>> right, goldman sacks also looking at some kint of marketplace. >> you need to be agnostic in terms of jp morgan. >> i think most was regarding the currency and federal reserve -- >> you'll be tired but happy thanksgiving we'll see you ksh. >> gobble gobble. >> you'll see these two on friday ♪ >> good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber and mike santxoli, cramer is off today s&p not too far behind the thanksgiving holiday approaches, europe is mixed. durables were a miss down 1.2.

road map begins with the global stock rally, tech futures pointing to a higher open ahead of the holiday. >> ceo meg whitman saying she will step down early next year she's going to join us in a live exclusive and perhaps final interview in a few minutes. and president trump weighin in on the at&t time warner merger saying the deal is not good for the country. >> stocks looking to continue their upward momentum, technology was tuesday's top performing sector along with apple. the first time that's happened since july of 2015 q guys i think it's 25 times we've had the dow and s&p and nasdaq -- 28 times set records on the same day surpassing the record we got back in 1995. >> which just sort of shows you that the dips have been so shallow, that any time you get

the three indexes rising this year, chances are they are going to be in new record territory. it was are the everything rally yesterday. after last week's little backup in the indexes and high yield didn't open up any cracks, people felt let's try for the seasonal trade one of the strong estd tendencies for gains -- maybe we got that yesterday but it seems like with small caps outperforming and transports were up. a lot of the little quibbles with the market went away. on the other hand wasn't the highest volume, very orderly march forward in a very well behaved way. >> and the yield curve continues to flatten and why everybody is watching that is it actually dropped below 1%, 98 basis points yesterday, the gap between the shortened and long end. >> to the 30s? >> to the 30s. >> exactly usually when that happens it indicates expansion is coming to an end if it inverts it indicates recession. that's been the previous pattern

and why it's such an important -- >> there are competing theories that corporate treasures are buying long dated paper in light of the change in interest. >> you can go over many reasons why the long end is goeing up in yield. on the other hand, once you get to a totally flatter inverted curve that is the tendency to see the cycle is somewhere close to the end there's a long way in terms of market returns and economic signal between when it gets to this level and inversion sometimes -- >> how long? >> seven months to a couple of years. >> imean, the other puzzling thing, if tax reform is getting priced in and considered a boom for the economy, why isn't the bond market treating it that way? >> how much is getting priced in and how much of a boon. >> we think they are really determined to do two more hikes,

therefore the 2-year yield has to get to 2% is that a really bearish thing or not i think that's the argument people are having. >> yellen did address some of these things, including the uncertainty the inflation at some comments made last night. take a listen. >> we expect it to move back up over the next year or two. but i will say i'm very uncertain about this my colleagues and i are not certain that it is transitory and we're monitoring inflation very closely i'll go back to what i said earlier about keeping an open mind and not assuming you have a monopoly on truth, there may be tlg something more indemic or long lasting here that we need to pay attention to. >> and of course, given the news this week, each appearance from her will be one step closer to the final one. >> we'll miss those thoughtful

conversations. >> she did a good job wearing the nyu purple but seriously asked one of the most pressings questions and maybe that's behind the lower treasury yields. where's inflation? >> some kind of structural absence of inflation. >> and it's this afternoon to see how they were thinking about it at the last meeting. >> moving on to corporate news, the battle between procter & gamble and trian's nelson peltz is not over. it was -- what was it last week we told you of course that the preliminary but official vote count by ivs associates had shown mr. peltz with a 43,000 vote win and therefore enabling him to take his seem on procter & gamble's board of directors after a very heated battle with the company. but no, this morning we can tell you that procter & gamble has notified ibs associates, the firm that basically has monopoly on counting votes at any proxy contest. you don't usually hear about

them because they are not usually contested. procter & gamble has made it clear they want ibs associates to go through and have lawyers present to challenge and make surethat their count was correct. essentially creating what we call a challenge of this account by official preliminary voting tab lags by them what's that going to do? it's going to mean a bunch of lawyers have to go down to delaware and go through every single ballot cast we're talking about almost 2 billion of them cast in this election if i recall now obviously many of those are from large institutions. that's easy but there are a lot of individual shareholders which made this a very difficult count which is why people questioned when p and g declared victory on day one why they did that having had that reversed. this could go on for weeks,

sara, in fact it could go on i'm told until january it will begin next week, this challenge of the preliminary count. i do have the statement from trian this morning i wanted to share. regardless of how they voted, trian says p and g shareholders should be concerned that thech opted to waste further time and money contesting the official tab lags and review and challenge process will tib -- improving business results and regaining last market share. i don't think it's a stretch to say certain shareholders will be disappointed to hear this simply because it delays and either way, even if they were to come out on top by a few thousand votes. a message has been sent many would argue and should have been received. >> it's sort of crazy we're at this point where they are arguing of over a matter of less than 50,000 votes, which i is .0016% of the overall shareholder vote i did reach out to p and g on

this to try to get an official statement. here's what they told me they say as we've said before, ivs, the tab lags service you're talking about, results are preliminary and going through the customariry review p and g will disclose the results after the final certified report which we are pushing to get as quickly as possible no acknowledgement that they are challenging but clearly an admission that they are not accepting what they call the preliminary independent results -- fighting all the way through. >> mr. peltz will be taking a seat at this point that will clearly be delayed if it happens at all but unexpected to a certain extent. many anticipated p and g would say, we'll let you sit. >> big question as to why. p&g said it was a fight for souls their company. >> however many lawyers go down

to delaware and sit there for who knows how long, that cost more money what's the point of it all is the question just a question that i'm sure others are asking. but we did want to share that with people as well this morning. >> when we come back, meg whitman stepping down as the ceo of hewlett-packard eerisntpre. more "squawk on the street" when we return. [ 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.

>> hpe shares are falling this morning. the company announcing that meg whitman will step down as krxgt eo in february she's led the company through one of the largest break-ups in court history splitting hewlett-packard into hp and hp inc., in 2015 and software business as well over the last year, year and a half. she joins us now from palo alto. every quarter since you took the job in 2011 you have joined us we certainlyappreciate it. >> thank you for having me. >> why are you stepping down >> yeah, so we have been through a six-year transition of this company to restructure the company as you described and build a very strong

hewlett-packard enterprise, we have a crisp strategy and best product fort toll toshio portfo and i have crusted that together and felt this was a time for a new generation of leaders to take charge of hewlett-packard enterprise and create the next wave of shareholder value. the company is ready and it's the right time. >> what's the next wave of shareholder value going to be about and why does it need a new generation to bring it about >> so, we -- as you know now have hewlett-packard enterprise, a very focused strategy. we power the intelligence edge and have services to make it happen we are redesigning now the company from the ground up to be fit for purpose for this new environment. so hpe next is what we're calling the change in the company around simplification products sim application and supply chain sim application and changes in go to market.

antonio has been leading that for well over six months and he's the right person to take the company to the next level. don't forget, i'll being on the board. i'll be right here you know, certainly continuing to do customer calls and things like that. but antonio is the right leader and he's going to do a tremendous job. >> the last time you joined us, we had some conversation about your daliance with uber, did that figure into your decision to step down >> not at all. you know, one of the things i think you know that we do pretty well here is succession planning great track record at ebay and here we've been thinking what the plan is. i said for many years the next ceo needs to be someone we have promoted from within, deep enterprise technologist and loves the company and passion for its products and culture and that's antonio

