it is not always the most volume at anything. >> just to put in perspective, the dow lost about 1700 points over the last two weeks. >> no, but if you are looking just over 200, you are not getting back everything. >> no, you are not maybe or maybe not make sure you join us tomorrow "squawk on the street" is next ♪ good monday morning, welcome to "squawk on the street," i am carl quintanilla with jim cramer and david faber. future bounced at 230 right hereafter losing 1600 dow points big week as we get to earnings the g-20 summit. europe's green, oil is back above 51 road map begins with global markets rallying as oil prices

rebound. u.s. stocks of what is an ugly week >> will there be a tech turn around google and alphabet are all rising at least 1% >> walmart and target and others are in the green a strong start for the holiday season with online sales stocks are said to rally at the open following their worst thanksgiving week in about seven years heading into the last week of the month all three major indecises. >> although we are getting some halt today on some names we are familiar with. >> look, i don't want people to lose money i think what happens is that you easily can say now i got my chance and you do a couple of days where things go right

let's use the classic example, i know we talk about china so you are jay powell and you are trying to figure out how you can justify that you want one hike in december and three next year you have all the m.o. in the world. he can stick it to the president and over spend by the republicans. and he end up in a situation where what's good news is bad news classic bare market behavior, you leave here friday and you come on monday already screwed that's how you lose money. you come in today and buy it up a little people feel that powell is going to say the right thing >> we are over sold. we can bounce. >> what if we got - we got this brexit, little clarity italy is talking about reducing their deficit. what if we get some tariffs

week >> we don't have what matters the most to me which is great earnings maybe sales force is good. a lot of people want to hear from mark benioff. >> we got a whole new crowd of earnings >> we'll get tiffany and dick's. >> all i am saying is we deserve a rally. every time we went to minus 5 on the s&p, we can bounce the fundamental thing that kept us down can take in advance, i don't think that president trump is going to be rude at the g-20. >> just the same two things. >> it is powell and china. i am just saying -- >> i got a new netflix for him >> we'll talk about them >> okay, okay, without any new

data points necessarily. certainly when it comes to china. we can talk about united technology i am just saying -- >> it is only one year, november 17th cvs is going to close as well. we got some big deals closed >> there are good things happening. i am just saying that you just sum up the problem things we hear of everyday are control. i think pence is in control and i think powell is in control pence does not care about the stock market he's about stopping the road initiative and containing the chinese. >> i never thought i hear those words. >> so he is articulating the view of navarro and lightizer?

>> he was not exactly good cop >> you know what a lot of people seem to think? there is going to be good body language and good sort of talk out of the g-20 that won't amount to anything but results people buying stocks >> that's what i am worried about. karen cramer, wow, this is it. this is it it is happening. we got to go buy workday this is it can't you tell amazon -- why didn't you buy on friday well, i don't know, why don't you get me a pretzel and diet coke and she sells things at the rally. why did you do that? >> karen cramer going to

initiative nvidia ividia out performing >> what does it take for people to say it is a bare market 280 to 240 is that a correction >> yes >> that's a correction >> it we see a reset down to 50% >> a compelling point. >> let's take all these terms down so you can't use the word bare >> compelling. >> these are the things that says come get me >> my favorite of the hedge fund world uses is a draw down. >> it had nothing to do with we made a mistake and we invest incorrectly. >> david, draw the big victory, campbell soup.

>> what about them >> it is going to take us to 43? >> well, his average price is right here >> i mentioned 46. >> we'll talk more about it. >> ralph, internet and cyber monday, wow. buy. is that what we are down to? we can bounce. italy, i got a place in italy, it is not solved we got a communist government where i am >> he's talking about brooklyn >> that's true >> do you guys want some olive oil? they let you have 50 liters. >> jim, if you are so cautious --? i am saying don't get sucked in. >> morgan stanley under waiting --

>> did you read that piece you got to get through that tunnel remember what that tunnel was like before you get to the emerging markets >> that was a throat solicitlid. >> they say dollar is going to top out and buy em now is the time. >> interesting story today as well over the fact that so far this year with only a few weeks left, almost every asset classes have performed poorly. commodity. >> is that not the definition of bare market. >> i was going over the chart this weekend i was taken down i came across coca-cola and clorox >> that's it >> one you can drink and the other you can't. >> verizon >> verizon looks good.

it is breaking out here. >> that's a bare market. >> nobody wants to call that >> josh brown got a great blog over the weekend >> that's about it >> that's 2000s. >> how about all these oil companies? >> that's a lot. it is just a lot they need $50 to make money and they all -- >> that was the story on friday with the decline today we are looking backup a little bit >> we are now the largest producer in the world is the u.s. >> the numbers are 12 and not 11.5 >> 12 million barrels. 35% of the shipping is our expert >> shell producer is shipping right now.

what are you thinking of next year >> you are getting 35. you got to take that, trying to get the oil infirmary. >> do you think the president? thank you president xi for fallen oil prices? >> i am not going to comment about that that guy is bad news for the market he was great and then he was bad. he gave me the tax cuts which i think is happening it is the tweet. can we have a little presidential act >> it is interesting that people we had come on and discuss it points out the importance of u.s. companies and how much is going on down there. when you get to this level, there is a question to where the trade offic is. certainly is good.

gasoline is coming down. it is an important part of our economy producing wood >> natural gas is where the actual is. we got some warm weather and maybe can drop to 350. a lot of the places did renewables they have to have a backup of natural gas. they kind of discovered that natural gas, i am going to argue it is more important of the southern economy it turns out to be temporary shortage that offset, i think it could be good news for a lot of the -- >> it helps with the other pet peeve of the trade deficit >> wow, why will you so happy? >> i am happy. >> the only thing that really change was china holding up the rockwe rockwell/collins deal which is

the olive branch >> given what they should do given antitrust regulations. they let fox and disney happen qualcomm have been off >> well, it will be great. that'll help semiconductor it is down 40% that's a correction. it is not a fair market. they have to go to zero to be a fair market. facebook is a correction its got to go to zero. what does it take to get people to use the word bare they hide because they go to the really good zoo in san diego it is a great zoo. >> i can't say that. >> look, i will put you on my show as a bear no, there is no bear you want to see bear, go to jersey and leave the garbage

cans there are many bears rolling in the stock market >> that's part of it that was the smartest part of that piece >> what if facebook have to go through? that's not a bear, that's a mild correction >> 25% >> we'll continue this in a moment when we come back, amazon shares are up on optimism of cyber monday we'll take a look inside the company. we'll take a look on tp phe premarket, we are on alert of gm in regarding to wndosize we'll be back in a moment. elusive today. more is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha

