and -- >> but it was a throwback to the other thing, too >> if you were going to be part of a great heist, you would wear gloves >> but it was also part of that other, where she tagged some of her designer clothes i think it's a throwback to some of that. >> get us out of here. >> we've got to go make sure you join us tomorrow we have a big show >> what kind of stare? >> good thursday morning welcome to squawk ont street i'm carl quintanilla with jim cramer at the new york stock exchange david faber is at liberty media investor day in new york they'll have exclusive interviews beginning with media giant john malone. a lot from david in a moment futures agreeing for the first time this week as a several retailers raised their guidance today. house votes on tax reform later on this afternoon. europe's helping out, ten-year's around 235 our road map begins with walmart's big earnings beat, on track to open this morning at a record high. nelson peltz appears to win the

recount in that fight for a p&g board seat and cisco shares up 6% premarket on an earnings-driven recovery walmart, though, is up sharply in the premarket the dow component reporting better than expected earnings, revenue, and comps, which were the best in eight years. online sales up 50%. walmart issued some upbeat guidance for the full year jim, you just said to joe, that doug mcmillen may have re-invented this company for real >> he's done a great job in bringing in mark rory of jersey fame he's done a lot of tech stuff for jet.com. smart. i think this was the quarter where you realize, we're playing for keeps. we can actually make a lot of money, cutting prices, bringing people in, well, who's that? that's amazon. so we found our toe-to-toe now the stock was down yesterday, down about a buck and a half, off of target. that turned out to be a mistake. this company is taking share by the way, online 50% is rather remarkable this is a reinvention. and i think that people have to

recognize, when walmart gets it right, like, i remember during the golden age of walmart, in which we may be in a second golden age you would look at it and say, this is a premium multiple best in show company. this number was as good as costco, as good as home depot. >> david, you're doing media today, but you know walmart well we said, best comps in eight years. best grocery comp in six years traffic up, ticket up, hard to find any hair on this one. >> yeah, well, grocery, of course, we know, is such an important component for the company, over time, of course, becoming the largest grocer. it's more interesting what mcmillan is doing in terms of the leeway he's been given by his large shareholders, the walton family, to, carl, think about the longer term future and it's a long way, isn't it, jim, from that day with they surprised everybody, upstairs at the new york stock exchange, during that -- i think that analyst presentation, when they significantly lowered in terms,

but as a result, they do seem to have given themselves the needed, i guess, space to change things and create a better growth path. >> yeah, look, i think that day was seminole i had doug on at the end of the day. he came on the show. and it was -- not just saying it was -- we didn't become fast friends that particular day. but, you know, they figured it out. and yes, they did lower expectations but they're beating expectations now, yesterday, for the 50 -- you know, i don't know, for maybe the fifth time, brian cornell lowered expectations this is a different kind of lower expectations this was setting them on a path to spend a lot of money, because they couldn't afford to lose to amazon and when you talk with them, all they talk about is, we're going to beat amazon no one talks about beating amazon you're supposed to lose to amazon and drown in the amazon >> so if we found our toe-to-toe, what does that mean for everyone else? why is best buy raising guidance today? why is restoration hardware raising guidance

>> best buy won. they won their category. they are the only one left to buy stereo equipment or buy -- for iphone, great stand-alone, they really help you restoration hardware was a big squeeze. gary friedman, one of my favorite execs, let's see how he did. he bought a lot of stock at 20, in the 25, a lot of stock in the 70 good average, about 50 it's really -- what's most interesting about it, he's got three stores in florida. well, those were hurt. he's got a big store in houston, and he still blew away the numbers. gary friedman, congratulations redefining furniture, because it's not just furniture, it's the gallery. but it's an upscale gallery. it's not like -- well, with i don't want to be too critical of other galleries. but the first one, july 18th, 2018, he bought 32,000 shares at the price -- at $27.59 and then he told everybody to buy it no one listened. they all laughed at him. another carry situation. we get those periodically. >> by the way, the guidance is 102 to 104

street's at 80 so street's got some catching up to do. >> the street got its head handed to it a lot of people really kind of roped gary off because they had a couple of bad quarters gary has these conference calls set to music like nordstrom's. and what happened is people just said, he's off the reservation i heard people say, he's off -- which is actually kind of a negative term. >> yes >> and it turns out he owns the reservation. he's not off it, he owns it. >> guys, let's move on to pelts here the interesting twist in this proxy fight between nelson peltz and p&g. peltz appears to have lost his bid for the seat last month, but this recount shows him winning by an extremely slim margin. p&g, which did not want the activist investor on the board says it doesn't consider this final and may appeal i'm trying to remember, the margin here, we're talking not hundredths of a point, thousandths of a point >> it's time for p&g -- david,

what do you think of this idea it's time for p&g to say, as a gesture, we'll have you on the longer they protest this, if he comes on, it's less pleasant. if you keep stiff arming him and he does win, that's not a recipe for conviviality >> no, it isn't. and listen, this took weeks. the independent inspection of elections took weeks to do this. and in fact, on both sides, there was a preliminary count. remember, that preliminary count apparently was enough in at least p&g's eyes to declare victory incorrectly, right after the proxy vote took place. but both sides were higher than what ended up being the numbers, guys and you know, it's hard for me to imagine that there'll be much movement now, saying that, of course, you're talking about 43,000 shares out of almost 2 billion shares this were voted at the meeting. so, you know, the margin of victory here was 0.0000 -- just keep going with juniyour zeros l

you get to it. but that said, jim, are they really going to challenge this first of all, taylor, frankly, does not look particularly good here the decision that was made to fight, fight, fight and then to declare victory incorrectly, it would seem -- i just don't know that you can challenge here and have your shareholders support you at this point. it doesn't send a good message >> no, and the lead director, it's time for jim, you remember boeing, such an honorable guy, to reach out to peltz and say, you know what, come on in, it's too close, there's too many people by the way, the stock is reacting positively. i mean, i would think if the stock were down $1.50, i would say, geez, the people have spoken the people are speaking. they want the stock higher and they want peltz on the board let's make that gesture to nelson peltz saying, you know, we're not going to wait for another count. come on in >> not to mention the resources, attention, and money it's costing -- >> it's $30 million, but what is it really? as this thing goes on, you could start a brand with how much it costs to try to keep him on.

like, dove -- no, that's another company. you know, tide extra extra strength could have been started with this money. >> of course, you guys have interviewed peltz several times about this during the course of this is a dsaga this is a sound bite from nelson peltz back in september. >> i don't even know how to spell "lose," okay so i'm not going to discuss that what we're hearing from all the shareholders is thank you for getting involved >> tenacious, right? >> implacable. >> good word >> yeah, relentless, the way so many -- >> carriers and the british have -- i'm sorry. >> right you know, it's funny, yesterday, when we broke the story, i said, he might have been learning the letters for "lose," but apparently he didn't need to actually figure that out what will be most interesting, of course, is if and when he is se seated, as seems likely, and

takes his role as a board member on this company, what will that mean the way p&g have painted it, even one voice in that boardroom that was embraced by the board and its ceo would be enough to sew some discontent and perhaps create friction that was not to the pebenefit of shareholders. i don't know guys, we'll see where it actually leads, but it will be interesting when that tenure begins again, as it seems likely to for mr. peltz. >> yeah, it's interesting, because, of course, peltz not on the board at ge, david but now on the board after the ed garden coming on the board after considerable amount of market cap shrinkage, i don't know i mean, this idea that one guy can disrupt everything, david. what the heck is this? i mean, you got a whole chorus of people, the guy sings out of tune and it wrecks the chorus? >> i know. listen, sometimes it depends you know, there's no doubt nelson is going to show up to those board meetings very well

prepared and he's got a lot of people who can -- it's not just about reading the board book, they are doing enormous amounts of work, which puts you in an advantageous position for the dialogue that may take place in a board room, versus other members who show up and do their reading but don't have their staff go through everything and not doing deep analysis and asking a lot of questions. every board, as i understand it, is different and the dynamic is different. sometimes one person means nothing and reluctais reluctant speak, but other times it can make a difference. >> when you look at the proctor board, it's a completely heavyweight board. i did not feel the same way about the ge board these are people who have all been distinguished, they're remarkable, andi have to believe that they are confident in themselves and if nelson comes on and they think that everything that mr. taylor does is right, well, then, you know what, they're going to win over nelson these are not people who are -- look at this, frank blake, mcnernen, these guys are total

heavyweights why would they be confused if they really, knowing that nelson will come in and say, listen, i changed my view. but you know what? these are people who have to be able to do that. they're too strong this is not an academic board. i look at the ge board and it looks very much like the board of the overseers at harvard. but you know what, they're not playing with my money. >> not anymore, they're not. >> well, listen, when it comes to money, though, guys, they've got $3.5 billion that's the most money that will be in that boardroom at stake of any of those board members now, it's not nelson's per se, but it is triann's >> that's a great point. and the stock's higher ge may have -- you know, there's some issues. you know what, we've got to move on >> we'll take a break. david's got so much coming up this morning his exclusive with john malone, liberty media's chairman will weigh in on things like netflix and other things sarah's at coke's investor day, the first investor day in eight years. we've got some m&a to get to, as well sarah, good morning.

