jones. >> 210 >> a tighter range >> based on expectations and inflations >> do we owe "squawk on the street" any seconds? >> we may. >> let's just give it to them. >> all right, folks, make sure you join us on monday, have a great weekend everybody, "squawk on the street" begins right now. hurricane florence makes land fall at 7:15 eastern time this morning a weather story with big economic impact that we'll watch today. good friday morning, i am carl quintanilla and david faber and jim cramer the future is up modestly, weaker than expected retail sales, adobe earnings and a lot more and europe is relatively mixed as becky said ten-year near 3% is close to a six-week high hurricane florence crashing

ashore in north carolina the region is bracing for life-threatening storm surge and catastrophic fresh water floodingment. ups is suspending service to large portions of the carolinas. ceo abney is going to join me. we'll talk about the company's growth transformation. and jeff bezos says the company will announce hq 2 by the end of the year florence making land fall, it is a category one storm the national weather service says life-threatening storm surges continues and the catastrophic flooding is expected hundreds of thousands now without power in north carolina. flights have been cancelled making this land fall a little painful and some of the measurements were getting at 24 hours and 30 inches in atlantic beach is close to the most

rainfall we have seen anywhere in the united states over 24 hours. >> we don't know other than evacuation what it exactly do. in terms of trying to put it in perspective. when we had the fire in california, no one knew what to do these are natural disasters. i remember there were a fish in my basement during super storm sandy. what do i do with the fish in my basement no one knew what to do these are situations we are not prepared to have there is supposed to be once in a hundred years and how many are we having in five years? >> half way through the season >> remember the late mr. fishman from travelers who said i am not going to sell insurance to florida after hurricane andrew baas you can't estimate anymore. >> how can you estimate along

the sea board. >> last year's incredible rainfall totals as a result of harvey you have the conversation again and people do about climate change and whether it is much more normalize kind of things. we hope to if best and hope that those rain totals are not met but certainly that's going to be one of them and you will have the conversation of developing in areas that should not have been fully developed or we'll see. people are worried about charlotte which is a banking scen center >> did you know that we see autosales and you got to recognize that harvey destroyed hundreds of thousands of vehicles >> the second most costliest hurricanes ever. >> second to katrina >> some analysts taking their el estimates down for ensurers. let's get to jackie deangelis in

north carolina good morning to you. >> reporter: this is it, this is the eye of the storm the hurricane made land fall about 7:17 it has come south to carolina beach and this is what the eye looks like look at the trees, no wind and rain coming down all is calm right now. as the eye moves through and this is a slow moving storm. you will get those wind speeds backup and rain is going to start to fall again. it is expected to continue for quite some time. we had wind gusts up to 90 miles per hour and the rainfall was very heavy you can see ton the ground and the flooding was beginning to start here first responders have been dispatched to a couple of communities where people chose not to leave or could not leave for various reasons. the president is commending fema for its efforts to help people under these ex trash btraordina

conditions new bern, 150 people are still waiting for some help to get out. it is a coastal town that's seeing massive flooding. 250 people have been able to get to a safe place. that's positive when you are looking at a storm with power like this one. power outages speaking of and a little bit less than half a million right now across north care lean n carolina they can be as high as 3 million. those power outages could last days and weeks look at the ocean. much calmer than it was this morning. we don't know how fast the storm is moving. again, when the outer ban on the other side of the eye starts to come, those waves are going to pick up again. we'll continue the rest of the coverage through the storms, guys weap we'll keep you posted and bring you updates. >> thank you jackie deangelis

looifr there on the beach of north carolina one company that's impacted by the storm is ups this is one day after the company announced of their refocused initiatives to focusing on small business and healthcare ups's ceo david abney is joining us now certainly i want to ask about the hurricane. there was a lot of it in terms of what you call of this transformation what gives you the confidence that you can threw the initiative that you discussed yesterday to get to that number. >> it is a dollar to $1.20 in

ups. one is to focus on higher quality revenue and we see the b 2 b ecommerce and great business we are looking to fund the trans formation because there are so many opportunities out there that we can modernize our business the fact that things -- business operates quicker today we need to have just a little bit tone and different speed >> how do you change the culture of ups that's a well-known company of 450,000 employees. it would seem to me it is quite an under taking to change the culture. >> our cultures changed so much over the years i have been there over 40 years.

what people today associates of the culture of ups is the way it is today it has changed many times. we talk about moving forward fast we talk about we live in a state of continuously transformation that's the way that we have to look at. we can't look at the beginning and it is an end this is the way of life. you will have to spend a good amount of money to achieve the hopes of adding that incrementa income tell us more about why those investments are going to pay off. >> well, those investments are going to pay off largely because of automation and because of technology we are able to retrofit existing buildings with technology that we could not have done several years ago and we are building new buildings, too

the charge is over the nets four years or so. the benefits will be coming throughout the entire process so the only thing i would say a $1.20, that's not what we hope to do. we hope quantify initiatives that we are going to do. we believe there is an upside and that could be in the quality of revenue and initiatives >> david, so great to you have u on the show and your company's story and there is another company. u.s. postal service, you have seen this huge surge it was impossible to predict and you always deliver things on time which was incredible. do you think the u.s. postal service has a better deal or a worse deal than amazon the president thinks that u.s.

postal service got hurt here we know how hard this business is >> yeah, when it comes to it, we have a unique relationship they are our competitor. where we have our concerns is we believe they take monopoly revenues and they subsidize their small package business we are just continuing to focus on -- we want them to allocate their costs properly and we want them to be transferred if they do that, their pricing should not reflect their costs right now they don't allocate all their costs to a product this where we have concerns. >> i think the president got a dead rule. postal service is doing better and making a lot of money on samson

they manage to do cross subsidies. maybe we just say trump is wrong and he ought to rethink his plan >> i don't know if i would say that ill say it is hard to say that they're making money on amazon or just because they're not allocating their costs so that's where we you know -- we have to let the folks focusing on their pricing and issues we just want a levelled plain field in this >> when you talk about technology being a fuel for these numbers, what kind of tech and to what degree of labor would you ordinary hire? >> the first thing of our transformation we did a volunteer retirement program and it is going to be about $200 million a year in savings. a lot of that is back office operations that we can automate and that would just simplify the

process and so that's where we see a lot of the gains there will be and because we are going to grow our business there is going to be jobs that's created. when we stream lean these offices, there will be jobs that'll be reduced, there is no doubt about that we think technology is going to help us or assist us for the body growth we are taking. we are opening brand new facilities in phoenix and atlanta and other places that's going to allow us to handle this growth to create jobs >> do you see seasonalty getting worse as we go into the holidays >> ecommerce creates seasonal.

