couple of years this has taken off. it's changing at a dramatic pace it's high rate of change and a high level of unpredictability for a conglomerate that has many businesses, their exposure is really much greater than for other companies. the argument would be, ell, portfolios are going to take care of that risk, but i think in this case it actually is making it worse. they had oil they had railroads with the drop in coal. they had issues of multi-national with the problem of the currency and the strong dollar they're exposed all over the place. i think flannery understands that complexity. he knows that they need to get more focused and really identify the areas where they can get some complimentaries across the business rather than thinking about it as a portfolio. >> i wonder in the process of attacking that complexity it

only means exiting business lines or if, in fact, there's a little more within the business unit of trying to perform better i mean, it seems as if the wall street is now looking at these businesses that are going to result they have very long cycles a lot of times, you know, they have varying kind of public customers. a lot of complexity just within how business is acquired and run there. it just seems like a big job, and i think investors are kind of wondering how flannery is going to attack it at this point. >> exactly i think you're spot on investors are upset, and i think that maybe flannery tipped his hand too early they're saying there's nothing new, but flannery announced some things a few weeks ago, and i think what he announced is still true i don't think things have changed that significantly we knew a few weeks ago he knew the issues behind the scenes, and he knew that there were cash flow problems. the plan that he announced already had that factored in for him to come up with something dramatically different

yesterday for investors would just be spin in my opinion >> mary, real quick, if you could get the cash position in decent shape, do you think you could get in a position to -- >> the big challenge he has right now is the cash flow, right? the reality is that he has a tremendous opportunity let's talk about what the opportunity is this is your question earlier in terms of what he should do and what he shouldn't do i do think that he needs to divest, and he knows that. he wants to simplify some of the business he has to look for implementaries across. where does that lie? that lies in the fact that the world is going digital they're talking about ge as a digital industrialized company i think that vision and that path is right on track i think flannery understands this is now an ecosystem that the world is in data and data analytics. it's the new industrial revolution their expertise is industrial. we're in an industrial company when industrial is going away. we're going to digital and tech. >> what does that have to do with health care >> well, health care is in

complexity health care is incredibly affected by the fact that they missed the i.t. movement in the 1990s. digital is everything for health care right now >> should this stock be valued as something that ooefrt we'll is going to be broken up, or should it be valued in the way you value an industrial company? if it's valued like you -- what is the normal multiple for an industrial company what do you think it deserves? >> i think in this case if they break it up, they're going to lose the opportunity they have >> what would a normal industrial -- i'm just trying to figure out when the earnings per share catches up with where the stock is right now isn't it right now at a higher multiple than your average industrial company >> yes i think the stock is going to probably go down i think it's going to get worse before it gets better. >> what should we -- what's -- is 10 too low? a 15 multiple? >> so i'm not a finance expert >> all right i'm just wondering it still seems -- they're going to earn $1 they earn $1 to $1.07.

i'm just wonder whg it gets back to where they're earning $1 .50 or $1 .60 to where it justifies the price where it is right now. >> i'm with you. i understand that. this is to the point of what he should not do. you asked me earlier what he should not do. i think there's a lot of pressure from investors right now. to me from a leadership perspective you never waste a good crisis. >> right >> investors are going to be unhappy for a little while i think the stock is going to get worse. i think that he has to get the cash flow situation under control. that's problem number one. if he uses this and really drives the cull tower change that he is talking about, focuses on strategy, gets the idea of the digital and really works to expand that strategy, i'm going to go out on a limb here and say i'm going to be bullish on flannery. not ge per se, but flannery. there's potential for us to come back in two years and say, wow, look at what he did at ge. >> mary, want to thank you very much for your time today we appreciate it

>> thank you >> mike, thank you >> 18 handle now by the way, folks, keep it locked on cnbc today general electric ceo john flannery will be joining "squawk on the street" right after the open on wall street. coming up, fed speak from janet yellen on market valuation. later, former u.k. foreign -- he is out with a book called refugees and the political crisis of our time check out the european markets at this hour you're looking at a bit of a mixed picture, with the se 1ft00 looking up "squawk box" will be right back here on cnbc

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welcome back to "squawk box", everyone we've been watching the futures this morning they've been right around the flat line all morning long dow futures now down by about 11 points s&p futures off by five. the nasdaq off by six and a half janet yellen making comments about market val wags. steve liesman joins us with more on that. good morning again, steve. >> good morning, becky janet yellen speaking with three other global central bankers at a conference in frankfurt saying that price to earnings ratio on stocks are at the high end of historical changes she was repeating there a staff evaluation that was made public not too long ago she said ultimately, they judge the financial stability in the

system to be quite moderate. >> in recent months we have communicated in the minutes staff's evaluations that asset prices are elevated. that means that price earnings type ratios are at the high end of their historical ranges we are in a low interest rate environment. >> you can see her on the stage with mario draghi from the ecb, mark carney from the bank of england, along with mr. corrota from the bank of japan dr draghi said regulation are what the central bankers called macroregulation not monetary policy should address the asset prices also, yellen earlier had criticized some fed merngzmbers citing the failure to explain communication decisions, but she later also defended the overall strategy saying rate forecasts provide a benefit to the markets

and to the public. >> jeremy is head of investment strategy chief u.s. equity strategist for ubs wealth management americas and tom, he is portfolio manager for fpa new income fund. i'll start because one of your concerns, jeremy, is that there could be something in the rate side of things that could derail some of this, but at this point people talk about, well, the market is getting tired, and there's been pullbacks you mentioned there's been a pullback, then it's escaped you. you haven't seen it, right >> exactly one thing that's been very strange about this year is the biggest peak to trough decline we've seen in the s&p has been 3% even in bull markets, typically we get a 10% to 12% correction on average during -- >> we haven't seen 3 we've seen it, but it didn't even feel like a 3% correction >> i think that the reason that

