thank you sofi. sofi thank you, we love you. ♪ what we got, make sure you join us tomorrow "squawk on the street" is next ♪ 0 to 60 in 3.5 ♪ ♪ you got the speed now shut up and drive ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures mildly positive as stocks search for catalyst you got china trade, election day results and now some reports of strategic m&a get morgue attentimore attention. ten year 1.82. productivity no good the first negative print in nearly four years.

road map begins with the curse of the unicorn uber under pressure again. >> we have that softbank disaster after the fund's wework debacle. masa son saying his investment judgment was poor. >> hp rallying ahead of the bell, the target of a potential takeover effort by xerox we'll start with uber. shares facing more pressure after hitting an all time low yesterday. company reports another billion dollars in losses as you know and the post ipo lockup period is expiring, freeing up a billion shares for trade the take among some is the shares are so underwater, maybe the expire doesn't mean as much. >> i don't buy that reasoning. i think that what matters on the conference call, they committed to losing money. now they committed to making money in 2021. the patience level is lost here. i think this is one of those

stocks where you say why do i need this, i can buy -- i can name ten other stocks and the kinds of stocks that are going up are value stocks, this is the ultimate of what you're not supposed to buy now. you use the term that is not technical, it is just not working. i find that i can't come up with a reason i can't come up with a reason to own it and that is -- i got -- i can come up with a reason to buy hasbro at 95 when they're offering 10 million shares i don't mention that because the ceo of the company offering stock today. if you love it, you got to let it play out a couple of days when facebook's lockup expired, you got a bottom but you had to wait. if you really love this company, a lot of people do, wait a little let's see how many people do sell, do not presume they're going to sit on that stock and say i'm waiting for dividend not going to get that. >> do you feel as uncertain about -- the model as you are with lyft?

>> lyft doesn't have the uber eats it is all about -- i was trying to figure out, is this the time to pull the trigger on yum they got that problem. wendy's looks like the number is better than expected i'm waiting to hear about some problem with delivery. there isn't -- delivery is roiling everybody. people don't know what the model is, door dash is a great disrupter. but there is no question that if these guys announce right now, they're going to leave uber eats and sold it to grubhub, $26 stock, maybe more. >> went public at 45 some argue now the overhang is now 10, maybe $12. you buy that something like that? >> yes, that industry is totally not an industry, it is very rare that you ever see an industry that is not an industry. that means whenever you pay $10 to get $8, that you can't -- that's a really bad lemonade stand. you go to your mom and say, hey, listen, how much is the lemon?

okay, well, i'll charge 5 cents. >> i continue to,ba come back t softbank i'm fascinated by the decision at softbank to fund one of its largest investors, competitors, with even more money and in other words an enormous investor through the vision fund and uber and in dd. dd competes with uber. one of the key reasons why in foreign markets uber has to be pressed to spend more than they otherwise would. this goes on you have masa sitting there funding dual companies, if not even more on occasion, that are competing with each other, using his money to do so and not perhaps acting rationally as a result in terms of what the pricing should be. >> how much did he make on some of these, ten years ago some investments were incredible,

right? >> well, he's had one incredible incredible investment. alibaba. greatest investment of all time. >> how long can you live off alibaba? >> a long time. >> really? >> apparently. >> he paid $45 for wework. >> yes even though you paid -- he's obviously in the investor presentation they have done. he's made it clear he faulted his own -- >> was he humble enough this morning? >> i don't know if it is a question of his humble -- masa has an approach. the approach is i know what the future is going to be. i talked to a lot of people of late, haven't spoken directly to mr. masa it has been a topic of interest, let's call it, broadly speaking, not just wework, softbank, vision fund. i know what the future is going to be. i can't say how quickly and i love founders. he love guys who have vision and i'm behind him 100% no matter what in the case of adam neumann, he

may have made missteps in terms of the decision-making there that's masa. that's the way he goes. >> he did invest in nvidia >> yes invested in nvidia, got out, almost a trade >> this was terrific. >> it was. >> a great leader. >> the investment in sprint is still a significant one. >> right >> they are obviously trying to get out in i d-- by owning a combination yet to come. if the stakes are successful, it doesn't appear likely, but is possible, in trying to defeat that deal, that will also raise questions about softbank it is not in the vision fund, but that is softbank itself. >> when you go over the uber conference call, china is a bit of an issue for them because of -- the company that softbank funded. >> it is latin america too, isn't it >> yes, these are all the challenge markets. what do you do, you have bets on both, that is going over

roulette wheel and putting money on red and black and i'll tell you what comes up, double zero. >> first quarter lly loss in 14 years. he talked about this yesterday at a news conference. >> earning results announcement is not good at all it is a big negative and three months quarter result is the size of the negative is probably the first time after the foundation of the business once you look at this picture, we are actually in the rough sea. >> there have been reports they're trying to rein in the freedom they give to founder led companies. >> right >> too little, too late. >> change governance a bit earlier or focus on that sooner.

no doubt but there is going to be a lot more to come here from both softbank and the vision fund as people sort of put -- watch it more closely in terms of investments, in terms of the investments. it is interesting. masa is a fascinatingguy haven't spent time with him since march. but hoping perhaps we can again talk about where his head is at. >> it feels like this whole era has just his fingerprints on it. the era of creating your own valuation. >> and vision fund too, will they, can they get there this idea sure going to loan billions of dollars to their own employees to buy in, there is some fascinating things going on at softbank. but, you know what, i would love to get to another story if possible, because we are going

to significantly advance what was the wall street journal breaking story this morning on xerox and hewlett-packard. or hp ink. >> let's go there. >> the journal again had said that hp -- xerox was considering making an offer. they made the offer. and we are in full on bear hug mode here. xerox is going to try to buy hp inc. the offer i am told made as you expect a letter, i don't know the price other than it is, i'm told, a real, quote, premium to hp inc.'s stock price it is composed of cash and stock. the mix of which not quite certain on, perhaps somewhere in the 50/50 but not clear exactly but both cash and stock. they're talking about synergies of at least, at least, $2 billion, perhaps approaching as much as $3 billion in synergies