that's why we are hiring hundreds of thousands of seasonal employees this year if you know college students need a little money, send them my way >> i have many sendsing your way. >> the question is where will you find them and how much do you pay them >> will you let them keep their hats on the ground >> we found them at college campuses and we talk about for this period of time. they get good experience and we get good people that can help us we can take cell phone type devices and giving them the technology they need to be effective immediately, too it is a good model for us. i started as part time employees and it worked out okay i think it will for a lot of theses >> david, a lot of these is intended to change the mix from

ecommerce business of the lower margin to higher margin areas, b b -- is that share going to change dramatically as a result of the transformation? >> there are two parts we we'll focus more on ecommerce from a b to b standpoint and we are tayloriiloring products to on that. ups, giving business a consolidated of what they can get everyday when it comes to b to c, everyone thinks the larnl retgel retailers, well, those are the people that we are going to focus onto increase the quality of revenue that we talked about. >> finally on the same subject, i am looking at a note here of

long pay back time line and up front cap ex that's cs this morning what do you say to those well, it is going to be a while until we see rewards and you will see the spending early before we get back to that >> people would want to see immediate returns. there is no doubt about that >> we have one of our focuses with our culture is to move forward fast and that's to model -- some of these transformation does take infrastructure and developing technologies and yes sometimes the cost will come in front of the benefit but we are not paying to look at what's going to happen in the next 30 days. we have to look at the long-term picture, too we have to make sure we can do the things in place that'll benefit our customers and our employees and our shareholders for a long time. >> we feel confident doing that. >> finally, david, the hurricane, we led off by

discussing it. any sense to how long service will be suspending of this part of the region what a what are you hearing from people who are working for you? >> our hearts go out to our people we have a lot of employees there and safety is our first priority right now we have about 7 buildings that were forced to evacuate we also moved our planes out of the way. we have a department that as soon as they give us the clearance, we'll immediately go back you will see in recovery of utility trucks we are apart of the solution, we'll be working as soon as we can get our trucks back and we hope it is fairly shortly. >> david, we appreciate you spending some time with us this morning and we'll watch the opening bell in about two-minutes from now

thank you. >> david abney, chairman of ceo of ups let's get to rick santelli >> powerful number here. four tenths and we gained three tenths from last month 48 48.1 on utilization rate >> back to you, carl and jim >> still to come how the white house is responding to the hurricane, we'll talk to secretary alex azar and what bezos says last night of everything from whole foods to hq 2 to amazon stock price and why he called the company amazon to begin with. let's look at the future and sqwkn e re" aetin moment

♪ ♪ fight security threats 60 times faster with ai that sees threats coming. the ibm cloud. the cloud for smarter business.

busy morning futures is looking good here we'll get the mad dash with cramer in a few moments and the opening bell, don't go away.

what's inside? a moment of joy. a source of inspiration. an act of kindness. what will it bring? an old friend. a new beginning. some welcome relief... or a cause for celebration. the help you've been looking for. what's inside? possibilities. what we deliver by delivering.

less than seven minutes ago before the beginning of the end. last trading session of the week our first mad dash of the week >> hello >> zaslav want to move the stock 10%. >> that was incredible

we'll talk more about discovery around the bell. you want to talk adobe right now. >> this is fascinating adobe blew the numbers they were yus beautiful. i love everything. with many other, people are nitpicking wait a second, i thought they did better than expected please do not sell adobe we start seeing defer revenues and timing issues and there is issues with the billing cycle. david, listen to me. >> i am listening. >> this is what happens with the cloud kings. they nitpicking and finding someone. so the stock gets hit a little and all the big institutions come in and buy. that's going to happen i want to ask him more of artificial intelligence. narayen. at some point will he take

profits? >> we were idiots. this is a great story. every time there is always some line, david, it is nonsense. it was a great quarter we got openi bngell coming up just five minutes from now stay with us on "squawk on the stay with us on "squawk on the street."

♪ (whistles) ♪ come on. come on, squirt. (dog barking) whatever your financial gos are, a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible.

some breaking news out of washington today court filings suggest that manafort agreed with prosecutors with a plea deal let's get to eamon javers with that >> reporter: paul manafort has adpree agreed to a deal with prosecutors to plea guilty he's going to plea guilty to a sup criminal information that was filed in the court manafort is going to plea guilty of charges against the united states and money laundering and tax fraud and bank account reports and violating the registration act and lying and misrepresenting the department of justice and conspiracy to

obstruct justice a lot of new charges here foreman fo for manafort that he'll be pleading guilty to is manafort going to cooperate with prosecutors he was found guilty on eight charges last month in court proceedings in virginia. and now manafort is blepleading guilty >> thank you eamon a whole lot is going on as we talk about florence retail sales is lower than six months >> i just continue to be baffled by the national number verses what i hear. i don't get it i never know what to make of it. don't sell retail stocks on

this it won't make any sense. industrial production was pretty good on auto production in large part we'll see if they're back. we'll have to wait i sat down with so many retailers. this is a moment for them. k costco downgrade today, why? highest valuations the stocks have gone so much and that's because everyone is so excited for business >> here is the opening bell. we just talked to ups, david abney and siga against biological chemicals and nuclear threats. they go to market perform at 2:35 price for perfection, ecommerce investments at the market is not

truly appreciated yet. they say the model is not in fallible in their words. >> i think we get the highest valuations, they figured out how to do ecommerce. every time you downgrade at cost costco, you regret it. i was looking at sears number and costco have been a huge beneficiary declining of serars. sears have slunk hrunk to the point -- >> costco is getting better and better costco is doing a lot of things right. valuation is doing a sucker's game here when it comes to retail this stock has moved too much. nordstrom. hey, listen, that one is done

then they have huge up sight remarkable piece by talent of how vans is doing. everybody in retail is surprised how strong business is >> lb is finally getting a break their. what's the other big one today >> hasbro. >> i have to tell you the new member of the board at cbs is doing a remarkable job >> i do. >> one to watch, not yet radar screen, matel. >> turn around >> getting more experience he has made it into a multi media company. and its got fabulous matel i think brian is one of the

smartest guys out there and you could not predict it >> we were all worried of toys r' us and inventory change getting slammed, right and hasbro got caught with a lot of inventory >> it is funny, you listen to david and he mentioned during the break that apple can be seasonable and apple can cause seasonally it does not include apple of the prub pru products we buy. >> for orders we buy today and they can start delivery on the 21st >> this watch does not do anything for me. >> you still wear it >> it does a lot of things >> you can press at the new york