the market is essentially gone up in a straight line this year is that we've seen a very strong rebounding corporate profits in 2017 at the end of the day what matters for stocks is the earnings cycle for s&p 500 companies. the first half of the year we had easy comparisons, and earnings were up 12% what was impressive was in the third quarter expectations were for less than 2% earnings growth year-on-year going into the quarter, and we ended up at 7, and if you stripped out some of the property and casualty insurer's losses, it would have been closer to 9% or 150%. >> what would cause that streak to end that's what we need to worry about. if that doesn't continue, then we need to worry you don't see any reason why it's not going to continue or -- >> we think it continues we've been bullish on the profit cycle. >> how would it derail >> all bull markets end because of economic recession. i think the key indicator in looking at the profit cycle is the underlying economic momentum in the economy reasonably healthy, and we think it's okay. the gdp is on track this year, we think, for around 2.25, and

we think that 2018, 2019 you're going to see similar 2.25% gdp growth 3.5% to 4% global gdp. moderate growth and moderate inflation, goldilocks environment is -- >> inflation stays quiet, but you do worry maybe bonds in some cases are overvalued or in bubble territory, and we've been talking recently about junk and whether it's -- whether high yield is showing us anything to be worried about >> high yield does show you things it's a way to look at equities as well. >> going to talk to jeremy this might be what you need to worry about where. >> in that up until even last week, i mean, you were at almost all-time lows for a yield and the high yield bond index. the spread was still not quite at its all-time low. when you think about that, you look at it and think, okay, i've got to work through a default process in high yield. not everything is going to work. the default adjusted returns just weren't very attractive

they made more sense to be an investment grade or made more sense to be a structured product. starting to look at that within the high yield market, i think it's a good window to start to think about, okay, how long is this going to last in equities >> after thinking about it, what did you think? >> you look at it -- we look at it and go the cycle is finished. the quality of credit is lower the amount of it is higher that usually portends to a cycle of higher defaults forward a couple of years. combine that with a flatter yield curve, which usually tells you that, okay, i'm kind of getting towards the end of the growth cycle i'm getting to the end of the economic cycle to us those are flags that say take risk off the table. i think it would carry over into equities as well that would be more cautious. >> is that something that you put on your list of things to think about? >> on the list, but right now, you know, credit spreads are still quite tight. financial conditions have never been easier.

financial condition index is at a 20-year high, meaning that, you know, even though we're seeing interest rates start to creep up and the federal reserve has raised rates four times in the past two years, we still see that banks -- or companies are not having any difficulty getting access to capital and capital is still inexpensive we're simply not seeing that >> got a lot of money with you still. ubs. i think it goes all the way back to ge. i don't know somehow -- that's like -- everybody got taken over, but somehow we ended up with you this is like an interview personally and professionally to see how -- look, you're young. i mean, i got a lot of money there. i should feel comfortable? >> feel comfortable. >> okay, good. >> you're in very good hands >> okay. good you have ubs stuff, don't you? >> we have ubs >> not stock >> maybe some old, old, old

mutual funds in ubs. i don't know i just spread it out >> you diversify >> diversify >> don't keep all your eggs in one basket thank you, jeremy. >> thank you >> and you're not done yet you're almost 50, you say? >> closing in. >> k on. >> it's not so bad you'll see morgan stanley looking to -- except for getting all bound up. >> looking to fill the void for women entrepreneurs who need access to capital and exposure to investors carla harris is going to join us to discuss the company's initiative program before we head to a break, one more corporate story for you. ebay wants to one-upthe competition on black friday deals. they've already announced all this week it's going to match prices on select deals from wal-mart, kohl's, macy's, and jc penney ebay offering a coupon of 20% off most items computers and smartphones. get your ey baon "squawk box" returns in just a moment

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>> we're live at the nasdaq market site. >> the independent rose to 103.8 in october that's up from 103 in september. >> the company earned $1.43 per share from the third quarter that compares to estimates of $1.21. it did report a 3.4% drop in sales. investors appear more encouraged by the earnings beat goldman sachs has ridden down the value of its stake in the weinstein company.

>> let's see how bad it really was and potential of legal liabilities and things the fact that there are no assets there -- >> we talked with ron barren about it on friday i think where he was given an opportunity to invest eight or nine years ago he said he was intrigued by how clever they were with the movie scripts and some movies that they had made, but he said he heard from a lot of people nothing specific but just stories about those types of actions from harvey, and that's why he said -- >> democrats on the panel expected to grill him about a series of statements he made in the judiciary committee of the senate in which he denied knowing about meetings between campaign aides and russians.

three ucla basketball players who were arrested in china on charges of shoplifting are now heading home they've reportedly checked into an l.a.-bound flight their teammates already returned from china after winning their season opener in china over the weekend. president trump said earlier today that he spoke to chinese president xi jing ping about the situation. trump said the actions were unfortunate, and they could have faced long prison sentences. >> joining us on set this morning is david miliband, the international rescue committee president and ceo. also the author of a new book called rescue, refugees and the political crisis of our time david, thank you very much for being with us. >> they don't seem to be getting better i think they're getting worse. >> you're right that the number of refer gees are growing. they're a symptom of our failure

to manage the global system, where the political crisis i point is that without government interventions, effective government intervention, ewe going to end up with companies tipping over the wrej, they actually get off aid, skps there are some examples that i point to, things that can make a difference for the good. >> you mentioned jordsan, and that may be the most extreme situation where something like 20% are north of the population is now a population of refugees. >> it's a country that is the second closest ally of the u.s. in the middle east it's a country with about 16% or 17% of the population now syrian refugees they've had 650,000 registered refugees and another 600,000

unregistered they're a country that wants to do the right thing, but they're frankly overwhelmed by the numbers. short-term aid is not the answer i'm calling for a different kind of bargain with a country like jordan they need a different kind of imf world settlement >> the king of jordan is going around asking for help from european countries, from the united states. we don't have the political vision to help >> part of that becomes when you see a situation like germany with angela merkel, allowing refugees in, and then it nearly costing her her job. >> just writers of the policy agreed that germany will take a minimum of 200,000 asylum seekers a year obviously, here you've got the world's best record of integrating refugees into the

society. i think if you manage this properly, they're actually managing the integration of refugees they've got a group on the situation. i think that it's about leadership in politics and effective administration >> weave also seen incidents of terror on the rise, though >> not linked to the refugees, to be fair now, europe -- >> well, because refugee is someone who is fleeing for their life, and i'm very clear in the book you run a refugee system to protect those who genuinely are in danger. if they're not in danger, then they shouldn't be allowed to stay europe has finally come to this too late, but it's now got a proper entry and exit system tracking those who do arrive