between the with companies and they maintain as well from what i understand in the contents of the letter that they will be upon completion of the deal even with the addition of a lot of debt obviously it buy out the equity at hp for the cash portion would be investment grade. the remaining company. now, remember, it was just yesterday that xerox announced the dissolution of their 52-year joint venture or maybe more 52-year joint venture with fuji film, included in that is the payment of $2.3 billion to xerox. that's going to come in handy. and, of course, there is no longer going to be this crown jewel lockup that gave fuji film a right of first refusarefusal. they tried this in the past. the company's ceo who presided over an 84% rise in xerox, stock price over the last 12 months, he's explored this previously or

previous managements have explored it because they know it makes sense from a industry perspective. what hp's response is going to be, i don't know at this point i can tell you xerox is all guns blazing to get this deal done. we don't have the letter made public as yet. we'll see if any conversations ensue. my understanding is they have not. this is quite recent as you might imagine. but they are going after hp. it is interesting yesterday, he said to me, when i spoke to him on the phone, that we're going to go on the attack when i asked him what the idea of being perhaps that the sellers -- he said we're going on the attack, i didn't know they would be acting that hard that quick. >> he takes the job, he starts next week, this is crazy i was talking to dionne the other day, the ceo i'll tell you the response, the response is are you -- the response is ain't going to happen >> you think that's what the

response is going to be? >> the guy just started. he starts like -- >> isn't that a perfect opportunity to say, hey, we have a management team that knows how to deliver on taking costs out of the business. and you're at a time of transition, why not get together >> he has so much work to do because of the problems that dionne, dionne did a great job, split off of hp, a lot of people felt that hewlett-packard enterprises would be better than what dionne did. dionne is going 3-d. >> that is having a rough go right now. not making progress they hoped. >> not yet but the 3-d product, i've seen work, it is exceptional. david, when i spoke to loris, has a tremendous plan to bring out value. he would be totally distracted by this. $8 billion versus $27 billion. i would not buy hp inc. here let me tell you, i would not buy hp inc., if anything the numbers are too high

and loris -- >> i don't know the price, other than it is a real read into the premium, a significant premium. >> i'm betting $23 it is real. i've spoken to bankers that's how fanciful i feel. >> let's not forget, there is plenty of financing out there. >> reeseler, like -- friday is his last day >> it is up to their shareholders, right? they may fight, i don't know what their chosen position will be, i should add i have not heard back from hp inc. management. >> how much does it have to do with the fact that loris starts now and they're saying, hey -- >> it is part of it, but these it companies, hp expressed interest in the past in this potential deal years ago but they were never able to get to the finish line because of the crown jewel lockup part of the fuji film joint venture. >> you're saying that they could get out of -- there is a lot of businesses you don't want to -- >> you got a company with $2.3 billion in cash coming in, the ability to potentially finance

it and a guy named carl icahn, $30 billion and from what i understand at least might have a willingness to put in more >> a guy named rico morris will not do that. i understand the shareholders, the shareholders >> not up to him not up to him. >> i think he plays a role. >> it is going to be up to the shareholders and -- >> you think the shareholders -- >> what the market believes is a credible bid >> that said -- >> i'm reporting, we haven't seen it on paper, i would like to know the price, what their math is behind why they believe investment grade. >> $8 billion and $27 billion, you're saying, why don't you buy us, why don't you buy us. >> they say, fine, we'll buy you? >> i think hp says we're not interested >> and then what >> then people who bought it at $27 are idiots >> ill advised ill advised. i'm going -- >> they're very aggressive in not wanting hp to do this deal hp, i don't know about the

shareholders they shouldn't be that unhappy now that last quarter was bad. and no one expected dionne reeseler to resign resigned for family health reasons. i have checked it out. it is family health reasons. this is not where family health reasons, mcdonald's, sorry, steve, in my mind, like everybody else in the country. i do think that enrique is very -- they have given him -- >> a lot more reporting to be done here. but, look, my read is different than yours. >> i was going to go out there and see him in, i don't know, two weeks. he'll still there be. >> you can still do that may not be at hp. >> if you have an opportunity in an industry like this where it is difficult to get growth and can capture 2 billion in synergies, throw a multiple on that, that's a big number. >> you're right. he's going to be thrilled to do that on first day of his job. >> why are you so focused on him it is not his company. >> it is a little weird, right >> the ceo >> the board versus the ceo.

>> talking to dan, like he's leaving tomorrow, make that friday i know it is not up to him i find ceos often play a big role in companies. >> they do without a doubt. i'm not -- it is not -- >> great to watch this get resolved. >> i got to tell you, i don't want people to buy it right now. >> the quarter was bad printing business has been rationalized and you did great reporting. i'm just telling you -- >> no this is how it works we love each other. >> i do it on my side. >> i think it is great >> so thrilled he got the job. >> we'll get cramer's mad dash, countdown to the opening bell, a lot of news to get to. deal book is going on. andrew has right now rometty of ibm, gorsky of j&j, later muilenburg of boeing upgrade of lowe's. elizabeth warren responding to jamie dimon. a lot more when we come back does your broker offer more than just free trades?

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demonstrating, what you need, because the combination with aetna is starting to yield some terrific numbers unless you feel we're going toward single payer. this will prove to be one of the great deals. the numbers they reported this morning overall were a big guide up but more importantly, there is a belief that he can do the $7 now, there was a cast doubt that he could earn $7 larry merlo. so it goes this time in the wilderness now we hear it can make the $7 so people are trying to figure out how much do you pay for $7 of earnings power. i think the answer could be, if you have a clean story like this, you can put a 12 multiple on it. it is still not that high at a 12 multiple. the balance sheet, they're delevering larry has done a remarkable job in a very challenging industry so i think this can go higher and it is still -- yield is 3%. >> the benefit manager up 6%. >> a shocker

they were above estimates. i'm glad you mentioned that. that would have been another area i interviewed him at midtown, i said, are we going to get another -- this was all on tv. are we going to get another disappointment in pharmacy he said no look at this it didn't. this is a very clean story it went from being a murky story here to being a clean nonretail story. it is the healthcare brick and mortar it is working, david it does not seem like amazon roadkill as so many people are worried about. my salute to larry, on tonight, on "mad money," and i think he should take a victory lap. people think he's way too humble this is a remarkable healthcare company that also has a good brick and mortar presence. not unlike what we have -- food company that has a good brick and mortar presence. could be the revenge of brick and mortar it could be. >> really? really

could be >> skeptical about your xerox. little skeptical about my -- >> skepticism is good. >> right always constructive. >> right exactly. we're always about constructive skepticism we'll talk about the walgreens report >> you know that fellow who runs walgreens. you always have a call into him. >> sometimes a lot more "squawk on the street." countdown to the opening bell. stay right there mini is a different kind of car. ♪ ladies and gentlemen

