and then say sap and, you know, rhymes with app, doesn't it? >> it does. >> a big week. >> a big week. >> new set. >> new digs. >> new dye job, my hair, yeah. >> looks good. >> i have to dye my hair so it doesn't look dyed. >> is that what happened there >> that's what i have to do. make sure you join -- maybe they'll fix it -- join us monday "squawk on the street" is next ♪ ♪ good friday morning. welcome to "squawk on the street." futures a little less decisive than they have been on this choppy week. we're watching retail earnings, the tax bill now on the senate side a lot of m&a chatter in media. europe is mixed. housing starts at the best pace in a year. benchmark jeeyield around 236 the unveil of the $200,000

roadster. >> and the courting of 21st century fox. more potential buyers for parts of that company emerge the fate of the company and what it means for overall media >> and shares of cisco having a great week so far. chuck robins joins us on set in a cnbc exclusive. >> we start this morning with the latest potential bidders for assets of fox that include its studio, its ownership of sky, star, fx, the national geographic channel, regional sports network, i could go on and on ownership of hulu, comcast our parent company the latest company to be in talks with fox as i reported later last night as we reported yesterday at cnbc as well for those assets in what is described by people close to the situation as an all stock deal that would in effect exchange comcast shares for the assets in question giving comcast potentially a

much larger international component, certainly what is described as a whole if you want to think of it that way in the company's current construction largely a domestic company, giving it potential control of hulu , though it is under consent decree until august of next year. that expires, this deal would not close until after that comcast ownership stake and fox equals control of hulu and a number of other very important assets not to mention the studio, all of which of course has people scratching their heads when they think about the regulatory impact of a deal like this and whether in fact it could ever pass antitrust muster that doesn't seem to be stopping fox from entertaining and discussing this possibility. as i reported earlier, probably the next three or four weeks is when you get a decision one way or the other in terms of disney and its continuing talks and comcast continuing talks, both deals are all stock. that obviously has the effect of

deferring the tax implications, which potentially is helpful and giving fox shareholders, of course, the key ones being the murdoches, others as well, the opportunity to participate to a certain extent in the scale that would be created by merging the assets with those of disney or with those of comcast. the key point being as i pointed out when we broke this story last monday, the fact that the murdoch family doesn't believe they can necessarily gain that scale on their own to compete with the facebooks and googles and amazons and netflixes of the world. >> you're already saying they're to the point where they're talking stock. this is that deep. >> no. i added some details to the original reporting we did quite some time ago, both discussions center on deals that would be all stock. so if you're the murdoches, you're thinking, okay, all comcast stock or disney stock. i don't know, they haven't -- value is the key here. how much what are you going to pay for all the assets is the question if you are fox, 21st century fox

and the board is thinking what is the best stock. i do want to own a significant piece of comcast or own a significant piece of disney, maybe they turn to you and say which one, jim, which one? >> i heard the antitrust person talk yesterday what do you -- if fox, okay, if fox listens to what is happening, if any of these companies listen to what is happening, with time warner at&t, then they're wasting their time do they not realize this isn't justice department that has -- do you know, we could get a tweet any minute and the tweet could say, comcast and fox, are you kidding me they're great people at those companies. i work for one, i'll work for the other f the if there is a tweet, i'll save you a lot of legal fees. it ain't happening, just like greg hayes said about honeywell. >> it feels like people stepping on the gas just as they're getting a yellow light. >> it does and it is curious. that said, as you guys well

know, there are many people who are expert in antitrust law who don't believe that the government has a sufficient case to make here you never know what is going to happen in court in front of a d.c. circuit court judge when it comes to a vertical integration. comcast would say the descent decree was fairly onerous, they operated from under it 70% of the financial contribution from these assets is international and so -- >> comcast said they -- >> they want to be international. they're including the domestics assets, the cable networks, the studio, no doubt about it. but -- >> okay, let me give you time, time warner, at&t, they go to -- they go to the federal court >> but they haven't been sued yet. >> came in monday thinking they would be sued, it is friday, they still haven't been. >> but no antitrust person i spoke to thinks the government

has a case. >> i know. >> so how about your comcast, at&t goes, they win in court, comcast is ready >> that's right. >> if you're fox, do you take that risk, sign up now for a deal you don't know -- >> yes, because the antitrust department is loco >> you're saying two different things shouldn't do the deal, now you're saying you should -- >> ready to do the deal. time warner will win in court with at&t. that will get done do you think -- >> that could be a year or two away. >> that's why they're ready. that deal will take two years to close. this justice department is run by tweet okay okay >> one question for you, david, whether or not, some investors wonder if we're thinking -- if we're thinking it is too limited in terms of the array of would be souters for the assets, is it unthinkable that amazon comes out of nowhere >> no, it is not listen, we broke the story, day one, there was expectations that other bidders might arrive given the -- what, again, was the

change in world view from the murdoches in term of scale and willingness to consider selling. so, no there is no doubt that you could. verizon, some reports that -- >> what was that >> i don't think it is real. sony did make a phone call but nothing more than that right now it appears to be two tracks, disney and comcast, antitrust hovering over all of it on both sides more so on the comcast side. we'll have to wait and see. >> i'm checking twitter to see if the deal will go through in a second democrats were not obstructionists, still focused on this tax bill and. >> don't forget franken. >> franken, yeah there is franken on this. >> franken >> when we come back, an exclusive with cisco's chuck robins, right here at post nine, we'll talk about the road ahead for the company after its earnings beat. take another look at the premarket, s&p, with a bit of a downdraft this week about the worst in 16 weeks. back in a minute [ keyboard clacking ]

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networking giant cisco out with results this week they're seeing revenue growth in the coming quarter, first time in a little while.

joining us here at post nine is cisco ceo chuck robbins. a lot of things came together this quarter, clearly your cat leice catalyst, you have a double subscription business. all these paying a role or something bigger going on, you're going from hardware to software and that's what people want >> jim, first, thanks for having me, good to see you live as opposed to standing in a studio staring at a camera. but, you know, our strategy is working. we have been hard at it for the last nine quarters and when you think about the fact that we're fundamentally reinvent the networking industry for the future, we're really helping our customers navigate this multicloud environment that they operate in, which is evidence by the google announcement, security is front and center for every customer we have, and we're beginning to see the results in the business model transition that you talked

about with some of the software moves making. >> what surprised me, you in the previous quarter, talked about, look, it could be -- be patient, it may be kelly cramer your fabulous cfo, no relation, did say, look, may not until 2020 but it looks like that your new products kind of took the world by storm security up 8% you're clearly taking share from someone. could you explain to me the dynamic and how very quickly your competitors almost seemed to fold, you've always had a great sales force, something along the last three months that made you go far, far ahead of everybody else. >> well, you know, first of all, this is one quarter and we're very happy about our progress. we have -- this network intuitive that we launched this summer and david and i spent some time talking about it is really about helping our customers deal with the pace at which they're trying to move in the future bringing automation, analysttic security, deep into the network. we can now determine when there

is malware inside encrypted traffic without decrypting it, which is previously was deemed an unsolvable problem. and you know, it is only happening in the network through a combination of deep hardware and software, so but at the same time, we have been shifting hard to our software model and the recurring model, couple of stats for you that you know, we're now 32% of our business coming from recurring and nine quarts ago, 26 we went from 2.5 billion in deferred software revenue. i think our teams have done a good job, making good progress. >> some of the sale side has been annoyed or irked when segments are changed, the way they're reported some argue disclosure took a hit. do you agree is that part of the street getting used to new revenue models, new product models >> well, we shifted because our customers are looking at wholistic infrastructure as we introduce programmability and the whole notion of technology that is going to become more intuitive as it

