we want to thank dana and jan this morning for hanging out with us. we want to take a look at oil, it has taken quite a dip make sure you join us on monday, have a great weekend everybody, shop a lot "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i am carl quintanilla with sara eisen and david faber. cramer is off today. hope you had a great thanksgiving we'll talk to jeff gennette, ceo of macy's. the futures are weak following

the last hour fade on wednesday. ten-yr yield is back to 304 oil is getting demolished. so far this year, the dow and s&p are each in the red. wednesday's gains puts it further in positive territory. that 200 point gains lost in the hour is disappointing. >> the dow actually closed lower and signs resoceiving not much more promising weakness and commodities not just in oil but in copper and the question is what are the worries of global growth how severe are they? it translates into global stock.

the u.s. stock market. this is supposed to be the best black friday for the u.s. consumers in years and retail stocks have been under heavy selling pressure what's the market signaling? is it signaling this is as good as it gets in. >> that's the question question. you mentioned china, no smoking gun at least, a number of reports i have seen this morning from the people who are working sort of indicate that. you do have bond yields and concerns on capital out flows. i guess there is weak sentiment as well. the yuan fell 2000 lows. no one thing responsible for that significant decline of the chinese market >> except you got the high-stakes meeting between president trump and president xi you can say ex peck tapectatione

lolo low. if they play nice to each other could be an encouraging market >> that's true >> china is still not playing by the rules and they're talking pretty tough >> this morning the news about what steps washington is taking to try to actually encourage other countries not to use the main chinese supplier of 5-g connectivity around the world at this point it is another key sign we'll get to it later. utx does get approval. >> we'll get to all of that. but let's get to retail, holiday shopping season officially is underway investors can do some shares on retail sectors this quarter, more than doubling

losses on the s&p 500. kourtney reagan is out she's in new jersey with the latest on the action on this black friday courtney, good morning >> reporter: 3.7% in the last week history is on the bulls eye, if you look at kensho stats, the xrt ends up an average of 1.65%, almost 63% of the time things may be turning around here at the wood bridge maul, i would say everyone is positive they like the action and it is far from peak traffic. that's expected later in the day. let's listen to what some shoppers had to tell us today. >> we woke up at 4:30 this morning. >> i have been shopping since

12:00. >> we started last night about 7:00 walmart and kohl's, we went home and slept for about four hours and we have been here since. >> adobe says it is on a record breaking day of $29 billion likely spent online for thanksgiving today, $5.9 billion expected to be spent that's an increase of 17%. the top near store searches, walmart is number one and best buy. walmart is up. macy's is the only fashion name if the top four which is quite interesting. fashion is kind of seeing a resurgence here. why is there a group working with shoppers serving 350 and

asking them of top games lego coming in, hasbro and marvel by disney we'll keep you guys updated. >> busy day. let's get it underway. black friday and the holiday season, let's turn to the location at macy's first on cnbc is jeff gennette, it is always good to have you on black friday good morning to you >> the parade looked great congratulations on that. i love to get your comment of some -- is that how you feel >> o, carl, really strong star to the holiday shopping season customers showed up early online when we opened up our stores at 5:00, they were there.

they were responding to all the great values i also saw in our competitors in walking around last night, it looks to be a strong start for the holiday season weather have been working in your favor and the cycle is pretty good. low employment and gas prices have come down where is the worry spot? >> when you look at consumer spending environment, record lows and employment, clearly customers out there are shopping i think we are going up against the court order last year as many of my ketel marcompetitors. you look at the value we have and gift assortments and all year around and working with our brands to work the best possible values they responded very well last night and all the way through

the night. this morning started out well. >> i mention the stock sell-out. what do you think the market is telling us you guys reported results? you raise guidance and stock sold off 7%. what are you hearing >> i think there is a question about can retailers comp last quarter? when you look at the fourth quarter this year, i like macy's chances. we already had a strong digital bi business and it is a higher penetration in the fourth quarter. we take that momentum with us. our brick and mortar business is much stronger. those comps continue to improve. as mentioned, the gift assortments we feel are very strong when you look at our colleague competition, we are ready. were able to hire great folks. we have amazingly engaged and all are participating in incentive programs with growth

we are well positioned to continue a market share. >> jeff, another thing investors could have conceivably reacted positively too is your growth margin generally quite positive, you indicated this quarter would be better than the third quarter, do you feel that's going to be the case >> david, we have been working all year of getting the right gift assortment we want to make sure the army channel customers are served a lot of cases she wants free shipping and she wants to come to a macy's store and pick it up there. we make it sufficient as every one of our store when she does come into our

building, she's buying other things making sure we are covering our customer's journey is how we'll increase what we need to in sales and holding the margins. can you measure the impact of your loyalty program i see stuff coming into my home for blooming dales are you saying broadly in terms of what it means for actual dollar and scent purchases >> the macy's brand has revitalize our program on the macy's side we have customers we offer free shipping and extra value and increase experiences that we can offer uniquely at the stores customers that are spending at a

more profitable level than ever before we added the bronx program to a customer who's not on the loyalty program. the good news there, we are seeing those customers start to migrate and using macy's propri t etary. >> jeff, is there any truth to the thesis that marketers brought in goods ahead of time and try to avoid a tariff down the road and we are going in the season more bloated than years past >> what you are seeing is the opposite most retailers are controlled on inventories. they're buying closer to needs and customer demands we enjoyed over the past four

quarters, it gives us tremendous flexibility. the first two tariffs have little effects on the products that we are offering and how consumers are responding to us we'll see the next tariff going through in january but we'll be prepared for that. >> what will happen for pricing and how disruptive for apparel and everything else? >> we have been hard at work, we have a team that's internationally and many countries have been there and they have been for years or decades. they're aggressively working where they can ship supplier or where they can work on value and you look at our retail overall at macy's and bloomingdale's