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just over five minutes busy wednesday morning, though, jim, s&p didn't really go anywhere yesterday

futures kind of mild today are we hitting stall speed as we wait for clarity on trade? >> i think we are. the stocks bid up are really companies that people just say, listen, this is the company that benefits the most. this company benefits the most and the stocks that are being sold off are the companies that are the ones you don't buy when we get away from the inverted yield curve, longer rates going up there is a company worth watching called hub spot i know people know it, it is a company that had unbelievable numbers for many, many years, the stock is up from 50, this week, two years ago to 150 it was 200 people don't want these stocks anymore. this company is a profitable company. they do, yes, cloud-based marketing, who doesn't it is 100 times earnings people don't want that so on the ones that have been bid up, we need something good on trade and on the ones that are very overvalued on earnings, people just want to touch them at all.

>> we did goet an upgrade of lowe's today 129 target they upped their target on home depot as well. >> this is the third upgrade for lowes. they had so much white space, so much that could go right he cut out a lot of people and more importantly, that place was the least digitized retailer home depot may have been the most, they were an early adopter. i think ellison predicted by q 4 things would be good people want to get ahead of it i think lowe's is excellent. my travel trust owns home depot. after home depot pulling way ahead, i think ellison you bet on. >> a lot of talk about, you know, mortgages can get cheaper, but the inventory of affordable homes has been slashed.

>> i'm not going to say it is not a negative i'm not saying it is not a negative i think lowe's is a self-help story. lowe's was well behind in terms of systems, in terms of management the management of it is something that ellison was not happy with the execution. you hear about execution they did not execute well. i think that he promised it wouldn't be last quarter or the quarter before but he's getting his arms around the problems i think you have lowe's for long-term with ellison ellison is doing a great job. >> what did you make of q 3 productivity as we said earlier, negative print first in four years. unit labor costs 3.6 versus a prior 2.4. what are companies -- this is a preliminary number hopefully revised, but labor costs five year high on a 12-month rolling basis. >> someone will say this is the beginning of the stagflation that they're worried about i'm going to say this is an outlier.

we had good productivity it will stay strong. i continue to see that labor costs are under control, except for -- there were areas of the country where things were tight. because manufacturing kind of petered out a little bit, the areas have some -- there is no longer as tight, but i'm not going to try for the u.s. economy, it is strong. the consumer is strong and i know that there is mortgage numbers weren't that great, but housing is doing well just check in with zelman, who is the best at housing should stay long so i'm not going to let one productivity number, one employment number make me feel like things are bad here the issue is, when you have emerson stock climbing, climbing, climbing, and far starts the call by saying things aren't that good, how long can you continue it climb on a not that good, well, maybe because shaw says reinvent the company, 55% of the businesses are going when farr took over. you hear united technologies, honeywell will get out what

doesn't work, caterpillar, dividend is sacrosanct i count ten cloud-based marketing companies. do we need that? >> all trading at incredible multiples. >> do we need zendesk and 59 do we need z-scaler and cloud strike and fire eye and -- >> calling for potential consolidation. >> do we ever need it. i spoke to fire eye last night no one is willing to consolidate. that's why i know that people now tell me, jim, got to get the story straight, xerox. xerox wants to do a bid. the story straight xerox, they want to do a deal. the story is straight, hp -- i don't know, 48 hours, they didn't want to do -- no deal >> the guys who own -- the guys who are xerox, they say, jim,

don't you understand, you don't understand, that's my favorite, you don't understand the synergy behind occidental, you don't you're dead wrong. you're an idiot. you think there is -- no, i'm not an idiot i'm smart. look at dimon. look at dimon. faang. sold to the gentleman in the back >> the opening bell here, s&p 500, at the cnbc real time exchange and the big board, biomx, celebrating a merger with charten healthcare freshpet, the maker of pet food with natural ingredients. >> we had a bit of a conflict with them when my stepson made a sandwich in the middle of the night with the freshpet because it was next to the baloney my baloney has a last name that is freshpet. it turned out to not be as tasty as it looked

it is not boors head, what i'm saying to tirely something that looks like food. dogs are not as discriminate my dog eats banister, this is better than that this had a remarkable rally. i thought it was a take-out at 16 the humanization of pets made freshpet, it is something that even if it doesn't taste good to humans, i think the dogs will eat it uber is down what is that about >> i don't know. >> is that where sellers and buyers -- >> more stock. 1.7, how many shares 1.7 billion? >> like confederate dollars. ever see those they print them constantly zimbabwe, boom, boom, boom >> i got zimbabwe. 10 million percent inflation, yeah >> jim, we're getting -- a day where people are buying kellogg,

hershey and merck. back to this >> they were selling -- merck, here is something incredible merck has the greatest drug of all time, keytruda mr. frazer is not a hype artist. it is a life saving drug the company, saint merck, we used to call it, sells at 16 times earning. that's value that's value >> you mentioned cvs. >> you're going walgreens. >> going walgreens >> you don't understand. you like that, when people tell you don't understand >> i listen to what they have to say. >> that's different. >> i don't particularly like that approach. >> i don't either. >> i wouldn't advise that approach with my friend mr. cramer as it comes to walgreens, guys, the stock not doing much it was yesterday that bloomberg reported this idea they might try and explore a -- you got a $55 billion market cap, you got

to throw a decent premium on top of that, yes, 8 billion in equity, he owns a lot. but you roll in, but you are still talking about a deal in which you have to have, oh, quite a few private equity firms that have to participate, given the equity check beyond the $8 billion. >> it is not cyclical. it is secular decline. look at rite aid. >> do you want to add more debt and to your point in a somewhat difficult environment and a lot of -- the investors, the lps in the private equity firms, a long time since we had club deals, three or four of them, writing big checks they don't like that lps have investments in different ones, they end up with more exposure to the one name than either of the -- than anybody else they're not particularly fond of that so that's a tough one to think about pulling off. not impossible, i guess, from the math perspective if you did raise the equity but tough. tough. >> didn't take long for people to start bringing up txeu.