>> any refugee who wants to be received in america, they have to prove that they've got their papers, that they are who they say they are, that there's matching records on their facebook or elsewhere of who they say they are. they to go through cia or other intelligence agencies. the american process of vetting refugees, 24 months of vetting, means you have the world's best system for insuring that those who come here as refugees are actually here to do the right thing. the second chapter is why should we care? >> we should care for moral reasons. if we don't stabbed by feel in need we give away the essence of what it is to be a human being i don't think we give way to the

geolikt political reasons. they only have rights because of western leadership trash the rights of refugees, we trash our own history. secondly, listen to people like the former cia director mike hayden he will tell you if you don't -- if you discriminate against refugees on grounds of religion, you never are going to get the intelligence that's important in a connected world to help keep us safe. >> we want to thank you for joining us by the way, the name of the book, again, is rescue, refugees in the political crisis of our time a platform designed to help women succeed in the workplace, and they'll join us after the break. they're here to zus the success of morgan stanley's multicultural innovation lab that helps women entrepreneurs find capital and build their start-ups. the futures at this hour

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welcome back to "squawk box", everyone vodafone expressing strong growth driven by demand for data the world's second largest wireless provider is raising its full year earnings growth target to 10% that's up from the previous 4% to 8%, and that's up 4.5% >> it's been five months since the launch of morgan stanley's multi-cultural motivation lab. it's for companies to be potential investors. joining us right now is carla harris, vice chairman of global wealth management at morgan stanley, and lisa tatem is the ceo of land it good morning to both of you. >> good morning. zlo for those uninitiated, land it has been described to me as link linkedn for women. is that fair >> i think it's ion more powerful, frankly. you should ask lisa. >> love the analogy, but land it

is really a platform to increase the success and engagement of women in the workplace we provide each woman with a playbook and it gives companies an ability to invest in one size fitsz one solution to invest in their talent and scale >> how did you find her? explain the whole process. >> i've known lisa as a person since she was at harvard business school, frainkly, and people that she's connected to knew that we were starting this innovation lab she found out about and it and applied for the lab. she was stellar when she came in, and i think this is something that is scaleable from a b to b perspective and b to c perspective. and it's tech-enabled. >> i want to understand what this experience has been lying like to you. >> absolutely. we wille have all classes of investors there really just to see these companies as well as three amazing companies from hers and also north venture

partners there will be ten companies that will present kfr company has blown op through their plans. whether it's capital raising and attracting new customers or accelerating their pilots so it's been an amazing experience for us, and i hope for them as well >> absolutely. >> what is the experience been like in terms of all the things you just talked about? >> sure. it has completely improved and accelerated our progress in three main areas one, the morgan stanley investment actually catalized or ground, but we're now oversubscribed and can attract a strategy eenlic investor they've opened doors for us in terms ofcustomers and strategy eenlices, and we're going to announce very recently that we have a large hr tech platform that is investing in us as well.

>> we are miles and miles. >> you have to work for land it if i tell you, but coming shortly. just trying to find another job. basically. >> it's like your sixth job. that would be juror sixth job. you could do it. >> i can add on. this wasn't in place i thought this was in place of >> no, no. >> hem us understand >> hopefully as a result of them convening today they will make connections with key investors that will accelerate their rounds in terms of lisa or help them get exposed to either suppliers and/or customers because of the network that

those in the audience may bring to the table >> how many people in this audience >> we have over 200 people that will be there today. >> how big is this ultimately going to become? if you are working with ten companies now, really five of your own >> five of our own, and i think you can expect that to double next year. >> you want to keep growing then >> absolutely right. listen, as i told you, it's a market inefficiency. less than 2% of venture capital goes to entrepreneurs of color less than 4% to women. that's a gross market inefficiency i told you, everyone said we can't find any we went out in stealth mode. in two weeks we had 100 spligss for five spots that can't find any, that's not an argument that holds water anymore. >> right and is it a diverse group all over the country is it -- >> yes, this was just the country. we didn't even think about it

globally for the first cohort. you can imagine if we went global what the opportunity would be >> does morgan stanley put money in all of this >> absolutely. >> nice to see you congratulations. >> thank you thank you very much. >> which companies are looking to profit this holiday season? a special sector of santa sector-nomics coming up next we're watching the shares of home depot they're now lower and by more than $1 after trading sharply higher the company reported $1 .84 a share. that was 2 cents better than expectations it raised its forecast for the full year a little bit the stock, as you can see, is down over a percent. "squawk box" will be right back.

zbleefrmts dow component coca-cola was upgraded to outperform from market perform at wells fargo wells fargo says that the street is underestimating positive earnings momentum from the beverage giant citric systems adding to its stock buyback authorization. that brings the total for the cloud computing to $2 billion. delphi automotive's board has approved the spin-off of its

automotive unit to a separately traded company >> today's sector nomics report to the naughty and nice list landon has the list. landon >> hey there, joe. good morning that's right i brought the christmas cheer. it's almost that time of year, and as shoppers get ready for the holiday season, investors are too. these are names that could make -- or some you want to check twice before buying in let's start with these the not so hot retailers kohl's sliding 10% in q4, and macy's dipping 12% nordstrom nordstrom's, it's off 18%. all three major department stores increasingly struggling to keep e-retailers. not all retail stocks are saying ba humbug. michael kors up 14% as the company shows early signs that its turnlaround efforts are paying off as the focus is more on luxury. l brands up 15%.

some on the street say now is a good time to get in ahead of potential holiday boost for its bath and body works and lingerie businesses on the back of its massive earnings beat. joe, i wrote santa a letter. i'm not sure the jury is still out which list you're on. i'm hoping for nice. no bag of coal >> yep >> lord of the rings is heading to amazon. the company confirming it's working on a tv series based on the fan favorite

with the films am azblon studios multi-season show we'll explore new story lines rather than retelling the stories already depicted >> i think -- did you see the hobbit they made, like, three of them >> stretched it out. >> they were running it out, and they even made the last one two, two-hour films >> you know what -- >> i mean, they're -- it's a great -- i know. ty think they tried to make a sequel sometimes it's weird to try to do something that -- >> godfather 2 >> that was a mario -- i think he -- >> he actually did it himself. >> cg3 would fit into disastrous bridge too fares, right? >> friday the 13th part 14 was still terrible >> yeah. >> your high standards