we are working aggressively with our wholesale partner. at the end of the day, we want to make sure whatever changes that are coming that the consumer is not affected by it >> and when you are responding in the right way >> sorry, i didn't mean to interrupt. when you say there is limited effect so far from the tariffs are you surprise and can you extrapolate of what you are seeing to assume if that's the case or another 15% more that comes from china starting from january 1st? >> very few of our category with tariffs that have gone through thus far are included. we'll be ready >> are you taking solis in this decline in energy crisis and 20 bucks in a month or two is amazing to watch you think we are pass the peak

fear of freight and what about wages? >> when you look at the trade offs, sometimes higher wages we have done this for many years, we know how to work to make the appropriate adjustments and at the top of the end making sure that we got the right products at the right values to do this at the right rate while taking care of customers wages right now, we are competitive. when you look at our colleagues on commission of what they sell, that's an advantage. 94% of our colleagues over the course nine months have gotten an incentive bonus that adds into whole picture of what we pay and how we invecent

our colleagues we have seen good success. >> on the demand side trying to figure out how long this better consumer environment is going to last we do have lower gas and higher wages, that's a good thing how much do you think was the tax cuts announced adding more money into consumer's wallet and how sustainable? >> we have less layer and we are bringing inventory much closer we are ready to respond if there is a drop off in the overall mark what we are focused on is taking market share we got businesses today in which we are taking market share from our competitors and we have businesses we are not. every business, we are narrowing the gap. i am not satisfied in the economy when we are taking over gaap

we got the in sfrfrastructure ad the team and the strategy by which we can react which ever come our way >> it may not as be quite as strong it is sure to be discussed which is slow death of them all. you have your share of all based in the store what can you tell us in terms of your expectations and traffic there. what do you say when you hear the themethat's going to be a number that's significantly lower than the year before in terms of people dpoigoing into e malls. >> i am encouraged by the traffic we are getting in stores right now. what i said earlier, all of our store performances included than a year ago so you know we were working closer than ever with our mall developers and what they are creating in their mall and making sure we are augmenting that with business and services.

we are making sure that we have added experience with great values and as mentioned all the trends are improving when you look at 2016 in august, we made the decision to rationalize our brick and aborter portfolio, we closed 100 doors. we got the right amount of fleet to operate i amhappy of the role of os of r stores and we got plan for each of them. >> top category, what's selling the most >> so you mention at the top, when you look at the people if they need to bundle up, we are in a place where you can buy that if you look at our coats and boots and all those categories are really great at the beginning of every year, we sit down with our great brands and we pick what are the

gift categories or trends. we get exclusive products that's packed with value. if you look at boots, and apple products toys have been strong for us in every single category the house area is about the fryer or slow cooker we can offer all of them in one website or in one room that has been a strength about it starting this holiday season. >> jeff, you set us up for last holiday season talking to us about black friday thank you for coming back. we'll see you soon, i hope, jeff gennette joining us from macy's. >> with the stock market in the red, the bull could use a santa claus rally.

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futures are lower this morning on this day. >> it is on pace for what would be its worst week since march. let's take a look at where we stand. scott wren at wells fargo. before we get to the broader indice in the market let's talk about wells the president is giving an all clear to saudi arabia. any thought of the impact of lower crude overall or what it means for the equity market but for the economy. >> there is a couple of things you can take from lower crude. people have more money to spend at the retail level. we expect good retail spending season here.

also, you know the supply issue which is certainly out there i think the stock market is worried about, the stock market was already worried of global growth we think that's one of the two biggest risks of the fed making a mistake. when you see oil drop like a rock, it is catching the fallen knife right now. you have to think that what does it mean for global growth. we know growth is decent here in the u.s. clearly the market's afraid and adding that to fears already that the global economy is going to be slowing down >> so is he giving you pause or more concern of the overall economy and a slow down? >> for us as i mention, fed mistake, global growth slow down margins, those are three biggest concerns and it is you have to think about it when oil drops 25 bucks plus in six

weeks, you have to try to figure out what's going on. our commodity team just upgraded, they like oil down here, they think it has gone too far. from our perspective, oil while it is hard to say right now, it is exactly where the bottom is going to be. we feel like it is close to where we are right now >> scott, you have been constructive all yearlong. might be fair to say you were a dip buyer on net for the year. has your psychology change in the last few weeks >> right now today we are going to be testing and something like this of course always happens on a low volume day when people are not around there is 25/80 to 26/30. there is some good support known. our fundamental outlook is for decent economic growth fear and abro abroad, not much inflation valuations are down quite a bit.

we have been encouraging and we'll continue to encourage our clients to step in here. we think this is a good spot to put money into work. most retail investors are sitting in quite a bit of cash the two events i talk to sara earlier this week, the two events they'll determine whether the stock market finishes -- >> all right, i can tell you the stock market rallies whether the fed moderates its aggressive tone on rate hikes and xi and trump can come towards some harmony. >> thanks to scott wren and sara eisen as well. >> i talked to him earlier in week nu oni bl fr elinou mites now. stay with us

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hoping your thanksgiving is fantastic. it is officially take your child to work today. >> a lot of kids not mine he decided he did not want to sleep last night >> yes, soon enough you will bring him here >> a lot of names are down in the premarket, oil of course has been an amazing story. broke below 51 in west texas just reclaimed that moments ago. the 10-yr yield close to 303 is the closest since the end of september. yield have backed off of those highs that we saw early in october that got us into the whole mess when everyone was worried about higher yield also just wanted to mention some of the other moves in commodities. you put it all together and you wonder what the story is on global growth. we just come off of a global, showing capital spending slow.