>> he has a piece i like to headline, why we're not buying the prospects of a buyout, deal sized structural head winds. i used to be -- i used to like rite aid when i felt they were going to get a takeover bid. they got a takeover bid, exit stage right. look at rite aid challenging. i was going to include that with ill advised and suboptimal, now challenged that's a challenged deal, david. >> yeah. >> you can't load up any -- don't you think that macy's now wants to go private? to get away from the glare >> i think that would be helpful. in this kind of environment, retail, hobble yourself with debt while trying to fight a war that -- >> you know what -- >> use the great word, and it is could be because he's read a lot

of steven king i like i did, hobbling, misery one of james caan's best. >> kathy bates, she won the oscar. keep an eye on deal book sorkin has an all-star lineup today. take a quick listen. >> you made a decision where you told him you didn't want to take a bonus for this year. i want to talk about that. but tell us about what happened on saturday morning. >> andrew, thanks for the chance to join you this morning first of all, i have just a ton of respect for dave and appreciated the comments he made earlier this week. saturday morning's conversation really came out of my discussion with the families of the victims earlier in the week, between the two hearings, on tuesday evening. i spent a few hours with the families and i had the chance to listen to their personal stories, and

heard their sorrow, their grief and, you know, as a father and husband myself, i was heart broken over that and we take a lot of pride at boeing in the safety of the products we build and people count on us for safe travel. and those stories just had a huge impact on me. and caused me to think about, you know, what could we do as a company, what else can we do to help these families, and also for me, just to step up with a sense of responsibility as a leader of this company i felt it was important for me to forgo those bonuses and, you know, send a message of responsibility and also just begin to think about how we can help with the healing for these families i called dave saturday morning and conveyed my request to do that and dave convened the board and there was a good discussion around that. but, again, that all ties back to our mission as a company and the importance of the work we do. >> do you think you didn't appreciate the victims before this though?

i ask it because you did get to see them in person, but there has been so much criticism and critique of the company throughout this whole process that it hadn't been as human, and i wonder whether you feel now you should have gone and visited with those victims earlier. >> andrew, i think about that every day. and i wish i had gone to visit them earlier we have been focused ever since the accidents on understanding what happened, doing everything we can to fix the airplane, to improve the max. we have been focused on working to make it the safest airplane ever to fly. but the personal element of this and the impact it had on families it reminded me of the importance of the work we do and we talk a lot about the fact that lives depend on what we do, literally. that should demand this incredible sense of excellence and how we do it but until it is personal, until you really talk with the families, really hear those personal stories, there is nothing else like that and that's going to stick with me forever

it is now, you know, it is part of me. it is part of the legacy of our company. and we're going to learn from it and it is going to make us better as a company, but as a leader, it is important to hear that. >> how much money are you giving up >> tens of millions of dollars ultimately by the time the numbers are calculated to me, it is not so much about the dollars, the dollar figures themselves it is more about a sensory responsibility and focusing on what is important and conveyin to our team, to all of our customers, to the families that to me it is not about the money. it is about the importance of what we do, and our commitment to safety as a company this all needs to tie back to a culture of safety. that's -- >> i saw voices out there, after you announced, that say, he should have taken the bonuses and given them to a victims fund. >> part of my plan, i haven't been public about this, part of my plan is to contribute significant amounts of that to charity. and that will include

substantial amounts going to the funds that we have set up for the victims' families. that's a personal decision for me, but something i intend to do, yeah. >> and let me ask you, a separate related question, there has been a big debate in the airline world about -- at the company from what i understand about whether there should be clawbacks in terms of compensation both for senior executives and other people you have been working on the line that might have been related to this incident and future incidents. what is your take on the idea of clawbacks? >> i think you heard dave gave some good comment oz s on that yesterday and our board will take a look at every dimension of our processes and policies related to safety. and clawback provisions, i'm sure, will be part of that discussion that's not really where my focus is. >> you support the idea of clawbacks? if there say problem with the company, you think there should be clawbacks on compensation, i say problems, at this scale, in a very interesting way, boeing is the ultimate trust company, right? you get on that plane, you are in the air >> yeah.

i think it is important to differentiate between responsibility and culpability, first of all, that's an important difference but take a look at clawback provisions, take a look at every one of our policies and processes and how they go back and reinforce our safety culture, i fully support that. our company works. our business model works because we build, design, support safe airplanes. we provide safe travel for the public and everything we do should reinforce that objective. >> boeing's dennis mulan bu mui with andrew ross sorkin. >> i want to know, i think it is admirable that dennis said that he'll change his compensation. what i don't like is let's parse what he said in front of congress it was basically the usual, if the board decides, that was wrong. it was just wrong to say and because it was not up to the board to decide he wasn't going to take the money. i find it somewhat quizzical that he wakes up saturday, and

says, you know what, i'll give the money back i think what he did was realized that he said the wrong thing and i think a lot of people at boeing thought he said the wrong thing and didn't want to lose boeing he did not want to lose boeing and i think he was in danger of losing boeing. >> what does that mean >> i think the troops really -- everyone was upset. >> losing the support of -- >> yes, let's consider boeing a great american company, maybe the best ever. there is a so-called locker room at boeing. this was not -- ill advised choice and i don't think that he woke up and said, you know what, i did the wrong thing. i think he listened to other people, which is good, and realized that he said the wrong thing. these companies where they say the ceo says, listen, it is up to the board, now, david, i agree when it comes to xerox it is up to the board of hewlett-packard, but not up to the board to forgo the pay cut it is up to you. and i think, yes, david, it is absolutely impossible that

dennis' conscience got to him. i think others got to him. >> we're going to keep our ears, eyes peeled for headlines about return to service as he talks more about the max muilenburg's job appears safe, but cnbc has fresh figures on ceo departures on pace for a record year. mcdonald's, sap, service now, nike, under armour. >> those are all really interesting. at nike, i feel it could be more benign, that's kevin plank telling me, i'm a founder, i need to have something bigger going, issuing service now was absoluteman and then to donahoe, donahoe offered the nike job two kinds of ceos leaving. ceos leaving for a better job, bigger job, and then you have some ethical issues. and the ethical issues are the ones i want to focus on. those didn't used to exist. >> some studies are saying