learns, it really is going to happen across all of the platforms that we have built whether it is wireless routing, switching our compute platforms, data center switching platforms, we put all that into an infrastructure platform group, we gave color around how some of the subelements were actually -- this past quarter, talked about the fact we did have strength in our campus switching business, which was part of the launch we did this summer. we continue to be, i think, very transparent about what is going on in our business >> one thing that really struck me, interesting, you made a lot of acquisitions. you have bought back a lot of stock. you pay a big dividend yet your cash flow is so voluminous that your catch balance never seems to go down and very little of it is domestic if you got tax reform, chuck, would your company not be the single biggest beneficiary of repatriation >> we're one of the top five i think that clearly we're optimistic about what is happening right now with tax

reform we believe that the house and the senate will come together and settle their differences and get something through. we're hopeful. and clearly we would love to have access to that cash and it would give us the ability to do lots of different things from a capital investment perspective. >> like what i think that's the key here. you are the key to this bill in terms of what you do with that money. >> don't think that -- pressure on you but you're -- >> you're the key. >> you're the key. >> you are, the point being, of course, what you just said is supposed to be the cat, why we're doing all of this, right it is not just going to be dividends, not just going to be buybacks, you see increasing capbacks and investment here in the u.s. if it passes. >> yes we do. we see, look, it is a combination, lots of businesses that are capital intensive businesses that will put that cash to work we see increased m&a, we see the ability to do obviously dividends and buybacks as well

we'll leverage the cash across all aspects of our capital strategy. >> others say, well, why, you produce an enormous amount of cash flow now and meeting the needs you feel you have, why would that change? >> well, it wouldn't change anything relative to our m&a strategy. >> in your capital investment strategy, why would it change that >> we're levered and we'll continue to be levered it will give us an incremental capacity but the territorial tax system just gives us more flexibility to move cash around as we need it depending where we need to put it to use. and the place we would like to put it to use is in the united states. >> you haven't done it previously because of the tax system now >> well, we have been taking out debt to a certain point. >> you've been spending money, borrowing against what is overseas >> but we would have access to the capital and the ability to raise debt so it increases a total capacity we have as a company. >> i think -- the argument that we hear a lot is people have the sense there will be a way of money coming back in, but in truth, some of that money is

already here in the form of debt, right? >> some of it is >> let's talk about the google deal i think a lot of people felt cisco is a bit of a island you've come in, making deals actually with a lot of the different cloud providers. what is a deal with google bring to you that you seem so upbeat about? >> i think the -- what we see happening today is that our customers, they began this journey to the cloud and the reality is this -- it is not a destination, it is actually a method of consuming technology services and now they find themselves with multiple cloud services with multiple sass provider like sales force and others that they're buying, you know, services from. they still have their private data centers and now the explosion at the edge with iot and the data being created, the single pervasive common denominators across all of that is the network as a customer tries to actually

implement a consistent policy, consistent security across that complex environment, the network is where that hybrid cloud and enablement has to occur. that's what google realized and that's what drove us to the partnership. >> why only 3% the legacy business continues to drop because i felt that was a prescription on the call to think you guys could do midsingle digit growth in the next couple of years >> we have given long-term guidance this past summer. and we're one quarter into this campus refresh we made an acquisition this summer with vitella, software defined win provider we think between the new innovation we built internally, the acquisition we made vitella and some of the clarity around the multicloud policy management that we can begin to help our customers evolve to the next generation enterprise architecture we're just a quarter or two in we'll see. >> they're wildly bullish about

internet of things are we in some sort of cusp of just a gigantic corporate spend and we're being too negative by saying when is it going to end is it possibly at the beginning? >> ibc, as, you know, basically predicted that in 2020 on a global basis we'll be adding 1 billion new devices to the network like every month or so >> every month. >> a million per hour. one million per hour. >> cars, houses, industrial equipment. >> that's right. our jasper acquisition we made two years ago is the largest commercially available machine to machine connectivity platform in the world we have 56 million connected things to it today cars, elevators, vending machines, so we're -- everything is being connected and we're at the very beginning of it right now. >> that's the case, every day i hear that these technology companies are overvalued, when i hear that, i think that we're

not being smart enough i'm talking wall street. what you just said is the recipe for a company growing for double digit growth for much longer than what wall street thinks >> i think what we're seeing happen is technology is not restricted to it anymore >> that's the big change. >> technology is infiltrating every industry it is no longer enabling the strategy of a company, it is fundamentally redefining the strategy of a company. and so it is at the heart of everything this is why every job will change it is going to be everywhere >> before we let you go, we had a discussion about antitrust and the degree to which it is being driven by tweets do you feel it is a confusing policy where the u.s. stands right now on mergers and antitrust? >> i don't know. what i think is that the department of justice needs to do their job and that's when these acquisitions come up, i think they have to look at them rationally, and i made a couple of comments yesterday on a lot

of issues relative to immigration, net neutrality, department of justice, i'm a fan of common sense. and so i think that -- >> that makes you an ally. >> i think generally they do a good job. >> well, chuck, it is great to see you in person and congratulations on, i think, the breakout work. it really is everybody should know that stock is still very cheap, even you get the money back, then i know you will commit to raising the dividend you went from value to growth, chuck. >> thank you, guys good to see you. thank you. cramer's mad dash, count down to the opening bell on this friday, take one more look at the premarket. don't go away. [lance] monica, it is absolute chaos out here! gale force winds, accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? [lance] can we get a shot of this cold front, right here. winter has arrived.

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all right, time for a mad dash it is friday yea. >> retail is very emotional. you'll see up and down walmart up 9. >> not too emotional. >> very emotional. i get so emotional, baby remember that? whitney houston. get this, david. gap stores, they are 3% comparable store sales, 4% for old navy, athletia, on fire, i'm using this as representative, foot locker better than expected, abercrombie better than expected, ross stores better than expected williams sonoma not better than expected retail really dead this is a mall-based retailer and they're putting up good numbers. >> what explains it? i think retail might be dead in the mall >> some -- >> not quite dead. >> some companies are more dead than others. some companies are a little less dead it is not as final

remember when elon musk said about mars i want to die on mars but not on impact that's how i feel about the mall. >> got it. so the take on retail as we head into thanksgiving. >> everybody is saying the same thing. get some cold weather, the numbers will be great. they need cold weather without it, david, you just don't know what to do with those heavy braided sweaters. >> stay home and order everything on amazon anyway. >> look -- >> i don't mean to -- >> no, it is going to be -- i'm not denying it is going to be amazon all the companies have -- they all have -- and e-commerce i'm saying that it is -- the stocks got to the point where amazon was going to destroy everything and amazon has to get around the death star cannot destroy everyone some have force fields right now. the force fields for gap, they're solo >> i'm glad you heard that death star comment yesterday >> didn't you love that? that was a great interview

i got a transcript of it i'm like your lap dog. >> yeah, right. >> how do you feel about that? >> all for it, yeah. we got to go got an opening bell coming up. a lot more here onsqwkn e re." "ua o

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you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell in just over a minute on this friday. retail earnings, jim just talked about them, stocks all over the place on a number of names tax bill, we are watching as the senate finance committee advances it. all attention on the senate side media m & a. tesla last night, this electric semivehicle with the 500 mile range, jb hunt apparently now reserving multiple tractors. is this going to work? >> i wonder where they're being built, what factory. i wonder how soon they can come out. i know that recently on the invidia conference call, talked about dhl buying trucks, i don't think -- i mean, look, musk is a miracle man. i just need to know which factory, when and why and how.