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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. retailers counting on a block buster cyber monday today. shoppers spent $6.2 billion online on black friday alone contessa brewer is looiive in nw jersey today morning contessa >> reporter: you are thinking of black friday as deals in brick and mortar stores and yet 24%

more online sales this year. amazon is really upping the anti this year, it is trying to best its own cyber monday last year where it did its biggest day ever this year is offering discounts and free shipping to everyone, not just those who are prime members. last year, it processed 3.5 million items per hour this year amazon says expect to beat that. here at 110 fulfillment center, this is one of 25 global robotics that amazon has emphasis is on efficiency and making sure that things are convenient for customers if you have more people shopping online, they have more competition as well. walmart and target, time to take a bite out of this online retailing giant. let me show you how it works you are seeing a woman who's stocking robotic shelves

it comes in on these robots. it brings the shelves over she stocks it and over here you have human beings who'll go through the robot shelves, move up or back, you have other humans who pick out items and put them in these yellow bins and they turn around and go to these massive conveyer belt. they can process 300 items every minute and off to the people who ordered them amazon really think this free shipping is key to keeping their customers and attracting their customers. if black friday of any indication, we are off >> 382 minutes incredible, contessa thank you for that some of the numbers getting jim over the weekend, in store traffic down about one but more than made up for online.

>> consumers are doing well, it is part of what i regard to be where the profit money margin is made and nike will tell you that we have this retailer of the last two weeks it was devastatdevastating you can go over every one of them you can go back to target. dave, you said something that target is not very big six months ago what's happening here. >> brian cornell did a good job. it was not that it was bad it was nobody cares. >> macy's, we had jeff gennette joining us on friday >> astonishing

>> jeff gennette is leading a remarkable institution it does not matter jeff is doing a very good job. it is going back and forth on that quarter the fact that it is not important if i liked it. what's important is the market hated a good number. that's discouraging. there is a time where if you were hedge fund, if i get this from macy's, i am going to get a 10% move >> this is what gennette told us on friday. >> record low on employment. consumer conference remains quite high and customers are out there shopping clearly i think we are going up against the positive and fourth quarter of last year as many as my competitors are as well. >> everyone is ready for that. >> he did say if we get to the next round of tariffs in january, it is cotton based.

that's where retailers start to feel it. >> also on goods that have not had any yet. a lot of apparel is really untouched. >> the president has to back away from 25 it is not about tech trade it is about stopping chinese >> that's the plan there is nothing to do to trade. >> that's going to go on for a long time. >> i know. >> we'll get to cramer's "mad dash," futures is still looking pretty good here "squawk on the street" is back in a minute.

time for our "mad dash," six minutes before the opening bell. i am going to talk about sochi so they breccepptors. david, this thing sells according to jeffery, 6.5 times 19 earnings. 6.5. look at this look at this correction. this is a correction, it is subtle >> look at this. 6.5 times earnings one of the great american growth that a lot of people -- their

blood cancer judge is going to lose celgene is the kind of thing that really does worry me. a great american company no matter what they do, can't raise it >> don't you buy it six times? >> why >> because you are not in the gain over night. >> they can battle you know they always battle these things it was a one drug company. it was a fabulous drug company they tried to diversify, it did not work >> you are just throwing in the towel. >> we can put up the chart of gulliad. it is like micron. >> it was the cheapest it has ever been. >> i don't think celgene - i

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you are watching "squawk on the street" live on the financial capital of the world the opening bell is just under a minute on this monday morning, coming off a long holiday weekend. a week full of earnings, we talked about the g-20 summit is really talking on friday and there is italy we have a lot to juggle. >> look, i want to discount italy because i think the e.u. will do whatever necessary brexit remains a total mess. we keep on thinking of this closure. like i said, i think powell is looking at what contessa brewer is saying. the small picture is we are doing a lot online

look at that we don't need a lot of humans. he's worried of full employment. texas have been boom oh, come on. i look at what powell is worried about and i see the recount coming down. pay attention, jay pay attention. >> that's a good one >> there is the opening bell, the s&p cnbc realtime exchange at the big board biohaven let's start off with campbell, let's do it. >> we don't have the announcement yet but we can report and others have as well there will be or has been an agreement reached between third point. not a surprise, we have been

sort of wrigright here talking t this as a strong possibility third point reducing its slate from 12 to five directors. now, what do you get you get to two that they originally signed off on hostetter and schmidt. something additional that they have been able toll win here the right also signed off on a third director as well for the company. you can argue this did not go twa exactly the way they hoped for they have to support some of that family, charlotte, for example, they really thought they had they did not believe they're going to fight what was a

winnable map if you assume the 41% ownership of the family. that's what happens. once that was made clear, it sort of went in a way that they had not expected they were successful and fighting for a couple of seats here jim, the question now is can the ceo really make that big of a difference it is interest to note, their average cost is around 39 to 40. so their stock is right about if not a little bit over what they are paying not bad in the market. can it become a $50 stock based on the reaction of whoever this new ceo. >> if they spend money then the balance sheet is a more spread

if they sell, it is a small company and less than anybody. so i don't know. i mean a new ceo if they have to orchestrate its turn around for a consumer package good company. what is their end game i mean do they want to sell it to coca-cola >> i think they look at -- >> the numbers reported last week were not bad. >> they were not bad the sentiment on campbell has been quite negative as we know they came up with not a bad quarter. 19 is still looked at as two years of work from which you rebuild and potentially sell those who would embrace the idea that eventuallythis company will be sold, it is not going to be right away. the expectation is you bring in the new ceo that could really do some of the things we are talking about and deal with the