they're leaving more often for ethical reasons than for financial performance. >> yes dion, family health, some people really, like charlie schafer when he resigned, spent more time with his family >> off the highs of the morning after we first told people it is happening. xerox has made an unsolicited offer, bear hug to acquire the company. price i'm told a significant or real premium to where hp stock was yesterday. they're talking about at least $2 billion in synergies. the fact that they believe even with incurring the debt it would take to buy the far larger hp, the combined company would still be investment grade. it is a cash and stock offer not clear exactly based on the conversations i've been able to have exactly what the composition would be, but it is not all going to be equity, cash, and therefore not all

debt xerox performed very well over the last year. up some 84% and most importantly they have $2.3 billion coming in from the end of the long, long joint chventure with fuji film speaking to the ceo yesterday, he indicated a willingness to go on the attack. interesting to see xerox's stock up as well don't know if that's people saying maybe this ends up going the other way or whether they're embracing the idea of the union of these two companies who it is not foreign to the idea of getting together in this industry, jim, has been one that has been around for a while. yesterday you were typing that very thing when i was talking about it >> i am not saying that lores shouldn't do it. the new hp inc. ceo. i'm not saying he shouldn't do it i can tell you they could immediately get -- the weakness was printing something we're saying, the weakness was personal computers, that's dead wrong.

look at amd and intel. personal computers very strong i believe in 3-d it is happening slower, but i love the products they're doing. my issue is would this allow them to make it so that printing is a much smaller part and inc. is -- it would give them cover should he do it? that's different from will he do it should he do it, the answer is yes. will he do it, the answer, i don't know, you think he wants to kikt tick the tires >> hp's comment is we don't comment on rumors. >> can you look at the portfolio? >> xerox kept their zrdistributn deal with fuji it went well >> it is enterprise versus personal i like the enterprise business and hp would be able to be a little bit more tie verse phied toward enterprise, which is

good. >> down 18%. >> i've been working on, trying to figure out, it is opaque. >> they lost 32,000 residential video subs, a little more than people anticipated they want you focused on broadband. average revenue per user up 9.2% deceleration the stock was up a lot this year one of the great -- highest performers the numbers not coming in where the investor base hoped it would. >> i was surprised that there is some of these -- comcast lost some subs. make it up with broadband. >> their base is shrinking, below the 3.5% that generally being -- >> pressure from perfection. >> maybe that was it. >> people like that. i think comcast, of course, the parent, sky hasn't even kicked in yet, the stock is terrific. remember, tomorrow is disney of

which so weighted. >> disney plus. >> disney plus. >> got to turn it on. >> keep your eye on uber, trying to hold 2640 now second day of record lows. let's get to the bond pits as well and rick santelli >> this morning's 8:30 eastern number did change the look of treasuries we had productivity at the lowest level since december 1st, negative numbers it is preliminary number and also i caution, it is kind of a strange comp the first negative number since 2015, but down .3 is a big difference in terms of size versus its comp of down 3.5, which was the number in december of 2015. let's look at some one week charts look at one week of two-year, we lost the mid160s, where the resistance is, on the left on that number. on 10s, mid180s

between 2s and 5s flattening we're seeing all the space of the term structure open up a little bit on the curve. that isn't a bad thing 30 year bonds lost the mid2.30s. holding in all right we're giving back 3 to 5 basis points along the curve bunds, july 1st chart, i used it a lot, at minus 33, off its best at minus 31, you can see how things have changed. matter of fact, might be like turning a barge into a small lagoon, but interest rates are doing something different because policy perceptions are changing and i can't stress how big that is over a larger time frame. i guess the poster child for that might be a may 1st chart of 10-year japanese government bonds. certainly they're at minus 08, isn't a positive number, but they are at the smallest negatives or highest yields in over five months since the end of may on a closing basis.

carl, jim, david, back to you. >> rick, we'll see you in a little while. coming up this morning, the first rule is, you don't talk about it but we might anyway. award winning actor director edward norton is with us at post nine talking about the business of film, streaming, his investment outlook and "fight club." dow down 25. "squawk on the street" back after this ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

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for $329 a month for 27 months. experience amazing at your lexus dealer. down another 5 1/4%, a new record low off more than $20 off its all-time high of 47 and cha change we'll get to stock trading in a minute with jim. dow down 18.

it's time to jim and stock trading. >> one guy from israel runs a company called cyber hawk. this is the keys to the kingdom. let's say jamie diamond, if he were to ever leave, if someone were to burrow in and use jamie

diamond's idea and unlock everything, that's not going to happen if you're a high-growth company with no flies on it. he delivered the best of the cyber security >> it does seem like the worries about enterprise software are ex-kurt stuff. >> they're just saying there's let up with china and russia i'm raising estimates because china and russia are pals, are trading partners >> they're always at it. and russia, too. >> and north. >> i got larrimer low. i used the man of the hour because he may be the person that heity feated the death star >> i guess i can credit him.

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> good wednesday morning welcome back to "squawk on the street." leslie picker is in for sarah eisen. markets looking for a little direction here, amid earnings, trade talk, strategic m & a reports. >> we start with uber under pressure, the stock sinking, trading with an all-time low we'll look at what's ahead for that company >> award winning actor and fell many maker ed norton is with us.

we'll talk about his latest movie and more >> and a bear hug for hp on fwlor xes bid to try to buy the company. >> uber sinking to an all-time low. and now the post-ipo lockup period is expirinexpiring, freep more than a balance shares for trading. we go live to the schwab impact conference the stock is down 40%, about a third of uber's insiders are underwater today at thises will and over the course of the next few days >> leslie, i think we're already seeing very, very high velocity selling you saw it leading up to today. almost 50 million shares have traded in the first half hour

today. average is around 11 million you absolutely are seeing people rush to the exits. now, the question of wh the private investors who are underwater have more or less incentive to sell, i think they certainly have incentive to sell some once a company is preg nand y you -- the question is it all building up to some kind of important purge with this stock. this idea that soft bank is an uninvestable stock, maybe the stock can try to settle out at some value here. >> you bring up a good point with softbank. do you think some of the pressure they're under makes them sellers today they were part of a contingency of insiders that were planning