but otherwise, yes >> let's get to the opening bell and the s&p, the bottom of the screen sale point technologies at the big board, cloud identity management software, celebrating the ipo, bunch of ipos today stitch sticks, we'll talk to the founder and ceo katrina lake when the stock opens the first woman to lead a tech ipo in over a year >> right i don't want to be too pessimistic about that ipo, but i myself, if i were in the old money management business, i would not be so quick to pick up the -- shares in that company. >> that is because -- >> because it is doing -- slowed down dramatically and no longer a business model people like

and it could -- >> that's tough. >> what? do i look like a pushover? >> no. you don't. >> thank you. >> nike will lead the dow this morning. foot locker up 21% in the premarket off being down by a third in three months. >> i never thought when you announce a number where you're down 3 1/2 on comparable store sales prediction people would be excited about it hibit said good things the nike read through pin action is correct remember nike has not had a good run here, under armour should be up too kevin plank saying this will be the quarter we put our heads down and grow the company. so it is very possible that you're through a period of tremendous negativity in sporting goods >> mentioned gap earlier we got a lot of good things happening supposedly in footwear now anf beats by 8 cents, comps

up 4, hollister up 8. >> here is something for you the company was without a ceo for a long time. my conclusion is when you pick a ceo, even if it is fran horowitz, once you have a ceo, you can do better than without a ceo. abercrombie did not have a ceo since 2014 you get a ceo in there, the numbers are good. >> that's a-long time to go without a ceo. >> david, they were taking a permanent intellectual vacation at anf. >> self-driving company. >> it is self-driving. >> by the way, a piece out by city today, has the 37 companies that could be bought by amazon i'm being facetious. it just says the retail weekend reading, i'll digest, the eagles play sunday night, and it says that anf is the first company that could be on the list to be bought by amazon instant infrastructure. >> maybe we reached peak amazon. it comes up in every conversation think about this, just in the world of m&a, two transactions

that are now being contemplated. one cds and aetna, amazon is somehow a part of that, right? the other, fox, disney, fox comcast. fox responding to a threat from amazon you can go through so many different things. >> like a cloud business. >> drugstore and a -- >> yeah. >> a lot of insight into that. the customers love amazon so much that anything they touched turns to gold. they are and everybody feels these retailers are king midas in reverse. >> okay. >> everything they touch turns to -- >> like, for instance, i was doing -- i was talking to some of the drugstore people the other day, why are -- >> talking to the drugstore people. >> so fearful of amazon. >>i asked her, do

you want me to die that's what you have a conversation when you deal with the drugstore. amazon will send you the stuff they'll go, your doctor will go right to amazon and it will be at your house the same day you won't have to be told by a pharmacist, i wish i could help you, but -- >> i asked, do you want me to die? just tell me i need the pills these people can be -- so easily and if amazon were your pharmacist, david, the stuff would be there that afternoon. everybody fears amazon because they're better than everybody. >> all right, so they're disintermediateiating the drug company -- the drugstores. >> everyone hopes they -- >> and disintermediating the movie studios. >> the movie studios, there say creativity element, people don't feel that amazon is the most creative company. >> they're buying creativity from other people and having, you know -- >> that's the argument on a bunch of tech giants, very little room to innovate, just get bought is your best hope.

>> i'm just saying that when you see this, it is because we love amazon as customers. so therefore we feel worldwide they can do no wrong maybe they can they made some mistakes. and don't forget, this whole foods acquisition, there is ten times as many walmarts as there are whole foods. >> there are >> yesterday, doug mcmillan said death star, we're the federation. >> that was a big day for walmart. the biggest day -- >> hans solo. >> hans solo. >> okay. >> he's going to -- >> he's going to blow up the death star. >> he can beat darth vader he has the family behind him, a lot of money in this one area, i think darth vader may have met his match. >> darth vader in this case is bezos. >> a light stick >> i thought -- >> called a lightsaber. >> that's how we referred to amazon we had the tape wracked up, we could share it with you. >> of hans solo. >> of john malone calling amazon

the death star. >> i want to see hans solo representing walmart it is the revenge of the people in arkansas. versus seattle >> got it. >> bentonville versus seattle. >> and a headquarters city to come soon. >> could do a move on walmart. walmart is so capable of taking on the death star. >> really quick, just add on to retail, lb gets an upgrade at rbc. target of 58 also, ever core up square to outperform, they see revenue growth 40 next year, 35 the next year >> they're right, it could accelerate sarah fryer, the cfo, talking about, listen, the customers want to be able to trade bitcoin. we'll give you bitcoin, won't be important to us. square is working in concert with all of the great credit card companies and all the banks. they're empowering small and medium sized business. sarah fryer's remark came from goldman via sales force.com.

and they're real that stock is going higher it is going higher by the way, pay pal, everyone laughed at pay pal look at that stock they did a deal with synchrony what an amazing split between ebay and pay pal dan shulman empowering youthful people >> youthful people. >> hated ed millennials. convenie these are people in their 40s well, maybe 30s and i bring the demo up by averaging >> i don't know how to venmo i got to learn. >> is it hard? >> i dropped it last night i thought venmo was a wide receiver for the saints. >> jim, you mentioned ge at the top of the hour with -- had good

knowledge of internal metrics of the company, that the chase plane was not his idea never touched base with corporate aviation. >> an interesting interview. really got to the heart of the issue. 60,000 shares is -- not chump change i would like to see more >> you would. >> immelt bought a lot of stock along the way too. he was paid a lot of money along the way. there is -- you hear clawback. i hear that from a lot of investors. not going to happen. >> that's not going to happen. never will know what happened from 30 to 18 either. >> no. >> ge will be a mystery and enigma >> yeah. >> back to media guys, fox says we thought it would be -- almost up 6%. when you do think about a comcast potential bid for the entertainment assets and distribution assets, antitrust is a key consideration, that's what a lot of the analysts are writing today in response to our reporting and those of others on these talks.

viacom up after a bad day yesterday, rebounding sharply. >> down since you mentioned the stock -- >> up 5% comcast is down a little -- actually -- yeah, over 2% on -- it is -- >> i'll throw a whole monkey wrench in. t-mobile was up 3 yesterday. what is that about >> i don't know. >> it is not just about earnings. >> why not >> it didn't report. >> you think somebody is buying them >> yeah, who >> i don't know. i'm asking you. >> comcast is the only other name you heard they don't want to -- wireless, it is funny, malone, again, admits wireless and cable are going to come together everybody believes that. you don't necessarily want to buy one of these companies that is involved in a death match in terms of pricing >> i don't know. t-mobile fell dramatically after what i felt was a good quarter and it has been going down, down, down, john ledger has been

relatively silent in terms of trying to bait him into trashing his competitors. and the stock was on the move. this is really a takeover related move >> there is some -- there is some talk that deutsche telekom will be buying more stock perhaps in the market and the company will be buying back more stock. that may have been the reason, jim. >> that's a good -- that would be very -- look, the company is undervalued on an earnings basis. >> did indicate buyback could start as soon as december. >> that's like tomorrow, david, when you think about the thanksgiving vacation. >> and also good accelerating reporting ratios >> i watch that stock. that stock is cheap. >> just a handful of stocks in the green. nike and ge among them cisco as well. to bob pisani. >> good morning. down open, but overall we're flat wasn i want to show you some of the sectors that have been movers. retail doing well. that's a big winner right now. but we had some of the semiconductors do well this