>> good morning, carl. yes, this company is actually opening the curtain on some never-before-seen innovation, like this. there's no branding, there's no name for it. it's a brand-new coca-cola flavored with all steve ya, no sugar no artificial flavoring. they're letting analysts and investors tape it. a lot more on innovation we're going to talk to james quincey, the brand-new ceo about the lineup and much more this is his first-ever interview since becoming ceo it's coming up right here, 10:00 a.m., "squawk on the street. we'll be right back. ( ♪ ) whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now.

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busy morning of fed speak. we've gotten philly fed claims and now industrial production. hey, rick santelli >> yeah, i'll tell you, in the industrial production numbers are rather big so if we just look at production, that's almost double expectations it's up 0.9. last month it was upgraded from 0.3 to 0.4 big number but if you look at utilization rates, another big number. 77%. we were expecting 76.2, 76.3 and last month has gained almost half a percent from 76 to 76.4

we haven't had a 77 handle going all the way pack to the spring of 2015. so these are very good manufacturing numbers. and we've all been reading these stories that manufacturing is starting to kick in a little bit, even though we've had other areas of mixed data. so a key number, i didn't see interest rates move much, although 171 two-year takes me all the way back to october of 2008 carl, jim, david, back to you. >> okay, i'll take it. i'll take it, rick, thank you very much. of course -- thank you we are at the liberty media investor day today, as we do every year, luckily, being able to sit down with a number of the executives of a company that, well well, you think about qvc and they own that, and formula one, a new addition, of course, serious control in satellite radio or trip adviser or live nation you go on and on and who's behind a lot of this well, john malone is still the

company's chairman still sits on nine public boards as a result of that. and as is the case every year, thankfully, we get a chance to sit down with mr. malone and discuss sort of the state of the world and media and cable and so many other things, as opposed to focusing on some of the companies i just mentioned, when we began our conversation today, we were talking issues of scale. in particular the threat that netflix represents, given the scale that it has been able to obtain worldwide take a listen. >> it's all about scale. and it's all about, you know, can netflix get enough scale that nobody really can challenge them can they figure out how to use that scale -- >> how far along are they on doing that >> my own personal opinion, the only outfit right now that has a chance of overtaking them would be amazon. and the reason being that amazon has an entirely different

monetization strategy. but, you know, reid is a very smart guy and he's not wasting any time, you know, he's pouring the coal on the burners. >> spending fortunes -- >> expanding fortunes. >> expanding globally at a more rapid clip >> and he's been -- you know, god bless him, he has been successful in throwing hail mary passes and then growing into them and i think he's going to continue to do that. >> now, you were -- >> he's got a great service. >> right >> he's disintermediating the studio industry by going directly to the talent and the producers ahead of the studios so he's a disruptive force >> you had been arguing for years that the cable companies should have banded together, figured out a netflix-like service. it's too late now. >> it's way too late but, you know, cable at one point could have done it as you know, when i was direct tv, i tried very hard to buy netflix for direct tv.

the stock then was like 17 bucks. you know, pre-splits and reid was pretty clear that his ambitions were to build a much bigger global company. and he was right to do that. >> yeah. >> so, you know, his scale, the ability to create content to scale, i mean, if you think about it, three years ago, hbo was the biggest, most powerful thing in the premium entertainment category they spend, i think 2 to $2.5 billion on content they're now dwarfed. >> netflix will spend $8 billion next year. >> correct and besides that, hbo is essentially only a domestic distributor. so they don't have the global platform under them. and while they can syndicate or

sell their content to foreign distributors, it is not nearly as strong a business model as being able to know the customer, deliver the stuff directly, and control the pricing at which your product is delivered. so, ahaving all the information about the consumer and their habits, in which reid's case is not using for advertising at this point, but he certainly can use that optimize his programming. i think he's done a brilliant job of building that business. >> and scale will beget scale? it's only -- >> scale is very, veryproducing that has a high fixed and very low variable cost so when you get to a point where your marginal cost is zero, profitability is enormous as you scale up and he's on that track.

so whether or not his stock is ahead of itself, i don't really have an opinion. but there's no question, he's built one wonderful company. >> there you go. back at netflix headquarters, where reed hastings watching has certainly god to be happy hearing that, guys when your marginal cost get to zero, that's probably a good thing when you have such an enormous distribution platform malone explaining very easily, i think, the power that netflix has, jim >> yeah, david, i think people may not really understand this artificial intelligence company. netflix knows what you want, just like amazon these are two companies that anticipate you and have unbelievable customer service. david, these are like the gems everybody wants to be them, but they can't be, because three guys were first. >> yeah, and the point is -- of course, the discussion -- we'll

get to disney and fox a bit with malone as well, but the point of the discussion is about scale. he mentioned that only amazon is in a position in his opinion to really challenge netflix, doing it through a different business model, of course using the prime service and using it as an engine for ecommerce growth but they have established quite a beachhead and they're growing so much more quickly outside the u.s. than they are inside of it. spending enormous amounts of money to get it done but for now, malone concedes field to netflix and saying the chance of cable having done something has long been passed >> the stock is not expensive if he thinks it's won i think that's important if he thinks it's won, you woul have to understand, what is it doing at only $83 billion? right? should be much higher. >> david, look forward to a lot more later on this morning we'll get cramer's mad dash and count down to the opening bell still a lot of names we haven't go gotten to today. tomorrow, we'll speak

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great as intel may have been 25 years ago. intel coming on very strong, intimidating nvidia in a lot of ways trying to beat nvidia. and that's brian krzanich, a great job. but jenson is artificial intelligence he saw it coming the last conference call was, i had to take it to computer sciences to understand it. this man is so far ahead of everyone, in terms of where things are going to go autonomous driving, data center, gaming you can't even be on the great gaming -- you think call of duty looks great, it looks great because of nvidia's chips. he has actually downplayed the fact that he used chips to data mine from bitcoin, sarah fryer last night, cfo of a company that you never thought would be involving bitcoin using, you can't mine bitcoin without these guys >> it is amazing, the intersection of mobility, graphics, ai, crypto currency, they have their fingers in all the right pies >> but he saw it coming. nobody realized what machine

learning was this guy has it going. he's one of the great ones by the way, everybody loves him. in person, people just love the guy. i love him he's fabulous! >> at the big board, it is sanju technology, an online financial planning perform celebrating its ipo today. over at the nasdaq, discovery communications celebrating the premiere of the series "hot grease." jim, we've had nine chinese ipos at the exchange this year. >> i'm working on a piece for that for "mad money" that may not necessarily be a great sign, because a lot of them seem -- i'm not seeing they seem fanciful, but we've got to drill down on them they trade very erratically. so i think people who buy them should understand that they're doing a bit of a gamble. >> just the past couple of

weeks. >> and they're not as well vetted for people. this is not, by any means, alibaba, which has american financials i know my friend, herb greenberg disagrees with that. but that's been about 100 points of proof, i think. >> let's check walmart really quick here if you missed the news, they beat by 3 cents, missed their guides some hurricane benefit, they said >> yes, but in truth, not that much, no more than home depot. i have been ignoring -- i've been ignoring the job that greg foran has done turning around the united states, turning around the domestic business one guy done a fabulous job. he's remarkable. lack at this stock this is not a small-cap stock. this is not, i don't know, fashion bug. it is real it is big. and this is incredible >> we know what the market cap is it's about 100 billion larger than ge.