we know it has been barish >> that's the opening bell and the s&p at the cnbc realtime exchange at the big board is american express celebrating small business saturday tomorrow at the nasdaq, a next generation think tank company we'll keep our eye on crude. a lot of the big name that is have had weakness, microsoft, faang, adobe are all down. >> how about apple >> it is down another 1.25% and down more than 20% since november 1st when it reported earnings said that iphone shipments were slow and they were not going to report iphone

shipments anymore and since then there has been drip, drip, drip of news. subsidies in japan of the 10-r are going to come down some confirmation of this worry of iphone demands which weighs on the whole market. >> that iphone demand is not quite as strong. it seems a long time ago with the trillion dollar market cap amazon of course which we have talked so often about up this morning and we get to cyber deal and what we are talking about and none the less of $750 billion market value. briefly the trillion dollars market as well i guess that's a sign for both >> apparently.

bitcoin prices to have just 20% for the week that appetite has gone the other way, fading and enthusiasm issues with regulation and such -- as far as the market action, no surprise, energy is the biggest loser off the market today. new one year low for crude and financial not far behind consumer staples and discretionary is just popping. >> home douepot and walmart, iti s chevron and cap. if it was not for collins, s&p would have a harder time >> other than oil which seems to be the chief's story this morning. stock wise, it is an important story. it is up to 8% they got the approval. united technology receiving the approval of china state administration for market

regulation, they have been waiting for quite some time, a deal was announced back in september of 2017. it is now going to close the next three business days according to a press release this morning from united technology it is about 141. that's what you get so you can see the spread is tighten considerably once the news came out. we got collars and things like that this is not just important because it will bring to the end the 14-month process of them trying to close this deal. it will then focus investors on the prospect of the break up of united technologies. remember that's something that's thought to be likely gregg hayes, the company's ceo on their last conference call saying he made his view pretty clear and he thinks focus businesses to do better on the

long-term. he did say the board had a valuation. remember aerospace and otis carrier. he said there is a lot of questions we continue to answer. i feel confident that the board will come to a final decision shortly. that decision will be to probably explore all these options. so united technology is not just closing rockwell but seemingly on its way to be broken apart. it is going to take awhile we got to get the exploration and the announcement and the split. it is a pretty big deal. one that's obviously a lot more likely given they have successfully receive that antitrust approval and sara, back to chinese u.s. relations, we got the antitrust approval

for fox/disney this one sets a little better next week even though there are other tensions that mitigate against the process. >> they're trying to control the rhetoric going into this meeting. potentially good sign though another good sign if you are bullish on the consumer and retail, including macy's we just talked to jeff gennette, maybe it was a call to max that david had from blooming dales. i am telling you, get those loyalest thing loo look that's a lot off, i don't go i send people. >> more and more now, well, my daughter actually goes she's at the shopping age now. >> i know the feeling. let's talk more about retail weighing in on the sector.

our special around bell retail additio edition. some of these names are higher did they get beat up the past two weeks. >> i think there is a balance. there is a lot of concerns that jeff talked about. i do think as you get good results, as we hear about good results, you will see a balance. as you look to 2019, it looks awfully late cycle and we invest in change at the margins it is not going to be as good as last year and the margins pressure will persist in the 2019 in what space specifically a lot of analyst and year to year contemporary points to home furnishing or things that are in china. >> you will start to see certain categories slowing down, home furnishing and apparel looks

pe peakish. williams and sonoma, tough >> and bed&bath. >> i think we can have a serious conversation about what happens with bed bath & beyond >> gennette indicated a lot of their stuff are not subjected to tariffs. is that a concern? >> if you go from 10% to 25% most vendors are supporting retailers right now and currency depreciated. that's a manageable number you go to 25, there is not a lot you can take out you can't move sourcing that quickly. then you know when tariffs came in on appliances, two-thirds of appliance demand because something breaks

your refrigerator break. you need it that day >> who gets hit the hardest if it goes through? >> anything that touches home furnishing, all your retailers >> bed bath & beyond >> buy buy baby is so useful >> are we back to ulta and dollar general or where can you hide in the space? >> to our opening question, i think they're over sold. you want to stay inventive and you want to have a barbell and some risk in the market. home depot is a great company. housing does not turn into a pumpkin next year. it is probably the best that i follow including walmart

one category that's more risk on is sporting goods. there is these single categories that are accelerating at the margin and it is an in verse of what's happening next year the this cold weather as jeff talks about great for selling boots and coats. it is great for dick's sporting goods. >> all these companies have worked hard to fight amazon and their supply chains and they invested in loyalty program like macy's and revamped stores how much of that of the improvement they have been making and a healthier consumer. >> that's the best since '05 '05 was an incredible growth for

consumers. they're more competitive if you look at the growth between core retail sales and online only sales. starting in about april of last year, that contracted quite a bit. part of that is a better environment though rising tides, people are more flushed willing to go to the stores or the malls. >> i was fascinated by gennette's answer on real estate suggesting they reach to some kind of equilibrium on brick and mortar is that fair is that common that people feel they are close enough? >> i think it depends on the category if you are in a strip center and you are best buy, there is about 900 stores and home depot, that's a right number what you have seen is a&b malls it is not very strong but c and

b malls, i don't think so we are done there >> what about tax rate as we start to anniversary not long from now, can we expect less of a response >> i think yes in a couple of ways, it benefited retail number one, you got accelerating growth, you have a plethora of company around the time the tax package was signed that puts this one time bonuses out. that continues through march the second way it benefited retailer, it was on the bottom line i am mostly domestic companies they got 20 points of earning growth benefit from the tax reform you get to next year slowing comps and margin pressure persiste persi persiste persistent that tax is a one time benefit >> you don't send it positive. >> we want to be defensive right now.