leverage balance sheet and potentially you can enter talks if you want it to. >> i look at it as, we got to put finally under the table. kind of like $20 >> it is kind of a situation where listen somebody is going to lose their job if they don't get their stocks up. one of the things that campbell could not destroy no matter what they did is that we still buy their stuff. people still buy goldfish and peppers farm there are still the pepsico of the world wanting more shell

space. >> interesting that you point it out. campbell is part of a larger framework. barron had a story over the weekend, corporate america is ready the pay down its debt and that's bad for stock >> i think it is i look at the amount of buy backs that were done very low where you are borrow money lower than your dividend the cfo says that's not making a lot of sense the big one we have to find out about is apple did apple stay in there and buy? apple is worried of g-20 does apple recognize at this point that their phone is a bust and not thinking much about service. there is still so many buys on apple. there is so many buys on it. don't you think they use any lifts to be able to get out? >> right >> rain or shine

>> absolutely. >> it has not been that -- >> david, you know what, i look at that and there is a reset for that >> where is buffett's average cost maybe the stock stabilized and kind of like when mark went on -- >> who >> "house of cards." >> it was the other guy, the industrials. no one everyone watch this show? i watch it >> i don't know what you are talking about. becky quick is a cameo in "house of cards," you have to finish "house of cards. >> sorry, becky, i watched it and i thought you were great some of her best work -- >> what? >> thank you for explaining because carl and i were both --

>> it was in a bad side for netflix. >> netflix never tells anybody who produces their shows and what their ratings are they have a completely all the leverage on a day where -- >> on a day where faang is doing okay and netflix is not. >> well, because you are not watching becky spoiler alert that becky is in it >> i think it is great that she's in that. >> i hate to say this but i am never getting to >> well, i will watch the clip with becky >> other than "body guard," can you name a netflix that you watched in conclusion? >> i have not finished "body guard". >> that's why the stocks are

going down, people didn't watch.nwatch. netflix is going down because nobody here knows. i am like there is becky quick, becky quick. >> it is going to be the world of tv to you >> i saw the upgrade. >> david, that's an opportunity. >> unchanged they're change to the target at 28 >> at&t having been down a lot in the quarter its dividend yield approaching 7% >> i know. >> that's a lot of pain for people >> obviously quite a few people again who are long verizon in part because of the dividend and they benefited this year it has been a very interesting story to watch of the version and performance of the two companies as they diverge

dramatically in their strategies >> i know. we talked about corporate debt and paying down. at&t is certainly one of those companies. >> $250 billion. >> as -- >> it is incredible. >> it is bare market >> you guys notice the reset in goldman sachs? >> the reset >> 240 to 190. what's going to happen there, jim? >> what, did you think i was in one. how do i know? gunpoi i have people coming up to me, jim, what do i know, malaysia?

hey, there were guys involved. >> all right, so you sell stocks >> i was speaking to people at goldman, they could not pick out malaysia and singapore, for haven's sake you just google everything >> i know. >> goldman sachs, i said it was the most stupid thing that we have done. at 190, i got to reclassify how stupid i was >> 192, you are feeling better >> no, i told you i was trapped in adam class in fourth, fifth and sixth grade and now again. >> last week morgan stanley cut to equal weight. that was 26 target >> i mean it was a huge country. everybody courted malaysian

money. $110 billion in cash it is $6 billion that was what the draw was, it was $6 billion write the damn check for $7 billion until they give them a good rate of return and move on you throw the guy under the bus. that's in a great tradition of goldman. throw them under the bus what is it >> '86 >> the one that goes at the end. >> 86. >> he referenced amazon because it is going to be getting crowded. >> moving back to the broader conversation >> you write a $7 million check to everybody's involved.

a safe valentine's day massacre. you throw them under the l you got to use something how about the c's. >> all right, can we move before we get to bob? >> you mentioned the antitroous and what people have to focus on is technology. >> it is going to happen >> it is lightly although the board has to weigh in, otis can be a separate entity >> that's going to be sitting in the new york stock exchange. >> otis redding. >> a lot of deep tracks today. >> omnivore, what h my god, wha do for you >> thanks carl >> they're going to split it up.

>> four days rest. >> guys, dow is up 316, oil is up a buck and a half let's get to bob pisani who's back >> hey guys, good to be back what a great start 6-1 we are prime for a rally. you can see the stock moving strongly today we got consumer discretionary and retailers have been doing well energy is ugly in particular to oil services name. we are primed for a rally. that's one thing i agree with for the bulls right now. we are trading for multiples, that does not happen very often, folks. that shows you how over sold we are here everybody is hoping mr. powell is going to turn into inflation dove over what

this is hopeful thinking and the fed is going to hike one more time in december that sounds wish full thinking to me. and trump/xi meeting this week everybody thinks this will be a victory if we don't have any tariffs, the ones that's proposed does not come into effect the bar is very low for a rally this week. it looks like people are applying for it right now. we are rediculously over sold. semis are down 20% and retailers are down 20% these are pretty god sectors to knock the market down here the market is still stupidly defensive. we have done pretty well on all of those consumer staple names they're very close to their

52-week highs. mcdonald's and lily and johnson&johnson. you got this flat yield curve. an interest rate sensitive name. equity residential and avenalon bay. and the utility had been rallying edison pg&e are down on the california wild issues most utilities are up this month. i don't know i heard people arguing over the weekend. did you notice, the home building and home related stocks have been reelectricallying in few days open courting is up. these are pretty destruction the

got. i will be looking for some kind of item. they're going to look for any comma and mr. powell indicated suddenly that he's becoming an inflation dove the dow is sitting at the highest at 300 points. >> bob pisani, down 337. we continue to watch these gains on oil, almost back to 52, dom chu. >> that's right. 3% gains for west texas. $60.65 so far in this early trade. of course, this all comes as bob mentions some of the deep value buys there crude oil for west texas have lost a third of its value. as these energy prices have fallen and energy stocks along with them, it has gotten attention of some investors or traders or strategists out there

to key on this goldman sachs, they see a lot of buying opportunities and not just gold but oil prices as well as heading into the 2019 of these levels we see are attracted entry point to enter long positions. that's helping that's one of the reasons why you see oil prices up today. that deep value buy is a big part of it we have two big potential catalyst in the next few weeks here g-20 it could have a huge effect in the market and of course, what's happening in the opec meeting. trade is looking to see of any agreement on production cuts there. >> as we go to break, keep your eyes on the market and movement of treasuries today. dow 321 is the best gain in about three weeks. back in a minute alpha seems more elusive today.