>> well, both of them are helping their own causes in terms of getting that spread walmart is so -- i mean, you've got to hand it to what he said he said, i'm not going to let amazon win now, we heard john malone in that excellent interview with david faber talking about the game, set matches for amazon and netflix. no, not amazon walmart wants it i've been to walmart i don't know if you've been to walmart lately i've been to two in the last month. their food isles i took lisa, she was a skeptic she was a skeptic, but she sure wasn't after she went. she said, look at these! we bought a lot of stuff we didn't need. including a t-shirt for four bucks that had some crazy stuff on it. >> interestingly, amazon, some reports this morning that their ca cashierless store in seattle has made great strides, getting closer to prime-time you'll walk in, there will be no one to take your money >> there are 2 million checkers in the country, so what do we

do what are they going to go do get computer science degrees at stanford and go run another company? this is real issue it's not like paypal, which sold its loan portfolio to sink , bu you do with these people who are not skilled beyond what they do. because this is a job taker. >> speaking of which, you mentioned nvidia and autonomous driving. tonight, tesla, elon musk will roll out this look at autonomous trucking after being on the cover of "rolling stone" jim chanos this week doubling down on his bearish bet. >> i know that there are really smart people against tesla, but then yesterday -- we were driving yesterday, and one of my buddies, let's call him car, he has a tesla. and he picked me up. he stopped me, like going down

the street and i'm like, wow! wow! then the big screen. once we get to driverless, i can watch netflix. when you say anything positive about tesla, the financial guys hate you, but how many of them covet one? how many of them want a tesla? it's kind of like when they were bashing apple and writing those notes, i hate apple, i think it's bad but can i have that iphone what are you kidding me? i'll crush you >> david, i want to touch on some m&a today, because there's new news emerson rockwell. we're watching mattel, hasbro, at&t, time warner all week, obviously. >> yeah, let's start with emerson and rockwell that was a story we broke a number of weeks ago when we reported that they had come at 200 and they had come at 215, not really gotten much of an audience from rockwell automation the latest offer, $225 a share they've also increased the cash component of that.

it had been 50/50. it now goes 60% cash and 40% emerson shares you can see the reaction in emerson's stock price and in rockwell's, of course. the question is will they get traction with the shareholder baste that seems to be very, very loyal to rockwell and its management team at this point. will you get an activist in there who starts to make a lot of noise and encourages the company to sit down. because for its part, emerson doesn't have a path to control in any way they missed the nominating deadline for directors at the meeting, for example something we've talked a lot about it when it comes to broadcom and qualcomm coming up on december 8th there. in contrast, these device don't ha have that opportunity. they have to wait an entire year so they neat need to get the shareholder base in an uproar saying, we're willing to pay 24 times and that's a lot more than the group and that's a real big number you should pay close attention to jim, i don't know if they get traction or not. >> how can they -- it's such a great combination, i sure wish

they would this would create an american titan. really, an industrial colossus, that's very forward-looking. but david, that's not how people look at it, is it, on the other side >> no, and you know, social issues become important. they're very close, of course, to their hometown, milwaukee but they've tried to make offerings on that front, as well change the name to some extent, commit to certain things but they haven't got any traction that's why they keep writing these letters and releasing them we'll see if they do but rockwell collins has been good to its shareholders and we'll see if shareholders are willing to give it time and patience and be good to it as it continues to potentially resist. this morning, rockwell comes out as is often the case and says, we'll take a look, but one would expect that would be followed at some point by a rejection. the important point here is, will their shareholders stand for it or start to get more of an uproar and make more phone

calls to board members and the like that we often see guys, when it comes to other things, i'm not going to talk about "time" the magazine, but time warner is up today and certainly worth noting we're still waiting for the department of justice to make their move they're still waiting at at&t and time warner for it to do the same as we reported yesterday, it doesn't appear they have the support of any state attorney's general. that could have changed overnight, but that seems to be the case late yesterday in bringing this case the expectation is still that they will. but perhaps some people say, well, maybe there's a shot here that it gets back to behavioral remedies tell you what john malone had to say about it when we air that a little bit later on. >> although, it's worth getting "time" magazine on the record, too. shares up 30% on multiple reports that the koch brothers are ready to finance a -- >> how about that? that's a kind of interesting thing, because i think that we -- this is -- i don't know how it remains independent david, if you merge them, is the

goal of the koch brothers to have a say in how "time" goes or they just let the guys do what they want, the journalists >> i don't know, no offense to "time," they have great "sports illustrated," "fortune," "time" itself, but the company's "people," "people" magazine, can they create a viable, vertical out of "people" and the digital world? that's sort of the big question and that's what you get. do you want the koch brothers to have a lot of influence over "people" magazine? maybe. not that "time" doesn't matter, but that is not the cash flow-producing asset here. >> david's right "sports illustrated" should have kept up more than with espn, though >> let's get cisco on the record, too, jim because we're going to talk to robins tomorrow. >> what a smoke show i've got to tell you that this is one where they imbibe e guidu up, security up 8%

they're clearly taking share and doing a great job now with data center, with the cloud and they're back they're back don't forget, they've got the most money overseas amgen per capita, but that i have got 71 billion, a lot of it overseas and a good yield chuck roins has changed the culture there, too they are not switching and routing. that's part of their pibusiness but they are the backbone of the network and i think he should be applauded and i can't wait to see him tomorrow >> and ibm said they might have a good currency tailwind >> i think ibm has been knocked down by one seller, i said that last night this was the last bad quarter for ibm. maybe you're getting an opportunity. but understand if buffett keeps drilling theed by, the stock is not going to be able to lift until he's finished. >> let's get to the bond pitts as well this morning, check in with rick santelli at the cme. hi again, rick >> if you look at any of the yield curve spreads, 2s, 10s,

they all look like a hockey stick today. why? because we have a parallel move on the yield curve all maturities are basically up three basis points so even though all these spreads are basically at nine or ten-year flats, everything's sideways today but that doesn't mean you can't see something interesting. look at a two-day of two-year. yes, i've been talking about it all morning. we've popped over 170. chart going back to right around halloween 2008, that's the last time we were up here on a closing yield basis. and prior to that, the numbers get rather large we're going to be comping to the same period for a while until we start to clear the 10% hurdle. if you look at ten-years, since september, you can clearly see that we had a move, it seems to be petering out a little bit, maybe one of the reasons is the same time frame bunds. bunds are definitely looking like them to make more of a move towards 30 versus the mid-40s where things start to get interesting. if you're looking at things like steeper curves and the relative value trade pushing long rates

up but here's where the real action is, both in terms of talk and to some extent trade and anxiety. hgy high yield we've showed barclays spreads are widening a little bit, but not really a lot but here's something interesting. two-day of the hyg if you look at yesterday's intraday-low, it's around 620. but if you open the chart up year-to-date, that intraday low came within a whisker of the low close for hyg all year we are having a bounce today, but listen, the spreads seem to be behaving okay, but the etf's a different animal you want to pay attention to that 86 level, should we start to trade below it. and finally, the stellar player of the week in terms of strength has to be the euro and the greenback. one week of euro versus the dollar show that it had a nice move, 118 and a half intraday yesterday, but it certainly isn't giving up the reduce many traders using 118 even as a

market pivot carl, jim, david, back to you. >> when we come back, we'll go back to liberty media investor day where david will have an exclusive with 21st century fox vice chair, chase carey. best gains of the months so far. dow's up 132 we're back to break-even for november and wal-mart adding about 35 points to the blue chips. accused of obstructing justice to theat the fbinuclear war, and of violating the constitution by taking money from foreign governments and threatening to shut down news organizations that report the truth. if that isn't a case for impeaching and removing a dangerous president, then what has our government become? i'm tom steyer, and like you, i'm a citizen who knows it's up to us to do something. it's why i'm funding this effort to raise our voices together and demand that elected officials take a stand on impeachment.

