margaritas >> instead of stretching pants, you could eat that new restaurant in paris. >> which no. >> just eat naked for thanksgiving, you don't need the pants. >> one way to make sure you keep to your diet. >> right >> we've got to go. >> do they do anything to chairs between -- >> good-bye, everybody. >> thank you for joining us. big day on the set make sure you join us tomorrow "squawk on the street" begins right now. ♪ >> good wednesday morning, i'm carl quintanilla, futures still pointing to a weak open. major averages poised to get red as we watch target earnings and ge down again. cpi runs warmer than expected but empire was below estimates road map begins with wall

street's pull back as oil prices slideand tax plan jitters -- >> target -- target's holiday forecast, brian cornell joins us exclusively. >> the general electric slide, continuing to sink premarket now down more than 43% this year stocks are poised to open lower after the dow and s&p posted a third negative session in the past four, concerns about slowing growth in china, weighing on commodity prices and crude under pressure after the international energy agency lowers its oil demand forecast jim, we've got the same jitters about high yield and then of course inflation has run hot for a couple of days. >> i come back and look at the bureau of labor statistics number that came out real average hourly earnings for all employees decreased .1%. so i think there's a lot of faux worries here china has been okay the whole time, remains okay these wage numbers tell me we're

okay and oil went up on turbulence and middle east problems and goes down incredibly wrong i think we're churning what matters is we keep importing declines from overseas, whether it be japan, germany or britain we're trading with them and as you saw yesterday, we traded with them and then when they closed, we went up the slide from ge is electric. >> but not affecting the overall index? >> no, it's a gloom factor as people wait for truth and reconciliation that they are not going to get from mr. flannery mr. flannery is adamant he only wants to work forward. people are still figuring out how to go from $2 to $1 and there was a shocking piece of news, mr. brennan will remain -- i did not know mr. flannery had the ability to remain lean he might say that was a group decision but the fact that the stock continues to slide is a

sign that people just don't believe and it's a big industrial -- >> i was going to say, surpassed by boeing for first time ever, largest investor. >> listen, when you and i sat here on friday, or no, monday, excuse me, it's already a long week. >> on monday, carl was out -- on monday we talked about what we were seeing then, you did say $17. >> i did. >> because you backed into a multiple that seemed to make sense, off a number that seemed to make sense based on what they were giving us. >> i picked the lower industrials that are the worst -- let's say least best because i don't want to be too -- and gave it the multiple of those the question is, can they beat -- did they take the stock -- did they sandbag and get the earnings down low enough i felt in flannery like everybody else doesn't have a handle on ge there was again the notation

about different ways of using cash flow from operating activities nobody uses that but it snuck its way in i think it's one of those -- i don't want to say it's a show me story. i think it's a story of what happened and we're not -- if we don't get it, then we don't know what the numbers will be for but they refuse to even examine what happened at that company. >> you're using ge as a gloom factor story lead of the journal today, american industry picks upstream goldman has taken its odds of tax reform to 80%. why are those things not working? >> i think because there is a sense that we -- i love that shot -- it was a good tie shot is that like -- i have brionness e, you would think they show it. expensive tie, got it in milan it's a sense of gloom we import and then we have ge. i think ge does color -- we believe things aren't so hot yesterday we chose to look -- we

ignored home depot entirely. i went through the home depot call and felt great about the country, certainly better than you might feel about europe. germany maybe too hot. come back and say wait until 12:00 when people forget it is just nutty in first two hours of every day, nutty. >> nutty and not indicative necessarily of what we can expect? >> i think that's right. we did get this new wrinkle, they can't restop repealing and replacing and here we go again, why don't we just kill it and make it too hard to pass. >> inexclusion of the mandate or exclusion of the mandate, included in the bill. >> which would save $338 million. >> $13 billion don't get health care 13 million, 14 million, 12 million -- >> 13 million not insured over ten years. >> insurance is expensive for the government. >> we've noted that.

>> a lot of things are expensive for the government. >> yeah. defense. >> weapons systems, medical, you know, medicaid, expensive. what's not expensive >> what is not expensive >> what -- if the government uses buying power to buy drugs it would not be expensive but that's considered to be single payer, got to be careful. >> yes. >> you mentioned boeing, some of the orders out of the dubai air show, stunning, $77 billion in deals in two hours a lot of them from airbus and what is being called one of the largest single orders ever. >> boeing got some the other day. look, the travel market is extraordinary and what people do obviously, they have private equity firms and buy and sell to these cut rate carriers but when boeing talked about the incredible demand for airline for planes over the course the next ten years, remember there

was a moment on the conference call where someone says, it can really be this good? can it be? is the cash flow this good it was one of those, yeah, mulen berg will say yeah i think that's another positive -- i hate to be so positive in the face of the market telling me it's going down yesterday we had mr. swenson from jayale and calling for a crash because there's not enough volatility. >> according to janice -- >> the whole crash thing is -- i'm not -- i don't like to use that word. >> it could happen it can it has it can and it will again >> i can be somewhat la gub reaous on occasion. >> no kidding. i'm not saying too nonskeptical. >> i didn't say he was now i'm just pointing that out.

>> are you dour? >> apparently i've been door but i try not to be morose. >> if we went to children's place, we would be happier look at that number. >> we'll talk about target in a little bit. >> he just lowered the boom by talking about fourth quarter mr. cornell is one of those guys who likes lower and then beat. and children's clothes there very good. >> are they? >> yes >> traffic up 1.4, comps up .9 inventory a little bloated >> tjx was talking about maybe analysts were saying maybe there's not enough inventory at the department store level that they'll be able to buy stuff and this is obviously contrary to that. >> they had a good quarter last quarter, right. >> this was a good quarter -- cornell likes to say -- cornell he'll be on --

>> i think he's uprod, under promising and overdeliver. >> worked for the eagles. >> hottest in the world. >> eagles? >> i gave the eagles a speech about take np, take no prisoners and consistently they've underpromised. if i even talk about the s word, eagles don't talk about it you noknow what the "s" word is. >> i do. all of these things you're talking about cost money and that's one reason for this fourth quarter guidance. >> i think that when i look -- embrace the moment, be more mindful and understand that business is good business is good by the way, when you listen to conference call like home depot, i heard someone called it like that, i like that or conference call or tjx, the last few weeks

have been good cold weather helps we were way -- the global warming thing, the hot weather you can't say global warming without getting in trouble really really hurt all of these apparel companies. and now it's getting a little colder i'm going to ask mr. cornell to be a little more upbeat in the interview. he should be more upbeat but i hope he doesn't takes his cue from the u.s. futures which are sharply lower. >> they are lower. stocks near a three-week low we're less than 1% off the all time high on all of the major averages. >> why are we so gloomy? really. >> you really think people are that gloomy? >> yes, i do yes. i've got aerospace good, retail is better than i thought but people are selling down retailers. look at home depot, amazing quarter. in the conference call then it goes up. we just keep -- when i was talking to dr. slifr, people worried about drugs in the federal deficit.