>> got a story for you guys. >> jamie lee curtis is supposedly coming back for another halloween. the maker of stove top stuffing are selling stretchy papts it will give customers a little extra room to get through thanksgiving dinner. fans on social media are buzzing about this they're saying pants were apparently -- the pants were apparently inspired by the 2001 "friends" episode which character joey wears a pair of maternity pants while trying to eat an entire turkey on his own. the pants come in sizes small through extra large. they are available through the end of the month >> you know that my diet lasts until wednesday before thursday i'm going to totally -- >> you are ready for the stretchy pants >> you need the stretchy pants >> i was actually talking about a trough -- that's -- that sounds like -- that sounds like -- no yeah bad idea

i have some maternity pants i could loan to you. >> that would be nice. they might be too short, though. snoo senator rand paul returned to the senate after being seriously injured at home in an alleged attack by his neighbor he said he suffered six broken ribs and a damaged lung. now he has trouble speaking and breathing. senator paul said there was no justification for the attack his neighbor pled not guilty last week to misdemeanor assault charges. wow. still waiting to hear more details on all of that i'm sure we will at some point wlek on "squawk box", general electric's restructuring plan and what it means for investors. we'll take a look at how the company is going to be moving after making some tough decisions about the dividend and the management's pay that stock dropped more than 7% yesterday. we'll have more on ge right after the break. later, a house budget committee chair diane black will join us to talk about tax reform "squawk box" will be right back.

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>> we have reaction from -- the exclusive cnbc interview >> new this morning, janet yellen speaks out on market valuations we'll tell you what the outgoing fed chair said >> plus, comedian bob saget heads back to the stage. >> it was full house now it's fuller house. one day it's going to be fullest house. it's going to be me in an urn on a windo. >> the full house store about join us here on set as the final hour of "squawk box" begins right now. ♪ whatever happened to predictability ♪ ♪ the milk man ♪ the paper boy >> live from the most powerful city in the world, new york.

this is "squawk box." >> completely didn't recognize must have been in college. >> full house is, like, my whole life >> oh. good morning wrrks welcome back to squawk. this is going to be big for you. >> whether did that show run >> i'm going to get you the dates. >> i guarantee you, i -- >> late 1980s. >> i policed so many shows because, you know, i was either in college or in the work force. >> 1987 to 1995. >> i would not have seen that. right? i just wouldn't have >> it was on abc >> i can watch the tgi fridays >> that was when erkel was on.

>> yes eh >> did you watch "the munsters?" >> at that point i think that was, like -- >> that was in black and white, right? >> yeah. "bewitched?" >> "bewitched" in repeats. >> when i was home in school >> bonanza was in color. >> how about magnum pi for you >> i'm okay with -- >> murder she wrote. >> i can go all the back to rebel or halladan. you remember him westerns >> now you are just showing off. >> clint in "rawhide." >> he can go back to the civil war. >> yes >> let's talk about dow woman poenent out with earnings. the home improvement chain reported quarterly profit of $1.84. that was 2 cents better than the

street was expecting, and revenue beat forecasts too the company raised its full-year forecast just to reflect the beat in this current quarter bev been watching that stock for a while. it had been sharply higher joe, you said it touched above a new all-time high. he says that nothing has really been said. the conference call doesn't start until after 9:00 a.m there's nothing in the commentary to explain why the stock traded higher and then down he thinks maybe it's the shares pulling back just because of the big move higher lately including yesterday's big move too. dow component down by 86 cents to 164.49. >> also, check out shares of dick's sporting goods. sports retailer beating on both

the top and the bottom line. same store sales down by 0.9%. that's a much smaller drop than what the street was expecting. dick's raised its full-year forecast, but it did say the 2018 earnings would decline by as much as 20% we're also. >> the fall-out has taken place. >> stock did have its worst trading day yesterday since april 2009 the depth of the financial recession.

>> few reasons to believe this stock bottoms here similar commentary from others, including cowen, which called the financial messages underwhelming. now, folks at ge, to be fair, had told me expectations ahead of the meeting had gotten perhaps unrealistic, but with the stock now down 40% this year and each new update really worse than expected, perhaps it's easy to see why, where especially since ceo john flannery is taking a very frank and really aggressive approach. here's the biggest take-away this is the reason the stock did have its worst day since the financial crisis earnings and free cash flow next year are, again, going to be weak. now, i asked flannery yesterday if 2018 is the bottom in terms of those metrics he said it's a reset year that is going to be "extremely hard" but that profit and cash flow will grow from there now, factor in the dividend cut. 50% dividend cut many are asking why buy this stock before there's actually proof that that turnaround is

taking hold. very good likelihood we could see the stock continue to sort of move along these bottoms. >> thank you, morgan let's take it to an analyst right now to join. john hinch at deutsche bank. here's the question that i just don't understand steve liesman really was the one who raised it yesterday. >> the company cannot bust itself up where zwroosh morgan said as it moves along these bottoms i would like to know whether these -- are these bottom >> i mean, i don't see them as bottoms. >> 16 possible is 14 possible people had gaup out and said it's impossible. how could ge be trading at $20 it's about profits per share i think in your intro, hit the nail on the head

the company's track record being able to forecast both its cash and profits in this manner a year ago the profgts were supposed to be double. >> what multiple should it get >> look, the market trades at 18 times. the problem is ge is over 40% owned by retail. >> definitely a discount to the market >> then it shouldn't be at 18. the market multiple, you said, was 18 what's fair? 12 12 or 15 just give me a number. >> it's going to come back to the cash flow. the cash has really been the most important thing i think you have to wait until the cash settles >> you don't know what the multiple should get or what multiple it deserves >> i think you could probably argue for something like 15, 16 times. i think that's reasonable. >> earning $1 to $1 .07 next year, right? >> there you have your answer, right? >> hey, john this is a major story.

