ago. >> from my hometown of cincinnati originally. he's a freak horrible >> keep an eye on futures today, we've been watching through much of the morning been just below fair value this morning as we get closer to the opening bell, dow futures up -- >> that's hot. >> right now it's time for "squawk on the street. >> that's hot. ♪ good monday morning, welcome to "squawk on the street." i'm carl quintanilla. thanksgiving week begins with modest gains focused lashlgly on how the tax bill is progressing. analyst calls on mcdonald's and walmart. the two tens down two basis

points are we seeing signs of a top we'll break down head winds. >> we have a $6 billion chip acquisition to tell you about this morning and what it means for other potential deals as well. >> and retailers gearing up for black friday but walmart gets slapped with a downgrade over at goldman today. we have the latest on the retail sector as we begin an abbreviated trading week due to the thanksgiving holiday, the dow and s&p east in the midst of a two-week losing streak na nasdaq coming off the third session and bit coin surges past the 8,000 mark over the weekend. i think the high 8101.91 there's discussion whether or not it can hit 10k. >> i was thinking about zimbabwe, whoever has money may want to go to bitcoin. a chinese crackdown, they go to bitcoin. venezuela, natural bitcoin because it's defaulting on everything

when you see defaults and people realize currency may be devalued, bit coin seems to be a good alternative jack dorsey this weekend disagreeing with sara fryer, the cfo of square. sara fryer made the point that they are going to be trading bitcoin but not going to be important. square goes up again. >> over all on the markets, jim, we're going to talk to santoli about whether the bears missed their last chance. when you put together the outflows and high yield, goldman says we might get four hikes next year. the migration from tech and social media stocks to more stable companies -- >> i just think the migration from tech and social media is -- is going downstream. everything that -- all of the deals and stocks moving are companies that have bet them so i think it's just an expanding universe i read a lot of stories about the top. i read a lot of stories about high yield and come back and

say, listen, it's a benign period there's just enough good news in tech -- i had applied materials on friday. gary is well known as a guy who's rigorous, not prone to any sort of hyperbole and he's saying, jim, you have to understand these companies are including -- are doing so much better than you people in the media think. typically they try to tell you to tamper expectations, these tech companies are all going to minneapolis. >> that's a reference to the super bowl. >> you wouldn't know that. >> i'm not really thinking about the super bowl i would advise you not to either. >> you played ten games i think. >> jets have, yeah. >> no, i'm not thinking about minneapolis other than point of view of like 3m and target. >> general mills. >> that's what makes me think about and air bnb. there's a lot of companies that are doing well that are part of this weird mix, whether it be

broadcom or europe world with qualcomm. >> my world is qualcomm not broadcom qualcomm reports, analog devigs advices. i have to get ceos to stop saying iot people don't know the difference between iot and iou. >> they don't. >> but you say them all together, ai machine learning iot. >> you've got it. >> it's all one thing. >> that's something that mr. up dollar and quarter bennyofftold me, not just social and mobile and include, it's machine learning and ai. >> speaking of all of that, marvel confirming it has agreed to buy the chip rival cavium, that's when media reports of the transaction first came out both companies expect the deal to close in the middle of next year also reports that qualcomm is expecting to get japanese and i

trust approval -- >> nxp they have the battle to come and what price they are willing to raise to i continue to believe qualcomm is going to need to raise. broadcom would rather see them not raise and not do the deal at all. as for this deal this morning, comprehensive data center solutions where they try to be pointing to. >> intel, it's an arm holdings -- partner, the main thing you have to know, marvell tech has been associated with the lowest of the low of the food chain, which is hard drives this gets us to hard drives less than 35% and that's fantastic a lot of what they are doing here is car. the internet of things nonconnected part of the car, not the cloud part, david, this is a big win for your friends at starboard. >> oh, that's right. >> they are owner of marvell right. >> matt murphy is their guy and put in really good numbers on the board including rick hill

and took the stock from 10 up to 20 where they can do this deal and congratulations to starboard, this is probably one of the better let's say like carden, they turn this company around. >> as we always point out, keep an eye on the acquirer stock price and in this case it is going up, both the cash and stock deal, $40 a share in cash and 2.715, the overall value going up a bit. >> great balance sheet. >> increase in marvell stock price. >> marvell shares as 18 times -- they are going to go to 22 times, which is the average multiple of companies involved in the data center you can see the stock going to 26 rather rapidly. >> it's not a merger monday but it's interesting how many different situations we are tracking that could result in large deals. we mention broadcom and qualcomm remember december 8th. that's the deadline they have to

file for nominees for lts board. we'll see how many they come with, whether they come at all it is expected they will hasbro mattel is still out there and cvs and aetna, remember? it's still out there and being worked on. >> cvs needs it badly. >> that's a vertical deal, which gets you to time warner and at&t, still waiting for the department of justice there as to whether they make a move. time and meredith, small deal but people care about that a lot of things out there when it comes to m and a activity that haven't hit yet not to mention the other one about fox, reported on a little bit we'll keep an eye on all of those. this morning just this one deal to actually tell you about. >> i do find that the conversation -- wherever you go, people want to talk stocks, they are enthralled by the fox deal because everyone comes back to your unbelievable malone interview, which is the death star summit. so the federation has to unite. >> the death star -- if you missed it, the quote from

malone, referencing amazon the death star if it moves in your industry and blows up the planet. >> how about a moment in interview where very -- i don't know people didn't talk about it more, are the cable companies too late to take on netflix? >> yes, without a doubt. >> didn't say know, they all get -- yes. >> it's too late, yeah >> when the moment was -- the pin drop in interview -- >> yeah, just like yeah. malone for his part had been asking years and years ago for there to be some sort of coalition of cable companies to come up with a netflix like streaming svod offering and they didn't and it's too late. >> now you've got verizon having largely turned its back on large scale m and a. according to reports today -- >> better be careful because the nfl is everywhere. i find you can't -- you walk down the street, you get hit by nfl. >> you could. >> handheld in your -- >> maybe there's going to be

punches slammed between jerry jones and roger goodell. >> i know -- last night was kind of a preliminary battle, it's going to be a beat down for jones. >> retail will be a story of the week as we get closer to black friday walmart got downgraded by goldman citing valuation, they still raise the price targets from 100 from 91 alibaba and art retail groups gives them more than 30% stake making it the company's second largest shareholder. sun art operates 150 stores across china goldman note says all of the appreciation has been multiple expansion, which is not common they've gone from 16 to 21 times. >> i can't disagree with that. that's sound reasoning it's just when you come back and think who can take on amazon, whoever can take on amazon gets a higher multiple it's not like -- i think they can grow into that multiple and do the earnings.

they had very impressive comparable store sales, that really does matter so i like the combination. going back by the way to cvs, there's still so much talk about amazon wanting to own the pharmacy arc, that i thought there was an amazing cardinal hold to sell because amazon is putting its whole model at risk -- >> despite their supposed denials about wanting to -- >> this is about selling to hospitals, selling medical equipment to hospitals. >> the death star analogy is apt and we talked about this last week, amazon when you think about the m and a world, there's fox disney and amazon is parentally is having impact on the way they are thinking about the assets and the whole studio model which is being thrown out to a certain extent because of amazon and netflix and how they go right to the producers and then cvs, what two completely separate industries and yet it's having an impact on both. >> this is first time i've

seen -- i made a terrible error, i said buy 50,000 cbs now it doesn't matter, you would short 50,000 cbs and both get hit by amazon, wouldn't matter. sell 50, which one >> cv or cb -- doesn't matter. >> called channel 2. >> immediately became channel 2 because i bought the wrong one we're all channel 2 in the eyes of amazon, we're all channel 2 we like the little white guys getting mowed down, the white robots, that's us, right >> you mean star wars. >> star wars, yeah. >> storm troopers. >> do we have a solo on our team >> i don't think so. >> you said doug mcmillan was our best hope. >> that's right. he's princess -- no, that doesn't work you know. >> yes. >> exactly like he's got the sword light sword -- i don't know. >> maybe elon musk is like --