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welcome back to "squawk on the street." i'm david faber from liberty's annual investor day, where we get to talk to a number of people who run the various companies or at least the tracking stocks for those companies. one of them of which, most recently, is formula one so i'm very happy to be joined by chase carey, the chairman and chief executive officer of formula one, which is liberty media, for all of you trying to pay attention -- >> don't ask me to unwind it all. >> i won't ask you about the

other nine public entities >> just worrying about the sport. >> how many boards do they have you on >> i'm trying to stay off boards these days >> let's talk about care racing, which we don't typically do here on "squawk on the street." why is formula one a valuable asset? i know malone loved the way the deal was structured and thought you got into a great price and were able to make it work with ecklestone and everybody else, but the business itself, why is it a growth opportunity? >> i think there are a handful of things. first, a view that global, we're truly a global sport, unique in the world in a global sport. unique global event content is going to appreciate value as other types of content fragment and commoditize. and i think, you know, that competition for that unique content is all of these digital players emerge into it is going to increase that further so first, the uniqueness of this content and uniqueness of event content. second, it's an opportunity to control a sport, not just a team it's not like you're a participate, not like you're one of the guys at the table we really do control the sport and can grow it in the way we

think the opportunities present themselves i guess i'd say, i think the third feature is, it is a sport that i think we feel is undermanaged and underinvested in, in recent years. it hadn't been delivering its potential to the fans. >> why not >> i think in many ways, it's a sport that was run the same way it was 15 years ago. and look at the competition on the track, it's a great sport. it's a sport that captures people's imagination but we don't have the competition you'd want on the track today. we don't have the action you want on the track. rules are too complicated. some of the business aspect of the sport, what teams spend, they've gotten too spread out. so i think all of those things should be addressed, to make the sport better and then you need to make this sport a spectacle. in reality, the race is at the center of what we do, but this sport should be 20 super bowls we should take over a city when we're in, have a multi-dimensional spectacle of food, entertainment, music, exhibitions. we're in some of the world's

great cities, shanghai, singapore, milan -- n >> not new york, not las vegas you're on the short list for the u.s. is that coming >> it's a work in progress one of the opportunities for the sport is to grow the sport in the u.s. it is not a sport that is really -- >> ask most people, formula one, they don't know what you're talking about. >> it hasn't taken advantage of the opportunity, because there's never really been the investment to make the sport work here. we have a great race in texas, but we want to put a race first and foremost as a cornerstone to growing it here in what i would call a destination city, new york, miami, las vegas are the type of cities -- >> when are you going to make that decision? >> we're actively working on it. we're engaged in each of those locations. we have interest from around the world of some of the great cities that want to have races there's a lot of interest, but, you know, the u.s. is important. that race, we need to build out all the capabilities to engage fans and particularly digital media. this one's in a sport that believed in digital media

before so we started to engage in social -- >> direct-to-consumer. some sort of direct-to-consumer formula one offering >> this is a sport more than any other in data and information and it has hard-core fans that love to get as inside as it can, to see what it's like to be in a garage to see what the stewards see when they're in a steward room so we do want to create a product, an over-the-top product that can really let that hard-core fan really get all they want out of the sport >> right there's a $70 million car downstairs that you guys are displaying you're not kidding when you're talking about it being expensive. >> that's the low end of what we spend. on the high end, our high end teams today spend the better part of $500 million a area putting a race car or two race cars on the track. >> so it's a very limited amount of people and/or teams that can compete in this kind of thing that have that kind of wherewithal, right >> there are ten teams but realistically, with the global reach of this sport and the brand, value, and marketing that comes with that, and we've got teams, you know, red bull,

ferrari, mercedes, the marketing value, the brand, you know value of those teams being able to get those cars, get those brands out there, is enormous >> right >> the reach we have, you know, we have half a billion fans around the world and we get -- we have of unique visitors of 350 million. that type of reach around the world on product that captures people's imagination this is a sport about shock and awe speed, power and sound there aren't other places you can get that so the value to these teams on the flipside is enormous we want to make the spread narrower and prove the competition. we want the cars to be state-of-the-art and unique but make the competition more balanced. >> you mentioned over the top. certainly when you ran fox and directv. this world is in the midst of changing dramatically. if your perspective, given your history as a media xecutive, i

the bundle over? >> i think it's certainly changing people still want -- at core, people want choice and people you know, in content that means more options. but i think they still want to be able to have a breadth of content available to them that they can pick and choose amongst. and i think the digital opportunities, digital process that's evolving clearly as double edged because you have on the one hand, it's changing some of the past rules. on the other hand, you have a whole new array of competitors coming into the world. enormous players, amazons, facebooks, apples coming in with resources that recognize unique content. there will be winners and losers but unique content is going to be a critical factor in driving it forward how you package that content and put it out for consumers - >> they have enormous scale which plays into the continued discussion whether media companies have enough.

you're a board member of fox how do they view scale >> again, my role is a board member, not an executive anymore. fox management should speak to fox's strategies, not me as a nonexecutive board member. >> understood. i would expect that interesting things go on in the boardroom. thank you for taking time with us today and teaching us a bit about formula i. >> feels great to be here. >> chase kau r carey runs formula i. what's the symbol on that? >> f1. >> back to you >> looking that one up right now. thanks very much good stuff still to cop, the ceo of coca-cola. james quincy as his get tore w usts ysorda doisp 120. well, it's earnings sn once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings

estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

it's time for stock trading. >> i always tell people do not trade off the headlines. best buy headline this morning was extraordinary, up 4% in the comps call, for the money quarter which is the next quarter because of the holidays, looking for 1% to 3% so that's what brought it down a lot of times people have to understand retailers like target

yesterday, you look at the posted number how they did, not as important as what they're going to do. walmart where you're already jacking it up and standing by it is a different story the big one, walmart is killing retail except for amazon. >> best buy below the 200-day for the first time since july of last year. >> i know they got the iphone. i thought it would be better a couple winners in retail home depot fabulous. maybe one of the best is children's place i have to promote her. she won't promote herself. by the way, david's stuff excellent. take up my valuation in netflix right now based on that interview. it's only $80 billion. it should be $120 billion easies >> interesting malone's comments >> wish i had smucker tonight. ppg, which had a tussle, tried to buy someone, didn't work out. didn't matter.

mr. mcgharry led the company higher kevin sayre, dex could the, diabetes maintenance >> good show. >> oh, yeah. good show. exciting it's always great to see walmart and cisco. congratulations mr. mcmillon tomorrow, chuck robinson he's got to dress up. >> we can't wait. >> when we come back, coke's james quunsy outlining its growth strategy. dow is up 133. 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. ♪ ♪ and do the best work of your life.