week utilities have done well energy has been a big laggard this week, oil has come back oil is up today, saudi arabia's oil minister would like to see -- that's doing a little better retail, take a look here this is some serious short covering you look at foot locker, abercrombie, ross store, gap, there is some pain out there this is among the most heavily shorted sectors out there, so people are scrambling to get back in and cover their shorts mixed overseas, asia is mostly up europe is mostly down. the exception is over in shenzhen, the nasdaq of china, which is down almost 3%. you want to talk about -- the news corporation came out and said mutai up 40% in the past few months was going up too fast this is the news agency, a government news agency all the liquor stocks in china

promptly dropped enough said about nani capitalism very mixed, we're waiting for the nasdaq for stitch fix to open over there. i'll make it blunt for you they were looking to raise 190 million. they raised $120 million and a lot of concerns about how you get -- how you can -- the cost of acquiring new customers this is the problem we saw with blue apron and a lot of people raised those issues. we have a winner down here for sure because we're talking about sale point technologies here they raise 20 million shares of $12, the price talk was $9 to $11, very nice crowd down here, they do add price security they track users on network to make sure that the credentials are appropriate, and nobody is doing anything that they're not supposed to be doing nice crowd here, waiting for some indications we don't have that yet but this is going to be a clear winner today i have to give a very mixed grade to the ipos. we had six priced overnight,

this is one of the busiest days we had in many years we did get a winner, sale point priced above, blue green vacations, time share company, they're below. and we had some others, sterling bancorp, mortgages in san francisco at the low end legacy acquisition, in line. i give this a c plus, folks, in terms of ipo pricing clearly trying to get on the higher end and the buyers are pushing back saying we don't want it, it is too expensive for us there are some cracks in the ipo market we had three postponements this week for ipos. we had recent pricing disappointment and some of the chinese ipos, none of them today, had a very lukewarm response a lot of them coming from china. a lot of interest here but prices have been in the last couple of weeks among the newest registers. so keep an eye on that this may be a sign that the ipo market is having trouble digesting all of the new issues. right now we're waiting for sale point to open.

and nice crowd here for that 13 to $15 is just put up for the indication so that looks like it is going to open to the up side david, back to you. >> thank you, bob. reference to a lot of course, john malone talking to him about charter, about fox and disney we talked about the power of netflix. one name we got to that we didn't air yesterday was his investment in discovery. economically, what about 4%, 5%, but controls over 20% of the vote in discovery. and that stock up today, has been down dramatically for some time certainly since it announced its deal to acquire scripps. so i did ask him about that deal and why he feels positively about it when the market seems to feel so negatively. >> look at scripps, first of all, big synergy second of all, relatively cheap.

free cash flow, engine if you buy post synergies, if you buy something that is generating a 12% cash return and you buy it with 3.5% money, right, it is -- it creates a lot of free cash flow. have this attrition going on as the big bundle, as people are cord cutting what they're really doing is going from the big bundle to buying connectivity services and going out and figuring out where else to get their content, right? and so, you know, as that process continues, discovery needs to make sure they're in every small bundle, they have to make sure that they're in a position to transition to direct consumer platforms >> discovery also has a very

large international component to its business, something that malone came back to a number of times as well as being a key as so why he believes it differentiated from so many other companies that seem to be under so much pressure given what is going on with the bundle sometimes it is connectivity, he's talking about, broad bant into your house, a lot of different options, we know it. discovery up today, he endorses it i did go on to ask him, well, if he thinks it is so cheap, why doesn't he buy more? he didn't say no he sort of indicated he might, it might be an opportunity and he's thinking long-term. you want to see more of it, we'll put it on, it is all on cnbc.com >> fabulous interview. the guy really is not afraid to tell the truth he's not afraid to say things. >> no, he talks he talks tells you what he thinks, anyway >> position to strike. usually speaks for him

dow down 90 points let's get to the bond pits rick santelli in chicago good morning, rick. >> good morning, carl. i see two year 171 closed last week at 166. see a 10 and 234 closed last week at 240. so it really cements the notion of how much flattening we have seen and every subcomment along the curve and any combination you team it up with short, medium and long-term rates intraday of tens and realize that after we drop at 8:30 eastern, it wasn't because of data the housing data wasn't bad. there is more going on many traders down here traded opening numbers for many years, call it the hurdle mentality you might have something you want to do on a friday, especially in front of a weekend. but just in case you wait until the data comes out, you make a move even though it wasn't the data specifically it was just the event that you wanted to make sure everything was out of the way before you took action

it is a global thing look at an intraday of bunds if you want a steeper curve, bunds over at least 40, 45 basis points down here in the 30s, it just dragging all sovereign rates on the long end, seemed to be a little slippery. look at a one week of 10s. see the weeks progress the reaction today if you're looking for a big move, look at this intraday of the dollar yen chart. really moved a lot lower now, maybe it was tpp talk, you know, japan would like many of the parties to sign before they get involved in all of the politics of elections coming up in 2018 and beyond, early 2019 but there could be a lot of different stories. as you look at may 1st, maybe a technical story on dollar yen. look at how many times we have tried to cross 114 and have failed and look at how much ground we lost backing away from the level so quickly finally, end of september chart of the dollar index gives us a nice technical glimpse of what is going on.

94 we talked about it, 94,000 times. and important level, we're still toying with it but it was supposed to be once you crossed over, we'll be popping and maybe the year over the dollar would drop to 114 barely did any trading under 116. the long and short of it is, when you look at interest rates globally and dollar index, it certainly doesn't seem like it is in any hurry to go dramatically higher. back to you. >> thanks so much. coming up, stitch fix going public on a big day for ipos, opening trade by a live interview with founder and ceo can katrina lake dow down 70 points, being led lower by walmart, coke and other staple stocks. back in a minute

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time for jim and "stop trading. >> they always say that hock tan gets his man, that's broadcom buying companies. when he does, his stock goes up. this morning, brocade closed so i'm transferring coverage of broadcomright here right now to david, because broadcom is trying to buy qualcomm, now that brocade is done. i think he's going to get his man and that qualcomm doesn't have the force field to stop him. >> you don't believe he does >> i don't >> that's interesting. it will be interesting to follow the next few weeks as that continues. >> and there are people who believe that qualcomm would adopt the poison pill of buying nxpi >> what number that really is, i don't think that happens maybe 125 gets it done >> well, just be aware that the stock is no longer an earnings story. it's now a faber story

he gets his man. >> jim, what's on "mad" tonight? >> you can hear the people like "mad money." applied materials. gary dickerson is just like chuck robins, talking about how the next ten years are going to be unbelievable. and by the way, i have to tell you, owens corning, you need them if you have flooding. home depot says they're doing great. i can't wait for tonight >> we didn't mention housing starts what a number on starts. >> this business, please go read what cal says about housing in the home depot call. we have housing, internet of things, voice activation we have cloud. these are fabulous big trends. people are too negative. >> we'll see you tonight >> can't wait. >> "mad money" 6:00 p.m. eastern time >> when we come back, what a day for ipos we'll talk to the ceo of stitch fix. down dow 75.