>> elon musk, i read about him a lot this weekend because i realized that the reason why the utility stocks are hitting a high is because this guy is convinced everybody we're going to plug in 18-wheelers cummings, a terrific company was down huge last week because of elon musk talking about the truck. >> yeah. >> and there were people who had the guts to actually mention he's having trouble making cars. >> not fair. >> look, we're talking about him next. >> we are? does he want -- he wants to go to mars. >> yes, he does. >> he wants to -- >> going to take three years to get there and probably not coming back. >> it's amazing multiple expansion without earnings. >> probably not coming back from mars, better be ready to live there. >> musk had a weekend, we had an eye opening tweet roading quarter million dollar roadster and anand plans to add jobs in

the america. we'll get to an upgrade to gm which mentions autonomous driving. re" omosni "squawk on the stetfr pt ne when we return ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive,

far-reaching and, yes... a little magical. fedex.com slash dream

after tesla's surprisingly unveiled that quarter million

dollar roadster late last week, elon musk said a special upgrade could make it capable of briefly flying not saying next package will definitely enable it to fly short hops but maybe, certainly possible just a question of safety. rocket tech applied to a car opens up revolutionary possibilities. it's funny, my daughter this weekend asked me, do you think one day there will be flying cars and your instant reaction, no, unlikely then for a split second, i don't know anymore, right? >> elon musk has big ideas and i think that the end of fossil fuels is within sight because of this thrust, whether it be mostly these cars don't -- the future of cars will not be fossil fuel. i would have thought that was impossible -- >> no, although the combustible engine is fighting back, you saw that story. >> but coal fought back too.

i thinkthat musk's vision -- look, he wants -- he puts the roadmap out for all of us and i think we can -- i know a lot of shorts continue to say it's a giant scheme but every single idea resonates with younger people with your daughter and my kids they just think this man is a hero >> the cynical view on some write-up is that he's dusting off the fund raising playbook, right, reaching back in his pocket for big promises. >> well, it works, it worked for amazon and worked for netflix. >> and worked fosh him. >> that cohort of people that say i'll throw money at him if something will stick. >> there are efforts underway to have some sort of flying -- i don't know what you call it, vehicle or -- and they would station them sort of in highway areas where there's dead space, i'm not kidding, like the big highways and then there's that dead space where things turn on

each other. >> really? >> yeah, there would be fleets of these things. >> is that so. >> take off -- i'm telling you >> really? >> i had a whole conversation recently about it with somebody. >> anything to do with -- >> i wasn't dreaming. >> really? >> it does remind us -- >> i've never seen, this is reversed now >> total reversed. >> is that what i do every day >> yes must be annoying >> guggenheim does take gm to buy today on increased comfort in the 2018 outlook. i guess mary barr will have a presentation about autonomous as she has said apparently this is a story not in years but quarters. >> yeah, they have to take on waymo, they are talking about waymo, therefore alphabet's self-driving this one of those companies that can benefit from a little bit of multiple expansion if you think they are going to be the winner, what's interesting is this note talks about increased comfort in 2018.

do you remember six months ago we had all of these bears telling us about peak auto this is changed the narrative, not only bam tech changing the disney narrative they have come up with more technology and it makes people feel like gm is an edge technology play. >> i know, but it is fascinating to me how that narrative changed quickly. >> very quickly. >> and decisively for owners of that stock who suffered for years suddenly all of these thing mattered when they didn't previously even though they've been under development for a long period of time. >> does mr. met want to split it -- what is that fellow. >> einhorn. >> income and just income to get it higher. i mean, those are all things -- those are like viagra. you get this thing higher by like actually having technology. >> by the way, in that moat, guggenheim note, they say they are 1.6 trillion miles traveled urban suburban, right? >> that's huge.

>> two tenths are autonomous and see is it going to 10% by 2025. >> i think we would never have engines that we drove if we had first invented these kind of engines. these are much safer and that's what people keep realizing that's why musk when he does the 18-wheeler, it res snats because they are safer this is about doing something in traffic. i had ppg last week, the more jobs the more congestion, more accidents because people are not focused during traffic this is a way to cut down accidents. and when people start getting that, they'll realize i want to own gm but i want to own it because it's more useful than ford where's ford >> i don't know. >> that's been the story, right? leap frogging effect. >> where's fog have you heard from them >> we've heard from them. >> fiat is tied up with waymo. they are, they are

>> we'll get cramer's mad dash and count down to the opening bell in a moment take another look at the premarket on this monday of thanksgiving week. more "squawk on the street" after the break. today, smart planning is helping the new new york rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas into vibrant places to live and work. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. [ click ] [ keyboard clacking ] [ clacking continues ]

good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. ♪ >> time for a mad dash on a monday let's get to jim here. we're going to talk a little footwear. >> people are still upgrading foot locker after that amazing quarter last week. wells fargo goes to 42

to 49 on price target. if you go through the conference call, you really want to be buying nike. that's what they emphasize i also think you want to start thinking about under armour. kevin plank, if they start doing well, it's a rising tide be aware this quarter really was a nike breakout quarter and people are regarding it as a foot locker quarter. when foot locker does well, that's nike. that stock going up is still well behind the rest of the dow. can make a strong case for it. >> i think i heard you say it might be time to think about buying ua. >> under armour. a rising tide. kevin plank is focused he had lost focus and back to being focused, apparel is not their strength, not the strength but i do think that yeah, i think under armour, it's time to accumulate but i'm saying nike is the winner, under armour will

start going ahead i think of reebok this is coming back. now, it won't come back fast because kevin has a lot of work to do. i'm inviting kevin to come on the show he will articulate what he articulated to me, i know i've missed and had too many different units, i know i was not laser focused, that's over, i am laser focused. >> okay. he's laser focused. >> as are you at all times. >> we're laser focused on an ayen five minutes away st with us for "squawk on the street." ♪

[vo] progress is an unstoppable force. the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. something we all think about as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned

and ensure it lasts. introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. while maintaining a level of protection in down markets. so you can head into retirement with confidence. talk with your advisor about shield annuities from brighthouse financial established by metlife. you're watching "squawk on the street squt. the opening bell in a minute and a half, perhaps looking for lighter volume on this thanksgiving week of the we'll be paying attention to any news on how the tax bill is progressi progressing. we had comments from mulvaney, mur could you ski on friday, as

the senate hammers this out. >> you keep getting defections and then you get little things like the -- i'm on scott wapner's show, talking about the last in, first out versus first in and you can overchoose your lot in order to be able to avoid taxes legally, you have to take your first lot but the mutual funds got exempted from that it's one more reason why people may not want to own individual stocks but go with mutual funds, which is really -- i don't know why the republicans seem to think that's such an important issue because they are so pro stock market but i'm hoping the president realizes that's really hurts the vest investor. he seems to be pretty pro -- >> he's been vocal on twitter all weekend, made fun of jeff flakey as he calls him now, says it will be a no. apparently flake's office is not definitively said that. >> i saw a little not. volvo to supply uber in 1

billion in self-driving cars this is again and again, self-driving cars, i mean, we're just going to see them on the street we're just going to see them >> let's get to the opening bell and s&p at the bottom of the screen at the big board, october gone credit investors at the nasdaq amplify etfs celebrating its online retail etf. that brings us to one more note about the president's tweets over the weekend one of them involved apparently a goldman call, that sees unemployment going to 3.7, 3.5 by the year after that. >> geez. >> that's their reasoning why they see -- they are above the street in terms of number of rate hikes they expect for 2018. >> gdp would be -- there's a lot of people who feel what a great time to raise the rates and get them back to where they used to be rates are ridiculously low if