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. ♪ all i do is win, win, win ♪ got money on my mind i can never get enough ♪ >> welcome back to squawk on the street sara eisen is with us from coke's investor day in atlanta where she will sit down with new ceo dave quincy. >> we'll hear from liberty media ceo greg faffei in a little bit. s&p up almost 12 in what is turning out to be one of the best gains of the month so far

getting to break even once again. walmart adding 35 points to the dow and reporting an earnings beat nice metrics across the board whether it's u.s. kochs, grocery, traffic and ecommerce, rev currentlied is 50% versus a year ago mike, i was looking at a chart of six-month performance walmart in a dead heat with amazon. >> it's been quite a sprint. the last year but the last six months easy to forget that the stock hit 90 in the beginning of 2015. it had an almost two-year period where it went side ways. the take away invests have it's beyond kind of surviving and now a net winner in this environment. you mentioned comp sales, 13 straight quarters of increasing comp sales what's almost as significant if not more is 12 straight quarters of traffic increases if you're actually having more people in the stores, that's going against the general tide clearly the investment is paying

off. the stock looks like it's getting pretty rarified. we'll see. >> sarah >> i was just going to say, what's a big driver of that traffic, what walmart called out many times today is the strength in the food business, the largest grosser in the country, bigger than kroger, the largest peer play. actually, the quarterly food performance in terms of comp store sales was the best in six years. so usually, bever ands are a big driver actually of that traffic into stores. in a minute we'll talk to james quincey ouch that's contributing to the strength in walmart it's also coca-cola. i've seen a lot of new innovations and what they're doing around digital and improving sort of the look and feel of coke products in places like walmart.com ecommerce for walmart growing 50%. all the consumer brands have to think about it a lot and a big driver for walmart right now. >> the why, mike, when you compare it to target yesterday

is the market overlooking the cost of competing? >> it's interesting. the skeptics view has been the investments are necessary but they're just kind of table stakes and maybe there won't be a payoff for target that's more of an overhang just because walmart again it seems like it's grabbing market share and not really from amazon i guess they're saying in that physical store balance, walmart is getting the payoff. >> the other big story this morning is p & g, nelson peltz claiming victory in his fight to get a board seat after a preliminary tally of votes was released last night. p & g is refusing to concede and wants to see a certified result before declaring a winner. sarah, you're on the front page of the "cincinnati enquirer" and that shot of you and pelts leslie picker has a great perspective on the margin here it's equivalent to if the whole world voted and difference was the employee base of p & g,

believe it or not. >> absolutely. i think the breakdown will be interesting once that's actually released but what a twist here to have -- and i know they're calling it a recount this is the first time the independent reviewer of the votes is coming out with their tally to have any son pelts ahead by .001%, i mean, it is a stunning result and the fact that in that release last night from p & g, they didn't necessarily welcome him with open arms but waiting for a final result it takes me back october 10th, after a day in cincinnati where p & g cape out quickly and said we won this by a hair and we spoke to any son pelts and he said i don't buy it. listen to what he said that day. >> our numbers say it is as close to a dead heat as possible i think our numbers show we were in the lead this morning we don't know what they came in. they don't know what we brought in but if anything, it's plus or

minus 1% we need to really count it and understand it. >> well, it looks like he turned out to be right, not only was it close but now he is in the lead. it's on the company, guys, to determine whether they want to invite him on board or i guess wait a few weeks it looks like they're prepared to wait even though it was so close. clearly investors sent a clear message to this company and the biggest ever market cap company to face this. >> jim's point this morning, if we're going to split hairs just call it. rather than extend this and create ill i will if he does join the board. >> there's a case to be made there. on the other side, it's interesting if he's on the board because by definition, half the shareholders said we don't want you on the board it's a funny balance the market was interesting when the news broke, when david broke the news last night, you had a better pop in the stock. now it seems more wait and see seems like the street would like

him on the board as accelerant of whatever change will be there but not going to price that in till the recount is there. >> guys, lots of news on the consumer front we want to go from cincinnati now to atlanta which is why i'm here today because it is coca-cola's first investor day in eight years we have the first interview with james quincey as the new ceo of the company right here on cnbc thank you for having us. >> it's great for you to come down. >> what sort of changes are you making to this more than 130-year-old company you want to communicate to investors today >> you know, we want to reinforce with investors the idea behind the total beverage company, how we're using that as a plat phenomenon for growth about broadening into lots of other categories, helping create value for the customers out there in the world and doing so by changing the culture of our company on the platform of having refranchised all bottlers it's about reinforcing the growth story. >> when it comes to coca-cola,

one of the strongest brands in the world still. seems like it's losing cache young people are not drinking soda like they used to do you feel you have to reinvent this company and this brand? >> absolutely. i think every brand needs reinvented the company as we expand the portfolio become bigger than the brand. every generation has had to reeffective vent the relevance of coca-cola we've been the first at many things over our history. it's our job to reinvent coca-cola for this generation whether it's the way we engage on social media or smaller packages or reformlations, we can find ways to keep grow that's part of why coke brand has revenues grown consistently. >> and you plan to increase sales. you talk about a total beverage company. this is still a carbonated soft drinks company a majority of sales is brand coke, diet coke, coke zero how many adjustment do you have

to make? >> it will be an ongoing journey. we've been moving about a percent of the business into new categories every year. we're looking to accelerate that with new things we launch and with organic things. it's going to be an and story. we're going to grow the revenues and add these other beverages. >> did volume ever come back. >> it's part of the revenue equation in the u.s. it may be a small part of the equation in some of the emerging this markets the prafl driver will be volume. >> at the same time, you have cost discipline, 3al $8 billion productivity savings is there more room to cut costs? >> i think the absolute challenge to management and we inclur ourselves, we've got to be efficient the first prize will be growth but it needs to be done. an efficient and productive fashion. and that will be an ongoing part of the culture i think we've over the last number of years realized a lot of savings and instilled more

culture of very choiceful use of resources. >> so you are culturally shaking up this company? >> yeah, we made more painful changes this year, reduced the head office in part because we sold off the bottling companies and able to bring in new digital technology and shrunk the head office and more focused on empowering the country countries out there. we're taking the necessary steps humanly and with dignity. >> walmart shares shooting higher, 7% food was a bright spot best performance in years. how much did coke contribute to that >> we work with walmart and all our customers. we take the approach if we can help use our portfolios to help them grow their business, we'll drive value for them and that will work for us that's why we've been over the last three years consistently the fastest growing in revenue terms large consumer products company. so we work with our customers to

create value including walmart we're a small part of their story. we focus how can we create value for them. >> they've been aggressively discounting. we've seen the grocery price wars to the bottom again with the whole foods, amazon deal, kroger cutting prices. how much pricing power do you feel have you in that grocery environment? moo people can see from the numbers that pricing remains rationale in the beverage industry we're promoting not just through pricing itself but through the use of smaller packages through the use of innovation in the portfolio to create a revenue growth story for the customers and therefore propel the beverage industry forward. >> you don't necessarily sell to whole foods but a lot on amazon. how does this deal transform the grocery industry >> we sell some products with whole foods. we sell on amazon. we try and be where the consumers are. i this i we'll see how this deal is going to transform the landscape. in the end, what's going to

happen is it's just going to be a digitization of everything bricks and mortars will incorporate digital in their irshopping experience and online people are having physical presence our focus is how do we fit in their strategies to help create rivalry. >> coke versus pepsi, pepsi had the upper hand over the last few years. it's changed recently. but this better for you strategy resonates with investors they also have the snacks padparadschai padding the fort folio. is the tide turning? >> we know that there are ups and downs sometimes in north america in beverages we've got a long multi year track in the u.s. where we've been winning 30 plus consecutive quarters, growing revenues, innovating, winning in the business we think we'll stick to our strategy and think the third

quarter was a small dip coming off a very strong second quarter. if you look through the trend, you see us leading the beverage industry to a more rational place on pricing, greater innovation, creating engagement with consumers i think it's going to be a good story. >> coke zero sugar is part of the story. what does that tell you what consumers want right now to see that kind of brand winning but diet still declining >> i think the success of coke zero sugar here in the u.s., we've taken what we did in other parts of the world and lever anded that first, people want great tasting beverages. it starts with great tasting yes, they want certain ingredient profiles whether it's natural or less sugar or different combinations so i think weigh see a lot of success from coke zero sugar and diet coke is still a work in progress. >> diets aren't dieing >> they aren't dying globally zero sugar is growing for us i think you'll see more people moving into low calorie

products, less sweet products globally. >> they taste as good? that's the trick, right? finding tasty zero sugar. >> i mean, i think why coke zero sugar is a success it's a better formula. i think making it a little more red, being more inclusive into the core coke franchise is helping people and people like it but the formula is better. and so we're investing more in our own innovation because great tasting is the price of entry. i think we're finding better ways forward and showcasing a pugh things here today we think are going to resonate with consumers. >> what about booze? one analyst brought up the prospect of coca-cola getting into alcohol, at least the beer category is that somethinged you be interested in? >> philosophically, i never say never about many things. look, there's so many more things we can do we're so close to what we already have strength and capability in, it doesn't make