times here >> great, i have it on this thing. >> i have cnn. do you watch cnn it is fake news. all things are fake news i use it but it does not have the stuff i want >> what does your watch do >> you know actually i stop wearing a watch entirely >> battery ran out >> plus one. >> i am like i know what time it is >> does anybody know what time it is? >> does anybody care >> david, my iphone can't tell if i fell or can't tell --s is. >> it is not a symbol. >> this motion is not difficult of this motion >> you don't know what you are talking about. >> have you been to a meeting and take your phone out to see where us your wife look, i am late. >> is everybody's phones not on their table? >> i have been on a major formal

and you are talking to distinguished guests and you want to pull your phone out in the middle of the conversation, i am late, i am sorry. >> everybody got their phone on the table. >> let's talk about media right now. a private equity firm known as technology folks. they're due on 2024 and paying 2.95% and 17 point conversion. the money going to use by amc to pass special dividend of a $1.55 share. remember the chinese company

juju juana. >> it will still have 51.7 million shares of the company. what's most interesting is the technology >> adam aaron is very smart from amc. >> they'll agree on independent film directors >> the way to play it is epr property that's a company that people felt it is going to be challenged and movie theaters at 6% david, i know you care about this fantastic chart >> i do. >> what chart. >> stock chart >> i am talking about david abney, not you >> put your ups hat on he >> he's still with us. >> jeff bezos made some news yesterday in washington, d.c. talked to a group about amazon and the washington post and his purchase of whole foods. take a listen.

>> we are interested in physical stores i have been asked for years, literally 20 years and i always say yes but only when we have a differentiated offering. >> all right, no mention of hq 2 other than decision by the end of the year. that's a big deal of $5 billion investment and 3,000 jobs. >> no mention of the coals deal. there you are and you can return things and not having to wrap them amazon does not want to talk about returns. >> he did talk about the early days where there were five people in the company and he was drive to the post office himself and waiting to see if they can afford a forklift one day. why it was called amazon earth's biggest river and

earth's biggest thing. >> it is so rare to hear from mr. jeff bezos that guy ticked me off, he's getting all these darn interviews >> i am getting tired of this. >> jeff bezos should come on and spend time with us >> david, we are on air right now talking about this >> sorry >> bezos mentioned the stock price which you don't always get. take a listen to that. >> it almost every all hands meeting, i said when the stock is up 30% in a month, don't feel 30% smarter because when the stock is down 30% in a month, it is not going to feel so good to feel 30% dumber and never spend any time of the daily stock prices i don't. >> we are 30% richer >> he did talk about going through the dot-com bus.

it was that time that things were starting to click operationally and he had to wait that out >> some people think it is the greatest company i am so in awe of and ahead of everybody and if you look at what walmart is saying and adobe and microsoft azure is doing incredibly well. this is an advertising story and web services story and retail story. they should talk more about it >> they're throwing a lot of heads out there. >> it is getting crowded on that page >> you are a complainer. >> i am not a complainer i wonder if the experience is affected by people >> do you feel 30% dumber? >> no, i don't >> ten-year gets to 3% today and dow is up 33 let's get to bob pisani. >> 10-year yields at 10% but it

is not helping the banks that much we are knocking on the doors of the old historic highs of 29.18 at the end of august new highs have been expanding this week and the volume is getting normal here and banks are up a little bit. it has been horrible for the banks. we should get a better move and i will show you some of the moves this week here energy is better this week overall. semis have been bouncing around and emerging markets jenrr emerging markets are up this week take a look at the market trends overall. i will call it mix we are approaching new highs and the s&p. tech, i will call it stable up and down the semis a lot generally stable to the upside banks are on a down trend folks.

the dollar is weaker look at some of the bank stocks and i am talking about regionals and how goldman this week, this is just this week for the bank stocks these are the big regional banks that we all follow it spreads the yield curve flattening and the two ten is spreading. put up that chart and you will see here, that's the lowest that we have been essentially going back 10 or 11 years and that's a major problem for the banks. global market trends, i will call it mix. japan has a great week overall china's down trend is still intact they are down this week again. shanghai of 25% in late january. europe hitting the lowest levels since april this week but it has moved up we are off the lows and emerging markets generally are bounced.

let's revive everybody what's moving the stock market. number one is china and trade wars and up on resolution and down on trade war talks. the dollar has been a big help because it has been quieter in the last couple of weeks the other big mover of the market is tech leadership. but, again the trend is not clear. let's call it down but it is not out. the other one, fourth one, the rate heights not disruptive. >> right now the dow at 47 points carl, back to you. >> thank you, bob. rick santelli has been bringing us awful a lot of numbers today. let's get to chicago >> absolutely, carl, you are right, retail sales was not powerful as leave liesman brought out, we

have positive grounds. the middle mopt nth may all come out on the wash. it is clear sailing to the upside, fresh high yields with this 278 going back to 24th of june, 2008 now, if you look at one week of tens, similar fashion and opening the chart up to august 1st. it is right on august 1st, we had our last close at 3% there is only been about a dozen touches today. it is going to do it again technically on my inside screen, we came at tenth and a basis point. if you look at guild it is interesting of the two central banks met yesterday. the gilt and the pound is moving pretty good, hovering around at 154 and the pound verses the dollar looking pretty good going back to early august it is the dollar index that's

not looking good 94.70 now. there is a july start to the chart, that's about the last time we were down here at the end of the month if you open it up in june, we wiped out august and back in the well-range that we had volatility carl, jim and david, back to you. >> the trump's administration responding to hurricane florence and we'll talk to alex azar and the dow is climbing to early gains here at 51 s&p is up 29.07. don't go anywhere. so i got an offer on the business, and now i'm thinking... i'd like to retire early. oh, that's great sarah. let's talk about this when we meet next week. how did edward jones come to manage

a trillion dollars in assets under care? jay. sarah. so i have a few thoughts on that early retirement... by focusing our mind on whatever's on yours. (guard) i've seen things unnatural things. these people they don't sleep... like ever. they reveal in extremes and defy limitations. these pursuits may seem unnecessary.

but the scariest thing i can imagine is a world where this, doesn't exist. that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flights for us. so i'm more than confident. kayak. search one and done.