this economy is as strong as it is we don't have a lot of inflation, but what are rates doing, when are rates supposed to go up you would think at a certain point there would be enough demand for treasuries that the -- would go up there's still a ridiculously low rate and the world wants our treasuries we're stable. >> we're moving towards shorter duration. >> yes, we are. >> you know , lock them in they want to lock them in less than gitener wanted to lock the in. >> that seems to be the path. >> private equity? >> in some capacity? >> yeah, i think did he. >> certainly -- cantor is -- >> i think now jack lew, i don't

know. >> back door, but i didn't know jack lew's firm, wish him well. >> lindsay goldberg based in new york verizon is leading the dow we mentioned the nfl talks but wells does take it to outperform price target 50. they say the bad news is out that we'll get more fiber plans and that's going to add visibility about costs and they are focused on 5g which is still a prove me technology at this point or prove it or however you want to put it it depends on who you talk to, but real deployment of 5g is some ways out. >> for verizon, they want to be ahead on that. remember the stock has been hit lately when the sprint t-mobile talks fell apart, suddenly the idea that oh, man we're still going to have four competitors, shareholders are didn't take that too well. you could make the argument again, argue why the deal never would have passed antitrust

muster in the first place. if verizon stock gets hit on the idea they'll remain four as opposed to potential of three. >> a lot of people have been playing these just by looking at the cell phone tower companies, that's the way i look at watch american tower, that often tells you ahead what the talks are. i remember last week on t-mobile what's going on -- >> had to do with buy backs. >> the day before we missed that news. >> buybacks, very good >> and deutsche, that's why t-mobile is up. >> i did a deep drive on scripps and discovery, because malone just talked about -- >> nine minutes of our interview talking about it i tried to get him off of it but he really -- >> i'm coming around to it because there's too much programming. some of it will stick. and because of international i think that these -- a lot of what's driving things is trying to get beyond our country. and i was just surprised

he really -- be hold internationally. >> they do that's been the key strategy behind discovery, david zas love and they own a lot of content outright over there. >> stocks up buck and a half from i think the date of the interview. >> yeah, it was up but now down today. viacom is up again it was up on friday also, you have a deutsch bank note that was worth mentioning because it does put perspective what we've been talking about, these media companies are trading at all time lows on multiples viacom upgraded and say we've never seen multiples this low in media since the credit crisis until last week. given these multiples implied declining business, we think the probability of further multiple compressions is low. i don't know sometimes these things just seem to make new lows it's hard to argue but at least it seems to have been having a positive impact this morning again, it was up, i think it was

friday it was up after being down much of last week yet again concern there, it got hit on the day that we saw the charter deal i interviewed tom rut ledge on that day as well and seemed to imply they got a very good deal, carriage deal they signed with viacom, deals with fees from affiliates after earnings and then this morning people trying to -- the incomes out and says 45 bucks is what fox would be worth on a deal with disney or comcast, the entertainment assets what's interesting is some people now trying to fast forward if we get something and as i reported last week, next three or four weeks are key. fox does not want this thing to be out there for a long period of time in terms of these talks. they want to try to either get to an answer or not. but this idea that fox would then own 20 something percent of disney, that has to trade at the

discount, doesn't it, jim? >> yes, that's a very good point. yes. >> not going to trade at market. >> no. no but again, reach scale, reach, reach. we have not thought of disney needing scale because we felt dismy had a lot of scale until this developed the viacom, it's interesting to hear, everyone is so quick to say we're at the top i read a lot of top articles, you are talking about this is a historic low for viacom. we have companies not overvalued within this mix. i know there's still propensity to look at fang, come back to the financial they are not over valued and you have a whole lot of them. >> trading 10.5%, free cash flow yield. based on the estimate of free cash flow, stock price represents free cash flow itself would represent a 10.5% yield.

>> a lot of people were telling me it's time to buy ge. >> big piece about potential board shake-up on the way. >> yeah, that was one that i felt resonated in that it's entirely possible that if you get a new board and you get more of a direction but there are also a lot of critical people saying that the big presentation was slap dash. >> really? >> yes and what's a ge company -- we didn't know. in retrospect, flannery has to move fast. but that i don't necessarily think they were ready. the reason i say that is because power is going down as a business, a secular decline business and why? because power is associated too much with fossil and the undercurrent of their power decline is fossil. people -- it looks like that

immelt made a bet, more than he led on, about fossil, whether it be oil and gas drilling or whether it be power, which wasn't that focused on wind. it was more focused on turbines. this is a company that uniquely went the wrong way to go far more towards fossil than it wanted to. one of the things great about ge, they deny anything that's negative here's what they won't deny. we're a great american company they'll deny anything you say which made it really hard from 30 down to 18 to be critical because they denied it >> you've got to agree with that. >> yeah. i just wonder as an investor when you look at the company at this point, why would you -- what's going to be the catalyst that finally gets people believing? maybe it will be when they recompose the board. but i don't think so that's not -- that's not results. i mean you're going to have to wait for a couple of quarters here to get some sense that things have bottomed and there's some possibility of recovery. >> well, i think if you broke it

up and saw aeropace, you would like health care very much. >> breaking this company up is not in the cards right now. >> they have to raise some capital. >> wouldn't necessarily create value. >> ultimately i would pay a lot for their aerospace business which is fabulous, maybe the best after boeing. >> some people say that alone is worth $100 billion. >> they have to separate all of the fossil fuel stuff. if they came in there and someone came in on the board and said listen, everything that's fossil, we'll have to work our way out of over the course of the next three years, i think the multiple would go up they need to clearly articulate fossil has been a mistake. >> my guess is that you are at this point more favored to ibm than ge. >> i think ibm is closer to a bottom than ge ibm is next -- we saw pretty good piece this weekend. >> could go up 30% in a year. >> that's aggressive because they are so far behind in their -- they have a public

private cloud which is interesting business but the thing is that ibm stock has really been laid to waste by f bufr fet selling if you knew he was almost done, people would say i'm not going to keep running into the buffett buzz saw >> the argument is revenue is beginning to turn, strategic imperatives are beginning to pay off. >> martin schroeder is pretty much assured me that we -- had the last bad quarter and main frame cycle kicking in i think there are special faster growing initiatives will really stand out. are they behind the other cloud companies? everyone is behind the other cloud companies. no one is even coming near what amazon is still doing. that's why the piece last week about the parts -- some of amazon's parts -- >> the one talking about a trillion dollar market value not too far away. >> it's realistic because their web services is so good. it's just so quick. >> you don't think azure or google are close.