over and over again, oil, suddenly bad again when it's at 45 and the stocks are getting killed >> what about the point carl is making if you're right and everybody is so gloomy, we're down 1% off the high what does that say. >> i think people are saying, this is the beginning of the big rollover every morning -- yesterday the beginning of the big rollover. today we have the big rollover and get more crash calls. >> what are these crash calls. what's their thesis? >> that's it been too easy, too little volatility, too basically happy -- >> an air pocket. >> yes, that's good an air pocket that it's going up and now there's nothing. we see a lot of speculative

stuff. boom, boom we've seen a lot of chinese ipos and people don't like that there's just enough out there to make people feel uncertain i on the other hand look at the best story that we had this quarter for earnings was a weak dollar and everyone said -- everyone was calling the top in the euro -- are you kidding me you want to get long in the euro, big time >> okay. i'll do it i'll do it i'll get some euros. >> don't make me buy bitcoin. >> bitcoin square will make that easy for you i have one i was going to give him but i'll give to you because i'm tired of him looking axans. >> we need a picture of you going like this. >> time warner is now cheap on earnings basis. >> time warner >> i got you going. >> tws. >> almost back to where it was before at&t made that bid. you notice that? >> i would argue if it trades fully independently as though it

was not in a takeover it would be lower. >> almost. >> take a look at the complex so to speak. >> the complex in the industrial entertainment complex? what are you talking about notice i called -- i said an aborted bid, didn't even challenge. >> that it's not it's a challenged bid, soon to be challenged. >> because of the incredible around tanti-meaningness of the -- >> we're going to get to that. >> is that going to be a cramer report >> there's a lot to -- >> washington is killing us. hear paul ryan saying everybody is fabu. that guy -- he -- we got to get some of his optimism this earnings day is not great for him. when i saw him he was telling me about the 30 minute workout and six pack and i was thinking about six pack -- >> cockeyed optimism. >> yes, cockeyed optimism. >> when we come back, as we said, an exclusive with target's

brian cornell, holiday quarter guidance weighing on the stock take another look at the premarket. coming off the lowest close in november since halloween actually more "squawk on the street" in a minute i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time?

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prices on items further. it's a preview for discounts that will be available to amazon prime members when prime becomes the official rewards program for whole foods, the news is impacting grocery stocks this morning. not the only news, according to reuters, scrapping plans for a bundled streaming service after they were unable to convince networks to basically break up long time models and join the party. >> that i think one of the things that has distinguished netflix is reed hastings has been able to get the independent directors to work for him because they like the creativity freedom. maybe not as much with amazon. as far as the food issue, i felt that walmart was going to go toe to toe and you know, i don't know -- i think maybe this

amazon reaction to say, we're even cheaper than walmart, which is fabulous. >> there's this emerging theme, if anybody is going to take on amazon it would have to be walmart. 4500 plus stores and with their reach and measured by a different metric and pe multiple that's real as opposed to amazon you hear that a lot. >> it's a good analysis. >> amazon comes up in every conversation about virtually everything and it's not hyperbole to say the whole foods deal is the most important acquisition of the deal given the message it sent and what it means, not to mention the whole idea of private label and where and when they are going to get there on that we're going to talk more about that i have a feeling as they move to their own brand. >> treehouse, the big private label for food, stock has been a complete disaster. i don't know who amazon necessarily used but it has been

horrendous here. i agree in the importance of the acquisition. it rattled everybody yesterday home depot, a lot of people insisted that home depot has to get crushed by amazon until you listen to the call and realize home depot is probably the only -- can go toe to toe and good prices, they have a lot of bopus, 6% -- that's buy online, pick up store. >> right >> they have to change that. >> okay. are you tigger, who are you? >> i'm tigger. >> david is eeyore and i'm christopher robin. >> that guy was a great writer, like a real writer, something he did on the side. >> yeah. >> kind of like william stooig, wrote those great books on the side. >> dr. seuss, what was the real name >> theodore geisel. >> and turned out to be a great writer and also involved with world war ii with photography.

>> interesting. >> great series. >> we're covering all of the bases today. >> we have to. >> bud shul berg. >> black listed correct? >> that's why i'm naming all of the black listed people. high noon is a great book -- >> cobb was in that movie, his son worked here at cnbc for a while right? >> yes, that was his name. black listed. >> cramer's mad dash when we come back. opening bell in a moment and also an exclusive with brian cornell with a stock under a bit of pressure this morning we'll talk holiday season and plans to battle walmart and amazon in a moment [ keyboard clacking ]

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>> cramer's mad dash watching square. >> there's a report in tech crunch, talking about how bitcoin is -- there's going to be a buying option from square which sam miguel uses for bit coin square confirmed the pilot saying customers are interested in using a bitcoin app why is this important other than the fact sara fryer is on mad money tonight? the people on the board of square, jack dorsey's company are the -- on a committee chair, you don't get more conservative than that. mary meeker, one of the greatest thinkers on tech is on the board. these are people who unlike jamie dimon, right there saying square is a bit -- is willing to go bitcoin

i think this is something big and drive square up and make people feel better about bit coin. >> that's amazing. futures about to get traded on bitcoin at the cme now this. >> david vinier is the guy who many felt was the most honest -- most transparent cfo of the period and he's the head of the committee and saying bitcoin lives. meeker, how great a thinker, bit coin lives sara fryer, bit coin lives, very conservative we have to go back to jamie dime on -- >> i need a bitcoin, day of studying bitcoin, can we do that, get somebody to teach us all about it. >> i'll get you a tutorial. >> crypto currency person. >> do a full hour on how it works, what a fork is -- >> and how do you mine bitcoin, what do you need to mine bitcoin?

>> nvidia chips. >> and on the call said it's not even important business. he's right but i think this is seminal because a vinier and fryer and meeker they are endorsing bit coin this is big. >> we'll get the opening bell in n'gonyere minute s. dot awhe.

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>> you're watching cnbc "squawk on the street. the opening bell in a couple of minutes on this tuesday. stocks poised to open near three-week lows and the president is back at the white house from his asia trip, got a bunch of economic data about an hour ago cpi up a tenth, 2% year on year. we'll continue to watch target with the guidance for the fourth quarter and ge, which will be down again. >> yeah, i just come back again, you've got germany down 1.19%, britain down 1.2 and we're going to mirror those. when those markets close we get a better read on things. but i do think that there's a sense that technology other than a couple of big cat names is

rolling over big and that matters. i think when i look at the panaply of stocks, trying to find something to buy after the air pocket that david identified does make people less likely to come in and say, this is my level. we have to wait until the air pocket is tested, in other words, look at yesterday's low test that low and have europe close and then bounce. >> does he learn a tone that does have a broader implication than its own stock price >> i think ge is regarded in america -- and people don't know why it's going down so much. >> wow >> buy that stock. >> that was not intended at the same time. >> knicks almost won yesterday. >> you mean against cleveland? >> yeah, that was brutal

i hope they are saying sends grid, celebrating their ipo. [ bell ringing ] >> focused on cancer treatments and one name we will be watching is accorda -- >> holy cow. >> many times, this is a parkinson's -- very successful i felt, hope for parkinson's drug where there have been fatalities and when there's fatalities, that's the end whatever you might have thought about it, it's almost impossible to recover from a fatalities call and we saw this with identix in bris ol meyer, remember i like mr. colin very much, i

had high hopes like other people that it was something that could work if there are fatalities, might as well say it's not going to happen. >> five patients died. >> that's a lot. >> parkinson's itself has not led to fatalities so this is maybe the end. i don't know pretty important pretty important >> one thing we didn't get to guys, these 13 fs, buffett cutting ibm by a third. >> we know why -- he was in there just -- >> he was selling it i've heard it selling during the quarter now i rememberat the time. >> the market seemed to be somewhat aware he was a seller. >> yes, but the thing is the stock was up big and i think his selling really drilled it. it wasn't a bad -- it wasn't that bad a quarter. >> as you said on twitter, mystery solved. >> i like that. >> he did add to apple by about 3%. >> i think he took the capital and went there -- >> not the only one by the way.