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some eye-opening comments from elon musk during an interview with axios which aired last night on hbo. the tesla ceo said the automaker came awfully close to collapsing take a listen. >> tesla faced a severe threat of death due to the model 3 construction ramp. essentially the company was bleeding money like crazy and just if we didn't solve these problems in a short period of time we would die. it was extremely difficult to solve them. >> how close to death did you come >> we got within single-digit weeks. >> covered all kinds of topics, ai merging with machines even reiterate wed might be in a simulation. >> i remember when he called me a simulation -- no he said it was a 50% chance i was a simulation i listen to that interview and i

say to myself; what was he saying publicly during that period about how great things were this guy is supposed to be -- there is an s.e.c. they can look at what he was saying and tweeting versus what he said. there is -- you're noting there's an s.e.c., right >> there is an s.e.c they brought an action they settled the action. they have a new chairperson who you said is tough. >> yes, very tough. >> we don't have the new independent directors as of yet i don't believe. >> do you think the president believes that when georgia got in top four that the s.e.c. is pretty good? what do you think? because michigan lost. >> i just think he gets them confused and it's okay because one is on cbs and that's the harder one for him to follow because he watches fox i'm sure joe buck is like -- oh, man. joe buck says something about musk, musk is finished

he watches fox joe buck is more powerful. >> i followed you completely through that bizarre -- >> i thought romo did a good job. >> great player caller we'll get stop trading with jim in a moment. dow is at 335. what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

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click or visit a retail store today. time for jim and stop trading. >> there's the stock of a company that's hated that i really like, it's paychex. one of the things they've done is expand overtime they bought a company call ode way sis. i think analysts will have to upgrade this thing why? because this is an anti-harassment trainer. and i think everybody knows in corporate america unless you bring anti-harassment people in that do training then you're going to get sued at some point or another this was a very smart acquisition. it's going to give them the growth a lot of analysts who hated the stock want and i think it will be upgraded repeatedly tomorrow. >> we'll watch that. what's on "mad."

>> one of my favorite companies is planet fitness. everyone doubted them. i like them. chris is a persuasive guy. but they've used the strip malls that have empty space and they've used it effectively and they keep growing and growing. they have that pizza tuesday it's the -- look, a lot of times when you go go into into these boutique gyms everybody is six pack everybody looks like strauss zelnick. like oh, my god. they don't -- strauss zelnick does not belong to planet fitness. strauss zelnick, mr. america mr. senior america. >> yeah. >> both? >> six pack. >> if he wince both -- >> i prefer pabst blue ribbon. >> see you tonight >> absolutely. >> "mad money," 6:00 p.m. dow rally. dow is up 352. almost every component in green. back in a minute and to manage this risk, the world turns to cme group.

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♪ on a spaceship, take me new places ♪ good monday morning, welcome back to "squawk on the street. i'll carl quintinilla with morgan brennan and david faber sara is off today.

the market has built in the first half hour. dow is up almost 360 points. s&p up almost 37 oil getting a nice bid as well. our road map starts with brent higher after stuffabling 8% on friday alone and stocks bouncing back after the biggest declines for a thanksgiving week since 2011 is the worst over for the markets. a strong start to the holiday shopping season. online sales are surging and the, quote, threat of death, why elon musk says his company was bleeding money and closing in on the end. markets coming off the worst thanksgiving week in seven years. s&p has exited so-called correction territory dow is on pace to break a four-day losing streak, in is a year-end rally finally in sight. we have the head of asset allegation at ubs global management happy monday, let's tackle that

question, jason. four weeks left in the year. what can be saved? >> i think there's -- a lot will depend on what happens this coming week. we have the g20 meeting, a lot of eyes are on that nerms of in trump and xi's negotiation what speech powell gives what happens with oil. i think people are in a wait and see mode if we get people in a good mood, we'll have a santa claus rally. >> you're betting on more good than bad >> we are betting on that but there's a lot of uncertainty a lot of news is already in the price so if trade doesn't get better, a lot of bad news in the price so it's skew aid symmetric in the upside. if things play out in terms of trade getting better fed is more dovish, we feel like there's more upside. in a few weeks, a lot of volatility but on a six-month horizon we're comfortable. >> a lot of macro strategists

putting out their books. morgan stanley underweights u.s. b of a 2900. how do you think the next year is shaping up? >> well. i think we're going to have slower growth in the united states as well as the rest of the world over the next 12 months the interest rate structure that has come up across the yield curve is showing up in the data. i think dollar strength is going to slow manufacturing, industrial activity and i think that combo will slow overall more than expected i think the issue for next year is if we slow growth down to 2%, will that bring interest rates down will it stop the fed will it stop inflation from creeping higher? if it does, we could have a decent rally but if we slow

growth and the ten-year yield stays around that 320, 325 area or creeps higher and wage and core inflation creep higher then we have further to go on the down side. i think we might have a further deeper correction and a decent second half of 2019. that would be my guess. >> does the fed raise rates next month? >> it raises rates next month. the economic data in terms of labor market, inflation data is right there. the market will prime for it so they'll take advantage of that but they can guide us to say we'll be more cautious on march. assess the data but if they have a window of opportunity to raise rates they'll take that chance right now. >> jim, earlier on our last hour we were talking about the fact that there's been nowhere to hide not bonds, not commodities if you had to pick an area where you want to be in terms of trying to gain a return, what would it be?