sense to do that next. it makes most sense to do the things synergistic with your consumers and capabilities as a company. >> how does m&a fit into that? when you were an pointed ceo, people were excited about your background, european bottlers and thinking coke would get in the game again many are wondering why you haven't bought monster by ow. >> i save up my classic answer is i couldn't possibly comment on m&a that applies here. we'll try to make acquisitions we've had a good track record of taking small companies helping them grow and expanding them globally we've got a good track record and we'll continue to follow that strategy. >> bolt on acquisitions is versus major transformational deals which is something the industry has been going through driven by 3g and warren buffett pore years now. >> whether it's a bolt on, it's always got to obey three

criteria a strategic fit, a logic streakcally, the numbers financially add up and opportunity. it takes two to tango. >> we were talking about p & g and nelson pelts now ahead on the board battle there ever wonder whether coca-cola could be a target? the industry has been so ripe for activism >> look it, the many different forms of activism or other industry changes going on are you an versions of the same question, is management doing the best job it can. so the way i take all that is i could get distracted by that, but what i need to do is focus on making this the best possible company it can be, growing into the future that's the platform you stand on. >> what about warren buffett who still owns more than 9% stake, what sort of interactions have you had? is he on board with your mandate? >> we see each other during the year he's very on board with the transformation and very supportive i think in the end it will come down to the same matter.

he's never going to give you a haul pass on anything, nor should he. what he wants is growth. he like everyone else should hold me accountable for doing the best we can do and making this a growth company. >> one thing that is working in your favor is the dollar has weakened and emerging markets are coming back. what are you seeing in places like china and india which are such key marks right now >> we've suffered over the last number of years with the strengthening dollar that's kind of going away. we see returns to some of the emerging markets china is doing better. india is doing better. still weakness in other emerging markets. it will take a bit longer for the rest to come back but encouraged by china and india. >> the dollar a huge story for keck koch hurting results. are you worried it's back on the rise now the u.s. economy is looking pretty good. >> i certainly hope we don't go back to the minus 8 to 10% every year head wind for us because of the currency in the end, that can't last

forever without exporting inflation which it didn't previously but i don't think we'll go back to kind of multiyear strengthening of the dollar at the moment. >> what about tax reform based on what you're hearing from the house and senate and the administration are you hoping that gets passed? you pay a low tax rate but do have more than $20 billion overseas >> yeah, clearly tax reform, we're pro. a number of elements, obviously it's changing kind of week by week or day by day from our point of view, more competitive simpler tax structure for the u.s. from a corporate point of view would be positive for us. >> what would you could with the money if you were able to bring it back from overseas, that cash >> some of our money is invested overseas we would bring some of it back and invest more here in the u.s. and use some of it for dividends as we always do. and we'd use some of it for investment in the u.s. business. >> what about jobs ain

>> i think principally it's not our short term change. it's not like there's a big botch of money out there that suddenly comes back and gets reinvest bid us in 2018 but an ongoing increase of competitiveness of the u.s. economy. from our point of view as a company, if this were to happen, it wouldn't be suddenly there would be billions reinvested in a big bang we've got a lot of new projects on the go. in the end, the reform would help support economic growth and attract more investment. it's not so much a leads to b, it's more the general growth of the economy will cause us to invest more money. >> we've seen a big jump in sculpturer confidence in recent months is that translating into spending >> i think you saw a softeninging into q2 and q3 into the summer and now it's becoming a little better going forward. it is picking up a little.

>> as it relates to taxes, i want to ask you about the increasing wave of sugar taxes that we're seeing globally the uk, your home country putting did in the budget going to take place next april how big of an existential threat do you view these kind of taxes? >> well, i mean taxes just on soft drinks clearly the level of h of the taxation makes a difference i don't think they're existential. i mean, we're quite clear in our view that very narrow taxes are not going to help solve the health problem which is real we need to do what we need to do which is smaller packages, reformlations, reduce the sugar level on some products and innovate in less sweet mez in our products but you can look at the studies, latest being berkley, california from, mr. bop kins it was clear calories in total went up. i'm not sure things will solve the obesity crisis

that shouldn't be a pass on us taking action. you can see in the government numbers, sales of sugar through drinks have been coming down by almost 40% as we've grown zero cal pripz sugar through other categories is going up they need to have a broadening of their approach. >> i was wondering how much you take it as your responsibility to help fight obesity in this country and others. >> we need to do what we can control which is the way we, the forlations we put out, the size of the packages we put out, the information we share on some of the products when we we can take action, we have the responsibility to do so we believe solving the obesity crisis which needs to be solved, a much broader response from many private companies and the government rather than thinking a narrow tax will solve it. >> we visited a lot of your innovation and we'll show a lot of it on squawk alley" you've got a big show for investors. what do you want them to take away in terms of the narrative

for the company going forward? >> i think what the principal objective is to give them confidence that we know how to make the growth story happen we're looking for acceleration in our top line and we believe we know how to get it done >> and can you clear something up for us? the president in the past has tweeted that diet coke is dangerous but then he's been caught with a lot of photos with diet coke around his desk. is he a diet coke fan or not >> i have to assume so as the photos show him drinking it. >> is that good for your business or bad? >> we invite all consumers in. >> thank you very much for having us here today the ceo of coca-cola and his first ever broadcast interview on a wide-ranging array of topics in the next hour, we'll show you some of what he's working on when it comes to ecommerce, home spoke speakers and a lot more. you don't necessarily think coca-cola and technology, but they've got a lot to show here

back to you for now. >> good stuff. we can't wait for more when we return, a lot more from david's exclusive interview with john malone of liberty media earlier today including now thoughts on amazon's jeff bezos. >> jeff is going to be the most disruptive. >> he already is, bezos you mean. >> yeah, as the death star moves into striking range of every industry on planet >> later on, greg maffei of liberty media, as well squawk on street" will continue in just a moment

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welcome back to squawk on the street i'm david faber at liberty media's annual investor day meeting, an opportunity i relish because i get to sit down with john malone who created liberty media and the old tci and one of the pioneers when it comes to the cable business that is now starting to break apart in let's call it media and the television world to a certain extent. earlier when we spoke today, we also talked about one of liberty's holdings namely its significant ownership of charter communications, the very large cable company that is often in the news and discussed by people like me in terms of will it ever be a takeout candidate will it ever agree 0 potentially adil a lot of those roads lead

through liberty at least potential acquirers seem to think so this they end up at his doorstep to inquire whether or not he would be willing to sell. that doesn't necessarily mean charter is he talked about four potential acquirers he's heard from over the last year. take a listen. >> in our relationship with charter, i callit a three-tier situation. first of all, we have our holding company that owns 21%. >> liberty. >> 22% of charter indirectly then we have a partnership with new house, right so if it's something,ing if massa comes and throws a proposition at us, hen we talk to the new house guys. we say we've studied it. what do you think. it's one of those. if they think it's worthy of further look, okay, then we both call up tom and we say hey, tom,

would you meet with these guys, you know they've got this, they got that, right? and so far -- and this has happened with four different approaches - >> i don't know who the fourth is i've only got three of them. >> i'm not going to tell you but the problem is that none of them at this point have made a pitch that was worthy of bringing it to the board and proposing it seriously to the board. okay >> why not >> when we look at charter as a stand alone and we look at a projection of what we think the next four or five years are going to look like and we value that, we come to some sense of value. okay and if these other propositions can't get us substantially

beyond that value on a risk adjusted basis, then you know, why would you be interested? >> something that starts with a five in front of it for a stock right now trading at 340 would seem to be potentially compelling for a capitalist like. >> you where is the check? okay is massa talking about a $540 collect? >> no, he's not. he's not what about the altese guys >> when you value, you know, with altese, if patrick wants to come and offer us a huge premium, his stock, our stock, right? then in effect, we're buying cablevision at a discount. that i would be interested in. patrick on the other hand, is not interested in giving up control of his empire. >> meanwhile with his stock, what's going on with the stock lately. >> it's going the wrong way pore him lately.p there's a lot of synergy between