this is going to be a duration, power will be off and infrastructures will be damaged or destroyed we need your help in setting expectations to our citizens and state and local government >> hurricane florence making land fall a couple of hours ago in north carolina. the very slow moving storm combined with heavy rain and

surge. joining us exclusively to talk about the white house response is alex azar, good morning, good to have you with us today. >> good to see you thank you. >> people are talking about the lower than expected wind speeds. this does become a health issue very quickly what's the response? >> i want people to remain on guard in the affected area we here play an important role in helping with preparedness respo responseness and we even have veterinarians of people who brought their pets with them we wait for our seniors to get access to medicine and care. we collect data and we stand ready and in the after math of the storm. >> the most recent example that we had of severe flooding was

harvey last year the topography of the carolinas are a lot different than south eastern texas. how does that change the equation this time >> every storm is different, 15 to 20 inches of rain and that can be catastrophic and the impact can be unpredicted. one of the biggest things that we worry about is electricity. that's why we have a unique database here called empowered that let us trap every senior who are dependant on healthcare, we correlate with that closely so that we can reach out to them to get healthcare. >> thank you so much for taking your time to come on >> thank you >> during the department, do you use artificial intelligence and to be able to map what could happen i don't think humans can figure this stuff out

>> it is a good question, jim, i love to enhance our data capabilities we are working of this empowered database is a big move for us to have this level of patience of knowledge of electricity independence it helps us save dialysis patients. we've been able to work with dialysis providers to ensure they have adequate capacity and can move patients around in the impacted area to make sure people get the care they need. >> that's not the only big story but it's the most important. thor w-- the other was this move out of the fda on e-cigarettes thoughts on that >> we are completely supportive of what fda 1 doing here i'm a father of teenagers and i have seen the impact of these e-cigarettes, the pervasiveness and the rapid spread and that's what commissioner gottlieb said. we've seen a rapid, rapid spread of e-cigarette utilization among our youth and we are not going to permit e-cigarettes to become a pathway to nicotine dependency

or even, god forbid, the use of combustible tobacco. so while we look to e-cigarettes as a public health off ramp for adults who use combustible tobacco, we won't permit it to be an onramp for-to-addiction and dependency >> we did see bullish action in tobacco names in terms of share prices and some wondered whether or not limited access to e-cigarettes would, in fact, push youth back to traditional cigarettes you don't think that's a danger? >> i would completely disagree and i wouldn't want to speculate on the why the stock market reacts the way it does it's important to remember various combustible companies have e-cigarette product lines and they may be forecasting as we move into a much more heightened regulatory framework capabilities and capacities to deal with a heightened regulatory environment. >> mr. secretary, if we're against addiction and dependency then we have to be against opiates but we can't win the war without the possibility of cannabis i know cannabis, legal in some

states, obviously the president, the federal government says no to cannabis, even just to talk about importing it from canada but can we consider the idea that perhaps this is a good alternative to opiates >> well, we've not seen any data that suggests the causal link there to -- that that would be a way to prevent opioid addiction. the problem we have with opioid addiction is one of people getting into it through legal opioids. the majority of people get in there through legal opioids, they get addicted, transition to legal opioids. our role is to keep them off the legal opioids and we're making great progress we've seen a material decline in legal opioid prescribing rates and dispensing and we're also seeing an increase in access to and use of medication-assisted therapy as we help bring people out of dependence. >> mr. secretary, it's going to be a long weekend for folks in the carolinas and the southeastern u.s appreciate you coming on, help us understand what the trump administration is doing about it good to see you. >> thank you. >> secretary azar from hhs

dow is up 27 on isth freud morning, "squawk on the street" continues in a moment.

broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

time for jim and stock trading. >> the last few days stocks have

been up. amd, stocks have been on a big move, yesterday a bit of reversal but it's always been at the expense of nvidia. needham takes the price up to 350 and says listen this is an artificial intelligence play fast becoming the monopoly for artificial intelligence, in other words not making it a story about gaming, about data center where they're nipping and nipping. there's room for both. who told me that dr. lisa sue who is my hero. >> she's your hero >> up 200% >> that's what it takes to become your hero >> sometimes off hero and they stop being heroes. >> look, you heard what jeff bezos said if it's down 30% -- >> don't worry. >> that was the other david. 30% dumber >> whatever you say david said, we assume you mean -- >> unless it's discovery which david is making the discovery.

>> that's david zasloff. >> all of the david's are in ascendence king david. >> quickly, mad tonight? >> i have broadridge and boot barn gina went to boot barn, she wanted to buy the whole store. >> that's wonderful. >> jim, have a good weekend. >> going shopping with me? >> never, ever. >> fly eagles, fly, we'll go into kohl's. >> watch the new york jets, baby. >> j-e-t. >> when we come back, the latest of hurricane florence and its impact on individuals and businesses dow is up 23 and overheating. we've got aging roadways, aging power grids, ...aging everything. you're kinda bumming me out clive owen. no, wait... it gets worse. we also have the age-old problem of bias in the workplace. really... never heard of it. seriously? it's all over the news.

i've heard of it. ahh. the question is... who's going to fix all of this? an actor? probably not. but you know who can solve it? business. that's right. the best-run businesses can make the world run better. because solving big problems is what business does best. and doing good is just good business. shhh! sorry. so let's grow more food, with less water. and make healthcare, more healthy. it's okay, i've played a doctor. what have we got here? let's take on the wage gap, the opportunity gap, the achievement gap. together, we can tackle every elephant in the room. and save the rhino while we're at it. because, whatever the problem, business can help. and i know who can help them do it... when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

fidelity. if you're waiting patiently for a liver transplant, it could cost you your life. it's time to get out of line with upmc. at upmc, living-donor transplants put you first. so you don't die waiting.

upmc does more living-donor liver transplants than any other center in the nation. find out more and get out of line today. welcome back to "squawk on the street." more breaking news if we look at business inventories, this is a july number, we're expecting the inventories to rise three -- actually looks like about six tenths and we got exactly that number up six tenths. now to the meaty number. our preliminary september read on university of michigan, a lofty number, 100.8. that's the second highest number of the year, so that takes us

back to march where we have 101.4 which was the highest number going all the way back quite a bit of ways to the -- far back we look at inflation numbers here's something nteresting. if you look at the inflation expectations for one year that were 2.8, 3% has been the highest level. so we want to pay close attention to that. we did hit 3%, we're at 3% in a ten-year note having closed there since the first day of august carl, back to you. >> thank you very much, rick santelli you are looking at a live shot of carolina beach. hurricane florence made landfall on the east coast. we'll take you there live in a moment good morning, welcome back to sweet. i'm carl quintinilla as rick said, ten year, 3% has people's attention but so much else going on between the hurricane. retail sales, industrial