pick your point of risks and names of where you see >> and costco, thank you chris horvers from jp morgan >> trying to erase some losses dom chu is on the floor for us today. >> good morning, carl, i chatted with one trader earlier this morning who's keeping a close eye on the early action and given all the sale pressure we saw in china we have got technology and communication services related stocks and they have been at the heart of the sell-off. that trend continues today all the s&p 500 sector are in negative territory with the biggest slackers right now they'll continue to watch those faang stock and how they perform. we are seeing general weakness in the likes of facebook and

amazon and apple and alphabet.nalphabet netflix is about a third of a percent. brent crude prices hitting their lowest for the year. that's gag carry over effect in in those energy related stocks and etf, and that ticker xl xle -- of course, it is black friday, retailer very much in focus, it has not been great news for consumers you guys just mentioned those. it is the second worse performing this year with only tech we'll see the shopping holiday spirit sara, david and carl, i want to mention, it is kids' day here. all the children are here.

i figure i would try to get a man on the street retailer polls of what these kids want for the holiday season what do you want for the holidays >> sweat pants and shirts. >> what do you want? >> health. >> what about you? >> a car >> skateboard. so skateboard could work as well we'll go right over here what do you want >> stocks. >> what about you? >> a puppy all right, i am not sure how many of these things are going to help the brick and mortar retail shop with puppies and skateboards and good health and some stocks. we got the full covered. >> that's a mature group of children >> they seem very well prepared. i didn't think stocks and puppy dog were going to be on the list

>> of course, one wanted a car >> great live shot >> i thought it would be with unicorns and slides. >>. >> puppy would be on my list, too. >> dom, thank you. >> without a doubt >> we got top oil prices as dom mentioned, let's go to jackie deangelis. >> good morning to you a new 2018 low for oil prices. $50.60 getting closer and closer to the $50 mark remember wheveryone was saying e are going higher the pressure from the fundamentals kicking in. that's not completely priced into the trade that's now coming through. you can see it reflected in today's prices, combined u.s. out put with the numbers coming

opec and russia and this equation is unsustainable. the supply numbers are up. if anything, demand is being revised down at this point before thanksgiving the president thanked saudi arabia for lowering oil pricesme those prices can only go so low. businesses become unsustainable. that's what we theed need to wan the energy patch >> what an incredible morning, jackie deangelis >> when we come back, we have bill simon with us as we go to break, take a look at the movement and treasuries today, 10-yr got down to 303 we'll be back in a moment.

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bertha coombs. >> we are edging into positive territory at this point. when you take a look at the major sectors that often move the nasdaq, it is all around the worst drag this is week has been the hardware sector down here over 4.5% and the big reason why is apple. apple on pace for its ninth straight weekly decline and as you look at the drag that apple is causing, it's across the board. it's responsible for more than a third for the dow and the s&p. nvidia is one that i'm watching today. a lot of traders have said you're seeing folks sell whatever they can. this is a stock that has been down it started up the other day and really faded we'll watch to see whether it can hold on to the gains we're seeing this morning. we're also watching china stocks under pressure with that selloff

in china interestingly, c-trip had been the best performer coming into today. so far it's given up more than half of its weekly gains back to you. >> bertha, thank you very much bertha coombs. look at this morning's top-performing names on the s&p as we cut our losses on the dow. session low is down 195. currently down 111 back in a minute we're about to move. karate helps... relieve some of the house-buying... stress. at least you don't have to worry about homeowners insurance. call geico. geico... helps with... homeowners insurance? been doing it for years. i'm calling geico right now. good idea! get to know geico. and see how easy homeowners and renters insurance can be.

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we are going up against a positive comp in the fourth quarter of last year has of my competitors are as well and i think serve ready for that. >> that's the macy's ceo describing a strong consumer environment. we'll get more on retail coming up on "squawk on the street" with the dow down 85 don't go away. i am an independent financial advisor. when i meet a new client, i start by asking questions like: did you understand all the fees you were paying? was your broker a fiduciary? were you satisfied with the attention you were getting? then i explain that being independent gives our firm the freedom to give our clients the attention they deserve. we can put a plan together that makes sense for them. independence lets us do that. charles schwab is proud to support more independent financial advisors and their clients than anyone else.

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♪ welcome back to "squawk on the street," i'm carl quintinilla with sara eisen and david faber at the new york stock exchange stocks close at 1:00 eastern time for the time being. a little selling here. dow is down 96 as we talk all things retail and black friday today. >> with the children at the new york stock exchange, our road map for the hour will begin with a blockbuster black friday, one of the busiest shopping days of the holiday season and the year. we have live reports from all of the major outlets as retails biggest weekend kicks off. >> the chief executive perspective, ethan allen ceo and walmart's ceo will sit down with us to talk about consumer trends that we should be watching

>> and finally major indices trying to rebound after what's been a rough start to the week coming off their worst leadup in seven years. is there a possibility of a year-end rally we'll try to find out. and where the buying opportunities may be and how to position your portfolio towards year end. we start thewith retail. courtney reagan is live in woodbridge, new jersey, where a black friday update. courtney >> deloitte says 81% of shoppers that plan to shop this weekend will do it today 70% in store, half online. of course some folks will do both adobe expects today will be another huge record-breaking day online $5.9 billion today alone that's up 17% from last year target says that two times as many black friday orders are going to be picked up in its stores this year compared to last year. just a good example of shoppers using both ways to shop, just one retailer

like target, walmart store door busters were thanksgiving evening. chief merchandising officer steve bratsby says phones, toys, gaming consoles, cookware and tvs were the most popular deals. shoppers we spoke to are far from done. as a matter of fact, some are just getting recharged, ready to come back out for the day after being out last night and traffic is only expected to pick up from here >> i want to kohl's 12:00 and it was packed. >> we started about 7:00 we started at target, walmart and kohl's we're leaving this mall and heading to another mall. bed bath & beyond and anything else we can stop at today, yes. >> small and medium-size businesses also benefit on a day like black friday. shopify has 600,000 customers in its network and they say $250 million was spent on thanksgiving day alone according to captify, laptops