>> how long has he been the guy you thought and board thought would be your successor? >> well, listen, we thought very carefully about, interm, external candidates but we worked very closely over next four or five years in crafting the strategy, what businesses to sell and keep. all of the acquisitions we've done we've done six acquisitions in the last eight months. he and have have been joined in at the hip deciding how much to pay and how to integrate them. he's been my right hand executive for well over four years. >> of course speaking about acquisitions but what we've many times discussed in your appearances over the years has been slimming down this company. when you took it over in 2011, i think it was almost 350,000 employees, $120 billion in revenues, obviously the big split took place and then very significant spins as well. do you look back, meg and think

i followed the right strategy, i did in retrospect what needed to be done and not have regrets about some of the decisions you made >> listen, i think we did exactly the right thing for hewlett-packard. given the pace of technology change and breadth of portfolio this company had i believe the future belongs to the fast and it was just too big and too cumbersome and competed in too many markets to do the best job in all of them. by focusing these companies, each company now has the right capital allocation strategy and right cost structure and deeply focused on customer needs in their segment. you can see it beginning to work hpi had a great run and dxc is doing well, little early for microfocus and hpe since we separated from hpi the stock prigs increased 89%, three times

the s&p 500. if you look at the total shareholder value creation from the fall of 2011 or fall of 2012 to today, it's over a 200% return to shareholders which is prettygood track record given the situation we faced when we came in. so there are times for big supermarkets and i.t. supermarket or financial supermarket like citigroup used to be and time you need to be small and nimble and focused and fast and and i think it's going to be reremarkably successful. >> some shareholders are looking at the numbers you reported yesterday and wondering, will that really be the case? there seemed to be a reduction in guidance from first quarter though your full year guidance for fiscal year '18 remained the same should there be any concern about the ramp you're going to have to climb or the company going to have to climb next year in ternms of meeting those earnings goals >> i don't think so. we had not given guidance on a quarterly basis, but for the

full year at the last security analyst meeting and we held that guidance i probably have more confidence today than i did even a couple of months ago given the q4 we turned in. very strong, 5% increase in revenue, eps a penny above the high end of our range, great free cash flow and a great portfolio that had excellent pockets of growth. so my view is -- >> meg -- >> the porterization, it's going to be more back end loaded in 2018 because of cost savings that kick in and you have to remember that the first quarter is -- we have low commodity prices in q1 a year ago. this quarter the commodity prices are full-on high. with october come that challenge, but i have no worries about the full year guidance we're in great shape we expect the product mix beneficially to kick in because we're going to be pivoting more towards higher growth and higher margin products. and then the cost savings kicks in i have a lot of confidence in

2018 i think we're going to deliver and i think the street will be very happy with the results. >> meg, i had a broader leadership question for you, sorry about the noise, santa claus is making his way to the floor ahead of the opening bell. with your departure, it looks like only 25 s&p companies will be led by female ceos and that number will go down even further to 24 when staples goes private. we recently saw the departure of irene rosenfeld. is this a cultural issue in corporate america that such a small percentage are leds by women and those female krxceos stepping down are not replaced by female ceos. >> in the last couple of decades we made a lot of progress of the number of female executives but it has stalled out if the last decade if you look at the data and that's concerning. we need to look carefully why that is.

we need to continue to encourage the pipeline of women going to business school, law school, getting into business and beginning to build their careers, but it is of concern because we made a lot of gains and then to your point it has flattened out. now you're seeing a generation of women who are irene rosenfeld, pat wertz, pat russo and me and others, i've been in the business world for 35 years. we have to make sure that next generation of women is strong and has all of the opportunities that that they deserve. >> meg, a lot of people looking at your future and predicting even on this network that you're going to run for office even for a presidential nomination, is that true? >> that is not true. i can definitively say i'm running for elective office or president or any other office. i'm going to be the incoming chairwoman of teach for america,

remain civically engaged but not running for office. >> what are you going to do? i know you're going to take a break. but we've known each other a long time. you're not a sit on the beach kind of person, i can't even imagine it for a week let alone more than that another ceo job? what do you sense you want to do next >> not entirely sure, david. if it was another ceo job it would have to be exactly the right opportunity but i am going to take some time off earn think about what the next step and things reveal themselves after i lost the race for governor in 2010, if someone said you're going to be the ceo of hp in fall of 2011, i would say there's no possible way that would happen you know, things will reveal themselves and obviously there's lots to be done but i would like to take a little time off an recharge my batteries and i'm excited about teach for america. >> it wouldn't be a meg whitman opportunity if i didn't ask you about something else other than hpe. in this case you are still a

board member at procter & gamble we reported earlier in the hour, i don't know if you heard that p&g will challenge this election, the political vote of nelson peltz to the boards do you support that? some shareholders say why spend the money and effort at this point on fighting mr. peltz' entry to the board >> i think what p&g is doing, at least what i heard on board called, that the count of the votes was right. it was reported that p&g had won then mr. peltz had won they are trying to make sure the vote count is absolutely accurate if it's accurate, i think p aern g won't fight that if not, there's another decision to be made they are making sure the vote count is accurate and all votes have been counted correctly. >> yeah, you see any problems working with mr. peltz if he is on the board >> listen, if he earns a seat on the board, we'll bring him on board and embrace him and i'm -- there's things we'll probably learn from him and things he'll

probably learn from us if he wins that vote, we'll welcome him on the board and include him as the 12th member. >> and finally, meg, again, i mentioned at the outset every quarter since you took the job, when you look back, what was the most important decision you think you made during your tenure of the last roughly six years? >> i think really there were three. first was to refocus this company on innovation. innovation is the lifeblood of this company you can see the innovation that is coming to market at hewle hewlett-packard enterprise and hp inc.. we've never had a better stronger portfolio with high growth products and high margin areas like high performance compute, our no infrastructure called synergy and flexible capacity services and aruba. focusing on innovation was number one number two was deciding where to play and how to win. that decision to decree atd four smaller more nimble companies,

i'm convinced will stand the test of time, it was absolutely the right thing. lastly this focusing back on the employees, when i came 65% of directors and above were recruited from the outside today that's absolutely the reverse and i'm super proud that the next ceo is someone who has been with the company for 22 years and incredible technology executive and will carry on the proud tradition of this company. >> all right, meg, we always appreciate your willingness to join us and maybe your last interview as ceo of hp, i'm confident it's not your last interview with us. meg whitman, ceo of hp, at least until february thank you. >> thank you, david. >> you're welcome. >> system to come, the countdown to black friday. stocks look set to build on record gains yesterday we'll be right back. whoo! ( ♪ ) woman: class, let's turn to page 136,

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you're watching cnbc, "squawk on the street" of the opening bell to ring in three minutes. santa claus has made his way to the balanconbalcony. macy's thanksgiving day parade is of course and he's celebrating that durables was a bit of hi hiccup, some discussion whether that throws a wrench in themes about a resurgence in manufacturing. >> i don't think it really disturbs the idea we're in a strong patch for the economy, if you look at the surprise index, citigroup, surprise index, close to a five-year high. we've been beating the macro numbers for a good long stretch here, which means it's about due to rollover. expectations catch up and that might be one of the issues but growth stocks yesterday like the big teches that carry things once again.