>> they are very good but what happened is that amazon first mover advantages really helped i think walmart last week was a great tell, don't rule anybody else out because walmart will not subsidize to amazon. >> aren't they asking all of their -- >> we don't know, that's a restraint trade issue. it was a good suggestion if you get down to bentonville you want shelf space you help me, i help you. >> you try the google cloud and it's a good cloud. i mean, cumulus and serous and google -- >> we're not compatible with the other cloud. >> get off my cloud, right it's like a jagger thing. >> it is >> ibm is leading the dow at the moment let's get to seema modi on the floor. >> good morning, a burning question, traders are trying to answer, what the worries in the bond market means for the outlook of stocks. high yield bond funds saw 6.8

billion in the past one week third most on record, that akos akoshding to bank of america it's a similar question being posed to emerging market inve investors where yields in china surpassed 4%, keeping an eye on the indian bond market as well just crossed $500 billion, placing it alongside u.s. tech giants facebook, amazon. this week will be an important one for u.s. retailers four days until black friday, interestingly enough, macy's nordstrom and kohl's are among the most heavily shorted stocks. short interest has climbed to a two year high. but one standout is walmart. now up 40% this year analysts say most of the upside for walmart stock is behind it after the big run this year. goldman sachs lowering the rating on the stock. as we discussed the $6 billion deal between march marvell and

cavium, check out the best selling stocks, nvidia, lam research, up 100%. bitcoin surpassing $8,000, a level goldman sachs team forecasted it would break through but certainly garnered a heated debate as to whether this is another sign of a market top. carl >> seema, thanks, we'll see you in a bit let's get over to the bond pits as well check in with rick santelli, good morning, rick. >> good morning, carl. if you're up looking at interest rates, you would see familiar areas of the curve in terms of where they are trading yieldwise except for the shortened of course two-year note yields are different. we'll get to those in a minute looks like they popped and in a way they did if you look at the one-week chart pretty much, we're continuing to hunker down between the 2.32 and 2.38 level a key start date around mid

october, you can see it's a very consolidating type pattern if you look at bunds under the same microscope of time, it's very similar in the spread between the two is almost exactly 200 basis points and it's been resolving around that difference for about a week now. many traders think it's found an equilibrium as we get ready for volatility at the end of the year back to that two-year, his a two day of twos. 1.73 we continue to work our way higher with respect to the highest yields for this particular move and this particular move still goes to october of 2008. and it's not going to go much farther back in time because if you look at mid 2008, we had a 3% two-year. i don't see that any time soon i think a 10-year comp on two-year, even though we continue to rise is going to be pretty much sealed in cement for quite a while. a two day of twos, you can see

that if you look at the foreign exchange chart, there was a lot of action last night two-day of euro versus dollar and how it snapped down. the story is that ang la merkel is having a hard time finding any partners since the last election to form a coalition and that was deemed pretty big news as the euro started to trade in asia. we're back above 1.17 and a half and a lot of that has come out of the marketplace if you look at the same mid-october start date for euro versus dollar, it certainly has a look to it that it wants to hold every time it gets anywhere down in a 1.16 handle. carl, david, jim, back to you. >> rick, thank you very much still to come, a lot to talk about in the tech space with venture capitalist roger mcnamee. dow is up 29 points to start this holiday shortened week. we're back after a break

i think we should do that meeting tomorrow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

attention homeowners age sixty-two and older. one reverse mortgage has a great way for you to live a better retirement... it's called a reverse mortgage. call rfree information kityour with no obligation. it answers questions like... how a reverse mortgage works, how much you qualify for, the ways to

receive your money and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free money from the equity in your home... and here's the best part... you still own yohome. call now! take control of your retirement today!

♪ treasury second steven mnuchin's signature got lots of attention, he printed his name rather than signed it. he explained why on fox. >> i changed my signature, i had a very, very messy signature you could barely read. it was very effective at signing things but i felt since it was going to be on the dollar bill forever, i should have a nice clean signature. >> we've paid a lot of attention to not only his signature but his trip to the mint the other day. i guess easy to understand story, right, everybody can relate to it. >> yeah. >> i like it with the black gloves. >> if you've never been to the mint -- >> we went last year and they were redoing the machines. >> the giant copper -- so

exciting. >> that's the picture people love they say they look like disney vil ins. >> really? >> mulvaney said if they have to remove the individual mandate, that provision from the tax bill, that they would do mnuchi repeal of that is not a bargaining chip in the progression of tax reform. >> these are the things that make me concerned that we're going to see a smaller package boy, the senate, you can't have any more defections if you're a republican >> you have johnson, and now - >> collins >> possibly collins over the aca, and flake the president is saying he thinks flake - >> we're still waiting >> that's three. that's all you need. >> waiting for mccain and corker and rand paul. >> right >> marshawn lynch, he talked about, too >> going to be a battle. the idea they're going to get something done prior to, what is it, christmas? what they're trying to talk about. still seems unclear. though there are plenty of firms weighing in with their view that

tax reform is simply not part of the market's valuation despite what i remember secretary mnuchin saying differently about a month or so ago. >> they have chuck robins talking too about the bringing back the money, repatriation it's not really clear whether that won't land directly in the pocket of shareholders >> when we spoke to robbins, i looked back to read his conversation with us, chuck robbins, ceo of cisco. he never said it would result in them investing more in the u.s he didn't say that he talked about the fact that they use debt now to fund their investment because they have so much overseas cash and they'll have more capacity, but he didn't actually speak about raising the total amount of capital allocated. >> the marginal addition to investment because of taxes. same with sara and quincy at koch same answer. >> we have a lot of american companies. i think some of the semi

equipment companies are ready because they need to have more capacity it depends on -- look, if you don't have great demand, you don't need more factories. >> but if you're cisco or some of these other companies, you're generating a lot of free cash flow a lot of that is becoming cash, but you're going to spend what you think is -- it's not as though you're constrained from spending if you think there's not a market opportunity >> you're right. i'm not going to disagree. you're right >> we'll getst tdi" "oprangwith jim in a moment. dow up 37. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

let's get to jim and "stop trading. >> you know, it's interesting that one of the weaknesses in tech has been in cybersecurity even though we all know that there's been more hacks than ever so palo alto reports tonight, and i'm going to be watching that because i think one of the things we heard from chuck robins, he has 8% security growth these guys are squarely oppositional so is it coming out of palo alto or suspend bigger for the larger players in it, which is palo alto tonight, i have cyber arc, which is a smaller player. they missed a couple quarters. these guys make the keys to the

kingdom kind of software that stops you once you're in you know, a guy leaves a company. he's executive vice president. a lot of times, the door is not closed the bad guys find it, and that's how they burrow through. they look and see who's left, who's there. then bingo, they're in he tries to stop that. but this is such an important area i really feel like what's happened is that people forget about it semis. look at lamb research, marvell, that's in cars anything that's involved with cybersecurity. these are the growth areas that make me so bullish about tech. and make me not back down. >> yeah. >> i'm not backing down. >> just like tom petty >> don't back down >> tom petty >> i know. it is a tough year >> tough year. >> jim, we'll see you tonight. >> yeah, marvell, i like that one. >> "mad money," 6:00 p.m. eastern time >> when we come back, billionaire anand mahindra

we'll talk to him in the next hour with the dow up 40.

welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. holiday shortened week the dow is going to start off with decent gains now, close to the highs of the initial session of 56 points, led by cisco, ibm, home depot and others. >> that's where our road map for the hour begins, with stocks kicking off the week on a high note we'll bake down the signs of a possible market top next >> holiday shopping season upon us black friday just four days away what's in store for retailers straight ahead >> and bitcoin is surging yet again, hitting a new high, this after what's been a volatile but up month we'll discuss the future of the crypto currency. >> up month, up year up everything. first, we have economic data let's get to rick santelli for the numbers. rick >> well, i tell you what this is a shocking number. now, granted, leading economic indicators for october is probably not going to change the current direction of the

markets. but up 1.2%. pretty much close to double expectations and i'm telling you, i'm going to have to go a long way to find a higher number. looks to me like we're going to be somewhere -- holy mackerel, long ways. i think the current tie is not far from that level. as i'm saying, i'm really having to siver back again i'm not able to find anything higher at the moment i'll have to get back to you on that yeah so let's just say 1.2% is going back quite a ways. my guess is at least ten years carl, it'snot moving the market, but it does give us constant reminders there's a lo of subtle aspects to the economy that are doing well. manufacturing is one of them as we shoot for a 3% gdp handle for a fourth quarter average, these little numbers may help along the way. back to you. >> thank you, rick i'm sure you'll get us that