are the top electronics searched online and the top laptop brands in order, google, dell, lenovo and apple. apple dropping from number one to number four 150% search decrease year-over-year for apple laptops. then we got an update from fanatics they're the largest seller of licensed sports material and apparel and they say 65% of the activity on thanksgiving came from mobile. a record-breaking day, the top team the dallas cowboys. top player, drew brees back to you guys. >> interesting, they did have a good game. thank you, courtney reagan talking about retail and football today retail underperforming the s&p for the year the xrt etf down almost 15% since the end of august. that's on pace for the worst performance in serve years we talked to macy's jeff gennette about the consumer environment and how retailers are adjusting to global trade

tensions. >> most great retailers are very controlled on their inventories. they're buying closer to need and customer demand so we've enjoyed over the past four quarters inventories below the rate at which we're selling which gives us tremendous flexibility. the first two trenches of the tariffs have had very limited effects on the products we ear offering, the value s we're offering and how consumers are responding to it. >> we're joined by wwe ceo januajan niffen happy black friday like kmachristmas for you. you see strength this quarter, next quarter, second quarter your concerns come in the back half of '19. >> my concern is third and fourth quarter of '19. there's no doubt it will be a good christmas selling season and the tax refunds in q1 and q2

will be big you have no make a difference but by q3 there's no more tax benefits so hopefully the consumer is still strong but that would slow the growth rate. not that i think things are going negative, i just think the rate of growth in 2019 will be hard to be the same as 2018 and 2017. >> you believe gennette when he says we're ready for any incremental tariff that comes in january? >> i don't think incremental tariffs will make much difference and he says they're ready. i think all the big players are ready. i don't think that's the issue the issue is going to be does wage growth continue and does the consumer keep spending at the kind of levels they have does their credit stay as strong as it had been and do gas prices stay down? all of that is flowing into it but i think the tax cut issue -- it goes away we'll annualize it and that's my biggest concern. >> everyone saying growth, growth, growth this holiday shopping season but for the retailers will it be profitable

growth more free shipping options deep promotions? anything to take market share and get consumers into the store? >> that's the problem. we'll see compression on the earnings line and you're seeing that reflected in the stocks why? because we're seeing inflation in wages, inflation in shipping, some inflation, a little, at least, on input product because we've already seen some tariffs come in and that will feed into the business but not the selling price so it has to come out of either the supply chain torre tailer. >> stacy, we like to think here at cnbc that stocks can talk they can't really but if they could, what are they telling us given the performances we've seen as to whether results are good or bad or neutral >> what we've seen in the last couple weeks is very much the top line is intact and the consumer is out there. however expectations were incredibly high going into the quarter so it's like no good deed goes unpunished you get the comp or close to the

comp but the bottom line profitability, as jan was just saying, is under pressure and it will become more under pressure from wage growth so stocks are telling us and investors are telling us this is potentially as good as it gets and also in addition to all the cost pressures these retailers, a lot of them are not done investing in their business, in supply chain, in free delivery and all those things the consumer demands right now. >> are you buying the dip on any of these names >> some of them. so there are a couple names that i've liked out there we upgraded foot locker based on our european data and there's momentum there nike is carrying foot locker and they've turned into a partner that's behaving well so they will stick around as a primary partner for nike the other is urban outfitters which is clearly serving not only the mom through

anthropology where the product is spot on but also urban outfitters the retro trend, that's what they're delivering for millennials so they're hitting on all cylinders and now that expectations have come down, i think those are interesting names to look at. >> i see you nodding your head. >> i think stacy and i are sharing one mind everything she likes i like and everything she doesn't like i don't like so i wouldn't say that's necessarily true for everybody following retail but it's clearly true on what i saw on the screen because we didn't talk about this but i'm 100% in her camp on those names. >> something you have talked about for some time is the decline of the mall. >> nationsy won't argue with that, either. >> where do we stand on that ch we hear about b and c malls or even d, i didn't think there were any d malls, i think they're an f but are we going to talk about

that or have things leveled off in terms of traffic? >> things have not leveled off and this is as good as the consumer is ever going to be in your lifetime so when we get to the next year or the next year after that we'll have malls losing traffic but they're losing traffic this year in the best consumer environment ever so, yes, we're still having issues, the top 250 malls are fabulous but there's 1200 malls and when jeff says he's covered with his footprint, i'd say in general they are but they'll have stores they're going to downsize, they'll have stores that will go away so whether every other retailier. we're not done with store closings we're at 5,500 store closings, we're running at record bankrupt sis. that won't change next year and it sure won't change if there's any hint of a slowdown. >> it strikes me we've gone four or five minutes talk regular tail and we haven't said the

word amazon once which after whole foods last black friday was a different story. what does that say about how other players have tried to catch up >> it speaks volume s we're not speaking the amazon word some retailers like target and walmart are real competitors last year and the year before we weren't speaking about them as being able to compete. target gets you your merchandise within two days free shipping. it's the same as private so you start reconsidering, do i have to go to amazon for everything so i think that's a big impact here for the big players and as jan was talking about, the bigger players who are able to invest are getting stronger and the weak, like j.c. penney, like the gap, like abercrombie and fwhoich have the highest promotions today, all of them, those get weaker and the divide gets greater every year. >> l brands down 50%

isn't amazon set to capture 50% of online sales in this country? are other retailers really catching up? >> they're not catching up as far as volumes but their growth rate is higher than amazon target 49% growth online, walmart 40,% growth online that's the good news and the bad news and stacy described it perfectly. they're starting to win the game with amazon. the bad news is it's causing compression in the cost structure because it's hard to win against them without spending a lot of money. >> guys good setup for the next few weeks as we try to absorb data that will be coming our way. jan, stacy, thanks, good weekend. >> goose to sd to see you. major averages are in the red. tech stocks unable to catch a break though the nasdaq has popped higher so we'll watch that into the close at 1:00 p.m. eastern time dow is still down 106. tech having its worst week since march. apple on pace for its eighth straight weekly loss