producti production. >> hurricane florence making landfall in north carolina, bringing with it heavy winds, historic rains we'll take you live to the carolina coast. >> big businesses should be scrutinized, not vilified. the ceo of amazon speaking out on everything from regulation to his company stock. and theof domino's plus his take on the on going scandal involving papa john's. hurricane florence making landfall in north carolina we have complete team coverage for you. first, let's get to kaitlyn mcgrath. >> florence made landfall over white wrightsville beach florence might move back over water and make a second landfall later today in south carolina but right now that eye still

sitting over carolina beach, becoming rain-filled we haven't seen much movement in the past hour or so. that eye wall bringing heavy rain and hurricane-force winds to far southeastern north carolina but all the way back through kingston, new bern, jackson. right now the national hurricane center bringing florence to a tropical storm as it moves into south carolina tomorrow but maintaining that category one strength as we head throughout the day today, moving slowly to the south and west at five miles per hour and it's the slow forward motion that has us concerned with the flood threat and storm surge threat as we approach high tide after 11:00 much of the carolina coast already without power and those outages will become more pride spread throughout the day and through the weekend. those tropical storm force winds will continue through saturday

and sunday and for some folks into next week so let's break down the rest of the impacts and what we can expect from florence we're talking about two to three feet, not inches, feet of rain from florence when all is said and done that surge between seven and 11 feet and that is on top of high tide we are talking about an exceptional wall of water pushing on shore you add in that high tide around 11:30. what we call storm tide and we are talking about a life threatening and catastrophic situation for much of the carolina coast and those winds continuing at hurricane force between 85 and 110 miles per hour so the winds not to be ignored. still very serious as we head through the day today and into tomorrow but the flooding is our main concern with florence back to you. >> kaitlin, thank you very much. let's send it over to contessa brewer live in myrtle beach, south carolina contessa >> we're just starting to get those first feel of the rain

bands. myrtle beach is under a hurricane warning, a storm surge warning and a flash flood watch. i want to show you the changes we've seen as you look at the surf we're seeing white caps in the distance, high tide expected close to noon so we will watch to see whether the water comes in but as you look at the surface you can see the wind whipping across the top layer of ocean water, the palm trees start to sway and we have seen a few beach walkers still out today. the police locally have been out and about checking out areas vulnerable to flooding and that includes some inland areas this is a map that google puts out but overlays data from the government where it puts in the most vulnerable regions to flooding that includes all of those inland rivers where we're not

expecting to see river cresting until early next week. when you're talking 24 inches of rain plus the storm surge no, they're thinking the rest could be anywhere from 18 feet to 24 feet in some of these rivers it might actually braesh i-95 and all of the communities that line these waterways are just as vulnerable to hurricane florence as is the coastline here so we'll keep a close eye on that so far no major power outages to report from this area as the storm just really starts to make its approach to this area before we see the center of it later this afternoon and into this evening. >> i wanted to ask you about any businesses open in the area. >> there's almost nothing open yesterday -- in fact, i have not seen in the leadup to a storm a community of businesses close down as completely as the coastline of south carolina has.

and i think the governor issuing mandatory evacuation orders on tuesday is largely responsible for that we were so lucky to find one restaurant open last night but they were closing down last night and planning to stay closed through the day today our hotel is one of only a couple along the coastline that has accommodated guests. most people have evacuated up to 80% in this county. >> thank you very much, contessa brewer we'll come back to you all morning long joining us to talk about the storm, vice president of catastrophe experience at usaa, elizabeth gullick. also with us, pure insurance group president and ceo ross bo bookmuller thank you so much for your time today. appreciate it very much. ross, i wonder what you make of the conversation about less-than-expected wind speed but higher-than-expected threats from inland flooding and what

that means. >> good morning. these hurricanes are humbling so while we are grateful it wasn't gatt goir four winds. >> we know we have work ahead of us and this won't be easy and the flooding complicates things. >> where exactly -- what areas are you worried about? >> well, our business happens to be a little more south carolina than north carolina so this path is not our worst-case scenario but we ensure hundreds of very high-valued homes in and around wilmington and so we'll be working hard to make sure we can help those folks bounce back. >> our -- the percentage of homes that have insurance, the kind of insurance necessary right now? >> most of the people with us have full wind insurance we provide flood insurance through the national flood

insurance program. but a relatively small proportion of our members in north carolina use us as their flood servicing company so we're hoping that they had secured flood insurance through another provider. >> elizabeth, what about your clientele? who do you provide insurance and how much exposure do you have to the carolinas and those in the storm's path >> well, yes, thank you for having me and really our thoughts and prayers go out to all affected in the path of this destructive storm. we actually have a strong membership base across north carolina, south carolina, into virginia because at usaa we are dedicated and focused on our mission which is to serve military communities and take care of them so right now in those states that are in the path of the storm we have a little over a million members that are in arm's way elizabeth,

what should we expect here it seems based on the reports that wind is not necessarily going to be key destructive force here but the amount of rain, the potential for flooding, we have seen people who are still dislocated as a result of harvey so how do you think about it and approach it and think you have some sense as to what the damage could be. >> yes so you're hitting on it. this is a rain event and it's doing similar to what we saw in harvey last year where when it came in, made landfall, it's like stalling and it's delivering a lot of rain i think we're expecting 20, 30 inches or more on the coastline. so this will be a tremendous flooding event it's not to say the wind isn't affecting our members. there are going to be damages from wind and we have to remember this was an already saturated area so this additional rain will

create flooding as the biggest impact >> ross, we've talked a bit about residential exposure to all of this but we continue to watch the impact on refineries volvo, bmw, mercedes have huge plants in the path, they're having to evacuate inventory and workers. how would you characterize the threat to business as opposed to homes? >> it's not my area of expertise but i certainly can that business interruption is going to be significant. hopefully those places that are more upstate south carolina will ultimately be spared and the evacuations are predominantly out of precaution. >> i leelizabeth, have you had o beef up your war chest because of the bad weather and hurricanes harvey last year, there's so many, maria, irma and now florence

how do you manage the cost do you have to add to capital reserves >> at usaa we are a financially strong company so we are prepared for these types of hits so we are prepared, we are financially strong and there for our members to take care of them. >> elizabeth, thank you very much we'll continue to watch the progress of the storm and hope it speeds up because moving at five miles an hour is not fast enough thanks so much. >> thank you when we come back, bezos speaks out a rare look inside the mind of the ceo of amazon. what he thinks about everything from his company's stock to when we'll get an announcement on amazon's hq 2. plus we are continuing to monitor and cover hurricane florence "squawk on the street" will be right back

at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. you'll only pay $4.95. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

i'm ready to crush ap english.