number one way or another. we'll come back to you >> markets are higher as sara said this morning as the trump rally passes the 12-month mark some cracks in the rally last week as investors look ahead to the passage of tax reform and the next round of rate hikes joining us, wells fargo global equity and technical strategist. and gabriella. given numbers like that, we know it's lei and everything, but why so many write-ups over the weekend about a top or toppish signs? >> for us, this is great reminder that the consumer is doing well, manufacturing is doing well we're even seeing a rebound in investment spending. the economy at the end of the day is doing very, very well that translates very nicely into earnings so while perhaps we do have a correction, perhaps we have a pause like last week, for us, if we look at the next year or two years this is still a market that has a little bit of room to

run. >> are you in the camp where you're looking for ways in which things could overheat like goldman is over the weekend? >> we're starting to think a little bit about that. when we think about the strong growth that we have already seen the past few quarters, right, 3% for an economy that potential gdp is still below 2% in our mind, and then you add a little bit of fiscal stimulus that could continue that nice strong pace into the first half of next year you're starting to think a little bit about overheating, but not quite at the point where you're starting to call the end of the cycle but it is a nice rebound here in a late-cycle economy >> it stands out to me that the market continues to brush off any sign of political risk today, that's coming out of germany, specifically. german stocks and the euro recovering even after the coalition talks broke down, leaving merkel potentially in her biggest crisis and a huge question mark over the stability and stalwart of europe this woman has been in power for the last 12 years and kept the euro together. why is there not more concern

about it this morning? >> we're back in this mentality of bad news is good news because if there is political uncertainty in europe, that maybe means the european central bank might be less aggressive in terms of removing some of that stimulus that mentality has sunk in around buying the dip, central bankers will be less aggressive if there's uncertainty virtually, that will change, but for now, not a lot of signs of the economy slowing. from that standpoint, easy money and good economic data means higher equities. >> really, do you buy that >> i don't know. i think it's a little early for us to get overly concerned around the political situation in germany there's still a ways to go in terms of forming a coalition at the end of the day, it's about the really strong momentum you see in the eurozone economy and zuro zone earnings for those who have too much u.s. exposure, we're also advising our clients to look at the positive europe story despite the headlines that will come and

go with regards to politics. >> given what we said about the markets overall and the economy going into '18, what do you think your next tactical move will be and how close are you to calling that >> so for us, it's procedure still, because we are so late in the cycle, because we have some of the headwinds starting to bubble up, whether it's the central bank starting to remove stimulus, et cetera, as value driven investors we'll probably continue to taper back on risk we want to be more countercyclical. we enjoyed quite a few years where we were overweight now we're closer to neutral. as we get overshoots in the markets, we would probably again continue to up the quality and pull back on risk. >> so that means going to defensive sectors or does it mean leaning in to more industrials out of tech, be more specific >> absolutely. we would say going up market or, you know, taking out a small caps and putting it into large caps, that would be one way to do it.

counterintuitively, we would focus on the cyclical sectors. if you look at the multiples they're trading at as opposed to defensives, interestingly, at this point in the cycle, you're better off continuing to play the growth, some of the positive economic data through the sickicliccals than through the defensives there will be a time when the defensives get thrown out and they end up cheap. that is not the case now >> sounds like you're not there yet, either. >> we're not in terms of taking riv off the table if we're thinking about all of the positive economic data in the u.s. and around the world. this is great for equities going into 2018. the only thing we'll say is the u.s. is later cycle, making sure we also have exposure to other stories around the world as well it's still a risk constructive view here. >> how much does tax reform, the prospect of lower corporate taxes down to 20%, factor into your bullish view? >> so if we get aggressive tax reform, we would say there's quite a bit of upside to markets. that is not our expectation.

we do expect modest tax reform and slightly lower rates kind of in the 23% range, which large caps have an effective tax rate kind of in that ballpark. they'll benefit a little bit, so we'll have a little nudge higher, but nothing meaningful unless we get aggressive tax reform >> one thing, because it is thanksgiving week, and we're talking black friday until we're blue in the face later in the week, retail short interest is up 13% in the past month close to a two-year high are people just playing into how well some of these names have done, do you think >> i think it's all about the positive backdrop for the consumer not going to lift all tides. the old boats the same way, but it is still a very constructive background for the u.s. consumer, if you think about expectations of income growth, if you think about wealth gains, if you think about access to credit, and mostly important, confidence >> are you a buyer or retailers specifically you could also factor in there falling traffic, growing online business, retailers facing major structural challenges.

but they also have the prospect of lower corporate tax rates >> exactly we'll await the consumer discretionary sector retail is obviously in there, but again, if you're looking for the health of the consumer, probably the best place to look is e-commerce sales. those are growing at healthy double-digit, kind of mid-teens level of growth year over year the consumer is doing well and the retail is doing well brick and mortar has to be rationalized >> guys, good discussion going to be -- we're going to start talking 2018 playbook more and more as we get closer to the end of the year. samir, gabriella, thanks guys. >> thank you so much when we come back, just four days away from black friday. we'll discuss specifically what's in store for the retailers. winners and losers as the holiday shopping season officially gets under way. plus, india's largest utility vehicle manufacturer expanding into the u.s wnitthch caruso-cabrera will sit do wh e airman live from

their new plant in michigan. "squawk on the street" will be right back stay with us you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

counting down to black friday, goldman sachs taking away its buy rate on walmart shares are lower today after a banner week, surging over 7% last week. meanwhile, the broader s&p retail basket had its best week of the year. what do you do next? joining us next, jan kniffen and

garu, ceo of boomerang commerce. welcome to both of you >> thank you >> thank you >> jan, just on this walmart call, it's interesting because walmart is now trading at a premium valuation to the market and to other retailers is it too late to make money in this stock if we continue to see e-commerce growth of, what, 50% last quarter >> i still like walmart. i said just yesterday or rather friday, the only reason not to be buying walmart might be valuati valuation, but i think they're going to have this great e-commerce growth. i do think they still have to invest money in e-commerce and that scares the market a little bit, but it's come down to a two-horse race, amazon and walmart, and alibaba, i guess, on who takes over the world. i think walmart is still a very interesting year i'm surprised to see that the price goes to 110 and somebody takes off their buy rating >> and it was largely on valuation that this has been

realized i'm curious your take. boom rang, your company, you help online retailers price effectively and analyze what their competitors are doing. how do you see the online landscape playing out? do you agree with jan that this is a two-horse race? >> absolutely. this holiday season, it's going to be definite ly most probablya two-horse race with amazon versus walmart this is a game of deep and wide discounting. in the last one year alone, we have seen walmart ramp up ithat dramatically and low stock prices which by the way, they will match in their stores. and of course, amazon has been consistently raising the bar in terms of how they can be the world's largest selection, and dynamically pricing their goods to be extremely competitive in the market >> what does that do for

margins, jan any worry about that or investors just focused on growing market share and sales >> unfortunately, i agree with everything i just heard, and yes, i think it's still going to be very competitive, despite the fact i think we'll see 4% -- as a matter of fact, if you look at just the beginning of november to now, it looks like you could have better than 4% growth this holiday season maybe closer to 5% i don't think that's going to happen, so i think things have to slow down some. i think the purchases are coming early because i think the offers, the discounts, are just as good now and have been ever since november began as they will be this coming weekend. i think the consumer knows that. the consumer said 20 points less of them are going to go shopping this black friday than last year last year, 58% had an intent to go shopping on black friday. this year, it's more like 38%. i do think we're seeing it come earlier. it's spread out a lot farther. we'll see heavy discounting, but i still think it's going to be a very good season for the consumer they're going to spend a lot of