>> you have to point to what's happening globally this is really a worldwide rally as we've been talking about predicated on worldwide growth china fell but emerging markets, for instance, index is at a six-year high and this has been the surprise breakout, the nikkei also at multidecade highs. >> hong kong above a ten-year high as well john deere is a pretty good reflection of a lot of that. it had a good quarter, good earnings the stock has been racing higher and the street has kind of not buying into it, which is kind of interesting, that's definitely the theme. >> people are posting some charts of retail chask and apparel traffic on a one and two-year stack, whether it's the cold weather or something else, close to going positive. >> it takes that little bit of an idea that there's stability here, not falling off a cliff. if you look at how the stocks have fallen off cliffs, the idea

it might be a somewhat normal shopping type quarter for the ju kishl rejudicial retailers, that explains a lot of theories. >> the hated department stores but there are signs of life in retail and pockets of strength we saw a good quarter from urban outfitters, 69% of americans, 164 million people plan to shop during thanksgiving weekend according to the national retail federation which puts out a survey and that's up from last year, unclear how much of that will be online or on cyber monday. >> the same survey, 24% say they'll spend more and about 54% say they'll spend about the same i think the spending intentions are back to 2007 highs in absolute dollars which they should be, given where unemployment is and incomes are. that's pretty a pretty safe expectation. >> let's get to the opening bell this morning and get the s&p at the bottom of the screen

at the big board is macy's and santa claus sell brcelebrating t thanksgiving day parade. nasdaq, pancreatic cancer action network. earnings to watch, crm is one of them, 39 cents beats by two cents. revenue up 25. current quarter revenue guide a shade below the street. >> this minor hit it's taking two bucks lower, stocks up $40 year to date maybe not so great revenue guidance but overall, it's the exact kind of company that everyone is feasting on this year >> i thought it was interesting, they are riding the growth winners facebook, amazon, alibaba, google and microsoft.

>> it's pay 2 and 20 for that kind of insight. >> they have the short book. >> you're going to defend hedge funds? >> no, 10% year to date is what they say of course s&p is up 16 but they'll tell you they had a smoother ride. it's hard to have a smoother ride in the s&p this year. >> it has been -- you're right about as smooth as i can remember, about 18%. >> watch for the vix to get to seven today or something. >> right we talked about oil crossing 58 and big reason that's a big reason why a lot of energy companies will help lead this morning. deere is leading the s&p and cat is leading the dow interesting comment on the demand for machinery, whether it's ag or construction. >> worldwide, i think deere was citing south america as a huge area of comeback. >> the numbers are worth pointing out deere in its forecast says worldwide farm equipment will rise 9% in the next year net sales of farm and construction equipment to rise 22% in the fiscal year and they

reported a pretty strong quarter as well. soaring 22% for farm and landscaping machinery. so that's the kind of economy -- that's a positive side offsetting what we got out of durable goods on the manufacturing side. >> durable goods, it's one number in a volatile series, we can shrug that up. >> existing home sales up 2% it feeds into the story of expansion, despite whatever we're seeing in the bond market, buying of treasuries. >> it has been those kind of big secular growth stocks that have been working -- not been a very narrow market but been a selective market so yes, industrials are picking up today the fertilizer companies maybe riding along with it but it seems to me that i think everyone kind of has put that in the we assume worldwide growth is good. and now i think the watch is on for expectations to either get too high into the year end or into early next year and that might be one of the reasons we take a pause.

>> i was trying to see whether ge was participating in the industrial rally we're seeing today. it's been somewhat of an anomaly lately. >> it is up but below $18 a share is ge. of course after that investor day meeting didn't really engender a great deal of confidence, i think it's fair to say, the dividend cut being the key component of that. still so many questions swirling around ge. and it's market value now $5 billion less than boeing. >> yeah it's amazing you know, i have to say, to the extent you're going to get tax law selling this year and talk about a widely held stock with losses year to date. you would think people might be weary of how that goes in december, which would be a mechanical thing, usually temporary factor pressuring a stock. >> speaking of taxes, mer could

you xi supports the appeal of the mandate but wants an alexander murray like protection to stabilize the aca that's seen as one incremental step in favor of this bill getting here. >> an important vote but they also attached opening up certain alaska wild lands to drilling as part of the tax bill as well her participation was anticipated to a certain extent as a result of being in favor of that provision as well even though she previously had voted against on health care about the aca. >> there's still a lot -- >> from ron john, colins is still take little murky. we're into the microtea leaf reading range. >> mccain and rand paul. >> rand paul your deficit hawks. >> and whoever might be voting from alabama. >> and corker who said he doesn't want to increase the deficit. >> said corker, yeah

the all important election -- >> i guess there's some talk that election whoever wins it might have to not be certificated until christmas -- >> get vote done before that >> i don't know. let's get to stocks moving this morning, exalta, the codings company, reported to be in talks with nippon paint holdings, this was reporting by dow jones and others i believe what's interesting is they had been in some -- in talks with axeo nobel about doing a deal, kp combining those two companies. it's not clear exactly what the price is at this point because it hasn't been publicly acknowledged in a press relief or anything along those lines but discussed in the japanese press as well. and so it raises questions not just about axealta and what will

happen there but would ppg consider coming back for -- remember they had a bid out there, had to take the six months off after it was rejected under the dutch law and they did use -- it's not clear they'll be able to come back or want to but worth noting that all of those stocks are moving this morning. >> we mentioned squawk box mentioned these reports that jp morgan is considering help clients bitcoin futures despite dimon's derogatory. >> watch what they do not what they say. >> now raising the target on bitcoin to 11.5. in our view the move we no longer feel caution is warranted. >> that's not a discounted cash flow analysis eight months out i kind of -- i give him credit for kind of getting in there and

trying to put some kind of framework around what bitcoin should be valued at. not terribly surprising that jp morgan as an institution would say look, let's see what our clients want to do there's been more moves to institutionalize the ownership of kr crypt poe currencies and create an infrastructure to around whole sale trading and investing in crypto can work it's sort of fascinating because the price action continues to look like speculative nuttiness but yet the bigger picture, all of these institutions saying let's figure out a way around it. >> and try finding an asset that has gained more in percentage terms so far this year, whether it ends in tears or not. it's hard to ignore. >> look, it's not -- rare earth metals, do we remember that whole thing? >> yes, overstock, i nice overlay of overstock.com and bitcoin, charts looked similar. >> there's a lot of ride along

going on but you don't know if it inval dates the whole thing. >> it's hard to put a price on lack of trust we're seeing in the system, whether in governments or central banks and i know that continues to be a theme and the believes say it's driving money into the crypto currency. >> meg whitman did talk about the creation of value since she took over as ceo of then just hewlett-packard, exceeding 200% when you add up the splits and spins, the two kpecomponents do, the first quarter it was below what perpendicular were anticipating, despite it was % top line growth and 10.6% margin and subsequential improvement at the enterprise group and hpq also getting hit today after reporting earnings and that's been a big positive story, mike.

>> the stock has been great. >> free cash flow story. >> but it is down as well about 5% >> all right, so overall, index the dow can't quite get over the hump and get that record although we got it for the nasdaq and russell let's get to seema. >> thanksgiving is tomorrow and investors potentially have a lot to be thankful for if they are long this market as you just pointed ouxt the dow opened higher but we fall into negative territory here in terms of stocks that have been participating in this broader rally this week, take a look at deere. trading at an all time high on earnings the tractor company citing strong rebound and demand in south america. social media has been a big part of the tech rally. look a twitter, close to a 52 hitch week high. even shares of marriott trading at an all-time high. speaking of hotels, check this out, marriott hilton, up more than 45% over the past 12 months

thanks to not just positive earnings but broader approach in selling off core real estate assets switching to financials, jp morgan getting into bitcoin futures as you were discussing, despite ceo jamie dimon outspoken criticism on the viability of bitcoin it certainly indicates there's a race to get exposure to the emerging technology. looking to trade bitcoin as well we know the cme group is also expected to launch bitcoin futures sometime in december, pending regulatory review. there you go, bitcoin, new record, now 8,171, right below 8200 which it traded at yesterday. >> let's get to bertha coombs as well hi, bertha. >> hi, carl, yes we are seeing those records for the nasdaq the nasdaq 100 and the russell, although we have seen this week's small caps take the lead, this is really been a large cap tech fueled rally.