>> i think right now i'd be defensively positioned i'd have a little cash here. maybe intermediate bonds i would move away from the united states. it's interesting to me, we've had 10% correction and the emerging markets have outperformed the u.s. stock market that might say something about how washed out those markets are so i would have a tilt that way. i'd be overweighting more defensive sectors here utilities and staples. stocks the dividend aristocrats, the low vol sort of things i might be tempted to start picking away at things like energy stocks or material stocks in lieu of inflation continuing to be an issue next year but it's been tough overall and i think what we have to do is get a bottom in this equity market and we can get back to assessing whether you want to get risk on

again but until we do that, it's going to continue to be a difficult investment environment. >> jason, same question to you where do you put your money? >> we like owning equities if we think back to 2015, that was the last year in which every asset class was flat or negative so the chances of us being flat or negative is quite low in terms of rates, the market is pricing the fed to go to three hikes, get to 3% and stop. so if we think about the rate moving high, if nothing else changes, we estimate the s&p will be down 20% so we've absorbed that big move in rates they'll plateau next year, which i think is a reasonable bet. then you have to have decent earnings growth. your dividend yield mid to high single digits for equities not spectacular. >> your line about you need decent earnings growth is key. we've gotten some calls that 50%

chance of an earnings recession. two quarters of negative growth next year.ridiculous >> we think that's extreme we're looking at 4% earnings growth and that includes impact from the tariffs so get that earnings growth, get 2% dividend in yield, that's 7% return not spectacular but still a good place to put your money. >> jim, what underlies your belief we'll slow down here in terms of overall growth here and around the world >> we have already overseas, david. it's pretty clear slowdown if you look at china and europe and japan. the data has gone weak here, too if you look at the economic data. the autos, housing statistics, durable goods in general, including capital goods have been weak. if you look at the gdp atlanta fed estimate falling below 2.5% for the quarter. look at the leading economic

indicator, it was over 7% last month year on year and now it's below six. rollover if you will but i'm more concerned about what the message of the markets are. we've had a complete collapse in cyclical stock performance here. that's suggesting a big slowdown coming in those economically sensitive parts of the economy if you move the bond market we've had some falloff in yields here, we've had a blowout in bond spreads for investment grade and junk spreads of late suggesting a more difficult economy. commodity prices are way off certainly crude but the one to me that's important is industrial commodity prices off 10% to 15% since june. the impact of the dollar weighing on a lot of economic activity i thinkif you take monetary tightening and the dollar together, there's been a lot of tightening i think companies will start to experience margin pressures in a

bigger way the lagged impact from having higher wages and higher interest rates is about a 12 to 18-month lag on profit margins and we're entering that era as we move into 19 so let's say we get 5% sales growth but 5% or 10% margin erosion, we could have a negative earnings result next year for the s&p 500 and that's not in wall street's mind-set at the moment. >> corporate credit? liquidity events accentuated by etf withdrawals how much is on your radar? >> we know the amount of credit has grown -- pretty much doubled in the past decade where banks' balance sheets have struggled so there will be an issue where people want to exit at once. right now the default rates are low. they'll tick up but until you see a pick up in default rates that could be tied to slower

earnings growth, that will be stress points. that's where you'll see markets more concerned i think things are pricing reasonable risk. >> we'll keep our eye on that. jason, jim, thank you both. when we come back, retailers on watch as shopping results roll in from the holiday weekend. it's the biggest day for e-commerce cyber monday we'll take you inside the numbers and inside a walmart fulfillment center plus, bleeding money why tesla's elon musk says his company was within weeks of collapse as we go to break, the s&p is up almost 37 points equity trades . so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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amazon up over 3%. it's cyber monday after all. it's set to get bigger courtney reagan is live from a walmart fulfillment center in chino, california, with more. >> good morning. today is expected to extend what's already been a record-breaking weekend for online sales i'm at a walmart fulfillment center in chino, california. it's one of a large network of locations working to fill millions of orders that were placed over the honk holiday weekend. it can be ord record-breaking day for walmart. this location has thousands of associates working, covers 1.2 million square feet and there

are 12 miles of convoyors. when it comes to walmart's cyber monday top sellers so far, they includes ipads, tvs, gaming consoles, toys like lol surprise, lego and even classic board games like sorry, chutes and ladders and candyland. according to captify, folks are searching for electronics as the number one more category on walmart with 74% more searches than the next searched category, which is toys. samsung is taking 45% of the searches on walmart.com in that category walmart has 4700 give or take stores in the united states and that could give it an advantage to some online only retailers this season and more and more shoppers are using the buy online pick up in store option we know adobe said from thanksgiving to black friday shoppers kmo s chose that 73% m.

edison trends said walmart's thanksgiving and black friday sales together increased 23% year over year compared to last day -- last year on that thanksgiving day jet.com, however, which walmart owns, those sales dropped 6% well, amazon sales grew 25% and target's soared 48% online overall adobe is looking for.8 billion to be spent. that would be good for growth over last year but that's a slower growth rate than what we've seen online for thanksgiving day, black friday and small business saturday. look for 76 million americans to shop today they no longer have to use the high speed internet access at work now they can do it whatever they are on their phones, on their ipads, on their tablets. so 10:00 p.m. to 1:00 a.m. eastern time is expected to be the peak shopping hours for

today. back over to you guys. >> i'm probably going to be one of those people making it a peak courtney reagan, thank you. joining us at post 9, former target vice chairman and former toys "r" us ceo jerry storch jerry, some of the early numbers we've gotten on black friday and now cyber monday as it gets under way, how does it stack up against years past and do we have winners and losers in this process >> we said this would be the biggest black friday in history and it was this will also be the biggest cyber monday in history. there's over four weeks until christmas. the longest amount of time and people are spending. whatever is going on in the stock market, it's not affecting the consumer pocketbook and they are spending, spending, spending online spending was up but the stores held up pretty well traffic may have been down, low single digit percent but we don't know what the average ticket was and what i saw it was likely up so the retailers have