i'm ready to do what no one on my block has done before. forget that. what no one in the world has done before. all i need access, tools, connections. high-speed connections. is the world ready for me? through internet essentials, comcast has connected more than six-million low-income people to low-cost, high-speed internet at home. i'm trying to do some homework here. so they're ready for anything. amazon's ceo jeff bezos speaking out at the economic club of washington he made comments on everything from regulation to amazon's headquarter two announcement he touched on the company's stock. listen. >> at almost every all-hands meeting i say look, when the stock is up 30% in a month, don't feel 30% smarter because when the stock is down 30% in a month, it's not going to feel so

good to feel 30% dumber and never spend time thinking about the daily stock price. i don't. >> bezos talked about the regulation of large corporations. >> my view on this is very simple all big institutions of any kind are going to be and should be examined, scrutinized, inspected. governments should be inspected, government institutions, big educational institutions, big nonprofits, big companies. they're going to get scrutiny. it's not personal. it's what we as a society want to have happen. >> one everybody is waiting for is the location of amazon's second headquarters. bezos said hq 2 will be announced by the end of the year the point on scrutiny was interesting for a company and ceo that is heavily scrutinized right now by both parties in washington he didn't touch on senator bernie sanders's attacks on the

worker conditions but just on -- he could have been more political and fiery in his comments and i thought he was measured and said bring it on. consumers love low prices and choice doesn't seem like a guy who is very worried waiting to see what politicians are going to accuse him of. >> he's a pretty rational human being. scrutinize don't vilify seems to make sense in many ways. and as you've heard different institutions of institutions to our society. it's hard to argue with anything he said. i mean, the man -- he just keeps moving forward in a very rational logical manner. >> although one thing people are scrutinizing is the charity people are wondering that's it a guy worth more than $160 billion, and he's giving 1.3% of his total net worth.

>> classic. >> it's a lot but not much prepared to what gates has done but bezos said he would have some announcements of the summer regarding philanthropy. >> he solicited some suggestions of how to play it. he was criticized for saying he would spend money on space development as opposed to mark zuckerberg and priscilla chan giving aaaway 99% of their mone to charity. >> but the recode headline is $2 billion in charity not enough for jeff bezos to shrink out of the public limelight. he also said last night he was fine being the second richest person in the world. >> it's better to be number two. i remember jack ma complaining about being the richest man in china, that it would be better to be down the list than not

have that profile. then they dent have people get down on them with their charity and philanthropy but 16.1% of amazon is what he owns. >> a little down today i can't do the math that quickly but shares are down 12 bucks let's get a check on the major averages today dow losing steam, s&p has gone red just a ty biint. "squawk on the street" will be back in just a moment. guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

whenshe was pregnant,ter failed, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it. it was unbelievable. having insurance is something everyone needs, but having usaa- now that's a privilege. we're the baker's and we're usaa members for life. usaa. get your insurance quote today. at ally, we created a savings account with a great rate. but if that's not enough, our app helps monitor your spending too. and if that's not enough to help you save, we could start a carpool. look at this traffic. don't worry. ok, if that's not enough we'll start a trainpool. oh i have a meeting in five minutes. and if that's still not enough... i got it. we'll just create a shortcut. we'll do anything, seriously anything to help you save. ally. do it right. talking 4th quarter? yes.

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.

welcome back to sweet. time for our etf spotlight mike santoli looking at the best and worst investments over a longer time frame going back as much as ten years. >> exactly ten years so now we have a ten-year look back in terms of performance that takes you to the day that lehman brothers declare bankruptcy so this tells you what went. that was not by any stretch the bottom of that bear market that was the beginning of the kind of cleansing panic liquidation phase. here are the winners and losers.

some should be expected. on the winners side, heavily in tech if you look at the fdn as a dow jones internet index etf, the one that most looks like fang and behaves that way in terms of its weightings, that is up 590%. for context, the s&p 500 is up 130% from that point in time so this is multiple times xbi is biotech next comes, of course, the qqq, the nasdaq 100 etf consumer discretionary obviously consumer came back in a big way but not ramply amazon is a big help there and defense interestingly is like the all weather all cycle all season winner the industrials that is up twice as much as the market in the last ten years if losers, that's funny, it's a mix of the expected and maybe the unexpected or stuff we need a reminder about so the worst largest segment is oil services

the iez is an oil services etf oil was going from $140 to eventually the 20s but it was around 100 when lehman failed so you were still at the beginning stages of a bear market. metals and mining, similar story, it was a commodity boom capital markets firms, brokers and banks, that's what you would expect now they're up from that point even though that index would have included bear stearns and lehman brothers but it's up 35% in a market up about 130% so it's not as if you want it to go for the most beaten up stuff it's growth companies, many that didn't exist in a big way at this that time that really produced a lot of returns. >> speaking of which, you've been keeping us honest on this tech rebalancing that will be coming in a week or so. >> it should be another week it's effective >> some argue their rebalancing

is already happening do you think that's true >> in terms of the jockeying of real money that will try to account for these changes, it's probably mostly happened when it comes to the etfs themselves, shifting stuff around, pretty seamless. the dealers do that from one pocket to another but in terms of active managers who decide for whatever reason they're going to look like they own too much or not enough tech. i don't know if you can blame it for semiconductor weakness but it's a noisy factor. >> did you hit the banks >> they're up about 35% as a group. the kb is the s&p bank sector so it's been a tremendously bad laggard. look at citigroup. that was a 1 for 10 reverse split and it's still massively underwater so it hasn't been a good decade for the banks. >> and march of '09 was where we saw true lows.

>> you were down 40% from lehman to the bottom in march of '09 in the s&p. when we come back, hurricane florence hits the coast. we will take you there live, get a look at what the aftermath could look like and the cleanup as well. two former fema directors will be joining us next sweet will be right back dow is up a point. stay with us

i'm sue herera, here's your cnbc news update paul manafort to plead guilty to two counts -- conspiracy against the u.s. and conspiracy against the u.s. and conspiracy to obstruct justice in the mueller probe. this to avoid trial on charges stemming from the work he did for pro-russian political forces in ukraine it's unclear if he will cooperate with the russia

inqui inquiry. a series of gas explosions causing fires in 60 to 80 homes in massachusetts last night, killing one person and evacuating total neighborhoods the ntsb says it will investigate. >> the ntsb is launching a full go team to begin our investigation in what certainly appears to be multiple explosions involving natural gas pipeline in the merrimack valley ar area. video from a coastal run to in the philippines showing trees being lashed by strong winds as typhoon manghkhut retained its ferocious strength as it barrels to the northeast part of the country where a massive evacuation is under way. more than five million people are at risk from that storm. you are up to date that's the news update