to sell about 27 million shares when ub are went public. they weren't able to do that because the overallot minute agreement was do you think that some of the issues compounding with their makes them even more incliepd to sell to the to i think standard risk management if you're an investor i would say yes, you might want to lighten up i don't know if the signaling effect of being a big seller is a negative in itself opinion i do think the other private investors in that round or close to that probably would be motivated. everyone wants to lock back to the facebook example when the stock bottomed and a very pore the problem is the company had just turned profitable pb it was

on a solid profity course. not clear that uber right now is anywhere near that >> that's a good point one of the only ipos aside from facebook that was bigger than uber is alibaba of course in terms of ipos listed here in the united states. and when they had their lock-up expiration, they had a staggered form to it, a staggered schedule where the first lockup expiration took place six months out. i think the next one was nine up ins out, they had so much 1.5 billion shares coming to the market in one day. >> in behindsight, that probably would have been the better way to do it but the core of the issue with uber and where it traded since the ipo is not about pure supply did it's also

a reflection of the fact that everyone has been talking about the fact that all these union corns got overcapitalized and then you did not have any lasting damage to the stock. it performed pretty well through th thatlooking at uber, in the next couple of days you're going to say maybe that was something climate particular of a crescendo, very mechanical selling, even by employees >> jpmorgan had a recent report that said in the 30 days going into a lockup expiration the stock tends to decline about 10% on average but in the one, five and 30 days following it, you do tend to see some gains here. we'll see what happens with the uber stock thank you so much, mike. >> we want to get to a story we

first brought you at the top of the 9:00 hour. uber wh uber has made a so-called bear hug, an offer to buy hp. it was a bid made in a letter recently sent to xerox we don't know the price other than people telling me it is a significant or, quote, real premium to hp's stock price as of yesterday "the wall street journal" overnight reporting that xerox was considering making this bid. but we can tell you the bid has been made. it was sinner i didn't, that is cost synergies and cost savings that would come along with that. the beeped would still be ins

either because people think it's a good idea or perhaps they think this could end up in some sort of a deal but one in which hp is actually the buyer don't have a rot of but there is a great deal of -- belief on the despite the significant discrepancies in size. yesterday concluding its long, long venture with fuji film, which will result in 2.3 million dollars coming into the country. and it's going to engs continuing wish, another deal. because this deal is not

necessarily a change strange but been prevented from pursuing this because of that fuj eye film whether it's been made blackm some way and whether i've been recently moved or are moving to floridahe is a significant holder of sfwleer and that could play an important role here one might imagine should he build a sizable position in hpq because he could then become important if in fact there needs to be influence on them to sit down and talk >> it's kind of giving me a deja

vu with regard to all of that. >> it's worth also pointing out that icon it federal budget the person who longer works for nsh and, in fact, he and darwin defeated the previous plan, that was going to be acquired by fuji film they essentially took co request and when i asked him if you now will sell begin the expiration of the lockup? he said, no, we're going on the attack little bit it will be from but

it's cler the market to your point leaks the sitter jis strakt hp's stock price is declining right now, only up 9 1/2% might have been up to 15% earlier. >> jim might have had something to do about. when we come back, don't miss an exclusive of the fas leader on, edward none a big program ahead. dows up -- down 2. devices are like doorways

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restaurant brands international, the owner of burger king, pop eyes and tim horton's fresh off its earnings last week, getting a boost from the pop eye's chicken sandwich craze. joining me is the ceo, jose cil. >> nice to be here >> did you expect pop eye's would receive quite as much marketing -- unpaid for marketing it received for the introduction of that sandwich. >> we were really, sighted about

the launch of the chicken sandwich we spent a lot of time working on a best in class sandwich. we felt we had something really special to and we were ready for something wig and then we broke the internet in early august and that created a craze that i haven't seen in more than two decades in the business. so we were excited, not prepared for are the craze. >> now you're ready. so what went on between the time that you had to stop and now started again. what did you have to do to be ready? >> we worked closely with our franchise restaurant owners and our teams at pop eye's to make sure we had great product and the supply chain ready to deliver at higher levels and we worked with our franchise owners to make sure they invested in addisal people and equipment to be ready for myer roll ums that we saw at that time. >> why do you think the supply

chain wasn't ready to i mean, it seems like based on the simplicity you tried, bun, chick y chicken we started in house to and rolled it out to a bunch of different markets. we expected big volumes. we prepared for big volumes and actually had a cushion as well beyond what we saw in the test markets and then with this exchange that happened, the so-called chicken wars on the internet, we saw volumes that far exceeded anybody's expectations we were ready but not for what happened >> it's why some believe that the shortage was manufactured sow to build virility on >> we're excited to be back online with the product and our chan chichester owners are delivering a great product to our guests we're happy where we are >> horton offset as lot of the

number what's going on at horton's? >> tim's is a great brand. it been a dominant brand for 4,000 restaurants, more than 1,200 amazing restaurant owners that do a great job in their communities and their restaurants. we're working on important initiatives around brand communications, connectioning back with our equipment. >> from time to tim we'll thank overall on a son sol dated basis, rbi had a ebidta growth of 7%. so we're excited about the path forward, exit beyond me for its

breck sausage. how do you describe working with both of those suppliers in terms watch consumers like better and the actual supply chain in getting those ingredients? >> we're a brand-led company so they did the work locally and to figure out what taste profile better matched what consumers are looking for. we decided that with burger king the right product was the impossible product in canada we felt beyond meat of the right product. both were exceptional partners and we're excited to bring our guess going on in part they're going exclusive with grub hub. i don't know what your delivery options are, whether you'll see an impact from a the decision. >> we started at the beginning of 2018 and it represents a

growing part of o you are business in the u.s. and canada and all around the world we have some markets internationally that have 60, 70% delivery business. it's a big part of our business. we always felt that working with a third-party aggregateors was instrumental we have great partnerships but they're incremental with each other and we feel that's the path forward >> and changes, significant one at mcdonald's in terms of leadership >> we're always focused on giving a great experience for the guest. what happens from time to time ot an executive level we don't comment on or worry too much about. we focus on dlifing great pocket po. >> what about in terms of m and a? restaurant brands, the whole ethos of the company came about due to m and a, teaming up

burger king to acquire tim horton's and popeyes this morning bloomin' brand is up about 7% are you looking to do more with something like a bloomin' brands, would it be a good fit for your portfolio >> we're a growth company and we've seen good ruts over many quarters and many years, and we have a ton of optionality with our business we can invest our cash flow, which we generate quite a bit of we can invest it in the business, back to shareholders through repurchases as well as dividend and we can also invest opportunistically in m & a we haven't done so recently other than popeyes and tim hortons. we'll look at it when the opportunities arise and consider it accordingly >> all right >> all right we appreciate you taking a little time with us. thanks jose. >> thanks for having me.