are their there buying opportunities in faang or outside of it? plus, look at the top performing stocks on the s&p 500 right now. rockwell collins got approval david mentioned, amd big winner for the year and the airlines doing well off of sharply lower oil prices big theme today. dow is down 115. quk t see wl be right back

markets are negative

we have the dow, s&p and nasdaq coming off what are their worst pre-thanksgiving performances in seven years. joining us for more, dan morris and michael pervez, wheaton and companies chief global strategist michael, let me start with you oil seems to be the story of the day if not for the month of november given the pullback. what does it mean and are you taking note in terms of perhaps those who want to say it's sign of a slowdown? >> it's a very significant factor it's harder to delineate what is supply and what is demand dynamics going into it but at the end of the day, forward inflation metrics are heavily defined by the trajectory of oil prices rightly or wrongly. so that is going to help soften the fed stance to what degree -- >> even with wage growth. >> it's not just oil there's a broader narrative about almost every major

inflation in the u.s. since july has been missed expectations or at best met them inflation break-evens are picking that up in part as a reflection of the global economy shrinking. you saw that in the european data this morning. it's not robust. that takes inflation risks out of the equation. >> we've had pmi for the eurozone and saw weakness in france and germany so at least in europe that does seem to be the case. now whether it continues is what we're concerned about and what we're thinking about we don't necessarily think so because if you look at business investment, if you look at

consumer demand it's still quite solid and the variable from last year they are this year has been trade so it's a question of whether you think you'll get a rebound. >> from from trade into next year to president trump and what kind of relationship we're likely to see between the u.s. and china. >> and then there's the uk which is the source of drama when it comes to brexit. how does is going play out do u.s. investors need to pay attention to what's happening ahead of that march deadline for potential shocks or risks to our mark market that matters if you care about uk asset bus not necessarily beyond that. if you had a hard brexit it will

be quite negative for europe you can have the conceivable knock on effects so the potential is there but it's one of the risks we ear analyzing, monitoring and evaluating day to day to see if we're moving in the right directi direction. >> the fed, you said perhaps you don't see the fed moving aggressively next year >> time will tell. what started the volatility party is the ten-year shooting up to 3.75%. the narrative has softened and the data is softening. one other factor is that texas, the shale revolution is a huge part of the economy.

powell could go full speed ahead but it means he has to surprise the markets even more and that tightens financial conditions. so he has to have strong data coming forward to -- >> i was going to ask about that point, dan after durables and l. e.i. and all these softening pmis, how much weight does a hot wage number have? >> i think it will matter. the fed is clearly trying to ascertain to what degree cyclical factors reporting inflation are still there. on the other hand, if we think

about financial conditions more broadly, the selloff in the stock market weakens financial conditions and says they don't necessarily to help hide so much we have one factor supporting the hike, another pushing against it and what we all need to think about is what degree are the structural factors we get to demographics, all the things that arguably are going to keep inflation lower than we anticipate given our normal cyclical models and this will factor into their equation as always, data dependent and one of those points will be what happens with wages. >> to wrap it up, you're talking about lower inflation, lower growth, an easier fed. is that a recipe for a rally or not? >> in my view it is. what's happened in the last couple months, we've seen real earnings yields, inflation adjusted pes skyrocketed on the back of, hey, interest rates are now going to be a tightening factor

>> all right, thank you. thanks to dan and to michael we've got to talk facebook because the company did acknowledge details of the "new york times" investigation into its crisis handling. julia boorstin has the latest on the story and saga what is facebook saying now, julia? >> facebook's outgoing head of communications and policy shared details about facebook's relationship with the d.c.-based consulting firm confiners for attacking george soros and spreading disinformation about facebook's critics facebook posting a knowing from schrage. he took responsibility for hiding definers writing after soros attacked facebook in a

space facebook, quote, wanted to determine if he had financial motivations. schrage saying after definers learned soros was funding several coalition members of freedom from facebook, definers prepared documents and distributed these to the press to show this was not simply a spontaneous grass-roots movem t movement sheryl sandberg responding, taking responsibility for the communication's teams work and saying it was never anyone's intention to play into an anti-semitic narrative against mr. soros or anyone else in response to that, the president of soros' open society foundation tweeted so @facebook decides to drop a turkey on thanksgiving eve with admission that definers was task by company leadership on target to smear gorge soros because

publicly criticized their out of control business model. >> another wrinkle in that ongoing story. julia, thank you julia boorstin on facebook today. when we come back, what macy's ceo jeff gennette told us about the retailers' holiday strategy and don't miss former j.c. penney ceo and apple's head of retail ron johnson he'll sit down with us at "squawk alley. dow down 142 ilsqwkn e re" et stl ahead.

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we're gonna need the if we'element of surprise. mas, go team. [ snow crunching ] [ load crunching ] [ whispers ] this is the loudest snow ever. dow down 150 time for our etf spotlight where dom chu is looking at the recent weakness in tech and where investors should be looking for value there, dom. >> it should be interesting because it's the worst performing sector so far this quarter. it's technology but at this point, given today's trading action, it's pretty much a three-horse race for which s&p 500 sector is the worse since just the end of september. you have tech, consumer discretionary and the collapse in energy-related stocks given crude oil's tumble you could argue that technology matters more than either of

those other two since what w a near 21% weighting in the s&p 500 it has more influence on both discretionary and energy combined together, they're worth 15% to 16%. as of wednesday's close, 56 of the 67 stocks in the s&p tech sector have pulled back by at least 10% from their recent highs. 29 of those stocks have pulled back by 20% or more. in the etf world, that's taken a toll on the spdr tech sector which is the ticker xlk fallen by more than 15% from its 52-week highs. the qqq has fallen by a similar amount as well but there are other tech-related etfs that include those that track technology the i shares u.s. tech fund, ticker iyw down 16%. also the fidelity msci i.t. index etf, that teicker ftec dow

as well. so a mix of communications, technology and retail stocks the likes of which include apple, amazon, facebook and alphabet have been seen as upside and down side leaders, they are still a key focus for traders as we head towards the year end we are seeing value buying in shares of netflix and amazon. >> value buying and netflix. that one is hard to square >> when we return, farooq kathwa wl wriilbeith us we have more "squawk on the street" after this break.