welcome to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. markets down 67, but that's

clouding over some retail earnings that are in good shape. of course, watching the tax bill and media m & a. a lot of chatter on that >> our road map begins with the media frenzy new suitors lining up for some of 21st fox's assets is a megy deal in the works? >> zero to 60 in under two seconds, including some new commercial trucks. tesla is unveiling the fastest production car ever, but is it too much for musk as the company burns through cash >> we're waiting for stitch fix to start trazing on the nasdaq lots of doubts surrounding subscription services, but is this company a different story we'll talk to the ceo. >> let's get to media goings on. the stocks in question, our parent company comcast is in talks with 21st century fox in terms of buying a substantial amount of assets of that company, namely its entertainment assets, distribution overseas assets, ownership of hulu. same deal that i first reported

on back almost a couple weeks ago that disney and fox had been entertaining when they were in talks. now, the talks between disney and fox, i'm told, are low intensity, but sort of continue at a certain pace, and talks with comcast also are continuing they are both for what would be all stock deals, namely, if they were to come to fruition, fox would accept comcast shares and/or disney shares for the assets in question that would at least tax defer the potential capital gain, though it would not eliminate the capital gain it is preferable, apparently, from the perspective of the murdochs who when looking at this fast evolving world of media, do not necessarily believe fox as it is currently comprised has the scale needed to compete against the likes of facebook, gookal, amazon, or even netflix so in merging its entertainment assets with those of comcast or

disney would potentially gain that scale and have its own shareholders benefit whether or not this happens is certainly unclear. i'm told by people familiar with the situation talks are expected to continue for the next few weeks and a decision will be made as to whether to get down to getting a deal done or walking away guys, regulatory, of course, remains a key concern, particularly as it relates to comcast, given that company is already under a dissent cekree for its deal to acquire nbcuniversal a couple years back that expires in august of this year look no further than further opposition to the deal than at&t and time warner getting together that evidence that comcast getting larger in content, distribution and content, which apparently has certainly concerned the doj this time with time warner and at&t, well, one would imagine it would certainly concern them yet again were it to happen. doesn't mean the deals aren't

being discussed, and it is certainly interesting. we'll be following it closely. >> sort of interesting to ponder what these combinations would li look like. so comcast, our parent company, you said they were interested in the international assets i guess that's a response to at&t >> verizon, again, doesn't appear to be fully engaged here. they may have expressed some interest sony also apparently made a phone call saying hey, we might be interesting there might be others. it's comcast and nizly right now. the international assets comprise the single largest components of the cash flow of these assets sky, but star in particular. comcast doesn't have international. that's not a big component of its portfolio. >> then julia borsen last night, taking pains to call himself a content company, but hinting maybe they, too, will have to join the frenzy somehow, in some way. >> what's interesting, we

pointed this out initially, fox would slim down to a company that's very similar to what cbs currently looks like a broadcast network, sports because they would keep the fox sports network and the fox news and the broadcast and the affiliates so they would be a news and sports company, very similar to what cbs is, and moonvez would be the first to tell you we're having success we're on every ott platform. >> that's apparently the key crazy week markets lower with the dow on track for its second straight down week. s&p trying to avoid it first weekly decline of 2% in about 60 weeks. ben joins us, global strategist. don shriver, guys, happy friday to you >> happy friday. >> i wonder what you think, don, about what some are calling this modest move down the risk curve the last couple weeks. >> i think the markets are showing the fatigue they have. i think earnings are not quite as strong. they're good, but they're not

quite as strong as expected. we have only got seven sectors out of 11 this quarter that are positive we had 11 out of 11 last quar r quarter. that's a little fatigue, and you know, the fourth quarter of 2017 compared against '16 is going to be a big hill to climb for earnings to be positive. i think the markets, you know, are a little concerns where we are. >> that picture. you have some outflows at high yield that are somewhere in the top three of all time for the week are these clues adding up or not? >> that's the key question is what are markets telling us about what is happening in the economy? so equities have struggled this week high yield spreads have widened this week. you have had yield curves that are flatter. ostensibly, those aren't great i would like to paint a slightly more sanguine picture. i think what markets are telling us is that we're somewhere in the middle of a late cycle rally. so a lot of that acceleration that's characterized the last year and a half is leveling off, but growth remains pretty good

things like high yield spreads widening out, things like a flatter yield curve, that's symptomatic of a late cycle economy. the good news here is that this could go on for some time. we're not seeing a clear path between where the economy is today and the next economic recession. so late cycles can last for a long time. late cycle rallies can last for a long time. >> don, how do you square your caution on this market with what we're seeing today david's talking about potential mega deals in the media space. it's not just there. this broadcom/qualcomm deal is out there. huge deals a sign of confidence also, seven ipos today >> the market at the end of a late stage market rally like we've had tends to do this there's all kinds of stuff going on for companies thereat are trying to reposition, get more competitive, and a lot of times these mega deals don't work in being accretive to their business models.

you have companies that have been much more competitive than older line companies you see this move to try to create a more competitive structure. we'll see if that works. i actually think some of the good news is that we had a 3% gdp print this quarter in the face of the hurricane, you know, slowdown that everybody was expecting. and we're looking to probably 3 plus for the fourth quarter. that trend by itself is supportive, i think, for a rally continuation if we get tax policy, right, we could definitely skate on what could be a very nasty market cycle if we don't, i think the markets are in big trouble >> the treasury secretary was on our air earlier this morning and talked to joe, becky, and andrew about a potential timeline for getting this legislation through capitol hill take a listen. >> we're very excited about the timeline yesterday was obviously a huge day in terms of having the house

pass the bill. that's a great move forward. we're going to have the senate as soon as they get back from thanksgiving vote on the bill. and our expectation, it will go to conference right away, and we have every reason to think we'll get it to the president's desk before christmas for him to sign >> so does that elongate this late cycle part you're talking about? >> i think you have to be careful what you ask for so is this a 3% economy? is this a big fiscal boost all those things are fine, well and good from the perspective of near term growth i think you want to be a little careful that in a late-cycle economy, a big boost to growth actually might bring forward some of the vulnerabilities that ultimately sew the end of the cycle. there's a bit of a tradeoff between near term growth and the length of the cycle, but in the near term, next 12 months, we're still in good shape. >> you see tax reform to a big contributor to growth? [ cheering ]

>> post eight. i think we're getting a first trade on sailpoint >> they have a $1.5 trillion net tax cut in the next ten years. on our measure, it's probably 2.3% gdp growth in 2018. it's a contribution, not an outsized contribution, but supportive next year >> where do you want to be if that happens, don, in the market >> i think this is one of those markets cycles where you can't afford to be heavy cash, and it's tough to stay fully invested after you've had the gains you had. i don't think you can afford to sit on the sidelines here. you know, i think that hedging is an example right now. would normally be a great strategy, but because there's little downside risk, hedging is very expensive i think you have to be careful i think we have to see what develops over the next quarter or two, and i would stay more invested, not less invested,

because i think that, you know, we are going to get a boost to growth i think the tone of growth is a little bit better. you know, for whatever reason, business investments have been really strong in contributing to gdp growth that is underlying this improvement in growth that we have seen. if we can get government spending of any kind, which includes tax policy, i think the markets are going to respond to that positively. i think the economy is going to get a boost. i think it actually will help the fed rationalize the rate hikes that are coming because right now they're skating out over their skis. they're way out over their skis, but they need the margin in case things change to a negative tone >> sure. something yellen has been saying for a while, right >> definitely. >> reload the chamber. thanks very much good discussion. ben and don, as we await the next couple quarters when we come back, tesla's new semitruck getting an endorsement from one transportation company. shares of the electric carmaker are up about 2% today.