it's a busy news days. back downtown to you. welcome back to "squawk on the street." i'm sara eisen with carl quintinilla and david faber live from post nine at the new york stock exchange about an hour into the trading session. s&p 500 is flat. if it rises it's five days in a row. all the major averages are looking at a gain of at least 1% for the week as we head into the end of trading, got better confidence data at the top of the hour a little disappointment in retail sales and the ten-year yield back at %. >> to today's stop story, that's hurricane florence battering the carolina coast you're looking at rescues under way in new bern, north carolina. we have complete team coverage seema modi is inside home depot's command center in atlanta but we'll begin in carolina beach, north carolina, with with jackie deangelis. >> governor, carl, last time i

saw you the eye of the storm was totally calm here. now you can see the winds are picking up again the eye has continued to move n on so strong winds have come through again. it's falling heavy and hard. fema has made the statement saying that this is just the beginning and that the worst is yet to come and that as this eye travels through and takes a slow path, the storm will hover in certain parts and that has been the concern all along, that we'll see excessive flooding and storm surge. you mentioned new bern new bern was waiting for assistan assistance about 200 people were evacuated earlier. remember before the storm came when the warnings were given people were told to get out of dangerous places as soon as possible in advance of the storm because they said it would be hard to get first responders there to provide them with help.

power outages continue in north carolina and south carolina. figures of energy loss are predicted. duke energy says more than three million people should not have power and they should expect to not have their power back for days the final point is that everybody across the country 1 concern concerned. tim cook tweeted earlier that apple was going to donate a million dollars in renew year's eve funds to help with these efforts. back the you. >> jackie, we'll have you keep us honest on developments in north carolina meanwhile, as we said, seema modi inside home depot's command center in atlanta. let's see what the scene is like there. seema? >> command centers across the east coast are quickly ramping up

the key is to monitor the assets on the ground. 1600 deliveries are made yesterday. that's increased to 2,000, time is of the essence. once winds pick up to 40 miles an hour, trucks physically cannot get on the hour so people will not be able to get key suppli supplies. >> once the roads are cleared to move in, we'll move in and make the critical products the stores ne need. >> and they're going out with different supplies, righting if they're going out for high winds or coastlines? >> right whether it's a power outage, flood or cleanup type product

that you need. >> number of trucks you have out? >> 500 right now waiting in the queue to go. >> any type of misstep or miscommunication that takes place is currently going to impact supply chain disruption and this is a topic that is being discussed across a variety of different industries, not just hope depot, low's, at&t and verizon. even royal caribbean has command centers that they'll keep a very close eye on hurricane florence back to you. >> i know every storm is different. but do they have a sense of which skus, which products are selling in the wake of the storm and during the recover >>. >> right now it's a number of products in high demand. everything from battery-powered flashlights, radios as well as getting more batteries to customers that may have to deal with power outages, that's top

of concern but the range of products will change as we deal with the recovery efforts and the hurricane passes through. >> see how much rebuilding there has to be. thank you seema for taking us inside how home depot is preparing. we'll continue the conversation two former fema officials joining us now both have spent their share of time in crisis-and-command centers. sandra knight served as deputy associate administrator for mitigation and mark misjack served as deputy director of the individual assistance program overseeing emergency food and shelter. great to have your expertise sandra, what's your sense of how many people in this region north and south carolina have flood influence that's an interesting question looking on fema's web side there's probably about 300,000 more policies in north carolina and south carolina with the

exposure of on the order of $85 billion to $95 billion but if you look nationwide the takeup rights and special flood as area are the order of 25% to 30% and we'll see rain outside of the special flood as area and all over these states so it's -- there will be many that are not covered by flood insurance. >> so what happened to those folks not covered? 30% doesn't sound high enough. how much does the federal government step in when it comes to loans and cleanup >> this will be a good question for mark but the individual assistance program on average only pays out $4,000 or $5,000 per family so this is a low payback and not enough to build your home back. >> mark, you want to weigh >> yes so i would say fema's programs are set up to do a variety of things and so they -- the

average may be 4,000 to 6,000 but they have a congressional cap they don't exceed adjusted every year i think the year cap this year might be 33,000, but that has to cover all the needs created by a storm. that may be paying for temporary residences such as rent, it could be for what might be temporary hotel stays. it would be the physical damage to a home as well as all loss of personal property or transportation or in some cases even medical, dental and funeral expenses so the challenge is there's a lot to cover under that cap and it won't be enough to make people whole that have had total losses. >> mark, president trump has come out repeatedly on twitter and television telling people the government is prepared, we're as ready as anyone has ever been.

do you agree too far >> i would say that is too early to say that. a lot has been done to be more ready than we were in 2017 fema is a learning organization and they are self-critical in relation to their own performance. they've published reports about where they believe their shortcomings were and they spent time addressing those. there's been an uptick in their private sector and public partnerships so they can take on more of what that load would be so i feel they are better positioned but as far as exactly how we'll perform, it's too early to determine that. >> sandra, what would you be looking for as far as fema preparedness and how to correct some of the mistakes and its own self-criticism from some of its inadequacies in previous storms? >> absolutely. the stafford act doesn't say

where the storm hit or the community that it hits has to be prepared, it says that the fema will come in when governments can not -- don't have the capacity or capability to take care of themselves and so in puerto rico they reached out for help and it was a poor performance so in north carolina and south carolina you have a more prepared set of governance going on and certainly the lessons learned from last year i hope are being implemented now and fema has been transparent about looking into their own issues and doing lessons learned so we'll see how that plays out. >> it's a difficult challenge you guys have been up against every time, mark it's a crush for demand, a crush of requests for assistance that you are facing in the wake of a

storm at fema. to what degree has technology made that easier if any. >> if you look at the last decade, fema's capability to take in registrations and get initial awards out the door to large numbers of people, 2017 broke all records prior to that so they were able to take in more registrations and process those in a quicker period of time and a lot of fema's programs have been designed so that they're staged in such a way so that those things that require a physical verification may come later where the things that mightbe emergency assistance afrtd r and funding that would completely for the out-of-pocket expanses can be done being verified through publicly accessible information.