been doing fantastic. >> is it still amazon versus everybody else especially when you think about how much collaboration is now taking place with retailers saving and selling on the amazon plalt fo platform >> amazon is becoming more of a partner than ever before amazon is becoming more of the mall and less of the retailer. that means brands can sell on amazon but mathematically the margin goes higher it's more profitable to collect a fee than run fulfillment to courtney's point as we can see in the fulfillment center so that's the future. amazon and walmart as a marketplace. this idea of a marketplace, things will blend and as long as you have to product where the customer wants to find it you'll win. >> what does that mean in terms of valuations for these stocks >> they've come down so think about transition from sales to margin story for a stock that's normally not a good thing because if you can see expotential growth, in my world

the athletic companies, then you start maturing, that's a deadly word but that means doing things better, with age comes wisdom and profits so we're going through a period where the consumer is great at figuring out where the profits are going to lie that brought people in and layer on asia global concern and we've had a lot of contraction next year those are the stocks you want to look at. >> i'm curious to see if you agree this idea of amazon becoming more of a platform and less of a buyer of to then sell product. >> he's a smart guy. i heard him say that and he's right. if you looked at amazon's third-quarter results you saw their first-party sales were up about 10%. that might be great for a normal guy but not amazon it was their marketplace that was way the heck up vmg and why? they collect revenues of about 15% of sales on a marketplace

sale on their own sales they're lucky to make any money at all and the bricks and mortarguys are trying to copy the amazon model and all they do is find out that it ice almo it's almost impossible to make money doing it so they have arbitrage taking place as sales shift, at least mix, from being in the store to online so amazon's a marketplace -- they're selling weapons to everyone, they'll make money doing that. bricks and mortar guys have to figure out what they're going to do. >> are we done talking about amazon as a price leader >> you ran the price compare sons, we saw third party data and they're not always the cheapest option. >> on friday we ran numbers. >> so we'll see that there's enough companies that allow you to check against amazon so if amazon was the original price transparency it comes full circle and when you're in your sweat pants on your couch you have to ower

so if price matters, the reality is that's where you gravitate but we found shipping and returns and other conveniences if you're going to be the mall, you need to be full service. >> amazon has never been the price leader people say that but they are a brilliant price follower, they use their spiders to make sure they follow it walmart takes the price down then amazon matches it it's not amazon. it's the screen. like when stock trading and bond trading went to the screen everybody's price is instantly available that's compressing margins. >> what about the mall itself? there were some early numbers that show foot traffic is down even though sales overall to your point are up. is that just a trend that will continue >> i think a-malls are in great shape. great restaurants, great entertainment. it's the b-malls and c-malls very clear traffic will continue to decline

stores will try to make it up in other ways but eventually the reality is we have way too many stores in the u.s. not just a little bit but we are vastly overstored so a lot of tertiary malls will have to close and become places to get your cat scans and insurance >> we just did this analysis, looking at where brands cap. in a world where you no longer have merchant kings that can dictate fashion but a 12-year-old with an instagram handle has just as much as the power, you would think brands should be smaller and we found no matter what brand you are, you peak at $3 billion if you're direct, 5 billion if you're wholesale. right now when we look through where does that lead you, the mall will have to figure out how to shrink to grow. michael kors, ralph lauren got ahead of ate few years ago. >> going back to the fact that jet.com sales are down what do we make of that? >> i don't know if that's true

all those reports are not primary reports. we're not getting the true sales from these retailers, we're looking at reports if it's true it these do with interaction with walmart.com which is grossly up and where they share infrastructure and vendors. >> so take it with a grain of salt >> yup. >> gentlemen, thanks for joining us jerry storch and simileone -- o my goodness. blond moment. when we come back, elon musk speaks out why he says his company was weeks away from collapse. plus, oil is higher. we'll show it to you in a minute after the tumble we saw on friday it's still down 25% since the start of october arldman's head of commodity resech jeff curry says buy here and he will be with us next

we have a halt on gm for news pending there have been various reports out of reuters and the a.p. that the company is considering shuttering a factory in canada, potentially reductions to the north american salaried and

executive work force all of those news wires citing sources so we have to wait and see. again, gm halted for news pending. tesla faced a severe threat of desk. that's what elon musk told axios on hbo last night. >> >> tesla faced a severe threat of death due to the model three production the company was bleeding money like crazy and if we didn't solve these problems in a short period of time we would die and it was difficult to solve them. >> how close to death did you come >> within single-digit weeks. >> musk also commented on the threat of ai, the threat of regulation talked in detail about his workload over the past several months and how hard it was to spend virtually every waking minute at the plant. >> he talked about mars colonization not quite a market-moving discussion. >> couple hundred thousand

dollars to go long term he thinks i think he's planning on going. >> 70% chance he said. >> have they figured out a way back yet, morgan >> i don't think that's part of the game. >> still figuring out once the way there. >> so a life long resignation. >> at least for now. time for our etf spotlight we're looking at oil which we've been talking about rebounding after the sharp selloff on friday. >> bouncing today in an exaggerated version of the overall market if you look at different ways to capture the energy space, this is since october 3 when crude oil prices peaked. the overall energy sector of the s&p 500 down 15% you have to real whip end of the business down 27%. almost as much as crude oil

itse itself the energy majors that dominate the xle are not as sensitive to crude oil swings. but the oih is the one to look at in terms of expectations for drilling in the last couple weeks the oil futures market has gone back to where the premium has been trading. so you have to get through this with iran coming on and after that perhaps stabilization and that is how the energy majors tend to trait so you can't sound an all-clear but it's suggesting that at least when it comes to major energy stocks maybe the worst is over in terms of longer term impact to commodity prices. >> i saw numbers over the past month if you look at megacaps and the biggest drawdowns you

have apple and facebook but exxon is in the top five. >> exxon is right there. 15% in a month and a half is a tremendous loss so not to minimize but just to say relative to what crude has done. on a year to date basis it's down 10% which is significant in a flat s&p right now. >> thanks, mike. mike santoli we'll continue this conversation with jeff currie a few moments from now. time now for a cnbc news update sue herera has this for us in a tweet, president trump threatening to close the u.s. border with mexico if mexico does not act to stop the migrant caravan. this comes after a peaceful march turned chaos when u.s. agents fired tear gas at migrants who tried to breech th