nasdaq on the longest winning streak since a perfect quarter at the beginning of 2012 among the big gainers and big leaders have been chips. this morning you're seeing the chip index right now trading lower but yesterday traded at an all time closing high. that's pretty significant. this had been the last of the major indexes to take out those year 2,000 highs among the stocks that had really propelled chips, micron, lam, all three doubled. intel has been a laggard but intel has been one of the main drivers as far as point impact apple and amazon, amazon today hitting a fresh all time high, continue to be the biggest drivers and certainly will be on watch this quarter as we move into this holiday season when a lot of folks will be looking to buy new things with those

particular large cap teches. but some of the other movers today, not particular news, pharmaceuticals is the leader in terms of percentage gain even as the biotechs have fallen out of favor. that seems to be a source of funds and they have been down quarter to date. back to you. >> thank you, bertha bertha coombs at the nasdaq. did want to get to a contested situation, we haven't paid that much attention to since we brought it to you at the end of october. emerson's continued pursuit of rockwell automation. it was a report that we had back then that indicated emerson had come at 200, 50/50 stock and cash this morning, it was sadly rejected yet again by rockwell and this time it was a full throated defense, not just a one page no thank you but a letter

of five pages going on to great detail and four pages why rockwell feels it is better off being an independent company remember here if you want to step wak, there is no path for emerson to pursue in terms of a full-out hostile bid they can't nominate to the board. they missed that deadline for the meeting that would be coming up there's a staggered board of directors anyhow and frankly my understanding has been all along that the management team at emerson had not wanted to engage in a hostile bid and not have come in a proxy fight, gone after the staggered board. they wanted to try to make shareholders of rockwell aware that they were there and they claim a significant price and many analysts agreed but it does appear this may be where the road ends for emerson given they can't find a path and they have been thoroughly rejected

let's get into some of the reasoning at least that rockwell offers for the the rejection bigger is not always better the company says when driving for growth and value creation, emerson may see this proposed acquisitions necessary to enhance its growth and earnings potential and expand its capabilities in the industrial automation market, rockwell does not. it wants to stay singularly focused and make investments in one platform to deliver value to customers. they also take aim at the synergy numbers being offered by em arson saying, to get to your synergy target, proposed company would need to choose cost cuts instead of investments, required to integrate multiple platforms. they think that attempt would result in what they say is a substantial -- a substantial loss of talent and that is another reason that they cite, also cite increased

leverage of the company that would approach five times and don't believe in the synergy numbers and always like that one, remember, tried to use that against nelson peltz too rockwell has faith from its shareholders why? because over ten years they returned more than the s&p and emerson has. now, i do understand some of the shareholders have implored rockwell to sit down and engage but that doesn't seem to have changed the board's opinion, again, a thorough rejection of emerson and the question is where do they go from here >> emerson stock get hit pretty hard, down as much as 10% at one point. less an incentive to go to greater lengths if the share holders seem to be not that crazy. >> as expected, they did note the decline in stock price since they announced orcertainly wer made public in terms of their intentions to try to buy

rockwell some wondering what's the problem at emerson if they feel the need to pursue this but they have been trying to do it frankly for years. they thought they saw an opportunity, and it's not clear that opportunity is going to result in success. >> let's move on now check in on treasuries in demand today, dollar is weak. let's go to the bond pits and rick santelli. >> good morning, sara. maybe this two-day chart will tell you everything you need to know as we get ready for holiday closure tomorrow and shortened session in many markets on friday it's 30s minus 5s. it would be overdramatic to say it's steepening but it stopped flattening for now, most likely profit taking and positioning being even up in front of the holidays, let's pick a day, let's pick tuesday, the 14th of november, why? because since then, this would be the seventh day, we've had six trading days where 10-year note yields have closed between 2.32 and 2.37. it looks like this will be the

seventh. you see the chart there. back to my first comment about the yield curve not flattening, look at the same period for two-year note yields, covered a lot of term in terms of climbing to the upside. today not the same hyg had a nice little run, so there's less anxiety and vix is back down and finally the dollar index, you know just look the 10-year note it hunkered down in a solid tight range. the problem is if you're looking for a higher dollar index, that range seems to be pretty much below a technically significant level of 94 even sara, back to you. >> rick, thank you coming up, a look at holiday travel and why a busy thanksgiving weekend may not actually pay off for the airlines "squawk on the street" will be right back

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well, rainy in new york. record number of people expected to fly this thanksgiving

weekend. let's check in with phil who is at chicago's o'hare airport. phil, how does it look this hour >> it looks actually very smooth, sara in fact, i just looked at the arrival boards i don't see one flight that is delayed at all that's really unusual. usually, you see a couple here and there, bument we have mild weather across the country and that's good news you know, when you look at what's going on for the airlines this weekend, and this holiday season, a lot of people say, well, they're packed isn't that great take a look at what's happening in terms of air fares. they have been trending lower this year as they have for several years here, but the most expensive day to fly is the wednesday before thanksgiving on average, the average fare, $325. you see that monthly average of just over $200 that's when you factor in all of the over non-thanksgiving days of flying. in terms of the number of people who are taking to the skies, just under 4 million people will be flying in the u.s. this thanksgiving weekend that's up 5% compared to last year you would think that's good news for the airlines, and yes, they

love having the planes packed. but here's the downside of the airline business right now take a look at jet fuel. you talked about crude oil going above $58 a barrel that ultimately moves jet fuel prices higher. they have been moving substantially higher since the summer as a result, that's why the airline index has failed to regain the highs that we saw earlier this year. there are concerns about the cost equation when it comes to airlines not only in the fourth quarter but as you head into the first quarter and the first half of next year that said, if you are somebody who is flying this weekend, the good news is, mild weather means few delays and few long lines at the airport. guys, back to you. >> all right, phil wti today, 58.05, the highest since july of 2015 we'll see if we talk more about that as it pertains to the airlines later in the season. thanks phil lebeau watching the travel picture. when we come back, amazon's first season with whole foods

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uber is reporting that a cyber breach nearly a year ago

exposed the personal information of 57 million uber users and drivers. the hackers stole names and driver's license numbers of about 600,000 drivers in the u.s., as well as mobile phone numbers. the company paid the hackers about $100,000 to delete the data and keep it quiet uber has fired their security officer. they disclosed this in a corporate blog i mean, 57 million we have seen worse numbers but the fact it's uber comes with its own surprise. >> the fact that you're paying the hackers to give their word that they have deleted the data. obviously, this is something that a public company, you could not keep hidden and decide to blog about it, presumably. >> how did they keep it secret for a year how did that happen? just when you think he was talking at the deal book conference about how he's focused on the ipo and growing the business he has to continue to apologize

and shift the corporate culture and try to explain and change what has happened in the past. just another big misstep >> yeah. meantime, markets having a little trouble getting -- maintaining its streak of records. dow down 13. s&p is essentially flat. >> flirted with the 2600 number a couple times yesterday >> didn't we breach it >> went above it, but -- you know, flirtation worked for a little while and then it backed away >> we'll talk more about the markets on the day before thanksgiving in a minute you always pay

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welcome back to "squawk on the street." breaking news. the last number before we get out the carving knives, 113.5 is the current condition, but the headline number on michigan is 98.5 and that is bit better than expected now, remember, we had our last read which was 97.8. that comes out because that's the temporary mid-november so now, 98.5 replaces it a much stronger number but of course, if we look at what the number was the month before that, our october final, 100.7. the best in nearly 14 years.