appreciate it. >> still to come, an interview with actor edward norton, his investment in tech and a lot more dow is only up 6 don't go away. >> seen that guy >> friend of yours >> yeah. >> nice face >> nice yourself >> nice yourself >> you got a light >> a tease superior long-term results? it begins with a distinctive approach to managing money. that for over 85 years has focused on keeping confidence up when markets are down. an approach where portfolio managers work well independently. and even better together. who don't just invest, but are personally invested. can i find a proven approach designed to deliver results? with capital group, i can. talk to your advisor or consultant for investment risks and information.

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mixed messaging in the markets today. earlier this week positive headlines on trade and the economy helped fuel the risk on rally but today's negative print on productivity is creating some cause for caution. so joining us to distill all of this is nancy davis of qu quadrattic capital also with us is wells fargo asset management global cio.

thank you for both joining us. is this complacency regarding some of the headlines we're seeing or do you think the markets are gearing up for some sort of inflexion point? >> i think we have to listen to the fed and they're say they go want to normalize inflation expectations >> it's the shape of the yield curve. and when the pred paj where that are trying to steepen the yield curve and bring back more fluctuations in the the market we in a pivotal time >> pivotal time to being to the up side or people will take take money off the table. you a want to have and lower

trait so i think having strategies that profit off that steepening yield curve is really timely because you have to listen to what the fed is saying, which is inflagstick exkentucky seems to be ignoring earnings forecast and point to the fact that s&p 500 companies expect to grow earnings at less than 1% compared to 14 months ago. do you think the market is starting to realize this underlying weakness in earnings yet? >> well, i think the market has been very pleased so far and earnings are good but not great. if you look at the forecast for next year, 165 earnings per

share for the s and to your earlier guest's point, i think a lot of this is a function of interest rating. and i think that's why. >> yesterday i was in this this format in greenwich. and companies and other entities have been overencumbered with too much debt. therefore, if they did so, it might be a much breger pron lp. >> well, i think you have to be concerned bell and a lot of

publics can been hef are in i don't know if that influences the fed per se but obviously all the leverage in the system and you have trillion dollar deficits so we live inform a world of debt right now. >> nancy, what to you think? >> i any et the market is really not pricing for any change every way, whether the to be cutting interest rates back to zero stl flar the interest rate volatility is mispriced. turnt are for the optionsin the sap of and i think own that earn it you always talk about rahal u versus goet. you need things that are cheaply pryce. and vlg mispriced optionality,

we think it attractive, you given you don't know which way the prsh. >> time for our atf spotlight. we'll look at spider trading marginally lower tonight look at jorg jorg fraesh and as the broader record coming off of that conversation about trait, from and "squawk on the street" will be right back ♪ ♪ ♪

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♪ ♪ good morning, everyone here's your cnbc news update at this hour. mexico's foreign minister visiting site of the attack where drug cartel slaughtered american citizens on a highway in the north he vowed they would be brought to justice zrnlts police say 15 officers were killed at two checkpoints overnight in thailand. >> and andy beshear's margin of

victory was .7% and he said he will not concede >> the student hit a halfcourt heave after making a free dough. >> i'll accepted it back down to you, carl. >> sue, thanks very much >> we have everything to talk about coming up. the future of media advertising and data and his latest film joining us a the post 9 is award winning actor, director and entrepreneur edward norton it's great to meet you guys. >> i don't know where to start >> the film. it been the last two years of my life

>> ken burns wrote a glowing review, right? >> he's probably one of my inspirations as a filmmaker and he published this phenomenal essay about the if i am, people tonight really make anymore, it's in the vain of "l.a. confidential" or "chinatown. it's about new york in the 50s it's one of those old fashioned fillles that we all love and don't get enough of anymore. >> i saw, the you right -- hollywood a took of what's going on whether it's the social media environment or the political environment. are you seeing that pop up more and more in scripts that you're

reading and -- >> no, not so much i this i the he's dysfunctional but brilliant. he digs into a mystery that is somewhat based on -- inspired by what robert mosts did to new york in the 50s. as many people know, robert moses was kind of the ultimate bully. he had his way in an autocratic sense with new york for many decades. this is one of our amazing cast in the film, willian da foe, including alec baldwin and bruce willisnd i just wanted to make up for but that also has kind of old fashioned feel to it >> it hard to hear you talk about it and not know of ar

archgiven help testing group, march wrote -- it was almost a valin tin to my film he talked about how hard it is to make films like the one i just made. >> so is he wrong? >> i think every generation confronts new versions of the same problems. it's always hard to get original adult content, you know, made. but i think it's important, too, to recognize that for young storytellers and young filmmakers, this is also a time of ncredible opportunity i think i is that more diverse voices are getting to tell stories in more forms than ever in the i.

>> it's a struggle he rightly pointed out the crowding out a fill frks, now the timelines are much pressurized by the churn of franchise films taking over the multi-plexes. i don't totally agree with that this is not an exciting time for young filmmakers i think it's full of opportunity. >> there's an enormous demand for content from those streaming -- >> more than ever. >> and all sorts of genres >> and language and. >> reporter: it's an incredibly divorce strrks in terps of who you'd like to work with and what you would consider in.