>> soreos, exited snap, i should say. >> snap, there's a downgrade today. what was the guy doing recommending it to begin with? i continue to question whether snap is a company. >> really. fidelity, the sixth largest holder added to their stake. >> i love fido, we call them the big dog. >> what does that mean i question whether snap is a company? >> because it does not have public shareholders in terms of having power -- >> right there's no vote at all -- no vote versus of course you're -- >> every other company. >> well, although you don't have power of google or facebook either >> yeah, but you could -- >> it's controlled by the original shareholders. >> i felt -- >> you have something -- >> a true public company i felt had public shareholders that could vote this one does not, which is why i say question whether it's a company. it's an entity but a company --

>> it's like a cipher. >> wow. >> i'm looking for a new word about a company that does not have shareholder vote. >> it's a ghost company. >> it's a younger company -- >> yunker. remember the yunkers had more votes than the non-yunkers i like that. people should know if you want to google that, it looks like junk. >> got it. >> thank you >> we've mentioned apple, really quick. wells does resume coverage with a market perform, target 195 they see increased volatility as we go into the december -- >> swenson has increased volatility, man from yale -- we're too come placeant. you look at the square with bitcoin? >> i'll look at it it's strong. all i know is since my coffee got put in their square terminal, the line is longer that's all i know.

he has a line management issue everybody uses their credit card to pay for a 1.50 cup of coffee. >> they do and they swipe. they should use apple pay. we use the square takeout system and sara fryer on tonight, i'm promoting this interview jack dorsey runs the company and he's starting to have success in both of his companies so maybe it's time for a third company, ceo. >> you know, the criticism has died down about running -- being a too public company ceo. >> isn't that a shocker. >> it is. >> like the criticism of bob iger, not that there was any, that disney goes higher. we never talk about disney because that was upper west point, whatever, the narrative change there not just talking about espn anymore, talk being about bam tech which i recall as solo in terms of its generous nature

>> direct to consumer offering is going to be so important. i want to stay in the area of media but get to time warner and at&t can we do that there's a lot of waiting going on right now in terms of really what appears to be when not if the department of justice will file a lawsuit, complaining to block at&t from acquiring time warner we'll update you on what i'm hearing at this point, which is that the doj staff has been approaching state attorneys general. this is a fairly typical when they bring a complaint of this nature, often times they may see that a number of states sign onto the complaint as well many as you can get makes it as powerful as possible but in this case, what we're hearing at least, is that while approaching a number of state ags as many as 19 or 20 of them, they've gotten very few of them at this point to sign on to a

complaint. now, the department of justice spokesperson declined all comment on this but it would seem to indicate two things, one of which is that the department of justice remains committed to bringing an action here. but it is facing potentially at least some resistance from state ags in terms of at least their willingness to sign on we'll see. probably has the effect perhaps of delaying an action by a day or two but not necessarily derailing it but i don't want to get out above sort of where we are right now. >> what would a state ag be saying on behalf of his or her constituents >> what they do in other types of actions -- they'll be hurt by it. >> but how >> staples is going to injure companies here that buy their paper on the -- from these companies, that baker hughes halliburton, going to -- >> you know. >> i don't know.

>> they sign on to whatever the complaint is. >> are they afraid jeff zucker will target them >> that is the point that this would seem to be a somewhat unorthodox approach were they to move to block the deal because it's a vertical integration that typically does not warrantor receive these kinds of complaints or structural remedies which they have asked for. >> you pick a particular word there and the word unorthodox, which is really not per juror tif as well. i would say wrong headed antitrust was one of the subjects i actually attended -- >> we'll see, if they get to it, they'll take a look as they said for any connection between the white house and department of justice and any correspondence that's taken place we don't know whether politics was a part of this or to what extent it's been a part of this. >> the president not shying away from criticizing cnn overnight. >> again >> while in the philippines, i

was forszced to watch cnn which i've not done in months and realize how bad and fake it is, loser. >> loser >> does jeff zucker take offense to that. how about the great american has he surfaced. >> great american keeps his cool. >> i think jeff -- surface and that's really a very vicious tweet from the president what is that -- why did he watch it if he didn't like it? >> that's a good question. >> right >> sometimes that's all you have. >> why doesn't he cut cord and watching netflix >> maybe it's not distributed over there in the philippines. >> that's something. there's a lot of people in the philippines, major market miss jeff zucker should be proud, got -- i would like to hear from jeff zooker, keeps his head down. >> he does his work quietly. >> dow took out yesterday's lows by the way >> indeed, russell is now 4% off the october high. >> we're getting into the correction territory for that and i think people should understand that this is a very

widespread correction transports are down, a lot of commodities are down, starting to get to these let's say territotiary teh names and amazon, lowers prices -- you know, kroger -- i have been watching kroger thinking maybe they are going to make a comeback, the country's largest grocer, no. no. >> how is ge doing today >> 1776 was -- >> isn't that when the company was started? they are always talking about how old it is. did anybody watch bob wright yesterday? >> we have sound cut i don't know if it's available right now. >> if we have that. >> essentially said one of the most difficult days of his professional life, watching the share price hit these levels, obviously knowing how much bob must own of it i assume. >> i always loved him and think he's a great guy he was shocked at the interview,

shocked that he said that, bob ran ge capital prior to taking over nbc. >> right. >> and running that for many years. >> kind of a great man, really been involved with charity, done remarkable things and comes back and says this obviously all miss -- geez, that was not said idly. >> this is bob wright formerly at ge and nbc talking to our bill griffith yesterday. >> this is the worst day of my business life today. >> what are you going to do? >> i'm going to sit there with it i'm not going to sell it now i'm going to sit there and trust the history of the company and quality of people that are there. >> there by the way is puzzle piece, autism speaks, ilike to point that out that is a remarkable admission and i would have loved to see. is he as mystified as we are

i think some degree misty fi the about what occurred. and this is not a man -- this is a man with great financial sense, obviously i think he understood the value of cnbc since he was integral to us. and i was shocked about what he said, shocked. i just always have loved the guy. do you know carson -- one of carson's few friends was bob wright >> absolutely, very tight. went on a ship together. i'm still -- carson holds up. >> yes, he does. >> what is a guy who holds up? >> right, johnny carson. >> trodxi. let's get to bob pisanixts. >> happy wednesday, everybody, six straight declines at the open for the s&p 500, haven't seen that in a long long time. only stock on the upside in the dow, boeing.