money and they're going to get a really good deal >> jan, i mean, five would be an amazing number, right? the five-year average is 3.5 last year, we did 3.6. nrfc is 3.64 that would be a barn burner. >> this year is going to be 4.2, and if i'm right, it will be extraordinary. if it was 5, well yeah, it would be, you know, off the charts so no, i don't think that can happen that's why i believe it has to slow down as we come through the back end here. >> i know you focus on online, but does it matter to you that jcpenney is opening its doors at 2:00 p.m. on thanksgiving day and tj max is waiting to the crack of dawn on friday? is that still the narrative of how much time these retailers, which still do make up a bulk of the retail sales around black friday weekend, spend in their stores >> well, as i said, it's still going to be the most probable

battlefront is going to be amazon versus walmart, but any of these other retailers have a real chance of being the dark horse in this, and the holy grail of all of this is going to be competitive and dynamic pricing. remember that even though the sale actually might happen in the store, more than 50% of sales in the store are still being driven by online price shopping and assortment comparisons. so online has a big role to play even for brick and mortar sales, which is why these retailers have to really get their act together in terms of dynamically pricing their goods to be extremely competitive in this holiday market >> jan, i'm thinking back to a couple years ago when walmart boosted their wages, right, made a big investment in the in-store personnel. and i'm wondering how much of that will be reversed if in fact they start leveraging their physical distribution and emphasize delivery >> well, i don't know the answer to that exactly, but if you look at what's going on here, you

have 4% of the growth happened, if we get 4% growth, 3.6 percentage points of that will come online. at walmart, if they're going to be up 40% or 50% online, they're not going to be getting much growth out of the stores, obviously, so the stores are going to have to be more and more and more efficient. now, raising the salaries did a lot for the stores, in my opinion, because i think the stores are more shopable, where they're better stocked everything is going right in the store part of walmart. they're doing a better job in grocery, fresh produce, all of that but the game has to be won online if they're going to win against amazon and the other competitors. >> all right, guys we'll leave it there much more on the retail game and how to play the stocks into black friday thank you very much. jan and guru from boomerang commerce >> let's get to dominic chu. >> good morning. we're watching the s&p 400 midcaps. they're within five points of an all-time record high

3d systems is helping to lead the charge after they upgraded the stock to a neutral rating. still, the 3d system shares still down 35% in 2017 a nice pop today, but a lot of ground to make up. carl, back over to you >> dom, thank you very much for that let's get over to michelle caru caruso -cabrera for a look at what's coming up next on "squawk on the street. morning, michelle. >> good morning, carl. we're in a mahindra assembly plant where they're going to put together utility vehicles. white house is concerned about jobs moving to countries like india, but this is an indian company bringing jobs to the united states. we'll talk to the head of n'mot.ra nex dot ve it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data-

so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

welcome back to "squawk on the street." let's get over to michelle caruso-cabrera this morning. she's in aurben hills michigan, siting down with the company's chairman, anand mahindra >> thanks very much. they have up to 275 people working at this new facility within the next couple of month,

and they want to have 400 people working here by 2020 joining us now is anand mahindra tell us why. good to have you here. >> detroit is frankly the birthplace of the modern industrial manufacturing revolution so we thought we would get a tiny piece of it in a way, it's coming full circle you know, one of our businesses, the automotive business in india, started by importing the jeep into india. and now i'm back here starting an automotive factory in detroit. life has come full circle. >> i think a lot of people will be watching and saying oh, this is an indian company are you going to bring indians here under h 1 b visas >> the people we have here, the 275 you talked about, are almost 95%, 99% american. they are american citizens or green card holders. we came here, michelle, to tap the local talent we came here to tap the engineering experience that detroit is steeped in.

why on earth would we bring people from india when we're here to offshore and to outsource engineering talent from the u.s.? >> explain to us the economics because yes, there's a lot of engineering talent here, but labor is cheaper in india. so why do this here? >> you know, there is no business in the world, i don't care what it is, whether it's i.t. or manufacturing, that does not have what i may refer to as a blended resource base. you have high-end work, you have engineering work, you have some local knowledge you require. then you have some very low class work to be done. whichever value chain you're in, whatever business you're in, you're going to have people from all around the world you're going to have people who are going to be people from a local source, but you're going to have to have people of very high end talent, which are people who also understand the consumer we're going to be selling our product to the american consumer we want to have americans who understand american consumers. >> off road utility vehicles why these in particular? >> well, you know, we started

out as makers of the utility vehicle in india of the original jeep that's in our dna. we understand off-roading. we are, as you know, a major player in the tractor business the last time we met, we talked about that number three tractor maker in the small tractor segment here and then we have just started making a utility vehicle from our tractor company called the retriever, which i think you saw outside. and now what we're going to produce is going to be something that takes you a step beyond something that is industrial strength all-steel body, really durable, that leverages the dna of mahindra i think it's the right time and the right place for that market. so it's the logical next step to establish the mahindra brand in the u.s. >> you're doing this at a time where there's a lot of policy uncertainty in the united states around a number of issues that i think your company in particular might deal with. for example, tractors, as you mentioned, large market share there. you have facilities in mexico, facilities in canada

our league, larry kudlow, tells us he's worried that the white house will leave nafta what would that do to you and how worried are you about that >> our major base is the u.s it's mahindra north america. which is really spreading to canada and mexico. so we are essentially still a master distributor to those places so we are in no place right now where we are going to be in any difficulty over changes. if you ask me my personal impression, i think your president is a consummate negotiator he's fired an opening shot, but i think he's just as aware of how integrated nafta is. nafta may need some tweaks it's a 20-year-old agreement but i'm not so sure, i don't necessarily share anyone's pessimism that america might bail out entirely. >> you're not worried about supply chain disruption if they do >> not at all. disruption of the supply chain, no, not at all hot the cost impacts will be, maybe a different matter but as i said, again, i'm an

optimist about nafta merely being updated but i don't think it's going to be a situation where nafta is going to explode. >> mahindra is a huge organization with lots of different businesses you have tech mahindra, which uses a lot of h1b visas. they have made the bureaucratic procedure much more difficult and now there's a house vote on friday saying the minimum wage for the visa recipient may have to go from $60,000 to $90,000, a 50% increase for those doing the math what would it mean for tech mahindra and your company? >> to be very honest, michelle, what it means is that it's going to make offshoring more attractive the u.s. companies that may have been wanting us to hire h1b visa people here are simply going to find ways to offshore. with digitization, with platforms being major delivery mechanisms, offshoring has become even simpler. so in fact, it could actually make your profits improve for an indian company i think america has to think

very hard, though, about the balance of what pressure they bring to bear on american companies and make them uncompetitive by raising the rates too high in any case, frankly, tech mahindra was trading up. indian i.t. companies which were really at the low end of the value chain were moving up, employing more people. we have 2,500 people at tech mahindra hired here, who are american citizens or h1b visas, sorry, not h1b, but green card holders or american citizens in fargo, in rural fargo, we have 2,000 people we have hired. so that was happening well before this current administration >> you talked about u.s. companies being more competitive. they're debating tax reform in congress right now would a lower u.s. corporate tax rate make the u.s. more competitive and by how much? >> that's a rhetorical question. of course, it would, because that's one of the reasons america has become an even greater magnet for investment.