border two russian ships were spotted moored at a harbor in crimea ukraine's navy says six of its seamen were injured when the russia opened fire the ukrainian particle system set to consider martial law in that country. theresa may gathering her cat in the as he tries to convince the british public to back the brexit deal she struck with the european union. she plans to address the house of commons later today. and bernardo bert lucci has died he won oscars with "the last emperor" and "last tango in paris. he died surrounded by his family he was 77 years old. you are up to date that's the news update carl, back to you. >> let's get to that news on gm. general motors is going to be cutting production at a

number of plants they're using the term "unallocated resources" starting by the end of 2019 basically that means these plants will be idled down to no production we're talking about a plant in ontario where the impala is made detroit where the impala, the lacrosse and lordstown, ohio, where the chevy cruze is manufactured in addition, general motors will be closed down two plants, baltimore operations center as well as a warren transmission plant. those are the propulsion facilities that will be shut down they're cutting capital expenditures by $1.5 billion this will mean 15% fewer employees. what does this mean in terms of charges? the company will take between $3 billion and $3.8 billion in charges. most to be taken in the fourth quarter and in the first quarter. those will be non-cash charge fwlus will be some cash charges

involved as well when you look at general motors in terms of why it's making this move, we've talked about this for some time. nobody is bauying cars anymore there's been a huge dropoff and these plants are affected. crossovers make up 45% of the company's sales, 31% are cars, that's down drama altically. pickups and suvs continue to grow we have shares of general motors halted as the company saying that it will be closing down these plants, though technically the plants aren't closed officially although we talked with somebody in ohio who said the workers were notified at the lordstown plant that they plan to stop production as soon as march and that's where the cruze is manufacturered. so this company is not waiting until it's forced to close plants it's trying to get ahead of the curve because the sales of cars is just not there and they are

trying to get rid of excess capacity in north america. >> how much of this is gm specific and how much would you expect given declining auto sales to see other manufacturers follow suit? >> well, they're the third of the big three to say we're throwing in the towel when it comes to cars. they're not completely getting out of building cars but we saw that announcement from fiat chrysler they led the move in this direction. then you heard the news that ford would start going in this direction. those moves are in the process of taking place and now gm has finally said look we have too much capacity out there. especially at plants that are building sedans and cars we can better utilize that capacity in the future for autonomous vehicles, electric vehicles but who knows if that will take off the way the

company is expecting so thereafter fiat, chrysler and ford in terms of making this mov move. >> why aren't people buying cars anymore? >> utility there's better utility and more options when you look at crossovers and lower gas rices that plays a factor here as well when you have gas well under $3 a gallon, in some parts of the country close to $2 a gallon, people want more utility, more space. they like sitting up higher in a crossover utility vehicle and don't discount the transition we're seeing in the middle of america towards pickup trucks. especially mid-sized we are a country that enjoys trucks but more than ever people are saying i would rather drive a pickup truck than a car or crossover utility vehicle and that's why you don't see many people buying sedans anymore and compact cars, forget about it. nobody is buying those right

now. a very small segment of the population and these guys, the big three, they've been beaten at their game by the asian automak automaker. hands down what started 30 years ago is almost completely done now you don't see them in the game. >> phil, thank you for bringing thus news. up next, surging supply and a lowdown in demand growth weighing on energy gold man saks head of commodity research jeff curry is with us why he says now is the time to buy. getting another check on the averages dow up 345 points. the s&p is up 33 and the nasdaq is up 106. we've got more "squawk on the street" after this break don't go away.

oil is rebounding along with

the broader markets, as you can see right there. a note out today, goldman sachs details its top ten trading ideas for 2019 the firm saying, quote, commodities offer an extremely attractive entry point for longs in oil, gold and base. joining us, jeff currie, goldman sachs' head of commodities research this has been an interesting period. >> to say the least. >> never you write have markets seen every asset class down outside of a global recession or economic crisis yet here we are. why and what will change that? >> there's a fundamental story for commodities. they're miss behaving. equities should be down right now. bond markets, everything else is relatively stable. commodities are the outlier here and there is a fundamental triggering of event. one was the waivers for the iranian sanctions and then

concerns over demand, particularly in china right now. but the movement in oil prices far surpasses any fundamental drivers of that magnitude. and the question then becomes what was driving the oil price it was positioning we don't have discretionary investors in these markets anymore because the ability to assess risk, whether it's around u.s. foreign policy or around indeterminate trade war has discouraged discretionary or fundamental investors. what's left over systematic traders drove the market down to extreel levels. we triggered a negative gamma event, blew through the put strikes of hedging programs. >> so we don't have as many active managers pursuing commodity strategies, their aum has declined and computers are running everything. >> exactly. >> what changes that fundamentals start to override this >> what makes commodities unique is they're attached to a

physical market and when you have dislocations of this magnitude against the physical market they will be corrected or disciplined by the physical markets. if you don't see discretionary money come back into the markets. what would be the catalyst we think this g20 meeting this coming week could be that catalyst they'll discuss two big important drivers. one, u.s./china relationship and then you'll discuss between putin, the crown prince of saudi arabia and trump we think a production cut is in the interest of all three parties. oil prices dig into the u.s. industry's cost structure. it's not good for the u.s. at these price levels. >> where do they want it where's the magic price for them and us >> in terms of the equilibrium price, $65 to $70 a barrel our target is $70 a barrel but when you're in that level it's not too high and damaging to the consumer but it creates a stable

environment for the industry. >> i get the world is awash in oil. you have record numbers being pumped out of the ground in the u.s. are there any actual tangible signs that demand and consumption iswaning. >> the answer is no. yeah, you can find idiosyncratic stories like demand in germany is week, the rhine river is low. you have problems in metro chemicals in some parts of the world but if we look at overall demand, there's no indication we have recession-like demand so why are commodities underperforming and not delivering the late-cycle performance we see it's positioning >> jeff, why are you optimistic on the g20 and as well given what the president seems to treat about loving low oil prices, why be optimistic he would have want cuts >> if you go any further you start to create problems for the