goldman sachs and caterpillar, biggest weight on the dow, 60 points to those three. defensive tone to the market telecom and utilities on the upside for a while, in fact, really things started to change a week ago, about november 6 rgt. look at the market and global markets and see a notable down move in europe for example the stock 600 which is sort of like the s&p 500 for the markets over there down about 4%. nikkei is down 2.5 and s&p down 1% in the last week.phasizing t russell 2,000 has been dramatically underperforming down 2.6%. the high yield also down 1.7%. high yield not just the tax issue but very good indicator of the willingness of a lot of people to take risks in general. change in tone, we talked about this yesterday, progress on tax reform but no home run i think that decision by the

senate to include appeal of the aca's individual mandate complicated things a bit people are trying to figure out what the flatter yield curve means and china data has been a little disappointing and we have a lot of middle east uncertainty. all of that playing into a slight risk off for the last five or six days here. the guys talked about target i won't belabor that, better numbers but guidance rather poor you see it's affecting walmart and costco what i think is very interesting, the comp store sales. remember, sales are made up of two things, traffic, people coming in and buying something and they are made up of the ticket how much are they actually spending if you look at the numbers here, it's fascinating the traffic did well, up 1.4%. but the actual ticket is down 0.5% people trying to figure out what that means joe feldman thinks a lot of this has to do with deflation and that's a major issue, not just target but many companies, pushing prices down and

deflation pushing pricesdown a well let's talk about the ipo today, we'll have the biggest week in a long time for ipos send grid's to come out, we're waiting for that to open a cloud based platform for e-mails and marketing, well above the price range, 13 to 50, priced at 16 don't have an indication on that yesterday. tomorrow night, seven ipos will price, the biggest nice of pricing in over two years. we're waiting for one that will price tonight, junpu technologies you would think lending tree over there, going to be competing with financial, it will be interesting to see what's going on there. the dow down 152 points. david, back to you. >> thank you very much, mr. pisani a name well known over here but trades over here,altice and i mention it because we talk so often about ge up after the company spent time talking to investors at a

conference in barcelona. it has been absolutely crushed going from $23 to $8 a share by the way it's u.s. sub altice usa owns 40% of, also been crushed, perhaps unfairly. why mention it now a lot of concerns over the last day given the $50 billion debt load at this company some of them may be unwarranted, not about the lack of performance in france though, that is when a lot of this began km the company reported its last quarter and showed the altice way didn't get a lot of traction in france where competition seemed to really hurt it in terms of customer retention. and that's -- that was at least one of the areas -- one of the reasons why the stocks been going down since then in a big way. high yield jitters, of course have helped there. you're talking about a company that's 5.4 times levered in france, at least which is a lot. and as well losing customers and

cord cutting which we've been dealing with so often over here and starting to happen to a certain extent over there as well this morning patrick drahi and dexter, running ceo of the entire business, saying a few things including the following, they promise to turn around in french kpis, that's key performance indicators and stay focused on debt reduction. they are down four times in the states when they started at seven, remember how many debt they poured on not as fast in europe and especially when it's not going up that fast, harder to delever. not going to spend a lot on content but they don't have any maturities until 2020. 50 billion is a lot, it's sigh lowed, some of it is in the u.s. and france and different divisions have different debt structures but none have a maturity coming up any time soon some of the concerns seem to be

in part on are they in trouble is he going to have to sell? no his net worth drahi's has taken a big hit, maybe a bill dollars in network decline as a result of his 61% ownership overall in the company. they are talking about 4 billion in capex they punched into the french business in the last couple of years. will they get a significant return on that that certainly has been a question there are a lot of people going to be fired and it is something that mr. drahi says he can fix again i noted they changed management there as well atus, i think we have that also, take a look. remember cable has gotten hurt here, started with comcast in the preannouncement a couple of months ago remember and then it wasn't followed up by charter at least in commentary but then its quarter was not good altice's quarter was not that bad buti finished nonetheless.

>> that's what i talk about with gloom. the thing i was most worried about was the balance sheet. here you have the balance sheet being taken care of and the stock gets hammered anyway >> it's getting hammered because of the same concerns that have hurt comcast and charter, namely cord cutting and broadband inability to change price and more competition than originally thought. >> the letter m. >> the letter m. >> millennials. >> yes. >> the scourge of all existence. >> i thought you were talking about macy's. >> the cruise lines, they are the only ones benefitting right now from millennials because they can rebrand themselves on instagram while you're on a cruise. >> tomorrow we're going to have a chance to talk more about my favorite subjects when i sut down with all of my friends at the liberty family of companies, including well, there's one guy -- there egs. >> >> wait a second. is that john

>> don't you know who you're talking to >> chase carey, remember, he ran fox. he looks like rujerford b. hayes. >> let's get to rick santelli. >> if you're trading the shortened you're on pretty solid ground twos are down one and fives are down 4 and tens and 30s down a handful of basis points. two day of 30s, lost ten basis points i don't remember big news. i remember yesterday's pti being hot. today retail sales wasn't terrific but it wasn't bad cpi wasn't hot, wasn't cold, as expected look at october 1st, 30-year, it is losing the bid in every form of the yield curve is flattening, 30s minus 10 30s minus 5s at 75 flattest in ten years. tens minus twos, we were talking

75, 80 64 another ten-year flat. but this is the beginning. there's even more. david, talk about high yield down there, vix very pop you particular charts mid march since the etf was at this level. one month ofetf was at this level at the barkleys on the spread side, based on history, it's pretty good u but it's the rate of exchange now that people are paying attention to. if you look at the september start of euro versus dollar, it's overtaken 1.18. haven't closed above 1.18 in three weeks. back to you. >> thank you very much rick santelli. still to come, that exclusive with target's chairman and ceo, brian cornell. s&p's down almost 20 points. the vicks got to 14 and change aus's the highest since the end ofugt. we're back in a minute

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we seen selling across so many classes. the dollar, oil, and apple and

caterpillar dragging the dow down 157 points. we're back in a minute

jim, what's on "mad" tonight? >> people looking for a way to play bitcoin we have square and sarah friar

who along with jack dorsey is running square this is big. they're going to be the broker for square, i guess. remarkable look at that stock, will you that's no cable company there. >> no. ge up. can i note that? a sunny day. sunny day. that's more sesame street. what do we say about that? >> bounced again we'll see you tonight. "mad money","," 6:00 p.m. >> when we come back, target's ceo brian cornell. don't go away. [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both.

talk to one today and see why we're bullish on the future. yours.

good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with david faber, kayla tausche at post nine sara eisen is on assignment. look at the market, worst day for the s&p in almost three months dow led lower by high price weighted names like caterpillar and apple. oil is not working, and this comes on the back of a widespread selling in europe and asia overnight

our road map begins with target's holiday warning an earnings beat, forecasting a tough season ahead we'll speak to brian cornell in a minute >> plus, ge's big slide, at least yesterday, after announcing the recamp and strategy on monday what's going to turn this around we'll talk about that next >> and crude getting crushed the international energy agency lowering its oil demand forecast the ceo of one of the largest oil companies will join us >> cpi retail sales and sore detail crossing the tape rick has it. >> september, so third quarter number on business inventories unchanged as expected. our last month look moved from up 0.7 to up less, only 0.6. i'm not sure these inventory numbers are market moving, but if you're looking for more flattening in the-year-old curve, you're a happy camper today. >> rick, thank you very much >> as we said, stocks are falling this morning all three indices in the red,

gone negative for the month. we're at post nine to talk about what's leading today's selling and whether or not we're going to see that midday reversal yet again. >> that's the question i mean, we didn't really see them pick them up before the open too much as they have in the past you mentioned the global pullback europe has been in pullback mode for more than a week right now it's almost 5% off the highs the nikkei went up for two straight months vertically, more than 20% it's been giving a lot of that back this month. that's what everybody owns, what everybody has loved. you had that undertow along with the average stock in the u.s. underperforming and everybody focused on the flat curve. that gives you a flavor of retreat from risk. people very exposed to stocks coming into november there was no selling pressure all year, and what does that mean the markets went up and everybody owns a lot and everyone expected to skate into year end. i think that's an adjustment of risk appetites right now