january of 2004. so as good as it is, and it is a solid number, of course, it's a little down from some of the really lofty numbers that we have had since the election last november carl, back to you. >> all right, rick, thank you very much. good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at post nine of the new york stock exchange record highs looked possible in the premarket, but we're not quite getting it, at least x, russell, and nasdaq. down just a touch. >> our road map for the hour begins with a countdown. it's on. two days away from black friday. we'll tell you what to watch as the holiday shopping season officially gets under way. >> another cleanup at uber for the company's new ceo. the company revealing a hack that exposed 57 million users and driver data in 2016. details on that. and the battle apparently not yet over p&g challenging the proxy vote count that showed nelson peltz

winning by a narrow margin the seat on the board of directors we'll have more on that. >> we'll be watching volume on this day before thanksgiving the markets hit record highs yesterday. as you know, the major indices opening higher but now mixed overall stocks looking to build on their record gains as we head into the holiday we're joined by equity strategist and pimco's executive vice president, tony happy thanksgiving good to have you both. >> thank you >> maybe tony you can help us settle a conversation at the top of the show this morning about the run we're seeing in equities and the compression in the curve. what is -- why does that make sense? >> you just said what does make sense. the fact that the equity market is faring well and financial conditions are loose on the whole tells you the flattening of the yield curve probably does not signal an economic slowdown ahead. does not portend a slowdown. what it does tell us about is the global interest rate picture we talked about a great deal

throughout this year, and even in previous years, thinking of europe and japan japan, its ten-year yield went back down to zero percent. in the context of that and the context of a 3.5% boon yield 2.5% yielding ten-year looks high to the foreign investor, to the global investor. so they reach out to the united states for that higher yield, so it really is not a signal so much about the economy more a signal about the global story on interest rates. does that mean the runway for equities is longer than we thought? >> i think it does in the sense that when you think about the relationship between the yield curve and the equity market, they're symptomatic of the same thing, rather than one causing the other. in that sense, the decline in term premium, i think signals the fact that, you know, we're going to be in this kind of slow growth, goldilocks environment, and that environment, equities can go higher. >> what about this question of tax reform if the stock market is so excited about it, why isn't the

bond market? >> because the bond market is viewing it through a different lens the lens the bond market is looking at it through is through the structural challenges to the economy in a long term imagine a individual receives a $1,000 tax break next year perhaps the spending level will go up by as much as $1,000 then what happens in 2019? can the spending for the household go up another $1,000 no, because it's reached a new plateau. what's needed for the bond market to change its tune, for interest rates to move higher, is a permanent increase in the trajectory on growth which requires an increase in productivity quick math historically, u.s. growth is 3%. 1% increase the number of people to buy goods and services. lately, 0.5% for numbers of people because of the aging demographics and productivity is only growing less than 1%, what we need then therefore is an increase in productivity, which has to be tied to more physical

engagement in the growth promotion side, which is to do more than stimulate demand but to stimulate investment and invest itself. >> isn't that what taxes are supposed to do >> that's how they're pitching it >> despite the cloudy picture from ceos on cause and effect. >> and it's not popular. you can't bank on consumers, companies investing for the future just yet. >> can you invest in companies with the idea that their dividends and buybacks and profits will grow on the back of a 20% corporate tax rate where do you want to be there? >> in the case of the tax rate, i think historically, a lot of market commentators have looked at the russell s&p spread. we noticed that quite recently, that spread has diverged relative to other highly tax sensitive baskets of stocks. and when you thing about the relationship between tax reform bonds and equities, one thing we noted is yields have remained

relatively stable. they haven't gone up despite the fact that tax reform seems increasingly likely. those tax reform effected stocks have also underperformed throughout much of the year. i don't think they're sending separate messages the fact that the s&p is higher is not necessarily symptomatic of tax reform there are a lot of multinationals in the s&p that pay a below statutory rate i don't think it's a massive boon to stocks that some people think. >> on inflation, again, last night, yellen, more uncertainty regarding the inflation picture. we'll see what minutes say this afternoon. are you seeing any turn, whether it's on wages or something else? >> you see today oil reaching $58 a barrel, near its highest in two years it does tell you something always, i would advice juners to look at janet yellen's search from june 2016 chart number three from her shows her the reason the inflation rate has been below

the fed's 2% target. one is inflation prices. how could it be, though, in the future since the u.s. dollar has fallen 8% this year? so that's over with. the idiosyncratic factor such as cell phones and -- >> and the old wireless service thing. >> correct, and the fed and its 200 ph.d.s and its staff have suggested that slack has been a major contributor to the shortfall inflation, but this year, you see it in this bar chart from janet yellen, slight sliver to the positive so - >> labor stock >> in other words -- correct, and slack in general it's fallen about a half percent. the share is likely to fall below 4% in 2018, and that slack element therefore should give along with import prices and the lack of idiosyncratic factors the fed back toward 2% in 2018 >> is that the picture you see >> same picture here we expect the unemployment rate

to fall all the way down to a firminal rate, 3.5%, and with that, we expect the phillips curve is not dead. at some point below 4%, that wage inflation will occur, but it's just not yet. i think throughout the majority of the cycle, in a number of things, whether it's equity valuations or when the inflation is going to occur, we have to be patient, but we'll see it eventually >> is it not a riv that there are four open spots on the federal reserve board? people get a vote at every single meeting, so you can't really see into the future in terms of fed policy until president trump starts nominating people? >> well, all of the indications we have, and this comes in part from conversations we have had with our adviser, ben bernanke, is that what donald trump and the administration wants is continuity at the fed. the most clear example, of course, is choosing mr. powell to be future chair he was the continuity guy. >> they could have reappointed yellen that would be real continuity. >> not in the sense of what reason she's not been

reappointed more than likely had a lot to do with her views on deregulation the administration is hell bent on deregulating the financial system >> happy thanksgiving. thanks for coming in today meantime, big story. uber reporting that a cyber breach nearly a year ago exposed the personal information of 57 million users and drivers. deirdre joins us from san francisco with the latest. how did this happen? >> well, what's remarkable about this breach and what makes it different from yahoo and equifax cyber attacks this year are the lengths that uber went to to cover it up from users and regulators for almost a year now, the data of 57 million riders and drivers was exposed we're talking names, e-mails, driver's license numbers and on top of that, uber paid the hackers $100,000 to delete the info and keep quiet. in a blog post yesterday, new ceo writing, quote, i recently learned that in late 2016, we became aware that two individuals accessed user data

we identified them and obtained assurances the data had been destroyed. what guarantees is a big question i'm told travis kalanick, who was ceo at the time, was aware of the breach, but he left it in the hands of his chief of security, joe sullivan, who was previously facebook's head of security he was fired by uber this week for his role in hiding the hack. we reached out to sullivan, but we haven't heard back. a spokesperson for kalanick declined to comment. the fallout has been swift a uk regulator has expressed, quote, huge concerns and remember, uber was stripped of its license to operate in london earlier this year it's appealing that decision this latest crisis also throws another unexpected turn into negotiations with soft bank. a deal that would usher in major governance changes, put out some fires on the board, and put uber on the path to a 2019 ip orc there's also a question of what uber did or didn't disclose to the ftc, which experts say could potentially open the company up

to criminal liability. i think we're just at the start of this latest crisis. back to you. >> what a story, deirdre thank you so much. deirdre bosa watching the uber hack today >> when we come back, just two days away from black friday. we'll talk to the former ceo of bloomen dale's about what traffic trends will be like this year >> plus, meg whitman stepping down from the helm of that company, what she said to say about its future, a possible run w wn 2fice, and a lot more dodo4 points "squawk on the street" will be right back stay with us you always pay