u.s. the cost basis for shale is between $50 and $55 a barrel we're below that. >> it's really that high i'm surprised to hear that. >> in terms of looking at the all end cost including the return on capital you're in that $50 a barrel we are digging into the cost structure. now take high yield market 15% of the issuance is tied to energy you go below $50, you create problems in high yield this becomes a much larger problem than just a commodity market problem it becomes a credit market problem. we don't want to see that. >> what brings the invest orbach are we in this for good? >> one is confidence in the underlying fundamentals. at this point the discount in in prices, offering hazard pay for somebody who wants to come back into these markets the response we got this morning

on the note was it was more like everybody was asking everybody else i think it's an indication how fear it feel market is coming back in. so you expect the administration to change their tune somebody will get the meant mow. >> it's not good for the u.s. in terms of thinking about if we go lower from here. >> and then you are positive of what comes out of the g20 because why? >> you look at the duress that the current trade war is imposing on chinese growth, iron ore is down because you have problems with steel mills. they will want to come to at least a pause so we put a 40% probability we get a pause out of this g20. so it's a 50/50 proposition so you end up with something better

than the beginning of this week. >> natural gas, the wild moves, volatility, widow maker trade. what do you say to investors >> we want to short natural gas. you saw again a lack of liquidity, you had short vol positions in natural gas going into two weeks ago markets spiced tremendously. it's well above what fundamental fair value and one of our top trades is two short time spreads on natural gas it's warm out today and we're down 20 cents already. >> a lot to keep track of. appreciate your coming on frequently. >> commodities are entertaining these days. >> jeff currie from goldman sachs. look at where the major averages stand dow is up 345. gm has opened once again for trade. if you missed the news, cuting 15% of north american salaried workers, unallocating five plants in ohio, detroit, michigan, maryland and others.

"squawk on the street"s ck aomt. iba

one of wall street's biggest bulls said there's one thing that could make him change his tune on the markets. find out what that is on tradingnation.cnbc.com more "squawk on the street" after this

stocks are surging following what was the worst thanksgiving week for the markets since 2007. faang names seeing a rebound after a tough week apple coming off the worst week in a couple of years joining us this morning, altera capital partners head of technical research, market analysis, one of the kings of tech analysis. good to see you. >> thank you for having me. >> so more damage has been done in the past few weeks than people think >> i think the damage started a month and a half, two months ago when we started that decline in october. i've been looking at charts for

a long, long time and when they start ripping them apart you have to pay attention to that. that's the bad news. is good news is we're oversold and we're getting good news whether it's from europe or china and we should get a decent rally. then in the seasonal periods, the year-end rally but we have to see new highs, carl. >> new highs >> we have to for me to get happier again. >> really. >> then i can draw an up trend. >> is there an index or equity that is a poster child >> i look at the dow because everybody knows the numbers and as long as the day stays above 24.122.23, that was the october 29 intraday low. we held above it and that's good i'm willing to give it the benefit of the doubt and i tell people i talk to about the market, if you want to trade, yes. if you're thinking of investing i'd wait. >> if we don't see new highs any

time soon then what based on the technical analysis >> we had the break in october, we had this rally. if we don't make new highs at some point you roll over again then you're talking about maybe january peak, october peak that wouldn't be good. it is not a problem today. it could present some difficulty in discussion next year, 2019, and then you hear some of the economists telling you the economy will slow down, rates are going to go higher i don't like what happened to real estate, whether they're home builders or real estate they led in -- i don't have to tell you >> you sound a little concerned? >> yes, i am, i have been. >> so the only thing to change that is if we hit new highs, something you don't think we're going to >> the water has to lift all the boats, not just the dow and s&p, the russell.

but i think that will take time. >> the fact that transports seem to turn first a couple months ago, do you put stock into dow theory >> i am a big dow theorist but be careful transportation broke its 2018 low, recovered a little since then that's why if the dow falls through, makes a lower low, below the march low, then you have a dow theory confirmation in bear market right now, dow theory says it is correction in the bull market. >> everyone is in love with moving averages. which one matters? >> depends if you're doing daily, which is shorter term, i think the 50 and 200 are common i like to look at 10 week and 30 week they have more intermediate term implications one crosses below the other, you're in trouble. and by the way, look at mac-d,

moving average, based on moving average, and on weekly and monthly, they're ready >> volume, put call ratios, anything helpful there >> yes you want to see a little bit more, so you get some fear in the market i hear everybody talking about the vix being at 20 and that's bullish, not really. if you go back in time, i have seen the vix at 45 and 50, when they really washed it out. i would love to see that but i haven't seen it this time around >> jim talks about 25. decent number for you? >> no. i need the 45, 50. >> wow ralph, thanks. good to see you. always good to see you time to send it to jon fortt for a look at what's coming up on "squawk alley" in the next hour >> the holiday season is upon us when it comes to data about the holiday, i don't like anybody's numbers better than adobe's.

they're all over it. we dig deep with adobe on what technology platforms shoppers are using most and implications for stocks that's coming up on "squawk alley. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here,

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welcome back to "squawk on the street." stocks are hovering near best levels of the session so far with the s&p looking to rebound after two weeks of sharp declines financials among the best performing group in trade today. among names leading that to the up side, big banks like morgan stanley and citigroup, and regional names sun trust, and this eft that tracks regional banks, kre, right now on pace for the best day in more than a month. watch regional banks as the interest rate picture comes into a little more shape, guys. back to you, carl. >> thank you very much. when we come back, kara swisher with her take on who really is to blame for the woes at facebook. meantime, keeping a close eye on the rally. dow up almost 400 points, s&p close to session high. "squawk alley" starts in a couple of minutes. i consulted with your grandmother's doctor.

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good morning it is 11:00 a.m. at gm headquarters in detroit, 11:00 a.m. on wall street. "squawk alley" is live ♪

good morning i am carl quintanilla with morgan brennan, jon fortt back at post 9 of the new york stock exchange amazon is up almost 4% this morning, nasdaq is higher for the year, once again trying to recover from losses the last couple of months that saw the index drop more than 10% bru in anthony declemente and phil smeed good to see you both anthony, we obviously talked t