i don't think it's news driven it feels like march and august we had similar modest pullbacks in both of those months. >> maybe a lack of news, specifically on tax reform, at least for a couple days. the fact as you describe it, an undertow is led by the russell, which is largely domestic companies that are skewed towards those who are going to be affected by this tax package. do you think that's fair to say whats that's what's dragging us down >> it's fair to say the focus on the challenges of the tax package getting through or the scale of it if it does get through, it's definitely not providing the positive distraction we might otherwise have it's not giving you that excuse to say, hey, let's hang in there. we might have a bonus from d.c. coming i do think that has a role as well along with all these other factors. >> meanwhile, the vix got up to 14 and change. highest since august but as you said, we had bouts like this before >> we have, and all of these things that we're looking at, whether it's the vix or the high yield spreads which have ticked higher, they reversed in a

negative direction but they're still at levels that don't tell you to worry very much just yet. it's really more a mark of exactly how calm the markets have been that we were so low for so long, and let's be honest many people got very comfortable betting that we were going to have a continued low volatility environment. we now have a lot of tools to do that, and they have gathered a lot of assets, as people said this is free money and it's not exactly free on a day like today. >> was it harvard recent 13-f that shows a position in a short volatility etf >> it became the fashionable trade for good reason. you were taking what the market was giving you for a while >> mike, stay right there. don't go anywhere. >> i'm here. >> we want to check in on shares of ge this morning they're up, or at least they were the last moment i checked still down, let's call it over 11%. this just over the last few days this of course after the company lost its title as the top u.s. industrial by market cap it's now behind boeing

despite the shares slipping, former ge vice chairman bob wright voicing the fact that he still trusts in the company. take a listen. >> this is the worst day of my business life today. >> what are you going to do? >> well, i'm going to sit there with it. i'm not going to sell it now i'm going to sit there with it and i'm going to trust the history of this company, the quality of the people that are there. >> let's get more on this. we're joined by scott davis. he has a buy rating on the stock, is that right >> don't remind me >> it happens. i guess you agree with bob wright here. you don't want people to sell it now. >> you can't sell it now with the vix going up, you buy ge because it's derisked already. its an asset story the assets are worth $27 to $30 a share. earnings will take a couple years to go up >> when you say it's an asset story, $27 to $30.

what i hear from a lot of others some of the parts doesn't get you anywhere in terms of creating value right now what does that mean? >> i think they're crazy >> you do, who >> the aerospace business alone is worth billions, market cap is only $165 billion. that's only half the revenues of the company. i don't know what math those guys are using but it's worth a lot. >> also this belief that there's not enough cash to support some of the other businesses. making a split, which seems to be -- i mean, i don't care what the asset value is if there's no way to realize it. that doesn't seem to be a likely thing. flannery told us they're not going down that road >> i think flannery's hand is going to be pushed at some point. his first 100 days have been a little hard. monday's presentation was not inspiring at all at some point, the decision gets taken out of his hands >> what's the significance of ge losing the crown of the largest u.s. industrial company? we cover a lot of these rankings, bezos versus gates

wealth amazon versus google there would be a knock-on effect on hiring and morale when you lose a title like that >> i think it's embarrassing for the employees, for the shareholders, for the analysts this was a once proud company, great assets it still has great assets. the business system seems to largely be gone. the discipline around cost seems to be gone they have to fix it. it's not going to be overnight you can't reverse 15 years of bad decisions in 100 days. >> how do you reverse some of these long-term obligations, right? >> well, pension is pension. you probably have to -- you're funding $6 billion of it you probably need to fund another $9 given the grand scheme of things, i don't think that's that big of a deal you have debt within ge capital. one of the ways to get rid of the debt is to sell off some of the pieces the aircraft leasing business has been fantastic you could put a ton of debt on

it and it would trade well >> what's fascinating to see how ge is being just kind of liquidated as a stock and basically people thinking that the assets aren't worth it it seems to me your asset values are hinging on what other industrial companies are trading for right now. so ge is on the downside every other industrial company trading at a premium the aerospace companies, everyone loves them, but they're not giving ge credit for it. it is this interesting deal where the idea is the businesses are trapped in a wrapper that you can't really get at. >> if boeing is now larger than ge, i mean, that says it all right there. aerospace business is massive. and arguably much more attractive than even boeing's given the margin profile on returns. >> how systemic do you think this restructuring will be mark hurd talked about how oracle and ge are partners ge represents a lot of oracle business you start to wanter what some of these contracts will look like and what other companies might

start mentioning ge on their earnings calls in a few weeks. >> i don't think it's systemic i think it's fairly isolated to ge specific and corporate expenses plus the power business which just imploded. this was a fairly stable business for two years only had really two down cycles after three-mile island. >> and a $5 billion shortfall. >> unbelievable. >> sort of last question, but what did you miss? a lot of people did, a lot of analysts what was it? >> doesn't excuse the missing, but yes. >> what do you wish you had focused on more? what might have been a tell here >> oil and gas, we figured oil prices above $50 would help oil and gas recover faster, and it hasn't oil and gas was a big miss that's probably 20 cents there, and the power business, again, you only had two down cycles in the history up to three-mile island and 2002 after the tech bubble it's hard to mage we're in a situation similar to a nuclear

accident still don't get it >> i don't think the story is done yet i think we're going to find out, what did the company hide? what did the board hide? what did jeff immelt hide? what did they know that they didn't tell shareholders and analysts and such? i don't think we know yet. >> we'll bemike. >> when we come back this morning, target reporting earnings that did beat and then there was guidance for the holiday quarter, and that did send shares lower this morning one of the worst performers if not the worst performer on the s&p today. we'll talk to brian cornell exclusively. courtney reagan has him in a moment crude also under pressure. we'll talk to the ceo of one of the largest oil and gas companies in the world when "squawk on the street" continues. you always pay

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the street." let's get to our courtney reagan in minneapolis sitting down with the ceo of target, brian cornell. morning, court >> thank you very much good morning to you, carl. i'm here in minneapolis. just down the street or across the street from target headquarters brian, thanks for being here with us today. your earnings, you beat across the board. shares are lower, though, because of the holiday forecast that's implied looks like you think profit will be lower than what the street is hoping for so is that a result of you being conservative or are you exercising some caution based on what you have seen in early

november so far? >> courtney, i'm surprised with the reaction we had a really solid q-3. traffic was up 1.4 our comps up 90 basis points digital grew by 24%. so all the levers we look at are working well our brands have been well received small stores off to a great start. our remodel stores delivering exactly what we expected so so many of our elements are working well, and it showed up in our q-3 results we expect that to continue in q-4. so obviously, we provided guidance we think our comps will be between flat as much as plus two, so consistent with what we have seen throughout the year. we raised our full year forecast for eps. versus where we are when we talked back in february, we have raised our eps forecast by 50 cents. so i'll do the math for you. that's $500 million. >> right >> so we're seeing good flow through. so we feel really good about our