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black friday just a few days away with many stores getting ahead of the curve by opening as early as tomorrow night. walmart, kohl's, best buy, all opening thanksgiving night another way to combat amazon this holiday season. for more on the state of retail winners and losers, we're joined by michael gould welcome back nice to see you. >> nice to see you, sara >> let's talk about your parent company or your former parent company, macy's. one of the worst performers in the s&p this year, down another 40% for the year 11 straight quarters of same store sales declines what does a department store like that need to do this holiday season >> well, you know, i don't want to really talk specifically about macy's let's just talk about department stores in general. you know, people keep on saying that amazon's killing retail

i don't agree with that at all as a matter of fact, baen had a very interesting comment the other day in one of their reports that the retailers' lack of customer centric innovation is really killing retail and that really goes back to something peter deroga said to me in 1991 that department stores have more information about their customers and do less with it than anyone it is all about creating excitement in the store. i have said this over and over again. it's about an experience it's about excitement. when you look at where people are spending money, people are spending money dramatically, yes, they're spending it in the stores no question about it, but the enormous increase has really come from what i would call experiences. coming from entertainment, coming from all of those things that are outside travel. the things that really are exciting customers today take a look at the thing in the paper yesterday about broadway sales in the first half of this

year 2017-2018 season the first half, broadway sales are up 18% and the ticket prices are up 19%, over $125 so when people say that people don't want to spend, it's nonsense when people just want to be on the computer, i think it's nonsense it's about an experience it's about excitement. >> i agree with you. we're continuing to get very strong consumer confidence numbers. rick santelli just broke another one this morning and you're seeing shoppers go to more exciting places i guess off price, michael, is doing the trick, because tj maxx has done well, ross stores, and some of the cosmetic stores like sephora and ulta are also capturing customers. what is a department store which used to be catch-all for all of these categories do? and is it too late to create that excitement when they missed out on so many customers >> it's not too late and it's interesting when you talked about some of those stores i mean, tj maxx has no online business costco has no online business. home depot does, and their business has been spectacular.

and so you take a look at the lines around the block when apple came out with the iphone x a few weeks ago. i was in california at the time. i was in a mall. i just couldn't believe the lines. it was in every one of their stores, experience you take a look at the pop-up shop that topshop just put in with kylie cosmetic brand. line out the doors and around the blocks people want an experience. people want something that's exciting and i think that what the stores can do is leverage the thing they have the most people want a social experience. i have said it on this program, i don't know how many times. shopping is about a social experience it isn't just about going to the computer and punching something up and what the stores have is that social interaction the opportunity to smell, to taste, the feel, to interact with a professional sale s associate who can help them. there's so many things stores

can do and it's about taking risk you look at what amazon is doing, one of the most glaring things to me is here is amazon, spending about 12% of their sales. 12% of their sales on what i would call r&d and technology programs an average store, retail chain, is about 2%. so if you want to say are we playing the same ball game no, we're not playing the same ball game when here's amazon doing these kind of things look what they did with whole foods. thefirst day they had whole foods, hole foods prices were reduced dramatically amazon put in whole foods, whole foods private brand put on amazon so there's a tremendous amount of opportunities and if you have 3.4 trillion dollars being done in retail stores in the course of a year, there's lots of opportunities. >> all right, but michael, every time i hear you say this on our air, i think, okay, it's just going to cost a lot of money to create experience to have qualified sales people who engage customers properly and

therefore compensate those people properly. i mean, you talk about not spending enough on r&d, but that's going to hurt margins in an industry that's already suffering, isn't it? >> yes, it is, but you see, that's the dilemma i'm not sure -- i didn't ask pete why he wanted to take his company private, but part of that is about wall street. part of that is not having someone looking over your shoulder every minute, and god forbid you missed a quarter by a penny, you get whacked 10%, 15%. yes, it's going to take a step back to put investment in. you can't just talk about it the department stores are just talking about it it has to be something very dramatic they can't compete with the manufacturers who are now going direct to the customers themselves they can't compete because they can't flow the goods as quickly. they don't have as much newness, and buyers in the department stores are risk averse so if you're risk adverse, you can't flow the goods in as fast

as the manufacturers in their own stores you have no alternative except either make your store dramatically more as a concession opportunity as it is in harrods or you will fail. and i think that the model of the department stores in the united states is broken. i have said it there's no one that wishes macy's and department stores do better than they have been doing than i do, but i believe the model is broken and it has to be dramatically changed people to have step back and say what is going to excite the customer you can't look add what's happening on broadway. you can't look at what happened in apple, you can't look at what happened with kylie cosmetics and all these things and say the customers aren't interested in experiences. yes, they are. and those people that want to figure out how to do that and do that well will be enormously successful going down the road >> one last question, michael. we have seen a bit of an upturn in retail traffic by week. apparel traffic by week over last year, over two years ago.

is that just cold weather at work how sustainable is that? >> i can't tell you. it's going to be a funny season. first of all, i think last year there were a couple things in my own opinion, i think after the election last year, there was large percent of the country that was very depressed. i'm not making a political statement, but there was a real down feeling you don't have that this year. people may still be concerned and upset, but you know, it isn't to the same degree it was last year. weather has been a little cooler in the northeast, and that is certainly an impact for a business, the coat business, the outerwear business, sweater business, and it gets people in the mindset of holiday you can't look at friday, this friday, and say oh, that's going to be a barometer when sales have started last week, sak's was in the paper yesterday or the other stores too this week, and the fact of the matter is there's one extra day between thanksgiving and christmas this year christmas falls on a monday, new year's falls on a monday, which makes the weekends even more powerful

it will be a longer period of time i think where the unemployment down to the lowest level in 17 years. consumer confidence up by over 4 4% in the last month, it will be a decent 3% to 4% for the season i want to leave with one last thing, when you talk about excitement, since 2012, in the last five years, the increase in consumer spending in the areas of what i would call entertainment, the whole subject of personal care, recreation, dining out, that has grown by over $325 billion. stop and think about that. $325 billion in that five years, my guess is if you added up all the department stores in those five years, you may have a loss. so people are spending it's how do we want to get to their hearts, how do we want to get to their imaginations? >> yes, the experience factor. michael gould, thank you for your commentary and your assessment of the industry, the

former ceo of bloomingdale's >> the council survey is out, and jackie has those exclusive results. >> well, the headline out of this survey is that more cfos are optimistic on the global economy than they were earlier this year. more than three quarters say they think the u.s. economy specifically is improving and they see confident that the stock market is going to continue to rise nearly half said the dow is going to cross 24,000 before it drops under 22k. meantime, asia seems to be the region that presents the most growth opportunity cfos bumped their outlook on asia pacific, china, and scrupan from stable to improving, and its tech that seems to be the favored industry group makes sense. we looked at that sector in the s&p 500 in the u.s it's up around 40% year to date. on the fed, more than 80 persh surveyed see one more rate hike in the cards this year more than 70% think there will be two hikes next year the implication there, that rates are going to go up, but it's going to be gradual it shouldn't have a chilling

effect on the stock market finally, on tax reform, the majority answer that they think the proposed plan will create jobs, it will stimulate growth, but they don't expect their fiscal 2018 tax rate to be lower than in the current year they do have plans to repatriate cash they're going to use that money to buy stock back. we asked them about bitcoin. 30% said it's a fraud. the same amount said it's real but we're in a bubble, guys. >> all right, thank you, jackie. when we come back, shares of hpe, they're getting hit this morning. down over 5% ceo meg whitman announces she will step down from that role. and we'll tell you what she told us about her next move and the future of the company, including of course, a quarter that is being reviewed by wall street and not ttgeing the greatest marks. "squawk on the street" will be right back