the question is, can musk deliver? we're on ipo watch sailpoint here indicated 13 to 15, and then stitch fix, the subscription clothing company, set to make its wall street debut. we'll talk exclusively to katrina lake at 11:00 a.m. the only woman to lead a tech ipo in the past year "squawk on the street" will be right back my ambition is to find something. me. ambitions live everywhere. synchrony financial gives people the buying power and financial toolsthat help make them happen. synchrony financial. what are you working forward to? ♪

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unveiling the very first

electric semitruck the stock moving higher after jp hunt said this morning it reserved multiple tractor trailers tesla also surprised everyone, unveiling a $200,000 sports car. here's musk introducing the car. >> to travel from l.a. to san francisco and back at highway speed without recharging the point of doing this is just to give a hard core smackdown to gasoline cars. >> joining us to discuss all of this is robby shenger, transport analyst at morgan stanley. carl brouwer, executive publisher at kelly blue book investors appear excited the stock is up 2.2% is this alleviating some of the concerns they had of late about tesla? this new innovation? >> well, it certainly does bring excitement to the story and certainly a way for them to get

more deposits in, but at the same time, i think investors will be looking for tesla to get past the very busy slate they have ahead of them for the next three years, including building all the models, launching the truck, potentially launching the model y, the roadster, and even showed us a pickup truck yesterday. i think it gets people excited, but there's a long way to go in actually delivering. >> carl, are you guys excited, either about the roadster or the semi truck not the first mover in this category, but a lot of analysts say this could be an interesting growth area as tesla changes the game on trucks >> well, certainly there's lots of potential, but that seems to be the case with tesla lots of potential. we've still got 400,000 plus people who have given tesla $1,000, waiting for a model 3. and you know, at some point, he's got to deliver those before he can, you know, convince everyone that he's going to be

able to deliver things like trucks that have to be used by businesses and be very dependable and on time and of course, the roadster is a great kind of concept car at this point, but it's years away. so it's hard to get super excited until he starts to deliver on the more important thing he's got to do in the near term >> robby, not just a question of the timeframe but also of how expensive it's going to be what's the capital situation in terms of how much cash burn there is and how he's going to now fund these new ambitious two vehicles >> well, i think we're going to see as we go along, but to be honest, we think that the truck is a game changer, not so much for tesla, but for the trucking industry itself. we were looking for three things we were looking for what kind of range this truck could do. it is going to be the industry's first class 8 truck at 500 miles of range the industry's first level 4 economist truck, and the industry's first truck that's nearly 50% cheaper to operate in

a level 4 autonomous platoon tesla is doing what it does best, which is delivering innovation as they keep delivering both the models themselves and upcoming products, we'll see how the gap generation will progress >> karl, as least on the sale side, analysts might have been surprised by the range, right? there was some skeptics who said they expected a range in the $400 to $500, and the average range for long haul is 600 miles a day. does that include that at least their pace of innovation is ahead of expectations? >> well, again, it's the claim, what we have seen in the specs that he's mentioned. we also haven't seen cost yet, so we don't know how much this vehicle will cost. and i still want to see if he can sell it at a profit. you know, i'm one of those old fuddy-duddies who keeps going back to the fact that we're on 14 years now without a sustainable business model at some point, concept cars,

great ideas, need to turn into actual profit. that's what i think. >> so, ravi, what do you do with the stock? it has been weighed down lately amid questions about the production delays and the bottlenecks around the model 3, not to mention the financial strain that's going to take. and yet, here comes tesla again with a flashy new release of very innovative cars stock's up over the last year, but down over the last few months >> well, the near term is going to be determined by the model 3 and how quickly they can ramp up production there, but clearly, opening up, whether it is with commercial class-a trucks or pickup trucks or even extending into the roadster are certainly positive for the long-term thesis and expanding the terminal value in the dcf the near term is about model 3 >> we'll see if we get updates there after the quarter. ravi, thank you for joining us from morgan stanley.

karl from kelly blue book. >> as we head to break, take a look at shares of williams-sonoma, after the retailer posted weak guidance for the fourth quarter stock down more than 11% we'll wrap up some of this morning's earnings movers. there are real bright spots in retail like gap and others "squawk on the street" will be right back i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

stitch fix, the clothing subscription service set to go public john is there covering the event. >> this is literally going to open any moment now. stitch fix right behind me priced at $15. looks set to open higher than that, but we'll see where itopebes katrina lake, founder and ceo going to join us on "squawk alley" coming up in just a few minutes. bill gurley from benchmark, one of the vc's behind the deal, also going to tell us. a lot to talk about in stitch fix, retail, personalization, big data involved in this. such an important space as amazon is trying to dominate

that and so much else. and there's a lot of innovation pouring into it. right now, really any moment now, we expect this stock to open i'm standing here, and with betaed breath. i see katrina standing back there where it's about to open pretty exciting because there's so many trends that can converge right here at stitch fix and on this company going public right now, carl. >> yeah, john, i was sort of wondering if it's painting itself as a retailer or a tech company. and how combinations of those two ipos and companies have done it's been a mixed bag, and you always run into the amazon factor >> yeah, sara, definitely a tech company. i think if anything, stitch fix has perhaps suffered by association with snap and with blue apron companies that received a lot of hype on the front end, trying to connect. if you want to draw a line, trying to connect technology to the real world snap pitched itself as a camera

company. and the augmented reality piece. of course, blue apron dealing in food stitch fix, arguably, a bit different. here's a company that took in minimal vc investment to begin with has been focused on a model that works profitably they are saying they're going to have to invest some in marketing going forward. and there's big data behind this in terms of customization and the types of data that customers give to stitch fix there it goes. give to stitch fix when they sign up. questions about the frequency of purchase right now, we see stitch fix opening priced at $15, and let's see. very soon, we'll start to see the prices at which it starts trading, guys. >> will be an interesting test of ipo market, the whole personal stylist subscription model. john, see you in just a bit. let's get to some of the other earnings movers.

there are a few in retail. gap reporting third quarter earnings and same store sales. results there driven by a turn around effort at gap, the brand, and old navy the retailer also raising its full year profit end sales estimates. also sticking with retail, footlocker having a big day. beating expectations that stock shooting up more than 20%. same-store sales fell by 4%, but that was better than the decline of 4.6% than analysts expected this has been a bear of a stock over the last year you remember the previous quarter was very disappointing there were some positive comments around nike, which investors always like, especially out of foot locker. joining forces for the sneak easy you know about this? opening on wall street next week a pop-up store with nike, and some of the comments from the earnings call that stood out to me, foot locker saying despite the promotional environment, which a lot of investors have been worried about with sports retailers, they are starting to see more premium products sell

and that's a buy signal for nike, which we're seeing in the market right now, and also for foot locker that maybe they can turn it around nike is focusing on fewer stores, but foot look locker is one they want to work closer will and try to revamp the experience >> what happened to the inventory build i thought we were dealing with? >> well, all of these retailers still have inventory problems. but they're getting better i mean, they have to show better sales. john fort at the nasdaq, we want to go to you >> yes, the stock has opened it is up some 12.5% at the moment trading close to $17 a share $15 is where it initially opened now the consumer has a chance to get involved here. this is a stock that could open at $18 to $20. you know, priced below that. but now, the customers are beginning to have their say. it's moving up above $17 hours to go in the trading day

we'll have to see how volume is, but this crowd is excited. you can see katrina lake over there with the crew. talking, shaking hands an exciting moment, arguably, for this conversion of retail, fashion, and data. talking to bill gurley earlier talking about brands that are powerful in the fashion space, in the retail space, that don't have deep insight into customization. exactly how many times perhaps i purchased one of my favorite brands and what i felt about it. stitch fix aims to bring that into the industry. >> all right, john, thank you. we're going to talk more about stitch fix later on this morning. i'm just looking at the valuation, david, on the last round. $309 million, the last financing round in 2014. coming to market around 1.2, so

a nice jaump in a few years. >> the way it's supposed to work, i guess, right yeah, it is. and a decent pricing, it would seem, at least based on the open >> by the way, s&p says about 5% of ipos in the past few years have been led by women one of the highest profile was mary barra bringing sgrx m back, believe it or not, if you count that >> if you count that, right. >> you try to think of these new hot tech ipos and new generation of silicon valley entrepreneurs and it should be more equal, and it's not there are a lot of questions about that whythat is >> when we come back, the battle lines are forming for an epic anti-trust case, what "the new york times" jim stewart is saying when it comes to this a t sknrx t/time warner showdown he'll join us next to discuss would-be threats to the $85 w dbin d. doisown 61 alerts -- wouldn't you like one from the market