the ease of doing business is already an attraction here the large market is already an attraction on top of that, you're going to get lower taxes, you're going to get a huge amount of investment traveling to the u.s >> there's a racecar that we're going to show people later tell me about when you might decide to go into auto manufacturing here in the united states there was something you tried a couple years ago got slowed down for a number of reasons. do you still dream about that? >> absolutely. and dreams never die, michelle you know that. and i would be lying if i said that dream is dead i think what we are doing is we're progressing slowly we're walking up the ladder, tractors, utility vehicles now more sophisticated utility vehicle. and you know, we have a korean company that we own which is the third automaker in korea not many americans know of it. but thanks to hyundai and kia, most americans have accepted korean autos there's no reason why they may not launch a vehicle here as

well >> speaking with our auto reporters, said a lot of discussion is about whether or not an indian car could eventually close the quality gap or the perceived quality gap enough for americans to really want to buy them i assume you're confident that can happen at some point >> japan did it. korea did it there's no reason why an indian company couldn't do it the question is, as mahindra and owners of san young motors, we can leap frog. we can bring the koreans in. they have closed that gap, the perception gap >> you're competing for the u.s. postal service, for new trucks you have one comparative advantage. you already have the wheels on the right side of the automobile when do you expect to hear about that contract, which would be several billion dollars worth? >> i think we have been embargoed from saying much about it, so i have to be very cautious all i can tell you is we have been short listed amongst the top five we're very excited, the team here is super excited. the prototype is here, i can't

show it to you, but it looks terrific and as i said, it's a right-hand drive vehicle. they normally use diesel who knows how to make right-hand drive diesel vehicles? mahindra >> mr. mahindra, thanks so much for joining us on cnbc >> thank you for coming out here >> a beautiful new factory look forward to seeing it. carl, back to you. >> our thanks to you, michelle let's get to sue herera and news update at hq. >> hello, carl good morning, everyone here's what's happening at this hour hundreds of students gathered at the university of zimbabwe campus to demonstrate against president robert mugabe, this after he defied calls from his own party to step down the university has faced criticism for awarding a ph.d. degree to mugabe's wife. german chancellor angela merkel holding talks with germany's president after discussions on forming a new government collapsed those talks raising the possibility of new elections >> the georgia dome is no more

imploded this morning. the stadium was completed in 1992, and it was the home to the nfl's atlanta falcons until this year the building has hosted the olympics, the super bowl, and college basketball's final four over the years >> and infamous cult leader charles manson has died. in 1969, he dispatched his followers to commit a series of murders that shocked the country. he was sentenced to death in 1970 but was spared two years later when california did away with the death penalty manson was 83 years old. that's the news update this hour sara, i'll send it back downtown to you >> all right, sue, thank you when we come back here on "squawk on the street," a big bitcoin rally again. shares this time breaking through 8,000 for the first time we'll discuss the future of the crypto currency. >> and we're about one hour into the trading session. take a look at where stocks stand. dow up 71. ibm and cisco lead the charge there.

as far as the s&p, telec telecom materials, industrials are strong coming off a down week we'll see ifhe gnsol tai hd. "squawk on the street" will 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. see?

it's amazing, molly. thank you. ( ♪ )

stocks are up this morning after seeing some cracks in the rally last week. one of the risks being looked at, the historically high leverage on corporate balance sheets, and the risks that high-yield debt poses to stock prices for more, let's bring in michael san tolly, senior markets commentator, and dennis berman joins us nice to see you, mike. a bit of a wobble in high yield debt the question is how big of a warning sign is it for the equity rally >> i think it shows you how things might start to get dicy when the time comes. the bears lost a chance last week, a lot of things going in their favor, but the high corporate leverage is one of those background factors maybe it's underappreciated now. not corporate debt is up to peak

levels your late' 90s levels, your 2007 levels that doesn't say anything bad because rates are low, companies can cover their debt service, but if you look at valuation measures that incorporate that enterprise value to sales, to cash flow, they are between 30 and 100 percent higher than the ten-year average so basically, it's kind of all in you take out the top ten most cash rich tech stocks and it looks like companies have taken full advantage i think basically, nothing to worry about on a momentary basis, but it's the kind of things where investors start to say, hey, 3% for investment grade corporate debt, is that still good are we going to see rates go up and other things that make you second guess that. >> you guys down at the "wall street journal" also looked at ways to look for a top to this market how big of a factor do you think corporate debt, these highly leveraged corporations pose to financial crises >> from our perspective, we really saw things topping out as

it were, again, a somewhat subjective view, but topping out across the marketplace, be it expectations for 2018, be it the cape, the schiller measure for adjusted earnings. that's at its highest level since the dotcom bubble. so up and down sort of the stock as you will on the financial sector we saw things sort of brushing against the top, so leverage matters a lot. and mike is right, when you put it against or take out those cash rich companies, but right now, companies can pay basically nothing to get money, and they are perfectly justified and right for doing so it just matters when rates go back up. that's where the rub hits. >> right mike, leverage also matters when cash flow starts to go down. >> exactly >> but that's not happening right now. >> it's not happening. >> nonfinancial leverage the crisis was called by high leverage on financial companies and particularly the low quality of all their assets. >> tremendously important in terms of the systemic effect

you really don't have that transition mechanism, and you're right, cash flows are not going down across the board, but what you're starting to see is the market trying to separate out those with compromised cash flows and those with not if you look at the stocks of companies with strong balance sheets, last three months have vastly outperformed those with weak balance sheets. the high yield move last week was mostly about telecom debt, other media, hospitals >> which i follow closely. many of them are levered three, four times sometimes, and given the worries there, you're right. they have been taking it on the chin >> and is the market doing what it's supposed to do? we might see stres in this area, but it's not being extrapolated out broadly. >> how about sentiment for a long time, we had people say look at bulls/bears, surveys. don't tell me this is the most hated market of all time, yet over the weekend, people say that sentiment is one of those tawpie signs is it or isn't it? >> well, look at the vix at an

all-time low hitting 8 or 9 for good parts of the late summer and fall i brought a little visual aid there. if you look in the "wall street journal" today, investor optimism as measured by wells fargo is at its highest level again since the 2000-2001 period, carl so people say this is the most hated market, the most hated rally. i just don't buy that. look at how investors and particularly small businesses are reacting to the sentiment perspective. again, the nfib survey is through the roof so there are encouraging signs to it. but again, if you add them all up, every single, virtually every single indicator is sowing calm and happiness that at least here made us wonder, can that go on for that much longer. >> wonder if you look at bitcoin at 8,000 as a sign of sentiment or broader appetite for risk taking didn't that da vinci just sell for $450 million do we look at these things too >> well, the "wall street

journal" does. dennis says everybody is happy and calm except the people at the "wall street journal." i do think there's something to be said for the fact that easy money finds its way into esoteric areas the longer it goes i think i see bitcoin as a sideshow type thing, but maybe symptomatic of the fact that people don't see equities as something having great long-term returns. but it's interesting because it's so specific to the core believers. i don't think the people who are bidding up bitcoin to 8,000 dollars right now are saying, oh, if not, maybe i'm just buy ibm or ge. it's not as if that's the set of things they're deciding upon >> dennis, final word? go ahead >> the better correlation might be internal sentiment in china and how people feel about the economy there. that might be a better mover of bitcoin stock or bitcoin value one thing about the da vinci over 500 years, that painting returned 1.9% a year

that's all it returned started out add $450,000 now it's almost $500 million compounding interest, most powerful force on earth, as we know >> thank you always nice to see you from the journal, and our mike san tolly. >> the new ceo of mondelez international has started his new role today he's succeeding irene rosenfeld, who will remain with the company as chairman through march 31st of 2018, at which point she's retire van de put will assume role of chairman and ceo "the new york times" profiled her last week. just a titan of the food industry she's gone through so much, including this split of that company, kraft/mondelez. >> she did the cadbury deal. >> almost $20 billion deal as well >> not many people know van de put. his reputation was not - >> because he comes from a private canadian company that deals in frozen food

there are still question marks about how these companies go forward in a period of lack of growth in packaged food. >> you interviewed the new ceo of koch, general mills also. kellogg. right. >> a lot of turnover and a lot of questions about where 3g targets next, because warren buffett in his last interview with becky says the big brands don't need to add bigger brands because the consumer is rejecting big brands so the question is - >> and as peltz argued several times. small brands, niche, on top of consumer brands. that's the big challenge for this industry. >> as we go to break, take a look at shares of marvell technology the chip maker close to agreeing to acquire cavium for $6 million. when we come back, a possible shift in power in saudi arabia may be coming this week. what it could tell you about the price of oil dow's up 78. we're back in a minute and the wolf huffed and puffed... like you do sometimes, grandpa?