performance, the progress we've made, and i feel really confident that we've got all of the elements working well as we go into the fourth quarter >> it doesn't sound like you're worried about what you have seen you feel good? >> i feel great about the start of the year. >> okay. >> the start of the fourth quarter, you know, our new brands have been incredibly well received with just a couple days ago, we introduced hearth and hand our collaboration with chip and jo and the reaction across the country has been amazing it's driving traffic to our stores visits to our site the guests love the collection so we're off to a great start. and it's still early we've got a lot of work to do. but we feel really good about our position as we go into the fourth quarter >> you started to dig through the numbers a little bit you mentioned comp sales are up 90 basis points. that was double what the street was expecting. but digital was responsible for 80 of those basis points it's still a very tiny portion of target's business something like under 5% of total

sales. so if 120th of the company is responsible for almost all of the sales growth, what does that mean for the stores that you guys are leaning more into as opposed to pulling back and cutting down on your store fleet? >> i feel good about our store performance. it's stabilizing we saw a flat comp in our stores, but our stores are enabling our digital performance. so over half of our digital growth is really enabled by our stores whether it's someone ordering online and picking up in a store, now in minneapolis, someone ordering and driving up to a store we ship from store, obviously, and now 1400 locations so our stores really enable our digital growth and i love the fact that some days guests are in our stores and on a given week, about 30 million americans shop in our stores sometimes they click from their desk and come by and pick up in a store. in minneapolis now, they're driving up and we're putting it in their trunk, and our stores, 1400 of them, are shipping from our store to that guest. so there's a great balance

between what we do in our stores and how that enables our digital fulfillment. >> it's still worth having, the 1800 plus stores even if they're serving as many distribution centers really to enable online. >> i go back to the fact, 30 millionshoppers in our stores every week stores are still important as we remodel stores, and we have remodeled 110 this year, we're seeing our comps increase by 2% to 4% in those stores. stores are important the new stores we have opened up like harold square in new york, the reaction has been amazing, and we're seeing that across the country, whether its urban centers or on college campuses stores still matter. they're still going to generate the majority of retail sales for years to come. we want to provide a great in-store experience. >> even though the sales in stores are flat? >> but i expect them to grow over time. as we remodel, those stores are showing positive comps when we deliver a great experience and great brands, we deliver great value and great

service, and we're investing in our team as you know, we have made major investments in our team. more hours, a higher wage rate and we have hired over 100,000 seasonal team members. so our stores are so vital to our success, and i feel great about the work our store teams are doing. >> i think kayla has a question. >> i do, thank you, courtney, and thank you brian for joining us i'm curious if you could comment on the competition, because looking at the last year, walmart's shares are up about 27%, while target's are down about 23%. do you chalk that up to their acquisition strategy, their pricing strategy, and how does target plan to catch up? >> well, we're really focused on our strategy and as we talked about during our earnings call today, we're taking market share across multiple categories. we felt great about the fact that we took share in apparel, in home, in beauty we're seeing really strong results across our portfolio

so we think we have a significant opportunity to grow share in the number of different categories where we participate. we're excited about our position in toys as we go into the holidays, but we really like the way the guest has responded to our new brands and whether it's good fellow and company in mens, project 62 in home, some of the great new things that we have planned for 2018, we think the combination of great brands, our value, really sets us apart so i think target's at its best when we combine both sides of our brand promise. we can deliver expect more and pay less when we bring great style and great value on essentials. when we can combine both our physical experience and a digital experience we're folkished on executing that strategy. right now, the guest is telling us it's working. and they're shopping more often. there's more traffic in our stores our digital performance is outpacing the industry and the reaction to our brands and our commitment to value,

well, the guest is saying we love what you're doing, and they're shopping more often at target >> you mentioned the brands. the brands, of course, that are native to target you have launched four new ones. essentials are really something that drives traffic. you're not buying clothing as much as you're buying shampoo or maybe laundry detergent. that was down in the quarter what are you doing to make sure that shoppers are coming in more often for essentials that's important to target >> it is important and going back to the plans that we laid out earlier this year, we said we've got to make sure we're investing in value and we started with many of those essential categories so we have invested to make sure we're priced right every day that we deliver the kind of value our guest is looking for in those essential categories. and while the comps were down slightly, units were up. and that's growing for us. so a big part of that 1.4% traffic increase is the fact that that value message, the fact that the guest knows we're priced right every day, well, that's driving trips back into essential categories, and once

they're there, they're shopping the whole store. so i expect comps to improve over time. but right now, units are growing in those categories. we're regaining market share, and it's driving trips, and that's really important to our future >> one last one. the holiday season is upon us. black friday is next week. when it comes to marketing, target is actually leaning into a partnership with the nfl papa john's has blamed the nfl and some of those protests for hurting their sales. do you still feel good about your strategy to lean into advertising with the nfl >> i feel great about our entire holiday plan we have great creative and we're going to make sure we're there where the consumer is watching. so we have a great holiday campaign we're going to connect with those families who love to shop at target. we'll deliver a great holiday message. we won't back away from value during the holidays. and we'll make sure the guests know we're a destination for gifting. so i feel great about our position going into the holidays and the fun starts in the next couple days. >> that's right. thank you for having us, brian

happy holidays >> thank you same to you. >> thank you very much brian cornell, ceo and chairman of target. david, back over to you. >> thank you, courtney reagan. >> quick programming note as we take you to a break. tomorrow starting at 9:00 a.m. eastern on "squawk on the street," liberty media's analyst day. and i will speak exclusively with liberty media chairman john malone, its ceo greg carey usedn tom rutledge quk l ins.jo u "sawon the street" will be right back looking for advantages. the smart ones look to fidelity to find them. we give you research and data-visualization tools to help identify potential opportunities. so, you can do it this way... or get everything you need to help capture investment ideas and make smarter trading decisions with fidelity for just $4.95 per online u.s. equity trade. fidelity.

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group in chicago and rick santelli good morning >> good morning, and thank you you know, before i get to the white board, i want you to look at a few charts as i speak to the topic of the dollar being back on defense and quickly. if you look at a july 1st start to the dollar index, it seemed like a foregone conclusion our fed was moving in a certain direction. interest rates for a while looked like they were going to tick up. we actually had one day we settled higher than where we

settled the yield at the end of '16. one day. we settled at 2.46 we said last year basically a whisker under 2.45 if you look at the same july start for the euro versus the dollars, it's gone gun hots for sure if you look at a 20-year chart of the euro versus dollar, something should jump out at you. let's go to the board now. here's that same 20-year chart on my white board. and what should jump out at you is how much important activity sirkm vents the 120 level. we had quite a range over the last 20 years. a bit under 160 was the high, and very recently, we had a 1.03 handle when i look at the notion that we went a little through 1.20, shy of 1.20, but the biggest thing i really like trying to watch thinly and heavily traded areas. they're very important the fact this is so thinly traded at such key levels is

very significant, as is the touch here but i have to say, many traders ended up getting it wrong on that touch what they did was they now look for a 1.14 handle on the euro versus the dollar, and of course, it was never meant to be and the dollar intex, which is the other way to look at it, is it really isn't the proactive trade. it's slipping, it can't even hold the .94 handle breakout back to this, more likely, traders will lee looking for the 1.20 and somewhat of a double top. considering in less than five trading days, one week ago, one week ago, last wednesday, we were doing a lot of trading between 1.15 and 1.16. here we are now above 1.18 in 4.2 trading days, it covers a lot of ground. that's not unusual, but the significance is that it covered very important ground. remember, all this started on the 8th. the 8th of november. why was the 8th of november so important? i'll tell you why it was