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step down. she joined us earlier on "squawk on the street," and i asked her why she thinks now is the best time for her to leave her post >> we have a crisp strategy. we have the best product portfolio we've had in a long time real momentum in the marketplace, and antonio and i have crafted that strategy together and felt like this was the time for a new generation of leaders to take charge of hewlett-packard enterprise and create that next wave of shareholder value. an townio is ready, the company is ready, and it's the right time >> thought clear that shareholders are ready, sending the stock down 8 persh some may be a response to the numbers themselves toork be fair they had not previously given fiscal year first quarter guidance they did that yesterday. it was perhaps below by a couple of cents what analysts had anticipated, though they maintain full year guidance, i think it was 115 to 125 for the full year. but the ramp to get there, perhaps, is a bit steeper than had been anticipated previously by analysts.

that would be one reason why the stock is pressured it also could be he's untested or unknown to a certain extent, and meg whitman has presided over, however you want to discuss it, a decent amount of shareholder value, having taken over the company in 2011 and pared it dramatically, no other way to say that, cutting it in half, of course, with hp inc. being the printers and computers, and keeping enterprise and going to run that, and then doing the enterprise services deal with csc, that's become dxc, and spinning off software, a smaller division, to microfocus. large deals along the way, but she has created value. >> coming out to talk about it along the way. i remember when you sat here and interviewed her during the split, and during some tough quarters and bad news and that's something that a lot of ceos don't necessarily do >> i always appreciated that, without a doubt. her willingness to come on every single quarter and communicate, because she always felt as though it was important to do that and answer the tough

questions. even our last, not this quarter, but last quarter, as to what went on with that uber job, which certainly raised some people's questions about her relationship to her own job and what the board thought about her at the very least interviewing to a certain extent. she might not have called it interviewing, but considering that position. meg has always been willing to take on the tough, i think the tough questions when they have come and now the question is what she's going to do. >> not run for president, i guess. >> apparently not, although some viewers still not quite believing it >> she was very vocal in the last campaign against president trump. she campaigned for hillary >> a life long republican, we should point out, having run for governor of california and lost to jerry brown in that role. perhaps takes something of a -- well not in this administration, an appointment of some kind, but again, not going to become, one would expect, from the current president. >> let's get over to sue herera and get a news update. >> good morning, carl. good morning, everyone here's what's happening at this hour the navy is searching for three

missing crew members whose plane, like the one you'll see in a moment, crashed earlier today off the coast of japan eight sailors have already been rescued. that aircraft was on its way to the "uss ronald reagan" at the time of that accident. north korea responding to the trump administration's move to designate that country as a state sponsor of terrorism its state news agency is calling that move a, quote, serious provocation, and says it justifies north korea's pursuit of nuclear weapons david cassidy, a 1970s teen idol who starred in the partridge family, has died at the age of 67. in a statement, the family said he was surrounded by those he loved, free from the pain that had gripped him for so long. >> and in new york, the parents of a man killed in the halloween terror attack along a new york city bike path are suing the city court documents allege officials knew cars could enter the bike path and they didn't do enough

to keep cyclists safe. that's the news update at this hour i'll send it over to jackie d. for the eia inventory report >> the department of energy reporting crude inventory dropped 1.9 million barrels. we saw a rise in gasoline inventories of 44,000. these are not bullish numbers, yet you still see crude prices are higher that's because the api set us up for a much larger draw, and the expectation is we would meet that draw, but we're not session high today was $58.05. that's the highest since july of 2015 but there's other factors here that are taking these prices higher of course, we're a little less than a week out of an opec meeting, or rather a week out. it will be next thursday on november 30th. so some job owning ahead of that some disruption with the keystone pipeline deliveries as a result of that oil spill that we saw last week. and also, some of the other data that we have been watching has been pushing us up i will note, i looked at the u.s. production number

9.658 million barrels a day here in the united states we keep eclipsing that 2015 record, and we keep moving higher so a lot of competing factors here, yet it seems like the price is still rising, back to you. >> yeah, energy companies, some of the best performers right now in the s&p jackie, thank you. when we come back, not so fast the battle between procter & gamble and nelson peltz not over yet. the company challenging the vote count that elected trian's nelson peltz to its board. the news david broke ts hi morning. details and analysis for you next

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p&g is going to challenge the proxy vote recount, not the recount, but the official tally

that gave nelson peltz a victory and a board seat, it would have appeared, at the company the preliminary results showed peltz won by about 43,000 shares that's the tiniest margin you could imagine. i did ask hewlett-packard's ceo and energy board member meg whitman about the vote last hour >> i think what p&g is doing is just paking sure that the count of the votes is right. because remember, it was reported that p&g won and then that mr. peltz had won i think they're trying to make sure that the vote count is absolutely accurate. if it's accurate, i think p&g won't fight that if it's not accurate, there's another decision to be made. >> a lot of semantics here of course, p&g announced it won, and probably should never have done that on the day in question i think they did that with sara when you were there at the meeting. they are saying, well, it's not a formal challenge it is. it is a challenge of the official tally by the

independent inspector of elections who would have certified today, i'm told, that final tally, but now it's going to beweeks of reviewing all of these ballots. looking for clerical errors and what not question, of course, is is it all worth it we'll get more, bring in bill george, who joins us on the cnbc as well as cnbc newsline, joining us on the cnbc newline, nik modi hard fought proxy battle close as can be. it comes in with this official tally, he wins by the tiniest of margins. now they want to challenge it. what do you think? should they just say okay already? >> david, if 50% of the shareholders, i don't care if it's 50.01% or 49.99% have voted to add nelson peltz to the board, but him on the board. this is a very strong board. it's already got ten ceos on it,

people like jim mcnerney and meg whitman, who you mentioned, angela braley, these people can handle nelson peltz. they have 11 members ten are ceos and i think he should be added and he can bring something the earnings of this company have been flat their revenues are down because they're spinning off brands, the stock is going up at about a third the rate of the dow jones. david. and so i think it's time to make some changes you know, bill ackman made a big run at the company five years ago, and they warded him off, but bring nelson on the board, and before more radical changes take place, and they made improvements, but they have to move a lot faster at getting their results up to speed. they're just not there at all. >> yeah. nik, i wonder what shareholders are going to think this morning. you're getting different language from both camps but trian's point is we're going to spend more money now contesting us at this late

point? and delay us for what could be weeks if not a month or so what do you think shareholders are sort of feeling as they hear this news this morning >> yeah, david, i think it's all drama. right? this is today's version of the soap opera, which p&g created many, many decades ago the reality is this. from a stock picking perspective, and i won't comment on management, you know, philosophy or whatever the reality is it doesn't matter for the stock. i have repeatedly said that. you know, the reality of the situation is they have done a lot of good things to try to turn the business. the problem is the overall environment has been really tough. every consumer product company has either missed revenue or earnings this quarter and it seems like trends are getting worse. competition is getting more intense. local players are becoming more legitimate in the emerging market and procter, quite frankly, has value equation problems that they need to address if you thing about how they're really going to fix the problems

in short order, it's going to hurt near term earnings. i'll give procter credit on this one point. they're trying to protect their existing shareholders. they're trying to innovate their way out of their value equation problems and that takes time that's just the unfortunate truth. >> i want to clear up from the p&g side, they have not officially challenged the preliminary results of the inspector, they say. they're reviewing the data, but a challenge is a separate process, and they have not gone there yet. so that's the p&g side of the story. >> trian is a very different story, saying of course, they have and they're going to go through every single ballot. >> so i guess what i'm wondering from you, bill, does it matter does it matter if they officially challenge they fought this so hard they said that this was a battle for the soul of their company. they don't want to be distracted they're on the right path. from their perspective, why wouldn't they pull out all the stops to make sure the vote is correct because every single little one counts in this