this is 125-year-old company we're talking about massive numbers of employees that are going to get laid off. we're talking about lots and lots of retireees who count on the pension plan and other issues should they be worried any other retirees that are counting on this stuff >> well, they should have been worried for a while. if they're not worried now, i don't know what's going to actually cause them to be worried. look, the company is not going out of business. that's very clear. there are only so many things that they can do this company, to be clear, has also been restructuring for many, many years this is not the first time that management has tried to tackle a bloated infrastructure and bureaucracy and so forth this is going to take a while to slim down. i think the power business alone is talking about downsizing one-third, roughly, of their facilities 40% of their actual approximate capacity remember, these -- this company is in global markets competing here

the fact ais health care and aviation are running on a high >> what if this is in terms of asset mix. let's say you still had nbc universal. let's say you hadn't got rid of ge capital you still had the businesses let's say you still had interest let's say you didn't do anything for the last 15 years. do you think the stock would be higher or lower than it is right now? >> the age of the conglomerate is for all intents and purposes over right? i think back to the prior point, if ge could have dismantled or -- but they can't -- >> i'm saying what if they don't do anything? ge -- or nbc is worth twice as much as they sold it for >> meaning if you just let it ride >> you just let it ride. you didn't pretend you knew what you were doing with all the other stuff. are you sure it would be at 19 or lower >> there's no real way to predict with the benefit of that scenario >> look at the honeywell and united technologies. >> ge's track record at m&a is pretty poor. they tend to buy high, and they

sell low nbc debatably was sold at a lower. so was plastics and rail >> all the oil and gas right at the top. everything >> baker hughes is a real challenged company the timing of the cycle is fine. i don't have a problem with the timing of the cycle. i don't know why you're doubling down on those assets >> seemed like a lot of stuff going in and out, over and around, and all you're left with is a company that needs to be restructured more than ever right now. >> and don't forget ge capital the world's largest nonbank -- >> which now is probably a good thing to be in now with the financials coming back >> debatably going back to my point. debatably you have out of those businesses at the wrong time just as interest rates start to uplift, and the bank stocks got a bit. the age of the conglomerate is over shareholders can diversify more effectively. this is still going to be $125 billion company. >> what's is look like in three years? probably not a lot different ge capital is going to be much smaller. the disclosure will be better.

poub could be uplifting. ge looks like an l to me i'm kind of comfortable with a share price here >> you mean l in terms of the stock price, or l -- >> in ermz it of both fundamentals and the stock price. we see it -- >> l is for losers >> best case >> that's what i thought when you said it. >> jim carrey, l-loser >> i can't go there. >> all right >> i don't -- i don't know if it's cheap at 19 i don't know, you know i thought it was cheap at 30

>> i have been watching it a long time. >> thank you >> we should mention, ge ace ceo john flannery will be on "squawk on the street" at 9:30 eastern time it's an exclusive interview you do not want to miss. many of the questions we've been asking hopefully will be answered coming up, an eye-opening report on just how many people need a license to work we have the numbers when we return and, later, comedian bob saget is here. he is taking his act to amazon and itunes he is going to be joining us stn.t here on set at 8:20 you are watching "squawk box" on cnbc

>> based on these laws, it cab a challenge for some workers we spoke with sally lad, a new jersey resident. she was managing properties in the poconos for other people listing them on sites like air bnb and homeaway the state of pennsylvania called her earlier this year saying she was being investigated for operating without a real estate license. something she didn't even realize was needed the pennsylvania department of state could decline to comment on the pending litigation, and it has moved to dismiss the case you can see how it can be burdensome for someone like sally that wanted to do this into her retirement and didn't realize she needed a real estate license to manage properties for other people and just put them up on sites like air bnb >> not to engs many the people like hair dressers who need them now if you want to do braiding there's a million different occupations that you never would have guessed you needed licenses on >> most states on average they say license about 54 of those about 100 or so low income

occupations. it's pretty interesting, though. for sure >> thank you >> thank you up next, it's a full house this morning actor and comedian bob saget is here we're soic soed for this he is the real bob saget the one on entourage >> he just tweeted out he is here >> no way. >> talking about details on the new stand-up special "squawk box" will rhtacbeig bk. win an uncertain world?k predictable income pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth.

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♪ everywhere you look ♪ there's a heart ♪ a hand to hold on to >> welcome back to "squawk box." he played danny tanner, a clean-cut single dad with three girls -- of three girls on the sit com"full house." it's a role he is reprizing in "fuller house," but he is also a comedian known for telling -- i'm not ad libbing now telling dirty jokes and dark humor >> it's not that dirty >> you have said that as long as -- >> my kids have seen stuff they tell me stuff >> if you watch "family guy" or south park" in that vein a 15-year-old or 17-year-old can watch my new special, which premiers everywhere today. >> today is the day. >> yeah. >> when you walked in, i said i want to know who the real bob

saget is because i was too old to watch "full house" but i did watch "entourage" and i thought that was hilarious i had the impression of you as being the clean cut, and the role -- >> i grew up with him in "full house. >> you are my son. we could be. dna here >> the role in a doug allen -- >> he is a friend, and i did a bunch of them, and i love all those guys it was an interesting experience it's really not like my life, but sometimes my fiance -- she says you are a little like the entourage guy right now. please stop it i'm unshaven i have a cigar and a black robe. >> he was good-looking, and then he got better looking. does that ever irritate you? >> no, i love him. >> really? >> i just love him >> i don't know him, and he irritates me >> i have seen him naked, so that's fine. >> all right i have not i have not >> he is a great friend. he is a really great friend. >> this is launching today, this -- >> this is the big launch. >> a couple of clips

it's great >> thank you >> it's on in a way that hasn't been on because netflix has a model. i'm on netflix with fuller house in december, new episodes. this thing is on amazon, which is a big, you know, launch it's on itunes right this minute it's on 100 platforms all over the world. it's on every -- >> the same people that do that last special with, both comedy dynamics and a guy named brian, said do you want to do it? music hall of -- it was -- >> i said if i can get the name right, i'll do it. we shot it there six months ago, and i was 60 now i'm 61 it's got music in it, and -- >> it's a new 45 it really is >> it is >> it is >> right >> i'm excited about that. >> i'm telling you, 61 is the new 45 >> it is for me, and i have three beautiful daughters and a wonderful fiance, which i wish there was a good american word it's a french word, apparently, fiance i'm not educated that's the good thing about me