well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. it's a like, a dagger?a worm! a tiny sword?

bread...breadstick? a matchstick! a lamppost! coin slot! no? uhhh... 10 seconds. a stick! a walking stick! eiffel tower, mount kilimanjaro! (ding) time! sorry, it's a tandem bicycle. what? what?! as long as sloths are slow, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance.

which sectors could benefit most from the proposed tax reform bill. one tax strategist reveals the answers. more "squawk on the street" coming up.

let's get to the cme group in chicago rick santelli and get the santelli exchange. >> good morning, carl. thank you. i would like to welcome andy brenner. first guest of the week. thanks for being here, andy. >> always a pleasure thanks for having me >> all right we are all reading the news coming into the market this morning, wondering what the effects would be on foreign exchange and some of the other sectors in europe, but the issue is angela merkel having a problem putting a coalition together what's your observation here what does it or could it mean down the road, especially considering italian elections in 2018, this whole brexit threat that's still running through europe, as populist regimes seem to get more and more popular

what do you see, andy? >> rick, i see nothing but problems in 2018 in the european union. you know, the three things you just mentioned, the fact that germany will probably have to go through another election and if they don't go through another election, you're either going to have a weakened merkel or nor merkel at all i think things look bad. of course, if you listen to draghi, both friday and today, he is saying how well the european union is, you know, is doing, yet as i look at the wp page on one of your competitors listing all of the two-year rates in europe, 8 out of 9 are at negative rates, yet in the u.s., we're at 173 so i think there's nothing but problems as that adjusts you can't have everything going. >> you know, no, andy, you bring up some great points points we have actually seen investors have to grapple with for the better part of the last eight years. that is, in european investments, investors have had a pretty good year i don't think you would dispute that but it's the foundation we continue to look at all the

negative rates, all the political uncertainty. and yes, mario draghi is looking at one aspect and seeing that it's doing well. but how is this going to metastasize? if you're an investor in europe, what should your strategy be in terms of your investing optimism now and how you should approach 2018 >> i tell you, rick, i would exit the euro union as quickly as i can, at least from the fixed income side. and i would be buying u.s. dollar denominated paper, probably corporates. i would exit dramatically because you know it's going to change when it changes, it's going to be ugly. >> you brought up a great issue. corporates corporates kind of going in two directions with my observation one is, of course, mario draghi and others have brought up that the percentage of qe for 2018 might be smaller, but the percentages for corporate securities would be larger we all know they're probably running out of all the other securities they're buying at multiples of

issuance globally, the u.s. is also contributing to buying channels to treasuries and corporates why don't you finish up and tell us how the new tax bill may be one of the issues at work there. >> rick, we all know we're going to get a tax bill. whether it's passed this year or next, we know corporate taxes are going to go from 35% to 20%. give or take and you know, one of the things you have corporate treasurer has discretion on is when he funds his pension plan so would you rather fund it today at 35% when you can take tax dedictionary 20% next year then the question becomes what do you invest in if you're investing as a pension fund, you invest in the longest dated stuff you can buy, which is either 30-year treasuries or even better, 30-year strips. the strip data points that out so i think the yield curve fives and 30s is going to continue to flatten, and i think it turns on a dime january 1 >> see now, it's the last part that fascinates me so we have all these buying channels and very few of them have to do

with the old school fundamentals of what makes interest rates go up and interest rates go down. you have the relative value trade, meaning that whether it's negative short end or the way the long end is acting in europe and japan, that keeps our rates down the tax plan and some of the activity that it has caused, specifically because the 20% or thereabouts corporate rate seems to be something we are going to get. so i ask you, can we trust what we look at, the yield curve could snap back that quickly how nervous should investors be as to the smoke signals of where the long end is situated and how quickly it may move? >> rick, we're in artificial markets from the fed to the bank of japan to the ecb. you have to be nimble, realize at some point you're going to break, the curve is going to shift, but we're not looking for significantly higher long-term rates, but we are looking for the curve to shift back in a more steepening bias because of those that are saying the economy is weak, the economy is not weak. >> no, is today -- even lei,

which is old data kimbined which is why most ignore it, was very strong close to a 7 1/2-year high thank you, andy brenner. david faber, back to you >> okay, thank you, rick let's sendrick over to meg and get a market flash. meg? >> thank you so much looking at two sets of data sending shock waves through the pharma data. first, lung cancer data, sending its shares up, affecting the shares of competitors, bristol meyers and merck bristol meyers down 1%, merck down more than 2%. this is an ongoing battle of treating lung cancer with these new drugs. we often see the stocks moving on each other's data positive data negatively affecting bristol meyers and merck. affecting stocks of competitors in that space, bioverativ and shire, those lower, after a drug confirmed last week and sending

those lower, too, bioverativ 7%, shire more than 8% back to you. >> thank you, meg terrell. now for a look at what's coming up on "squawk alley." john >> troubling times in digital content. buzzfeed perhaps missing targets and facebook and google taking a huge share of the ad markets snap not doing so well, so what's this mean globally? we're going to talk to the chairman of vendi content and see what he says now coming up on "squawk alley". ♪ ♪ what we do every night is like something out of a strange dream.

except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. fedex.com slash dream [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

growing speculation saudi king salman is ready to pass the reins to his son and could come this week let's find out what that means for the price of oil jackie deangelis joins us from hq jackie >> good morning to you, david. these rumors have been around for a while. the king salman is in his 80s, but no one knows when the torch is going to be pass. there is speculation it is going to be soon the king's son has had influence for years, even begun implementing reforms in saudi

arabia and shaping future policy at 32 years old, he's been seen as the driving force behind a more modern saudi arabia and his influence would become absolute power if he gets the official title. the saudis are at a cross roads. as king, mds will be dealing with foreign nations like the united states, israel, iran. he's already made moves to align with president trump and seems the saudis could even partner with israel against the iranians, but for the saudis, foreign policy and business go hand in hand oil price fluctuations and the aramco ipo are both on the radar. consensus would the king mds will be bullish on the oil prices they have a tremendous amount of influence, all eyes, of course, on vienna next week for the final opec meeting of the year any color on production out of the middle east or plans to extend production cuts will likely drive this price closer to 60 and, of course, all eyes

will be on this transition of power if and when it comes guys >> huge deal, jackie i'm wondering if you're surprised to see lack of a more bullish reaction in oil prices given as you say a prospect for a confrontation between iran and saudi arabia would be increased if he does assume the king's role those are two of the biggest world oil producers. >> you bring up a great point. certainly traders that looked at this market in past years have seen how headlines like this could shoot these prices up. the i think the oil prices have been more measured than normal and they are taking a look like let's wait and see what happens. we know he's going to take over, not necessarily tomorrow, although some think it could be, and they are sort of just watching it as it develops >> jackie de ange lis, going to be an interesting fall thank you for that when we come back, elon musk

teasing a supercar we'll tell you what it is. "squawk alley" starts in a moment i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. ♪ is this for me? [alarm beeps] happy? wooo! let out your inner child at the lexus december to remember sales event. experience amazing at your lexus dealer.

welcome back to "squawk on

the street," i'm dominic chu stocks trading slightly higher to start this holiday shortened trading week, one of the laggards as oil prices take a hit today. perhaps traders reluctant before the opec meeting next week meanwhile, check out exxonmobil and chevron trying to hold on to gains right now. that does it for "squawk on the street," back downtown to "squawk alley," guys, back over to you >> thank you very much good morning, it's 8:00 # a.m. at teslahe headquarters in palo alto, california, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