important. because that's the day as we covered yesterday that the dax had a key reversal it made a new all-time high and then closed below the previous day's low. they seem a little incongruent, don't they the euro going up, and their stock market leading the way actually for a global sell-off that was probably long overdue those are the times we live in things are incongruent, but a couple things aren't quickly, keep an eye on the hyg and the spreads widening and the vix making many traders a little nervous, especially in light of the turnaround in the stock market david, back to you >> thank you, rick rick santelli. want to update people on the continuing drama surrounding whether or when the department of justice will sue to block at&t's planned acquisition of time warner. we reported some details this morning that i want to get back to it is very often the case that the department of justice prior to bringing a complaint to stop a deal seeks support of state

attorneys general to join the complaint. and oftentimes you'll see the names of various states associated with a complaint filed by the doj when this happens which is still something of a rarity. in this case, sources familiar with the situation indicate the department of justice had been aggressively going after a number of state ags to get their support, but seems to be hitting something of a road block, ending up at this point, we're told, and we believe to be with only two states that are supportive of a doj action to block the deal those two states are washington and massachusetts. both of which, of course, are very liberal interesting to note, not one republican state thus far that we are aware of or have been made aware of has decided to join what might be the doj's complaint against the deal now, does this mean that the doj will think twice about actually bringing the complaint that remains to be unclear and officials at the department of justice declined all comment on our ongoing tally of states

that may or may not sign on. there is bob ferguson, the washington attorney general. we have been reaching out to them,reaching out as well to massachuset massachusetts. california apparently had been in but now is out. in terms of supporting, again, a very blue state, of course we'll see how this goes. it is an important at least barometer, it would seem, of support for the doj's action that seems to be having such a difficult time getting state a.g.s to sign on, and perhaps, carl, one reason why, many had expected we might see that complaint as soon as today but we probably won't. >> that had been the view of some analysts at least on the sell side. we'll find out let's get to sue herera and get a news update at this hour >> good morning, carl. good morning, everyone here's what's happening at this hour secretary of state rex tillerson arriving in myanmar to meet with that country's leaders it comes amid a crisis that has seen hundreds of thousands of muslim rohingya flee to

bangladesh >> we're deeply concerned by credible reports of widespread atrocities committed by myanmar's security forces and by vigilantes who are under strain by the security forces during the recent violence. >> zimbabwe's army says it has president robert mugabe and his wife in custody in an apparent military coup. he's the country's oldest head of state, he has ruled since 1988 the army securing government offices and patrolling the streets following a night of unrest >> a 500-year-old painting by l leonardo devinci set to be auctioned off tonight. it is estimated to fetch at least $100 million it is the only painting by da vinci still in private hands that's the news update this hour over to jackie d. for the eia

inventory report >> reporting moments ago that crude inventories built almost 2 million barrels last year, and an increase in gasoline inventories of almost a million barrels as well. seasonably speaking, this is not typical for this time of year. we like to see draws working through the inventory. we're not seeing the builds as big as the api reported last night. that's why crude isn't much lower than where we started earlier. we're trading 55.08 before the record, now trading just under $55 a barrel i will mention this, u.s. production continues to go higher 9.645 million barrels. so last week, we took out the 2015 high and continue to rise from there fundamentally speaking, it appears the supply/demand balance still is not in place, but remember, other factors, geopolitics, have been taking us higher back to you. >> thank you >> we're going to talk about that with the ceo of petrobras

in a moment. we'll talk about earnings and more dow is down 128. another day of work. why do you do it? it's not just a pay check, you actually like what you do. even love it. and today, you can do things you never could before. ♪ ♪ you're developing ai applications on the cloud. finding insights hidden in decades of medical documents. and securing millions of iot sensors. so get back to it. and do the best work of your life. ♪ ♪

brazil's state controlled oil producer petrobras reporting a slim earning implementing an aggressive turnaround strategy after more than a $16 billion loss last year pedestrian row parente joins us to talk about the company and the state of the industry. good to have you welcome. >> thank you very much a pleasure to be talking to you. >> manage to cut debt by 11% more divestments i think are on the way. how would you characterize the state of the company versus where you want to take it? >> yes, i think that we have many assets to mention one is operational terms, we're doing quite well very good margins. so the leverage is decreasing. and on the other side, we have

still a very huge amount of debt, around $88 billion in net basis. so working very hard in order to continue improving the operation and getting free cash flow to pay the debt is very important for us >> thou we have these sort of conflicting demand growth forecasts. the iea cuts their forecast for '17 and '18 on what they're calling warmer weather saying that we will remain in an oversupplied situation through the first half of '18. is that your forecast? >> you know, it's very hard to predict what will be the oil price. you know that we haven't seen any forecast saying that we would have by this time of the year growth around 64 as it was until yesterday. so very difficult to predict what we do is work with the current price, looking to the

futures, but anyhow, again, not easy task to predict oil price >> but it's part of urjob, pedro, to try to characterize and try to predict and try to hedge where it's going to go we have seen them come off 5% from recent highs and the recent surge before that that helped offset the decline in petrobras output how do you square your forecast with your coming quarter >> you see, you know that we have now the nonconventional producing oil here in the u.s. so what we see is that we have a kind of ceiling for that because it's very fast to increase the production of nontraditional oil. so we see the prices for the term between $55 and $65 again, the precise number, very difficult to work with

>> production down for you down 4% year on year that's the third decline in a row. cap exdown 15. at what point do you see those numbers turning? >> you know, the reduction in production was due to programmed maintenance in some of our units. we have a target for 2017 which is based in line with what we produced last year let's remember that we have sold operations abroad in argentina, for instance, and just by keeping this same level, it implies an increase considering the kind of concept, same store sales. so we do not see this as a problem. we will fulfill the target for the year, and our plan for the

2017-20 2017-2021, with the forecast increase in production oil from 2.1 to 2.8 at the end of this period of 2021 >> the added complication of trying to read your results, separating the fundamentals from the host of charges and extraordinary items that we see regarding brazil and at what point do you think you might be giving a clean quarter, so to speak >> you know, it's a very good question you're right we had this quarter, again, some non-recurrent items that reduced the net rofit. but we had the first profit this year, a plain number, and it was a very good one. as a matter of fact, if you look at the number in the third quarter last year, you had a huge amount of impairment, which we didn't have this year so what we assume is that we will see these numbers going

down, and certainly we will see better numbers ahead but again, this is something that we cannot guarantee we have to look at the numbers and what the accountants and the legal people say, and we do exactly what we have to do >> pedro, how is a company like petrobras preparing for a rising rate environment where heavily indented companies will only find it more expensive to borrow and keep refinancing >> you know, i think what is very important to do is to have a very good operational numbers, very good operation. if you look to our margin, around 30% is a very good number so what we have to do is to continue very strictly following in the very disciplined way our strategic plan, reducing costs as we have done. having more effectiveness, more efficiency in our cutback numbers, and fulfilling our

divestment plan. so at the end of this period, if we reach the leverage, we can, which is no more than 2.5, the net debt of the company, and i'm sure we'll be prepared for this period >> finally, pedro, i'm curious about the tone at the conference you're at. because just today, general motors expected to tell investors about a new family of electric vehicles for 2021 batteries that are getting a lot less expensive how are your peers thinking about the long-term marginal utility and hence cost of fossil fuel >> i mean, that's a very important point. we are facing challenges coming from the supply, i mentioned the nonconventional production of oil. and from the side of supply as well we mentioned the electrical cars and society is changing.