>> how do you think your comedy has changed? >> well, it's a little more responsible. even now more if i was to shoot the special right today it would be a different show. there would be different -- there would be a different feeling behind it because everything has happened in the world. >> when you say everything that's happened in the world -- >> i'm talking about you will of the things that have happened as far as our news, our leadership. skbro this is a joke about people that are like that. >> i was going to say the day and age of harvey weinstein, how do you think about how to make those jokes? >> comedy right now. >> you don't want to say it on stage, and, yet, sometimes the -- they would call it peck's bad boy in the 1930s or 1940s. it's a very tragic thing the only thing i'm thinking in a will come good out of it is that people will be more responsible. some people that might not even care about the situation and would replicate it will go, oh, i don't want to get in trouble or ruin my career. that will be the thing that

stops them from doing it other people will go i'm going to fix this. our world has been prime evil forever, and we seem to be -- you guys do this every morning you get up at 3:00 or 4:00 in the morning to tell people that either things are going to be okay or here's what happened 20 minutes ago. >> i refeet tweeted it >> it wasn't did -- it was about did. >> i wanted people to see it >> tell them to watch it >> i'm not the guy i'll tweet right before i go to something. i won't up at 3:00 in the morning thinking about it. i have to tweet "squawk box. "squawk box" now it's a good name, by the way >> "squawk box" is a good name we didn't like it when they were thinking about it. >> i could use my last name. i couldn't get saget box >> that's a little strange >> too early for anything i have to say >> you have another show, but it's more -- it's kind of got some dark issues to it too >> the movie i'm making?

>> yeah. >> yes it's called benjamin, and it comes out in the beginning of 2018 i'm real excited about it. my son is -- i directed it, and i'm in it with some great people rob cordery and mary ann -- >> something that affects too many people. >> it's about a father and his girlfriend believes the son, his 15-year-old boy is on crystal meth, and my girlfriend takes a post out on facebook in order to call an intervention >> very low budget movie written by a guy named joshua, and i'm real excited if you'll have me back, i'll come back in six months. >> do you have a 60 to 120 in you and 120 to 180

do you have enough material? >> that is an interesting question >> you know, there's -- >> well, i was going to -- >> there's some openings for comics there's a few places that need to fill some holes for stuff they were doing. >> i'm aware in five years or three years and i'm ready to do it again, one friend might, you know, resolve this he might be forgiven because it's bad >> it's hurtful. there's no question that it's 1,000% wrong >> i asked beforehand whether -- you can see how warped the whole -- the thought process was in that. those thoughts don't occur to everyone they just -- the idea --

>> it's amazing that someone is so funny and such a genius and has their devils >> do you think it corrupts too? >> there's a lot of people with devils a lot of men more so than women have been mistreating -- men are taking power, and, you know, it will be -- if everything can change, if the world forgives, he is a genius he is a comedic genius >> great to have you back. >> thank you >> please don't say come back after that last topic. thank you. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

>> .2% if we look at what's going on year-over-year. 2.8. x food and energy year-over-year

2.4. on trade year-over-year of core, 2.3. there's a lot of 2's there a bit hotter on scale we've been through this ordeal in september. it's going to be very interesting tomorrow to see our october read on cpi to see if it bears the same fruit of higher inflation. we do see it in many areas we see it in energy. of course, if you are following the cqg we see it. dollar index down one-third of a cent interest rates ten-year back under 240. remember, we've only had one close in this most recent set of moves over the last couple of months that was into change territory, meaning higher than 244 1/2 yield close. we said it last year we if any to monitor that as an important pivot. andrew, back to you. >> thank you, rick meantime, we should tell you that draghi, yellen, carney, and roda all speaking out this morning. our good friend steve liesman has some of the highlights from that central bank palooza

>> let me quickly go through this ppi number, andrew, because it's a pretty big number, and we haven't seen that 28 number that year-over-year rate that rick just talked about. i think you have to go back to 2011 to find a big number. the fed does not make policy on producer prices, but you do have yields moving this morning on this the long end yield rose a little bit on the ten-year. it looks like some of it came from food. some of it came from trade it looks like it's kind of all over the place as to the source of it. you go up the processing chain >> we have carry-over in energy. have to monitor it, and then most borntly see if it feeds into the consumer price index, which is much more important for policy and, therefore, rates yellen did say this morning speaking of frankfurt, that price to earnings ratios aren't the high-end of historical ranges financial stability risk remains quite moderate now, speaking next to mario

draghi from the eb, draghi said there are some local cases where asset prices are out of line again, it's the consensus of this group of central bankers at macropredus macro prudential regulation should be the way to address ags et prices. not doing it through policy. yellen did cite failures for communications decision bz by the board before going off and giving their own decision. yellen overall defended the strategy saying when the fed puts out those forecasts, even when they're wrong, they provide a benefit, and she reiterated that they always say that these forecasts are conditional on the outcomes of the economy. rare to see all those folks sitting down, but not a lot of news on current monetary policy. a lot of differences which way each one of those banks is

going. >> awesome thank you, steve >> sure. >> appreciate that very much >> the condo tower became a symbol of new york's luxury condo boom, says but now it's a monument to its troubles robert frank joins us now. >> good morning, joe last week a unit 79 of the skyscraper called 157 became the biggest foreclosure sale ever. it auctioned off for $36 million. the owner had paid $51 million for it he is a nigerian billionaire now charged with money laundering and fraud. real estate boosters say this is all a one-off. the building and the market are fine, but an analysis of sales at one 57 shows that every apartment that has traded since it opened in 2015 or 2016 has e declined in value all by double digits jonathan miller of miller appraisers ran the numbers a unit was purchased for $31 million and two years later it sold for $23.5 million 26% decline. a unit on the 65 td floor was

bought for $29 million and sold for $22 million this past april. one unit was bought for $20 million in 2015 and sold the same year for a 13% loss around $18 million now, prices for new condo developments across manhattan have fallen 27% this year. the average sale price is still $4.3 million for new developments or 2,500 a square foot the foreclosure last week, that sale, represents $5,600 a square foot, but that's below the $6,500 or $6,700 a square foot they had been selling for. >> robert, that's way too much still way too much >> yes thank you, robert. >> thank you, guys >> let's check in on some headlines this morning as well one of the morning's big stock winners is retailer advance auto parts. it posted much better than expected earnings. even as the revenue fell slielts short of street forecast wow. the stock is up now by over 14%. also, the fda has approved the first so-called digital pill