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good morning, everybody. i'm sue herera here's your cnbc news update at this hour. the highest ranking chinese envoy in two years going to north korea, arriving in pyongyang to try to improve relations that have soured over north korea's nuclear missile program. the visit is seen as an effort by beijing to explore a new approach in relations. zimbabwe's president robert mugabe making his first public appearance since being placed under house arrest this as the military announced significant progress on talks for his departure after 37 years in power more than 20 people are in the hospital after flames ripped through a senior living community in pennsylvania. the four-alarm fire spreading to multiple buildings of the friends community in chester

county >> almost half of younger consumers plan to spend more this holiday season than last. the survey by the national retail federation says 46% of young adults aged 18 to 24 will increase their spending, while 39% of those ages 25 to 34 will as well. the retailers like that. that's the news update this hour david, i'll send it back downtown to you. >> okay, thank you, sue. sue herera >> the apartment of justice may be preparing a challenge to the proposed merger of at&t and time warner our next guest says if the government goes to court to block that deal, it may well be the anti-trust case of the decade joining us now here at post nine, pulitzer prize winning "new york times" columnist, jim stewart. no news yet. >> no. >> we have been waiting. in fact, i will say, monday, they fully expected the government was coming. yesterday, we got an interesting speech at the doj, in terms of his views of behavioral remedies

not working. >> there's a real revolution going on here in the approach to anti-trust that speech is part of it. he clearly came out saying i don't like these conduct reme remedies i don't like these agreements not to favor somebody. we want to get the government out of this. we want to see asset divestitures the justice department guidelines say conduct measures are often in a good way to protect the consumer the big thing about what's called a vertical merger like time warner/at&t, you have the same number of customers in the market as you did before it's not like two airlines combining and diminishing competition. so traditionally, it's these conduct things have been used. he's saying no, we don't want that that's revolution number one revolution number two is there hasn't been a litigated vertical merger case, according to the experts i talked to, the most recent one they could find was

1964 now -- >> 1964? i heard it had been 40 years you're saying over 50. >> a litigated vertical merger case that's because the chicago school of rational economist had really taken over this field and you know, there's no -- the rational economic owner of these assets are going to do the same thing once they're vertically merged as they're doing now. people are saying maybe at&t will raise prices for time warner time warner is already presumably charging the profit maximizing cost for their content. at&t has exactly the same incentive to do that so this really has anti-trust experts scratching their heads if they do file suit, it will be fascinating to see just what is the theory that they're going on because i can almost guarantee you it will be a new one >> jim, my reporter earlier this week focused on the state a.g.s who often do join, at least in some number, a complaint of this type and in fact, some of them had been party to the deposition of

potential witnesses that the government were to bring a case. none of them have signed on. so like you, if they do bring that complaint, it will be fascinating to see what legal theory they rely on given what seems to simply be this opposition of the coalition of distribution and content together, which by the way, this very place we work, well not here, but comcast, does all the time >> comcast is in the spotlight again. you're absolutely right about the state ags. typically, the justice department will want to rustle up support your reporting suggests that they came up empty part of this is politics one of the odd things is this hostility towards a big media merger is kind of a populist theory trump articulated it during the campaign but it's not a traditionally republican market oriented approach at all. so you have these sort of odd bed fellows who want to block the merger, which consists of

kind of the trump populist on the one hand and the kind of what people call the hipster anti-trust crowd, which tends to be kind of on the liberal side again, like the cool kids in anti-trust have nowed into this camp but traditionally, and traditional republican anti-trust doesn't support this. i think they're having trouble even getting republican attorneys general to go along with this because it flies in the face of decades of republican policy. >> if all of that is true, why are we in the same week seeing the fcc relax ownership limits on tv stations are there conflicting messages all over the place >> i think there are one danger for the department is they may be hopelessly out run we're hearing the fox assets seem to be on the block, we have comcast, verizon they're all maneuvering. we're going to see horizontal mergers. mergers of rivals in the space the rise of the internet, of amazon, google, netflix, this

has really dis rupted the traditional distribution and content creators and i honestly don't think anti-trust policy is in a position - >> no, what you're seeing is with all those conversations potentially or the ones that could take place, greg maffei, the ceo of liberty media said we have to wait and see what the rules of the road are. to your point, if they do this 180. >> that's what it would be >> it changes everybody's view of what's possible and not possible >> there are market implications i talked to various experts. stock prices are, you know, assume that in a vertical merger is going to go through and that if somebody wants to come in and bid a higher price to make a better use of those assets, it's going to happen this gets blocked, you're going to see a general shrinking of multiples in many fields, not just media >> i feel like you're being too rational about the legal case. isn't the underlying issue is that the president has weighed

in indirectly about this, about cnn? did you see jeff sessions get asked about this earlier in the week he declined to comment >> he really ducked. >> about whether there had been any communications between the white house and his department on this deal what does that tell you? >> i want to say being accused of being too rational, i take as a compliment nevertheless, there's unquestionably a lot of emotion around this. the populist feeling about this, first, there's hostility towards the media, that the whole cnn piece of this, widely reported and discussed here that the justice department wanted them to sell turner, which is code for selling cnn. you know, where would cnn go would it go to sinclair media, to a fox, which maybe they don't like vertical mergers. but a horizontal merger into a conservative leaning news organization might be okay so a lot of -- [ cheering ] >> driving by emotion, by passionate feelings about the media, about bigness, and about this populist feeling that we just don't want these people to

be more rich and powerful. but that's not, as you say, not a rational economic argument for blocking a deal. >> well, jim, another week has gone by. we'll see if what we get, if we get it, when it is, but we'll be watching it closely. thank you. all right, jim stewart when we come back, stitch fix shares are soaring on its debut. opening up about 14% a few moments ago. we'll be joined by the founder and ceo katrina lake more "ua othstetsqwkn e re" continues in a moment. the dow down almost 80 sure, t. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

well, it'sonce again.eason >>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.