>> no be it's just literally like the relaying soup from and those alliances make for exciting moments in who is the right partner who believes in ma nas did you have date in it in, on the big screens before it goes to netflix? sfwli personally think the rules of the academy on theatrical distribution and things like that are very clear. and they've been playing by them to me the national if if i think if theater

distributing companies, ands that just business >> well, they wanted it for longer obviously >> but that's straight up business if nest flicks a way to give mae in a to me the idea that a film like roma should be excluded from the academy awards is completely absurd. that was a magnificent artistic improvement but these things are constant conversations, you know i think people get up this is a very fluid environment, something we're all on many levels exploring and figuring out as we go but i think it's exciting, all exciting >> we to you'in l.a.?

ia, i was ride egg went, i was rider one be a i tock. >> so you followed their path and weep know what's happening now. what do you make of their future >> i don't know honests will i that oo request and i think thifs very call foo if the new yorker system. >> that is is and the market has commented appropriately on the value of a medallion and i think there's nothing but good in that i also think empty cars going andoneding forecast -- of nonefficiency and i think there are many, many things that ride they're if to kin our

improvement? yes, it. >> how did you get cooked with mr. and. in the they had like 15,000 cars and we knew some of the people people and i met him for tacos >> yeah. sfwlu still have shares of uber? >> yeah, everybody invested in uber is still in the lockup. >> lockup's up now >> many dee signatureses to be made >> i assume you've got a prit' flee it was one of those very special things to be rofd in at a sfwror -- that's a company that i started with dan yesterday nadler, who you guys no well. he founded and is a ceo. and your own great kevin

cripple, one of great cnbc executives >> dal it and i was at one of ken's show early investors, eaters ep from that's why you guys start it and? sets that s&p acquired but daniel and i in conversation with bob mueller from there was applications to these thern nrn we're in this area where you fwies drop nielsen as a pricing net trick, for good reason under faen be a fla there are a lot of people who live how audiences

reopinion sfrt and you tonight want to use a stone age tool, which is essentially what we think nielsen's measurements are. you want previous signatures and to measure with really high-fwra twchl stwrchlt in a quantifiable finance grade that correlates were their trch not take the actions that correlate >> you must have a target on facebook's ability to target political ads? >> that's a different subject. i mean, i think that -- i admire greatly what jock dors in terms of fwrchl and that doesn't have

anything to do with what et in the but the majority of major market advertiser spend is on television it far and away for all of the tuck about, you know, the growth of tij tall advertising, the major markets and televisionnd we have level and we think it be can done and are doing it much better >> you said you're following somebody through to the actual action and try and understand whether or not the ad was affected are there privacy issues >> no, not at all. to me that's where the digital space, people are as are the die would be a we work with nothing

to do with dout, which twrrks m there are methods for using open source data for measuring people's intent that are unbelievably sophisticated, and that's of tw you're proven ability frb from is there a space within dwrn be be in that you think is next that you're interested in? >> you no, if a broad sfrfrlt and i'm very interested in things that i am deeply engaged in you know, media -- i've seen -- it may sound like sort of like why is he talking about this,

but i've spent 25 years in the film business looking very closely at the dollars and cents and the knit as artists we sit within profit participation contracts. we care about inefficiency in marketing spend, sflrt and in and artists benefit treasury secretaryly from the companies that pout fought smarter and better in the implementation of their tatia to be effective. we are totally aligned we want efficiency of you don't

want this inform so i was interested in that pd inform for measuring -- how effective is television -- who saw a thing? what does that evenare in the all right ook i'm sfrk when ad drop, what do they drive people o do did did -- >> you mentioned wes anderson sfrajt dhas. >> plans at all to wok had frt. >> and did a small wole never i

hope you'll forgive one "fight club" question because you're in a room of fans the new yorker did an anthem how about it from american country twrr that's a violent misread of the inter. a in which a thorough rebuttal of at that eyitysfrt want to fwrab headlines with quick bait like fwrobt below the complexity there's nothing you can doand fight club has beenfrb and rejection of the frsht, which is

more than i can say for some move reese right now >> it been great talking to youthank, if a quick note, motherless prk flrk yeahwide or nil. there fact and as we go to break, take a look at cvs, getting a poos from strong strut frb health insurance business. don't miss an exclusive with i medical pao more "squawk on the street" when we return >> yeah. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best...

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presidential candidate elizabeth warren continuing her war on wealth, this time through her health care plan our robert frank joins us with the latest robert. >> good morning, leslie. elizabeth warren planning to raise $3 trillion a year on taxes on the top 1% to pay for that medicare plan

most of that would come on a new tax on unrealized capital gains. right now you only pay a capital gains tax when you sell a stock or asset that has appreciated in value. warren's plan would tax capital gains every year even when you don't sell if you own 100 shares of apple, which is up about $100 this year, your gain would be $10,000 and you would pay a capital gains tax of around $2,400 for top earners if you sold. but warren also wants to tax capital gains at the same rate as ordinary income, so those apple shares would be taxed at $3,700 this year even if you didn't sell a single share now, warren says the tax would only apply to the top 1% of households and it would exclude retirement accounts. this is an idea that's been floating around congress for a bit. senator ron wyden proposing a similar plan as warren explains, ultra millionaires and billionaires won't be able to earn income on giant fortunes year after year without paying a penny in taxes.

guys, back to you. >> all right, they don't want to question but i've got to ask one. what happens if the stock goes down the nerxt year, do you get to recoup the taxes you paid >> yes she says losses will be carried forward, so if you gain on apple this year and lose it next year, you'll get that loss next year which you can offset any gains or the next year, so that's incorporated yeah, david, it's complicated. >> yes, it is. rob, i know you'll stay on top of it. thanks a lot let's sending it over to jon fortt with a look at what's coming up on "squawk alley." >> yeah, the tour of california continues, three cities in three days right now i'm sitting at qualcomm headquarters. their earnings are coming up after the bell, bringing you a preview of the whole tech landscape coming up on "squawk alley.

welcome back to "squawk on the street." i'm dominic chu. stocks are trading just around the flat line so far in early action, taking a bit of a

breather following this recent rally toward record highs. we are strength in defensive sectors like utilities and also real estate as you can see behind me. one of the best performing if not the best performing group is the consumer staple side of things, now trading less than a percent away from its own record high mark that it hit last monday a big reason why is coty's strong earnings report it reaffirmed its year outlook they are up a whopping 99% this year, the second best performing component in the s&p this year i'll send it back downtown to you guys, carl, at the new york stock exchange. >> thanks so much. when we come back, we'll hear exclusively from airbnb's aaron chesky and uber. you do not want to miss those interviews live. "squawk alley" starts in three minutes. driverless cars,

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good morning it's 11:00 a.m. at the deal book conference here in new york city, 11:00 a.m. on wall street, and "squawk alley" is live ♪