it has an embedded sengsor that lets the doctors know if patients have taken the medication and when they took it the digital drug that was approved is a version of a schizophrenia treatment from japan's pharmaceutical also, the number of millionaires is on the rise new figures from credit suisse show there are more than 50 million u.s. millionaires. the u.s. -- is that 1.1 to 15 million in a year? or is that over a decade maybe >> i don't know. most millionaires, i don't know. >> united states in a year they're saying in a year >> wow >> from 1.1 million to 15 million? i guess if you are looking at the stock and the gains, you have a push of -- >> i bet you get a gain of 25% plus the stock market. that's what's going to happen. >> phenomenal. the sugs, by the way, has the most millionaires in the world with japan and the u.k. ranking second and third up next on ""squawk box"" president trump returning to the

united states with a packed agenda, including tax reform we'll talk to congressman diane black right after this break get elected by talking toughon on the national debt? will they stay true to their words? or did they promise you one thing... only to do another? right now, congress is talking about tax cuts that will add trillions to our national debt and hurt our economy. it's time to tell congress... don't borrow more money from china. and leave more debt to our kids. keep your word. tax cuts shouldn't add to the national debt.

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welcome back cvs health announcing it has set a goal of adding 5,000 additional apprentices by 2022 it coip sides with the expansion of the program to seven new states it provides training in pharmacy care, prescription benefit management, and other fields

we were thinking about doing the landit thing earlier this might be cooler for your portfolio if you are an aprept is to learn about pharmacy services >> i could learn a lot in my spare time >> you think the landit thing. you can't handle both? >> i got to call my agent. >> your agent. >> your agent. >> they'll have to pay you >> yeah. all right. >> to figure out which is the right decision >> one of those lab coats? >> could be exciting >> the lab coats >> that's a much smaller drop. dick's raised its full-year forecast, but said the 2018 earnings would decline by as much as 20%. i want you to look at that stock. >> look at the year. >> yeah. >> well, 60 -- yes that's what it is. >> then coke upgraded outperform

from marked performance at wells fargo, and analysts saying the beverage maker's positive momentum could continue to accelerate, and that the street is underestimating coke's revenue potential. zbriefrmt president trump heading to the hill today with the tax plan looming this week joining us right now is representative diane black, the chair of the house budget committee and a member of the weighs and means committee too chairman black, thank you very much for being with us morning >> you are welcome thank you for having me. >> let's talk a little bit about what to expectwith this meetin with the president, which i believe is thursday. >> that's correct. >> and what will be happening at that meeting what do you expect >> i just expect that the president will be encouraging all of our members to stay strong on the tax reform that we'll be voting on thursday afternoon. >> when we have seen the senate's own version of this, there are some significant differences between what the senate is considering and what the house is considering we've already heard from kevin brady that he will not accept the complete disappearance of those deductions for state and local taxes.

what do you think about this issue? that is one of the major differences between the house bill and the senate bill >> well, we started this out -- we were addressing the middle income earners we did that as well as simplifying the code, and also to make sure that businesses had a fair opportunity to be able to compete around the world those have been our three focuses. there are a number of pieces in this code, as we move along, that are not going to be making everyone happy you can't lower the rates and at the same time not find that there are some complexities there that we can remove from the code this just so happens to be one of them. we feel very strongly that the states that have the higher taxes need to re-evaluate those taxes and we want to be sure it's equitable to those states that have lower taxes. sf that one state isn't getting a bigger share of the cuts than the others >> the problem becomes when you are counting on republicans from some of those states that are

getting the astate and local tax deductions and their constituents count on that, you won't be able to get the votes together that's why chairman brady from the house weighs and means committee has been so out there in saying that he won't accept a bill that completely eliminates those deductions because he is not going to have the votes, otherwise how do you kind of rectify all of that? >> well, we have -- i think we have really in our body at least -- we have hit a layer of acceptability across the line because a number of those people that were from this higher tax states had at the beginning said, look, you have to do something to help us out we have high property taxes, high income taxes. i think we hit a sweet spot here, and we obviously will have some that are still concerned, but the majority of those people -- kevin has been working really hard with them to find that middle ground and to make sure that we can get the votes that we need in order to make this bill a possibility. >> i'm just saying one of the big differences with the senate is that the senate is much more concerned about budget deficits

and that they have put forth a bill that has zero deducks allowed for state and local taxes where, if that's the billing that gets forwarded back to conference, what happens? you still need your members to agree to this. it seems like there's been some careful manipulation to make sure you can convince your members to go ahead and vote on this >> well, that's why we go to conferences. there will be some things in there that perhaps the senate has that we'll be able to find negotiated ground on, and that's what conferences are all about at the end of the day we have to do this. this is what is going to help those in the middle income to get the greatest relief as well as grow our economy. we've been in the doldrums we've fwot to get this done because this tax reform is going to give the economy a jolt that means for tennesseeans, that means about 20,000 more jobs and about $2,200 more in their pockets. this is a good thing for those especially in the middle income. >> there are certainly a lot of people that would be looking at a tax cut under the new plan, but because it is tax reform that is broader than just straight cuts across the board, there are going to be winners and losers in any of these we've heard from a lot of the

losers, one of the groups that i continue to hear from are seniors who are living largely on dividends and checks that are coming in and who maybe took advantage in a big way of the deduction from medical costs they're very worried that their taxes under this plan will go up what do you say though that group of people? >> i say just hold on. let us take a look at this i say we will have an opportunity -- several opportunities to work on that particular issue, and we are hearing and we are still listening. look, we put this out there so that we could hear from people we did a lot of listening for the last seven years, frankly, but we need to continue to listen we're listening to our seniors and making sure that we don't do anything to hurt our seniors that's a population we want to make sure we take care of. >> chairman black, we're going to hear about if there's one person whose taxes go up we're going to hear about it, obviously, and there could be a lot more than one. when you are selling this and it's all -- everything in life -- that's what it comes down to eventually will it work to say that if we could get corporations more

competitive globally, which allows them to expand and invest more and tohire more and then waelks go up, is there a way to sell the growth aspects in a better way that shows that it's not just about cutting the middle class tax rate by a couple of points but to actually -- the overall picture is a 3% or 4% economy that you can't measure in whether your taxes go up or down. that's not the way you measure whether this is a success or not. you measure it through economic growth, but that's -- i don't know i think that's tough to sell, but that's the whole crux of this i think it gets avoided. >> it is >> a lot of people avoid it because, i don't know, it seems politically easier to say you're going to get an immediate tax cut, and that's supposed to help you.