in over a year is now the time to buy find out what our traders are saying on tradingnation.com cnbc.com

every day, on every street, in every town, across america. small businesses show their love to you. with some friendly advice, a genuine smile and a warm welcome they make your town... well, your town. that's why american express is proud to be the founding partner of small business saturday. a day where you get to return that love, because shopping small makes a big difference. so, on november 25th get up, get out, and shop small. dow down about 75. treasury yields are lower, so is the dollar let's go to the cme group in chicago. rick santelli with the santelli exchange >> good morning, sara. thank you. i would like to welcome my last guest of the week, dr. martin

felt stein thank you for taking the time. >> happy to be with you. >> the house passed the tax reform package it's now in the hands of the senate do you have any observations you would like to share with us about either one of those bills that seem to be heading for an intersection in various markdowns and maybe melding into a uniform bill your thoughts? >> well, i think they will i think the good news is we are going to see tax reform. i think it's going to be very important for the economy. so much talk about all the details, what this might mean for this taxpayer and that taxpayer, but the key thing is what it's going to mean for the economy. and what it's going to mean for the economy is really very good. what it's going to do is attract a lot of capital into the corporate sector, increasing productivity and increasing real wages. >> now, when it comes to capital going into that sector, it's

hard to disagree with your logic. but yet, i'm a bit tainted over the last seven, eight years, buybacks have been huge i'm not saying there's anything wrong with buybacks, ultimately, i guess my question is i don't suspect corporations are going to immediately raise everyone's strategy buybacks will be one area. how will that indirectly affect wages and what timeline do you suspect it would take for the middle class, the average guy, to experience those benefits >> you're absolutely right if you give corporations money, they don't just rush out and raise everybody's pay, but what's going to happen is by increasing investment in the corporate sector with more money coming from the rest of the world with american corporations bringing back funds they otherwise would leave outside the country, with all of that happening, we're going to see increases in productivity and a demand for workers and when that happens, wages

will be bid up so i have said in print that i think over the next ten years we're going to see the capital stock rise in the united states by some $5 trillion. that sounds like a super big number, but remember, the gdp is going to be something like $30 trillion at the end of the decade and that $5 trillion of extra capital will mean about $500 billion of additional real gdp and that's going to mean higher incomes for the average household. >> you know, and finally, with about a minute left, doctor, i would like to go to another area, ins.a.l.t. aspects have been very large. in the senate bill, they'll be even larger. many of these big states we're talking about, new york, new jersey, california, the types of governments that they seem to elect have no problem with high taxes, and many are democratic, and democrats always say the rich always benefit.

is there a bit of hypocrisy in putting s.a.l.t. back in the senate from that point of view, sir? your final thoughts. >> i think that eliminating the tax deductions for state and local taxes will put pressure on politicians to spend less. i live in a town that provides really good local services, and we all support it, but we're paying for it with 60 cent dollars because of the deductibility of the local taxes. so i think that's something that really will benefit the way we spend our money if we are no longer incented by the tax law to create more spending on things that are really less valuable to the average american >> i like that answer. maybe the government's done setting a pick for other forms of government in the form of taxation thank you very much. carl, back to you.

>> rick, thank you very much coming up, tom matthews, the executive editor of line spectator is here to unveil the magazine's number one wine of quk tye "sawonhe street" is back after this use we know you want . more great camera features and more power. and more than just unlimited data, we give you unlimited plans with hbo included for life. because you deserve more entertainment. and more spokespeople. talking like this, saying the word more. at&t. it's time for more. am i too close? i feel like i'm too close. get the iphone 8 and with all at&t unlimited plans, get hbo for life. only from at&t.

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wine spectator announcing their annual top 100 wines of the year this week, ahead of the magazine's year-end issue. joining us this morning to reveal the number one wine of 2017 is executive editor tom matthews back again tom, welcome back. before we let you unveil this, talk about what's working in wine in general right now. >> so, the wine market is booming. it's gone up for 20 years in a row, and we see continued growth, because it's part of america's lifestyle now, and people want information, they want to know about what they are drinking, and it's a lot of great flavors out there. >> sparkling, rose, packaging, lots is changing over the space. >> because the millennials are

coming in and they are extremely curious and will try everything and latched on to sparkling wines, which increased from 6% to 8% over the last five years >> i was surprised, thought they were into craft cocktails, harder liquor. >> spirits is also booming whiskey will outsell beer in ten years. >> there are a lot of apps you can use to help you understand what it is you're drinking or find something similar or know exactly what's going on. >> thank you, like ours. we have wine ratings plus, which gives you the ratings, and x values, which is free which gives you great bargains >> when you say whiskey is going to outsell beer in a decade, by dollars. >> by dollars. >> going to need a lot of aspirin if that's the case so before we unveil this, are there trends or similarities among the top 100? are they concentrated in one area >> for us it's like a diary of the wine year in the past.

wine spectator reviewed more than 1600 wines in blind tastings narrowing that down to 100 is not easy we pick for quality, value, and what we call the x-factor, the excitement behind the wine, something that really moved us during the year. this wine has the double x-factor one, it's a comeback grape, and secondly, it's a great american success story. >> why don't you lift -- >> ready >> yes >> number one wine of the year, wine spectator for 2017 is the duckhorn merlot napa valley three palms vineyard 2014. >> that is a vineyard a lot of people know. it's a comeback story, why is that >> because, merlot, merlot was huge in the '60s and '70s, '80s. "sideways" the film came out >> i'm not drinking any. >> but the duckhorns, who founded their winery on a shoe string in 1976 have always been making merlot, from this

vineyard, since 1978 dan and margaret duckhorn lived the american dream they founded the business on their passion, sold it in 2007 for $250 million >> so what happens once you announce this? does it become hard to get, sales go through the roof? >> there will, but there were 5,000 cases made, also three other merlots in this vintage all 90 points or higher, so plenty of good duckhorn merlot out there. >> how do you describe merlot to someone not similar versus other grapes >> rich red, round, full flavored, and easy to drink. you can drink it right away. >> you were talking about the year that was. it struck me, it was a big story for us not too long ago when you saw the wildfires burn across napa valley. now that you've had time to survey damage, how much was done >> vineyards are a great fire break. this vineyard was not damaged, very few vineyards were damaged.

the problem came with housing and especially rental housing for middle and lower class people, the ones that work in the vineyards. that was wiped out but the wine community is raising a lot of money to rebuild and restore the valleys, sonoma and napa. >> price on this >> 95 points, classic. the highest scoring merlot we rated this year. it costs $98, which sounds like a lot, but for the quality it's really not that bad. and we think it's a terrific wine and deserves its place as number one >> well, thank you for leaving it with us really appreciate that >> i wish i could. >> drink that eight months in, right? >> tom, thank you very much. great seeing you a lot of big movers leading the s&p this morning we're keeping our eye on ross stores, gaap, viacom, kroger, disney although the major indexes down. s&p down about 3 points, as you can see, as we put to bed a crazy week >> i was going to say, i'll add

one mover, bitcoin, eyeing the 8,000 mark, believe it or not. this was, you know, the digital currency crazy swings, it was down to 5,500 last weekend after a crash, has climbed all the way back up and is up 88% since jamie dimon said it was a fraud. went back and looked that up >> did he say fraud? >> he did say fraud, yes he used that word. and square, that was a big boost of confidence. jim talked to sarah frier, the cfo, about getting in. >> 40% revenue growth next year, that's above where the street is david, thanks for an amazing week of coverage >> sure thing. never a dull moment in media these days >> as we go to break, again, take a look at stocks and we'll "sawaly"onn itch fix whe quk le ctinues

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welcome back markets are lower today, but retail is up over 2% on pace for its best day since july 25th and its best week of the year. among the leaders are foot locker, abercrombie, and ross stores, all reporting better than expected quarterly results

this morning shares of all the stocks jumping over 10% that does it this hour i'll send it back downtown for "squawk alley. >> good morning, it's 8:00 a.m. at stitch fix headquarters in san francisco, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good friday morning, welcome to "squawk alley. i'm carl quintanilla with sara eisen at post 9 of the new york stock exchange, john fortt is at the nasdaq in times square where he'll sit down with stitch fix ceo katrina lake in a moment bi