instance >> yeah, this is sounding like the hanging chads back in 2000 presidential election. no, they can bring nelson on the board. they're not going to lose the soul of the company because they bring nelson peltz on the board. bring him in to the boardroom. have him stop fighting you from the outside. but make changes look, they appeal to people in my generation with products like tide they have got to get to the younger generation they're not doing that they have to get much more global they haven't done that they have just got to radically transform the company. otherwise, you're going to see it like peltz's other target, ge, where they're taking the company apart. i don't want to see that happen. i have not always supported peltz. i opposed him on pepsi co, i opposed him on dupont, but when a company is not moving fast enough, this is an opportunity for mr. peltz to come on the board and add some value and the shareholders have spoken half of your shareholders matters. again, i don't think these margin errors matter at all. >> to that point, i mean, shareholders spoke for and

against, right so why is 49.9 suddenly the limit you have to cross if the company is not doing well? >> i think you listen to your shareholders, and half of the shareholders is a big number and if i were -- if i were on the board, if i were ceo, i would say, bring him on the board. and let's get on with focusing on the business. this is a huge distraction this is where management is spending all their time. meg sounded like she was just a listener in the process. the board needs to be much more active they need to bring millennials on the board and gut much more active with the millennial generation, and finding out online, e-commerce, and sustainability and other things consumer companies are doing, they need to move a lot faster hot can be the harm of having peltz on the board he's not going to destroy the company, and i don't want to see them broken off. they have already spun off brands they need to move faster to avoid that, otherwise they're going to be in a situation where people say look, enough already. there haven't been results for five, ten years.

let's throw everything out i don't want to see that happen. but they have to move a lot faster and bring peltz on he can help. >> yeah, i mean, nik, bill brings up a good point, which is it's one thing to keep going back and forth and fighting over hanging chads, but this is something that has occupied management for the entire year is there a cost at some point of the distraction and prolonging this fight, what, maybe even into next year >> absolutely. i mean, it also changes the way you behave in the near term. if you're trying to ward off an activist, you take short term measures i'm not sure if p&g is doing that, but i have seen a lot of companies in these situations take short-term actions that cost shareholders longer term. i do think it's a distraction. the reality is, i think trian had some very good ideas, but there are some ideas that i just disagree with. i fundamentally don't think procter needs to buy all these small brands i think they can grow with big brands you're seeing online brands dominate the market share online

relative to what you see in the store. i'm not abeliever, again, that the small brands are really taking it to the big brands because you can see online, big brands actually have pretty good presence >> yeah. guys, listen, we'll continue to follow this and the competing statements from both camps but for now, we'll leave it. bill george, nik modi, thanks to you both when we come back, taking a look at shares of amazon that's an all-time high this morning. got to 1149 and change, as the official start of the holiday shopping season is right around the corner when we come back, soul cycle says forget the bike we're going to tell you why the company is breaking away from its own brand and going bike-free, which "squawk on the street" continues. today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent.

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this year. are there any left that are still buys for your money? go to tradingnation.cnbc.com to find out more "squawk on the street" coming up. ♪

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dow is down about 25 point, taking a pause near record let's go to the cme group in chicago. rick santelli with the santelli exchange >> thanks, sara. ira harris, welcome. hope you have a great thanksgiving tomorrow. >> you, too. >> with respect to the markets, it looks like equity traders have had thanksgiving all year in the u.s now we see certain things starting to happen on the political side in germany. merkel, her coalition. how do you think mario draghi views all this >> mario draghi is very nervous right now because he has hung his hat with merkel. merkel has set a pick for him against everybody -- >> she's really been the appeasing force in how the germans in essence have underwritten much of the monetary policy. >> they have not underwritten most of it, all of it. that's what people don't understand they think that the ecb's qe program is like the u.s. or

japan. wrong. mario draghi has a different desire here. and that's to create through the back door a eurozone why? because if you build that balance sheet of the ecb big enough, there's no getting out from under it. >> you know, we all know that if you look at the total amount of notional value of the negative yielding securities around the globe, it has come in, okay, but there's still a boat load of it in japan and europe. that's really what you're referring to, isn't it in. >> sure, because we know, because we keep crushing the spreads. except that we all talk all morning, and you and i have discussed this for years already, are the yield curves. the yield curves have flattened in the u.s., but the european curves have gone the other way, which flies in the face of what you would think. >> one central bank has found religion and stopped purchasing, the other may taper, but they're buying more than issuance in many areas of securities >> when you look at the -- >> rose colored glasses. >> you have to look at it

through rose colored glasses we saw last week, the french concern offered a three-year bond at negative three basis points >> triple-b. >> it's so broken, we don't know everybod we don't know. everybody was talking about the 2/10-year-old curve today. yes, we talked about the importance of it but in this realm of central bank, breaking the bank, you better be wearing rose colored glasses >> with respect to the yield curve, the issue is not trying to desifer whcipher about what s telling about the future, the better exercise is to determine why it's moving so quickly one of the reasons -- i had many on -- were tax issues. the corporate rate, funding pensions, the purchase of long-dated securities fits into that plan from a tax perspective. >> there are so many disconnects

here you have the 2/10 now -- the two-year at 1.75 the german is at negative 75 that's a 250 basis point differential to the best credit in europe. things that should be happening as well as the equity markets, the dollar ought to be rallying. >> foreign exchange volatility, if you're long that, you're a poor trader. we have to leave it there. you'll be heading to warme weather. we'll miss seeing you in person. we have you on the air from a remote location. david faber, back to you >> tell ira to be careful. those can hurt your eyes let's send it over to john fort. >> it's beginning to look like retail season. so we'll dig in on tech, how it will effect shoppers, particular millyobe. lots of angles coming up on "squawk alley.

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soul cycle is expanding beyond biking. diana olick has more on the annex. already some mixed opinions here >> we'll hear that later look, this is the brand that really launched the boutique fitness craze in new york city over a decade ago.

expanding to 82 locations across the u.s. and canada. four in the d.c. area. now it's taking a big risk on a new brand, separating the soul from the cycle as you said, it's called soul annex. just one test location in manhattan's flatiron district offering three different workouts from high intensity cardio to stretching and strengthening. no bike. all soul the company's ceo says soulcycle is in the business of community and personal transformation and it's never been about the bike but what really drove this is that her customers demanded it >> this is our first step in the annex, moving off of the bike and out of the traditional soulcycle studio our riders are asking consistently for other ways to spend time with the brand and instructors. >> soul annex has its own branding and its own clothing line to go with it ripped t-shirt, about $95. all in line with the luxury fitness line it's a way to get more business

from current clients who might do other workouts in other places, but she says it is not about competing with other big names in the cycling space >> we don't view the cycling space as our competition the way we talk about it internally is competition is time people are time-starved. >> that said, when i brought up the competition of the likes of pelaton, which has a growing following and fly wheel which just put a cycle at home, she did not rule out the possibility of putting a soulcycle in your home what home what do you think? lots more on cnbc.com. >> that's one more excuse not to do it. thanks when we come back, more on that uber hack the breach of personal information of 57 million users and drivers. details and now aconreti from capitol hill "squawk alley" is up next.

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welcome back stocks trading slightly lower

ahead of the thanksgiving holiday. if you look at the energy sector, it's getting a boost in the middle of that busy travel week that we have. shares of range resources, chesapeake energy, newfield exploration and marathon all trading higher after lagging on tuesday. that does it for this hour of "squawk on the street. let's send it back down to the stock exchange for the start of "squawk alley. back over to you good morning it's 8:00 a.m. at uber headquarters in san francisco. 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