low carbon economy is something that is here to stay and much more concerned society about these issues so it's very important to be on the side of the low cost producers this is what we need to do and we're working for that and for this, we count on the production because the level of productivity of the fields are very high. so the cost of to extract oil is very low we're talking about extraction costs below $7 per barrel. so basically, really what we have to do to be in the winner side is to work in the cost and reduce our costs, and as we all develop technology related to the use of energy, new sources of energy. >> pedro, appreciate your time always good to talk to you and get your insight on the

industry thanks again pedro parente of petrobras >> as we go to break, take a look at the dow. familiar pattern here. lower open, but seemingly getting bought at the margin here off the lows. dow down 100 tomorrow morning at 10:00 a.m. eastern, sara eisen is going to sit down exclusively with coca-cola's ceo james quincy during the company's investor day. you don't want to miss that. "squawk on the street" will be back in a minute

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welcome back to "squawk on the street." let's send it out to tyler mathisen in chicago at the schwab impact conference, sitting down with the institutional executive vice president at schwab. tyler. >> kayla, thank you very much. and we're here at the schwab impact conference. probably the largest gathering in the world of investment advisers we'll be talking to several of them throughout the day. we're going to begin with bernie clark, the head of schwab's adviser services

probably the fastest growing part of schwab's business right now, right >> it is the pastest growing for schwab and in our industry and something we're excited about. we bring together 4,000 to 5,000 people at this meeting >> this is the 30th year that you guys have been in the business of serving registered investment advisers, which are really to me the new replacements of what we used to think of as the old brokerage houses >> they are, the new model excuse me. certainly very independent in what they do and a very important part of the future of many investors >> we need to get you to see dr. jack daniels on this chilly and rainy day in chicago 26th impact, how many people are here >> we have almost 2,000 advisers and as many people here to serve the ecosystem for advisers technology companies fund companies, asset managers >> i'm leaving with the plush zebra, i promise you that. let's talk about the survey. you have gone out and you have queried both advisers and asked them about their attitudes and their clients' attitudes

advisers are 59% of them are optimistic right now i'm supposed to think that's pretty good. right? it is. >> it is, it's very good they care so much about the wellbeing and the entire life of their clients that it's not just about the portfolio. they know, and they're setting their clients up for retirement in some cases, for generational wealth transfer and other, or working with the next generation of investor. >> 59% are optimistic, compared with 52% a year ago. as i look back at years prior, they were even more optimistic what does tell you about the mood of the market >> very true we know this bull market has been a little bit slower in acceptance and we talk about things like the wall, people are being cautious 2007 and 2008 were very, very difficult times. and we're keeping that in perspective. and yet we're seeing tremendous success in the marketplace >> you know one of the other findings here was that 80% of the advisers say they had to reassure their clients one way or another in recent times

does that tell you that clients are a little squirrely, a little nervous that there is a wall of worry being scaled >> there is, and it's the nature of their business. they stay very close to their clients' lives always modifying, changing, and trying to keep them on course for the future so the worry is a lot about portfolio and a lot about their personal wellbeing >> as you rank the concerns of advisers, and you ask them what are you concerned about? >> yes, we do. >> what in rank order were their top concerns right now >> they have moved very much towards passive index investing, which has served them well but retirement and generational wealth transfer is top of mind, as well as making sure their clients are safe cybersecurity has become a big topic on the agenda. we talk a lot about that >> i'm going to talk to walt betinger, the head of schwab, on power lunch about that very topic. as they rank the things they worry about, is it the markets, geopolitics they're worried about? is it domestic policy?

what is it >> when we talk to advisers, they tell us the portfolio is about 25% of the work they do with their clients, and 75% is about life coaching, planning, thinking for the future, educating the children it's become such a responsibility for them. we a responsibility for them. we think in the digital economy they are even going to do more for their clients. >> does the fact that so much of this business has moved to etfs and passive investing, does that give the investment adviser more bandwidth, mental space to do real portfolio advising and handling and so forth, because they are not having to go out and pick and follow individual stocks >> you know, it does they are proving, they are taking that time for even more value added services with their clients, getting to know them more deeply. i mean, you and i have talked about it in the past, the retention of their clients is 95% plus parts of their clients' lives.

they think of their businesses as family businesses more than anything by and large, none of thinking about disbanding their businesses as they want legacy firms into the future. >> how much are robo advisers or automated platforms coming to play in the relationship between ria and customer/client. >> no question it's part of the future digital technology, artificial intelligence is part of the future the deep personal relationship they enjoy and the mainstay of our industry is only going to be augmented by those technologies. it won't be driven by technologies. >> bernie, congratulations on the turnout. year 26 for impact i've been here for quite a few of them. always good to see you. >> you too. >> back to you. >> now let's send it to jon fortt for a look alt what's coming up on "squawk alley." jon. >> we're going to talk to ceo of

boingo, the broader wireless business, broad com, qualcomm involved in tit for tat space. it's a complicated space coming up on "squawk alley." and hey, unmanaged depression, don't get too comfortable. we're talking to you, cost inefficiencies, and data without insights. and fragmented care, stop getting in the way of patient recovery and pay attention. every single one of you is on our list. at optum, we're partnering across the health system to tackle its biggest challenges.

. all right. another update on this continuing side story to the main one, which is doj and whether or not it's going to move to block time-warner acquisition by at&t. as you might imagine, fluid situation. they are going out to a lot of state ags, not getting virtually any support earlier. massachusetts appeared to sign on with washington that remains unclear according to our sources not clear massachusetts has signed on. the possibility remains that the department of justice will have no support from state ags if and when it does bring an action to block the at&t time-warner merger, again, on what would be somewhat untested theory given vertical integration but simply says the company is putting together distribution and content to a certain extent would certainly be uncompetitive. but apparently not getting very far at least with the state ags who are reviewing that potential

complaint and deciding whether or not they want to sign on or not. notably it may be none of them, kayla, and certainly no republican states thinking about it at least as far as we are aware. again, these things can change >> you mention how common it is for the justice department or perhaps the ftc to reach out to get the support of states before lobbying a complaint like this i'm curious if you've ever seen a situation where you have a republican administration trying to enlist the support of democratic states to back its complaint or vice versa. >> you have argument on the far left against concentration of media power that are stronger perhaps than are what would be typical republican views on something like this and what is more obvioften than not a broad trust law. doesn't mean they aren't coming with a complaint, carl we'll stand by. >> not the first time we've seen a split between state and doj. many issues. david, thank you for keeping us

abreast of that. when we come back, squares on the move look at the chart after testing support for bitcoin through its new cash app we'll break down their new play. stocks off the lows, dow down 96 points quk le wl othe air in a moment. ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. fedex.com slash dream

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welcome back to "squawk on the street." i'm kate roger stocks selling off with energy the worst performing sector. crude oil down following gloomy outlook for demand growth. devon energy leading downside. now send it back for the start of "squawk alley.." >> thank you very much 10:00 a.m. target headquarters in minneapolis, 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