good morning, i'm sue herera, here's your cnbc news update at this hour.

amazon workers in spain going on strike, walking off the job on the company's busiest day of the year they are accusing amazon of unfair work conditions the company says it's diverting cargo deliveries to cope with a black friday and walkout and its network is fully operational in northern california authorities say there is another fatality from the camp wildfire. bringing that death toll to 484 people the butte county sheriff's office says 560 remain missing the blaze which is 95% contained, the blaze has destroyed 13, how homes. the government is investigating poor brake performance affecting general motors's big pickups and suvs. the national highway traffic safety administration has more than 100 complaints that contain nine crashes and two injuries. the investigation covers 2.7 million vehicles including the hef lay silverado and the gmc sierra pickups, model years 2014

through 2016. feast your eyes on this. there's a man delivering a thanksgiving prank on a new york city subway. eating a turkey while dressed as one. that's a big turkey, actually. two instagramers did the stunt in honor of the holiday. i don't think i would be eating a turkey on the subway but what the heck that's the news update sara, back downtown to you. >> you see all types of things >>. welcome back with carl quintinilla and david faber live from post 9 at the new york stock exchange about an hour into the trading session let's check out where we stand here the dow is down 153 points nasdaq has been waivering through positive and negative territory. s&p makes for its worst black friday performance since 2010.

oil prices slide more than 6%. >> oil is a huge story today retail as well frank holland is at a best buy in new jersey with a look at the retailers' holiday strategy. good morning, frank. >> good morning. the doors opened about two and a half hours ago people were waiting in the cold for the door buster. >> so sorry! >> you're shopping >> it's terrible. >> they're here for items like this flat screen tvs, things management says they expect to be their best-sellers. home devices like this from google and video games like this nintendo switch. also, a there's a bigger emphasis on toys show this aisle behind me. oscar, you'll see a wide range of toys, just about everything you can imagine, everything from barbie's to lol dolls to star wars toys to avengers toys even the old standbys of nerf. they have everything here. it's designed to attract shoppers that once shopped at

toys "r" us before that store shut down and it's all encompassing part of its one shop shop strategy that was very effective in q3. best buy posting a beat in eps and revenue and comparable store sales. however, the stock has been down for the year shoppers say they are ready and willing to spend. >> i got a credit card this year and i'm spending more than ever. >> i'm not nervous about anything, no i'm happy to be here, happy to buy something and get something on sale. >> i adjust how i spend so i go a little bit more of a budget than normal. >> best buy is hoping to appeal to those budget shoppers by opening on thanksgiving day. also offering free shipping with no minimum same-day delivery and a whole

bunch of other offers to make themselves competitive with those e-commerce sites they're hoping people shop early and often and say they'll have deals tomorrow and early as well on cyber monday. >> frank, good stuff frank holland at best buy. macy's ceo was with us in the 9:00 a.m. hour talking about the state of retail and consumer environment that some contemporaries are saying is the strongest they've seen in a long while. >> i think it's a favorable consumer spending environment. record low unemployment, consumer confidence remains quite high clearly the customer is out there shopping and i think we're going up against a positive comp in the fourth quarter of last year and everybody is ready for that so when you look at the values we have, when you look at the great gift assortments, in macy's we've been focused on this all year round and working with our brands to get the best possible values. they responded last night and

through the night. >> we also asked about the selloff we're seeing in stocks and retail stocks specifically. >> we had a strong digital business and it's a higher penetration in the fourth quart quart quarter. our brick-and-mortar business is much stronger and over the past four quarters those comps continue to improve. we have amazingly engaged colleagues in our stores right now participating in our incentive programs with growth we'll well positioned to take continual market share during the fourth quarter. >> talked about key categories being winter weather wear. foods and jackets, apple,

diamonds across all price points. >> the cold weather category doing well is notable because chris was on with us, analysts from j.p. morgan, he says that directly impacts an under armour or nike that do well when the jackets and'll go sells very bull i bullish. >> watching the trade fight between the u.s. and china and joining us more on the broader retail space, that issue and more is farooq kathwari, the chairman, president and ceo of ethan allen, also former walmart u.s. president and ceo bill simon. welcome to both of you.

>> 70% of our products are made in our own worth shops in north america. we have 85 locations in china and we -- one of the few companies that ship to china you know we have many, many businesses in our industry and other industries, that has created an issue for us it's less of an issue because of the fact. you can see a slowdown and that

people are concerned with a high market that was last year. everything else is a competitive basis. business is strong but you can see the concerns about china -- the chinese consumer not only about the tariff issue but the fact is in china there's more competition they're concerned about what's happening in the world markets. to me it figures out -- right now the added cost component is being absorbed by the retailer and just starting to see prices being passed through

i'm hoping there's a trade deal that comes soon. >> consumer spending, how solid is it? >> it's good people are confident but i would say also this. we see it, we have 200 locations. we have about 1200 interior designers that work for us what we are seeing is people are becoming more selective. selective in terms of quality and service. that's a change that will take place more i'm talking about certainly the consumer that is buying from us where we see more interest in good quality, more interest in service, and if you're not able to differentiate and all you are doing is selling a product, that's an issue. we see the consumer is selective

and they are looking at -- especially when we are talking of furnishing your home, this is not buying a toy they are being serviced, they are looking at quality and we see good prospects >> speaking of toys, bill, it's such a crazy year in terms of share gains and losses with toys "r" us, sears, even looking back to sports authority. i wonder how those disruptive events have changed supply-and-demand issues across retail >> well, it was exciting last night to see the battle for the toy business target look really good and they were very busy, their toy presentation was good. walmart had an expanded toy section but i thought target was a winner the toy area. the demand for toys continues. there will be people that get engaged and saw toys in retail black friday events in places