>> fema leads the charge but there's so many government agencies involved in this. the guys were talking to the hhs secretary last hour about how they're preparing department of energy, the army how is it divvied up? >> well, fema is the lead for under the stafford act and they mission assign other agencies for certain efforts so under the emergency support functions under the response efforts, each agency has its own task so the army corps of engineers will come in for debris removal hhs for medical activities so each agency whether it's for recovery or response is given the task to execute. >> finally mark, any way of knowing how costly this is going to be already? some of the wall street firms like j.p. morgan are trying to put a price when it comes to

insured losses, based on the forecast can you do this? thinking back to katrina which was the costliest in u.s. history. >> yeah, there are a lot of things that can be done now that would give you models. there's a modeling program that would deal with flood inundation the real challenge is, of course, as you vary that rain predict and what the rainfall is and what that does in comparison with how full rivers may already be, that the inland flooding piece is a lot harder to estimate by comparison let's look at sandy and the types of losses that occurred there. one of the challenges up and down the east coast is hardened infrastructure takes time for communities to put in and quite often after previous disasters there's been a lot of rush for communities to restore services to where they were before the event. when the reality is, a lot more

effort probably needs to be made nationwide to thinking about how we restore to a higher or better standard and those are complicated land-use issues and zoning issues and building codes and so i think that you know although it's -- we can estimate according to where we were at a point in time, i think it's going to be difficult to get a real handle on those numbers this early in the event until we're at least maybe by sunday and we have a good idea what the rainfall has been. lidar and satellite imagery should get us close. >> yeah. jpm shows $8 billion to $20 billion which is put in the the top ten costliest storms in history. thank you both for joining us tonight. sandra knight and mark miscjak. >> coming up, we're going to talk about the new ceo richard

allison. we'll talk to him about the ongoing scandal with papa john's first, john is live at adobe's headquarters in san jose, california what's coming up on "squawk alley," john >> well, that's right, david i'm not just here because of the pretty background. the ceo is going to join me. adobe just reported earnings after the bell yesterday and traders after hours seemed ambivalent about it. not ambivalent right now the stock is unabout 3%. we'll talk about where that next leg of growth is coming from, partner shift with microsoft, situation pace and more coming up on "squawk alley.

at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back...

shares of boeing have stalled out, but one technical analyst says the stock is set to ar nd out why on tradei tradeingnation.cnbc.com. more "squawk on the street" right after this

alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. welcome back to "squawk on the street."

domino's opening its largest supply chain facility, kate rogers is there and spoke with the new ceo of domino's, rich allison, she joins us now. kate >> we are here at domino's new supply chain facility, its 19th in the u.s., set to be its largest in the world they're going to hire about 150 new workers here and they plan to open 8,000 stores domestically over the next decade to support really growing demand here in the states. i got to sit down exclusively with their new ceo rich allison and i spoke to him about a wide range of topics including trade and tariffs, nfl ratings, the papa john saga and more. first we asked about hurricane florence take a look. >> we're assessing that. it's an evolving situation as you know but we've got about 80 stores that are closed currently as our team members and our franchisees are making sure that they and their families are safe but just as we have this center here, we have a supply chain center in the raleigh, north carolina area, and they are gearing up to help our franchisees get back up

and running once the storm passes but our thoughts and prayers are with the franchisees and team members in north carolina. >> do you anticipate what may come in the future >> in the u.s. and most countries we operate in we source our food locally. if we can do that, we try to match currencies and try to have the best cost position we can. some of our international franchisees, however, do buy product from the u.s. so there could be some implications there if things don't settle down around trade and also we have great partners in the dairy farmers in the u.s. and we worry about the unintended consequences for them along the way. steel you see a lot of that in this building and the to the extent prices go up, that will have a modest effect on us. >> papa johns has been involved in quite a battle between founder and former ceo john

schneider and the board. we've seen pizza hut try to capitalize on that with promotions and reaching out to customers who haven't been happy with papa john's do you plan to offer promotions and capitalize on a competitor'a competitor's weakness? >> we have been on the same 5.99 price point for about nine years. for us it is not going back to value. we have been on value the entire time i think we're seeing at our competitor, reminds us that we have to stay 100% focused on customers and franchisees. if we do that, i think we'll be successful. >> do you have any advise to offer the new ceo? >> just what i said, as much as you stay focused on franchisees and customers, all the better. >> they're not foreseeing football related revenue weakness and beyond due to nfl

ratings being a mixed bag. they're not the official pizza sponsor. that's pizza hut you will see domino's commercials. back to you. >> with the new ceo, you wonder what's the narrative is it still that they're just leaps and bounds ahead of other restaurant chains on technology and delivery and creating a digital experience because that was the story for so many years. made it such a winner in the stock market >> reporter: certainly and i feel many analysts i speak to think it is a steady shift with him as successor. technology played a big role in the success, but carry out could be twice the opportunity that delivery presented for the company. it will be interesting to see where they take that in the future it is full speed ahead with the plan in place with the new ceo >> certainly been in the middle of so many issues, technology, trade, the nfl and a lot more.

kate rogers. when we come back, the carolina coast battered by hurricane florence we'll bring you up to speed on the latest path of the storm that forecasters got almost exactly right. w 2record high for the dow. doup1.

welcome back to "squawk on the street." i am sue herera. markets are hovering near the flat line to end the week. one of the most notable laggards is the utility sector. those losses driven by nisource. they're investigating a gas pipeline rupture that triggered dozens of explosions in three communities near boston, one person was killed. shares are down 10% on pace for the worst day of trading since january, 2009. keeping a close eye on that. carl, back to you. >> so much going on. thank you. we are focusing on live reports on florence, but weather channel took a look at what a nine foot flood would look like. watch this >> storm surge is often the deadliest part of a hurricane. let me show you what it looks

like, starting with a one to three foot water rise. this may not sound like much, but this is stormwater pushed by wind we know 1 to 3 foot of storm surge can knock you off your feet, stall cars, even carry cars away. it is too late to evacuate when the water rises to this level. but let's go above that, 3 to 6 feet, very large objects can be carried in this water an act as rams and enhance damage. let's go above that. nine feet of storm surge this kind of storm surge is not survivable unless you move to the higher administrators of whatever structure you happen to be in. please, follow the advice of local officials and evacuate as ordered when a hurricane moves in >> a crazy and scary graphic why the national hurricane center warns of life-threatening

storm surge. coming up later on "the closing bell" we will be all over hurricane florence updates. news that amc is getting a $600 million investment from silver lake, the stock moving higher. we'll talk to ceo adam aron about that. dow is up more than 30 points "squawk alley" is coming up next 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 lead with digital. get ready, because we're helping leading companies with a range of suv's perfect for any adventure, you can be in your element, in any element. ♪ experience amazing at your lexus dealer.

kayak compares hundreds of travel and airline sites so you can be confident you're getting the right flight at the best price. cheers! kayak. search one and done. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

good morning, it is 8:00 a.m. at adobe headquarters in san jose, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ ♪ ♪ good friday morning. welcome to "squawk alley." i am carl quintanilla with sara