>> the amount of tax they will now have to pay is -- as i said more importantly than that, it's about 20,000 new jobs that are going to be created, and as a result of that, people are going to see an average income addition to their paycheck of about $2,200 by the team you finish here, you have about $3, 500 additional dollars in someone's pocket. it does make a difference when you jolt the economy and the economy grows. we know that wages go up there are more jobs available. there's more opportunity for promotion. this is beyond just, as you have already said, the simplicity piece. >> just hard to sell you know, you have another side that's going to -- every time you try and say that, they're going to shoot it down say no, no, no, corporations already make enough money. that's what you are going to hear >> you know who pays the corporation doesn't pay the taxes. it's the people who buy the product or the service the corporation actually provides it. there's an economic lesson here as well. >> chairman black, let me ask you about my constant drumbeat

i've been asking about carried interest that seemed to survive not only in the house bill, but also in the senate bill, and i realize that you all put some restrictions on it where you extended the holding time to three years versus one year. that comes back to the argument, is this income, it or is this something other than income? should it be charged and tacked differently? what are your thoughts on that >> this is a really interesting topic and, i didn't really appreciate how diverse it is with carried interest. you have some businesses that have a lot of product that they keep let's say automobile dealers >> they have a lot of product that they keep that's important to them in other industries, it's not as important. it really has been one of those where we've had to listen p and make sure that as we looked at what the middle ground -- we took into effect all of those different businesses in the way in which they operate. >> private equity managers are

one of the big guys who really benefit from this. i think by taking their fees, this is income and should be charged as such. the highest tax rate is going to be, if that's 39% or .6% or something else donald trump, the president, talked about this in his campaign what i'm surprised to see is that it has survived in both the house and the senate despite what a lot of people thought was going to be an easy part of the reform >> this is a more complicated situation than even i appreciated when we went into it again, look at all the other industries and how they operate with interest is something that's very instructive and one that we are continuing to make sure that we're getting the right measure at the end much the day. >> chairman black, i'm confused. can you just speak i did not know this. automobile dealers are using carried interest >> they are, because they have a lot of inventory the inventory on their lots, they carry the interest on that, and that's just -- you know,

that's the way they operate. they have to carry a lot of inventory for people like me that want to go there and see a whole lot of different products before i purchase it they're one of the -- one of the particular industries that does have a lot of interest that they carry because of the way they operate. >> i did not appreciate appreci >> looking into that point to understand how that would work exactly. >> if you got rid of it without thinking about it, would that hurt the auto dealers to the point where it was an unintended sequence or should they be paying 39? >> this is the way in which they operate. we have to be careful we don't close whole industries down by doing that do you do something over time that perhaps would be something different? but it is -- it really is an interesting area that i did not appreciate until we actually got into this more deeply to find out where different industries -- >> i'm confused by that. i'm reading up very quickly, kevin brady's proposed amendment to the tax bill did help auto

dealers by eliminating how they would be affected on interest deductions, floor plan and finance indebtedness, the interest on loans that they take out to hold cars for sale. that's different than private equity and real estate and sometimes hedge fund managers who say that the fees that they get when they plow them back into these investments should be seen as an investment rather than actual income they never end up paying income tax on what is clearly income if you're taking it as a fee. >> and you know, i'd like to come back another time and talk to you more about this why don't we do that invite me back and we'll talk more about that particular area. >> all right, chairman black, thank you for your time. we will invite you back. thank you. >> thank you so much. >> when we return, jim cramer joins us live from the new york stock exchange we'll get his take on today's stories, earnings just in for

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let's get down to the new york stock exchange, jim cramer joins us now with some analysis, i think of retail week jim. any real bright spots, walmart seems to be distancing itself from the pack, i guess >> well mart is good, home depot was -- >> why >> it was a great quarter, sometimes the market just hates you. tjx, my trust owns it, 35 stores in puerto rico plus it was very warm. i don't know, i think there's a lot more to these retail numbers. can i say your interview with congressperson was very eye opening, she didn't know what carried interest was. >> in terms of the auto -- >> i think it's important to point out. she didn't know what it was and you know, as a hedge fund manager i chose not to do that kind of accounting, it became very much in vogue if you wonder why we're having

so many problems in washington don't you think -- she was -- suboptimal analysis about carried interest. >> i agree with you, jim, i don't think she understood when she started to talk about the car dealers, what are you talking about with car dealers but i'm going to hopefully be sympathetic maybe she didn't hear us or understand what was -- >> it shows how hard the discussion is. she's probably a good person but -- >> a kim couple of years ago i listening to one of our senators in new jersey, had no idea what a marginal tax rate was, no idea about marginal tax rates. >> it was an ill advised answer, i would like to think she's in defense of auto deerals, which was great but how about hedge funds. >> we'll see you in a minute ♪

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for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions. protecting what's most important to you. that's the power of pacific. ask a financial advisor about pacific life. >> before we go, we want to say a final good-bye to this, "squawk box" is leaving this particular set right here, we've been using for the last 11 months or so we're going to get a new look and new home tomorrow. >> this was always supposed to be temporary. >> it was. >> we'll be at ground level, not up here. >> downstairs. >> don't we share this

>> fast money will still be here. >> but we'll have our own set and no sharing. >> everybody on the street right behind us. >> what's going on there >> people are going to miss all of our -- >> screens now built into it. >> back under the desk finally so that means -- >> that does it for us today join us tomorrow and check it out. we need to be skinnier tomorrow. we'll see you. it's time for "squawk on the street." ♪ >> good tuesday morning, welcome to "squawk on the street", i'm carl quintanilla with jim cramer and david faber. good morning, john flannery set to join us onset this hour after that investor presentation on monday futures lower as earnings are in forecast from big retailers including home depot europe is down and another hot wholesale inflatio