you would haven't guatemalaed in the athletic stores. so people are fighting that out and the consumer is robust they were sure out last night and this morning >> if the tariffs go into effect, how long does it take retailers to change their supply chains and how much of an impact will there be? how much do they have to eat as opposed to passing it to the consumer. >> well, moving the supply chain takes a fair amount of time and they've started to look at it quite a bit and are headed down that pathway if you have to reestablish factories in north america that takes longer so the lead times from that will be a while keep in mind, the tariffs are on a component of the cost of goods of some of the products. they're not on the entire retail

product. retailers can absorb some but i expect them to pass most of it through. if retailers absorb the cost, tariffs won't have the impact the government desires them to have >> as someone whose company does most of their manufacturing in the states and given the idea here is to generate more jobs in the united states, do you think there will be new manufacturing in the u.s. as opposed to other places outside of china? >> well, let me just -- i'll talk about that but also this comment about discretion of tariffs and prices keep in mind that in the last 15 years we have all been living on deflation because of -- especially because of imports, because of products coming in cheaper. for us to stay even we have to grow 6% or so a year

so for the last 15, 20 years consumers have benefitted greatly. so i think -- i'm just talking about the fact that there are some increases, the fact is we still have tremendous rate values china also in our industry in the last five, six, seven years because of cost of labor in china, today they have moved most of the manufacturing to vietnam. so on the one hand we say we'll put tariffs with the objective of getting more jobs here but products are coming from vietnam than what we are getting from chin china. what people don't talk about is the fact we lost maybe more jobs because of technology and innovation than products going overseas plus, about 25 years back we had 35 manufacturing plants. now we have nine making more products than 30 did with less people because technology is an

important factor but jobs are going to come with more technology than the labor we had 25, 30 years back. >> i have to ask about your own price performance which has lag it had broader market down 26% and some analysts were disappointed with the speed of the state department contract. what else do you think is worrying investors and what are you telling them >> we make money we gave a special dividend of one dollar two weeks back. we have no debt. we run the business the right way. they would like to increase our top line in a crazy way, make no money. i'm not going to do that i'm going to run the right way i'm going to make sure we take care of our people, take care of the environment and make profits. the question is i always felt that the stock price is like flying a kite. you have the kite fly high, the stock is going to follow i don't want the tail to dictate

our business. >> thank you for coming on to talk about it. farooq kathwari, bill simon, good to see you as well. thank you. "squawk on the street" will be back in two minutes with the dow down 144 points.

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investors have been feasting on fast food stocks amid all the recent market volatility should you stick with these names? fi ondut more on tradingnation.cnbc.com more "squawk on the street" is coming up.

the pain in crude oil continues back below 51, let's get back to jackie deangelis with an update from hq and the commodities desk. >> i can't stress the importance of what's happening in oil right now. a one-year low down 7% on the session. for some companies it's a critical inpout v put but for those in the energy patch, low prices mean a

struggle to remain profitable and changes in a business plan that could have an impact on the economy as well. then there's the consumer. we've been talking about retail trends all morning the thing is, the commodity price usually falls much faster. the price at the pump takes at r to catch up. national average is $2.58 according to aaa down 26 cents from last month, but higher than last year. i think of a quarter saved for a 16 tank gallon on average is about $4 total sure, it does add up is that enough to get people spending significantly more? something to think about today's trdrop is fundamentals being priced into the trade. session low was close to 50. we usually see a test of that, a break below it could come in a few days it will take a lot of people by surprise majority of analysts --

an investigation revealed he used company money to buy personal residences and enrich his sister phil lebeau has more >> reporter: this is an alliance between the two companies that over the last several years there's been greater tension between renault and nissan he was stripped by the board of his title. he remains on the board, he can't be removed from the board until shareholders vote, scheduled in the next couple of months he remains in detention in a facility in tokyo. there's no time frame for when charges will be filed. already we're seeing stories leak out in terms of what he allegedly did. there's a report from dow-jones the last couple of days that his sister was paid for consulting work another report by nhk out f

japan that ghosn ordered payment of $1.5 million for a home renovation another report there was $18 million that was diverted for acquisition of houses, and there were people that said why is this guy in jail for misreporting his salary on a filing with tokyo stock exchange some say that's extreme. the deputy chief prosecutor says uh-uh, that's not the case he says there are those that call this a minor infraction but in fact it is ranked among the greatest offenses in terms of crimes in japan. look at shares of nissan and renault. one, what's the future between them they would like a full merger. nissan is saying maybe not maybe we need to cool things off, even though nobody is saying dissolve the alliance

then you also have questions on the finances at nissan that's the latest. guys, back to you. >> a lot of question marks there. future of the two companies, thank you. let's send it to morgan brennan with a look at what's coming up in the next hour on "squawk alley. good morning >> hope you had a great thanksgiving dow down triple digits we're talking about that and talking shopping, shipping, and the role technology is playing in all of it we have an all-star lineup mi uonsqwkll."

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welcome back to "squawk on the street". stocks off the worst levels of the day, trying to take a run into positive territory for some indexes. oil prices are leading the energy sector to the down side it is helping industrial names, specifically ones with fuel as a larger part of expense structure. look at transportation related names, they're moving higher as oil prices head lower. shares of american, delta, alaska air, united continental holdings among the biggest gainers overall. shipping and logistics stocks

are held up by energy prices you have shares of ups and fedex moving to the up side in early trading. those moves help ishares transportation efts post fractional gains so far. that tracks the transportation index, up 1.5% in the last month compared to 3.5% decline for the broader s&p 500. watch in transports for any signs, carl. back to you. >> american, top stock in the ndx. a huge show ahead on "squawk alley. apple former head of retail ron johnson and mike perra dow is dn 4. ow11

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