cablevision and charter. patrick brougcablevision while charter was tied up with time warner tom used to run it all of these things, part of the problem, and the reason you get rumors is because we're open >> sure. >> anybody who's credible, we're happy to talk about almost anything. >> right. >> right >> but it doesn't mean. >> that starts rumors. it doesn't mean we're anywhere near a deal. and you know, the last time there was a board discussion and sort of a sense of the board on this stuff, it was unanimous >> it was unanimous. right. in other words, saying no interest or. >> saying no interest in this conceptual deal. >> is there something that could change in terms of the performance of the company >> sure, lowell could lose his mind and offer us something that

he can't really afford. >> he can if he wants to stay investment grade. >> you know what i mean. >> of course >> these are all subject 0 limitations. >> what about on the rutledge side >> this is driven by fact we believe we have a wonderful business and wonderful business plan that tom has just started to exploit you know so if you believe that you've got a high single digit grower innive by ta and you have a levering and philosophy that you'll keep that cash flow leverage and still running under a big nol, right, and you just project any kind of fair multiple for your cash flow four or five years out, you end up with a number up here. okay and you're not taking the risk of trying to fix somebody else's business, right? you're not running the risk of being overlevered, right you don't have to change control

relationships. oh the point is, is charter for sale anything i'm involved in is for sale every day of the week the store is always open have we seen anything yet that gets even close toes ringing the bell no does massa have the resources if he wanted to to ring the bell? yes. >> all right so massa is mass sa sun, rut lenl is tom rutledge who runs charter. dra hawaii e runs altese local runs verizon any time i get asked from now on about charter and rumors and who buy it, i refer them to this tape i think malone laid it out there. just because people come to him and have offers doesn't mean he's willing to consider pushing rutledge to consider them or that they would represent enough

value against the plan charter already has in place he believes will still deliver more value over type, that being malone we're going to talk 0 greg maffei who runs liberty media and oversees so many different assets the company has and figures in so prominently into so many discussions. they're always open for business he does a lot of talk. for now, send it back to you. >> he's got a unique blend of candor, especially with you, david. it's a lot more interesting than having someone say we don't speculate upon a potential merger. >> the store is always open is a different message than we don't speculate. >> david, thanks david faber today. >> about 32 past the hour. dow is up 164. sue herera las a news update. >> good morning. here's what's happening at this hour we begin with china. contradicting president trump and once again, says its support of called freeze for frees

agreement for north korea. north korea could gain con exsessions if it freezes its nuclear program. the president said the u.s. and china agreed north korea cannot freeze its program for concessions and must eliminate its arsenal. a suicide bomber killing nine people at a political gathering in kabul isis claiming responsibility the explosion the latest in a wave of violence in afghanistan that has killed and injured thousands. . the trump administration lifting a ban that had prohibited hunters from importing trophy heads of hunted elephants from zimbabwe and zambia reverses a 2014 rule put in place by the obama administration animal rights groups have blasted the move. and davinci's salvador mundi sold for 450 348d last night it is the most expensive work of art ever sold at auction some experts say it was painted

in the same time frame as the mona lisa. huge success that's the news update this hour carl, i'll accepted it back downtown to you. >> thank you very much when we come back, we'll break down the future of ai and automation with the ceo of ca technologies take another look at the market here 163, has more than offset yesterday's losses on the dow, the s&p and especially the nasdaq where the gains today are ckn mites wse yesterday'la ba ia nu

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without pg&e's assistance, without their training we could not do our mission to keep our community safe. anytime we are responding to a structure fire, one of the first calls you make is for pg&e for gas and electric safety. it's my job to make sure that they have the training that they need to make the scene safe for themselves and for the public. it's hands-on training actually turning valves, turning systems off, looking at different wire systems all that training is crucial to keeping our community safe and our firefighters safe. together, we're building a better california. alarm about the dangers of machine learning and artificial intelligence tesla's ceo calling for government regulation to rolling stone. he's on the cover this week. our next guest says machine learning, security and intelligence automation remain key to copied growth in the tech sector groining us this morning ca technologies ceo mark gregoire

is with us welcome back. >> thank you >> what goes through your mind when you hear these reaped warnings from not just rusk but a lot of skeptics about the future of ai and what it's going to bring us? >> well, i think at both ends of the spectrum there's going to be a camp that is very dystopian and this technology is going to affect us in a very negative way. the other camp is a little bit naive thinking this technology is going to be make everybody's life absolutely perfect and you're going to be able to live this incredible life and not have any issues with respect to how technology interface at the end of the day, we will pivot to a place where we get it right. you take a look at all of the technologies that have evolved over the last even 100 years, there's always a little bit of friction on both ends of the spectrum but eventually we get it right >> and mike, you're in there helping large companies figure a

lot of this out all the time as they transition to i guess new computing platforms and ways of crunching data what are their big issues right now? what do you feel as if you're spending most time on in terms of their big priorities? >> you know what, there's two camps once again when i'm talking to senior executives, ceos, their number one issue is speed they're trying to modernize their platforms, trying to digitize their business and don't understand why it takes so long then you get down to the practitioners, the people who have to do work, it's breaking down silos internally technically and culturally to make sure the new technology gets into production in a secure way and a way that's repeatable. there's this is work going on between executive management that really needs to go fast because they feel the pressure of business and you have the people who do the work that say we can't do the work the same way we did the last 15 years

we have take advantage of new technologies, modernize our infrastructure and working through that process is difficult. it takes a little bit of time. but i'm seeing a lot no more traction with respect to how people are cooperating better inside companies and outside of companies. >> even if you don't believe as you say the dystaupian view about computers going self-aware and annihilating the human race, that esa big debate about the impact on employment, right? and the degree to which companies in search of efficiency will minimize human interaction where factories go dark how close are you to that scenario >> well, we see technology taking over, you know, mundane tackles that quite frankly humans don't do well and don't want to do them very well. when you see this happen, it opens up a whole new category of jobs for other people. as we move through, we went through the first second thirded industrial revolution, now we're

in the fourth. this is happening in realtime. there's going to be skills displacement this is where i think we as the private sector as well as governments can lean in and help retrain people, give them the skills so they can be participants in the new technologies and the new cultures and the new ways of doing things and to the extent we can make that happen, i think we can mitigate a lot of risk there is always going to be some displacement when you're adopting whole new generations of technology. >> this idea of trying to work to retrain and close this perceived skills gap, i wonder what you think whether that translates into it makes sense for everybody to essentially learn how to code. it seems like that maybe going to be not necessarily the most valuable skill coding in today's terps if the machines will be doing that, as well. so what's the mode of retraining or education that you see? >> well, i think you have to broaden the spectrum take a look at maybe ten years

ago. the hottest technology, the hottest skill to get in the valley was designers right now if you snap the chalk, the hardest skill to get is data scientists when you look at -- if you look at most universities don't offer a degree in data scientists and deep learning. you look at the vast variety of people that move into the profession of being a data scientist they come from traditional computer science there's a big population coming out of math essentially statistical analysis there's also a big group coming from philosophy. believe it or not, philosophers understand how to think logically. as you're starting to pore through reems and reems of data, teach algorithms to understand that data which moves into ai, there's a whole new set of skills you need. and we're pulling those in from a variety of different place so it's not just localized if i don't have a computer science degree i can't participate in the new economy. that's a very shallow view. >> yeah, but to mike's point, i

mean, is akin to going from an agrayerian society to an industrial society i mean making the leap to steam, to electricity, to information technology, or is this some larger many times that >> you know, the pattern recognition will be similar. i think the big difference is, speed. if you take a look how long it took us to go from an agrayerian economy to a steam economy, we'retalking 40 or 50 years. talk about how to go from steam to electricity and into a computer technology that's another 30, 40 years this is happening a lot faster that's what caught most people off guard. and i think it's what watch catches a lot of governments off guard, as well >> indeed. seemed to happen slowly and seems to be happening much more quickly now. mike, we hope you'll come on a lot. >> it seems the way our industry works. >> we look forward to having you help us through this in the

months and years to come thanks again mike gregoire of ca technologies >> thank you very much. as we go to break, shares of cisco up 6.5% here after reporting an earnings beat with an upbeat forecast we'll talk exclusively to chuck robins tomorrow in our 9:00 a.m. hour when we come back, david sits down with the ceo greg maffei. back in a minute i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss

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>> is it possible to be a long-term bull by a short term bear mi up vestment strategist is congon trading nation. more "squawk on the street" after this

welcome back to squawk on the street i'm david faber. yet again here at liberty media's annual investor day, and greg maffei, the ceo of the company joins me now

always nice to have you and thank you for having us. >> thank you, david. >> and talking to all of your different portfolio companies can, as well let's start off broadly speaking about the content business viacom today is down sharply, about 7%, affiliate fees they did a carriage deal with charter which is a significant investment of liberty's. content business seems a tough place to be if you don't have scale these days. >> the linear video channels are in a tough spot. i think the overall content business has a challenge coming ahead. you've seen scripted shows go from something like 200 had to 450 this year or next year and the cost per hour has probably doubled. so you've seen roughly a 5x kind of number increase in content. and 0 i don't see how you mon tisz that. that's going to lead to eventual pressure on the content business combine that with the fact you

have new entrants whether it be netflix or even more people like amazon, apple, google, facebook who have different video montization methods. that puts pressure on traditional companies. >> malone earlier, $8 billion netflix will spend on content they can distribute it over a wide base. their cost gets very, very low when they can go that large. >> they have a lot of advantages let's talk about them for one second and then the challenges perhaps to them. their advantage, let's look at them against hbo hbo spends 2.5 billion dollars on content for a consumer, you can get netflix which is spending 7.5 to $8 billion on content and charging somewhere between $12 to $13 you get more content for less.

unless you assume hbo is always going to be better picking content, that's a tough model to sell consumers people at amazon, they're spending $4.5 billion. in the next five years, i project it's $10 billion and they're giving it away you're getting prime and video is for free. >> we don't know how many prime members there are. there are a lot of them. >> no one bought that originally for the video. maybe over time they will, but that's a further commoditization and pressure on pricing. what happens when facebook said they'll spend a billion. those are all going to put increasing pressure. >> nobody gets a return on the investment but those of us in the content business do okay. >> that's not right. if you're apple you're getting return because you're selling devices. amazon is getting a return because you're selling a lot through prime. traditional content companies will feel a lot of pressure. >> what gets they will out of the cull d sack?

it's like a bunch of cars now stuck. nobody seems to know how to get there or what to do in terms of traditional media companies. to witt fox's idea of selling its entertainment asset because it can't get the scale it compounded when you talk about trying to get out of the traditional cable bundle and going direct to consumer, you immediate more scale how many subscription services are consumers going to step up for? disney for fox, don't know, but my guess is that was about getting scale, trying to increase their direct to consumer offering. throw that in, though, with a challenge, the government by entering into the time warner/at&t merger discussions has thrown all that a wrench in anyone's plans i don't know how you could announce a big media deal today and have any confidence you know what the government is going to do out of left field. >> what are your thoughts about that we haven't seen the government yet make their move, although we still anticipate, at least they seem to, time warner, at&t, my

sources, that they are going to, they are going to file a complaint because they did not feel behavioral remedies were enough to meet their objections. what do you think? >> i don't think -- first, the doj tends not to just make noise and not file complaints, so you have to think is there a structural remedy and far from obvious to me there's some set of the needs of at&t and the needs of the government that there's a match there that you can find something that's going to hive off. i don't know, but i bet this goes to a lawsuit. >> all right who wins >> i think at&t's got the better hand >> you do? >> yeah. >> and to your point about you are obviously somebody who is in the business to a certain extent of making deals, not necessarily in this particular arena all the time, does it put you on pause do you watch closely to understand the rules of the road before you think about doing anything else? >> i think all participants and observers are going to have to watch and say what are the rules of the road, because this is out of left field. yes, the president had tweeted some things, but the head of the

antitrust division suggested there were not problems, so i think this was kind of a surprise to a lot of people. >> yeah. charter, of course, john malone and i had a long discussion about it and he went through the different opportunities that presented themselves to you guys and usually he says to greg. >> john gives credit when it's happened >> right that said, the relationship between liberty and charter, and we're going to speak to tom rutledge soon, is there a frustration at all on your part when somebody comes in with potentially a large number and yet you can't get any movement on the charter side? >> look, it's not unusual that management has a positive view about their business and that they want to drive the business plan, the strategic plan, the operating plan they have going forward. you know, we're big believers in charter, but i think as john likely said, you know, i chat about it, you know, we have an obligation to our shareholders to see what opportunities are

presented to us, and, you know, that doesn't mean there isn't potential for disagreements, but we work them out well usually. >> yes, i assume you do. let's get to some of the companies the portfolio companies, i'm moving so quickly here tripadvisor. that's been a tough one. >> it is >> came out of nowhere, not out of nowhere >> trivago came up, then came down it's a tough space >> what do you think they should be focused on as hopeful signs here >> i think if you look at the opportunities that trip had, it has 450 million uniques a month, 525 million reviews. there is a consumer love for this product our challenge is, there's less mo monetization for the hotel space, hotel pillar in general, and the profitability has been sucked up by google, challenges around mobile conversion we have to address those and find new ways to make a profitable enterprise over what we have.

it's exciting what's happening in attractions, with restaurants. i think we can reinvigorate hotels, but also find other ways like advertising, i think, to monetize that enormous and engaged customer base. >> are you the chairman of tripp adviser. >> i am. >> you are do you feel you need a change in management >> the board and i are committed with the current management team >> despite what has been a trufrm m number of missteps >> yes >> that's the simplest answer you've ever given. >> i try to be direct to you >> i appreciate that i appreciate that. when it comes to qvc, which again we sit down with mike george, we're not going to today. >> mike didn't want to sit with you? >> we may not have had the time. why do i think qvc is going to get steam rolled by the amazon death star, as malone refers to it >> we're in a different space. not to say we're not in the shopping space, but amazon is the everything store

75% of our customers already shop on amazon they come to us for a different experience not for the rationale i want to buy it cheap, but a curated offering, experienced shopping, come to us for a community and very different experience and it's working look at the q3 results, the long-term profitability of qvc, we're very excited put it together with h, with zoo, i am bullish where qvc is going. one of the best positioned retailers, number one in video commerce, number three in e-commerce, very excited >> finally, i haven't asked you this in a while and look at the spread between liberty sirius and sirius itself. >> there's a spread? who knew >> is that sort of old business or still a possibility >> look, our long-term plan is to continue to drive the growth of sirius xm, and it's modestly annoying that there's that discount, but it's really not something we need to solve in one day. when the timing is right, just

like we waited for q to buy hsn, we might do something with sirius, but not something that needs to get fixed in any one day. >> you feel comfortable with the underlying business? >> business is doing great >> greg, thank you >> thank you, david. thanks for coming and being here all day. >> i look forward to it all day. >> did we feed you >> unless you have the shake shack burgers. >> don't tell anybody. >> keep that between us. greg maffei, ceo of liberty. back to you guys >> good stuff, david, see you in a little bit as we go to break, dow's up 176. best gains in november in fact, best advance since september 11th for the dow "squawk alley" is up next.

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stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. welcome back i'm seema mody markets are higher this morning with consumer staples standing out as the best performing sector up over 1% on pace for its fourth positive day in five. walmart and smucker on pace for their best day in over a year. that does it for this hour of "squawk on the street," i'll send it downtown hi, carl >> thank you very much good morning, everybody, it's

11:00 a.m. at koch headquarters in atlanta, 11:00 a.m. on wall street, and "squawk alley" is live.morning, i'm carl quintanilla at post 9 with john fortt, sara eisen is getting some behind the scenes access to some of the company's new technology we'll hear more from sara in a moment first, though, retailers are on the move, shares of walmart getting close to 98, also shares of best buy and